Analysis of the Relationships Between Sustainable Management Control and Performance Appraisal System
DOI:
https://doi.org/10.18662/po/91Keywords:
sustainable development, management control, performance, balanced scorecard.Abstract
This study investigates management control from the perspective of intention of companies to engage into sustainable development. The authors mainly focused on analysing the relations between sustainable management control and the system of performance appraisal utilising resource-based theory. The theory behind these relations has been studied by reviewing the literature in the field, and the empirical investigation used questionnaire-based data, presenting the responses of top management, and the data available in the Annual Reports on the main segment of Bucharest Stock Exchange. The study proves that financial performance has a significant influence on management control therefore the authors recommend the return on capital employed as one of the most recommended indicators. The sustainable nature of management control is the result of the spread and development of the institutional theory, the provisions of Directive 2014/95/EU and the Guide of Global Management Accounting Principles (2015) using stewardship. Consequently, profits could no longer be the main element in the assessment of company‟s financial „health”. Therefore, sustainable balanced scorecard is one of solid measures for managing financial and non-financial performance in the process of achieving sustainable success.References
Anthony, R. N. (1988). The management control function. Boston, USA: Harvard Business School Press.
Association of Chartered Certified Accountants (ACCA), & Chartered Institute of Management Accountants (CIMA). (2008). P5 Advanced performance management. Berkshire, UK: Kaplan Publishing.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. doi:10.1177/014920639101700108
Barney, J. B. (2001). Is the resource-based “view” a useful perspective for strategic management research? Yes. Academy of Management Review, 26(1), 41–56. doi:10.2307/259393
Boisselier, P., Chalençon, L., Doriol, D., Jardin, P., Mard, Y., & Mayrhofer, U. (2013). Contrôle de gestion. Paris, France: Magnard-Vuibert-Août.
Braganza, A., Heather, S., & Ngosi, T. (2003). The case of customer recruitment processes: Dynamic evolution of customer relationship management resource networks. Journal of Marketing Management, 29(3-4), 439-466. doi:10.1080/0267257X.2012.737818
Burlaud, A., & Niculescu, M. (2015). Informaţia nonfinanciară: o perspectivă europeană. Audit financiar, 6(126), 43-53.
Campbell, J. P. (2002). Modeling the performance prediction problem in industrial and organizational psychology. In M. D. Dunnette & L. M. Hough (Eds.), Handbook of industrial and organizational psychology (1st vol.) (pp. 687-732). Palo Alto, USA: Consulting Psychologists Press.
Campbell, J. P., McCloy, R. A., Oppler, S. H., & Sager, C. E. (1993). A theory of performance. In E. Schmitt & W. Borman & Associates (Eds.), Personnel selection in organizations (pp. 35-70). San Francisco, USA: Jossey-Bass.
Cappelletti, L., Khouatra, D., & Beck, E. (2007). Setting up a socio-economic management control in independent professions: The case of the notary public offices. Proceedings of the American Accounting Association Annual Meeting, Chicago.
Capron, M., & Quairel-Lanoizelée, F. (2004). Mythes et réalités de l’entreprise responsable. Acteurs, enjeux, strategies. Paris, France: La Découverte.
Caputo, F., Veltri, S., & Venturelli, N. (2017). Sustainability strategy and management Control systems in family firms. Evidence from a case study. Sustainability, 9(977), 1-23. doi:10.3390/su9060977
Chartered Global Management Accountant. (2015). Guide of Global Management Accounting Principles. Retrieved from https://www.cgma.org/content/dam/cgma/resources/reports/download abledocuments/global-management-accounting-principles.pdf
Chiapello, E. (1996). Les typologies des modes de contrôle et leurs facteurs de contingence: Un essai d‟organisation de la littérature, Comptabilité-ContrôleAudit , 2(2), 51-74. doi:10.3917/cca.022.0051
Colasse, B. (2007). Les fondements de la comptabilité. Paris, France : La Découverte.
Cowton, C. J., & Dopson, S. (2002). Foucault‟s prison? Management control in an automotive distributor. Management Accounting Research , 13(2), 191–213. doi:10.1006/mare.2001.0173
Cresti, E. (2009). Sustainability management control systems. Towards a socially responsible planning and control framework. Oxford Business & Economics Conference (pp. 1-30). Oxford, UK: Oxford University. Retrieved from http://www.gcbe.us/2009_OBEC/data/Erika%20Cresti.doc
Ditillo, A., & Lisi, I. E. (2016). Exploring sustainability control systems' integration: The relevance of sustainability orientation. Journal of Management Accounting Research, 28(2), 125-148. doi:10.2308/jmar-51469
Dupuy, Y., & Guibert, N. (2000). La complémentarité entre contrôle formel et contrôle informel: le cas de la relation client-fournisseur. ComptabilitéContrôle-Audit, 3(1), 39-52. doi :10.3917/cca.031.0039
Enterprise Risk Management (ERM). (2018). Applying enterprise risk management to environmental, social and governance-related risks. USA: Committee of Sponsoring Organizations of the Treadway Commission and the World Business Council for Sustainable Development. Retrieved from https://www.coso.org/Pages/erm.aspx Framework.pdf
European Parliament, & European Council. (2014). Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups Text with EEA relevance. Official Journal of the European Union, L330/1, 2014, November 15.
Figge, F., Hahn, T., Schaltegger, S., & Wagner, M. (2002). The sustainability balanced scorecard-Linking sustainability management to business strategy. Business Strategy and the Environment, 11(5), 269-284. doi :10.1002/bse.339
Gervais, M. (1996). Recherches en contrôle de gestion. Paris, France: Economica.
Global Management Accounting Principles (GMAP). (2015). Chartered Global Management Accountant. New York, USA: American Institute of CPAs. Retrieved from http://www.cgma.org/content/dam/cgma/resources/reports/downloada bledocuments/global-management-accounting-principles-9.pdf (accessed on 25 July 2019).
Hansen, E. G., & Schaltegger, S. (2014). The sustainability balanced scorecard: A systematic review of architectures. Joumal of Business Ethics, 133(2), 193-221.
Hart, E. R. (1994). Strategic change: Reconfiguring operational processes to implement strategy. In L. Fahey & R. M. Randall (Eds.), The portable MBA in strategy (pp. 358–388). New York, USA: John Wiley.
Herremans, I. M., & Nazari, J. A. (2016). Sustainability reporting driving forces and management control systems. Journal of management accounting research American Accounting Association, 28(2), 103–124. doi:10.2308/jmar-51470
Ilgen, D. R., & Schneider, J. (1991). Performance measurement: A multi-discipline view. In C.L. Cooper & I. T. Robertson (Eds.), International review of industrial and organizational psychology (6th vol.) (pp. 71-108). Chichester, UK: Wiley.
Illmeyer, M., Grosch, D., Kittler, M., & Priess, P. (2017). The impact of financial management on innovation. International Journal Entrepreneurship and Sustainability Issues, 5(1), 58-72. doi:10.9770/jesi.2017.5.1(5)
Journeault, M. (2016). The influence of the eco-control package on environmental and economic performance: A natural resource-based approach. Journal of Management Accounting Research, 28(2), 149-178. doi:10.2308/jmar-51476
Kant, I. (1991). The metaphysics of morals. Cambridge, UK: Cambridge University Press.
Kaplan, R. S., & Norton, D. P. (1998). The Balanced Scorecard: Translating strategy into action. Boston, USA: Harvard Business School Press Boston.
Kunitsyna, N., Britchenko, I., & Kunitsyn, I. (2018). Reputational risks, value of losses and financial sustainability of commercial banks. International Journal Entrepreneurship and sustainability 5(4), 943-955. doi:10.9770/jesi.2018.5.4(17)
Le Maitre, D. (1996). Évaluation de la performance et comportements opportunistes dans les centres de responsabilité. PhD Thesis. Thèse de doctorat. Rennes, France : Université de Rennes 1.
Liu, Y. (2011). Performance-based funding and budgeting in higher education. NAAAS & Affiliates Conference Monographs (pp. 1516-1539). Jackson, USA: Jackson State University.
Motowidlo, S. J., Borman, W. C., & Schmit, M. J. (1997). A theory of individual differences in task and contextual performance. Human Performance, 10(2), 71-83. doi:10.1207/s15327043hup1002_1
Penrose, E. (1959). Theory of the growth of the firm. Oxford, UK: Blackwell.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resourcebased view. Strategic Management Journal, 14(3), 179–192. doi:10.1002/smj.4250140303
Schaltegger, S., & Wagner, M. (2006). Integrative management of sustainability performance, measurement and reporting. International Journal of Accounting, Auditing and Performance Evaluation, 3(1), 1-19. doi:10.1504/IJAAPE.2006.010098
Sen, P., Roy, M., & Pal, P. (2018). Exploring role of environmental proactivity in financial performance of manufacturing enterprises: a structural modelling approach. Journal of Cleaner Production, 108, 583-594. doi:10.1016/j.jclepro.2015.05.076
Sonnentag, S., & Frese, M. (2002). Performance concepts and performance theory. In S. Sonnentag (Coord.), Psychological management of individual performance (pp. 3- 25). Hoboken, USA: John Wiley & Sons Ltd.
Sustainability Accounting Standards Board. (2017). Sustainability Accounting Standards Board Conceptual Framework (SASBCF). (2017). San Francisco. Retrieved from https://www.sasb.org/wpcontent/uploads/2019/05/SASB-Conceptual-Framework.pdf
Sveiby, K. E. (1997). The intangible assets monitor. Journal of Human Resource Costing and Accounting, 2(1), 73-97. doi:10.1108/eb029036
Trafimow, D., Hunt, G., Rice, S., & Geels, K. (2011). Using potential performance theory to test five hypotheses about meta-attribution. Journal of General Psychology, 138(2), 81–93. doi:10.1080/00221309.2010.540591.
Trumpp, C., Endrikat, J., Zopf, C., & Guenther, E. (2015). Definition, conceptualization, and measurement of corporate environmental performance: A critical examination of a multidimensional construct. Journal of Business Ethics, 126(2), 185–204. doi:10.1007/s10551-013-1931-8.
Xie, S., & Hayase, K. (2007). Corporate environmental performance evaluation: A measurement model and a new concept. Business Strategy and the Environment, 16(2), 148–168, doi:10.1002/bse.493
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant this journal right of first publication, with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work, with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g. post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g. in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as an earlier and greater citation of published work (See The Effect of Open Access).
Postmodern Openings Journal has an Attribution-NonCommercial-NoDerivs
CC BY-NC-ND