Chris Akroyd

The roles of management control in a product development setting

Purpose - The purpose of this paper is to examine the ways in which management control is enacted in a product development setting, to provide new insights into the different roles that control can play in this context. Design/methodology/approach - A nine-month, in-depth field study was carried out at a subsidiary of an Australasian multinational firm which operates in the consumer foods industry. A participant observation approach was used to collect field notes and documents from the organisation, which were analysed through the lens of ethnomethodology. Findings - The results indicate that the role of management control during product development is mainly focused on reducing uncertainty at each stage and promoting goal congruence at the decision gates. The authors argue that this helps explain why management control has a positive effect in a product development setting. Research limitations/implications - The implication of this finding is that the role of management control changes during product development due to the involvement of different organisational members (communities of practice) and the activities that they carry out. This helps build a more holistic understanding of control in product development. As this is a field study of a specific company, the findings are not generalizable to other companies or settings. Future research needs to investigate other possible roles which management control may play in this context. Originality/value - The paper extends the research in this area by showing how and why management control can take on multiple roles in practice.

Core values as a management control in the construction of “sustainable development”

Purpose - – This paper aims to examine a management control constructed by senior managers, a core value focused on sustainability, as it travels through time and space. The criticality of sustainable development suggests the need to understand the effects that core values have on organisational actions. Design/methodology/approach - – A case study methodology carried out at a multinational organisation is used. This analysis was informed by an actor-network theory which allowed placing the organisation’s sustainability focused core value at the centre of this research. Findings - – It was found that management control, in the form of a sustainability-focused core value, took on an active role in the case organisation. This enabled the opening of space and time that allowed actors to step forward and take action in relation to sustainable development. It is shown how the core value mobilised individual actors at specific points in time but did not enrol enough collective support to continue its travel. The resulting activities, though, provided a construction of sustainable development within the organisation more in line with traditional profit-seeking objectives rather than in relation to sustainability objectives, such as inter- and intra-generational equity. Research limitations/implications - – These findings suggest possibilities for future research that examines the active role that management controls may take within sustainable development. Originality/value - – This paper shows the active role a management control, a sustainability focused core value, took within an organisation. This builds on the research that examines management control in relation to sustainability issues and sustainable development as well as the literature that examines core values.

A revenue management perspective of management accounting practice in small businesses

Purpose - – The purpose of this paper is to develop a framework for the systematic examination of management accounting practices in small businesses using a revenue management perspective. This highlights the multi-faceted nature of size as a contextual factor and emphasises the role of management accounting in supporting profit-oriented decision-making, rather than its traditional role of co-ordination, control, and accountability. Design/methodology/approach - – The framework is theoretically derived from the management accounting, revenue management, and small business literature. An illustrative case study of a small fast-food business is presented to demonstrate the applicability of this framework to practice. Findings - – The paper identifies that various dimensions of business size have different and sometimes opposing effects on management accounting practices. Given heterogeneity is a common feature of small businesses, the framework considers alternative specifications of the size contingency variable. Research limitations/implications - – The synthesis of small business characteristics and revenue management perspective offers a more incisive understanding of what has traditionally been considered a simple practice. The case study illustrates some of the influences of small business characteristics identified in the framework. Given its narrow scope, the findings are used for theorisation rather than offering generalisable results. Further cross-sectional comparisons of small businesses are needed to confirm size influences. Practical implications - – The framework can assist practitioners to gauge the strengths and weaknesses of their management accounting practices and can help assess the value of adopting more sophisticated management accounting practices, given their particular business environment. A synthesis of these small business attributes can help practitioners identify key barriers to implementation. Originality/value - – The revenue management perspective and the inclusion of key characteristics of small businesses provide a new approach to evaluating management accounting practices in small businesses.

The MCS package in a non-budgeting organisation: a case study of Mainfreight

Purpose - Budgets are commonly viewed as a central component of management control systems (MCS). The beyond budgeting literature argues that managers can develop other controls to replace budgets. The purpose of this paper is to examine the MCS package of an organisation which has never in its history had a traditional budget. Design/methodology/approach - The authors carry out an ethnomethodology informed case study at Mainfreight, a large multinational logistics company headquartered in New Zealand. Data were collected from interviews with managers and accountants, internal company documents, published corporate histories, a company presentation, the corporate Web site and site visits. Findings - The authors found that Mainfreight’s MCS package was explicitly designed based on cultural and administrative systems which supported the planning, cybernetic and reward systems managers used to monitor key drivers of short-and long-term performance with a focus on profitability. Research limitations/implications - The implication of the finding is that a more holistic view of the MCS package is necessary to understand how control is achieved within organisations that have moved beyond budgeting. Practical implications - The authors show that organisations can operate without traditional budgets and still maintain a high level of control by developing appropriate cultural and administrative control systems that are internally consistent with their planning, cybernetic and reward systems. Originality/value - The scarcity of organisations that have never had budgets limits opportunities to investigate an MCS package intended to function without budgets. This unique case setting reveals the design of an integrated non-budgeting MCS package.

Employers' Perceptions of Information Technology Competency Requirements for Management Accounting Graduates.

Abstract Management accountants work in a computerized workplace with information technology (IT) for producing financial ledgers and for reporting. Thus, the role of the management accountant has shifted from capturing and recording transactions to analyzing business issues. The research question is: what IT knowledge and skills do employers require of management accounting graduates? An exploratory field research approach was used; chief financial officers and their subordinates at some of New Zealands largest firms were consulted. These respondents were consistent in their requirements. They emphasized intermediate proficiency with some Microsoft tools (Excel, Word, PowerPoint, and Outlook) and sufficient familiarity with the structure and navigation of an enterprise resource planning system to process transactions such as accounts receivable. Of those requirements, Excel for analysis was the most important. Our contributions update and augment the literature by clarifying the perceptions of employers regarding the IT competencies required of management accounting graduates.

How Management Controls Enable Strategic Alignment During the Product Development Process

Purpose – This paper examines how management controls are used in practice to enable the alignment of projects with potentially conflicting corporate strategies during the product development process. Methodology/approach – Using an ethnomethodology informed approach we carry out a case study of an innovative New Zealand food company. Case data was collected through an internal company document, interviews with organization members from new product development (NPD), marketing and finance functions as well as an external market analysis document focused on our case study company and its market. Findings – Our case study company had both sales growth and profit growth corporate strategies which have been shown to cause tensions. We found that the company used four management controls to enable the alignment of product development projects to these strategies. The first management control was making different functions within the company responsible for different strategies. The other management controls used were product development project activities, cross functional project teams, and strategy focused project performance measures. Research limitations/implications – These finding add new insights to the management accounting literature by showing how a combination of management controls are used in practice to align projects with potentially conflicting corporate strategies during the product development process. Practical implications – While the alignment of product development projects to corporate strategy is not easy this case study shows how it can be enabled through the use of a number of management controls. Originality/value – We contribute to the management accounting research in this area by extending our understanding of how management controls can be used during the product development process.

Requirements for Information Technology with Newly Hired Management Accounting Graduates

The purpose of this paper is to determine what employers require newly hired management accounting graduates to have in terms of information technology knowledge and skills. The management accounting curriculum literature was examined along with pronouncements from relevant professional associations. CFOs at some of the largest New Zealand firms were interviewed. These CFOs were consistent on the IT knowledge and skills required by management accounting graduates, i.e., intermediate proficiency in some Microsoft tools (Excel, Word, PowerPoint, and Outlook) and familiarity with an ERP system to understand transaction processing. Of those requirements Excel for analysis was by far the most important. Our contribution challenges the literature and the professional associations, and clarifies what educators should provide to management accounting students.

The Integration Substitute: The Role of Controls in Managing Human Asset Specificity

As the integration solution to the problem of specific assets cannot be replicated on human asset specificity because slavery is illegal, economic theory states that control systems substitute for integration through a balanced structure to help align diverse interests. To understand the intricate design features of the balance, we examine a case-study firm. For low human asset specificity, the restriction and segregation of usable decision rights link with standards. However, incentives are traced to individuals only to the extent task deviations do not create relevant future costs that are difficult to be self-corrected. For high specificity, incentives are related to outputs rather than outcomes, because outcome variations reduce the attractiveness of maintaining the balance. Subjective assessment is used as an efficient alternate ‘balancing’ solution and decision control is shared when available subjective data are inadequate.

Management Controls and Pressure Groups: The Mediation of Overflows

Organisations produce effects that go beyond the economic framing within which they operate, referred to as overflows in this paper. When an organisation comes under pressure to address these overflows they must decide how to respond. Previous research has placed social and environmental reporting as an important tool organisations mobilise in their attempts to mediate these pressures and the groups that give rise to them. However, these reports are typically only released once a year while the pressures that organisations face can arise at any time and are ongoing and constant. The purpose of this paper is to explore situated organisational practices and examine if and how management controls are mobilised in relation to the actions of pressure groups.,This paper takes a case study approach to understand how an organisation attempts to mediate the pressures from a number of overflows: carbon emissions, changing lifestyles, aspartame and obesity. To undertake this research a performative understanding of management control is utilised. This focusses the research on if and how management controls are mobilised to assist with attempts to mediate pressures.,Analysis of the data shows that many different management controls, beyond just reports, were mobilised during the attempts to mediate the pressure arising from the actions of groups affected by the overflows. The management controls were utilised to: identify pressures, demonstrate how the pressure had been addressed, alleviate the pressure or to dispute the legitimacy of the pressure.,This paper shows the potential for new connections to be made between the management control and social and environmental accounting literatures. It demonstrates that future research may gain much from examining the management controls mobilised within the situated practices that constitute an organisations response to the pressures it faces.

Beyond Budgeting: Distinguishing Modes of Adaptive Performance Management

Abstract Purpose: The purpose of this study is to analyze the changes organizations can adopt to move beyond budgeting. We show how these changes can be understood as modes of adaptive performance management that explains the ways in which organizations move beyond budgeting to become more adaptive. The proposed modes are then used to derive propositions for future research. Methodology/approach: We follow a conceptual approach through an analysis of the beyond budgeting principles using the management and systems literatures on radical decentralization. We theorize how organizations can enhance their adaptability to environmental uncertainty through changes to their management structure and control processes. Findings: We show that organizations can move beyond budgeting by decentralizing within or beyond their management structure and modifying or removing their budget-based control processes. We propose that beyond budgeting can be conceptualized as four modes of adaptive performance management: better budgeting, advanced budgeting, restricted budgeting, and nonbudgeting. Research limitations/implications: The four modes of adaptive performance management can be used in future research to consider how changes to management structures and budget-based control processes can enhance the organizational adaptability needed to manage environmental uncertainty. Practical implications: We show that while the nonbudgeting mode may be most suited to organizations facing high levels of environmental uncertainty, organizations facing low–to-moderate levels of environmental uncertainty can achieve sufficient levels of adaptability with less extensive changes to management structure and budget-based control processes. Originality/value: The four modes of adaptive performance management reflect different approaches for dealing with environmental uncertainty. Positioning nonbudgeting as one mode and identifying alternate modes of adaptive performance management provides a basis for comparing and understanding the changes organizations make to move beyond budgeting.