Management control systems and dysfunctional behaviour: an empirical investigation

Soobaroyen, Teerooven (2006) Management control systems and dysfunctional behaviour: an empirical investigation. American Accounting Association (AAA) Management Accounting Section Meeting.

Record type: Conference or Workshop Item (Paper)

Abstract

This study is an empirical investigation into the effects of selected management control sub-systems on managers' extent of dysfunctional behavior based on survey responses from a sample of Australian functional managers. Although management control systems (MCS) seek to bring commonality of goals and process coordination within organizations, one research orientation has been to consider whether MCS actually increases or reduces managers' extent of dysfunctional behavior.

Specific hypotheses were developed to link two previously identified forms of dysfunctional behavior - information manipulation and gaming - and three typical control sub-systems, namely Standard Operating Procedures (SOP), Budgetary Participation (BP) and Reliance on Accounting Performance Measures (RAPM). SOP was found to be only negatively related to gaming and BP had some significant reducing effects on both forms of managerial dysfunctional behavior. On the other hand, a higher level of RAPM was positively related (enhanced) to the extent of managers' information manipulation practices.

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