Articlegreen2020

How management control systems enable and constrain integrated thinking

52 citations0/0 files storedMeditari Accountancy Research

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Accounting and Organizational Management Accounting Theory and Financial Reporting Corporate Social Responsibility Reporting

Abstract

Purpose This paper aims to examine how management control systems (MCS) can enable and constrain the successful adoption of integrated thinking in an organisation. Design/methodology/approach The study adopts a case study approach, involving in-depth interviews and documentary evidence. Findings The case study organisation perceived trust to be critical to the successful adoption of integrated thinking, and informal social controls with strong endorsement from senior management frequently substituted for more formal technical controls in helping to develop a trust-based organisational culture. These cultural changes improved collaboration and brought economic benefits by encouraging outcome-based decision-making rather than capital-based decision-making, thereby enabling employees to identify and address poorly performing projects earlier. However, established performance measurement systems geared towards reporting and rewarding accounting profits created tension, constraining the potential benefits of integrated thinking by reinforcing business unit protectionism. Practical implications Integrated thinking can be seen as a form of management with the potential to improve organisational outcomes. An improved understanding of factors that might enable or constrain integrated thinking could facilitate its spread. Originality/value Despite several calls for research on the practical implementation of integrated thinking, this has not been studied extensively. To the best of the authors’ knowledge, this study is one of the firsts to contribute to a better understanding of the role of MCS in the successful implementation of integrated thinking in an organisation. The study also contributes to the MCS literature.

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References

2008Management control systems as a package—Opportunities, challenges and research directions 1996Culture: The Missing Concept in Organization Studies 2009The design and use of performance management systems: An extended framework for analysis 2002An examination of the corporate social and environmental disclosures of BHP from 1983‐1997 2014Integrated Reporting: Insights, gaps and an agenda for future research 2016Integrated reporting: A structured literature review 2012Configuring management control systems: Theorizing the integration of strategy and sustainability 2017The economic consequences associated with integrated report quality: Capital market and real effects

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2022Will the formation of the International Sustainability Standards Board result in the death of integrated reporting?2023The relationship between corporate governance mechanisms and integrated reporting practices and their impact on sustainable development goals: evidence from South Africa 2023Hallmarks of Integrated Thinking 2022A review of integrated thinking research in developed and developing economies

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