Introductory description

The module will cover technical aspects of performance measurement systems which will develop the technical skills of students. The module will also enhance students' understanding of the links between management accounting and strategy.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

The module material will include some or all of the following topics:
Cost behaviour.
Financial management.
Short term decision making.
Product costing and pricing decisions.
Business performance measurement.
Strategic management accounting.

Learning outcomes

By the end of the module, students should be able to:

• Demonstrate an understanding of the main goal-oriented theories of human behaviour and relate them to the design of performance evaluation systems in organisations.
• Demonstrate an advanced understanding of various organisational structures and performance measurement designs, including unintended consequences of measuring certain behaviours.
• Critically evaluate different costing systems and predict the decisions (good and bad) which they may lead to under particular circumstances
• Critically appraise performance measurement systems and evaluate their effectiveness.
• Develop predictions regarding human responses to various performance measurement methods.
• Develop predictions relating to the firm-level outcomes of internal divisional reward systems.

Indicative reading list

Drury, C., (2023) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
Cooper, R., & Kaplan, R. S. (1992). Activity-Based Systems: Measuring the Costs of Resource Usage. Accounting Horizons, 6, 1-13.
Cooper, R., & Kaplan, R. S. (1991). Cost and Effect: using integrated cost systems to drive profitability and performance. HBS Press. Boston. US
Cooper, R., & Kaplan, R. S. (1991). The Design of Cost Management Systems, Text, Cased and Readings. Prentice Hall, Englewood Cliffs NJ.
Cooper, R. Implementing an Activity-Based Cost System. Journal of Cost Management (Spring 1990).
Al-Omiri & Drury, (2007) A survey of factors influencing the choice of product costing systems in UK organisations. Management Accounting Research (December)
Brierley, J. A., Cowton, C. J. and Drury, C. (2001) Research into product costing practice: a European perspective, The European Accounting Review, 10 (2) pp. 215-56
Cotton, W. D. J., Jackman, S. M., & Brown, R. A. (2003). Note on a New Zealand replication of the Innes et al. UK activity-based costing survey. Management Accounting Research, 14 pp.67-72.
Drury, C., Braund, S., Osbourne, P. and Tayles, M. (1993), A survey of management accounting practices in UK Manufacturing companies, ACCA Research Paper.
J. Innes, F. Mitchell and D. Sinclair (2000), Activity-based costing in the UK’s largest companies: a comparison of 1994 and 1999 survey results. Manage. Accounting Research. 11 pp. 349–362.
Drury, C., (2025) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
Bhimani, A, Horngren, C.T., Datar, S.M., and Rajan, M., (2015), Management and Cost Accounting, Pearson.
Atrill and McLaney, (2019), (11th edition), Accounting and Finance for Non-Specialists, Pearson, ISBN 978129224401-3 (chapters 1 -8; 11)
Bromwich, M. (1990) The case for strategic management accounting: The role of accounting information for strategy in competitive markets. Accounting, Organizations and Society, 15 (1/2), 27-46.
Bromwich, M. & Bhimani, A. (1989) Management Accounting: Evolution not Revolution. London: CIMA.
Bromwich, M. & Bhimani, A. (1994) Management Accounting: Pathway to Progress. London: CIMA.
Chenhall, R.H. & Langfield-Smith, K. (1998) The relationships between strategic priorities, management techniques and management accounting: An empirical investigation using a systems approach. Accounting, Organizations and Society, 23(3), 243-264.
Ezzamel, M. (1994). From problem solving to problematization: Relevance revisited. Critical Perspectives on Accounting, 5(3), 269-280.
Ezzamel, M., Hoskin, K.W. & Macve, R.H. (1990) Managing it all by numbers: A review on Johnson & Kaplan’s ‘Relevance Lost’. Accounting and Business Research, 20(78), 153-166.
Cuilding, C., Cravens, K.S. & Tayles, M. (2000) An international comparison of strategic management accounting practices. Management Accounting Research, 11(1), 113-135.
Johnson, H.T. (1994) Relevance regained: Total quality management and the role of management accounting. Critical Perspectives on Accounting, 5(3), 259-267.
Johnson, H.T. & Kaplan, R.S. (1987) Relevance Lost: The Rise and Fall of Management Accounting. Boston, MASS: Harvard Business School Press.
Langfield-Smith, K. (1997) Management control systems and strategy: A critical review. Accounting, Organizations and Society, 22(2), 207-232.
Langfield-Smith, K. (2005) ‘What do we know about management control systems and strategy?’ in Chapman, C.S. (Ed.) Controlling Strategy: Management, Accounting, and Performance Measurement. Oxford: Oxford University Press, pp. 62-85.
Lord, B.R. (1996) Strategic management accounting: The emperor’s new clothes? Management Accounting Research, 7(3), 347-366.
Lord, B.R. (2007) ‘Strategic Management Accounting’ in Hopper, T., Northcott, D. & Scapens, R. (Eds). Issues in Management Accounting, Harlow, Prentice Hall, pp. 135-153.
Miles, R.E. & Snow, C.G. (1978) Organizational Strategy, Structure, and Process. New York: McGraw-Hill.
Mintzberg, H. (1987) Crafting Strategy. Harvard Business Review, 65(4), 66-75.
Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.
Roslender, R. & Hart, S.J. (2003) In search of strategic management accounting: Theoretical and field study perspectives. Management Accounting Research, 14(3), 255-279.
Shank, J.K. & Govindarajan, V. (1992) Strategic cost management: The value chain perspective. Journal of Management Accounting Research, 4, 179-197.
Simmonds, K. (1981) Strategic management accounting. Management Accounting (CIMA), 59, 26-29.
Simons, R. (1987) Accounting control systems and business strategy: An empirical analysis. Accounting, Organizations and Society, 12(4), 357-374.
Simons, R. (1991) Strategic orientation and top management attention to control systems. Strategic Management Journal, 12(1), 49-62.
Sims, A. (2001) A model approach: Generating strategic options. CIMA Insider, September, 24-26.
Williams, K., Haslam, C., Cutler, T., Johal, S. & Willis, R. (1994) Johnson 2: Knowledge goes to Hollywood. Critical Perspectives on Accounting, 5(3), 281-293.
Drury, C., (2023) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
Management and Cost Accounting, 6/E, Bhimani, A, Horngren, C.T., Datar, S.M., and Rajan, M., (2015), Pearson. Chapter 18, 19.
Dearden, J. (1987) ‘Measuring Profit Centre Managers’, Harvard Business Review, (Sept-Oct) pp. 84-88.
Skinner, R. C. (1990) ‘The Role of Profitability in Divisional Decision Making and Performance’, Accounting and Business Research, Vol. 20, No. 8, pp. 135-141.
Ferreira, A. and Otley. D. (2009) ’The design and use of performance management systems: An extended framework for analysis’, Management Accounting Research, 20, 263–282.
Stewart, G. B. (1994) ‘EVA™: Fact and Fantasy’, Journal of Applied Corporate Finance, Vol. 7, No. 2, pp. 71-84.
Drury, C., (2023) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
http://www.oecd.org/ctp/transfer-pricing/
http://www.hmrc.gov.uk/international/transferpricing.htm
Drury, C., (2023) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
Bhimani, A, Horngren, C.T., Datar, S.M., and Rajan, M., (2015) Management and Cost Accounting, 6/E, Pearson. Chapter 22.
Drury (2016) Management Accounting for Business, Cengage, Chapter 15.
Franco-Santos, M., Lucianetti, L. and Bourne, M. (2012) Contemporary Performance Measurement Systems: A Review of Their Consequences and a Framework for Research, Management Accounting Research, 23, 79-119.
Ax, C., Bjornenak, T. (2005) Building and Diffusion of Management Accounting Innovations- The case of the Balanced Scorecard in Sweden, Management Accounting Research, 16(1), 1-20.
Brignall, S., and Ballantine, J. (1996) Performance measurement in service businesses revisited", International Journal of Service Industry Management, 7(1), 6 – 31.
Ittner, C. D. and Larcker, D. F. (2003) Coming up short on nonfinancial performance measurement, Harvard Business Review, Nov, 88-95.
Kaplan, R. S. and Norton, D. P. (1992) The balanced scorecard: measures that drive performance, Harvard Business Review, Jan-Feb, 71-9.
Kaplan, R. S. and Norton, D. P. (1996) Using the balanced scorecard as a strategic management system, Harvard Business Review, Jan-Feb, 75-85.
Kaplan, R.S and Norton, D (2004), Strategy Maps: Converting Intangible Assets into Tangible Outcomes, HBS Press
Rucci, A. J., Kirn, S. P. and Quinn, R. T. (1998) The employee-customer-profit chain at Sears, Harvard Business Review, Jan-Feb, 82-97.
Speckbacher, G., Bischof, J., and Pfeiffer, T. (2003) A Descriptive Analysis on the Implementation of Balanced Scorecard in German Speaking Countries, Management Accounting Research, 14(4)361-388.
https://youtu.be/5Psu_qW5FY8
HBSMPS-ABC and BSC Application: Real Company Examples - Chrysler (Automobile), Maplehurst (Bakery), Barclays (Bank), FMC (Diversified), Rockwater (Oil extraction).
(1-23 minutes- ABC)
(24-30 minutes - BSC)
(31-60 minutes – BSC Examples).
Drury, C., (2023) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
Atkinson, A.A., R.D.Banker, R.S.Kaplan, and S.M.Young(2001), 'Management Accounting', Prentice Hall Inc, NJ.
Chenhall, R. H., (2003), ‘Management Control Systems Design Within Its Organizational Context: Findings From Contingency-Based Research and Directions for the Future’, Accounting, Organizations and Society, 28, 127-168.
Shank, J.K., Govindarajan, V., (1992), ‘Strategic Cost Management: The Value Chain Perspective’, Journal of Management Accounting Research, volume 4, 179 – 197.
Drury, C., (2015) Management and Cost Accounting, (9th edition), Cengage Learning, Hampshire.
Hansen, D.R., and M.M.Mowen(2000), ‘Management Accounting’, South-Western College Publishing, Ohio.
Horngren, C.T., G.Foster, and S.M.Datar(2000), ‘Cost Accounting’, Prentice Hall International, Inc., NJ.
Horngren, C.T., A.Bhimani, G.Foster, and S.M.Datar(1999), 'Management and Cost Accounting.' Prentice Hall, Inc., NJ.
Zimmerman, J.L., (2003), ‘Accounting for Decision Making and Control.’McGraw-Hill, International Edition.
Drury, C., (2023) Management and Cost Accounting, (12th edition), Cengage Learning, Hampshire.
Edwards, R. (1952) ‘The pricing of manufactured products’, Economica, 19:298–307.
Guilding, C., Drury, C, and Tayles, M. (2005) ‘An empirical investigation of the importance of cost-plus pricing’, Managerial Auditing Journal, 20 (2): 125-137.
Hall, R.I. and Hitch, C.J. (1939) ‘Price theory and business behaviour’, Oxford Econ. Papers, 2:12-45.
Lucas, M. (2003) ‘Pricing decisions and the neoclassical theory of the firm’, Management Accounting Research, 14: 201-217. [An easier version is available at Management Accounting, June 1999:77 (6)].
Japanese Target Costing: A Historical Perspective Patrick Feil, Keun-Hyo Yook, Il-Woon Kim, International Journal of Strategic Cost Management/Spring 2004

Subject specific skills

Design effective reward systems in various contexts.
Set product prices and make product mix decisions in a multi-product environment.
Calculate product costs under different systems.

Transferable skills

Communication skills
Problem solving