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Course 2018-2019 a.y.

20219 - ACCOUNTING AND CONTROL IN MNCS

Department of Accounting

Course taught in English


Go to class group/s: 31

CLMG (6 credits - I sem. - OP  |  SECS-P/07) - M (6 credits - I sem. - OP  |  SECS-P/07) - IM (6 credits - I sem. - OP  |  SECS-P/07) - MM (6 credits - I sem. - OP  |  SECS-P/07) - AFC (6 credits - I sem. - OP  |  SECS-P/07) - CLEFIN-FINANCE (6 credits - I sem. - OP  |  SECS-P/07) - CLELI (6 credits - I sem. - OP  |  SECS-P/07) - ACME (6 credits - I sem. - OP  |  SECS-P/07) - DES-ESS (6 credits - I sem. - OP  |  12 credits SECS-P/07) - EMIT (6 credits - I sem. - OP  |  SECS-P/07) - GIO (6 credits - I sem. - OP  |  SECS-P/07)
Course Director:
ANDREA DOSSI

Classes: 31 (I sem.)
Instructors:
Class 31: ANDREA DOSSI


Prerequisites

Students are expected to have basic knowledge of Financial accounting and Management control systems.


Mission & Content Summary
MISSION

The control process takes on added complexity in an international environment. The existence of multiple currencies in the financial aspects of business and the emergence of sophisticated international transfer pricing policies complicate financial control mechanisms. The geographic and the cultural distance that separates operations contributes to increase the complexity of controlling multinational operations. Furthermore, the balancing of local responsiveness, needed in order to meet country social, cultural and economic requirements, and global integration, needed in order to gain efficiency from both economies of scale and scope, requires to structure a flexible control systems. The course aims to analyze how the administrative mechanisms can support global management. More specifically, which mechanisms are better suited to proactively manage the different international strategies and organizational structures.

CONTENT SUMMARY

The programme is subdivided in three parts:

Multinational Accounting and Reporting Systems.

  • Consolidation of accounts and Group financial reporting.
  • Information flows, different national accounting standards and reporting uniformity.
  • Multinational Financial Reporting: problems and practices.
  • Exchange Risks and international transfer pricing policies: management, legal and fiscal aspects.
  • Multinational Performance Evaluation: local operating units vs local managers.
  • Performance Evaluation and Strategic Alignment in international companies.

The role of administrative mechanisms in MNC management.

  • The role of administrative mechanisms in the management of diversified multinational corporations.
  • Strategy and structure in an international environment: multinational strategies, global competitive advantages and worldwide organizational structures.
  • Corporate role and coordination of multinational enterprise: global strategic coordination, multinational integration of operations, local responsiveness.

Planning and Control Systems in Diversified Multinational Corporations.

  • Multinational Corporate Planning and Budgeting: the different approaches.
  • The role of multinational management accounting mechanisms.
  • Controlling the subsidiary: the different coordination and control mechanisms.
  • Multinational network and strategic roles of subsidiaries.
  • Connecting subsidiary role to the set of control mechanisms: toward a contingency approach.
  • Planning and control systems and internationalization process: a life-cycle perspective.

Intended Learning Outcomes (ILO)
KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...
  • Recognize the key elements of an international strategy and organizational structure.
  • Identify the relations between international strategy, structure and measurement of local vs global performance.
  • Interpret the interactions and trade-offs between international strategy, role of local subsidiary and performance measurement and control systems.
APPLYING KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...
  • Analyze a multinational financial reporting.
  • Evaluate local and global performance in diversified multinational corporations.
  • Discuss the evaluation of managerial performances in presence of inflation, exchange rate risks, transfer prices, uncontrollable factors.
  • Design multinational planning and control systems according to the different international strategy, structure and subsidiary role.

Teaching methods
  • Face-to-face lectures
  • Guest speaker's talks (in class or in distance)
  • Company visits
  • Case studies /Incidents (traditional, online)
  • Individual assignments
  • Group assignments
DETAILS

The learning experience of this course includes, in addition to face-to-face lectures, case discussions, group and individual works, real examples, company visits  and interactions with managers.

  • As we use case studies students deal with the identification and analysis of complex, open-ended issues.
  • Optional individual assignment is used for applying methodologies to real cases, so gaining real-life information to be discussed together in class.
  • Group assignment asks to study, analyze and present some research papers dedicated to a specific relevant topic. This is expected to enhance the ability to analyze complex materials, to identify the salient issues of a relevant topic and to elaborate an effective presentation to a well-educated audience. Further, it is usefull for gaining an understanding of how a research article is structured and which methodology is best for a peculiar topic/question (very useful also for the final thesis).
  • Company visits (last year 2: Campari and Maserati) are dedicated to know the international strategy, structure and business model of a complex multinational (typical made-in-italy) corporation and to have a structured discussion with managers about the issues in designing and using management control systems in the internatonal setting.
  • Guest speakers and company examples and cases are also a way for finding interesting internships.

Assessment methods
  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)
  •     x
  • Individual assignment (report, exercise, presentation, project work etc.)
  • x    
  • Group assignment (report, exercise, presentation, project work etc.)
  • x    
  • Active class participation (virtual, attendance)
  • x    
    ATTENDING STUDENTS

    With the purpose of evaluating knowledge and ability, the student assessment is based on three main components:

    Group assignment (group grade, 30% of the final grade) designed for the purpose of verifying the student ability to:

    • Recognize the key elements of an international strategy and organizational structure.
    • Identify the relations between international strategy, structure and measurement of local vs global performance.
    • Interpret the interactions and trade-offs between international strategy, role of local subsidiary and performance measurement and control systems.

    Final written exam (individual grade, 60% of the final grade), based on a mix of open questions and cases, which aims to assess the student’s learning level of the theoretical models, the main concepts and the ability to analyze and evaluate local and global performance in diversified multinational corporations and to design multinational planning and control systems according to the different international strategy, structure and subsidiary role.

    Optional individual assignment and class participation (individual grade, 10% of the final grade) which aims to assess the ability to apply methodologies and to discuss relevant issues of planning and control in multinational corporations.

    NOT ATTENDING STUDENTS

    With the purpose of evaluating knowledge and ability, the student assessment is based on one final written exam (individual grade, 100% of the final grade), based on a mix of open questions and cases.


    Teaching materials
    ATTENDING STUDENTS

    The course content refers to the diverse teaching materials (slides, articles, cases, etc..) that are made available through the website of the course (Bboard).

    NOT ATTENDING STUDENTS

    The course content refers to the diverse teaching materials (slides, articles, cases, etc..) that are made available through the website of the course (Bboard).

    Further non-attending student must choose one of the following optional textbooks:

    • D. CHOI, C.K. MEEK, International Accounting, Pearson, 2011.
    • V. GOVINDARAJAN, A.K. GUPTA, The quest for global dominance, San Francisco, Jossey-Bass, 2001.

    One of the questions of the written final examination refers , for non attending students, to the book chosen. The choice is emailed to instructor at least two weeks before the date of the exam.

    Last change 05/07/2018 15:17