Management Control Systems: Performance Measurement, Evaluation and Incentives 3rd Edition

Bank of the Desert, for the year ending December 31, 2000 Branch Number Branch Age (Years) Total Deposit Balances ($000) Retail Accounts Non-Retail Accounts Cross Sell Accounts ATM/Debit Count Checkin g Count Savings Count Loan Count NIB Count Other Count ATM/Debit Balance Checking Balance Savings Balance NIB Balance Other Balance Loan Balance ATM/Debit Profit Checking Profit Savings Profit NIB Profit Other Profit Loan Profit Total Profit from Retail Customers HH Served # Sales (Total)

Case Matrix Case for use in Chapter: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Integrative Case? Leos Four-Plex Theatre

P rofessor Kenneth A. Merchant wrote this t eaching note as an aid to instructors using the Leos Four-Plex Theater case. Marshall School of Business University of Southern California Leos Four-Plex Theater Teaching Note Purpose of Case This case is intended as an in-class,

Marshall School of Business University of Southern California Axeon N.V. Teaching Note Purpose of Case The Axeon N.V. case was written to illustrate the effects of a management control system and the supporting management processes on one specific, major

© Pearson Education Limited 2012 Harvard Business School 5-198-104 March 10, 1998 ALCON LABORATORIES, INC.5 Purpose of Case The Alcon Laboratories case was written to illustrate a control system in a research laboratory, one of the most difficult control settings. Control is difficult in research

Marshall School of Business University of Southern California Controls at the Bellagio Casino Resort Teaching Note Purpose of Case The Controls at the Bellagio Casino Resort case was designed with several purposes in mind. First, it illustrates a

This note was prepared for the sole purpose of aiding classroom instructors in the use of The Lincoln Electric Company, H BS No. 376-028. It provides analysis and questions that are intended to present alternative approaches to

154 PCL: A Breakdown in the Enforcement of Management Control The Asia Case Research Centre teaching notes are available free of charge from the Asia Case Research Centre website for instructors who register. Go to www.acrc.org.hk to register. © Pearson Education Limited 2012

This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London School of Econom-ics) for the sole purpose of aiding classroom instructors in the use of

161 Sunshine Fashion: Fraud, Theft and Misbehavior Among Employees The Asia Case Research Centre teaching notes are available free of charge from the Asia Case Research Centre website for instructors who register. Go to www.acrc.org.hk to register. © Pearson Education Limited 2012

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Fit Food, Inc. case. Marshall School of Business University of Southern California Fit Food, Inc. Teaching Note Purpose of Case The Fit Food, Inc. (FFI) case

This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London School of Economics) for the sole purpose of aiding classroom instructors in the use of the Diagnostic Products Corporation case. I t p rovides analysis and questions t hat

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Game Shop, Inc. case. Marshall School of Business University of Southern California Game Shop, Inc. Teaching Note Purpose of Case This case describes an unusual, innovative

Marshall School of Business University of Southern California Wongs Pharmacy Teaching Note Purpose of Case This case was designed to contrast with the Leos Four-Plex Theater case. Like the theater case, it is intended as an in-class, warm-up case on the first day of

R esearch Assistant David P. Huelsbeck and Professor Kenneth A. Merchant prepared this case as a basis for class discussion rathe r than to illustrate either effective or ineffective handling of an administrative situation. Marshall School of Business University of Southern California A210-02-TN Family Care Specialists Medical Group,

P rofessors Kenneth A. Merchant and Wim A. Van der Stede wrote this teaching note as an aid to instructors using the AirTe x A viation case. Marshall School of Business

Marshall School of Business University of Southern California Kranworth Chair Corporation Teaching Note Purpose of Case The Kranworth Chair Corporation (KCC) case describes a company that is making an important transitionfrom a functional organization structure to one that is divisionalized. This transition allows the case to be

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Toyota Motor Sales, U.S.A., Inc. case. Copyright 1998 by Kenneth A. Merchant. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any

208 Marshall School of Business University of Southern California Zumwald AG ERRATUM Instructors using the Zumwald AG case from the first print of the 3rd Edition of the

Marshall School of Business University of Southern California Global Investors, Inc. Teaching Note Purpose of Case This case was written to illustrate a transfer pricing problem in a service setting, here an

Harvard Business School 5-187-059 October 28, 1986 Citibank Indonesia Teaching Note Purpose of Class The Citibank Indonesia case (9-185-061) is intended to allow students to discuss some of the important issues related to the

Harvard Business School 5-190-199 May 17, 1990 HCC Industries, Inc. Teaching Note Purpose of Case The HCC Industries case was written to motivate a discussion of the relationships between budget targets,

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Patagonia, Inc. case. Marshall School of Business University of Southern California Patagonia, Inc. Teaching Note Purpose of Case This case was written with several purposes in mind. One was

Marshall School of Business University of Southern California VisuSon Inc. Teaching Note Purpose of Case The VisuSon, 1nc. (VSI) case was written to illustrate a pure planning (forecasting) application of budgetingthe pro forma use of the financial statement format. The case requires students

P rofessors Kenneth A. Merchant and Wim A. Van der Stede wrote this teaching note as an aid to instructors using the Private F itness, Inc. case. Marshall School

Marshall School of Business University of Southern California Harwood Medical Instruments PLC Teaching Note Purpose of Case The Harwood Medical Instruments case was written in response to requests from instructors who want

Marshall School of Business University of Southern California Superconductor Technologies, Inc. Teaching Note Purpose of Case This case describes the compensation and incentive plans used by a high-technology company for its top-30 managers. The company is unusual in that it has been in business

Marshall School of Business University of Southern California Tsinghua Tongfang Co. Ltd. Teaching Note Purpose of Case This case was written to illustrate the control systems used at upper management

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Raven Capital LLC case. Marshall School of Business University of Southern California Raven Capital, LLC Teaching Note Purpose of Case The Raven Capital case was written to illustrate

Marshall School of Business University of Southern California Behavioral Implications of Airline Depreciation Accounting Policy Choices Teaching Note Purpose of Case It seems obvious that firms choices of accounting policies will affect

Marshall School of Business University of Southern California Las Ferreterías De México, S.A. de C.V. Teaching Note Purpose of Case This case was written to illustrate some of the basic problems with

Marshall School of Business University of Southern California Rev. 10-28-06 Industrial Electronics, Inc. Teaching Note Purpose of Case This case, which is really a short vignette, was written primarily for exam purposes in situations where the examination time is short.

Marshall School of Business University of Southern California Rev. 4-28-11 Haengbok Bancorp Teaching Note Purpose of Case The Haengbok Bancorp case raises the issue as to whether the activities of bank lending officers should be monitored and motivated using a results control system built

Marshall School of Business University of Southern California Berkshire Industries PLC Teaching Note Purpose of Case The Berkshire Industries PLC case was written to illustrate the use of economic profit in a performance

Marshall School of Business University of Southern California Catalytic Solutions, Inc. Teaching Note Purpose of Case The Catalytic Solutions, Inc. (CSI) case was written to motivate a class discussion about some issues commonly related to the design of

Marshall School of Business University of Southern California Atlanta Home Loan Teaching Note Purpose of Case This case was written as an example of an extreme control failure. It can

This note was prepared by Professor Robert S. Kaplan for the sole purpose of aiding classroom instructors in the use The case provides excellent opportunities to discuss Board responsibilities, how the Board should interact with the CEO, and how

Marshall School of Business University of Southern California Statoil Teaching Note Purpose of Case This case describes the innovative, even radical, management systems of a company that combines the major elements of Beyond

Marshall School of Business University of Southern California A203-11-TN Rev. 9-15-04 Olympic Car Wash Teaching Note How large should the bonus pool be for the Aalst location? One possible solution Flex the budget based on number of hours of good weather. Budget

Marshall School of Business University of Southern California Southern California Edison Teaching Note Purpose of Case The Southern California Edison (SCE) case motivates a discussion of whether companies should make adjustments for

P rofessors Kenneth A. Merchant and Wim A. Van der Stede wrote this teaching note as an aid to instructors using the Beifan g Chuang Ye Vehicle Group case. Marshall School of Business University of Southern California

P rofessor Kenneth A. Merchant wrote this teaching no t e as an aid to instructors using the Hoffman Discount Drugs, Inc. case. Marshall School of Business University of Southern California Hoffman Discount Drugs, Inc. Teaching Note Purpose of Case The Hoffman Discount Drugs case was

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Formosa Plastics Group case. Marshall School of Business University of Southern California Formosa Plastics Group Teaching Note Purpose of Case The Formosa Plastics Group (FPG) case describes the control system

Marshall School of Business University of Southern California Bank of the Desert Teaching Note Purpose of Case The Bank of the Desert (BoD) case was written to provide students with

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Vector Aeromotive Corporation case. Marshall School of Business University of Southern California Vector Aeromotive Corporation Teaching Note Purpose of Case This case introduces students to the

This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London School of Economics) for the sole purpose of aiding classroom instructors in the use of the Golden Parachutes case. It provides analysis and questions that are intended to present

Marshall School of Business University of Southern California Armco, Inc.: Midwestern Steel Division Teaching Note Purpose of Case The Armco case was designed to illustrate a performance measurement system with measures cascading from strategic priorities down to the lowest organization

This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London School of Economics) for the sole purpose of aiding classroom instructors in the use of the Pacific Sunwear of California, Inc. case. I t provides analysis and questions

Marshall School of Business University of Southern California Entropic Communications, Inc. Teaching Note Purpose of Case The Entropic Communications case was written to illustrate the process of implementing a formal enterprise risk

This note was prepared by Professor Paul Healy for the sole purpose of aiding classroom instructors in the use o f Financial Reporting Problems at Molex, Inc., HBS No. 105-082. It provides analysis and questions that

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Don Russell: Experiences of a Controller/CFO case. Marshall School of Business University of Southern

Professor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Desktop Solutions, Inc. (A) and (B) case. Marshall School of Business University of Southern California Desktop Solutions, Inc. (A) and (B) Teaching Note Purpose of Case

Professors Kenneth A. Merchant and Wim A. Van der Stede wrote this teaching note as an aid to instructors using the Landale PLC case. Copyright 2003 by Kenneth A. Merchant and Wim A. Van der Stede. All rights reserved. No part of

Marshall School of Business University of Southern California Two Budget Targets Teaching Note Purpose of Case The purpose of this case is to motivate a discussion of a real situation where a manager created two budgets, one with a relatively aggressive performance target which he communicated

Marshall School of Business University of Southern California Conservative Accounting in the General Products Division Teaching Note Purpose of Case This case was written to motivate an ethical discussion of earnings management activities. The example presented here is different from

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using t he Education Food Services at Centra l M aine State University case. Marshall School of Business University of Southern California

P rofessors Kenneth A. Merchant and Wim A. Van der Stede wrote this teaching note as an aid to instructors using The Sales A cceleration Program case. Marshall

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the Loctite de Mexico, S.A. de C.V. case. Marshall School of Business University of Southern California Loctite de Mexico, S.A. de C.V. Teaching Note Purpose of Case The Loctite

This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London Marshall School of Business University of Southern California The Expiring Software License Teaching Note Purpose of Case This case was written to

Marshall School of Business University of Southern California Rev. 05-26-11 Lernout & Hauspie Speech Products Teaching Note Purpose of Case The Lernout & Hauspie Speech Products (L&H) case tells a true story (with

P rofessor Kenneth A. Merchant and Research Assistants Lay Khim Ong and Liu Zheng prepared this teaching note as an aid to Marshall School of Business University of Southern California ConAgra Grocery Products Company Teaching Note Purpose of Case The ConAgra Grocery Products

Harvard Business School 5-398-124 April 24, 1998 Lincoln Electric: Venturing Abroad Teaching Note Case Background and Overview Case Structure The case begins with a brief introduction of the trigger issue, which questions whether

Marshall School of Business University of Southern California TECO Electric & Machinery Co. Ltd. Teaching Note Purpose of Case The TECO case was written with two purposes in mind. First, it illustrates the functioning of a control system in an arguably

This note was prepared by Professors Kenneth A. Merchant (University of Southern California) and Wim A. Van der Stede (London School of Economics) for the sole purpose of aiding classroom instructors in the use of the Kooistra Autogroep case. It provides analysis and questions that are intended to present

P rofessor Kenneth A. Merchant wrote this teaching note as an aid to instructors using the City of Yorba Linda case. Marshall School of Business University of Southern California City of Yorba Linda Teaching Note Purpose of Case The City of Yorba

Marshall School of Business University of Southern California Waikerie Co-operative Producers Ltd. Teaching Note Purpose of Case This case was written to illustrate typical issues faced in controlling a co-operative. Co- operatives are

473 This note was prepared by Professor Robert S. Kaplan for the sole purpose of aiding classroom instructors in the use of Boston L yric Opera, HBS No. 101-111. It provides analysis and questions that are intended

Marshall School of Business University of Southern California University of Southern California: Responsibility Center Management System Teaching Note Purpose of Case This case was developed to illustrate some of the issues involved with

Marshall School of Business University of Southern California Puente Hills Toyota Teaching Note Purpose of Case This case can be used to motivate discussions of a number of topics, including

P rofessors Kenneth A. Merchant and Wim A. Van der Stede wrote this teaching note as an aid to instructors using the Houston F earless 76, Inc. case. Marshall School of Business University of Southern California Houston Fearless 76, Inc. Teaching

This note was prepared by Professor Kenneth A. Merchant for the sole purpose of aiding classroom instructors in the use of The P latinum Pointe Land Deal case. It provide s analysis and questions that are intended to

3 Contents Chapters Pages I Introduction 1. Introduction 6 2. Model Syllabi 9 3. Case Matrix 70 4. The Case Method of Instruction: Suggestions for Students 75

Income Statement 2008 (Pro Forma) 9 Months Ended 9/30/08 2007 2006 Revenues (net) 59,766$ 44,227$ 52,994$ 47,443$ Cost of Goods Sold 27,269 20,224

Q1 Revenue Percentage 25.5% Q2 Revenue Percentage 24.0% Q3 Revenue Percentage 24.5% Q4 Revenue Percentage 26.0% 100.0% Base Revenue (year prior to 1st) 37,880$ Based Gross Margin Percentage 48.0% Fixed Mfg. Costs Percentage 35.0% Base Selling Expense Percentage 19.0% Expected Annual Growth Rate 11.0% Annual Depreciation Percentage 16.0% Other Assets Turnover Percentage 1200.0% Base Accumlated Amortization % 36.0% Annual Amortization

Introduction One constant in the teaching of virtually all courses in management control systems (MCSs) is their heavy use of the case method of instruction. Even instructors who are most comfortable lecturing and/or who like to describe the management

9 Model Syllabus 1 Accounting 476Performance Measurement Issues Leventhal School of Accounting, University of Southern California Professor Kenneth A. Merchant Office HOH 606 Telephone (213) 821-5920 E-mail kmerchant@marshall.usc.edu Class Hours T/Th 2:003:50 p.m. Classroom ACC 310 Office Hours By appointment.

20 Model Syllabus 2 The London School of Economics and Political Science Department of Accounting AC310 Advanced Managerial Accounting Module 2 Michaelmas Term (Weeks 610) Management Accounting in its Organizational Context: The Function of Management Control Systems Professor Wim A. Van der Stede w.van-der-stede@lse.ac.uk tel. 020 7955 6695 Introduction

25 Model Syllabus 3 Accounting 537Management Control Systems Marshall School of Business, University of Southern California Professor Kenneth A. Merchant Office HOH 606 Telephone (213) 821-5920 E-mail kmerchant@marshall.usc.edu Class Hours T/Th 12:301:50 p.m. Classroom JKP 202 Office Hours By appointment.

45 Model Syllabus 4 The London School of Economics and Political Science Department of Accounting AC411 Accounting, Strategy and Control Professor Wim A. Van der Stede w.van-der-stede@lse.ac.uk tel. 020 7955 6695 Introduction This course is focused on the study of the

53 Model Syllabus 5 Accounting 537Management Control Systems (Evening) Marshall School of Business, University of Southern California Professor Kenneth A. Merchant Office HOH 606 Telephone (213) 821-5920 E-mail kmerchant@marshall.usc.edu Class Hours Tuesday, 6:309:30 p.m. Classroom JKP 202 Office Hours By appointment.

Marshall School of Business University of Southern California A202-01 Rev. 8/20/02 The Case Method of Instruction: Suggestions for Students All teaching methods are aimed at producing learning. Learning occurs when someones skills, knowledge, or beliefs change, more than temporarily, because of an encountered situation. Most students

Student workbook for VisuSon Inc. Case A210-01 Many cells in this workbook have been protected to prevent accidental alteration of formulas and values. Unprotected cells have been highlighted in light green. To alter protected cells, use the password "visuson". Total % Var. % Discr. Var. Non- Discr. Sales Promotion Funding 1,972