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Journal of Management
Accounting Research
1996, Volume 8
Contents
Managerial Accounting Research: The Contributions of Organizational and Sociological Theories
Mark A. Covaleski
University of Wisconsin-Madison
Mark W. Dirsmith
Pennsylvania State University
Sajay Samuel
Bucknell University
Abstract: Organizational and sociological theories explicitly recognize the centrality of issues of social control and coordination in organizations, thus providing intellectual approaches from which to study managerial accounting as important aspects of the manner in which organizations and society function. This paper examines various organizational and sociological perspectives which have provided meaningful contributions to our understanding of managerial accounting. The credibility of both the theoretical and methodological traditions which typically underpin these alternative organizational and sociological perspectives is then discussed. Finally, this paper considers the unique insights which organizational and sociological theories offer in contrast to more traditional managerial accounting research perspectives for understanding the multiple roles of management accounting in contemporary organizations.
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Benchmarking and Management Accounting: A Framework for Research
Dan Elnathan
University of Southern California and Tel Aviv University
Thomas W. Lin
S. Mark Young
University of Southern California
Abstract: Benchmarking, the search for the best practices within and across industries to improve performance, has become a popular management tool. Increased global awareness and intensified international competition together with the development of numerous benchmarking clearinghouses will provide more opportunities for firms to engage in benchmarking. While much has been written about benchmarking, few attempts have been made to integrate the literature and formalize a research framework which includes the role of management accounting.
The goals of this paper are threefold. First, we integrate the literature and propose a research framework in which antecedent, contextual and outcome variables are developed. Second, we discuss the roles that benchmarking plays within the management accounting function. Finally, we illustrate how researchers can apply the research framework when conducting studies to determine whether benchmarking an activity based cost management system has been successful and which variables play critical roles in leading to success.
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Quality Improvement Drivers in the Electronics Industry
George Foster
Stanford University
Leif Sjoblom
International institute for Management Development
Abstract: While the management accounting literature has long mentioned quality as an important variable, it is only in recent years that systematic research at the quality/accounting interface has been conducted. This paper examines drivers of quality improvement in the electronics industry. One objective is to examine the extent to which traditional learning-curve models explain observed learning rates. These models underlie most discussion of learning curves in the accounting literature. A second objective is to develop a richer platform from which to conduct further research on quality improvement drivers.
A combination of data analysis, company interviews and surveys are employed. Up-stream variables such as product design, infrastructure, supplier and customer-related variables are found to be key drivers of quality improvement. The results support a much broader perspective than the traditional "learning-by-doing" approach being adopted in the accounting literature.
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On the Design and Choice of "Modern" Management Accounting Measures
Thomas Hemmer
University of Chicago
Abstract: To help reduce myopia, modern management accounting incorporates, as a significant element, non-financial measures of performance designed to reflect activities not fully captured by "earnings." Not much evidence, however, has yet been accumulated about conditions under which alternative designs perform well. This paper introduces a model that is well suited for providing new insights into the incentive use of alternative, observed measurement designs, such as ratios. In the context of a simple example, two alternative measurement designs intended to help focus management's attention to customer satisfaction and, thus, reduce myopic behavior are studied and conditions under which one or the other is preferable are identified.
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Managerial Incentives for Disclosure Timing: An Experimental Investigation
Ronald R. King
Washington University
David E. Wallin
The Ohio State University
Abstract: The research considers the incentive for division managers to delay the release of information that shows the division in a bad light. While central management desires to tailor divisional investment based on the division's prospects, division managers prefer higher levels of investment, without regard to divisional prospects. A manager receives information about division prospects at a random point during the period. It is predicted that managers will release "good news" when observed but will delay "bad news." However, the threshold separating good and bad news will change over time, such that all news will be voluntarily reported by the end of the period. The results support the qualitative nature of the model. However, the unraveling of disclosure is not as complete as predicted.
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Predicting Change in Management Accounting Systems
Theresa Libby
Wilfrid Laurier University
John H. Waterhouse
University of Waterloo
Abstract: This exploratory study provides evidence contradictory to the charge that management accounting and control systems are generally resistant to change. Economic and organizational factors associated with the adoption of changes in management accounting systems were identified from the organizational change literature. Their relationship to changes in management accounting systems was tested using a sample of medium-sized Canadian manufacturing organizations.
The data were analyzed by multiple regression. The results indicated that, on average, 31 percent of the management accounting systems in the sample organizations changed during the period 1991-1993. Those components of management accounting and control systems that support decision making and control changed more frequently than components that support planning or directing, or are concerned with product costing. Organizations operating in more highly competitive environments tended to have a greater number of management accounting systems in use. Change in management accounting systems was found to be proportionate to the number of existing formal management accounting systems, consistent with the view that learning and change occur from experience.
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Coordinating Order Processing and Production Scheduling in Order Initiated Production Environments
John O'Brien
Carnegie Mellon University
K. Sivaramakrishnan
Carnegie Mellon University
Abstract: In this paper, we examine the economic performance of two different accounting information systems, traditional accounting and cycle time accounting, for coordinating order processing and production scheduling functions in an order initiated production environment. We model a stochastic order initiated environment in which accumulation costs (work-in-process and finished goods) and cycle times are determined by the order acceptance decision. Our simulation results indicate that cycle time accounting results in superior coordination. In particular, a simple cycle-time cutoff based order acceptance rule outperforms all accounting information based decision rules because it provides better control over opportunity costs. Our simulation results also show that a decision rule that uses cycle time based allocation of accumulation costs dominate the rule based on traditional absorption costing.
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Expert System Diffusion Among Management Accountants: A U.K. Perspective
Alan Sangster
Queen's University of Belfast, U.K.
Abstract: This paper reports the findings from an analysis of 836 responses to a mail survey of expert system diffusion among over 4,000 U.K.-based professionally designated management accountants. The data revealed a low level of awareness of expert systems, and a very low level of diffusion of the technology. Promotion of appropriate role models is identified as a potentially effective means of raising awareness and overcoming resistance to change.
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Academic Cost Accounting from 1920-1950: Alive and Well
Gloria Lucey Vollmers
University of Maine
Abstract: Johnson and Kaplan (1987) maintain that cost accounting lost relevance after 1920 and offer a variety of reasons for its alleged decline. Among them, they claim that academics privileged financial over management accounting in cost accounting textbooks and course content because the demands for external reports and requirements of auditors took precedence over internal reporting for managers. They also say that cost accounting innovations cannot be found in the post-1920 scholarly literature until the 1950s. This paper challenges these claims. First, cost accounting education was in now way limited to supporting financial accounting reporting requirements during the period 1920 to 1950. Second, cost accounting education did not stagnate after 1925. The tremendous interest of the academy in distribution costing after 1925 is used as an example of the field's continued vitality. These challenges are supported by textbook evidence.
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