Strategy, Performance Measurement and Corporate Governance

Carnegie Mellon University

United States of America, Pittsburgh

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Carnegie Mellon University

United States of America , Pittsburgh

Key Facts

Program Level

Master by Course Work

Study Type

Full Time

Delivery

On Campus

Application Fee

USD 75

Campuses

Main Site

Program Language

English

Start & Deadlines

Next Intake Deadlines22-Aug-2022

Apply to this program

Go to the official application for the university

Duration 2 year(s)

Tuition Fee

USD 50,320 / year

Next Intake 22-Aug-2022

Strategy, Performance Measurement and Corporate Governance

About

The course studies the role of managerial accounting systems in developing, communicating, and implementing an organization's strategy. Much of the course is focused on incentive issues throughout the organization, including the board of directors (corporate governance), top management team (executive compensation), division heads (investment, profit, revenue, and cost centers), and lower-level managers. Managerial accounting systems establish administrative procedures (e.g., strategic planning and budgeting), performance measures (e.g., revenues, costs, profits, ROI, EVA, variances from budget, the Balanced Scorecard, etc.), and contracts (both explicit and implicit contracts). "Controllability" is an important selection criterion for performance measures, although other considerations such as a desire to foster team incentives can also be important. Non-financial performance measures such as those advocated by "The Balanced Scorecard" can be useful both in compensating managers and in focusing the attention of managers throughout the organization on the firm's strategic objectives. When well-designed, these non-financial performance measures are leading indicators of future profitability. If incentive contracts are designed properly, they help mitigate moral hazard, adverse selection, and other conflicts of interest that stand in the way of successfully implementing a firm's strategy. When poorly designed, incentive contracts can be extremely dysfunctional. Part of the course revisits the idea of relevant costs in decision making--the right cost for a decision depends on the particular decision horizon. Activity-Based Costing is a useful tool in evaluating one's own relevant costs. Managers also need to have a good understanding of their competitors' relevant costs, so as to anticipate their competitors' likely strategic responses. This is a case-based class. The cases will usually follow a theoretically-oriented lecture that develops some of the underlying economic concepts and traditional accounting wisdom that can be applied to the case. However, the cases are more than an opportunity to repeat the ideas presented in lecture-they present an opportunity to refine and challenge the ideas presented in the lectures. We will also discuss related empirical research. The course is intended for anyone involved in developing, communicating, implementing, and evaluating an organization's strategy. Students who intend to have a career in corporate finance, operations management, general management, or consulting should find the course particularly valuable. Course objectives are: 1. To develop an understanding of the important economics tradeoffs involved in designing managerial accounting systems. 2. To analyze the role of managerial accounting information in a variety of contexts such as pricing, product mix, improving productivity, product design, performance measurement, and incentives. This course was previously titled Strategic Cost Analysis. (4/13-JG)

Requirements

Entry Requirements

GPA

3.41 Average

3.43 Median

3.03-3.76

Middle 80%

English Program Requirements

Candidates are required to demonstrate a level of competence in English to meet the admissions requirements of the university. You are required to take a TOEFL, IELTS, or Duolingo exam unless:

You attended an undergraduate institution, earning a bachelor’s degree, where the sole language of instruction was English.
You earned a graduate degree where the sole language of instruction was English. (Although not required, we do recommend that you take the English Language Proficiency exam.)

You must request that the official score be sent from the testing agency to our program for us to verify the score entered into the application. Request that the official score be sent to us using the following codes:

TOEFL Program Code: Institutional Code = 2074; Departmental Code = 02
- Pro Tip: The recommended TOEFL score is 25 on each section of the Internet-based test. The minimum TOEFL scores required to apply for admission are: Reading: 20, Listening: 20, Speaking: 20, Writing: 20
IELTS Program Code: Select Carnegie Mellon and the Tepper School of Business
- Pro Tip: The recommended IELTS score is 7 overall and 7 in each band. The minimum IELTS scores required to apply for admission are: Listening: 7, Reading: 7, Writing: 7, Speaking: 7, Overall Band: 7
Duolingo Program Code: Select Carnegie Mellon University – Tepper School of Business
- Pro Tip: The recommended Duolingo English Test (DET) score is 120 overall

Pro Tip: TOEFL and IELTS scores are valid for two years and must be valid at the time you submit your application.

Pro Tip: If you earned a degree from a non-U.S. institution, your academic documents should state that the sole language of instruction for the entire university was English in order to be eligible for a TOEFL/IELTS/Duolingo waiver. If your academic documents don’t include this, you should upload an official letter from the University Registrar indicating English as the mode of instruction for the entirety of the degree.