Operation management Assignment Example | Topics and Well Written Essays - 3000 words - 4

Operation management - Assignment Example Moreover, operation management enhances the quality of services and hence develops the acceptance of the organisation among the consumers. Furthermore, operation management helps in monitoring the services and develop the same to enhance the standard leading to consumer satisfaction (Kleindorfer & et. al., 2005). With this regard, the paper elaborates on the operation management prevalent in the Intercontinental Hotel Groups. Operation management is observed to be crucial for the group as it helps in enhancing the level of services and consumer satisfaction at a global domain. The hotel group started operating in the year 1946 and has been successfully developing its global consumer base across culture. Moreover, with the elite class services and luxurious offerings the hotel has been successfully developing its image among the consumers, planning for luxurious destinations. With its elegance and distinctive styles that is distinguishable from the other hotels makes it ultimate travel destinations for tourists. However, the hotel needs to monitor their present situations to develop their quality in order to enhance their consumer base. This would help in developing the different approaches of the hotel services to meet with the elated needs of the consumers. The paper would also focus on dev eloping the different environmental changes that has been initiating the organisation to manage such changes and increase their consumer services with the help of operation management (1IHG, 2013). The performance objectives support enhancement of different approaches of an organisation by providing guidelines that would help in developing the services. This aspect would enhance the organisational ability to meet with the elated needs of the consumers. It provides with the development of different approaches and helps in assessing the same to enhance the

Stereotypes in Gender Essay Example | Topics and Well Written Essays - 2250 words

Stereotypes in Gender - Essay Example The very fact that the women gave birth made it someway mandatory that they take care of the children. The women’s terrain got defined inside her house. Â  When children grow up, it is the environmental conditioning that works strongly to establish this stereotype. Parents set examples, not because they intend to, but as a normal trend of daily activities and behavior. The child watches the father managing the office and the mother taking care of the cooking or the new baby. Girls usually take their mothers as their role models and boys go after their fathers. According to Dr. Benjamin Spock, people are likely to appreciate girls cuteness and boys achievements. Similar gender identification is followed even in schools where a preschooler is taught to distinguish between the man and the woman through the length of the hair or the dress they are wearing. Even gifts given to children support this distinction; girls are traditionally given dolls, while boys are given cars or sports items. Advertisers target their goods at the gender-specific audience and try to influence spending in separate male and female domains. Researcher Krisanne Bursik conducted a study about ego development at Suffolk University in Boston and compared the results to gender-related traits; of the 209 undergrads that she studied, she found that students who had higher levels of ego development were more likely to express non-traditional gender role traits. Male students, those who had less-developed egos viewed high levels of traditional masculinity as the ideal. She noted that in these men, "gender role conflict may occur for men when rigid, sexist or restrictive gender roles, learned during socialization, result in the personal restriction, devaluation, or violation of others or self." Â  

BT Group: Financial Performance Analysis

BT Group: Financial Performance Analysis BT Group (BT) is the leading UK company providing landline telecommunication services and equipment. It also had the mobile telecommunication business which was subsequently sold as MMO2. After the sale of mobile business, BT’s profile has now changed from a growth company to a mature cash generating company. A)  Financial performance The most common objective assessment of the financial performance of a firm is the return it generates on its assets and the quantity and quality of the returns. Quantity is measured by the absolute and percent change in total profits. The profit and loss account of an organisation and its analysis are the prime and first indicators of a firm’s financial performance. The latest annual results of BT is for the period ending 31 March 2005. Appendix I shows the summary of key profit and loss figures over the last three years. BT’s turnover and profit after tax in 2005 have increased as compared to 2004 but are still lower than those in 2003. The turnover has declined by 5.7% only whereas profit after tax has declined by 32.7% over the two year period. This shows that the business has very low variable costs which is in line with the heavy fixed cost investments normally made by telecommunication companies in establishing their networks and subsequent very low variable costs in carrying data. While turnover increased in 2005, operating profits have declined. This indicates that the business is facing some pricing pressures or is spending more on advertisement as the operating profit declined by 0.5% only. BT’s 2005 profit after tax was  £1,820m and was substantially higher than  £1,406m. Though the absolute profit is very high number compared to most of the businesses and indicates that the company is in strong financial position, it also shows that BT has high financial leverage. The company paid a significant high interest and if revenues and operating margins come under more pressure, it could have trouble paying interest costs. BT is aware of this issue and has focused on reducing its net debt. After facing tough times in early 2000s, it has sold many previous investments to raise money for repaying debt. BT’s share price rose after it announced its strategic decision to reduce net debt by raising money through divestments. The net interest payments have declined from  £1,439m in 2003 to  £801m in 2005. Not only that, the net interest payment has declined from 49.5% of operating profit to 29.0% from 2003 to 2005. The reduction in net interest as a percent of operating profit is an important improvement as it gives investors comfort that even if operating margins come under pressure, the company would still be able to meet its interest liabilities. One quick way to analyse a company’s performance is to look at the earnings per share pattern. The earnings per share had also a change pattern similar to that of profit after tax. It first decreased from 31.4p in 2003 to 16.4p in 2004 before increasing to 21.4p in 2005. The 2005 increase in earnings per share highlights the improvement in performance. Though the profits did decrease in 2004, BT kept on increasing total dividend paid to shareholders. This shows the management’s faith in business going forward and its ability to meet higher dividend expectations in future. The returns generated on assets is measured by Return on Capital employed (ROCE). Appendix II shows the calculation of ROCE for BT. BT had a healthy ROCE of 19.0% and 20.7% in 2004 and 2005. The quality of returns is measured by their consistency and by the spread of profits, i.e., the percent of profits being generated from different divisions and locations. The less reliance of profits on any one division and/or location means the company is in better shape to withstand downturns in its markets. None of BT’s business contributed more than 50% in its turnover in the year ended 31 March 2005 (BT, 2005). This indicates that BT Group is reasonably well protected from the declines in a business line. The situation is slightly different if we look at the operating profits where BT Wholesale division contributes more than 50% of net operating profits. Any more margin pressures in this business could reduce future earnings. Most of BT’s earnings originate from UK and hence it earnings are susceptible to changes in UK economy. Financial position The financial position of a company covers its financial structure, its assets and liabilities, its liquidity and risk management approach (Accounting Standards 2004/2005). Appendix III gives the highlights of BT Group’s balance sheet from 2004 to 2005. The total fixed assets have increased by  £639m in the last year. While total fixed assets have increased, the total current assets have decreased by  £254m, so total assets have increased by  £385m. The lower increase in total assets as compared to increase in fixed assets is mainly due to decrease in cash and investments. The major change in financial structure has occurred on the liabilities side. The total current liabilities have gone up by  £3,938m due to increase in current loans and borrowings of  £3,227m. This shows that BT is financing much more of its assets from current borrowings. The massive increase in current loans and borrowings has reversed the net current assets (liabilities) position. BT had net current assets of  £2,027m in 2004 and had net current liabilities of  £2,165m in 2005, a net decrease in current assets of  £4,192m. While the current liabilities have increased, the long term creditors have decreased by  £4,335m. If we just look at long-term creditors, the reduction is impressive and it gives more confidence to the investors that company is in better financial position now. But when we combine the decrease in long term creditors with the increase in current liabilities, the net change is very less. And the fact that changes in current liabilities is mainly due to borrowing instead of increase in trade creditors means that the financing of assets has merely shifted from long term borrowings to short term borrowings. The current assets to current liabilities ratio has declined from 1.24 to 0.83 in the last one year, a sign of concern in terms of liquidity especially when the increase in liabilities is not mainly due to higher trade creditors. Debt to equity ratio indicates the financing of assets. BT had total debt of  £13,697m in 2004 and the corresponding figure for 2005 was  £12,589m, a decrease of  £1,108m. If we now exclude cash and short term investments from total debt, BT’s net debt was  £8,425m and  £7,786m in 2004 and 2005 respectively. The net debt to book value of equity ratio declined from 2.75 in 2004 to 2.02 in 2005. This means that debt finances almost twice assets as being financed by equity. Higher amount of debt results in lower weighted average cost of capital as debt is cheaper equity. But as BT reduces more debt, its weighted average cost of capital will increase. The increase would be partially offset by lower cost of equity due to lower chances of bankruptcy. Risk of bankruptcy is measured by interest cover ratio which is defined as the ratio of cash available for interest payments to net interest. Appendix IV shows the EBITDA calculation and interest cover ratio. The interest cover ratio has increased from 6.1 in 2004 to 7.0 in 2005. The healthy interest cover ratio shows that BT has further reduced the risk of bankruptcy and is in better financial position now. The debt level is now very much within manageable levels and is more like a cash rich mature company. Companies normally tend to follow certain dividend trend to signal market of their assessment of future earnings. Dividend declaration is also part of risk management as it is based on management’s assessment of future cash generation and expenditure expectations. The hike in dividend in 2004 and 2005 inspite of decline in profits in 2004 shows the management assessment of future low risks to cash flows. Financial Adaptability An entity’s financial adaptability is its ability to take effective action to alter the amount and timing of its cash flows so that it can respond to unexpected needs or opportunities (Accounting Standards 2004/2005, page 26). Appendix V shows the main elements of consolidated cash flow statement of BT Group. BT Group is generating high amounts of cash inflow from operating activities. During the year ended 31 March 2005, the company generated  £5,900m of net cash from operating activities. BT is in telecommunication business which demands relatively high level of absolute investments. It spent  £2,408m on capital expenditure during the year ended 31 March 2005. Even if we believe that all of capital expenditure was required under normal operations, BT was still left with  £2,282m of surplus cash in 2005. As we can see from the Appendix III that BT has now focused on repayment of loans. During the last three years, the company has reduced borrowings by  £7,395m. Though BT is able to generate significant amount of cash before disposals but that was not enough in 2003 and 2004 to repay loans. The company then sold some of its investments to generate cash for loan repayments. BT also pays a significant amount of dividend to its shareholders. So if its net cash from operations do decrease in future, it has still some buffer in terms of dividend payments to take care of loan repayments. B) The objective of financial statement is to provide information about the reporting entity’s financial performance and financial position that is useful to a wide range of users for assessing the stewardship of the entity’s management and for making economic decisions (Accounting Standards, 2004, page 22). The compliance of an entity’s financial reports with UK’s Accounting Standards can be gauged over two main areas – content and format. Content is important to give true and correct picture of a firm’s financial performance and position. Different users need different information. Financial statements are used by investors to base their investment decision. So it is important that financial statements have the right content to help achieve this goal. It is also important to have right format of presentation. Investors are more likely to feel comfortable if they see familiar presentation style and can then evaluate the company easily. We will look at the content and major financial statements to see whether they comply with UK Accounting Standards. We will then also at few additional notes to financial statements to see whether they are also in line with true and fair principle and give the readers a clear picture of the entity. First of all we compare profit and loss statement with FRS 3 ‘Reporting financial performance’. BT’s consolidated profit and loss statement clearly shows the total turnover and share from joint venture and associates, and in doing so gives more clarity of its earning base. The financial statement format is similar to the example formats shown in Accounting Standards 2004/2005. BT’s 2005 Annual Report however doesn’t show share of turnover and profits from discounted operations (BT, 2005). It is because BT didn’t sell any business in 2005. If we look at the 2002 Annual Report (BT, 2002), it shows the turnover and profits from discounted operations also. The financial statement also has statement of total recognised gains and losses in line with FRS 3 practices. So the accounts meet profit and loss statement UK Accounting Standards in terms of both content and format. We now compare BT’s cash flow statement with the format prescribed in FRS 1 ‘Cash flow statements’. BT’s cash flow statement has not only got all the headings but they are also in the same order as mentioned in FRS 1. BT report also gives sub-categories under the major headings and hence is a genuine effort to educate investors as much as possible on the generation and use of cash flows. BT cash flow statement uses the format prescribed for the ‘Group’ accounts. The notes to financial statement also has detailed reporting on reconciliation of operating profit to operating cash flows, analysis of net debt, acquisition and disposals in line with formats for the ‘Group’ accounts. The next section we analyse is on segmental reporting and check its comparability with SSAP 25 ‘Segmental Reporting’. SSAP 25 says that a public limited company should provide segmental analysis on lines of business class and geographical location. The notes to financial statement section in the 2005 Annual Report has a section on segmental reporting wherein BT shows the turnover, operating profit/(loss) and net assets/(liabilities) of different business lines. It also provides the above data based on the geographical location of reverse generation. The above meets SSAP 25 requirements and also helps investors make a better judgment of risks faced by BT. BT is in telecommunication business where technology change is rapid. BT has acquired many companies in recent years to keep pace with the technological developments. So it is important to analyse the acquisition policies and disclosures are in line with the UK Accounting Standards. FRS 6 ‘Acquisitions and Mergers’ and FRS 7 ‘Fair values in acquisition accounting’ govern the acquisition accounting policies. BT’s annual report under ‘Notes to financial statements’ gives detailed disclosure of total and fair value of the acquisitions made by it. BT’s financial statements not only give the book and fair value of acquisitions but also a detailed explanation of them for each acquisition. The clear and easy to understand format of financial statements and the depth of information in them signals that BT not only just do the minimum to meet UK Accounting Standards but also follows them in true spirit. Appendix I – Highlight of BT Group’s profit and loss accounts (Source: BT Annual Report and Form 20-F; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm) Appendix II – ROCE of BT Group (Source: BT Annual Report and Form 20-F; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm) Appendix III – Highlight of BT Group’s balance sheet (Source: BT Annual Report and Form 20-F; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm) Appendix IV – Interest cover ratio (Source: BT Annual Report and Form 20-F; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm) Appendix V – Highlight of BT Group’s cash flow statements (Source: BT Annual Report and Form 20-F; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm) Bibliography and references Accounting Standards 2004/2005 – Extant at 30 April 2004 (2004); Wolters Kluwer (UK) Limited. BT (2005); BT Annual Report and Form 20-F for the year ended 31 March 2005; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/AnnualReports.htm BT (2002); BT Annual Report and Form 20-F for the year ended 31 March 2002; http://www.btplc.com/Sharesandperformance/Howwehavedone/Financialreports/Annualreports/Annualreportsarchive.htm

Comparing Death in Do not go gentle into that good night and Death Be N

Death in Do not go gentle into that good night and Death Be Not Proud  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The poems "Do not go gentle into that good night" and "Death Be Not Proud" both deal with the subject of death. These poems seem to have contradictory messages about death, yet at the same time have similar attitudes toward it. "Death Be Not Proud" talks about how death really has no power over people, while "Do not go gentle into that good night" says that it is part of human nature to fight against death. Both "Do not go gentle into that good night" and "Death Be Not Proud" see death as an opponent; however, one sees it as an adversary that is already defeated while the other sees it as an enemy that must be defeated. In "Death Be Not Proud" Donne says "those whom thou think'st thou dost overthrow / Die not, poor Death, nor yet canst thou kill me"(lines 3-4). This passage shows Donne's belief that people will always overcome death. In Thomas' poem, he writes "Good men, the last wave by, crying how bright / Their frail deeds might have danced in the green bay, / Rage, rage against the dying of the light" (7-9). Even the "good men" are in the end defeated by death according to Thomas. The tone of both of these poems is one of resentment towards death, although in dissimilar ways. In "Death Be Not Proud" Donne hates death because it thinks it has power over humans and in his opinion just the opposite is true. Donne says that death is a "slave to Fate, Chance, kings, and desperate men." (9). He thinks death has no reason to be proud because he relies on these things for its power, so really people have power over death. Thomas feels almost the opposite, though. He sees death as having power over people, and is saying that people do not ... ...is father do the same. Although "Death Be Not Proud" is seemingly directed at the personification of death, it seems like it could also be directed at the people who treat death like it is "Mighty and dreadful" (2). He wants to get this message across to those that fear and respect death that death is controlled by people, not the other way around. These two poems can each be summed up by one line from each. In "Do not go gentle into that good night" the main point of the poem is "Old age should burn and rave at the close of day" (2), and in "Death Be Not Proud," "death shall be no more; Death, thou shalt die" (14). When one looks at these two lines, the essence of these two poets disagreement on death is typified. Thomas believes one should "not go gentle into that good night," while Donne believes death is the "Rest of their bones, and soul's delivery" (8).

Mangement Control Systems

Management Accounting Research 23 (2012) 205–223 Contents lists available at SciVerse ScienceDirect Management Accounting Research journal homepage: www. elsevier. com/locate/mar Con? guring management control systems: Theorizing the integration of strategy and sustainability Jean-Pascal Gond a,? , Suzana Grubnic b,1 , Christian Herzig c,2 , Jeremy Moon c,3 a b cCass Business School, City University, 106 Bunhill Row, EC1Y 8TZ London, UK Loughborough University, School of Business and Economics, Loughborough, Leicestershire LE11 3TU, UK Nottingham University Business School, International Centre for Corporate Social Responsibility, Jubilee Campus, Wollaton Road, Nottingham NG8 1BB, UK a r t i c l e i n f o a b s t r a c t Although organizations have embraced the sustainability rhetoric in their discourse and external reporting, little is known about the processes whereby management control systems contribute to a deeper integration of sustainability within organizational strate gy.This paper addresses this gap and mobilizes a con? guration approach to theorize the roles and uses of management control systems (MCSs) and sustainability control systems (SCSs) in the integration of sustainability within organizational strategy. Building on Simons’ levers of control framework, we distinguish two possible uses of a MCS and a SCS—a diagnostic use and an interactive use—and we specify the modes of MCSs and SCSs integration. We rely on these two core dimensions to identify eight organizational con? gurations that re? ect the various uses as well as their modes of integration of SCS and MCS.We characterize these ideal-type con? gurations, explain their impact on the triple bottom line, and describe which mechanisms allow organizations to move from one con? guration to another. In so doing, we highlight various paths toward sustainability integration or marginalization within organizations. Finally, we explain how our framework can support future research on the role of MCS and SCSs in the integration of sustainability within strategy.  © 2012 Elsevier Ltd. All rights reserved. Keywords: Management control systems Levers of control Integration Sustainability accounting Strategic management accounting . Introduction There is a growing consensus that ‘. . . there’s no alternative to sustainable development’ (Nidumolu et al. , 2009, p. 57). This is from a variety of perspectives from concern with the role of human agency in climate change to new imperatives for achieving competitive advantage. Sustainability involves organizational strategic renewal (Hart, ? Corresponding author. E-mail addresses: jean-pascal. [email  protected] ac. uk (J. -P. Gond), s. [email  protected] ac. uk (S. Grubnic), christian. [email  protected] ac. uk (C. Herzig), jeremy. [email  protected] ac. uk (J. Moon). 1 Tel. +44 01509 223126; fax: +44 01509 223960. 2 Tel. : +44 0115 8466617; fax: +44 0115 8468074. 3 Tel. : +44 01 15 9514781; fax: +44 0115 8468074. 1044-5005/$ – see front matter  © 2012 Elsevier Ltd. All rights reserved. http://dx. doi. org/10. 1016/j. mar. 2012. 06. 003 1995; Shrivastava, 1994) as well as the creation of new calculative practices which drive, for example, the development of carbon trading markets (Callon, 2009; MacKenzie, 2009) and sustainability accounting and reporting (Adams and Whelan, 2009; Gray, 2010). Accordingly, there have emerged alternative paradigms to ? ancial pro? t maximization captured in such phrases as the ‘triple bottom line’ in which economic, social and ecological criteria of performance are expected to be integrated (Bansal, 2005; Elkington, 1997; Hopwood et al. , 2010). Although many organizations have embraced the sustainability rhetoric in their external reporting and their mission statements (Newton and Harte, 1997), these reports may serve as ‘veils’ hiding activities (Deegan, 2002) whose sole purpose is the recon struction of an eroded legitimacy (Banerjee, 2008; Gond et al. 2009). This sceptical view is nurtured by a lack of study of the 206 J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 intra-organizational impact of sustainability (Bebbington, 2007; Milne and Grubnic, 2011), and by the scant attention devoted to the role of management control systems supporting sustainability within organizations (Durden, 2008; Herzig et al. , 2012). The situation is compounded by anxieties concerning the capacity of any strategic move toward sustainability to alter organizational practices (Hopwood, 2009).However, because management control systems (MCSs) shape actors’ practices (Ahrens and Chapman, 2007; Hopwood, 1976), and support strategy (Kober et al. , 2007; Lang? eld-Smith, 1997), they can, if used appropriately, push organizations in the direction of sustainability. MCSs are central to strategy-making, as they shape the process of strategy emergence and support the implementation of deliberate strategies (e. g. , Henri, 2006; Marginson, 2002; Mundy, 2010; Otley, 1999; Simons, 2000). Accordingly, lasting attempts to integrate sustainability within strategy, beyond external reporting, discourse and mission statements, should be re? cted at some stage within formal control mechanisms (Gond and Herrbach, 2006). Although sustainability has been discussed in the management control literature to describe the emergence of sustainability control systems (hereafter SCSs) such as ecocontrol, this stream of research is mainly focused on the in? uence of these systems on environmental and ? nancial performance (Henri and Journault, 2009, 2010). Little is known about the nature and mode of integration between SCSs and more traditional MCSs (Durden, 2008).Yet, SCSs can contribute to an effective integration of sustainability within strategy only when they inform MCSs and are not used as ‘autonomous strategic tools’ (Burgelman, 1991; Simons, 1995). Short of this, SCSs may remain peripheral and decoupled from core business activities and fail to reshape strategy. As a result, we may observe two parallel worlds of MCSs and SCSs. The aim of this paper is to theorize further the roles and uses of MCSs and SCSs in the integration of sustainability within strategy. We seek to theorize the neglected relationships between MCSs and SCSs, as well as their co-in? ence in the process of organizational strategy development. Our aim is to clarify how MCSs and SCSs are related, and how together, and in relation with strategy-making, these systems can prevent or facilitate the emergence of sustainability at a strategic level and ultimately the integration of sustainability and strategy. Central to our argument are two concepts: the uses and the integration of MCSs and SCSs. Our concept of uses of MCSs is derived from Simons’ levers of control (LOC) framework (Simons, 1991, 1994, 1995, 2000, 2006). More speci? ally, we distingui sh control systems used by executives as ‘management by exception’ tools (diagnostic) to correct actors’ actions, from those control systems used as ‘actual strategic levers’ (interactive) to focus actors’ attention on key goals and support changes aligned with higher strategic objectives. By integration we refer to the degree of overlap between the two types of control systems under study. We approach integration as a thick ‘socio-technical’ process (Emery and Trist, 1969) which includes technical and methodological (Schaltegger and Burritt, 2005) as well as social (Ahrens and Chapman, 2007; Brown and Duguid, 991) and cognitive (Hoffman and Bazerman, 2007) components. We explore the combinations of modes of integration and diagnostic vs. interactive uses of control systems to delineate a parsimonious number of plausible con? gurations of SCSs and MCSs within organizations. We approach these con? gurations as ideal-types, in the W eberian sense of the term, that is â€Å"the one-sided accentuation of one or more points of view and by the synthesis of a great many diverse, more or less present and occasionally absent concrete individual phenomena† (Weber, 1904, p. 90).We theorize the relationship between these ideal-types and organizations’ capacity to elaborate a sustainability strategy. In line with prior con? guration theory-building (Doty and Glick, 1994; Miller, 1987, 1996; Mintzberg, 1983), we specify our framework by explaining which moves between con? gurations can support a change in strategic orientation toward sustainability. Finally, we discuss how this framework can support further empirical studies on the role of formal control systems in the integration of sustainability within organizational strategy. The paper is organized as follows. Part 2 describes he role and uses of MCSs for strategy-making. Part 3 speci? es the problem of management and sustainability control systems integr ation. Part 4 explores the various con? gurations of both regular MCSs and SCSs, provides empirical illustrations for each con? guration, and explains how they relate to speci? c approaches to sustainability strategy. Part 5 theorizes how moves across con? gurations explain the integration of sustainability within organizational strategy. Part 6 discusses the implications of the framework for future research on the role of management accountants and management control for promoting practices on sustainability. . Management control systems and strategy-making 2. 1. How MCSs in? uence strategy Simons (1990) conveys the idea of formal control systems in? uencing strategic processes within organizations. Although Hopwood (1987) pointed to the transformational potential of accounting and ways in which accounting change gives rise to preconditions for subsequent change, researchers have tended to consider control systems as passive and not constitutive of change. In contrast, Simons (1991 ) conveys the idea of formal control systems in? uencing strategic processes within organizations. Speci? ally, Simons (2000) highlights the role of information-based routines and procedures in both elucidating strategic uncertainties and revealing strategic risks. Accordingly, formal controls have a role in strategic renewal in the minimization of organizational threats and in the embracing of opportunities arising from competitive dynamics or internal competencies. In more recent work, Simons (2006) illustrates strategic renewal by considering different stages in a ? rm’s business life-cycle and the practices of newly appointed managers seeking to take charge and promote agendas and strategies. J. -P. Gond et al. Management Accounting Research 23 (2012) 205–223 207 In reviewing the literature on MCSs and strategy, Lang? eld-Smith (1997) argues that strategy is multidimensional in nature but that this is rarely recognized by researchers who simply assume that all mana gers view their organization’s strategy in the same terms. Following on, she points to problems in under-specifying strategy and implies that care should be taken in research design in order to uphold the integrity of research ? ndings. In a similar vein, Chenhall (2003) argues that strategy constructs used in accounting studies may be outdated.As a consequence, strategy in case-based studies need not be con? ned, for example, to typology (prospector, analyzer, defender) (Miles and Snow, 1978), mission (build, hold, harvest) and competitive position (cost leadership and differentiation) (Porter, 1980). Further, Lang? eld-Smith (1997) observes that strategy is under continual construction or, in her terms, â€Å"an ongoing developmental process†. Her study paves the way for alternative, dynamic, conceptions of strategy. The following sub-section considers Simons’ (1995) LOC framework and whether and how MCSs contribute to strategy-making.We focus on this framewor k to investigate how MCSs in? uence strategy and sustainability. 2. 2. Two uses of MCSs for strategy-making Central to the Simons’ (1991, 1995, 2000) analysis is the distinction between interactive and diagnostic control systems on the basis of their respective contributions to the strategy-making process. While diagnostic control systems are tools that help in the achievement of organizations’ intended strategies, interactive control systems provide input into the formation of strategy.That is to say, interactive control systems stimulate and guide emergent strategies in response to opportunities and/or threats within an organization’s operating environment. The purpose of interactive control systems is to direct managers’ attention toward strategic uncertainties and to learning novel strategic responses to a changing environment. Interactive control may be limited to one system only (Simons, 1991) or, given turbulent operating environments where complex information ? ows are valued, more than one system. Consistent with Simons’ (1991) study, the present paper views formal control as predominantly contributing to either strategy formulation or to strategy implementation. Use of formal control is mostly for the development of emergent strategies or else for the realization of intended strategies. In terms of the former, interactive control systems involve dialogue between top managers and subordinates in an effort to stimulate organizational learning and the development of new strategic initiatives.The link between interactive control and strategy-making is reinforced by Widener’s (2007) ? nding that interactive control is used to scan the external environment and, by implication, feed into strategic positioning. In relation to the latter, diagnostic controls are used by executives as ‘management by exception’ tools in order to correct actors’ actions and align activities toward the achievement of c ritical success factors. Focus upon two levers of control from Simons’ (1995) LOC framework should not be interpreted as the neglect of the other two levers. Interactive and diagnostic controls are used in order to identify con? gurations of control systems and, in so doing, theorize on an organization’s capacity to integrate sustainability into strategy. As depicted diagrammatically by Simons (1995, 2006), belief and boundary systems surround the use of interactive and diagnostic controls and therefore cannot be considered as separate from them. Empirical support is provided by Widener (2007) that belief systems do indeed in? uence each of the other three systems.Further, Simons (2000) suggests bi-directional relations between interactive and belief systems on the one hand and boundary and diagnostic systems on the other. The pairs are theoretically plausible given that interactive-belief systems serve to empower organizational actors and boundary-diagnostic systems s eek to constrain and ensure compliance with rules. On a practical level, belief and boundary controls are less amenable to systematic investigation but, nevertheless, can be used to elaborate on and interpret ? ndings. 2. 3.Identifying MCSs for strategy-making In a brief review of the approaches taken by researchers in the operationalization of the LOC framework, Mundy (2010) observes differences in choices made in the selection of MCSs. For the purpose of this study, and consistent with Mundy, a ‘package’ of MCSs is put forward, any one of which can be used by directors in forming or supporting strategy. 6 The selection of speci? c MCSs was informed by three criteria: (i) relevance to contemporary organizations; (ii) complete when considering cybernetic controls in practice; and, (iii) tangible in nature.Firstly, we note, for example, the argument of Nixon and Burns (Nixon and Burns, 2005) that there is a gap between the extant management control literature and practic e as well as between the concepts in management control literature and conceptual developments in strategic management. Accordingly, controls presented in prior literature (see Berry et al. (2009) for a recent review) have been adjusted to have general applicability to national and multinational organizations 4 We thank the one of our Reviewer for this observation. A similar focus on the distinction between and attention upon interactive and diagnostic controls can be found in a number of works including Abernethy and Brownell (1999), Bisbe and Otley (2004), Henri (2006), and Kober et al. (2007). 6 Although our focus on actual MCSs embodying the broader notion of â€Å"lever of control† may seem to arti? cially constrain the original framework proposed by Simons (1995, 2000), it is instrumental in our reasoning as it allows for identifying types of MCSs and SCSs that can be integrated or used in speci? c ways, as illustrated through empirical examples in the subsequent sectio ns of this manuscript.However, the con? gurations delineated by combining a variety of forms of integration and uses of systems are broad enough to support a variety of theoretical perspectives and empirical operationalizations. Hence, they allow us to bring back the theoretical and empirical ? exibility of interpretation that has been lost by adopting the restrictive approach to levers of control. We thank our second Reviewer for having drawn our attention to this important assumption in our analysis. 208 J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223Table 1 Management control systems used by top managers and corresponding sustainability control systems. Management control systems Strategic planning Budgeting Description of the management control systems Long-range planning covering a ? ve-ten year period (based upon forecasts of competitive environments). A plan specifying goals to be achieved in the next year; incorporates initial preparation and on- going revisions and updates More speci? c ? nancial information than that contained in the budget (includes information such as Return on Investment (RoI) and Economic Added Value (EVA)).Measurements expressed in non-? nancial terms (e. g. , introduction of new products, market positioning). Examples of sustainability control systems deriving from the accounting control systems Sustainability planning (Bonacchi and Rinaldi, 2007) Environmental budgeting (Burritt and Schaltegger, 2001); Sustainability budgeting (Roth, 2008) Environmental/Material ? ow cost accounting systems (Herzig et al. , 2012; Wagner and Enzler, 2006), Sustainable value added (Figge and Hahn, 2004) Environmental performance evaluation systems (Dias-Sardinha et al. (2002), Material and energy ? w accounting systems (Herzig et al. , 2012; Wagner and Enzler, 2006) Sustainability performance measurement (Schaltegger and Wagner, 2006), Sustainability balanced scorecard (Figge et al. , 2002; Hubbard, 2009) Socio-eco-ef ? ciency analysis (Schmidt et al. , 2004), Environmental investment appraisal (Burritt et al. , 2009) Reward system based on multidimensional performance system (Dutta and Lawson, 2009) Financial measurement systems Non-? nancial measurement systems Hybrid measurement systems Project management Evaluation and reward A set of ? nancial and non-? ancial indicators to assess the achievement of strategic objectives (e. g. , balanced scorecard, tableaux-de-bord) Review of discrete blocks of organizational activity intended to ensure delivery to time and budget (e. g. , to improve project attributes) To direct the efforts of individuals and groups within an organization (e. g. , bonus payments). operating in a competitive environment. Secondly, the full range of cybernetic controls as identi? ed in recent MCS research has been incorporated. The MCSs encompass controls presented by Malmi and Brown (2008) in their normative conceptual framework of management controls.This framework is based on extensive literature review, spanning forty years and covering the works of Chenhall (2003), Fisher (1995, 1998), Flamholtz et al. (1985), Lang? eld-Smith (1997), Otley (1980), and Simons (1995) amongst others. Finally, the use of accounting controls (in contrast to other systems such as human resources) is for pragmatic reasons (see also the works of Bisbe and Otley, 2004). By focusing on controls with ‘form’, we are able to observe more directly the relationships between MCSs and SCSs. 7 Table 1 provides an overview of the MCSs ‘package’ that results from our analysis of prior studies.Formal controls, as presented in columns 1 and 2 of Table 1, comprise: strategic planning; budgeting; ? nancial measurement systems; non-? nancial measurement systems; hybrid measurement systems; project management; and, evaluation and reward. The inclusion of three performance measurement systems corresponds with Simons’ (2006) shift towards performance measureme nt as well as remarks by Lang? eld-Smith (1997) and Widener (2007) that performance measures are necessary regardless of strategy pursued. According to the management control literature, budget systems (e. g. , Abernethy and Brownell, 1999; Bisbe and Otley, 2004; Kober et al. 2007), non? nancial measures (e. g. , Vaivio, 2004), hybrid measurement systems such as balanced scorecards or tableaux-debord (e. g. , Bisbe and Otley, 2004; Henri, 2006; Marginson, 2002; Tuomela, 2005), and project management (e. g. , Bisbe and Otley, 2004; Davila, 2000) have been used interactively as well as diagnostically within organizations. The MCSs included in our package have been shown to contribute to strategy-making through deployment of interactive controls in the studies of Bruining et al. (2004), Mundy (2010), and Widener (2007). In the next section, issues of integration in relation to SCSs, MCSs and strategy are discussed. . Sustainability and management control: the integration challenge 3. 1 . The emergence of sustainability control systems The MCSs described above were traditionally developed to align organizational and behavioural structures with the economic goals of organizations and to assist in improving economic performance. Despite more recent developments in hybrid and non-? nancial measurement systems and research indicating that ? nancial and non? nancial information can be considered equally important for both strategy deployment and development (Bhimani and Lang? ld-Smith, 2007), these traditional MCSs are seen to be limited in incorporating the interests of a broad range of stakeholders other than shareholders and in addressing environmental and social issues as well as their interrelationships with ? nancial issues (Bonacchi and Rinaldi, 2007; Burritt and Schaltegger, 2010; Durden, 2008; Herzig et al. , 2012; Norris and O’Dwyer, 2004). As a response to these limitations and to the prevalence of contemporary sustainability issues such as climate cha nge, various internal sustainability accounting systems and techniques have been developed and implemented by organizations.Column 3 of Table 1 provides an overview of some speci? c sustainability approaches to management accounting and control. They are mainly derived from the large body of literature on environmental management accounting and eco-control that has burgeoned in the last two decades and, more recently, has started to capture the broader aspects 7 In deviation from Malmi and Brown (2008), the study does not explicitly include informal controls such as occur in the socialization of organizational members through training or the practice of clan controls (Ouchi, 1977).J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 209 of sustainability (Burritt and Schaltegger, 2010; Lamberton, 2005; Thomson, 2007). 3. 2. The integration problem Within the growing stream of research on SCSs, attention has often been paid to the development of individual sys tems and tools of environmental/sustainability management accounting and control (such as environmental budgeting, environmental/sustainability performance evaluation systems, eco-control or sustainability balanced scorecard).In contrast, little research has investigated the interplay of these systems with regular management control, the improvements in decision-making created through better integration and how to overcome organizational barriers preventing such integration (Durden, 2008; Gond and Herrbach, 2006).With the exception of a very few in-depth case studies that have examined the relationships between MCSs in the context of socially responsible managerial decision-making (Durden, 2008; Norris and O’Dwyer, 2004) empirical evidence is scarce and our understanding of the interaction among these new forms of SCSs and their relationship with regular MCSs is limited. Some have thus called for more research into the needs and the speci? decision situations of managers as w ell as the use of various systems and tools when making environmental or sustainability related decisions (Herzig et al. , 2012). Similarly, others have stressed that the implementation process and related questions that arise from the use of management accounting tools and systems in the context of sustainability (such as integration-oriented cooperation and boundary-crossing, organizational learning) requires more attention (Bebbington, 2006; Burritt, 2004; Larrinaga-Gonzalez and Bebbington, 2001).In illuminating the various organizational processes whereby sustainability accounting contributes to raising awareness about and facilitating communication on sustainability issues inside organizations, we aim to contribute to advancing the discipline of sustainability management accounting and providing an impetus for future research. Likewise, it appears that the current evolution of the ? eld of sustainability in strategic management (Parnell, 2008) would bene? t from a broader persp ective that also looks at the relationships and interactions between MCSs and SCSs.As discussed in the previous section, MCSs are seen to play a critical role in in? uencing the process of strategy-making throughout the organization and thereby guiding organizational learning. Embedding stakeholders’ expectations and sustainability issues within the strategy thus calls for a closer look at the interplay between these two kinds of systems and how organizational moves towards more sustainability can be enhanced by strategic and simultaneous mobilization of these two systems.Drawing on Milne (1996) we argue that approaching the ? eld of sustainable strategic management from this process perspective increases the understanding of the power of management accounting systems in meeting the increasing complexity of global problems and contributing to the sustainability strategy formulation process. Our research re? ects the general lack of clear understanding of managers’ key arguments or business logic for adopting sustainability strategies (Salzmann et al. 2005). We propose that better understanding of the links between the two kinds of systems and their contribution to making a genuine sustainability strategy could enable organizations to move away from sustainability accounting systems operated in parallel to the ‘regular’ management control and often built in response to external legal and societal pressures (Zadek, 2004) to more integrated and dynamic uses of control systems which support the development of new business opportunities. . 3. Dimensions of integration In order to clarify the processes whereby MCSs and SCSs can be integrated, this paper conceptualizes integration as a â€Å"socio-technical† process (Emery and Trist, 1969) that is, a â€Å"thick† interface between both types of system that encompasses organizational, cognitive, and technical dimensions. Technical Integration refers to the necessity of consider ing single practices of sustainability control within a broader system of management control. It is de? ed here as the integration of regular MCSs with activities and systems that can be described as internal sustainability management control but are dealt with outside the management control function of organizations. Despite the presentation of two parallel worlds, the descriptions of MCSs and SCSs (Table 1) reveal potential for methodological integration. However, in practice, these accounting systems, developed and used for managing and reporting sustainability impacts, vary in the way they are integrated into ‘regular’ MCSs (Adams and Frost, 2008).When SCSs are run in parallel to traditional MCSs in practice, organizational decision-making is likely not be based on the broadest possible foundation of economic, ecological and social data available in the organization (Burritt and Schaltegger, 2010). Therefore, technical integration involves methodological links betwe en the two encompassing types of systems, such as the presence of a common calculability infrastructure to gather information for both systems.Organizational integration refers to the organizational dimensions that may or may not underlie MCSs and SCSs and point to actors’ practices in relation to both types of control systems. Rather than seeing regular and sustainability management control just as something organizations have, we argue that integrating sustainability into management control and strategy should also be approached as something people do, in line with recent calls for a practice perspective in management control and strategy (Ahrens and Chapman, 2007; Heidmann et al. 2008; Johnson et al. , 2007; Whittington, 1996, 2007). By de? ning actors’ roles and organizations’ formal structure in ways that facilitate the socialization of management accountants to become specialists of sustainability reporting and control and that enhance the ?nancial account ing skills of sustainability managers, organizations can reach a form of systemic integration, irrespective of the level of systems’ technical integration. We therefore argue that integration should also be approached through the ‘social practice’ lens.Organizational integration can be reached through groups which may have developed similar practices of reporting or management control, although they 210 J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 do not belong to the same part of the organizational structure and do not operate through the same systems. This ‘community of practice’ (Brown and Duguid, 1991) can be made up of accountants and managers using both or different systems yet sharing a set of common practices (Ahrens and Chapman, 2007). Finally, our broad approach to integration encompasses cognitive dimensions.Regular and sustainability control systems can also be viewed as communication platforms that facilit ate interaction and create opportunities for discussion between people who bring with them different patterns of thinking, mindsets and practical viewpoints with regard to sustainability (Heidmann et al. , 2008). The main aim of such dialogue is to attempt an exchange of knowledge between those involved, to reach an understanding and to overcome or rede? ne cognitive boundaries. Cognitive dimensions of integration have been deemed as crucial for sustainability integration within organizations in prior works (Hoffman and Bazerman, 2007).Therefore, we argue, a complete overlap of both management and sustainability control systems should also be re? ected in shared cognitions among the managers working on mainstream strategy/control and sustainability. Crucial to overcoming cognitive biases that are socially and environmentally dysfunctional and that perpetuate unsustainable practices (Hoffman and Bazerman, 2007) is the process of working towards a ‘common frame of reference†™ or a shared perception of reality (Levine and Moreland, 1991). Even if the adoption of sustainability and its integration into management control is viewed as necessary, this is easier said than done.An expansion of perspectives requires knowledge that is exchanged and assimilated into the respective individuals’ own knowledge structures (Godemann, 2008). It should be noted that these three forms of integration can co-exist within the same organization and may compensate each other and work together in bridging MCSs and SCSs. For example collective cognition or shared practices among users of two distinct control systems focused either on sustainability or management may compensate for a lack of technical integration between these systems by allowing a smooth circulation of information and knowledge.Furthermore, it is empirically and conceptually plausible to surmise that integration on one dimension can lead to tighter coupling on one or both of the other dimensions as a n (un)intended consequence. For instance, strong technical integration may lead to the enhancement of organizational integration through the construction of new shared practices and this—in turn—may create renewed common understanding for users with different backgrounds (Bechky, 2003; Carlyle, 2004). Although we consider integration as a continuum variable that re? cts an aggregated level of technical, organizational and cognitive integration, incorporation of empirical evidence allows us to consider different forms of integration and to highlight the challenges of moving from one con? guration to another. 4. De? ning con? gurations of control systems In order to appreciate the modes of sustainability integration within organizational strategy, we rely on the various uses of both sustainability and management controls (diagnostic vs. interactive) as well as on their level of integration to delineate ‘ideal-types’ of organizational con? urations. To do so, we distinguish two encompassing types of systems (management control vs. sustainability) and consider an overall level of systems’ integration that encompasses technical, organizational, and cognitive dimensions. Within these restrictive assumptions we delineate eight organizational con? gurations relating to integration of MCSs and SCSs and to their speci? c uses. These eight con? gurations are summarized in Table 2 and discussed in-depth below. We present these ‘ideal-types’ by moving from diagnostic to interactive uses of systems.We ? rst introduce low levels of integration con? gurations (characterized by a loose coupling between MCSs and SCSs) and then con? gurations with high levels of integration (tight coupling of MCSs and SCSs). Building on Miller’s (1986, 1996) insight that con? gurations â€Å"produce strategy†, for each con? guration we discuss the relationships between systems (considering technical, organizational and cognitive dimens ions of integration), provide an empirical illustration, and then specify some key parameters of these con? urations, namely their stability, their empirical verisimilitude and their capacity to enhance simultaneously the environmental, social and economic dimensions of the bottom line (that is, the ‘triple bottom line’). 4. 1. Dormant decoupled strategy (con? guration A) A ? rst ideal-type of organizational con? guration corresponds to a situation within which the organization possesses parallel systems of control for management and sustainability, yet neither of them is actually mobilized to deploy any kind of strategy.As explained by Simons (1991, p. 60): â€Å"when top managers of large business do not have a vision for the future—or a sense of urgency about creating such a vision—they do not appear to make control systems interactive†. In this context of ‘dormant decoupled strategy’, the organization lacks vision for future develop ment in both the strategic and sustainability domains. This situation prevents the emergence of a clear strategy and the focus is on a diagnostic control system.Such a lack of vision on sustainability and strategy may be reinforced by an absence of cognitive integration between both domains that could be perceived by executives as totally separated worlds (Swanson, 1999) and may also re? ect low organizational and/or technical integration of MCSs and SCSs preventing the emergence of a community of practice around systems. This situation can occur, for instance, for developed or bureaucratized organizations enjoying a high level of monopoly power in their market but whose power is declining due to the entry of new more dynamic competitors.In such organizations, control systems for traditional management and sustainability may have grown progressively and independently with emphasis on diagnostic use. Some large formerly state-owned European utility and transport companies faced these challenges when the energy market was liberalized in Europe. The ‘dormant decoupled strategy’ con? guration can also occur in the less J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 211 SCS, sustainability control system; MCS, management control system; TBL, triple bottom line performance. requent contexts described by Meyer and Zucker (1989) as â€Å"permanently failing organizations† within which actors fail to agree on a clear strategic direction and thus maintain uncertainties about the organization’s future. The con? guration of a ‘dormant decoupled strategy’ may also exist in uncertain business situations in which organizations operate illegally and under constrained circumstances. Such situations can emerge, for example, in developing countries where there are corrupt of? cials and ineffective regulations.Herzig et al. (2012, pp. 148–172) report the case of an electroplating company in the Philippin es which was required to move its shop because of landownership problems. Due to ill-advised and short-sighted decisions, the business was re-located to a mixed-zone which then forced the company to operate â€Å"behind closed gates† and at reduced capacity for more than one year. Strategic options to the company were limited as was the interactive use of â€Å"regular† and environmental control systems of the company.A low triple bottom line performance could be observed from a combination of reduced economic performance, risks in operations and low legitimacy within the local community. Moreover, these threats to the existence of the company support the view that this con? guration is low in stability. For organizations acting in dynamic and competitive markets and within effective regulatory frameworks, such a situation is likely to be transitory, as pressures for strategizing are likely to emerge either from external stakeholders such as shareholders, government or competitors.A persistent lack of strategy in a competitive environment would probably force the organization out of business. We can therefore assume that the empirical verisimilitude of this con? guration is low and con? ned to periods of strategy ‘crisis’ (Simons, 1991)—apart from the relatively exceptional case of â€Å"permanently failing organizations† (Meyer and Zucker, 1989). The entrance of a new head or CEO may indeed stimulate the adoption of a new clear vision (Simons, 1994, 2006).Overall, organizations characterized by such a ‘dormant decoupled strategy’ are unlikely to reconcile environmental, social and economic performance either in the short or in the long run. 4. 2. Strategy emergence through sustainability (con? guration B) A possible move from the ‘dormant decoupled strategy’ con? guration consists in having a change in the use of the SCSs. The move from a diagnostic to an interactive use of SCSs can re? ect an emerging strategic renewal through sustainability.In this case of ‘strategy emergence through sustainability’, MCSs and SCSs are still not integrated, but the sustainability system is mobilized strategically by the top management team to deploy a sustainability strategy (Simons, 1994). Hence, the strategy ‘emerges’ from the sustainability area within a dormant context (Mintzberg and Waters, 1984). Although such a con? guration seems to be empirically less plausible, its existence can be explained, for instance, by the creation of a dynamic new department for sustainable development or CSR, made of entrepreneurial actors who trigger changes within a bureaucratized orCon? guration D Schizoid sustainability strategy Stability: Low Frequency: Medium TBL: High (short term) Con? guration B Strategy emergence through sustainability Stability: Medium Frequency: Low TBL: Medium Con? guration A Dormant decoupled strategy Stability: Low Frequency: Low TBL: Low Level of control systems’ integration (cognitive, organizational, technical) Low Decoupling Con? guration C Compliance-driven sustainability strategy Stability: High Frequency: High TBL: Medium Uses of control systems (diagnostic vs. interactive) Table 2 Con? uring uses and integration of control systems. a High Tight coupling Con? guration E Dormant integrated strategy Stability: Low Frequency: Low TBL: Low Diagnostic use of MCS Diagnostic use of SCS Con? guration F Sustainability-driven organizational Strategy Stability: Low Frequency: Medium TBL: Medium Interactive use of SCS Con? guration G Peripheral sustainability integration Stability: High Frequency: Medium TBL: Medium a Interactive use of MCS Diagnostic use of SCS Con? guration H Integrated sustainability strategy Stability: High Frequency: Low TBL: High (long term)Interactive use of SCS 212 J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 mature organization. These changes can be co-opted by to p managers aiming at testing the ecological viability of this strategy within the organization (Burgelman, 1991) and thus using this control system interactively (Simons, 1990). The emergence of this con? guration can also be related to the willingness of a new top management team to promote strategic renewal through sustainability, by focusing managers’ attention on this speci? c system (Simons, 1994).In such contexts, members of the newly appointed sustainability team may have pro? les and backgrounds (e. g. , ex-civil servants or managers from NGOs) that diverge signi? cantly from the dominant managerial one, preventing cognitive integration between users of MCSs and SCSs; or may also work within an organizational unit loosely coupled to the rest of the organization or develop their own distinct systems of data-collection on sustainability issues. Such conditions can limit the organizational and technical integration of MCSs and SCSs.Strategy emergence through sustainabili ty may occur in mature and stable industrial sectors that become subject to profound transformations due to new and emerging sustainability agendas such as global warming. For instance, several energy companies and utilities that operated by relying mainly on a diagnostic use of their MCSs have started thinking about sustainability strategically. Gond et al. (2010) report the case of British Utility for which a change in the industrial sector pushed the executives to recruit a team of experts in order to â€Å"strategize sustainability†.However, this team was made up of newcomers who were loosely integrated into the company from an organizational and cognitive viewpoint. They only had a pre-existing SCS which was decoupled from daily managerial activities. Although MCS and SCS integration was low across the three components, the newly appointed team started transforming the use of SCSs to make it a strategic device for engaging employees and managers. Hence, new opportunities for strategic renewal emerged progressively, even though the con? guration was characterized by a â€Å"dormant† mainstream strategy and low system integration.Within such a con? guration, it can be expected that organizations perform well on the non-? nancial dimensions. Although strategic renewal through mobilizing the SCS may also be motivated by economic considerations organizations will probably struggle to enhance their ? nancial performance in the medium or long term without refocusing on a broader set of control systems in this con? guration where systems are less integrated, resulting in a medium capacity to achieve a triple bottom line. Therefore, the stability of this con? guration is medium. 4. . Compliance driven sustainability strategy (con? guration C) A second possible move out of the dormant decoupled strategy refers to the situation within which an organization mobilizes one of its MCSs to deploy its strategy (Simons, 1991, 1994, 1995), yet pays little atte ntion to sustainability issues which are managed diagnostically through a system that operates parallel to the dominant MCS. One case in point is the development of the sustainability control system driven by external pressures to report on social and environmental issues (e. g. legal pressures and/or stakeholder pressures) (Kolk, 2003; O’Dwyer and Owen, 2007). According to many observers of organizational life, this situation is often observed during early stages of sustainability integration (Maon et al. , 2009, 2010; Mirvis and Googins, 2006; Zadek, 2004). For instance, at the early stages of the Nike case reported by Zadek: â€Å"the company realized it couldn’t just shut out the noise. It eventually responded to activists’ demands for labour codes and, after further pressure, agreed to external audits to verify whether these codes were being enforced† (Zadek, 2004, pp. 28–129). The corporate responsibility department of Nike emerged as an orga nizational answer to these external pressures (Zadek, 2004; Zheng, 2010). With this ‘compliance-driven sustainability strategy’, the sustainability control system is usually used as a ‘management by exception tool’ to detect a ‘big issue’ and to demonstrate (e. g. , through disclosure of sustainability performance information in annual reports) that the organization has everything â€Å"under control†. In this regard, this con? uration presents an important level of stability, except that the sustainable discourse and practice run the risk of being externally perceived as ‘greenwashing’ or ‘window dressing’ (Banerjee, 2008; Deegan, 2002). Within this type of con? guration, the sustainability data produced by the organization can hardly feed into any internal management processes as there is a low level of technical and organizational integration, re? ected in a â€Å"decoupled† organizational context (Box enbaum and Jonsson, 2008; Meyer and Rowan, 1977).Similarly, executives and managers confronted with sustainability issues tend to ? rstly consider them as unrelated to their core business (Zheng, 2010), re? ecting low cognitive integration. Thus, this con? guration leaves little room for innovation and organizational learning through the diagnostic use of the sustainability system (Gond and Herrbach, 2006; Maon et al. , 2009). Accordingly, the organizational capacity to improve a triple bottom line performance remains low at this stage, even though the organization may exhibit high levels of ? nancial performance. 4. 4.Schizoid sustainability strategy (con? guration D) The fourth and last con? guration exhibiting ‘lowintegration’ from a technical, organizational and/or cognitive viewpoint refers to an organizational context within which contradictory sustainability and traditional strategies are followed and deployed through parallel MCSs and SCSs. Although this ‘ schizoid sustainability strategy’ is probably unusual, its existence ? nds theoretical and empirical support. Theoretically, Kets de Vrie and Miller (1984) argued that organizations are likely to experience ‘neurotic symptoms’ such as chizophrenia. Prior research suggests contradictory injunctions are not uncommon within organizational contexts (Emery and Giauque, 2003), and these situations may trigger schizophrenic symptoms (Watzlawick, 1979). Accordingly, the deployment of control systems supporting contradictory logics can be a way of delegating to lower managerial echelons the management of tradeoffs J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 213 and tensions which have not been effectively managed at the higher end of the organization.It could also re? ect a disagreement at the board level about the levels of priority to grant to strategic uncertainties. Both situations will de facto enhance the maintenance of low technical and organizational integration, and prevent cognitive integration of sustainability and strategy. Other theoretical arguments explain the presence of a ‘loosely coupled’ yet fully developed sustainability strategy. For instance, such a sustainability strategy is a stronger shield to buffer external pressures and external scrutiny through manipulation and super? ial reporting exercises in order to present a facade of conformity (Oliver, 1992). A ? ‘realist’ facade of conformity can be a way to attract institu? tional support for illegitimate actions (Elsbach and Sutton, 1992), a case in point being the instrumentalization of CSR practices by Ma? a organizations (Gond et al. , 2009). Empirically, diversi? ed US-based multinational corporations have been shown to exhibit contrasted sustainable behaviours in various countries, supporting the view of corporate actors ‘being good while being bad’ (Strike et al. 2006). Accordingly, this con? guration could be of a medium frequency. Critical analyses of the corporations which are the most invested in by responsible investors also suggest that sustainability performance may vary heavily across their different impacts on stakeholders (Banerjee, 2008; Markowitz, 2008). For instance, Microsoft is simultaneously praised for its social initiatives while having been found guilty of violations of the anti-trust legal framework (Markowitz, 2008).In addition, a temporary lack of systems’ coordination can also be a transitory situation faced by an organization implementing an organizational change toward sustainability. This con? guration is thus characterized by a low level of stability. Finally, in terms of triple bottom line performance, this con? guration can generate high convergence between the various dimensions of performance in the short run, even though it does not enable this convergence to be sustained in the long run. We now turn to the characterization of a second set of ideal-type con? urations that correspond to situations where MCSs and SCSs are strongly coupled and integrated, through cognitive, organizational and/or technical processes (bottom line of Table 2). This ‘high’ integration means that SCSs and MCSs are coordinated and overlap. Yet, important differences emerge from the various uses of both systems in these contexts. 4. 5. Dormant integrated strategy (con? guration E) Although both systems can be strongly tied from a technical, organizational or cognitive viewpoint, they are not necessarily mobilized to deploy any kind of strategy.This situation of ‘dormant intergated strategy’ can be found, for instance, in an organization that has recently integrated sustainability within its balanced scorecard (technical integration) but does not mobilize this system due to the emergence of new radical uncertainties—e. g. , prospect of a merger or of an hostile takeover—which temporarily prevents the adopt ion of strategic action. Such a situation arose from a part privatization of one of the largest water supply and sewerage companies in Germany (Berliner Wasserbetriebe) as reported by Gmindner and Bergner (2002).The organization’s control of and reporting about environmental issues was always well-developed because environmental issues had a high strategic relevance to the organization (as provider of drinkable water to the public) and were subject to strict regulation (under environmental law). After part-privatization of the public law institution, the new management board adopted a more defensive environmental strategy as it thought that environmental issues had been given too much attention in the past (at most, the board tried to meet regulations in a cost ef? ient way). As the public law company still acted in a monopoly position, bounded to public price regulation, no clear strategy emerged. This was, on the one hand, re? ected in the management’s decision to im plement a new balanced scorecard without clarifying its strategic role and its relationship with the public budgeting processes and economic plan. On the other hand, due to lasting cognitive biases at top management level, it was dif? cult to clarify which strategic issues of an environmental and social nature would receive priority in the future.The ‘dormant integrated strategy’ con? guration ? nds similar rationale to the ‘dormant decoupled strategy’ con? guration except that control systems are integrated here, either technically, organizationally or cognitively. In our German illustrative case, there are high levels of technical integration (e. g. , through the balanced scorecard), however organizational uncertainties prevent a more proactive approach to sustainability strategy being developed (see next con? guration). The parameters of this con? uration are expected to be similar to the ones of the ‘dormant decoupled strategy’, with a low level of stability, a low frequency and a low capacity to create a convergence between the various dimensions of performance. However, in this situation, given a lack of strategic vision, the prospects for sustainability strategizing are higher than in the ‘dormant decoupled strategy’ case, because interactive engagement by the top management team with one of the two systems may be suf? cient—due to high systems’ integration—for a move towards a con? uration which entails high potential for sustainability integration (see the next two con? gurations). 4. 6. Sustainability driven strategy (con? guration F) A second ‘high integration’ con? guration is the case of an organization within which the MCS is not used interactively and where the strategy-making process is driven by sustainability through the interactive use of the SCS. This ‘sustainability driven organizational strategy’ corresponds, for instance, to the situation o f sustainable businesses at their very early stage of development.Organizations at an early stage of development may have not yet integrated any formalized MCSs into their strategy-making process. Yet, as these organizations’ business models embed sustainability, the need to formalize and control sustainability related data and behaviour may be far higher, leading to an interactive use of this system, and to the development of an integrated MCS as a by-product. This con? guration can be observed in the case of ‘green’ start-ups addressing sustainability issues through 214 J. -P. Gond et al. Management Accounting Research 23 (2012) 205–223 their business model or at the early stages of organizational development focused on social responsibility or sustainability products/services. Medium sized corporations having constructed their business model around sustainability such as Innocent Drinks, for instance, may ? nd that having such a con? guration with a dom inant focus on the sustainability parameters of their activities constrains growth. Because it re? ects a transitory stage of sustainable organizational development, this con? uration’s stability and empirical frequency are both medium. From a triple bottom line perspective, organizations in this situation may perform well from a social and environmental perspective, yet struggle to secure enough ? nancial resources for their development. As a result, their triple bottom line performance can be expected to be only modest. 4. 7. Peripheral sustainability integration (con? guration G) A third con? guration exhibiting a high level of integration of control systems is ‘peripheral sustainability integration’.This situation corresponds to the case of an organization within which only the regular MCS is used interactively to deploy the strategy, the management of sustainability being used as a diagnostic tool. This con? guration seems highly plausible from an empirical viewpoint, especially for organizations that have derived their sustainability systems from existing MCSs—and thus enhanced technical or organizational integration—while considering that the main strategic uncertainties are not related to the sustainability area (low cognitive integration), for instance because of the speci? s of their industrial sector. In such a con? guration, as sustainability data do not feed the process of strategy-making, sustainability-driven innovation is very unlikely (Gond and Herrbach, 2006). However, they may engender some constraints and boundaries related to sustainability owing to diagnostic monitoring of sustainability issues. This situation corresponds to the approach of sustainability or social responsibility management which dominated the â€Å"design school† of strategy (Mintzberg, 1990) as well as the â€Å"planning school† of strategy (Ansoff, 1965).Both schools of thought regarded these responsibilities as external ‘constraints’ weighing on strategic choices rather than ‘business opportunities’ on their own for strategy making or competitive advantage construction (Burke and Logsdon, 1996; Porter and Kramer, 2006). Drawing upon the Prince of Wales Accounting for Sustainability: Practical Insights (Hopwood et al. , 2010) text, ‘peripheral sustainability integration’ is exhibited by Sainsbury’s, HSBC, and Novo Nordisk.In each case, it is evident that strategy is aligned to a commercially driven business model where economic progress is at the forefront of business activity. As acknowledged by the authors of the Sainsbury’s case, given the economic crisis, it is not known if sustainability would be embraced if there was not scope to contribute to cost-cutting within the company and across supply chains. Similarly, at Novo Nordisk, ? nancial considerations dominate for the majority of investors despite articulation of social, economic and enviro nmental interests within the company’s Articles of Association.The cases reveal environmental scanning of stakeholder concerns and careful investment practices in order to protect against negative impacts on reputation and therefore ? nancial losses. Novo Nordisk seeks to identify emerging issues that are potentially material. HSBC has implemented the Equator Principles and in-house policies to allow management of sustainability risk as the bank has some knowledge of what loans will be used for and is thus able to refuse to make loans where social and environmental consequences will impact negatively upon likely repayments.Theoretically, the less than ideal deployment of a sustainability strategy of this con? guration can be linked to lasting ‘cognitive barriers’ within an organization. Mindsets, for example, may prevent members of the top management team from perceiving the strategic uncertainties related to sustainability (Hoffman and Bazerman, 2007; Swanson, 1 999), even though SCSs and regular MCSs are integrated technically and organizationally. Executives may thus fail to give full consideration to this issue in their strategy-making processes (Simons, 1994). This con? uration is also likely to occur when the sustainability control systems are directly derived from a reporting system built to comply with external pressures and expectations. Because compliance remains an important driver of organizations’ engagement toward sustainability, we can expect this con? guration to be relatively frequent. From a triple bottom line performance viewpoint, organizations characterized by such a con? guration may perform only at a medium level, as social and environmental dimensions of performance maybe regarded as relatively low organizational priorities, in contrast with ? ancial dimensions of performance. Within the cases, the integration of MCSs and SCSs may in part be attributed to the in? uence of the Accounting for Sustainability proje ct (A4S), at least in the cases of Sainsbury’s and HSBC if not Novo Nordisk as the latter had not adopt the Connected Reporting Framework8 at the time of writing. Technical integration is apparent in Sainsbury’s application of the A4S decision-making tool and in HSBC’s linking of sustainability with ? nancial information in external reports.To this end, HSBC invested in a tailored, group-wide online system in 2004 that collates data on energy, water, waste and carbon dioxide emissions. These data were previously collected within a series of standalone spreadsheets and not connected to ? nancial data. Organizationally, coupling between the systems has been facilitated by business case reasoning and adoption of a longer-term perspective. However, evidence in the cases suggests that more is needed to move toward stronger communities of practice and common frames of reference.Pertinently, a member of the Non-? nancial Data Management Team at Novo Nordisk commented o n the need for 8 The Connected Reporting Framework was developed by A4S and aims to provide a new approach to corporate reporting that re? ects longerterm considerations. By measuring and linking sustainability and ? nancial performance, the aim is to provide a more rounded and balanced view of an organization’s overall performance and, in so doing, build credibility with a broader set of stakeholders. J. -P. Gond et al. / Management Accounting Research 23 (2012) 205–223 215 ognitive integration: â€Å"I see challenges ahead in relation to a common understanding and language between the ? nancial and the non-? nancial people, a whole cultural thing, a way of thinking† (Hopwood et al. , 2010, p. 224). In general, evidence suggests that stability at the three organizations can be considered high owing to adoption of a longer timeframe when making decisions and to a systematic approach to identifying potential stakeholder concerns. Sainsbury’s, for example, recognize that there is a need to support farmers if a continuous supply of lamb in the chain of supermarkets is to be secured.Given that social and environmental dimensions of performance serve to enhance economic dimensions at Sainsbury’s and HSBC, medium performance on the triple-bottom line can be expected. 4. 8. Integrated sustainability strategy (con? guration H) A last con? guration corresponds to an ideal-type of interactive use of both integrated systems. In this context of ‘integrated sustainability strategy’, sustainability strategy and strategy-making overlap completely, allowing the deployment and renewal of a sustainability strategy through the use of coherently integrated systems.This ‘ideal’ con? guration —if empirically rare—corresponds to the highest level of sustainability or social responsibility implementation described in prior models of CSR deployments (Maon et al. , 2009, 2010; Mirvis and Googins, 2006; Zadek, 20 04). It uncovers the control infrastructure that needs to be in place for embedding sustainability. Movement toward an ‘integrated sustainability strategy’ is demonstrated by the Aviva, BT and EDF Energy cases included in the Accounting for Sustainability: Practical Insights (Hopwood e

Video Case – Supply Chain Management at Regal Marine

VIDEO CASE: SUPPLY-CHAIN MANAGEMENT AT REGAL MARINE 1. What other techniques might Regal Marine use to improve supply chain management? Answer: The other techniques might Regal Marine uses to improve supply change management are as follows: * Allowing the supplier to become part of the company coalition. Specialization – utilizing the efficiency and knowledge of persons specializing in supply chain management * Virtual company – relying on a variety of supplier relationships to ensure the product is produced on time and within the demands of the customers * Using the latest computer and transmission technologies to schedule and manage the shipment of parts in and finished products out, would help to increase the efficiency of the company. 2. What kind of response might members of the supply chain expect from Regal Marine in response to their â€Å"partnering† in the supply chain?Answer: Regal Marine expects continuous innovation and high quality performance to en sure that the final goods and services reach customer satisfaction. The members of the supply chain expect that the expectations of Regal Marine transfer into a chain of suppliers that focuses on maximizing value and quality. They can expect loyalty from Regal, and the suppliers can gain prestige by representing the high-quality products which Regal Marine produces, which can result in profit margins.Suppliers can also largely benefit from economies of scale and learning curves, reducing the production cost. 3. Why is supply chain management important to Regal Marine? Answer: Supply chain management is about integration of activities that procure materials and services and transform them into the final product of the company. Supply-chain management enables Regal Marine to compete in a multibillion-dollar industry, and helps it to differentiate its products from competitors (e. g. rocure materials and services, transforming them into intermediate goods and final products, and delive ring the final products through a distribution system). As Regal Marine spends a large portion of its revenue on purchases, supply-chain management provides the company with the opportunity to work on closer long-term strategic relationship with key suppliers. Supply-chain management allows Regal Marine to increase its competitiveness via product customization, high quality, cost reduction and speed to market.Therefore, as a result, Regal Marine has been able to reduce costs while improving quality, responsiveness and innovation. Thus, its effective and efficient supply-chain management enables Regal Marine to differentiate its products through quality, innovation, unique features, up-to-date technology and responsiveness. Regal Marine’s innovative approach to supply-chain management not only benefits the company but the end user as well.