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 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 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

2 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: Exam 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. The assessment of the course consists of two parts: 3-hour written final exam counting 60 % Coursework counting 40 % The final written exam counting 60 % will take place at the end of the course. Coursework takes place during the course and will consist of the following: One home assignment (topic will be assigned at the beginning of the course) counting 30%

3 Oral presentation(s) of a case/paper (topics/cases will be assigned at the beginning of the course) counting 10% Literature There is no single major textbook for the course. However, a significant number of book chapters will be used from the following textbooks: Collin Drury Management and Cost Accounting, London: Thompson Business Press, 6th (2004) Edition. Issues in Management Accounting, by Ashton, D., Hopper, T., and Scapens, R., (eds.) (1995), Hemel Hempstead: Prentice Hall, Second & Third Editions. 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] PLEASE NOTE ALL LECTURES WILL START 9 AM AND FINISH AT 1PM (UNLESS OTHERWISE ANNOUNCED DURING THE LECTURES) Week 1: Evolution of Management Accounting and Theoretical Approaches Lecture 1 (Tuesday): Development of Management Accounting: Practices and Research 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]

4 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) LECTURES 2, 3 & 4 (WED, THURSDAY AND FRIDAY): RELEVANCE OF MANAGEMENT ACCOUNTING AND STRATEGIC MANAGEMENT ACCOUNTING ISSUES Topic: Relevance of Management Accounting, Japanese Costing Approaches: Life-Cycle Costing: Target Costing and Kaizen Costing, Total Quality Management, and Just in Time (JIT) Reading Drury, Chapter 22 [E] Mackey, J. and Thomas, M., (1995), Costing and the New Operations Management, Chapter 5, in Issues in Management Accounting (eds), Ashton, D, Hopper, T. and Scapens, R.W., pp [E] Monden, Y. and Hamada, K., (1991), Target Costing and Kaizen Costing in Japanese Automobile Companies, Journal of Management Accounting Research, Vol.3 pp [E] Case Study: Danfoss Drives, Drury, C., (2000), Management and Cost Accounting, London: Thompson Business Press, 5 th Edition, pp Topic: Strategic Cost Management Approaches (continued): Business Process Re-engineering and Shank s SCM perspective: Value Chain analysis; Cost Driver analysis; and Competitive Advantage analysis Reading Drury, Management & Cost Accounting, Chapter 22 [E] Shank, J.K., (1996), Analysing technology investments - from NPV to Strategic Cost Management (SCM), Management Accounting Research, 1996, 7, pp [E] Shank, J.K. and Govindarajan, V., (1992) Strategic Cost Management: The Value Chain Perspective, Journal of Management Accounting Research, Vol. 4, pp [E] Barnes, S.J., (2002), The mobile commerce value chain: analysis and future developments International Journal of Information Management, uncorrected proof [D] Case Study: PCCA (Lyford, C.P.,2002, Threads for the future: value chain analysis at PCCA, International Food and Agribusiness Management Review, pp.1 8)

5 Presentation 1: 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. WEEK 2: MANAGEMENT ACCOUNTING RESEARCH Lectures 5, 6 & 7 (Monday Wednesday): Management Accounting Research: Normative and Positive Approaches: Rational Model, Behavioural Model and Contingency Approaches Rational Model Chapter 11, 12 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] Behavioural Model 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. Contingency Approaches

6 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 Lectures 8 & 9: Thursday and Friday: Management Accounting Research: Alternative Approaches: Interpretive and Critical Readings Williams, P., (1989), The logic of Positive Accounting Research, Accounting Organizations and Society, Vol. 14, No. 5/6, pp [D] Boland, R.J (1993) Accounting and the Interpretative Act, Accounting, Organizations and Society, 18 (2/3): [E] Dent, J., (1991), Accounting and Organizational Cultures: A field study of the emergence of a new organizational reality, Accounting, Organizations and Society, Vol. 16, No. 8, pp Chapter 13 - Management Accounting Change Approaches and Perspectives, by Wickramasinghe, D and Alawattage, C, Routledge: London (E) Hopper, Trevor; Storey, John & Willmott, Hugh. (1987) Accounting for accounting: Towards the development of a dialectical view, Accounting, organizations and society, Vol. 12, Iss. 5, pp Accounting, Organisations and Society, Vol. 12, No.5, pp (E). 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: FA (attached)

7 Week 3: Management Accounting Research and Practices: International Context Presentations 2-4: In an article (Research and practice in management accounting: improving integration and Communication, European Accounting Review 2002, 11:2, ), Mitchell (2002) argues that Management Accounting Research only exists because there is a realworld practice of Management Accounting. Presentation 2: Critically evaluate the contribution of Positive Theories to Management Accounting Practices. Presentation 3: Critically assess the contribution of Interpretive Theories to management accounting practices. Presentation 4: Critically assess the contribution of Critical Theories to management accounting practices. Lecture 10 (Monday): Comparative Analyses of Management Control Practices 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] 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] Lecture 11 (Tuesday): Culture and Management Control

8 Hofstede, G. [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]. 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) Lecture 12 (Wednesday): 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 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, Vol (2), pp [E]

9 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) 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 Lecture 13 (Thursday): 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] 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)

10 Friday: 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. Important Information 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.