Magdy G. Abdel-Kader

Contingency theory, performance management and organisational effectiveness in the third sector : A theoretical framework

Purpose - – The purpose of this paper is to develop a theoretical framework that explains how performance management (PM) affects the organisational effectiveness in the third sector. Design/methodology/approach - – The authors adopt a two stage process in developing the theoretical framework; a systematic review of literature and theoretical developments of the framework. The underlying principles for developing the theoretical framework are mainly based on prior theoretical justification and empirical research in management accounting and international development fields. Findings - – Drawing upon contingency theory, the authors propose a theoretical framework explaining how the contingency variables affect PM and organisational effectiveness in the third sector. The authors discuss the justification for contingency theory as well as its weaknesses in the PM research. The authors also highlight how a modified Performance Management and Control Framework could be used to identify PM practices in the third sector. The organisational effectiveness can be measured using the four domains the authors suggest in this paper. Finally the authors put forward propositions that can be empirically tested in future studies. Research limitations/implications - – This conceptual paper opens an opportunity for future empirical research to cross-validate the model in a large survey through confirmatory factor analysis and structural equation modelling. Practical implications - – This paper helps researchers and practitioners to understand how modern PM tools integrate with third sector characteristics to optimise the effectiveness of individual organisations. Originality/value - – Integrating insights across disciplines, this paper strengthens cumulative knowledge on conceptualisation of PM and effectiveness within the third sector.

IFAC's Conception of the Evolution of Management Accounting: A Research Note

IFACs Management Accounting Practice Statement Number 1, revised in 1998, is concerned with management accounting practices. This research note describes an operationalization of its conception of the evolution of management accounting. The paper is informed by experience in developing and applying an IFAC-based model to survey the stage of evolution of the management accounting practices in a United Kingdom industry sector. The model is intrinsically interesting and has the potential for replication in other contexts and in comparative cross-national, inter-industry or longitudinal studies.

Changes in capital allocation practices – ERM and organisational change

Abstract This paper aims to study changes in capital allocation routines following the introduction of a new risk management system, enterprise risk management (ERM). Based on an institutional framework and empirical evidence from multiple sources in a large UK insurance company, we evaluated the extent and nature of organisational change. ERM was seen as an external driver to the change in the existing routines, which in turn led to internal changes in new capital allocation routines. The change was extreme, which signifies that existing capital allocation routines were not strong enough to deal with ERM as a key driver of change.

Accounting recognition of information as an asset

Attempts to recognize ‘information’ as an asset have led to an increased awareness of why and how this invisible valuable resource does not appear in the financial statements. This paper aims to develop a model based on three-circled sets of criteria for the pre-measurement phase of an asset recognition process. This model should be applicable to all types of assets, but we mainly focus on information as an intangible-based asset. Semi-structured, in-depth interviews and a questionnaire survey were used to provide triangulating perspectives to follow the grounded theory approach and generate artefact-based asset recognition criteria. The generated theory is applied to information as a candidate asset to explain how this invisible resource can be recognized in financial statements.

Performance Management in Non-Profit Organizations

Performance management is a complex concept that has received much attention in the management accounting literature. Theoretical and empirical studies, focusing on design, adoption, and use of performance measurement and management in private and public sectors are now common. Regardless of recent growth and importance of the third sector, particularly in developing countries, research focusing on performance management in this sector lags behind research in the public and private sectors (Moxham 2009, Chenhall 2007). Over the last decade, there has been a continuous call for performance management research in this sector, not only from management accounting researchers (see Otley 1999; Kaplan 2001; Micheli and Kennerley 2005; Chang 2006; Chenhall 2007; Soobaroyen and Raja 2007; Kong 2008; Keating, Parsons and Roberts 2008; Ferreira and Otley 2009; Broadbent and Laughlin 2009; Silva and Ferreira 2010) but also from international development and public administration perspectives (see Lindgren 2001 and Moxham 2010). Non-profit organizations are different from counterparts in public and private sectors in that there is no profit maximization and no bottom line against which performance can be measured (Speckbacher 2003 and Taylor et al. 2009).

Funding issues in a major strategic project: a case of investment appraisal

This paper describes and allows interaction with the issues involved in a major investment decision. In the summer of 1997, UKH faced major decisions concerning the purchase and funding of new plant and equipment. The authors were given excellent access to the company and were able to document key steps in the decision process. The issues are set out in a case study format which allows the reader to retrace the analyses carried out within UKH. A number of tasks are suggested which should test, develop and enhance a range of analytical, social and negotiation skills. The case can be handled in a variety of ways and most of the suggested tasks can be undertaken or omitted depending on the pedagogical objectives of the course/instructor.

Does compliance with corporate governance code hinder corporate entrepreneurship? Evidence from the UK

Purpose This paper aims to investigate the possible trade-off between accountability and enterprise in the context of comply or explain governance. The issue was addressed through examining the effect of compliance with the corporate governance code (CGC) on corporate entrepreneurship (CE) and organisational performance. Design/methodology/approach Based on cross-sectional survey and content analysis of annual reports, the level of CE and compliance with the CGC were measured in the large and medium-listed companies in the UK during 2010. Partial least squares structural equation modelling (PLS-SEM) was used for data analysis. Findings The results suggest no conflict between compliance with the CGC and CE in the UK, which can be attributed to the flexibility of the “comply or explain” approach. This implies that no trade-off between accountability and enterprise in the context of comply or explain governance. Practical implications The study provides evidence in support of the regulatory governance framework in the UK and the comply or explain approach at large. This evidence contributes to the debate on the rules-based or principles-based governance, which may affect future CG regulations. It can also guide the directors to achieve the balance between their conformance and performance roles. Originality/value The study bridges the gap between CG and CE disciplines through developing a theoretical model that integrate contingency and agency theories lenses. Adopting a holistic approach provides insights into the relationships between CG and CE, rather than investigating the effect of each of these practices separately on organisational performance.