Agency theory, national culture and management Control Systems

Management control system of an organization is the structured facet of management, the formal vehicle by which the management process is executed. In most organizations, systems exist for planning, organizing, directing, controlling and motivating. Depending on the level of appropriateness and quality of the management control systems, the task of management is either facilitated or hindered. The end goal of a management control system is achieving organizational objectives. Because employees (agents) do not always give their best efforts for achieving organizational objectives, management control systems need to strive for aligning goals of agents (e.g., employees, subordinates) with that of principals (e.g., senior management, owners). Agency theory and its extension, principal agent model, provide insights to the problem of goal congruence and suggest remedies, at least in the Western cultural context. Whether the agency theory presumptions, predictions and prescriptions are universally applicable is an important issue in management. Their validity in different cultural contexts is largely unknown. The available literature to date indicates the possibility that agency theory may not be valid in non-western cultures. However, further empirical research is needed in non-western cultures to shed more light to this issue.

Management control systems use, organisational capabilities and performance in universities: application of the resource-based view

Invoking the resource-based view (RBV), this study investigates relationships between management control systems (MCSs) use, including information use from performance measurement systems (PMSs), and organisational capabilities in the context of academic units of Australian universities. Increased competition and attention to distinctive capabilities amongst universities, particularly at their strategic operating unit level of Schools 1, provides the setting for application of this theoretic perspective. The objective of this study is to model various relationships between diagnostic and interactive use of MCSs, attention given to centrally-imposed and discretionary types of PMS information, the strength of capabilities of the academic unit and, in turn, performance of the academic units. This objective is investigated using a field survey in which a mail survey instrument is administered to a census of all Heads of Schools in all 39 universities in Australia. Valid responses were received from 166 Heads. Principal components factor analysis finds that Heads conceived capabilities of their unit in functional dimensions, not in generic dimensions as found in prior literature; Heads also considered performance measures in terms of their importance (critical or discretionary) rather than type (financial versus non-financial). Partial least-squares analysis is then used for path modelling, and several significant results are obtained. Highlights are that diagnostic MCS use and centrally-imposed performance measures, i.e., key performance indicators, but not interactive MCS use or discretionary performance measures, significantly relate to some or all of the strength of capabilities in the fields of teaching, research and networking, and in turn indirectly relate to performance of the academic units. The findings have practical implications for styles of control systems use; focus on selected key performance measures; and development of organisational capabilities for achievement of superior performance by academic schools in universities.

Knowledge sharing in professional accountancy firms : the effects of task complexity and management control system

Numerous empirical studies on knowledge management have focused on effectiveness of enablers such as organizational structure (Bennett and Gabriel, 1999; Gold et al., 2001), technology (Gold et al., 2001; O’Dell and Grayson, 1998), culture (DeLong and Fahey, 2000; Gupta and Govindarajan, 2000), managerial system (Nonaka, 1994; Sveiby, 1997) and strategy (Bierly and Chakrabarti, 1996; Holsapple and Joshi, 2001) on knowledge sharing. These enablers are organizational infrastructure or mechanism for facilitating the sharing of knowledge in a firm. In knowledge-intensive firms, task complexity and management control systems (MCS) can potentially affect the mode and effectiveness of knowledge sharing. However, these two factors have not been distinctly and explicitly investigated and discussed in literature relevant to the domain of knowledge sharing and management. This study proposes to examine how task complexity and the design of MCS could be the key determinants of the mode and effectiveness of knowledge sharing in professional accounting firms or practices.

Agency theory and culture : implications for research in management control systems

The objective of this paper is to encourage further research into the applicability of agency theory for the study of management control issues of organisations in Asian societies.

Students` performance and perception linked to the use of group and audience response systems (GARS) in large classes

This paper reports an investigation into the impact of Group and Audience Response Systems (GARS) on students’ learning outcomes, and perceptions of learning in large classes. Performance is compared between students who used the technology, and students who did not, based on progressive assignment and exam results. Perception is assessed based on an online survey questionnaire. The key findings of this study indicate that students who used the technology achieved, on average, 6.70% higher grades compared to those who did not. Further, use of the technology improved the overall achievement of students, on average, regardless of their perception of whether or not it would provide
an academic advantage. Key findings and future use of the technology are discussed.

Management control systems and effectiveness of knowledge sharing

Numerous empirical studies on knowledge management have examined the relative effectiveness of various enablers, such as organizational structure (Bennett and Gabriel, 1999; Gold et aI., 2001), technology (Gold et aI., 2001; O'Dell and Grayson, 1998), culture (DeLong and Fahey, 2000; Gupta and Govindarajan, 2000), managerial system (Nonaka, 1994; Sveiby, 1997) and strategy (Bierly and Chakrabarti, 1996; Holsapple and Joshi, 2001) on knowledge creation and sharing in organizations. Little research has focused on the role of management control systems (MCS) in facilitating knowledge sharing in knowledge-intensive firms (Ditillo, 2004). This study examines how the interactive use of management control systems (MCS) could facilitate the different modes of knowledge sharing among accounting professionals in Malaysia. Based on Nonaka's (1994) knowledge sharing mode, this study found a highly significant relationship between an interactive use of MCS and knowledge sharing to suggest that a more open, less fmancial-oriented and more interactive type of MCS tends to interlink and underpin organizational social process which is the central part of the knowledge sharing process. While professional accountants are generally keen to gain access to knowledge databases to source for possible task solutions, they are generally hesitant to share their tacit knowledge by transforming that knowledge into explicit form. The fmding suggests that there may be cultural-related factors that inhibit sharing of one's tacit knowledge totally and completely.

A new design of sliding mode control systems

A new sliding mode control technique for a class of SISO dynamic systems is presented in this chapter. It is seen that the stability status of the closed-loop system is first checked, based on the approximation of the most recent information of the first-order derivative of the Lyapunov function of the closed-loop system, an intelligent sliding mode controller can then be designed with the following intelligent features: (i) If the closed-loop system is stable, the correction term in the controller will continuously adjust control signal to drive the closed-loop trajectory to reach the sliding mode surface in a finite time and the desired closed-loop dynamics with the zero-error convergence can then be achieved on the sliding mode surface. (ii) If, however, the closed-loop system is unstable, the correction term is capable of modifying the control signal to continuously reduce the value of the derivative of the Lyapunov function from the positive to the negative and then drives the closed-loop trajectory to reach the sliding mode surface and ensures that the desired closed-loop dynamics can be obtained on the sliding mode surface. The main advantages of this new sliding mode control technique over the conventional one are that no chattering occurs in the sliding mode control system because of the recursive learning control structure; the system uncertainties are embedded in the Lipschitz-like condition and thus, no priori information on the upper and/or the lower bounds of the unknown system parameters and uncertain system dynamics is required for the controller design; the zero-error convergence can be achieved after the closed-loop dynamics reaches the sliding mode surface and remains on it. The performance for controlling a third-order linear system is evaluated in the simulation section to show the effectiveness and efficiency of the new sliding mode control technique.

Management control systems and organisational learning: the effects of design and use

Purpose – The purpose of this paper is to present a study on relationships between the design of management control systems (MCS), the use of MCS and organisational learning (OL). Design/methodology/approach – This study adopted a survey method. A written questionnaire was prepared and mailed out to collect quantitative data. After analysis of the empirical results, follow-up interviews were conducted to develop a deeper understanding of the empirical results. Findings – Findings of the study show that both the design and use of MCS are significantly associated with levels of OL activities in organisations, and the use of MCS is found to be a more influential factor in OL. Originality/value – This paper contributes to the accounting literature by providing empirical evidence on the relative impacts of the design and use of MCS on OL activities in organisations and the interaction between the design and use of MCS in influencing OL.

Occupational safety and health management systems in Australia: barriers to success

The growing popularity of occupational safety and health management systems in Australia has stimulated critical debate about their effectiveness. This paper asks whether the performance of such systems lives up to expectations. Making use of a research review and an extensive interviewing programme, the paper draws several conclusions. First, it observes that the definitional requirements for an occupational safety and health management system have been watered down, making it more likely that organisations can claim to have a system, but less likely that it will be effective. Second, a review of empirical research reinforces the view that systems can improve health and safety outcomes, but only if they meet strict conditions concerning senior management commitment, effective workforce involvement and programme integration. Third, several barriers to successful implementation are identified, including the failure to meet essential success factors, the inappropriate application of audit tools to ensure compliance, and their problematic application in certain sectors such as small business, contractors, and the part-time and temporary workforce. The paper concludes that occupational safety and health management systems can live up to their promise, but often fail to do so because of inadequate implementation or application in hostile environments.

Eccentricity and hardness control in cold rolling mills with a dynamically constructed neural controller

The main objective of a steel strip rolling process is to produce high quality steel at a desired thickness.  Thickness reduction is the result of the speed difference between the incoming and the outgoing steel strip and the application of the large normal forces via the backup and the work rolls.  Gauge control of a cold rolled steel strip is achieved using the gaugemeter principle that works adequately for the input gauge changes and the strip hardness changes.  However, the compensation of some factors is problematic, for example, eccentricity of the backup rolls.  This cyclic eccentricity effect causes a gauge deviation, but more importantly, a signal is passed to the gap position control so to increase the eccentricity deviation.  Consequently, the required high product tolerances are severely limited by the presence of the roll eccentricity effects.
In this paper a direct model reference adaptive control (MRAC) scheme with dynamically constructed neural controller was used.  The aim here is to find the simplest controller structure capable of achieving an optimal performance.  The stability of the adaptive neural control scheme (i.e. the requirement of persistency of excitation and bounded learning rates) is addressed by using as the inputs to the reference model the plant's state variables.  In such a case, excitation is due to actual plant signals (states) affected by plant disturbances and noise.  In addition, a reference model in the form of a filter with a desired transfer function using Modulus Optimum design was used to ensure variance in the desired dynamic characteristics of the system.  The gradually decreasing learning rate employed by the neural controller in this paper is aimed at eliminating controller instability resulting from over-aggressive control.  The moving target problem (i.e. the difficulty of global neural networks to perfrom several separate computational tasks in closed -loop control) is addressed by the localized architecture of the controller.  The above control scheme and learning algorithm offers a method for automatic discovery of an efficient controller.
The resulting neural controller produces an excellent disturbance rejection in both cases of eccentricity and hardness disturbances, reducing the gauge deviation due to eccentricity disturbance from 33.36% to 4.57% on average, and the gauge deviation due to hardness disturbance from 12.59% to 2.08%.

Occupational health and safety management systems : system types and effectiveness

The aim of this thesis is to develop a framework to evaluate the relative performance of different types of health and safety management system. This objective is an analytical one, but it stems from a policy issue of public importance. Over the past decade Australia, like other countries, has seen the emergence and growth of interest in developing health and safety management systems. But are they all the same, and if not, do they differ in their effectiveness? The thesis does not seek to give a definitive answer to these questions. Given the novelty of the phenomenon and the lack of research on this subject, the research is exploratory. An hypothesis about the effectiveness of different health and safety management systems is developed rather than tested. The thesis proceeds by first defining health and safety management systems as a combination of the planning and review, the management arrangements, the consultative arrangements and the specific program elements that work together in an integrated way to improve health and safety performance. A research procedure is described involving twenty exploratory case studies. The thesis then - develops - from the literature and the case study research - an analytical framework to evaluate the performance of different health and safety management systems. That framework has two parts. First is a typology of health and safety management systems. This is constructed from two distinctions - between 'safe place' and 'safe person' approaches to health and safety; and between 'innovative' and traditional' management methods and structures. These distinctions yield four types of system. The typology was applied to the case studies which yielded a reasonable fit in most instances. The second part of the framework is a 'process evaluation' technique akin to Quality standards. Derived from the Victorian SafetyMAP audit criteria, the "e;process evaluation tool "e; is preferred to traditional outcome measures such as incident or claim rates. Using this measure, the twenty case study enterprises were classified as above average, average or below average in performance. These results correlated poorly with traditional incident trend and benchmark measures. The two elements of the framework are then combined to explore the relationship between the different types of system and their performance. Evidence from the twenty case studies showed a tendency for innovative/safe place firms to perform better than traditional/safe person firms. This finding can form the basis for a hypothesis that may be subject to statistical testing on a generalisable sample. In addition five 'best practice' cases were selected and subjected to a cross case analysis to search for common characteristics that might explain their performance. This analysis suggests the importance of a number of factors: senior managers who drive health and safety change and mobilise all possible resources in the pursuit of change; health and safety representatives who work with managers in a 'joint regulatory relationship' across system activities; the involvement of employees more generally, but not as a substitute for action by managers and health and safety representatives; a comprehensive approach to elimination of all hazards; and the introduction of innovative programs to continually improve systems and facilitate employee involvement in health and safety.