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Book part
Publication date: 13 August 2018

Chaminda Wijethilake and Athula Ekanayake

Purpose – The purpose of this paper is to develop a framework which sheds new light on how sustainability control systems (SCS) can be used in proactive strategic

Abstract

Purpose – The purpose of this paper is to develop a framework which sheds new light on how sustainability control systems (SCS) can be used in proactive strategic responses to corporate sustainability pressures.

Design/Methodology/Approach – Corporate sustainability pressures are identified using insights from institutional theory and the resource-based view of the firm.

Findings – The paper presents an integrated framework showing the corporate sustainability pressures, proactive strategic responses to these pressures, and how organizations might use SCS in their responses to the corporate sustainability pressures they face.

Practical Implications – The proposed framework shows how organizations can use SCS in proactive strategic responses to corporate sustainability pressures.

Originality/Value – The paper suggests that instead of using traditional financial-oriented management control systems, organizations need more focus on emerging SCS as a means of achieving sustainability objectives. In particular, the paper proposes different SCS tools that can be used in proactive strategic responses to sustainability pressures in terms of (i) specifying and communicating sustainability objectives, (ii) monitoring sustainability performance, and (iii) providing motivation by linking sustainability rewards to performance.

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Book part
Publication date: 16 October 2014

Angelo Ditillo and Irene Eleonora Lisi

Although companies are increasingly embracing the sustainability discourse in their external reporting and disclosures, little is known about how management control systems

Abstract

Although companies are increasingly embracing the sustainability discourse in their external reporting and disclosures, little is known about how management control systems support sustainability within organizations. This is unfortunate, given the important role that properly designed Sustainability Control Systems (SCS) may play in helping firms to better face their social and environmental responsibilities. Starting from these premises, the aim of this essay is twofold. On the one hand, we present a review of the emerging stream of research on sustainability and management control mechanisms, in order to identify and discuss the link between the two. On the other hand, we try to illustrate the main unaddressed issues in this literature as a premise to exploring one possible way to advance research in this area. Specifically, we make a call for a more holistic approach to the study of SCS, which considers also their organizational and cultural dimensions in addition to their technical properties. A framework for informing future work on the topic is proposed, based on the concept of ‘control package’ (Malmi & Brown, 2008; Sandelin, 2008) complemented with notions from the complementarity-based approach developed in organizational economics (Grandori & Furnari, 2008; Milgrom & Roberts, 1995). By enhancing our understanding on how SCS operate as a package, the application of our framework should allow researchers to develop better theory of how to design a range of controls to support organizational sustainability objectives, control sustainability activities, and drive sustainability performance.

Details

Accounting for the Environment: More Talk and Little Progress
Type: Book
ISBN: 978-1-78190-303-2

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Article
Publication date: 13 January 2021

Hasitha Dinithi Rupasinghe and Chaminda Wijethilake

An alignment between financial and operational measures is an essential element to capture the lean productivity improvements enabling supply chain sustainability. With…

Abstract

Purpose

An alignment between financial and operational measures is an essential element to capture the lean productivity improvements enabling supply chain sustainability. With the aim of supporting small and medium-sized enterprises (SMEs) in addressing corporate sustainability challenges, this study aims to examine the impact of leanness on supply chain sustainability, and the moderating role of sustainability control systems (SCS) on the relationship between leanness and supply chain sustainability.

Design/methodology/approach

Drawing on lean manufacturing and the levers of control framework, survey data was collected from 106 manufacturing SMEs in Sri Lanka. Moderated multiple regression analysis was used to test the proposed hypotheses.

Findings

The study finds that lean manufacturing practices, such as just-in-time deliveries, quality management, environmental management and employee involvement show a significant positive impact on supply chain sustainability. As proposed, the interactive use of SCS shows a significant, positive moderating impact on the relationship between employee involvement and social supply chain sustainability. The diagnostic use of SCS negatively moderates the relationships between just-in-time deliveries and economic supply chain sustainability, and environmental management and economic supply chain sustainability. However, both interactive and diagnostic uses of SCS do not show any significant moderating impact between lean manufacturing and environmental supply chain sustainability.

Research limitations/implications

The following limitations should be taken into account in interpreting the results and implications of this study. Firstly, the study refers to supply chain sustainability as environmental, social and economic sustainability. As these concepts represent broader perspectives of sustainability, and no consensus on how to measure has yet been agreed, future studies may focus on other variables that might capture different perspectives of supply chain sustainability. Secondy, future researchers may further extend the role of SCS (including all four control systems – belief, boundary, interactive and diagnostic) in examining the impact of leanness on supply chain sustainability. Thirdly, this study has considered a sample of manufacturing SMEs in the Western province in Sri Lanka. The results should be carefully generalised to other manufacturing organisations in Sri Lanka and beyond. Finally, future studies may also investigate the impact of leanness on supply chain sustainability by using alternative methodologies, such as multiple case studies.

Originality/value

SMEs are more likely to focus on diagnostic control systems with the aim of promoting economic supply chain sustainability. However, the findings reveal that manufacturing SMEs in the developing country context lack strong SCS to enable supply chain sustainability.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 3
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 12 June 2019

Venkateshwaran Narayanan and Gordon Boyce

The purpose of this paper is to examine the role of management control systems (MCS) in organisational change towards sustainability. In particular, it examines the extent…

Abstract

Purpose

The purpose of this paper is to examine the role of management control systems (MCS) in organisational change towards sustainability. In particular, it examines the extent to which MCS may be instrumental in transformative organisational change in this sphere.

Design/methodology/approach

Through an in-depth case study of an Australian multinational corporation in the property sector, this paper explores the possibilities for MCS to influence organisational change towards a multi-bottom-line, balanced approach to social and environmental challenges facing corporations. MCS are conceptualised using Simons’ (1995) Levers of Control framework. On the question of sustainability, the approach adopted in this paper contrasts with much of the prior literature that largely takes a predominantly pragmatist approach and equates sustainability performance with financial performance. The prior literature generally reports a positive role for MCS in organisational change efforts. By contrast, drawing on the typology developed by Hopwood et al. (2005), this paper views sustainability as requiring a balancing of economic, social and environmental concerns.

Findings

The findings indicate that although MCS are not irrelevant, they do not play a transformative role in enabling deep-seated organisational change towards sustainability. The critical literature on the nature of MCS is drawn upon to explore the reasons for the observed non-role.

Originality/value

The analysis sheds light on factors that may influence the effectiveness of conventional notions of MCS in organisational change. The findings contribute to the debate regarding the suitability of continued efforts at using conventional notions of management accounting and MCS in enabling organisational change towards greater social and environmental sustainability. The paper also highlights the value of a critical examination of the usefulness of management accounting and control practices in the context of organisational change towards sustainability.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 5
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 15 December 2020

Fereshteh Mahmoudian, Jamal A. Nazari and Irene M. Herremans

Drawing on the natural resource-based view and the literature on management control systems as a package, this study aims to investigate organizations’ sustainability

Abstract

Purpose

Drawing on the natural resource-based view and the literature on management control systems as a package, this study aims to investigate organizations’ sustainability control systems designed to achieve the interrelated sustainability objectives of performance and reporting.

Design/methodology/approach

The authors use three-stage least squares regressions on archival data for a large sample of international companies.

Findings

Better environmental performance and sustainability reporting quality are related to certain control system components, and the dual objectives of sustainability performance and reporting are interrelated.

Originality/value

This study provides theoretical contributions and practical implications by demonstrating how a set of sustainability control components can enable better sustainability reporting and performance outcomes.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 18 February 2009

Mette Morsing and Dennis Oswald

The purpose of this paper is to demonstrate how top managers seek to provide the necessary leadership inside an organisation when sustainability is a primary strategic

Abstract

Purpose

The purpose of this paper is to demonstrate how top managers seek to provide the necessary leadership inside an organisation when sustainability is a primary strategic objective, and the paper seeks to ask to what extent it is possible to influence sustainability at the operational level by contemporary management control systems as it proposes to integrate the perspective of organizational culture.

Design/methodology/approach

The paper is based on a single case study of Novo Nordisk A/S.

Findings

The paper concludes by asking questions to managerial practice as well as to theory, concerning to what extent sustainability practices are measured by concurrent management control systems, and to what extent organizational culture perspective is a necessary prerequisite to manage and control sustainable leadership practice.

Research limitations/implications

Future research should engage in exploring informal and organizational cultural aspects of how managers control the integration of sustainability into business practice.

Practical implications

The paper is based on a single case study of a company internationally known for its high standards of sustainable leadership practice, and the conclusions therefore provide guidelines for other managers considering ways of integrating sustainability.

Originality/value

The paper brings new attention to the appropriateness of existing management control systems when managers attempt to control sustainability practices and it suggests the importance of organizational culture in an original case study of Novo Nordisk A/S.

Details

Corporate Governance: The international journal of business in society, vol. 9 no. 1
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 7 April 2015

Jennifer Kerr, Paul Rouse and Charl de Villiers

– This paper aims to examine how three different organisations integrate sustainability reporting into management control systems (MCS).

Abstract

Purpose

This paper aims to examine how three different organisations integrate sustainability reporting into management control systems (MCS).

Design/methodology/approach

A case study examination of sustainability reporting integrated into MCS in three New Zealand organisations.

Findings

The integration of sustainability reporting into MCS holds advantages for organisations to operationalise sustainability objectives, broaden stakeholder accountability as well as intensify interactions with stakeholders, formalise organisation beliefs and improve communication of sustainability measures internally. While frameworks such as the balanced scorecard (BSC) can facilitate implementation of sustainability reporting, some organisations may choose to fully integrate the latter into their management control system.

Originality/value

Sustainability reporting is sometimes seen as an external reporting philosophy that can be managed as a separate project. The authors show it can be integrated into MCS, either entirely or through tools such as the BSC. The authors develop a framework that may be useful in future studies to locate our case organisations.

Details

Pacific Accounting Review, vol. 27 no. 2
Type: Research Article
ISSN: 0114-0582

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Book part
Publication date: 10 December 2013

Giovanni Battista Derchi, Michael Burkert and Daniel Oyon

Organizations’ increasing concern for environment shows the interest in appropriate mechanisms that account for relevant flows of environment-related information. Today…

Abstract

Purpose

Organizations’ increasing concern for environment shows the interest in appropriate mechanisms that account for relevant flows of environment-related information. Today managers and researchers are promoting environmental management accounting (EMA) systems mechanisms as a means to incorporate the full spectrum of ecological data into day-to-day business decisions and foster green management execution. However implementation remains a challenge and many of the difficulties are associated with conceptual and practical problems in integrating ‘green’ information and providing guidance on effective implementation. In this context academics might investigate on further explanations on how to achieve excellence in both environmental and financial performance. Hence this chapter substantiates the need for more theoretical and empirical studies on EMA practices and proposes avenues for future research.

Approach

We review the growing body of EMA research to inform the reader of what has been studied to date and indicate the necessity for further investigation. In addition, we suggest areas for future research.

Findings

Our synthesis highlights the relevant aspects of EMA examined in prior studies. The review reveals unexplored facets that need to be investigated to complement existing knowledge. In particular researchers might explore the concept of environmental performance and the application of different forms of EMA within organizations. Moreover academics have the opportunity to further examine the role of EMA mechanisms in companies that do not pursue environmental results for economic benefits.

Value

The chapter sheds some light on EMA literature and emphasizes the opportunities that new theoretical developments and appropriate research designs offer in the investigation of the remaining gaps in the literature.

Details

Accounting and Control for Sustainability
Type: Book
ISBN: 978-1-78052-766-6

Keywords

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Article
Publication date: 22 September 2020

Katia Corsi and Brunella Arru

The purpose of this paper is to show the relevance attributed to sustainability management control tools (SMCTs) and their real use. Mainly, this study aims to shed light…

Abstract

Purpose

The purpose of this paper is to show the relevance attributed to sustainability management control tools (SMCTs) and their real use. Mainly, this study aims to shed light on the approaches, motivations and difficulties encountered in SMCTs adoption by the most sustainable Italian companies, as well as their effectiveness.

Design/methodology/approach

Using a pre-structured qualitative survey method, the authors grasped information about external and internal dimensions of sustainability management in light of institutional and resource-based view theories. Data are elaborated with two methods: a regime analysis to assess the relevance of SMCTs and a descriptive analysis to investigate the “aim”, “which” and “how” of the SMCTs' use by companies listed in sustainability indices.

Findings

Informal SMCTs prevailed over formal ones. There is a discrepancy between attention paid to some tools praised in the literature and their knowledge and use. In addition, a significant gap exists between what is desired and what is achieved in terms of effectiveness. Further, although sustainability management is primarily oriented towards the external perspective, SMCTs can be key to improving both the disclosure and management of sustainability.

Research limitations/implications

The criteria for the selection of the sample resulted in a small number of analysed companies, which allowed us to gain insight into what happens inside the listed Italian companies in the most important sustainability indices. These companies have sustainability-oriented management, which also probably safeguards their advantage linked to inclusion in these indices.

Practical implications

This paper provides food for thought for companies engaged in non-financial disclosure and for those who aim to implement SMCTs. It shows the need to reinforce formal sustainability control tools, also through dissemination of major knowledge about the implementation of these tools, and to encourage sponsorship from top levels of management.

Originality/value

Compared with SMCT research using a theoretical or case study approach, this study uniquely undertakes extensive research on the perceived effectiveness of SMCTs in achieving sustainability goals and the difficulties in implementing them, thereby highlighting a discrepancy between some tools emphasised in the literature and those infrequently used in sustainability-oriented companies.

Details

Accounting, Auditing & Accountability Journal, vol. 34 no. 9
Type: Research Article
ISSN: 0951-3574

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Book part
Publication date: 3 July 2017

Kelly M. Soderstrom, Naomi S. Soderstrom and Christopher R. Stewart

The paper complements the research framework proposed by Kim and Matsumura (2017) through a broad survey of the management accounting research in sustainability.

Abstract

Purpose

The paper complements the research framework proposed by Kim and Matsumura (2017) through a broad survey of the management accounting research in sustainability.

Methodology/approach

The paper reviews recent management accounting research in the area of corporate responsibility/sustainability; focusing on articles published in seven widely recognized accounting journals and the Journal of Business Ethics.

Findings

Our survey of the recent literature indicates: (1) a major focus has been on integration of sustainability in management control systems; (2) the primary research methods used are case studies and surveys, with few large sample, archival studies (primarily on compensation); and (3) a significant amount of literature has been published outside of the traditional accounting literature.

Originality/value

The paper complements existing literature reviews in the area by focusing on the set of most widely recognized journals. By focusing on these journals, we highlight opportunities for future research that are likely to reach a broader accounting readership.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78714-530-6

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