IDEAS home Printed from https://ideas.repec.org/a/icf/icfjar/v06y2007i1p39-60.html
   My bibliography  Save this article

Knowledge Specificity in Management Control System Design: A Case Study Evidence

Author

Listed:
  • V G Sridharan

Abstract

This paper builds a theoretic model to explain why and how knowledge specificity impacts firms’ Management Control Systems (MCS), based on Transaction Cost Economics (TCE). The model concludes that managers organize MCS on an individualized basis when knowledge specificity in a transaction is low, and involve worker teams when the specificity is high. Using the Product Variety Strategy (PVS) as a proxy for knowledge specificity, the model is examined in four New Zealand case units. The evidence is largely consistent with the theory, where for low specificity, decision management rights are centralized but the execution right is delegated to individual workers. The performance of individual workers is evaluated through task standards, and the incentive compensation is partly traced to individual performance. For high specificity, decision management rights are shared by manager with workers as one team, and the performance of the team is evaluated with reference to the job plan measures. Incentive compensation is traced to the whole firm, wherever inter-team involvement exists.

Suggested Citation

  • V G Sridharan, 2007. "Knowledge Specificity in Management Control System Design: A Case Study Evidence," The IUP Journal of Accounting Research and Audit Practices, IUP Publications, vol. 0(1), pages 39-60, January.
    • Handle: RePEc:icf:icfjar:v:06:y:2007:i:1:p:39-60
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:icf:icfjar:v:06:y:2007:i:1:p:39-60. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: G R K Murty (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.