Gediehn Management Accounting Practice and Strategic Behavior

On the Dysfunctional Effect of Short-Term Budgetary Goals on Managerial Long-Term Growth Orientation
2010
ISBN: 978-3-8349-8606-1
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Deutsch, 195 Seiten, eBook

Reihe: Research in Management Accounting & Control

Oliver Gediehn examines the determinants of managerial long-term (growth) orientation. Quantitative evidence casts serious doubts on the existence of a dysfunctional effect between the emphasis on short-term goals and myopic management behavior.

Dr. Oliver Gediehn completed his doctoral thesis at the Chair of Management Accounting and Control at the European Business School, Oestrich-Winkel. He works as a consultant in Berlin.

Zielgruppe

Research

Autoren/Hrsg.

Gediehn, Oliver

Weitere Mitwirkende

Schäffer, Prof. Dr. Utz

Inhaltsverzeichnis

1;Foreword;5
2;Preface;7
3;Contents;9
4;Tables;13
5;Figures;14
6;A Introduction;15
6.1;1. Research Issue and Objectives;15
6.2;2. Plan of the Study;18
7;B Structuration Theory and Management Accounting Research;20
7.1;1. Structuration Theory as an Ontological Frame of Reference;20
7.1.1;1.1. Structuration Theory as Socio-Scientific Meta-Theory;20
7.1.2;1.2. Post-Positivist Approach to Science;21
7.1.3;1.3. Ontological Synthesis;22
7.1.4;1.4. Duality of Structure;23
7.1.5;1.5. Research Informed by Structuration Theory;25
7.1.6;1.6. Critical Review on the Application of Structuration Theory;32
7.2;2. Structuration Theory in Management Accounting Research;35
7.2.1;2.1. Previous Accounting Research Informed by Structuration Theory;35
7.2.2;2.2. Structurationist Research Perspective on Management Accounting;41
7.2.2.1;2.2.1. Management Accounting as a Social Practice;41
7.2.2.2;2.2.2. Management Accounting within the Social Context;43
7.2.2.3;2.2.3. Social Dimensions of Management Accounting Practices;44
7.2.2.4;2.2.4. Empirical Research in Management Accounting Informed by ST;47
7.2.3;2.3. Value of ST in Management Accounting Research;52
8;C Management Accounting and Managerial Long-Term Orientation;55
8.1;1. Debate on 'Economic Short-Termism';56
8.2;2. RAPM Research;59
8.2.1;2.1. Definition of RAPM;59
8.2.2;2.2. Overview of the RAPM Research Stream;61
8.2.3;2.3. RAPM and Managerial Long-Term Orientation;62
8.2.4;2.4. Organizational Role Theory and RAPM Research;64
8.2.4.1;2.4.1. Basic Concepts of Role Theory;64
8.2.4.2;2.4.2. Application of Organizational Role Theory in RAPM Research;66
8.2.5;2.5. Social Dimensions of RAPM;69
8.3;3. Research Gap and Research Questions;71
8.3.1;3.1. Research Gap;71
8.3.1.1;3.1.1. Persistence of Accounting-Based Performance Measures;71
8.3.1.2;3.1.2. Increasing Relevance at the Middle Management Level;73
8.3.2;3.2. Research Scope;75
8.3.2.1;3.2.1. Long-Term Growth Orientation as Part of Long-Term Orientation;75
8.3.2.2;3.2.2. The Relevant Organizational Context;79
8.3.3;3.3. Research Questions;80
9;D Research Design;81
9.1;1. Research Approach;81
9.1.1;1.1. Case Study Approach;81
9.1.2;1.2. Two-Staged Design;82
9.1.3;1.3. Crucial Case Setup;83
9.1.4;1.4. Survey Design Parameters;84
9.2;2. Research Site;85
10;E Field Interviews;87
10.1;1. Purpose;87
10.2;2. Method;88
10.2.1;2.1. Selection of Informants;88
10.2.2;2.2. Semi-Structured Interviews;90
10.2.3;2.3. Group Discussion;91
10.3;3. Results;93
10.3.1;3.1. The Level of Managerial Long-Term Growth Orientation;93
10.3.2;3.2. The Role and Relevance of RAPM;95
10.3.2.1;3.2.1. Formal Incentive System;96
10.3.2.2;3.2.2. Extent of RAPM in Practice;96
10.3.2.3;3.2.3. Dysfunctional Consequences of the RAPM Practice;98
10.3.3;3.3. Other Relevant Factors of the Organizational Context;99
10.3.3.1;3.3.1. Corporate Entrepreneurship;99
10.3.3.2;3.3.2. Properties of the Strategy-Making Process;112
10.3.4;3.4. Propositions to Be Tested and Resulting Research Model;118
10.3.4.1;3.4.1. Dysfunctional Effect of RAPM;118
10.3.4.2;3.4.2. Impact of Corporate Entrepreneurship;118
10.3.4.3;3.4.3. Impact of Strategy-Making;121
10.3.4.4;3.4.4. Resulting Research Model;122
11;F Questionnaire Survey;124
11.1;1. Sample and Procedure;124
11.2;2. Measures;128
11.2.1;2.1. Measure Development;128
11.2.2;2.2. Measure Validation;132
11.3;3. Results;136
11.3.1;3.1. Dysfunctional Effect of RAPM;137
11.3.2;3.2. Impact of Corporate Entrepreneurship;138
11.3.2.1;3.2.1. Impact of Entrepreneurial Orientation on LGO;138
11.3.2.2;3.2.2. Impact of the Entrepreneurial Environment;139
11.3.2.3;3.2.3. Impact of the Individual Proclivity for Entrepreneurship;141
11.3.3;3.3. Impact of Strategy-Making;143
11.3.4;3.4. Relative Impact of RAPM and the Other Relevant Factors;144
12;G Discussion and Outlook;149
12.1;1. Theoretical Implications;149
12.1.1;1.1. On the Dysfunctional Effect of RAPM;149
12.1.2;1.2. On the Other Relevant Organizational Factors;151
12.1.3;1.3. On RAPM Research Informed by Structuration Theory;155
12.1.4;1.4. On Management Accounting Practice and Strategic Behavior;160
12.2;2. Managerial Implications;163
12.2.1;2.1. RAPM;163
12.2.2;2.2. Corporate Entrepreneurship;164
12.2.3;2.3. Strategy-Making;166
12.3;3. Limitations and Outlook;168
13;Appendix;170
14;References;180

Structuration Theory and Management Accounting Research.- Management Accounting and Managerial Long-Term Orientation.- Research Design.- Field Interviews.- Questionnaire Survey.- Discussion and Outlook.

Leseproben

A Introduction (p. 1)

"Without continual growth and progress, such words as improvement, achievement, and success have no meaning." Benjamin Franklin

1. Research Issue and Objectives

Achieving sustainable sales growth has recently been among the most important topics for business managers in large corporations. Practitioner journals portrait companies in a "do-or-die struggle" for sustained and profitable growth and explore the sources, drivers, and processes of growth.

The attempt to achieve a favorable long-term sales growth trajectory complements the continuous strive for profitability and operational excellence – and creates a latent conflict between short-term efforts for profitability and long-term concerns for growth. Academic research mirrors this conflict and its implications in the stream of literature devoted to the balancing of short-term goal achievement and the encouragement of strategic management behavior or, more generally, managerial long-term orientation.

While short-term goal achievement relates mostly to the attainment of budgetary targets8 or financial planning targets, in general, the operationalization of strategic behavior and long-term orientation is manifold.

It includes the strive for strategic renewal, innovation and adaptation, the concern for long-term positioning and growth, as well as the pursuit of entrepreneurial initiatives. A prominent topic of this stream of research is the role and relevance of management accounting.

To the most part, researchers see current management accounting systems and practices as functional with respect to short-term goal achievement but as dysfunctional or at least problematic with respect to the encouragement of strategic management behavior.

The literature on `economic short-termism` for example proposes the short-term focus on "flawed" management (accounting) practices as one potential root cause for myopic management behavior. Similarly, the Reliance on Accounting Performance Measures (RAPM) research stream assigns an excessive short-term focus as dysfunctional effect to the traditional (accounting-based) management control system.

A common characteristic of these two streams of research is the narrow quantitative empirical base. The impact of the allegedly flawed management practices on economic short-termism builds largely on theoretical arguments while the scarce empirical evidence is only circumstantial or anecdotal in nature.

The various dysfunctional consequences of RAPM including motivational aspects of job satisfaction or jobrelated tension as well as behavioral aspects such as tactical gaming or data manipulation are subjects of extensive empirical research. Yet, only few studies deal with the particular issue of managerial long-term orientation and those that do, fail to deliver conclusive results due to conceptual and methodological limitations.

In summary, the existing management accounting literature "is still inconclusive" to answer as to whether current management accounting practices and in particular the dominant RAPM practice have a dysfunctional effect on managerial long-term orientation. Consequently, the study responds to Van der Stede`s (2000, p. 120) call for future research on this topic and aims to render a more definite answer on the existence of the dysfunctional effect ideally reconciling the previous anecdotal and quantitative empirical evidence.

Reflecting the currently prevailing concern for growth in practice, the study explicitly addresses long-term growth orientation as an element of strategic management behavior and the more inclusive notion of managerial longterm orientation. This approach results in the following first research question guiding the study:

• Does RAPM have a dysfunctional effect on managerial long-term growth orientation?

The study is conducted in the tradition of Hopwood`s call to study management accounting "in the context in which it operates".

Über Autor(innen)

Dr. Oliver Gediehn completed his doctoral thesis at the Chair of Management Accounting and Control at the European Business School, Oestrich-Winkel. He works as a consultant in Berlin.