Topic Overview

Having just been through my year review process I have been working on defining and outlining my research topic concisely, I thought it might be useful to outline the current version here; based on the executive summary from my year review report.

Contemporary business environments present contemporary business problems. Within these contemporary environments organizations face an increasing amount of uncertainty and competition with increasingly fickle customers. There is a strong need for speed in adapting, responding and maintaining flexibility whilst also encouraging innovation and entrepreneurial, value-adding activities. A tall order for a select number of people sitting on the Board and senior management team. Particularly if they adopt the traditional, bureaucratic Theory X assumption that employees are inherently lazy and value-destroying if left to their own devices.

Contrasting this, a variety of post-bureaucratic organizational characteristics have been cited as combating these contemporary problems. Often, these are based on a Theory Y philosophy which assumes employees are intrinsically motivated and can, and will, contribute effectively to the organization if encouraged to do so under the right circumstances.

The right circumstances. These have presented organizational theorists with over half a decade of research opportunity. Whilst the development of these occurred over some time, many organizational, and some accounting, researchers have been confident in continually noting that the traditional, hierarchical, control and command, bureaucratic philosophy typically associated with management accounting provides precisely the wrong circumstances. The role of management accounting information within this space is well documented and understood; plan with a budget, price using costing techniques, measure using variances and reward accordingly through an individual, financial reward system to promote motivation and minimise deviations in the aim of efficiency. However, the role of management accounting outside of this space is less documented, and certainly less well understood theoretically.

It is outside this space, and within the space of these right circumstances which this research focuses. The research topic seeks to develop an understanding of how we can explain different forms of management accounting in the real world, particularly within organizations displaying these alternative characteristics.

The organizational characteristics cited as encouraging these right circumstances take on different typologies, and draw on various forms of best practice from a number of philosophies including Lean Thinking, World Class Manufacturing, Matrix Organizations, Operations Management, Horizontal Organizations, Total Quality Management, Just In Time Management etc. The central aim of these philosophies is aligning organizational elements in mutually supportive ways whilst integrating and simplifying to encourage organizational success. These philosophies influence all aspects of the organization; its structure, processes, people, strategy and rewards which in turn influence employee behaviour, performance and the culture.

Conceptually, the management control system is the attribute which influences and directs these aspects. It can be defined as encompassing these aspects alongside any other organizational element which influences, directs or controls employee behaviour.

A “lateral” management control system has been proposed as encouraging these right circumstances. The organizational characteristics promoted under a lateral control system include flattened hierarchical structures and processes with integrated, multi-disciplinary, cross-functional team-work alongside a supportive and open culture with high levels of decentralisation, employee involvement and participation to encourage commitment, motivation, innovation and ownership. The overall strategy focuses on value delivery to the customer, elimination of any non-value adding activities, simplification, integration and continuous improvement.

Typically these control systems are biased against the application of management accounting. Its role is often criticised as conflicting with the ethos of lateral control systems and being incapable of integrating with informal control elements within a cohesive control system. Despite this, there are isolated examples of accounting being used within situations demonstrating lateral characteristics within traditional research, and more contemporary research is challenging this view. Recent research suggests that the management control system is a package of configured control elements which are interconnected and embedded, and inclusive of management accounting. Other research has highlighted that management accounting has a role to play within control systems designed to encourage innovation and entrepreneurial practices. However, there is still a lack of understanding about the relationships between the elements which make up the management control system, particularly within lateral control systems. This research seeks to add to theory and understanding within this sphere by exploring the relationships, compatibilities and coupling between elements of management accounting and other less formal control elements within a lateral control system.

The research is abductive in nature and thus the theoretical lens remains undetermined. However the research hopes to explore the behaviours enacted by accounting and control practices at an operational level and how these behaviours occur in practice and is thus predisposed to follow a route more aligned with institutional theory. Developments and additions to institutional theories continue to surface and include social network theories, actor network theory, loose coupling theory, complex systems theory etc. These are to be explored alongside more traditional theories and frameworks such as enabling and coercive uses of controls, or integrative liaison devices, or interactive use of control levers in order to gain insight into the role of management accounting and control processes in their contextualised settings.

This research hopes to contribute to debates in MCS and MA by exploring the relationships between elements of management accounting and other control elements within a lateral control system through application of in-depth analysis of case-study(ies). Particularly the research hopes to focus on the enactment of management accounting and control practices as "action" and the levels and types of coupling between both the control elements themselves and the rules and routines arising from those controls. Secondly, the research hopes to explore the relationship between operational and structural spaces within organizations and how the MCS can balance the conflicting demands of these two spaces in trying to promote "intrapreneurial" activities as well as ensuring efficiency and compliance to best practice. 

This review presents proposals to investigate case studies through semi-structured interviews, documentary analysis, participant observation and other visual observations. The benefits and traditions of case-study research within this field are presented and justified based on practical and theoretical considerations including the research questions, access, and prior literature. The proposed methodology of data collection includes gaining familiarity with the institutional setting, exploring the elements that make up the control system, identifying aspects of management accounting within the system, exploring the relationships between these elements, reviewing data for inconsistencies and triangulating against other data sources. Similarly, data analysis is based on identifying themes and similarities, exploring inconsistencies, reviewing, analysing and theorising in an iterative process. The theory building process will be abductive and initially seek to explore if current theories can sufficiently explain the relationships between these elements; particularly institutional theory, loose coupling, actor-network theory and other social network theories.