China Science

We report the results of a nine-year field study that examines how responsibility accounting (RA) is used to manage horizontal relationships among several responsibility center (RC) managers including those who work on committees or cross-functional teams. We find theory-consistent evidence that the goal-congruent design or redesign of accounting and participation practices in general, and of RA in particular, depends on the magnitude, scope, and speed of organizational process change. When there is a change in the magnitude, scope, and speed of organizational process change, we find that the measurability of RC managers’ financial performance can change, and we also find that using RA to manage RC boundaries is an important mechanism for achieving goal-congruent behavior and avoiding dysfunctional behavior. Moreover, we show that several accounting and participation practices (e.g., activity-based costing, open book accounting, project budgeting, cross-functional teams) support RC boundary management that involves framing or reframing RC boundaries so as to influence competitive or cooperative behavior among RC managers. Finally, this study contributes by introducing a new research method to the accounting literature that is effective in structuring and interpreting longitudinal field data in relation to theoretical expectations.

Casey RoweaEmail:casey.rowe@asu.edu?Jacob G. Birnbergb?Michael D. Shieldsc
[a]W.P. Carey School of Business, Arizona State University, Tempe, AZ 85287, USA;[b]Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, USA;[c]Broad Graduate School of Management, Michigan State University, East Lansing, MI 48823, USA

This study examines how comprehensive performance measurement systems (PMS) affect managerial performance. It is proposed that the effect of comprehensive PMS on managerial performance is indirect through the mediating variables of role clarity and psychological empowerment. Data collected from a survey of 83 strategic business unit managers are used to test the model. Results from a structural model tested using Partial Least Squares regression indicate that comprehensive PMS is indirectly related to managerial performance through the intervening variables of role clarity and psychological empowerment. This result highlights the role of cognitive and motivational mechanisms in explaining the effect of management accounting systems on managerial performance. In particular, the results indicate that comprehensive PMS influences managers’ cognition and motivation, which, in turn, influence managerial performance.

Matthew HallaEmail:M.R.Hall@lse.ac.uk
[a]Department of Accounting and Finance, London School of Economics and Political Science, Houghton Street, London WC2A 2AE, United Kingdom

This paper explores the role of accounting calculations in constructing shareholder value within the context of organizational transformation in work organization. Using an intensive longitudinal case study (Conglom, a pseudonym), the paper relates innovation and experimentation in new forms of work organization to a drive for shareholder value creation. The priority given to shareholder value creation was articulated through a proliferation of accounting metrics and calculations that intermediated between the strategic preoccupation with securing financial profitability, as demonstrated by the share price, and the operational challenge of squeezing costs and improving margins to boost short-term performance through outsourcing, programme management and divestment. We interpret the discourse of shareholder value creation and the development of related accounting metrics as a hegemonic move which is central to the reassertion of capital – a development that, we contend, is symptomatic of a shift towards a more ‘despotic’ mode of capitalist reproduction [Burawoy, M., (1985). The politics of production. London: Verso], where the whip of the market, allied to notions of possessive individualism, free choice and self-determination, progressively replaces the velvet glove of the corporatist state. Earlier drafts of this paper have been presented at the Accounting, Organizations & Society Conference on “Accounting, Organizational Transformation and New Organizational Forms”, University of Southern California, Los Angeles, 4–6 November 1999, Warwick University, January 2001, Keele University, March 2001, the European Accounting Association Congress, Copenhagen, April 2002, and Caledonia University, Glasgow, May 2002.

Mahmoud EzzamelaEmail:ezzamel@Cardiff.ac.uk?Hugh Willmotta?Frank Worthingtonb
[a]Cardiff Business School, Cardiff University, Colum Drive, Aberconway Building, Cardiff CF10 3EU, United Kingdom;[b]University of Liverpool, Liverpool, United Kingdom