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Exploring the transformative potential of management control systems in organisational change towards sustainability

Author

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  • Venkateshwaran Narayanan
  • Gordon Boyce

Abstract

Purpose - The purpose of this paper is to examine the role of management control systems (MCS) in organisational change towards sustainability. In particular, it examines the extent to which MCS may be instrumental in transformative organisational change in this sphere. Design/methodology/approach - Through an in-depth case study of an Australian multinational corporation in the property sector, this paper explores the possibilities for MCS to influence organisational change towards a multi-bottom-line, balanced approach to social and environmental challenges facing corporations. MCS are conceptualised using Simons’ (1995) Levers of Control framework. On the question of sustainability, the approach adopted in this paper contrasts with much of the prior literature that largely takes a predominantly pragmatist approach and equates sustainability performance with financial performance. The prior literature generally reports a positive role for MCS in organisational change efforts. By contrast, drawing on the typology developed by Hopwoodet al.(2005), this paper views sustainability as requiring a balancing of economic, social and environmental concerns. Findings - The findings indicate that although MCS are not irrelevant, they do not play a transformative role in enabling deep-seated organisational change towards sustainability. The critical literature on the nature of MCS is drawn upon to explore the reasons for the observed non-role. Originality/value - The analysis sheds light on factors that may influence the effectiveness of conventional notions of MCS in organisational change. The findings contribute to the debate regarding the suitability of continued efforts at using conventional notions of management accounting and MCS in enabling organisational change towards greater social and environmental sustainability. The paper also highlights the value of a critical examination of the usefulness of management accounting and control practices in the context of organisational change towards sustainability.

Suggested Citation

  • Venkateshwaran Narayanan & Gordon Boyce, 2019. "Exploring the transformative potential of management control systems in organisational change towards sustainability," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 32(5), pages 1210-1239, June.
    • Handle: RePEc:eme:aaajpp:aaaj-04-2016-2536
    DOI: 10.1108/AAAJ-04-2016-2536
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    Citations

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    Cited by:

    1. Egbert Willekes & Koos Wagensveld & Jan Jonker, 2022. "The Role of the Accounting and Control Professional in Monitoring and Controlling Sustainable Value," Sustainability, MDPI, vol. 14(23), pages 1-23, November.
    2. Nuraddeen Abubakar Nuhu & Kevin Baird & Sophia Su, 2022. "The association between the interactive and diagnostic use of financial and non-financial performance measures with individual creativity: The mediating role of perceived fairness," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 33(3), pages 371-402, September.
    3. Syed Awais Ahmad Tipu, 2022. "Organizational change for environmental, social, and financial sustainability: A systematic literature review," Review of Managerial Science, Springer, vol. 16(6), pages 1697-1742, August.
    4. Albertina Paula Monteiro & Catarina Cepêda & Amélia Ferreira da Silva & Eduardo Leite & Élvio Camacho, 2021. "The role of accounting information in decision-making and companies’ sustainability development: the Portuguese accountants’ perspective," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(1), pages 486-501, September.
    5. Chaminda Wijethilake & Bedanand Upadhaya, 2020. "Market drivers of sustainability and sustainability learning capabilities: The moderating role of sustainability control systems," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2297-2309, September.
    6. Nuraddeen Abubakar Nuhu & Kevin Baird & Sophia Su, 2023. "The impact of interactive and diagnostic levers of eco‐control on eco‐innovation: The mediating role of employee environmental citizenship behaviour," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2245-2271, June.
    7. Neruja, S. & A. Anton Arulrajah, 2021. "The Impact of Environmental Knowledge and Awareness on Sustainability Performance of Organizations: The Mediating Role of Employee Green Behaviour," International Business Research, Canadian Center of Science and Education, vol. 14(9), pages 1-68, September.
    8. Kevin Baird & Sophia Su & Rahat Munir, 2023. "The mediating role of levers of controls on the association between sustainable leadership and organisational resilience," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 34(2), pages 167-200, June.
    9. Jenny Jing Wang, 2022. "The labour surplus and COVID‐19: the outlook for Chinese migrant low‐skilled workers," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 577-596, March.
    10. Faruk Bhuiyan & Kevin Baird & Rahat Munir, 2022. "The associations between management control systems, market orientation and CSR use," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 33(1), pages 27-79, March.

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