Performance Management

Introduction

The Performance Management course focuses on how organizations use management information to make decisions, plan, and control their development over time. Organizations’ strategic priorities are based on uncertain assumptions about the future, and these assumptions must be continuously evaluated in light of actual resource use and achieved results. Performance management provides a framework for analyzing such relationships and for monitoring whether the organization is moving in the desired direction.

For many organizations, both in the private and public sectors, this is done through setting objectives and identifying indicators combined with financial analyses. A central part of the course therefore examines how information about costs, capacity, and activity can be used to assess profitability, efficiency, and value creation. Students work with cost behavior, cost estimation, and costing methods, including activity-based costing (ABC), as a foundation for decision support.

The course further addresses planning and follow-up through budgeting, variance analysis, and responsibility centers, and demonstrates how these elements form part of organizations’ management and control systems. Performance measurement and reporting are used to evaluate goal achievement and to provide feedback to decision-makers, and are considered in light of the organization’s value creation and responsibility toward various stakeholders. Frameworks such as the Balanced Scorecard and Simons’ Levers of Control are included as structures for organizing and interpreting management information, and for analyzing how different control mechanisms influence decisions, incentives, and behavior.

Course content

Part 1: Perspectives on Performance Management

• Financial management and organizational control
• Performance management and management by objectives and indicators
• Key management control concepts
• Dynamic control

Part 2: Management by Objectives and Indicators

• Management-relevant information
• Financial metrics
• Development of control models for management 
• Organization-specific performance management
• Managing organizations’ social responsibility through objectives
• Forecast-based management

Part 3: Activity- and Cost Management

• Cost analysis – concepts
• Analysis of the value contribution of decisions
• Activity-Based Costing (ABC)
• Target costing, lifecycle analysis, and benchmarking
• Operational efficiency improvement

Part 4: Budgeting and Simulation

• The role of the budget in management by objectives
• The relationship between budgeting and accounting
• Profit budgeting
• Cash flow and balance sheet budgeting
• Budget simulation

Disclaimer

This is an excerpt from the complete course description for the course. If you are an active student at BI, you can find the complete course descriptions with information on eg. learning goals, learning process, curriculum and exam at portal.bi.no. We reserve the right to make changes to this description.