A management control system to support corporate sustainability strategies
© 2016 Elsevier Ltd. This paper outlines a management accounting system, based upon cost variance analysis, which supports the pursuit of environmental and traditional financial goals within a decentralized organization. The framework decomposes inefficiencies into two parts. The first consists of w...
| Main Authors: | , , |
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| Format: | Journal Article |
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J A I Press
2016
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| Online Access: | http://hdl.handle.net/20.500.11937/55025 |
| _version_ | 1848759528461434880 |
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| author | Dutta, Saurav Lawson, R. Marcinko, D. |
| author_facet | Dutta, Saurav Lawson, R. Marcinko, D. |
| author_sort | Dutta, Saurav |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | © 2016 Elsevier Ltd. This paper outlines a management accounting system, based upon cost variance analysis, which supports the pursuit of environmental and traditional financial goals within a decentralized organization. The framework decomposes inefficiencies into two parts. The first consists of what might be considered a natural outcome of pursuing the traditional economic goal of efficiency through cost-minimization, a "waste" variance. The second part consists of sustainability gains that produce societal benefit but may be incongruent with short-term economic goals, a "sustainability" variance. While elimination of waste variances can be encouraged using a traditional performance evaluation and reward structure, elimination of sustainability variances requires re-design of performance evaluation tools and reward structures. We demonstrate that differing production functions across operational units within organizations can impact the relative magnitude of the two variances. The failure to recognize and incorporate these differences can lead to inefficient allocation of resources and/or only partial fulfillment of the strategic environmental goals of the organization. |
| first_indexed | 2025-11-14T10:01:19Z |
| format | Journal Article |
| id | curtin-20.500.11937-55025 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:01:19Z |
| publishDate | 2016 |
| publisher | J A I Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-550252017-09-13T15:50:07Z A management control system to support corporate sustainability strategies Dutta, Saurav Lawson, R. Marcinko, D. © 2016 Elsevier Ltd. This paper outlines a management accounting system, based upon cost variance analysis, which supports the pursuit of environmental and traditional financial goals within a decentralized organization. The framework decomposes inefficiencies into two parts. The first consists of what might be considered a natural outcome of pursuing the traditional economic goal of efficiency through cost-minimization, a "waste" variance. The second part consists of sustainability gains that produce societal benefit but may be incongruent with short-term economic goals, a "sustainability" variance. While elimination of waste variances can be encouraged using a traditional performance evaluation and reward structure, elimination of sustainability variances requires re-design of performance evaluation tools and reward structures. We demonstrate that differing production functions across operational units within organizations can impact the relative magnitude of the two variances. The failure to recognize and incorporate these differences can lead to inefficient allocation of resources and/or only partial fulfillment of the strategic environmental goals of the organization. 2016 Journal Article http://hdl.handle.net/20.500.11937/55025 10.1016/j.adiac.2015.12.001 J A I Press restricted |
| spellingShingle | Dutta, Saurav Lawson, R. Marcinko, D. A management control system to support corporate sustainability strategies |
| title | A management control system to support corporate sustainability strategies |
| title_full | A management control system to support corporate sustainability strategies |
| title_fullStr | A management control system to support corporate sustainability strategies |
| title_full_unstemmed | A management control system to support corporate sustainability strategies |
| title_short | A management control system to support corporate sustainability strategies |
| title_sort | management control system to support corporate sustainability strategies |
| url | http://hdl.handle.net/20.500.11937/55025 |