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Dissertation
The role of management control systems to promote performance improvement in an environment of continuous improvement: an empirical analysis
Doctor of Philosophy (Ph.D.), Drexel University
1996
DOI:
https://doi.org/10.17918/00008539
Abstract
This research seeks to better understand whether the design of management control systems relates to performance/productivity improvement, measured in terms of customer perceived quality, on time delivery, waste reduction, and cycle time reduction. Using theories developed across several disciplines, five explanatory variables (i.e., Total Quality Management, Just-in-time, work group concept, proper goal setting procedures, and information feedback) are closely examined. Other factors, which may affect improvement have been controlled in this study. They are timing for TQM and JIT implementation, workers' mode of compensation, and the existence of major structural changes, which are non-TQM or non-JIT related. The sample of electronic firms selected were located within the United States with annual sales of $10 million and above. Letters requesting participation in this research study were sent to the manufacturing directors of 1,500 randomly selected firms which met the above criterion. One hundred and twenty-six firms (8.4 percent) responded positively to the request while 3 firms agreed to review the questionnaire before making a commitment to participate. Out of this group of 129 firms, 83 firms completed the questionnaires, yielding an overall response rate of 6.2 percent. This study contributes to the existing literature in several ways. First, using an integrated framework, the results seem to support the theory which states that management control systems, if properly designed and implemented, will assist the process of continuous improvement. Specifically, the results indicate that, in general, firms which implemented the notion of continuous improvement through TQM and JIT techniques, as well as team work concepts tended to have relatively greater improvements in performance. In addition, these high-improvement firms tend to set goals, provide more frequent feedback on performance information to their shop floor personnel, as well as using incentive plans. These findings have important implications for organizations. Overall, they imply that, without proper planning (i.e., designing) and control (i.e., the implementation and monitoring of performance), organizational goals or objectives may not be readily attained. The second contribution of this study lies within the realm of management accounting. The results suggest that, as an important component of performance monitoring systems, today's management accounting systems should provide performance information feedback to shop floor personnel. Such feedback of information serves as diagnostic signals to the employees, so that they can promptly react to production problems, such as a sudden increase in the defect rate, cycle-time and setup time. If the diagnostic signals come too late, or are not provided, process improvement activities may be jeopardized.
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Details
- Title
- The role of management control systems to promote performance improvement in an environment of continuous improvement
- Creators
- Khim Ling Sim
- Awarding Institution
- Drexel University
- Degree Awarded
- Doctor of Philosophy (Ph.D.)
- Publisher
- Drexel University; Philadelphia, Pennsylvania
- Number of pages
- xv, 210 pages
- Resource Type
- Dissertation
- Language
- English
- Academic Unit
- College of Business (and) Administration (1970-1999); Drexel University
- Other Identifier
- 991021888992404721