Aapo Länsiluoto

Collective action in the implementation of a “greener” performance measurement system

Purpose – The purpose of this paper is to investigate how different actors influenced the implementation of an environmental management system (EMS) and a performance measurement system (PMS) in a case company when the systems are eventually integrated. Another purpose is to illustrate how the frameworks of Gibson and Earley and Lovaglia et al. can be utilized to investigate the implementation of different management systems in practice.Design/methodology/approach – This paper is an interpretative case study, which utilizes qualitative methods such as semi‐structured interviews and internal documents.Findings – The results indicate the importance of maintaining a separation between the power and status of an actor in EMS and PMS implementation processes, and the ways in which the power and status of actors in the EMS and PMS implementation differed. The status and role of an actor can change although the power may be static during the implementation of different management systems. Therefore, the paper co...

Internal control effectiveness – a clustering approach

Purpose - – This study aims to examine and visualize the adopted internal control structure and effectiveness in firms and present a typology of firms. Control structure and effectiveness are measured based on the assessment of management, rather than using reported material weaknesses as most studies do. This type of evaluation is more purposeful for firms that do not apply the Sarbanes-Oxley Act. Internal control frameworks provide only broad guidance concerning internal control concepts, leaving the details to the adopting firms. Design/methodology/approach - – The survey data (from 741 CEOs) are clustered using the self-organizing map, a visual artificial neural network approach. A three-dimensional effectiveness proxy is used. Findings - – The analysis reveals four alternative types of internal control effectiveness in firms and visually presents how the components of the internal control structure are associated with each one. A typology of internal control structure and effectiveness is then created. Practical implications - – The findings suggest that there are interrelated, but not straightforward, relationships between internal control variables and that there is a link between some of them and higher internal control effectiveness in practice. These findings have important implications for those responsible for improving or assessing internal control, such as management, personnel and internal and external auditors. Originality/value - – This paper uses a clustering approach to create a typology for alternative types of internal control structure and effectiveness, based on data from actual firms. Instead of using material weaknesses as a measure, this study uses managers’ own assessments of internal control effectiveness.

Collective identity, institutional logic and environmental management accounting change

Purpose The purpose of this paper is to examine how collective identity and institutional logic affect the design and use of an environmental performance measurement system. Design/methodology/approach The authors use a qualitative case study with abductive theorizing and empirical data obtained through semi-structured interviews, observation and document analysis. Findings The new environmental measures were reshaped by aligning them with the existing and dominant collective identity in the case organization – in other words, cost savings and profitability. Moreover, the institutional logic forced the environmental measures to remain as non-strategic and non-bonus criteria in favour of traditional financial measures. Originality/value Thornton and Ocasio’s (2008) institutional logic is applied and its potential for analyzing change in environmental accounting is shown. The paper illustrates how collective identity and institutional logic are important mechanisms reshaping environmental performance measurement design and use, when the existing collective identity is reproduced.

Integrating greenness into a balanced scorecard in a food processing company

Purpose – The purpose of this paper is to investigate how and why a case company integrated an environmental management system (EMS) into a performance management system (PMS), specifically a balanced scorecard (BSC).Design/methodology/approach – This interpretative case study utilized qualitative methods in semi‐structured interviews, internal documents and e‐mails.Findings – The company integrated its environmental measures into the process perspective in its BSC. The integration centralized its fragmented PMS, stimulated its strategic control and complemented its financial reporting. This integration also crystallized the causality between the companys environmental actions and financial performance. Therefore, the integration enabled improvements to environmental performance and strengthened the finance‐oriented culture of the company.Research limitations/implications – The study has general limitations associated with the qualitative methods used.Originality/value – The paper shows that environmenta...

Performance measurement systems and environmental uncertainty effect on profitability

This study analyses how the changes in financial and non-financial measures, the scope of PMS and environmental uncertainty are associated with financial performance in accounting information system AIS. The empirical data was collected by a survey which was sent to 464 manufacturing companies with over 50 employees. We received 98 response rate 21.1% utilisable responses from the respondents with financial responsibility i.e., CEOs and CFO. According to statistical analysis, environmental uncertainty, PMS change and scope of PMS have an interactive association with performance. This association was found only after classifying aggregate PMS into three perspectives, i.e., customer, internal business process and employee. The highest performance occurred during changes in financial PMS, the emphasis on the customer or employee internal business process perspectives under low high environmental uncertainty.

Linkages between the Elements of Management Control Systems in a Non-Profit Organization

This qualitative case study examines the emergence of MCS package. We apply the MCS package framework of [Malmi, T. and Brown, D.A. (2008) Management control systems as a package-Opportunities, challenges and research directions, Management Accounting Research, Vol. 19, Iss. 4, pp. 287-300] and investigate the linkages between different control elements of MCS package. The control elements of MCS package, particularly governance structures and cybernetic systems became often overlapping and redundant. All the control elements remained in the MCS package when they were once constructed. Even tough a large number of cybernetic controls (i.e. balanced scorecard, budgets, quality management system; EFQM) were applied, only one non-financial measure was crucial at the time. Also informal control system outperformed two official cybernetic control elements used. Different control elements of MCS package were linked to each other causing complexity and challenges to manage MCS package as a one coherent system. This might be a challenge if ownership and governance structures are unclear.