Angelo Ditillo

Do environmental and task characteristics matter in the control of externalized local public services?: Unveiling the relevance of party characteristics and citizens' offstage voice

Purpose - The purpose of this paper is to investigate the mechanisms adopted by cities to control the provision of externalized public services and to explore the determinants of such control choices. Design/methodology/approach - The paper presents the results of a multiple case study based on the experiences of three cities and three public services (transport, solid waste collection and home care services for the elderly), where control mechanisms and their possible antecedents were analyzed. Findings - The results show that the control models found in the cases analyzed do not correspond to the “pure” patterns described in the private sector literature and that the factors identified by management control contributions do not seem to be exhaustive in explaining the configuration of control systems in the public sector. While environmental and task characteristics only partially explain the adoption of certain configurations of control, the features of the control systems seem to be rather influenced by variables that are related to party characteristics. Originality/value - The paper shows that the combinations of control mechanisms are more multifaceted than those presented in the literature, and that the factors identified in the private sector literature do not seem to explain comprehensively the configuration of control systems in the public sector.

Designing Management Control Systems to Foster Knowledge Transfer in Knowledge-Intensive Firms: A Network-Based Approach

Research on management control has emphasised the relevance of controls for knowledge integration on a project-by-project basis. This work contributes to this field by proposing a framework to explain how management control systems foster knowledge transfer between organisational units in knowledge-intensive firms. By combining network theory and knowledge network research, this study suggests that the design of management control systems should consider various forms of relationships between individuals (strong/weak, direct/indirect) that these systems activate and that are necessary to transfer various forms of knowledge (process, outcome, technology or opportunities) characterised by different levels of causal ambiguity and relatedness. An in-depth empirical analysis of a software firm and three of its projects shows that management controls may act as important mechanisms of knowledge circulation and that some principles reinforce this function. In particular, to achieve organisational knowledge transfer, enforceability of manuals and procedures, scalability of reviews and decisions, mobility induction of individuals, and multiplicity of roles and accountabilities are indicated as desirable design properties of control systems in knowledge-intensive firms.

Towards a More Comprehensive Framework for Sustainability Control Systems Research

Abstract Although companies are increasingly embracing the sustainability discourse in their external reporting and disclosures, little is known about how management control systems support sustainability within organizations. This is unfortunate, given the important role that properly designed Sustainability Control Systems (SCS) may play in helping firms to better face their social and environmental responsibilities. Starting from these premises, the aim of this essay is twofold. On the one hand, we present a review of the emerging stream of research on sustainability and management control mechanisms, in order to identify and discuss the link between the two. On the other hand, we try to illustrate the main unaddressed issues in this literature as a premise to exploring one possible way to advance research in this area. Specifically, we make a call for a more holistic approach to the study of SCS, which considers also their organizational and cultural dimensions in addition to their technical properties. A framework for informing future work on the topic is proposed, based on the concept of ‘control package’ (Malmi & Brown, 2008; Sandelin, 2008) complemented with notions from the complementarity-based approach developed in organizational economics (Grandori & Furnari, 2008; Milgrom & Roberts, 1995). By enhancing our understanding on how SCS operate as a package, the application of our framework should allow researchers to develop better theory of how to design a range of controls to support organizational sustainability objectives, control sustainability activities, and drive sustainability performance.

Audit team attributes matter: how diversity affects audit quality

Abstract How audit teams are structured and function plays a crucial role in determining the level of audit service quality. Despite this claim, little empirical research has been conducted on this effect. Using private data from two of the Big 4 audit firms, we fill this gap and document how diversity of audit teams influences audit quality. By combining the existing work in psychology and sociology with that in auditing, we develop our model by arguing that teams are composed not simply of single auditors but of sub-teams of individuals whose various combinations affect team performance. Starting from this premise, we study how the diversity of audit teams in terms of the different mix of work assigned to staff, seniors, managers, and partners influences audit quality and how this effect varies depending upon years of tenure. We also show that the proportion of leading auditors characterized by a common educational background and the percentage of female leading auditors affect audit quality. As an additional analysis, we examine how team diversity affects audit efficiency. The same elements found relevant for audit quality also affect audit efficiency.

Collaboration between firms

This chapter defines the various forms of collaboration established between firms. More specifically, the purpose is to give an overview of all the forms that collaborative agreements may take. Many firms increasingly cooperate with other firms to coordinate the production of complex products and the provision of composite services in uncertain and competitive environments. This cooperation is widely seen as producing important economic advantages to organizations. Different forms of cooperation have been described. However, little attempt has been made to provide an integrative framework to classify these forms and describe their legal, strategic, and organizational properties. Grandori and Soda classify them according to whether the relationships are formalized or not (due to the support of exchange or associational formal contracts), and whether they are centralized (there is a central coordinating firm) or parity based. Despite the diversity of interfirm relationships forms present some empirical regularities that are normally found in practice. Three elements encapsulate these consistencies: individual autonomy, resource pooling, and contracting.

How to organise firms’ collaboration

This chapter aims at understanding firm collaboration by describing how the underlying interaction is organized. The recognition of the hybrid nature of these organizational forms is another fundamental step towards the clarification of their control peculiarities. The growing importance of interfirm relationships in the last decades has motivated a rethinking of the logic of economic organization, that is, the existence of firms and the determinants of the choice between hierarchical governance, market governance, and hybrid governance. In fact, the organization of economic activities in practice appear to be increasingly moving away from the pure models of markets and firms towards hybrid models. These latter form a specific class of governance structures and are instantiated in a variety of cooperative interfirm arrangements that execute a broad range of activities that were previously completely carried out within organizations or through market exchanges. Notwithstanding the impressive set of organizational studies on hybrids referenced so far, this terrain is still a shifting one and the vocabulary is not well stabilized. Indeed, there is a sense of common knowledge regarding the concepts of both market, centered on the mechanics of supply and demand, and on the role of prices as key to its functioning, and firms, with the importance of hierarchical authority in sustaining activities and decision-making processes. On the contrary, the set of arrangements that rely neither solely on prices nor on authority for organizing transactions is broad and potentially confusing.

‘Fashionable’ control and information sharing practices of collaborating firms

A framework for analyzing case studies and providing some guidelines for designing accounting information networks and control systems is presented in this chapter. Data suggest that the collaborating firms that specialize in a particular function have access to others in the systems performing complementary tasks and this creates a level playing field within the network. Original modes of exchanging information may lead to new ways of doing business together, providing a source of competitive advantage. The availability of information on many aspects of the business facilitates more rapid responses to market opportunities. In contrast, the firms of the sample did not indicate that the sharing of management accounting information led to adversarial consequences, for example, the use of shared information for ones own advantage, without reciprocating, the exploitation to create superior bargaining positions, or, finally, in extreme situations, the utilization of shared information to activate a rival collaboration to the detriment of the original information provider. As a whole, data seem to suggest that collaborating partners activate networks in which a firm plays a central role in coordinating the activities of the counterparts and designs a network structure (the accounting information network) that provides an environment favorable for information to be generated and exchanged. The information exchanged in the network seems to be thicker than that condensed through the brokerage market, but is freer than that in the hierarchy.