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Prior literature provides little insight on how management control systems have responded to the growth of collaborative new product development (NPD). The purpose of this…
Prior literature provides little insight on how management control systems have responded to the growth of collaborative new product development (NPD). The purpose of this paper is to contrast the use of budgets to manage collaborative and in-house NPD and to consider the implications for enabling flexibility.
The paper reports on the findings of a case study company in the medical devices industry that uses two different business models for its NPD activities. While the company engages in in-house NPD for its own products, it also engages in collaborative NPD services with a range of customers.
The study illuminates how two types of budgets (annual and project) can have very different impacts on flexibility under different business models. The annual financial budgets imposed rigid constraints on in-house NPD and resulted in reduced flexibility, whereas in collaborative NPD, they had little impact on flexibility. Project budgets created hard operational constraints in collaborative NPD which generated a highly pressurised yet highly creative environment, whereas project budgets had little impact on flexibility in in-house NPD.
The study contributes detailed empirical insights into the control systems used to manage collaborative NPD from the supplier perspective, where creativity is largely responsive and contrasts these with the management of in-house NPD where creativity is largely expected. The authors also contribute an analysis of the key control systems and other factors that sustain flexibility in this highly pressurised open innovation environment.
Tremendous change has taken place in organisational structures, networks and strategy over the past 25 years. Yet, a strategic management framework developed 25 years ago…
Tremendous change has taken place in organisational structures, networks and strategy over the past 25 years. Yet, a strategic management framework developed 25 years ago has increased in popularity among researchers in the past decade. This paper aims to review how Simons’ Levers of Control (LOC) framework has been used in empirical research studies over the past 25 years.
The findings are based on electronic database searches of papers adopting Simons’ framework published in accounting and management journals.
A total of 45 empirical studies adopting the LOC framework are presented chronologically by research method. The review highlights the far greater use of the framework in qualitative compared to quantitative studies. Qualitative studies have extended the application of the framework to broader organisational issues such as sustainability, environmental accounting and inter-organisational controls. The quantitative studies have mainly sought to add to our understanding of the antecedents and outcomes of the use of interactive control systems.
This paper furthers our understanding of Simons’ framework by synthesising and analysing the literature over 25 years. It provides insight into the varying interpretations of the concepts underlying the framework in empirical studies including differences in operationalisation of the concepts in quantitative studies. In addition, it highlights the application of the framework beyond the original domain in which it was developed. Fruitful areas for future research are pointed to in the paper.
The aim of the research is to investigate, using a field survey, the concept of underreporting of time (URT), from both an individual and organisational perspective as a…
The aim of the research is to investigate, using a field survey, the concept of underreporting of time (URT), from both an individual and organisational perspective as a defence mechanism for coping with time budget pressure.
Big Four audit partners and seniors are interviewed regarding the factors that motivate staff auditors to engage in manipulation of time records and the consequences of the behaviour for individual auditors and audit firms.
Findings indicate that time record manipulation is not a single type of activity as suggested previously, but includes a variety of behaviours, six of which are identified in the study. Each of these constitutes a very different type of defence mechanism, motivated by different influences and resulting in different outcomes for the individual and the organisation. The firms engage in a defence mechanism characterised by a series of mixed messages to avoid dealing with inherent cost/quality conflicts and elements of this mechanism become embedded in routine activities at different levels in the firms.
The implications for audit firms vary with the type of time record manipulation and future research therefore needs to concentrate on a closer examination of the various practices that make up URT as identified in this study.
The insights provided by the research are used to explain apparently conflicting arguments in the literature and to set out implications for research and practice.
Audit firms face a constant conflict between the business of auditing and the profession of auditing, which is manifested at audit senior level in the pressure to perform…
Audit firms face a constant conflict between the business of auditing and the profession of auditing, which is manifested at audit senior level in the pressure to perform quality work within specified time limits. Prior quantitative studies have reported high levels of quality‐threatening behaviour (QTB) at senior level and the importance of examining contributory factors has been highlighted. Semi‐structured interviews were conducted with audit seniors in four of the (then) Big Five firms and findings suggest that key variables (time pressure, participative target setting, and style of performance evaluation) have been inadequately operationalised in previous studies and that two distinct forms of QTB exist: deliberate and inadvertent. Propositions are developed for variables associated with both forms of QTB, which provide direction and focus for future research.
Despite extensive adoption of Simons’ Levers of Control (LoC) framework, there is still considerable diversity in its operationalization which impedes the coherent…
Despite extensive adoption of Simons’ Levers of Control (LoC) framework, there is still considerable diversity in its operationalization which impedes the coherent development of the literature and compromises its value to researchers. The purpose of this paper is to draw researchers back to the conceptual core of the framework as a basis for stable, consistent definitions of the domain of observables.
We derive the conceptual core of the framework from Simons’ writings. We highlight instability in existing operational definitions of the LoC, weaknesses in the extent to which these definitions reference this conceptual core, and inconsistencies in the restriction of LoC to formal information-based routines.
We draw on the inconsistencies identified to build the case for commensuration or a “common standard” for the framework’s use on two levels: the constructs within the framework (through reference to the conceptual core of the framework) and the framework itself (through explicit inclusion of informal controls).
We illustrate the benefits of commensuration through the potential to guide the scope of the domain of observables in empirical LoC studies, and to study LoC as complementary or competing with other management control theories.
Our approach to resolving tensions arising from inconsistencies in the empirical definitions of LoC differs from others in that we focus on the strategic variables underlying the framework to define the conceptual core. We believe this approach offers greater potential for commensuration at the level of the constructs within the framework and the framework itself.
Purpose: The purpose of this study is to analyze whether information asymmetry (ASYM) plays a mediating role in the relationship between corporate disclosure and cost of…
Purpose: The purpose of this study is to analyze whether information asymmetry (ASYM) plays a mediating role in the relationship between corporate disclosure and cost of equity capital (COEC) in emerging markets such as Indonesia.
Design/Methodology/Approach: This study is a quantitative study using secondary data obtained from listed manufacturing firms from 2015 to 2017. Purposive sampling was used to select 105 firms. The design of this study was causality research, and the analysis was performed through ordinary least squares (OLS) regression and path analysis.
Findings: The results show that the level of disclosure for corporate social responsibility (CSR), intellectual capital, and enterprise risk management (ERM) reduces the COEC by suppressing ASYM. This finding confirms the argument that managers can reduce their companies’ COEC by reducing ASYM through increased disclosure. These results are controlled by earnings quality (EQL) because that is most relevant to the COEC, as well as corporate size, leverage, and differences in institutional factors.
Originality/Value: This research is based on the central assumption that disclosure enhances the level of information while EQL remains the focus for investors. This research is also the first to study CSR disclosure, intellectual capital disclosure, and ERM disclosure together as a proxy for disclosure. The findings confirm that managers can reduce their companies’ agency conflict by increasing their level of disclosure. Managers can also reduce the COEC by reducing ASYM through increased disclosure. This also implies that increasing the level of disclosure will be effective in reducing the COEC for companies in emerging markets, such as Indonesia.