Conference paper
The interaction effects of cost information and control on employee involvement in continuous improvement programs
Conference on New Directions in Management Accounting: Innovations in Practice and Research, 4th (Brussels, Belgium, 09-Dec-2004–11-Dec-2004)
European Insititute for Advanced Studies in Management
2004
Abstract
A challenge for organisations facing competitive environments is to improve their products, services and processes continuously. The design of management accounting control systems (MACS) is an important factor affecting the form and success of employee involvement in continuous improvement (CI) programs. One of the ways in which MACS can facilitate the creative process is through the information that they convey. Activity-based cost (ABC) information has been advanced as a particularly powerful means of empowering employees to generate ideas for improvements that are more likely to be effective because they are informed by cost implications. MACS can also be important in influencing cognitive processes. Indeed, surveys indicate that strict formalised control systems stifle creativity and thereby employee contributions to CI programs. On the other hand, this study demonstrates that, when individuals are provided with ABC information, results-based controls focus and motivate individuals to generate and then discriminate between their ideas. In this way managerial involvement in CI can be more effectively leveraged. When less informative cost information is available, however, individuals can be encouraged to express their intuitions but then managerial involvement becomes necessary to identify those ideas with the potential to achieve significant cost reductions. The results of the experiment reported in this paper demonstrate the benefits of providing employees with activity cost information and emphasise the importance of appropriately focussed MACS to leverage the level of cost information that is available.
Details
- Title
- The interaction effects of cost information and control on employee involvement in continuous improvement programs
- Authors
- Monte Wynder (Author) - University of the Sunshine Coast - Faculty of BusinessPeter Luckett (Author) - University of New South Wales
- Conference details
- Conference on New Directions in Management Accounting: Innovations in Practice and Research, 4th (Brussels, Belgium, 09-Dec-2004–11-Dec-2004)
- Publisher
- European Insititute for Advanced Studies in Management
- Date published
- 2004
- Copyright note
- Copyright © The Authors. Reproduced with permission.
- Organisation Unit
- School of Business and Creative Industries; University of the Sunshine Coast, Queensland; USC Business School - Legacy
- Language
- English
- Record Identifier
- 99449295802621
- Output Type
- Conference paper
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