Conflicting interests but filtered key targets : Stakeholder and resource-dependency analyses at a University of Applied Sciences

Abstract: Stakeholder theory (SHT) emphasizes that different stakeholders and their interests need to be identified and addressed to maximize firm performance. This emphasis can make the design of performance measurement systems (PMS) challenging because the interests of stakeholders are often in conflict. Based on previous research and using stakeholder and resource dependency theories, we develop a theoretical model suggesting that resource dependency acts as a “filter” in selecting which of the PMS design measures are emphasized for decision making. We find various conflicting interests between stakeholders in our case organization (a unit of University of Applied Sciences in Finland) that affected PMS design. Contrary to the earlier studies, however, we found that despite conflicting interests, all of the different stakeholders considered one nonfinancial indicator to be the most important: attractiveness, or the number of applicants divided by number of new students. As suggested by resource-dependency theory (RDT), the stakeholder providing the most resources had the most significant impact on the selection of the key performance indicators used. The key resource provider may also have had some effect on the expectations of other stakeholders

Strategic pricing possibilities of grocery retailers : an empirical study

The right pricing of products is one of the most important issues concerning the development of companies’ financial performance. Prices should be low enough to attract customers and at the same time high enough to cover all the emerged costs and expected profits. This research illustrates how self-organizing maps (SOM) can be used for pricing purposes. We show how changes in a company’s pricing policies would affect the company’s pricing position. The study illustrates clearly that companies have different possibilities to change their pricing positions. The SOM method is new and can be applied in many different ways through different pricing simulations.La tarifación correcta de los productos es una de los problemas más importantes, en relación con el desarrollo del desempeño financiero de las compañías. Los precios deberían ser lo suficientemente bajos para atraer a los clientes, y al mismo tiempo, lo suficientemente altos para cubrir todos los costes emergentes y los beneficios previstos. Esta investigación ilustra cómo los mapas auto-organizadores (SOM en inglés) pueden ser usados para fines de tarifación. Mostramos cómo los cambios en las políticas de tarifación en una empresa, pueden afectar a la posición de tarifación de la misma. El estudio muestra claramente que las empresas tienen diferentes posibilidades para cambiar dichas posiciones. El método SOM es nuevo y puede ser aplicado de muchas maneras mediante varias simulaciones de tarifación

Management control systems in small business transfers : a resource-based view

This study investigates whether post-business transfer MCS development (PBTMCSD) is associated with post-business transfer success (PBTS) in small firms. The data for the study was collected in January 2012 as a web-based survey. The target group consisted of acquirers (both external buyers and family business successors) who had implemented a business transfer during 2006-2011 in Finland. A total of 178 questionnaires were sent out, and 67 responses were received. Regression analysis is used to investigate the relationship between PBTMCSD and PBTS. We utilize both resource-based view (RBV) and contingency theory. The results indicate that PBTMCSD has a positive and significant relation with PBTS. Our findings highlight the importance of PBTMCSD even in small companies in the context of business transfer. However, the relationship between PBTMCSD and PBTS performance was stronger for firms with five or more employees as well as firms with previous experience of business transfers

Collective identity, institutional logic and environmental management accounting change

•Purpose: We examine how collective identity and institutional logic affect the design and use of an environmental performance measurement system. •Design/methodology/approach: We use a qualitative case study with abductive theorizing and empirical data obtained through semi-structured interviews, observation and document analysis. •Findings: The new environmental measures were reshaped by aligning them with the existing and dominant collective identity in the case organization – in other words, cost savings and profitability. Moreover, the institutional logic forced the environmental measures to remain non-strategic and non-bonus criteria in favour of traditional financial measures. •Originality/value: Thornton and Ocasio’s (2008) institutional logic is applied and its potential for analysing change in environmental accounting is shown. The study illustrates how collective identity and institutional logic are important mechanisms for reshaping environmental performance measurement design and use, when the existing collective identity is reproduce

Internal control effectiveness : a clustering approach

Purpose: Internal control frameworks provide only broad guidance concerning internal control concepts, leaving the details to the adopting firms. In this study the adopted internal control structure and effectiveness in firms is examined and visualized, and a typology of firms is presented. Control structure and effectiveness are measured based on the assessment of management, rather than using reported material weaknesses as most studies do. This type of evaluation is more purposeful for firms that do not apply the Sarbanes-Oxley Act. Design/methodology/approach: The survey data (from 741 CEOs) are clustered using the self-organizing map (SOM), a visual artificial neural network approach. A three-dimensional effectiveness proxy is used. Findings: The analysis reveals four alternative types of internal control effectiveness in firms and visually presents how the components of the internal control structure (COSO) are associated with each one. A typology of internal control structure and effectiveness is then created. Practical implications: The findings suggest that there are interrelated, but not straightforward, relationships between internal control variables, and that there is a link between some of them and higher internal control effectiveness in practice. These findings have important implications for those responsible for improving or assessing internal control, such as management, personnel, and internal and external auditors. Originality/value: This article uses a clustering approach to create a typology for alternative types of internal control structure and effectiveness, based on data from actual firms. Instead of using material weaknesses as a measure, this study uses managers’ own assessments of internal control effectiveness

Integrating greenness into a balanced scorecard in a food processing company

urpose – The purpose of this paper is to investigate how and why a case company integrated an environmental management system (EMS) into a performance management system (PMS), specifically a balanced scorecard (BSC). Design/methodology/approach – This interpretative case study utilized qualitative methods in semi‐structured interviews, internal documents and e‐mails. Findings – The company integrated its environmental measures into the process perspective in its BSC. The integration centralized its fragmented PMS, stimulated its strategic control and complemented its financial reporting. This integration also crystallized the causality between the company's environmental actions and financial performance. Therefore, the integration enabled improvements to environmental performance and strengthened the finance‐oriented culture of the company. Research limitations/implications – The study has general limitations associated with the qualitative methods used. Originality/value – The paper shows that environmental measures are worthwhile elements to integrate into the process perspective of a PMS if a company is in an industrial sector. Environmental measures can be worth selecting due to the way the measures affect a company's financial performance, if the company has a very finance‐driven culture. BSC can be useful for different purposes, such as for centralizing a fragmented information system, legitimizing environmental actions and for strengthening corporate culture.peerReviewe

Collective action in implementation of a “greener” performance measurement system.

Purpose – The purpose of this paper is to investigate how different actors influenced the implementation of an environmental management system (EMS) and a performance measurement system (PMS) in a case company when the systems are eventually integrated. Another purpose is to illustrate how the frameworks of Gibson and Earley and Lovaglia et al. can be utilized to investigate the implementation of different management systems in practice. Design/methodology/approach – This paper is an interpretative case study, which utilizes qualitative methods such as semi‐structured interviews and internal documents. Findings – The results indicate the importance of maintaining a separation between the power and status of an actor in EMS and PMS implementation processes, and the ways in which the power and status of actors in the EMS and PMS implementation differed. The status and role of an actor can change although the power may be static during the implementation of different management systems. Therefore, the paper confirms the classification of Lovaglia et al. and proposes that their classification should be added to the framework of Gibson and Earley. Originality/value – Earlier accounting studies using the institutional theory framework of Burns and Scapens did not specifically investigate the role of actors, or their power and status in implementing two different management systems. The collective action frameworks of Gibson and Earley and Lovaglia et al. have not been practically utilized before in EMS and PMS studies. Furthermore, EMS and PMS integration studies have usually been normative without empirical case data.peerReviewe

Interactive budgeting, product innovation, and firm performance : empirical evidence from Finnish firms

nnovation has generally been considered essential to the prosperity of firms. The existing innovation literature does not emphasize budgeting as an important contributor to product innovation, even though it recognizes that poor budgeting may weaken the capability to innovate. However, the budgeting literature suggests that budgets can be used in different ways to improve firm performance. The purpose of this study is to investigate how the frequency of budget preparation and the interactive use of budgets are associated with product innovation and firm performance. The empirical data were collected, through a web-based survey, from CFOs and CEOs in 132 Finnish firms. The results of our partial least squares analysis indicate that the frequency of budget preparation positively affects product innovation through interactive budget use, which supports our hypothesis. Furthermore, the frequency of budget preparation and interactive budget use do have a direct positive relationship with firm performance, but one mediated by product innovation. Therefore, this study contributes to the innovation and budgeting literature by showing the frequency of budget preparation and interactive use of budgets to be two separate and important factors in product innovation. The results also show that the relationship between budgets and product innovation and performance are different in defender and prospector firms