The organisational context of responsibility accounting systems

This thesis examines responsibility accounting systems (RAS) in the organisational context in theory and in practice. More specifically, it considers how RAS should be structured in the light of the classical and modern theories of organisations, in order to achieve better performance evaluation. The thesis argues that conventional RAS is designed and operated without reference to the organisational context, because it is tied to and influenced by the classical theory of organisations. This theory ignores certain contextual or structural variables which influence today's organisations. Technology, environment, size and interdependencies have been identified by modern theorists as variables having a major influence on organisation structures. The thesis suggests that technology, environment and interdependencies are the most influential contingency variables as far as RAS is concerned. With respect to RASs in practice, we have conducted an empirical study using the questionnaire method. The questionnaires were sent to organisations in four industries, which were chosen in the belief that they would reflect different technologies, environments and interdependencies. It was hoped that these differences would highlight the relationship between RAS and the organisational context in practice. In the first part of this study, i.e. the theoretical part, we found evidence from the organisational and accounting literature to support the view that RAS should be related to the organisational context. However, although our research found some evidence that this was, in fact, the case with respect to some issues, it was certainly not the case with many other issues of RAS in practice. Generally, the study found that in practice the similarities (and/or differences) between the organisations with respect to many issues of RAS owed much more to tradition and custom than to the chosen contextual variables, i.e. technology, environment and interdependencies. However, on the basis of the research done in this study, we would conclude that for RAS to be designed in the organisational context in which it operates, tradition and custom must be put aside. Finally, our research findings indicated that practising accountants are not entirely satisfied with the RASs of their own organisations.

Advisor / supervisor