A New Method for Measuring Organizational Authority and Accountability: Quantitative Approach
Abstract
This paper suggests a new approach to measuring the alignment of authority and accountability of different positions within an organization. According to the controllability principle, accountability and authority should be aligned for achieving better organizational results. Nevertheless, there is still a research gap in the quantification of this alignment. Thus, this paper aims to improve the method of measuring authority and accountability. It proposes a new approach to measuring authority and accountability, as well as the rules for defining their alignment. The suggested model is tested through the research conducted in 241 organizations. Top managers from the organizations answered the structured questionnaire. The results show statistically significant dependence between the alignment of authority and accountability and organizational performance. In order to overcome the identified limitations of the conducted research, it is necessary to do some additional research to verify general applicability of the proposed approach.
References
Aghion, P., & Tirole, J. (1997). Formal and Real Authority in Organizations. Journal of Political Economy, 105(1), 1-29. doi:10.1086/262063
Antle, R., & Demski, J.S. (1988). The controllability principle in responsibility accounting. Accounting Review, 700-718.
Arya, A., Glover, J., & Radhakrishnan, S. (2007). The Controllability Principle in Responsibility Accounting: Another Look. In R. Antle, F. Gjesdal, & P.J. Liang (Eds.), Essays in Accounting Theory in Honour of Joel S. Demski. (pp. 183-198). New York, NY: Springer Nature. doi:10.1007/978-0-387-30399-4_9
Bedford, D.S., Malmi, T., & Sandelin, M. (2016). Management control effectiveness and strategy: An empirical analysis of packages and systems. Accounting, Organizations and Society, 51, 12-28. doi:10.1016/j.aos.2016.04.002
Bouwens, J., & Van Lent, L. (2007). Assessing the Performance of Business Unit Managers. Journal of Accounting Research, 45(4), 667-697. doi:10.1111/j.1475-679x.2007.00251.x
Burkert, M., Fischer, F.M., & Schäffer, U. (2011). Application of the controllability principle and managerial performance: The role of role perceptions. Management Accounting Research, 22(3), 143-159. doi:10.1016/j.mar.2011.03.002
Cohen, J. (1988). Statistical Power Analysis for the Behavioral Sciences, 2nd ed.. Hidllsdale, New Jersey: Erlbaum.
Daft, R.L., Jonathan, M., & Willmott, H. (2010). Organization theory and design. Cengage learning EMEA.
Fischer, F.M. (2010). The Application of the Controllability Principle and Managers' Responses: A role theory perspective. Springer Science and Business Media.
Frow, N., Marginson, D., & Ogden, S. (2005). Encouraging strategic behaviour while maintaining management control: Multi-functional project teams, budgets, and the negotiation of shared accountabilities in contemporary enterprises. Management Accounting Research, 16(3), 269-292. doi:10.1016/j.mar.2005.06.004
Giraud, F., Langevin, P., & Mendoza, C. (2008). Justice as a rationale for the controllability principle: A study of managers’ opinions. Management Accounting Research, 19(1), 32-44. doi:10.1016/j.mar.2007.09.002
Goold, M. (1993). Strategic control: Establishing milestones for long-term performance. Addison-Wesley.
Jevtić, M. (2013). Pristup projektovanju organizacije zasnovan na merenju usklađenosti elemenata organizacije. Fakultet organizacionih nauka.
Jevtić, M., Jovanović, M., & Krivokapić, J. (2018). A New Approach to Measuring the Correlation of Organizational Alignment and Performance. Management: Journal of Sustainable Business and Management Solutions in Emerging Economies, 23(1), 41. doi:10.7595/management.fon.2017.0029
Kaplan, S.N., & Ruback, R.S. (1995). The Valuation of Cash Flow Forecasts: An Empirical Analysis. The Journal of Finance, 50(4), 1059-1093. doi:10.1111/j.1540-6261.1995.tb04050.x
Khandwalla, P.N. (1973). Viable and Effective Organizational Designs of Firms. Academy of Management Journal, 16(3), 481-495. doi:10.2307/255008
Lunenburg, F.C. (2012). Organizational structure: Mintzberg's framework. International journal of scholarly, academic, intellectual diversity, 14(1); 1-8.
Meier, K.J., & Bohte, J. (2000). Ode to Luther Gulick: Span of control and organizational performance. Administration and Society, 32(2), 115-137. doi:10.1177/00953990022019371
Meier, K.J., & O'Toole, L.J. (2013). Subjective Organizational Performance and Measurement Error: Common Source Bias and Spurious Relationships. Journal of Public Administration Research and Theory, 23(2), 429-456. doi:10.1093/jopart/mus057
Merchant, K.A. (1989). Rewarding results: Motivating profit center managers. Harvard Business School Press.
Merchant, K.A., & Otley, D.T. (2006). A Review of the Literature on Control and Accountability. In Handbooks of management accounting research. (pp. 785-802). 2 (pp. 785-802). doi:10.1016/s1751-3243(06)02013-x
Merchant, K.A., & Van der Stede, W.A. (2007). Management control systems: Performance measurement, evaluation and incentives. Pearson Education.
Mintzberg, H. (1979). The structuring of organisations: A synthesis of the research. New Jersey.
Mintzberg, H. (1989). The Structuring of Organizations. In D. Asch & C. Bowman (Eds.), Readings in Strategic Management. (pp. 322-352). London: Springer Nature. doi:10.1007/978-1-349-20317-8_23
Montana, P.J., & Charnov, B.H. (2000). Management, Barron's educational series. New York.
Ocansey, E.O., & Enahoro, J.A. (2012). Determinant controllability of responsibility accounting in profit planning. Canadian social science, 8(6), 91.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–2014. Management Accounting Research, 31, 45-62. doi:10.1016/j.mar.2016.02.001
Pallant, J. (2011). SPSS priručnik za preživljavanje: Postupni vodič kroz analizu podataka pomoću SPSS-a. Beograd: Mikro knjiga. 4th Edition; Trans.
Perrow, C. (1986). Economic theories of organization. Theory and Society, 15(1-2), 11-45. doi:10.1007/bf00156926
Shingala, M.C., & Rajyaguru, A. (2015). Comparison of post hoc tests for unequal variance. International Journal of New Technologies in Science and Engineering, 2(5); 22-33.
Simons, R. (1994). Levers of control: How managers use innovative control systems to drive strategic renewal. Harvard Business Press.
Simons, R. (2005). Levers of organization design: How managers use accountability systems for greater performance and commitment. Harvard Business Press.
Simons, R. (2010). Accountability and Control as Catalysts for Strategic Exploration and Exploitation: Field Study Results. SSRN Electronic Journal, doi:10.2139/ssrn.1534745
Simons, R. (2013). The Entrepreneurial Gap: How Managers Adjust Span of Accountability and Span of Control to Implement Business Strategy. SSRN Electronic Journal, doi:10.2139/ssrn.2280355
Stevens, S.S. (1946). On the Theory of Scales of Measurement. Science, 103(2684), 677-680. doi:10.1126/science.103.2684.677
Todorović, D. (2008). Metodologija psiholoških istraživanja. Beograd: Društvo psihologa Srbije.
Zhang, Y., Zhou, J., & Zhou, N. (2007). Audit committee quality, auditor independence, and internal control weaknesses. Journal of Accounting and Public Policy, 26(3), 300-327. doi:10.1016/j.jaccpubpol.2007.03.001