The illusion of no control: management control systems facilitating autonomous motivation in university research

Autonomous motivation, a fundamental factor influencing research success, can be undermined when people feel pressured, managed or controlled. So how do universities – which are under increasing external pressure to manage research activities to produce outcomes – exert management control without threatening the autonomous motivation of their researchers? We address this question through an exploratory case study of the management control systems used in two university faculties. Our results confirm the importance of autonomous motivation in driving researchers’ activity and show how incentives, performance evaluation and cultural–administrative structures can be designed to not only preserve, but also enhance and leverage this motivation.     

How to kill creativity

In today's knowledge economy, creativity is more important than ever. But many companies unwittingly employ managerial practices that kill it. How? By crushing their employees' intrinsic motivation--the strong internal desire to do something based on interests and passions. Managers don't kill creativity on purpose. Yet in the pursuit of productivity, efficiency, and control--all worthy business imperatives--they undermine creativity. It doesn't have to be that way, says Teresa Amabile. Business imperatives can comfortably coexist with creativity. But managers will have to change their thinking first. Specifically, managers will need to understand that creativity has three parts: expertise, the ability to think flexibly and imaginatively, and motivation. Managers can influence the first two, but doing so is costly and slow. It would be far more effective to increase employees' intrinsic motivation. To that end, managers have five levers to pull: the amount of challenge they give employees, the degree of freedom they grant around process, the way they design work groups, the level of encouragement they give, and the nature of organizational support. Take challenge as an example. Intrinsic motivation is high when employees feel challenged but not overwhelmed by their work. The task for managers, therefore, becomes matching people to the right assignments. Consider also freedom. Intrinsic motivation--and thus creativity--soars when managers let people decide how to achieve goals, not what goals to achieve. Managers can make a difference when it comes to employee creativity. The result can be truly innovative companies in which creativity doesn't just survive but actually thrives.     

The design and use of performance management systems: An extended framework for analysis

Issues in the area of performance management and management control systems are typically complex and intertwined, but research tends to be based on simplified and partial settings. Simplification has made the work easier to carry out, but it has come at the price of increased ambiguity and conflicting findings from different studies. To help mitigate these issues, this paper puts forward the performance management systems framework as a research tool for describing the structure and operation of performance management systems (PMSs) in a more holistic manner. The framework was developed from the relevant literature and from our observations and experience. In particular, it elaborates the 5 questions of Otley's [Otley, D., 1999. Performance management: a framework for management control systems research. Management Accounting Research 10, 363–382] performance management framework into 12 questions and integrates aspects of Simons’ levers of control framework.Anecdotal evidence suggests that the extended framework provides a useful research tool for those wishing to study the design and operation of performance management systems by providing a template to help describe the key aspects of such systems. It allows an holistic overview to be taken while making this a feasible task. The paper uses material from two field studies to illustrate how the framework can be used to provide an overview of the major performance management issues within an organization.     

How formal performance evaluation affects trust between superior and subordinate managers

An important question in the control literature concerns the role of interpersonal trust in the design and functioning of formal control systems for collaborative settings. In this paper, we argue that subordinate’s trust in the superior depends on the formality of the performance evaluation procedure and that this relationship is mediated by managerial perceptions of justice and feedback. The findings confirm our predictions. Furthermore, we find that formality matters more for trust formation for those managers that are in functions with less contractible outputs.     

Beyond postnormal times: The future of creativity and the creativity of the future

Creativity and imagination are the most important ingredients for coping with post-normal times, according to Sardar. This paper looks at the way creativity itself is being transformed in the West, from the individualistic/atomistic view of Modernity towards a more contextual, collaborative, complex approach. It explores the potential and possibilities for this more participatory creativity to help go beyond the “crisis of the future,” and argues that the centrality of creativity must go beyond the mythology of genius and inspiration to inform philosophy, ethics, and action. Philosophical reflection and the imagination of desirable futures can emerge from a creative ethic that stresses the value of generative interactions and contexts that support creativity.     

Information system integration,enabling control and performance

The literature has demonstrated the complex relationship between information system integration approaches, such as Enterprise Resource Planning systems, and management control. In this paper, we begin our analysis by focussing on just one aspect of information system integration, namely in terms of data architecture, commonly referred to as the single database concept. We argue that whilst this particular aspect of integration should be related to perceived system success, the variety of ways in which information might be drawn on in practice means it provides no strong basis for predicting a link to business unit performance. Instead, building on Adler and Borys [Adler, P., & Borys, B. (1996). Two types of bureaucracy: Enabling and coercive. Administrative Science Quarterly, 41(1), 61–90] we argue that the level of information system integration fosters the four design characteristics that make up an enabling approach to management control. Each of these in turn is related to both perceived system success and business unit performance. We present PLS analysis of survey data collected from 169 managers that broadly supports these expectations.     

How multi-sourcing can influence management control: Case study evidence from the electronic products supply chain

This study investigates how multi-sourcing can influence the use of management controls in the presence of varying buyer-supplier power dependencies. Multi-sourcing is an interorganizational design choice that can help buyers collect valuable information to facilitate cost and performance comparisons across multiple sources of supply. We leverage prior research to develop a conceptual framework that highlights how multi-sourcing can enable buyers to use cost management and performance management controls differently depending on the nature of buyer-supplier power dependencies. We then use case studies of three electronic product manufacturers to illustrate the framework, yielding empirically testable propositions regarding when multi-sourcing may enable cost management controls, performance management controls, and both types of control. The evidence demonstrates the importance of simultaneously considering multiple interorganizational design choices when studying management controls in supply chains. We also highlight how multi-sourcing may help supply chains promote non-financial goals, including those related to environmental and social activities.     

The effects of nonfinancial and financial measures on employee motivation to participate in target setting

Recent interest in nonfinancial performance measures has raised questions on how such measures influence employee reactions and behaviour. Surprisingly, the question of whether and how nonfinancial measures motivate employees to participate in target setting has remained largely unexplored. Employees can be motivated intrinsically or extrinsically to participate in target setting. Intrinsic motivation to participate in target setting initiates from within the employee and is perceived as an end in itself with the employee as the main beneficiary. In contrast, controlled extrinsic motivation to participate in target setting is controlled by the organization and is perceived as a means to an end with the organization as the main beneficiary. This study investigates the relative importance of nonfinancial measures vis-à-vis financial measures in engendering employee intrinsic and controlled extrinsic motivation to participate and how these two forms of motivation to participate in target setting translate into improved employee job performance. Based on a sample of 149 employees, the Partial Least Squares results indicate that both financial measures and nonfinancial measures are associated with employee intrinsic motivation to participate in target setting. However, only nonfinancial measures are associated with controlled extrinsic motivation to participate in target setting and because this form of motivation to participate is controlled by the organization as a means to achieve better performance, it is only this form of motivation which has a significant impact on employee job performance. These results provide important insights into the intricacies by which performance measures influence employee motivation to participate in target setting and job performance.     

Managerial accounting systems and organizational control: A role perspective

This paper proposes a new way of viewing the relationship between managerial accounting systems and organizational control. This is done to provide a structure around which control processes may be observed and research conducted. In the context of role theory several propositions are advanced in order to explain the relationship. Namely, it is noted that managerial accounting systems are useful in communicating role expectations, are important to motivation, and are useful in communicating organizational climate. Also, several factors concerning managerial style and social context were seen to influence the operativeness of these propositions.     

On the value relevance of information on environmental and social activities and performance – Some evidence from the UK stock market

Motivated by the requirements of the UK Companies Act 2006 for a Strategic Report introduced in late 2013, and the subsequent Directive 2014/95/EU of the European Parliament and of the Council, we investigate the relationship between the levels of disclosures on environmental and social activities and performance (analyst following) and subsequent analyst following (subsequent levels of disclosures on environmental and social activities and performance). We do so to investigate the value relevance of information about environmental and social activities and performance. Our evidence is consistent with their value relevance and an associated demand for, or general interest in, such disclosures from informed market participants. We also argue that our results suggest positive links between analyst following and the quality of environmental and social disclosure.     

Performance management in a milieu of customer participatory measurement: Beyond the ratings and rankings of Strictly Come Dancing

This research concerns the performance management practices that unfolded in Strictly Come Dancing, a television show whose viewers were promised that they could be its co-creators through Web 2.0-based customer participatory measurement systems that directed the development of the series mechanically. Analysing the performance management practice of the 2013 Danish version of the show, we find that an emotive, antagonistic competitive language game and an authoritative, calculative language game were operating in interaction. They facilitated an expectation of consumer democracy and made viewers engage fiercely with the show, while simultaneously controlling the drama so that it would unfold in a way that matched the voice of the television company. The study provides novel insights into our understanding of how companies might produce and use customer participatory measurement systems as an integrated part of their customer participatory logic of value co-creation. It also adds to the methodological apparatus for analysing, conceptualising, and understanding organisational practices of performance management.     

Strategy,accountants’ activities and new product development performance

Prior literature indicates that activities carried out by accountants in new product development (NPD) are important. We explore the relationship between accountants’ activities and NPD performance. We extend prior studies to identify the possible activities carried out by accountants within the NPD process to include five types of activities: basic, cost planning, cost control, profit management, and risk management. We argue that the relationship between accountants’ activities and NPD performance is contingent on firm strategy. We mainly use sales from new products over total sales to measure NPD performance. Based on a large-scale survey, the findings confirm our conjecture that the effects of the five types of activities on NPD performance generally vary as a function of the strategy adopted by the firm. The implication of these findings is that in combination with the chosen strategy, firms should concentrate on the specific activities of accountants that can improve NPD performance.     

Research issues on the use of ERPS in interorganizational relationships

The use of enterprise resource planning systems (ERPS) is a critical component of a firm's strategy for the proper management and control of inter-organizational relationships. This research note utilizes recent research findings that bear on the effectiveness of the implementation and use of ERPS in business organizations and extends these findings in the inter-organizational context. The major purpose of this essay is to present theoretical bases on which future research could justify theoretical models and present theoretically-sound arguments for the examination of the use of ERPS in the management and control of inter-organizational relationships. The implications of a number of theories are examined, including: (a) the theory of co-opetition from organizational strategy, as it relates to the necessity for carrying out simultaneous activities in inter-organizational cooperation and competition, (b) the economic theory of complementarity, as it emphasizes interactions in different elements of organizational design and explains how different elements of organizational strategy and management process relate to one another, and (c) the real options theory from finance as it relates to the degree of managerial flexibility in making infrastructure investment decisions. Each of these theories offers important implications for the examination of use of ERPS in inter-organizational relationships. This essay develops a number of research propositions in order to motivate research in this area. Future research not only could benefit from these theoretical bases but also could make contributions for the extension of these theories in the use of ERPS for the management and control of inter-organizational relationships.     

The effects of monetary incentives on effort and task performance: theories, evidence, and a framework for research

The purpose of this paper is to review theories and evidence regarding the effects of (performance-contingent) monetary incentives on individual effort and task performance. We provide a framework for understanding these effects in numerous contexts of interest to accounting researchers and focus particularly on how salient features of accounting settings may affect the incentives-effort and effort-performance relations. Our compilation and integration of theories and evidence across a wide variety of disciplines reveals significant implications for accounting research and practice. Based on the framework, theories, and prior evidence, we develop and discuss numerous directions for future research in accounting that could provide important insights into the efficacy of monetary reward systems.     

The global field of multi-family offices: An institutionalist perspective

We apply the notion of the organisational field to internationally operating multi-family offices. These organisations specialise on the preservation of enterprising and geographically dispersed families’ fortunes. They provide their services across generations and countries. On the basis of secondary data of Bloomberg’s Top 50 Family Offices, we show that they constitute a global organisational field that comprises two clusters of homogeneity. Clients may decide between two different configurations of activities, depending on their preferences regarding asset management, resource management, family management and service architecture. The findings also reveal that multi-family offices make relatively similar value propositions all over the world. The distinctiveness of the clusters within the field is not driven by the embeddedness of the multi-family offices in different national environments or their various degrees of international experience. Rather, it is weakly affected by two out of four possible value propositions, namely the exclusiveness and the transparency of services.     

The Boulton & Watt Case: The Crux of Alternative Approaches to Accounting History?

In accounting history, authors who have adopted a ‘Foucauldian’ approach have recently debated with those representing the ‘Neoclassical’ school of thought the relative sophistication and significance of cost accounting developments in the UK and US respectively during the late 18th and early 19th centuries. This paper argues that the differences between the two schools' understandings are important for comprehending the genesis and scope of modern cost and management accounting systems. It re-examines the historical case of Boulton & Watt, an engineering firm believed to have been in the vanguard of British Industrial Revolution accounting practice (Roll, 1930; Pollard, 1965 and 1990; Fleischman and Parker, 1991), in an attempt to clarify some of the key points of difference in the debate. It proposes that the historical crux for deciding where a modern managerial approach to accounting began lies in distinguishing between the development of engineering standards for materials and machine efficiency and the transfer of such performance measurements to human behaviour. A pressing task for historians is to establish when, where, how and why ‘labour standards’ were first articulated on the grounds that such forms of human accounting, by constructing norms of managerial performance, form the basis for modern management control. The paper reviews the primary sources on the history of cost accounting at Boulton & Watt, including the previously-acclaimed development of labour and engine standards. Its findings are that, while the latter were highly sophisticated as measures of engineering performance, they were less so on the economic dimension of cost measurement. Meanwhile, the evidence for labour standards is unconvincing; there was, around 1800, an intense period of investigating labour time and cost, but no subsequent long-term systematic control exercised over them analogous to the modern managerial approach found slightly later in US contexts. The paper suggests that one priority for further research is the detailed examination of early industrial enterprises on both sides of the Atlantic, in order to establish more definitively when, where, how and why this crucial development occurred.     

Are Employee Selection and Incentive Contracts Complements or Substitutes?

There is a debate in the literature as to whether employee selection is a substitute or complement to incentive contracting. We argue that incentive contracts and selection can be both complements and substitutes conditional on the contracting difficulty faced by the firm. We examine these control choices in a setting where contracting difficulties arise due to the firm's choice of strategy and from the volatility created by the firm's external environment. We select a firm's commitment to organizational learning (OL) as our strategic choice variable as this provides a useful proxy for identifying settings where explicit incentive contracting is difficult. The results show that, as firms become increasingly committed to OL, incentive contracts and employee selection operate as complements. However, with a high commitment to OL and an increasing level of external volatility, contracting on performance measures will become less effective. In this context, our results indicate that there is a substitution effect toward employee selection.     

Organisational change, outsourcing and the impact on management accounting

New empirical evidence is presented on organisational change, outsourcing and the impact on management accounting in three types of organisations: private sector companies, the National Health Service and Local Authorities. Spearman rank correlations are used to examine three propositions: that (i) change in organisational form exists and may be related to an increased use of outsourcing or subcontracting; (ii) outsourcing is expected to improve organisational flexibility and/or the service of an activity, to lead to cost savings, or to allow the organisation to focus more clearly on its core business; and (iii) outsourcing promotes change in management accounting. Statistical support is found for each of our three propositions. This is further supported by reference to three illustrative case studies. Overall, we conclude that organisational change, as effected by the use of outsourcing, is related to specific changes in the organisations' management accounting systems.     

The Modigliani and Miller Propositions: The History of a Failed Foundation for Corporate Finance?

The Modigliani and Miller (MM) propositions provide a foundation for corporate finance theory. Nevertheless, this paper argues that their adoption has led to a disengagement of such theory from the humanity of business, as well as, more broadly, from concepts of corporate strategic management. As a result, the context within which textbooks allow corporate investment and financial decisions to take place is severely distorted from reality. The paper argues that we require the context of behavioural and strategic corporate management if we are to accommodate the reality of business, the behaviour of formalised groups, and an ethical dimension to business.