EXC 2122 Strategic Management Accounting


EXC 2122 Strategic Management Accounting

Responsible for the course
Tor Olav Nordtømme

Department of Accounting - Auditing and Business Analytics

According to study plan

ECTS Credits

Language of instruction

Strategic management accounting focuses on defining and describing important causal relationships between factors that contribute to creating long-term values for the firm. By designing controlling systems that help us to evaluate the company’s ability to implement its overall strategies and plans, management theory, strategic planning and accounting together form a holistic framework for long-term decision-making.
The course focuses on theoretical models, various tools and techniques to support the decision-making process for management with real-life cases and exercises.

    Learning outcome
    Acquired Knowledge
    After completed course students shall have acquired knowledge about:
    • The link between the various activities carried out by an organization and its consumption of costly resources
    • How the design of a value chain model can be used as a tool to analyze the various activities’ contribution to value creation as well as how multi-dimensional process analyses can be used to improve process efficiency.
    • Allocation of costs to various cost objects by using traditional methods as well as activity based costing techniques.
    • The need to establish long-term goals and to determine critical success factors and Key Performance Indicators, as well as designing strategy maps.
    • How strategic decisions may tie up the organizational resources on a long term and the link between strategies, plans and budgets.
    • How the organization can measure the implementation of its current strategy plan by the use of Balanced Scorecards.
    • How traditional budgeting models can be improved to better facilitate different control purposes.
    • How the lean-philosophy’s continuous focus on reducing organizational waste can contribute to long-term value creation.
    • Challenges of achieving success by efficiently implementing processes that require actual change in organizational behavior.

    Acquired skills
    After completed course students shall be able to:
    • Identify relevant cost drivers in a given organization, an activity or a business process
    • Design a value chain for a given organization or business process
    • Design models for allocation of direct and indirect costs to given cost objects
    • Define critical success factors, suggest relevant KPIs, design a strategy map and a scorecard as a basis for implementing Balanced Scorecard.
    • Measure the efficiency of various business processes
    • Design tools for budgeting and other financial planning
    • Identify sources for organizational waste by the use of lean-philosophy methods

    The students shall reflect on management accounting in a strategic and long-term perspective, where the goal is to use resources optimally to create operational efficiency and value creation.

    EXC 3442 Managerial Accounting and EXC 3451 Financial Reporting and Analysis, or equivalent

    Compulsory reading
    Atkinson, Anthony A. ... [et al.]. 2011. Management accounting : information for decision-making and strategy execution. 6th ed. Prentice Hall/Pearson Education

    Barney, Jay. 1991. Firm Resources and Sustained Competitive Advantage. Jorunal of Management. Vol.17(1). pp.99-120
    Kaplan, Robert & Norton, David. 1992. The Balanced Scorecard - Measures that drive performance. Harvard Business Review. Vol.70(1). pp.71-79
    Kaplan, Robert & Norton, David. 1996. Using the Balanced Scorecard as a Strategic Management System. Harvard Business Review. Vol.74(1)
    Kaplan, Robert & Norton, David. 2000. Having trouble with your strategy? Then map it. Harvard Business Review. Vol.78(5). pp.167-176
    Porter; Michael E.. 1996. What is strategy?. Harvard Business Review
    Wernerfelt, Birger. 1984. A resource-based view of the firm. Strategic Management Journal

    Recommended reading

    Course outline
    1. Strategic Performance Management: Corporate Governance, The Balanced Scorecard, well-functioning KPIs, strategy mapping
    2. Financial Planning and Budgeting: Budgets as simulation tools, cash flow forecasting models, balance sheet budgeting
    3. Understanding cost behavior and the value chain: Cost drivers, primary vs.supporting activities, The Positioning School and The Resource Based View
    4. Cost allocation and more advanced costing models: Activity Based Costing
    5. Business Process Analysis and The Lean-philosophy
    6. Case studies

      Computer-based tools
      Students are expected to use spreadsheets (e.g. Excel) when solving and submitting assignments.

      Learning process and workload
      The course consists of lectures and self-tuition (reading the syllabus and doing exercises/assignments that are both mandatory and voluntary). Throughout the course, the students shall discuss and solve a number of case-oriented business problems from the private and public sector.

      Recommended workload in hours:
      Participation in theory-based lectures
      Participation in solving of assignments in plenary lectures
      Participation in case-based lectures
      Participation in student-based assignment tutoring
      Solving assignments alone and in student groups
      Reading theory and related articles
      Recommended total hours used

        A 48-hour individual take-home examination concludes the course.

        Examination code(s)
        EXC 21221 - A 48-hours take home exam, counts 100 % of the grade in the course EXC 2122 Strategic Management Accounting.

        Examination support materials
        All support materials are allowed.

        Re-sit examination
        Re-sit examination is offered every term.

        Additional information