...Accounting, Organizations and Society 28 (2003) 127–168 www.elsevier.com/locate/aos Management control systems design within its organizational context: findings from contingency-based research and directions for the future Robert H. Chenhall Department of Accounting and Finance, Monash University, Clayton, Victoria 3168, Australia Abstract Contingency-based research has a long tradition in the study of management control systems (MCS). Researchers have attempted to explain the effectiveness of MCS by examining designs that best suit the nature of the environment, technology, size, structure, strategy and national culture. In recent years, contingency-based research has maintained its popularity with studies including these variables but redefining them in contemporary terms. This paper provides a critical review of findings from contingency-based studies over the past 20 years, deriving a series of propositions relating MCS to organizational context. The paper examines issues related to the purpose of MCS, the elements of MCS, the meaning and measurement of contextual variables, and issues concerning theory development. A final section considers the possibility that contingency-based ideas could encompass insights from a variety of theories to help understand MCS within its organizational context. # 2002 Elsevier Science Ltd. All rights reserved. 1. Introduction The three purposes of this paper are to provide a review of empirical, contingency-based research as it has developed...
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...and Nichole Pelak for their helpful research assistance. The Harvard Business School, the University of Michigan Business School, and the Aspen Institute’s Initiative for Social Innovation through Business provided invaluable support for this project. Misery Loves Companies: Whither Social Initiatives by Business? Abstract Companies are increasingly being asked to provide innovative solutions to deep-seated problems of human misery. Organization and management scholarship can play an important role in understanding and guiding possible corporate responses. Theory and research to date have sought to reconcile possible corporate responses with economic premises about the purpose of the firm. Our goals in this paper are to reorient the debate and to spark new research about social initiatives by business. Acknowledging that firms already make such investments, we try to stimulate a fresh agenda for organizational scholarship in three ways. First, we depict the hold that economic reasoning has had on how organization theory conceives of the relationship between the firm and society. Second, we examine the consequences of this...
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...com/1176-6093.htm Research in management accounting innovations An overview of its recent development Nur Haiza Muhammad Zawawi Department of Accounting and Finance, University of Malaysia Terengganu, Kuala Terengganu, Malaysia and School of Accounting, La Trobe University, Melbourne, Australia, and Management accounting innovations 505 Zahirul Hoque School of Accounting, La Trobe University, Melbourne, Australia Abstract Purpose – The purpose of paper is to present a review of the literature on management accounting innovations (MAIs). Specifically, it explores recent developments in research on MAIs and offers suggestions for future research. The review differs from existing reviews by its specific focus on MAIs and the recent time period covered. In this paper, MAIs refer to the adoption of “newer” or modern forms of management accounting systems such as activity-based costing (ABC), activity-based management, time-driven ABC, target costing, and balanced scorecards. Design/methodology/approach – The paper presents a review of findings from journal articles published in 22 notable accounting journals. Findings – The review finds that research on MAIs has intensified during the period 2000-2008, with the main focus on exploring the extent to which a host of organizational and environmental factors influence the implementation and use of MAIs in organizations. In addition, research on MAIs indicates the dominant use of sociological theories and increasing use of empirical/field...
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...of Management Accounting Research Edited by Christopher S. Chapman, Anthony G. Hopwood and Michael D. Shields r 2007 Elsevier Ltd. All rights reserved Management Accounting and Operations Management: Understanding the Challenges from Integrated Manufacturing Allan Hansen and Jan Mouritsen Copenhagen Business School, Denmark Abstract: Innovations in operations management, like just-in-time, total quality management, automation, have produced a new manufacturing paradigm that challenges management accounting design and practices. The new manufacturing paradigm, which we conceptualise as integrated manufacturing, focuses upon the lateral flow of products and services, and thereby confronts management accounting ideals of hierarchical flows of information for planning and control. In this chapter, we take a closer look at management accounting research and the responses that have been made to the challenge from the new operational practices. We examine the extent to which changes in management accounting practices are observed, and the way in which design changes are recommended within organisations committed to the new manufacturing paradigm. Furthermore, we reflect upon the role of accounting as a management tool in integrated manufacturing, and on possible future research questions, so as to enrich our knowledge of the management accounting/operations management interface. Introduction Innovations in operations management (OM) have challenged management accounting...
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...The Social Responsibility of Business: A Review. Maz Demosthenous School of Commerce The Flinders University of South Australia GPO Box 2100 Adelaide South Australia 5001 Telephone: +61 8 82013896 Facsimile: +61 8 82012644 Email: Maz.Demosthenous@flinders.edu.au SCHOOL OF COMMERCE RESEARCH PAPER SERIES: 00-8 ISSN: 1441-3906 For many, the view that the main goal or purpose of business is to make as much money as possible is accepted as a matter of fact and is beyond debate. To go further and say that the social responsibility of a business is also just to make a profit is open to debate. The aim of this paper is to discuss the various views of the responsibility of business, and to consider where accounting fits in. In addition, to explore the ethical responsibilities that a corporation may have beyond making profits for its stockholders. The Friedman view Milton Friedman’s view is that in a capitalist economy, there is one and only one responsibility of business- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud (Friedman, 1983). When one is looking at the responsibilities of an individual or an organisation they must first examine their roles. The directors of companies have a fiduciary responsibility to act in the best interest of the shareholders. The managers are agents of the shareholders...
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...International Journal of Management Perspectives, ISSN: 1307-1629, 2008, 1(1), 49-70. The Effect of the External Auditors’ Ability to Assess Fraud Risk on Their Ability to Detect the Likelihood of Fraud Nahariah Jaffar* Faculty of Management, Multimedia University Arfah Salleh Graduate School of Management, Universiti Putra Malaysia Takiah Mohd Iskandar Faculty of Economics and Business Management, Universiti Kebangsaan Malaysia Hasnah Haron School of Management, Universiti Sains Malaysia ABSTRACT The Malaysian Approved Standards on Auditing, AI 240 on “Fraud and Error” (MIA, 1997) requires the auditor to assess the risk of fraud and error during the audit of financial statements. Based on the risk assessment, the auditor should design audit procedures to obtain reasonable assurance that misstatements arising from fraud and error that are material to the financial statements taken as a whole are detected. Inability of the external auditor to detect material misstatements, particularly intentional misstatements, may expose the external auditor to litigation. The present study aims to examine the effect of the external auditor’s ability to assess fraud risk on his/her ability to detect the likelihood of fraud. An experimental approach is adopted by sending case materials to audit partners and audit managers attached to auditing firms operating in Malaysia. The result shows that in a high fraud risk scenario, the external auditor’s ability to assess fraud risk...
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...JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH Volume Fifteen 2003 pp. 95–116 Practice Developments in Budgeting: An Overview and Research Perspective Stephen C. Hansen The George Washington University David T. Otley Lancaster University Wim A. Van der Stede University of Southern California Abstract: Practitioners in Europe and the U.S. recently have proposed two distinct approaches to address what they believe are shortcomings of traditional budgeting practices. One approach advocates improving the budgeting process and primarily focuses on the planning problems with budgeting. The other advocates abandoning the budget and primarily focuses on the performance evaluation problems with budgeting. This paper provides an overview and research perspective on these two recent developments. We discuss why practitioners have become dissatisfied with budgets, describe the two distinct approaches, place them in a research context, suggest insights that may aid the practitioners, and use the practitioner perspectives to identify fruitful areas for research. INTRODUCTION udgeting is the cornerstone of the management control process in nearly all organizations, but despite its widespread use, it is far from perfect.1 Practitioners express concerns about using budgets for planning and performance evaluation. The practitioners argue that budgets impede the allocation of organizational resources to their best uses and encourage myopic decision making and other dysfunctional budget games....
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...Journal of Management, Vol. 16, 175–194 (2005) DOI: 10.1111/j.1467-8551.2005.00453.x Revisiting Fayol: Anticipating Contemporary Management Lee D. Parker* and Philip A. Ritson *Corresponding author: Lee D. Parker, School of Commerce, Security House, North Terrace, The University of Adelaide, SA 5005 Australia Email: lee.parker@adelaide.edu.au This study argues that in classifying Fayol as a founding father of the Classical Management School, we have to some extent misrepresented this still important management theorist. The received Fayol portrayed in contemporary texts invariably emerges as a caricature of a much more insightful, complex, visionary and rounded management thinker. This study re-examines Fayol’s personal and career history, as well as the arguments presented in his original work, General and Industrial Management. It finds that he was a much more complex and multidimensional figure than his conventional stereotype today, and that his management theories embraced a wider spectrum of approaches and concepts than traditionally identified with the classical management school of thought. In marked contrast to his traditional portrayal, this study uncovers traces of ideas and concepts that anticipated aspects of the human relations movement, systems-based contingency theory, the movement towards greater employee involvement in decision-making and elements of knowledge management. Henri Fayol, the French industrialist and management thinker of...
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...1. Discuss the role of accounting and accounting information with regard to control and performance evolution of modern organizations. In you discussion you should consider the positive impact and limitations of accounting and accounting information on MCS. The use of accounting information had been started from the traditional cost accounting developments and has undergone many revolutionary attributes such as ROI measure, capital budgeting, agency theory and transaction cost economics. The primary objective of for–profit organizations is to maximize shareholder value. Thus, the results control idea would be to reward each individual employee for doing what s/he does to increase firm value. However, direct measurements of the individual’s contributions to value creation are rarely possible. Therefore, firms have to look for control alternatives. Most firms base their higher managerial level results controls on accounting measures of performance. That is accounting profits and returns and their components. Short-term accounting profit and return measures provide imperfect, surrogate indicators of changes in firm value. Management myopia is an almost inevitable side-effect of the use of financial results control system built on accounting measures of performance. Management myopia can be avoided at top management levels by holding these managers accountable for increasing market valuations. When markets are informed and efficient...
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...RESPONSIBILITY? Lance Moir Cranfield School of Management Lance Moir Cranfield School of Management Cranfield University Cranfield Bedford England MK43 0AL Tel: +44 (0) 1234 754374 Fax: +44 (0) 1234 752554 E-mail: l.moir@cranfield.ac.uk WHAT DO WE MEAN BY CORPORATE SOCIAL RESPONSIBILITY? There is an increasing focus by firms on examining their social responsibilities. For example, Business in the Community published ‘Winning with Integrity’ in November 2000. This has as part of its objectives ‘to produce materials and resources on how companies should measure and report their impact on society’ (Business Impact, 2000). It lists twenty such initiatives in various areas of furthering corporate social responsibility, not including its own report. Similarly, the World Business Council for Sustainable Development (WBCSD, 1999) seeks to develop a clear understanding of corporate social responsibility, including a matrix of corporate social responsibility indicators. But what is meant by Corporate Social Responsibility (‘CSR’)? Responsibility for what and to whom and who is calling for firms to be socially responsible? This article examines the broad development of the ideas behind CSR within the literature and some of the current attempts to define the social responsibilities of business. It starts by examining the debate about the nature of corporate social responsibility and current attempts to define CSR. It then looks at some theories to explain how and why business might...
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...degree of corporate complexity and risk are the main determinants of audit fees in the Jordanian environment. Unlike previous studies, however, variables such as corporate profitability, corporate accounting year-end and time lag between year-end and the audit report date appeared to be insignificant determinants of audit fees in the sampled companies. Key Words: * Audit fees, Emerging Economy, Jordan. S S cientific Journal of Administrative Development Vol.5 I.A.D. 2007 Dean College of Business Administration, Al-Ain University of Science and Technology, UAE. ** Freelance Financial Analyst, Jordan. *** Link Officer, National Health Service (NHS), UK. 84 Determinants Of Audit Fees: Empirical Evidence From Emerging Economy Introduction Although a number of studies have provided empirical evidence on the relationship between audit fees and the attributes of audited companies, most have tended to focus on developed economies (see for example: Australia: Francis, 1984; Francis and Stokes, 1986; Haskins and Williams, 1988; Craswell et al., 1995; Jubb et al., 1996; Houghton and Jubb, 1999; Craswell and Francis, 1999. Canada: Chung and Lindsay, 1988; Anderson and Zeghal, 1994. Ireland: Haskins and Williams, 1988. Japan: Taylor, 1997; Netherlands: Langendjik, 1997; New Zealand: Firth, 1985; Haskins and Williams, 1988;...
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...Compare China and Japan in Accounting Standard and Recent Events, Which country is drifting further from Confucianism Introduction Chinese and Japanese accounting system has been influenced by Confucianism long time ago, but Bloom and Solotko(2003) proposed that because of the role of the government in the accounting system, both countries China and Japan has went far away from the Confucianism. In this report, the researchers will compare the accounting regulation and corporate governance in both countries, and get the conclusion which country is drifting further from the Confucian origins. This report has been divided into four parts. The first part will talk about the definition of the Confucianism and the implication of the Confucianism to both countries China and Japan. The second part is going to discuss the relationship between China accounting system and Confucianism; the third part will focus on the relationship between Japan accounting system and Confucianism. The last pat will compare the two accounting systems, and meanwhile get the conclusion which country has went further from the Confucianism. Definition of Confucianism Confucianism was founded by Confucius who is the Chinese philosopher and the first raised the Master of Ceremonies. The master of ceremonies gradually developed into the ideological system, which the core is the benevolence, and it’s in the hierarchical structure of society over 2000 years (XingZhong 2000). It exerts a far-reaching...
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...Critical Perspectives on Accounting (1996) 7 , 409 – 435 RECONSIDERING THE ‘‘SOCIAL’’ IN POSITIVE ACCOUNTING THEORY: THE CASE OF SITE RESTORATION COSTS DEAN NEU AND CYNTHIA SIMMONS University of Calgary This paper seeks to challenge the hegemony of positive accounting theory explanations of managerial behaviour. We argue that the decontextualized perspective of positive accounting theory is limiting and that changing the perspective offers a more complete explanation of behaviour. Starting from the notion of social relations developed by Marx, we reinterpret positive theory variables as proxies for a subset of the social relations in which managers are embedded. From this perspective, a more inclusive explanation of behaviour can be obtained by considering the entire web of social relations that influence behaviour. To demonstrate the ‘‘cash value’’ of a social relations perspective, accounting for site restoration costs is used as an illustration. The results are consistent with a broad social relations perspective. ÷ 1996 Academic Press Limited Introduction ‘‘[I]t is clear there is a relation between firm’s accounting choice and other firm variables, such as leverage and size and the signs of the relations are mostly consistent across studies. Positive accounting research guided the search for empirical regularities and provided explanations for them. To date, there are no systematic alternative sets of explanations for those regularities articulated and tested...
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...resource functions and practices. The main reason behind this is that economy has changed from manufacturing based to knowledge based economy. Many organizations’ competitive advantage now stems more from their human assets (Bal et al., 2013). This concept of integrating business strategy and human resource management is called strategic human resource management where it gradually became well known in the 1980s (Azmi, 2011) This paper discusses evidences related to links between corporate strategies and human resource management and issues that needs to be identified for the link to work effectively. According to Liao (2005), “a strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage”. Whereas, strategic human resource management involves creating and applying a set of internally consistent guidelines and practises that safeguard a firm’s human capital, which directly contributes to the achievement of its corporate goals (Baird & Meshoulam, 1988). Bal et al. (2013) describe this approach of linking business concept and HRM practices as “bridging” between business strategy and utilization of its human resources. The main reason for the necessity of this linkage is that rather than HRM strategies being separate priorities, the integration allow employees to be managed more effectively allowing growth of the skill base of an organization (Holbeche, 2004). The theory of business strategy originates...
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...The problems with performance appraisal Introduction Formal performance appraisals form an integral part of overall performance management programs in many organisations. Indeed, for many decades performance appraisals have been a key method for monitoring employee performance and they often play a major role in promotion or salary increments. However, though appraisals continue to be widely used, there is significant and ongoing debate about the validity of results obtained, as well as their effectiveness in positively influencing employee productivity and performance. This paper examines performance appraisals in the modern organisation. It discusses the development of performance appraisal theory, the perceived problems with performance appraisal systems as well as the potential performance and productivity improvements that may be achieved with their use. OK! Performance Appraisals It is widely contended that many (if not most) organisations conduct regular employee performance appraisals (Gliddon 2004; Varma & Pichler 2007). Thus, it is understandable that there is a very large body of literature around the subject (Schraeder & Simpson 2006). Indeed DeNisi and Pritchard (2006, p. 253) state that ‘performance appraisal has been the focus of considerable research for almost a century’. Yet there is surprisingly little consensus on any aspect of performance appraisals, not merely in terms of how they should be constructed or conducted, but even whether...
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