Title: Management Accounting Control: Contemporary Theories and Issues

Transcription

1 Title: Management Accounting Control: Contemporary Theories and Issues Lecturer: Professor Shahzad Uddin Essex Business School University of Essex Colchester CO4 3SQ UK Co-Editor, Journal of Accounting in Emerging Economies( Co-Editor, Research in Accounting in Emerging Economies ( Chair, Accounting in Less Developed and Emerging Economies, British Accounting Association ( Aim of the course The main aim of the course is to develop a critical understanding of the management accounting control. The course critically examines a range of contemporary management accounting control issues and theories to understand the current practices of management accounting locally and globally. In particular, the course evaluates management control theories in the context of different cultural, political, and socio-economic contexts. The course will also explore the current debate of privatisation and public sector reforms and their underlying assumptions implicating better accounting controls in privatised enterprises in both developed and emerging countries. The Main Issues Traditionally, management accounting is seen as a tool to provide information to internal parties in organisations for decision-making, planning and control. Contemporary management accounting studies have demonstrated that the role of management accounting within the organisation is much more wider and complex. Similarly, a variety of management accounting theories have been developed to understand the changing nature of management accounting control practices. Thus, this course begins with the evolution of management accounting in order to understand the socio-political and socioeconomic context of management accounting practices and research. This will provide the opportunity to critically discuss the management control theories and their influences on management accounting practices. The discussions on theories will also focuses on the questions such as the applicability of management accounting control theories and

2 approaches in non-western contexts. In addition to the analyses of various theories of management accounting controls, the course examines the topical issues such as the implications of culture in management accounting. This should provide a critical understanding of varied management control practices in different cultural settings. The course subsequently examines the privatisation and public sector reforms debate with regard to management accounting controls. The particular theme will scrutinize the claims made by the advocates of privatisation and public sector reforms that public sector reforms and ownership changes will bring about sophisticated management controls within public and privatised companies. Teaching methodology The course consists of lectures, group work, presentations of cases and papers. The lecture will indicate the main areas and themes that you will consider during the course. Lectures will be followed by cases, group work and presentations of selected topics. Prerequisites The course builds on previous knowledge on management accounting. Students without accounting background should be able to cope but require some basic readings on management accounting. Learning outcome At the end of the course students should be able to: 1. Understand the history and development of management accounting; 2. Understand the contemporary theoretical perspectives to management accounting control; 3. Understand comparative analyses of management control practices and various control theories; 4. Engage in critical debate in the examination of traditional management control theory in different cultural, political, and socio-economic contexts; 5. Understand management control practices operating in enterprises located in emerging and less developed countries; 6. Understand cultures and their implications on management accounting controls 7. Understand the current debate of privatisation and public sector reforms and accounting controls. Literature There is no single major textbook for the course. However, a significant number of book chapters will be used from the following textbooks: Issues in Management Accounting, by Ashton, D., Hopper, T., and Scapens, R., (eds.) (1995), Hemel Hempstead: Prentice Hall, Second Edition

3 Management Accounting Change Approaches and Perspectives, by Wickramasinghe, D and Alawattage, C, 2007, Routledge: London Teaching Plan Detail Teaching Plan on day-to-day basis is given below (this is subject to change depending on the pace of discussions during the lecture). Essential readings are indicated by [E] and Desirable Readings are indicated by [D] Week 1: Evolution of Management Accounting and Theoretical Approaches Monday (9-12, ): Introduction to the course Lecture topic: Development of Management Accounting: Practices and Research Readings: Chapter 1 - Ashton, D., Hopper, T., and Scapens, R., (eds.) (1995), Changing nature of Issues in Management Accounting, Issues in Management Accounting, Hemel Hempstead: Prentice Hall, Second Edition [E] Chapter 2 - Ashton, D., Hopper, T., and Scapens, R., (eds.) (1995), The History of Management Accounting: Relevance Found, Issues in Management Accounting, Hemel Hempstead: Prentice Hall, Second Edition. [E] Chapter 1 Introduction (pp.1-18) in T. Groot & K. Lukka, Cases in Management Accounting, Prentice Hall, [E] Burns et al., (2004), Management Accounting Education and Training: Putting Management In and Taking Accounting Out, QRAM, Vo. 1, No.1. [E] Case Study: Ondina, S A (Case 15) from Cases in Management Accounting, ed Groot, T. and Lukka, K., Financial Times / Prentice Hall, (2000) Tuesday (9-13): Comparative Analyses of Management Control Practices Readings: Currie, W., (1995), A Comparative Analysis of Management Accounting in Japan, USA, UK and West Germany, Chapter 15, in Issues in Management Accounting (eds), Ashton, D, Hopper, T. and Scapens, R.W, pp [E]

4 Carr, C. and Tomkins, C., (1998), Context, culture and the role of the finance function in strategic decisions. A comparative analysis of Britain, Germany, the U.S.A. and Japan, Management Accounting Research, Vol. 9, pp [E] Guilding, C., Cravens, K.S., and Tayles, M., (2000), An international comparison of strategic management accounting practices, Management Accounting Research, 11, pp [D] Carr, C. and Tomkins, C., (1996), Strategic investment decisions: the importance of SCM. A comparative analysis of 51 case studies in U.K. U.S. and German companies, Management Accounting Research, Vol. 7, pp [D] Wednesday (9-13): Management Accounting Research: Normative and Positive Approaches: Rational Model, Agency Theory and Behavioural Model Readings: Chapter 11, 12 & 14 Management Accounting Change Approaches and Perspectives, by Wickramasinghe, D and Alawattage, C, Routledge: London.[E] Collin Drury Chapter 1 - Management and Cost Accounting, London: Thompson Business Press, 6th (2004) Edition [E] Chapter 1 - Accounting for Management Control (2nd edition) C. Emmanuel, D. Otley & K. Merchant, 1990, Chapman & Hall. [D] Chapters 2 & 5 - Accounting for the Human Factor, L.Parker, K.Ferris & D.T. Otley, Prentice Hall. [D] Chapter 11 - Issues in Management Accounting, Ashton, D., Hopper, T., and Scapens, R., 1995, (Eds), Hemel Hempstead: Prentice Hall, 2nd edition. [E] Chapter 2 - The social software of accounting and information systems, N. B. Macintosh, Published Chichester: Wiley, [D] Case Study: Tradition Limited (attached) taken from Management and Cost Accounting, by Collin Drury, London: Thompson Business Press, 6 th (2004) Edition.

5 Thursday (9-13): Management Accounting Research: Positive Approaches - Contingency Approaches Collin Drury Chapter 17 - Management and Cost Accounting, London: Thompson Business Press, 6th (2004) Edition. [E] Chapter - Chapter 3 - Issues in Management Accounting, Ashton, D., Hopper, T., and Scapens, R., 1995, (Eds), Hemel Hempstead: Prentice Hall, 2nd edition. [E]. Chapman, C S., (1997) Reflections on a contingent view of accounting, Accounting Organisations and Society, Vol. 22, no. 2, pp [D] Otley, D. T. (1980). The contingency theory of management accounting: Achievement and prognosis. Accounting, Organizations and Society 5(4): [D] Case Study: To be distributed during the lecture Friday (9-13): Revision of Normative and Positive Approaches and Students Presentations Presentation Titles 1 & 2: Management Accounting practices have moved from traditional roles to modern information technology strategic roles in a global economic environment. Task: Critically examine the roles of management accounting in sustaining modern business enterprises in an information technology-based era. In an article in The European Accounting Review, Mitchell (2002) argues that Management Accounting Research only exists because there is a real-world practice of Management Accounting. Task: Critically evaluate the contribution of Positive Theories to Management Accounting Practices. Week 2: Management Accounting Research: Alternative Approaches Monday (9-13): Management Accounting Research: Problems in Positive Approaches and Introduction to Alternative Research Case Study: CAA Case A (attached) Readings

6 Boland, R.J (1993) Accounting and the Interpretative Act, Accounting, Organizations and Society, 18 (2/3): [E] Chapter 11, 12 & 14 Management Accounting Change Approaches and Perspectives, by Wickramasinghe, D and Alawattage, C, Routledge: London (E) Tuesday and Wednesday (9-13): Management Accounting Research: Alternative Approaches: Interpretive and Critical Hopper, T, Storey, J and Willmott., 1987, Accounting, Organisations and Society, Vol. 12, No.5, pp (E). Armstrong, P. (2008) Calling out for More: Comment on the Future of Interpretive Accounting Research, Critical Perspectives on Accounting, 19(6): [E] Kakkuri-Knuuttila, Lukka, K. and Kuorikoski, J. (2008) Straddling between Paradigms: A Naturalistic Philosophical Case Study on Interpretive Research in Management Accounting, Accounting, Organizations and Society, 33 (2 3): [D] Baxter, J. and Chua, W (2003), Alternative Management accounting Research Whence and whither, Accounting, Organizations and Society, Vol. 28, pp (D) Hopper, T., Powell, A. (1985), "Making sense of research into the organizational and social aspects of management accounting: a review of its underlying assumptions", Journal of Management Studies, pp (D) Case Study: CAA Case B (attached) Thursday (9-13): Critical Realism and Structuration: Structure, Agency and Management Control Readings: Archer, M. (1982) Morphogenesis versus Structuration: On Combining Structure and Action, British Journal of Sociology 33(2): [E] Englund, H. and Gerdin, J. (2008) Structuration Theory and Mediating Concepts: Pitfalls and Implications for Management Accounting, Critical Perspectives on Accounting, 19(8): [E]

7 Macintosh, N. B. and Scapens R. W. (1990) Structuration Theory in Management Accounting, Accounting, Organizations and Society 15(5): [E] Sewell, J. W. (1992) A Theory of Structure: Duality, Agency, and Transformation, The American Journal of Sociology, 98(1):1-29 [E] Case Study: FA (attached) Friday (9-13): Revision of Alternative Research in Management Accounting and Students Presentations Presentations 3 & 4: In an article in The European Accounting Review, Mitchell (2002) argues that Management Accounting Research only exists because there is a real-world practice of Management Accounting. Task: Critically assess the contribution of Interpretive Theories to management accounting practices. In an article in The European Accounting Review, Mitchell (2002) argues that Management Accounting Research only exists because there is a real-world practice of Management Accounting. Task: Critically assess the contribution of Critical Theories to management accounting practices. Week 3: Management Accounting Research and Practices: International Context Monday (9-13): Culture and Management Control Hofstede, G. Cultural Consequences: International Differences in work-related values, abridged version. London: Sage, 1984 [E]. Chow, C.W., Shields, M D., & Wu, A., The Importance of National Culture in the Design of and Preference for Management Controls for Multinational Operations, Accounting, Organizations and Society, Vol.24, 1999, pp [E].

8 Wickramasinghe, D and Hopper, T., (2005), A cultural political economy of management accounting controls: a case study of a textile Mill in a traditional Sinhalese village, Critical Perspectives on Accounting, Volume 16, Issue 4, May 2005, Pages [E] Mcsweeney, B., Hofstede s Model of National Cultural Differences and Their Consequences: A Triumph of Faith A Failure of Analysis, Human Relations, Vol. 55, No.1, 2002, pp (D) Harrison, G., L, McKinnon, J.,L., Panchapakesan, S., and Leung, M., The Influence of Culture on Organizational Design and Planning and Control in Australia and United States Compared with Singapore and Hong Kong, Journal of International Financial Management and Accounting, Vol. 5, No. 3, 1994, pp (D) Case Study: Factory in Sri Lankan Village (attached) Tuesday (9-13): Students presentation and Lecture on Management Controls and Reforms in Public Sector Enterprises Presentation Titles 5 & 6: Are management accounting control systems used differently in different cultures? Are Hofstede s research tools sufficient to examine this? For Against Readings: Xu, W and Uddin, S, N., (2008), Changing Regimes of Control, Public Sector Reforms Privatisation: A Case Study from China, Accounting Forum, Vol., 32, No. 2, June 2008, Pages [E] M. Alam, Budgetary Process in Uncertain Contexts: A Study of State-Owned Enterprises in Bangladesh, Management Accounting Research 1997, V8 (2), pp [E] S. Uddin & Tsamenyi, M., Public Sector Reforms and the Public Interest: A Case Study of Performance Monitoring in a Ghanaian State-Owned Enterprise (SOE), Accounting, Auditing and Accountability Journal, Vol.18, No.5, pp , [E] Case study: PC Chemical Company (attached)

9 Wednesday (9-13): Students presentations and Management Control and Reforms in Local Governments Presentations Titles 7 & 8: State enterprises in LDC s are beset with uncertainty, therefore controls should be designed and operated according to best practices in high uncertainty business organisations in the West. For Against Readings Lapsley, I. and Pallot, J. (2000), Accounting, management and organisational change: a comparative study of local government, Management Accounting Research, Vol. 11 No. 3, pp [E] Horton, S., (2003), Participation and Involvement The democratisation of new public management? International Journal of Public Sector Management, Vol. 16, No. 6, pp [e] Lapsley, I. (1999) Accounting and the New Public Management: Instruments of Substantive Efficiency or a Rationalising Modernity? Financial Accountability and Management, 15(3) & (4), August/November, pp [D] Caccia, L. and Steccolini, I. (2006) Accounting Change in Italian Local Governments: What s Beyond Managerial Fashion? Critical Perspectives on Accounting, Vol.17, Nos.2-3, February/April, pp [D] Case Study: Ugandan Case (attached) Thursday (9-13): Privatisation and Management Controls Vernon-Wortzel, H and Wortzel, L. H, Privatisation: Not the Only Answer, World Development, vol.17, No , pp [E] Arnold, P. & Cooper C., A Tale of Two Classes: The Privatisation of Medway Ports Critical Perspectives on Accounting, 1999, pp [E]

10 S. Uddin & T. Hopper, A Bangladeshi Soap Opera: Privatisation. Accounting and regimes of Control in a Less Developed Country, Accounting, Organizations and Society, Oxford; Oct/Nov 2001; Vol. 26, No. 7/8, pp [E] Catchpowle, L. & Cooper, C., No Escaping the Financial: The Economic Referent in South Africa, Critical Perspectives on Accounting, Vol. 10, No. 6, 1999, pp [D] Danture Wickramasinghe, Trevor Hopper, Chandana Rathnasiri (2004), Japanese cost management meets Sri Lankan politics: Disappearance and reappearance of bureaucratic management controls in a privatised utility, Accounting, Auditing & Accountability Journal, Vol. 17, Issue. 1, pp [D] Ogden, S. G., Accounting for Organizational Performance: The Construction of the Customer in the Privatized Water Industry, Accounting, Organisations and Society, Vol. 22, No. 6, 1997, pp [D] S. Uddin and T. Hopper, Accounting for Privatisation: Testing World Bank Claims, Critical Perspectives on Accounting, Vol. 14, Issue, 7, October 2003, Pages [D] Case Study: Factory in Sri Lankan Village Continued (attached) Friday (9-13): Presentations, Coursework Feedback, Revision and Discussions on Exam Preparation Presentation Titles 9 & 10 Does privatisation improve management controls and enhance enterprise performance and facilitate development goals? For Against Week 4: Exam Preparation Coursework Details: Home Assignment: (a) Management accounting has moved away from traditional transaction-based financial information to non-financial and futuristic information. Discuss the above statement, highlighting the new roles of management accountants and accounting in modern business enterprises.

11 Important Information about the individual home assignment The coursework contributes 30% of the overall assessment (i) (ii) (iii) (iv) Essays must be submitted by Monday 15 th August, 2011 at 1pm. The essay is an individual piece of work. Essays should not exceed 2,500 words in length, and should be doublespaced and word-processed. Essays should include a title page, and a bibliography incorporating a full list of references for all books, articles and other sources used in the essay. The bibliography need not be included in the word count.