Subject and contents of the course
This course aims to introduce students to the issue of management control systems in energy companies. Students will learn how to model a decision-making problem and compare business alternatives, in the planning phase, interpret data and deviations, in the control phase. Students will learn and apply methodological instruments to deal with different elements of complexity that characterize business choices in companies competing in the energy sector: high level of uncertainty, existence of multiple stakeholders, coexistence of different objectives (from an economic, environmental, social and technological perspective).
Description of the topics
Topic 1: Objectives, requirements and components of a management control system. Functions, components and design variables of a management control system. Key requirements against which evaluating the effectiveness of a management control system.
Topic 2: Economic and financial ratios. Relative and absolute indicators based on annual reports. Financial indicators based on stock market analysis. Strengths and weaknesses of different types of indicators.
Topic 3: Discounted Cash Flow Techniques. Evaluation of the economic value of a company or an organizational unit, calculation of Net Cash Flows and Terminal Value, strategic options.
Topic 4: Non-financial indicators, balanced scorecard and dashboards. Non-financial indicators (timeliness, quality and service, environment and society, productivity, flexibility, resources). Information protocols. Strengths and weaknesses of different types of indicators. Dashboards of indicators.
Topic 5: Targets setting and budgeting process. Components of a budgeting system. Explicit and implicit targets. Links between budgeting and risk management processes.
Topic 6: Performance management for organizational units and products. Information needs and reporting tools at different organizational levels. Transfer prices. Activity-based management systems.
Course organization and examination
Classes includes both theoretical lessons and practice sessions. Lectures cover about 45 hours and are based on participative approaches in order to ensure students’ involvement in the learning process. Practice sessions cover about 48 hours and consist of "case studies" and practical exercises.