Sujeewa Damayanthi, Tharusha N. Gooneratne and J.A.S.K. Jayakody
This paper explores how management controls of a clustered apparel firm in Sri Lanka (Stitch-It) is shaped by institutional field and societal logics, firm's head office…
Abstract
Purpose
This paper explores how management controls of a clustered apparel firm in Sri Lanka (Stitch-It) is shaped by institutional field and societal logics, firm's head office prescriptions, clusters' own attributes and strategic behavior of cluster managers.
Design/methodology/approach
It follows the research philosophy of interpretivism and embedded case study approach within the qualitative research design, while institutional complexity within the institutional logics perspective and paradoxical tensions, organizational attributes and strategic responses to institutional processes provide the theoretical underpinning.
Findings
The findings suggest that market, profession and state logics in the apparel field, alongside community logic at the societal level, develop a state of complexity in Stitch-It and its clusters. At the cluster level, such complexity is further intensified by head office guidelines (on controls), which gets filtered by the organizational attributes of the particular clusters. At this state, paradoxical tensions are developed within clusters, and to mitigate such tensions, key organizational members employ different strategies, which in turn shape management controls of the clusters.
Practical implications
This paper highlights that practicing managers need to be mindful of different logics in the field, organizational attributes, resulting tensions, complexities, strategies to deal with them and their ramifications on controls.
Originality/value
The paper asserts that management controls is a dynamic and a situational phenomenon, which continuously evolves in light of organizational attributes, multiple logics and head office prescriptions. It conceptualizes the “tensions” evident in the design and implementation of management controls, arising due to multiplicity of pressures as “paradoxical tensions.” Although important and relevant to management control arena, “paradoxical tensions” has been scantly explored by prior researchers.
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Tharusha N. Gooneratne and Zahirul Hoque
This paper aims to report on an empirical investigation of the fate of the balanced scorecard (BSC) approach in an organization.
Abstract
Purpose
This paper aims to report on an empirical investigation of the fate of the balanced scorecard (BSC) approach in an organization.
Design/methodology/approach
Building on actor-network theory and using a qualitative case study approach, this study analyses how across time certain actors attempted to build a competing network in the organization to gain support for their underlying rationales for replacing the BSC with a budgeting system. Data were collected using interviews, observations and archival data from a Sri Lankan commercial bank.
Findings
This paper finds that despite the enthusiastic journey with all its potentials to be a sustainable accounting innovation, the attraction towards the BSC innovation by the organization appeared to be temporary because the BSC knowledge claims that were advanced by its promoters had not been widely accepted by those involved in the practice. Such a consequence of innovation diffusion appeared to be the result of the failure of the innovation promoters in coordinating the heterogeneous interests of various actors involved in the practice. This study concludes that the BSC failed to be sustained, amid varying ideologies and interests of powerful actors across time and opponent actors’ perceived deficiencies in its adapted design attributes.
Research limitations/implications
Although the findings relate to a Sri Lankan case, they offer important insight into how parallel, competing networks advocating different control systems may exist in an organization, and that the sustainability of a specific system may depend upon the efforts and the relative power of the advocators of that system.
Practical implications
This paper sheds useful insights for practitioners on the effective implementation of accounting innovations and managing management control systems in organizations amid tensions associated with competing networks.
Originality/value
The outcomes enhance the knowledge of how multiple networks operating in an organization could compete with one another, with the result that one network may fall apart while another network gains prominence in the corporate landscape across time, amid varying interests of key actors, their actions and interessement devices used.
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Rochelle Wimalasinghe and Tharusha N. Gooneratne
The purpose of this paper is to explore the co-existence of multiple logics, resulting complexities and their implications on control practices within a traditional industry…
Abstract
Purpose
The purpose of this paper is to explore the co-existence of multiple logics, resulting complexities and their implications on control practices within a traditional industry (southern cinnamon) in Sri Lanka.
Design/methodology/approach
The paper is premised upon the qualitative methodology and case study approach, while the theoretical backing is provided by the institutional logics perspective.
Findings
The findings reveal that controls are exercised in the southern cinnamon industry to manage competing facets stemming from the co-existence of multiple logics, such as family logic, commercial logic and state logic. Amid the recurring complexity caused by competing logics, the industry remains in a state of control through mediators, such as the exporter trade union (the Spice Council), which although predominantly guided by commercial logic, acts in easing-off tensions between competing logics, while serving the interest of multiple actors. Controls in southern cinnamon nevertheless take a peculiar form, giving way to the continuation of traditional rudimentary practices, which essentially represent the interests of ground level actors.
Originality/value
Moving beyond corporate settings, which are the typical focus of mainstream studies, this paper adds to the existing body of knowledge on control practices in traditional industries, where informal and localized controls prevail. Theoretically, it expands the use of the institutional logics perspective, recognizing multiple logics, tensions and complexities in management control research. In doing so, the authors probe into informal control mechanisms in traditional industries to understand the controls and complexities in practice. Practically, the paper portrays beliefs, issues and incidents in the field (of the southern cinnamon industry in Sri Lanka), which explains why the field operates as it does, thereby offering insights to actors in the field, ranging from practitioners to policymakers.
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Zahirul Hoque, Mark A Covaleski and Tharusha N Gooneratne
The purpose of this paper is to respond to Modell’s paper entitled “Theoretical triangulation and pluralism in accounting research: a critical realist critique” (AAAJ this issue)…
Abstract
Purpose
The purpose of this paper is to respond to Modell’s paper entitled “Theoretical triangulation and pluralism in accounting research: a critical realist critique” (AAAJ this issue), which offers a two-part exposition of topics and issues pertaining to the recent paper “Theoretical triangulation and pluralism in research methods in organizational and accounting research” (Hoque et al., 2013).
Design/methodology/approach
Critical analysis of Modell’s observations pertaining to the paper drawing on the classical work of Burrell and Morgan (1979).
Findings
The authors reemphasize the need for an interaction between adopting an ontological stance and then conducting empirical research where the authors stated that the intention was not to argue any idea that theoretical triangulation approach should become the dominant approach and “take over” single theory approach. Instead, the authors demonstrate the ways theoretical triangulation can advance the understanding of multifaceted organizational realities.
Originality/value
The authors make a contribution to the generation of knowledge in research by addressing the tradeoffs involved such as possible theoretical incoherence and lack of focus when integrating theories with different ontological and epistemological assumptions.
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Tharusha N. Gooneratne and Zahirul Hoque
This paper aim to review existing research in the management control systems field in the banking industry. It identifies gaps in the existing literature and suggests some…
Abstract
Purpose
This paper aim to review existing research in the management control systems field in the banking industry. It identifies gaps in the existing literature and suggests some directions for future research.
Design/methodology/approach
The review was carried out principally by consulting leading accounting journals, followed by other relevant journals covering all publications from the inception of the particular journal to 2010. The published articles are categorized by their research topics, theories, methodologies and settings.
Findings
The review reveals a dearth of detailed studies on management controls in the banking sector. As evident from the sizeable number of descriptive studies, most prior studies do not engage in an in‐depth inquiry into control issues of banks, and most lack clear articulation either theoretically or methodologically. It finds that currently little is known on the concerns encountered by banks and the nature of management control practices deployed.
Research limitations/implications
This review is selective and, while illustrative of the state of management control research in the banking sector, does not attempt a comprehensive coverage of all research. However, it identifies gaps in the current literature and makes calls for further research on a number of management control issues in the banking industry. Further, in light of the review findings, the paper offers some lessons and insights for practicing managers.
Originality/value
Although some general reviews on various facets of management accounting across time have been undertaken by past researchers, industry‐based reviews have not been their focus. Through a systematic review of management control research in the banking arena, this paper shows that despite both the significant position occupied by the banking industry in nations' economies and the importance of management controls for banks, there remains a need for researchers to pay adequate attention to exploring control issues in this sector.
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Zahirul Hoque, Mark A. Covaleski and Tharusha N. Gooneratne
The purpose of this paper is to present a critical review of the contributions of multiple theories to accounting and organizational research, which is often referred to as…
Abstract
Purpose
The purpose of this paper is to present a critical review of the contributions of multiple theories to accounting and organizational research, which is often referred to as “theoretical triangulation” or “theoretical pluralism”, with a particular focus on the manner in which chosen research methods have informed these efforts at theoretical triangulation.
Design/methodology/approach
The authors conduct an analysis of how to employ theoretical triangulations and methodological pluralism in accounting and organizational research. To this end, they use prior empirical evidence for illustrative purposes.
Findings
The authors argue that using theories with epistemological tensions that are captured by appropriate research methods enable one to explore different, sometimes even contradictory, layers of meanings of realities pertaining to management accounting information and processes in organizations and society.
Originality/value
The paper contributes to the thinking about the interaction between theory development and research methods chosen by demonstrating how and under what circumstances multiple theories could be meaningfully integrated and executed to provide deeper understandings of accounting and organizational phenomena.
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Kaveesha Rathnasekara and Tharusha Gooneratne
The purpose of this paper is to identify the complementariness and tensions in the use of management control systems diagnostically and interactively, using a budgetary control…
Abstract
Purpose
The purpose of this paper is to identify the complementariness and tensions in the use of management control systems diagnostically and interactively, using a budgetary control example, drawing empirical evidence from a clustered firm, “Pattern On”, which is engaged in the manufacture of apparels.
Design/methodology/approach
This paper uses the qualitative methodology and case study approach. Face-to-face in-depth interviews were carried out as the main source of data collection, supplemented by an analysis of internal documents.
Findings
The field data from this study shows that both diagnostic and interactive controls appear in the clusters of PatternOn. However, the extent of use, the way they are perceived by employees, consequences, complementariness and tensions differ among the clusters. It further suggests that interactive and diagnostic controls have their own positive and negative implications on organisational activities. Therefore, rather than ruling one type as superior; what is best depends on the particular organisational circumstances.
Research limitations/implications
This paper is a useful addition to the current body of management accounting literature, particularly to budgeting and to the levers of the control framework and highlights the use of a domain theory in a research study.
Practical implications
It provides insights to practitioners regarding the simultaneous use of controls, diagnostically and interactively, and how any resulting tensions are managed.
Originality/value
Using a budgetary control example, this paper shows how controls are used diagnostically and interactively while emphasising the complementariness and tensions created by such levers. This is important as most prior research has explored diagnostic and interactive use in isolation, while budgetary control, as well as the role of domain theory has not been their focus.
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Kumudu Kapiyangoda and Tharusha Gooneratne
This paper aims to review prior management accounting research founded upon family businesses. It presents the status quo, uncovers gaps in existing literature and postulates…
Abstract
Purpose
This paper aims to review prior management accounting research founded upon family businesses. It presents the status quo, uncovers gaps in existing literature and postulates avenues for future scholarly inquiry.
Design/methodology/approach
In carrying out this review, a search was conducted accessing three search engines: Emerald insight, JSTOR and ScienceDirect encompassing journals which have published family business and management accounting research. Accordingly, 50 papers spanning 28 journals were identified as relevant and selected for review.
Findings
The review suggests that amid heightened research interest, while literature on management accounting in the realm of family firms has accelerated across time, how peculiarities of family businesses get articulated in the management accounting practices they deploy deserve further study. It also became evident that currently little is known on the use of various traditional and contemporary control practices, sustainability accounting and infusion of new management accounting ideas as well as the use of informal controls, which are very real to family businesses.
Research limitations/implications
This paper contributes to the on-going knowledge debates on management accounting in family businesses and provides directions to potential researchers by illuminating the status quo of research and issues of significance which so far has been neglected.
Practical implications
This review, being placed at the nexus of management accounting and family businesses, offers lessons and insights to family business owners, managers and policymakers for the smooth functioning of businesses using management accounting insights.
Originality/value
Although a vast majority of family business studies in management accounting and controls have been published from 2013 onward, existing reviews capture publications up to 2012. Building upon, yet moving beyond reviews to date, and encompassing latest publications, this paper advances our understanding on the state of management accounting research in the field of family business.
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Kumudu Kapiyangoda and Tharusha Gooneratne
This paper aims to explore how management control systems (MCS) of an operating company (Delta Lanka) of a multinational corporation (MNC) is shaped through the interplay between…
Abstract
Purpose
This paper aims to explore how management control systems (MCS) of an operating company (Delta Lanka) of a multinational corporation (MNC) is shaped through the interplay between external institutional influences via global prescriptions stemming from the parent company culture and localisation needs as suited to cultural context of the operating company through the agency of practice level actors.
Design/methodology/approach
Theoretically, the paper draws upon institutional theory, more specifically the notions of external institutions and agency of practice level actors, while methodologically, it adopts the single-site case study approach under the qualitative tradition.
Findings
The findings suggest that given the complex setting of being encountered with multiple cultural ramifications, MCS of Delta Lanka encompasses compulsory elements instigated by the parent company, and non-compulsory elements as attuned to the realities of the local culture of the operating company. The authors show how imposed practices in the institutional environment by the parent company (homogeneity) interact with agentic aspects of actors in the operating company giving rise to practice variation (heterogeneity) in the adoption of controls at the local level.
Practical implications
The paper offers insights on how practicing managers in operating companies of MNCs could formulate control systems by striking a balance between multiple cultural considerations (of the parent and operating company). This would be a lesson for managers of other firms (especially MNCs).
Originality/value
By bringing together multitude of cultural dimensions relating to the parent company and operating company into a single study in the area of management control, this paper adds to the burgeoning literature on the interplay between external institutions, agency of actors, culture and MCS. It also contributes to the on-going debate on MCS research taking a post-Hofstede orientation while extending the use of institutional theory in management accounting research in MNCs.