Abstract
The article focuses on the analysis and development of the agency theory framework and seeks to define the conditions and functions which management control systems (MCSs) should meet according to the agency theory. The aim is to assess to what extent, under what conditions, and whether at all the validity of the agency theory assumptions can be ensured and the functions of MCS realistically achievable. More specifically, the article discusses the theoretical foundations of the agency theory, but also pays attention to the stewardship theory, assesses current knowledge in the area of different approaches to MCSs through the lens of the agency theory, and suggests conditions and functions of MCS reflecting the principles of the agency theory and the stewardship theory, including their critical evaluation.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Akerlof GA (1970) The market for “lemons”: quality uncertainty and the market mechanism. Q J Econ 84(3):488–500. doi:10.1007/978-1-349-24002-9_9
Atkinson AA, Waterhouse JH, Robert BW (1997) A Stakeholder Approach to Strategic Performance Measurement. Sloan Manag Rev 28(3):25–37
Baiman S (1990) Agency research in managerial accounting: a second look. Acc Organ Soc 15(4):341–371. doi:10.1016/0361-3682(90)90023-N
Baxter JA, Chua WF (2003) Alternative management accounting research—whence and whither. Acc Organ Soc 28(2–3):97–126. doi:10.1016/S0361-3682(02)00022-3
Bititci U, Garengo P, Dörfler V, Nudurupati S (2012) Performance measurement: challenges for tomorrow. Int J Manage Rev 14(3):305–327. doi:10.1111/j.1468-2370.2011.00318.x
Boučková M (2015) Management accounting and agency theory. Procedia Econ Finan 25:5–13. doi:10.1016/S2212-5671(15)00707-8
Chenhall RH (2003) Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Acc Organ Soc 28:127–168. doi:10.1016/S0361-3682(01)00027-7
Covaleski MA, Dirsmith MW, Samuel S (1996) Managerial accounting research: the contributions of organizational and sociological theories. J Manage Acc Res 8:1–35
Davis JH (1997) Toward a stewardship theory of management. Acad Manag Rev 22(1):20–47. doi:10.5465/AMR.1997.9707180258
Dirsmith MW, Covaleski MA, McAllister JP (1985) Of paradigms and metaphors in auditing thought. Contemp Acc Res 2(1):46–68. doi:10.1111/j.1911-3846.1985.tb00606.x
Drury C (2012) Management and cost accounting. Cengage Learning EMEA, Andover (Hampshire)
Franco-Santos M, Lucianetti L, Bourne M (2012) Contemporary performance measurement systems: a review of their consequences and a framework for research: challenges for Tomorrow. Manage Acc Res 23(2):79–119. doi:10.1016/j.mar.2012.04.001
Jensen MC (2000) A theory of the firm: governance, residual claims, and organizational forms. Harvard University Press, Cambridge
Jensen MC, Meckling WH (1976) Theory of the firm: managerial behavior, agency costs, and ownership structure. J Financ Econ 3(4):305–360. doi:10.1016/0304-405X(76)90026-X
Jönsson S, Macintosh NB (1997) Cats, rats, and ears: making the case for ethnographic accounting research. Acc Organ Soc 22(3/4):367–386. doi:10.1016/S0361-3682(96)00040-2
Král B (2010) Manažerské účetnictví. Management Press, Praha
Macintosh NB (1994) Management accounting and control systems: an organizational and behavioral approach. Wiley, New York
Marek P (2007) Vliv teorie zastoupení na teorii podnikových financí. Český finanční a účetní časopis 2(2):6–16
Mitchell RK, Agle BR, Wood DJ (1997) Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts. Acad Manag Rev 22(4):853–886. doi:10.5465/AMR.1997.9711022105
Namazi M (2013) Role of the agency theory in implementing management’s control. J Acc Taxation 5(3):38–47. doi:10.5897/JAT11.032
Parporato M (2011) Management control systems’ literature development: theoretical approaches and critiques within the functionalist paradigm. Rev Universo Contábil 7(2):146–173. doi:10.4270/ruc.2011218
Shields MD (1997) Research in management accounting by North Americans in the 1990s. J Manage Acc Res 9:3–61
Shields MD, Young SM (1993) Antecedents and consequences of participative budgeting: evidence on the effects of asymmetrical information. J Manage Acc Res 5:265–280
Simons RL (1995) Levers of control: how managers use innovative control systems to drive strategic renewal. Harvard Business School Press Book, Boston
Sundin HJ, Brown DP, Booth PJ (2008) Perspectives on multiple stakeholders and management control systems institutional and stakeholder theory: friend or foe? In: 31st Annual congress european accounting association conference website papers. European Accounting Association (EAA), pp 1–20
Šiška L (2015) The concept of management control system and its relation to performance measurement. Procedia Econ Finan 25:141–147. doi:10.1016/S2212-5671(15)00722-4
Williamson OE (1964) The economics of discretionary behavior: managerial objectives in a theory of the firm. Prentice-Hall, Englewood Cliffs
Acknowledgments
This paper has been prepared under financial support of the Internal Grant Agency of the University of Economics, Prague, Grant No. F1/13/2015, which author gratefully acknowledges.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2017 Springer International Publishing AG
About this paper
Cite this paper
Vimrová, H. (2017). Management Control Systems Through the Lens of the Agency Theory. In: Procházka, D. (eds) New Trends in Finance and Accounting . Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-49559-0_48
Download citation
DOI: https://doi.org/10.1007/978-3-319-49559-0_48
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-49558-3
Online ISBN: 978-3-319-49559-0
eBook Packages: Business and ManagementBusiness and Management (R0)