Value-driven responsibility accounting - dynamic tensions generated by competing values embedded in the management control system

This paper explores the way dynamic tensions are created by the management control system (MCS) at the lower management level in the context of a more flexible mode of management. Using Simons’ levers of control (LOC) framework, we adopt a case study method to investigate the way in which core values affect the design and use of a responsibility accounting system, which in turn shape the challenges which operational managers face, and how such managers fulfil their responsibilities by delivering financial results while at the same time being faithful to the organisation’s core values. Contrary to the existing literature, which argues that internal consistency of core values is required in order to create dynamic tensions, we find that dynamic tensions are created by competing elements of the core values, which are embedded in various facets of the responsibility accounting system. This paper contributes to the extant literature on dynamic tensions first by demonstrating how competing elements of core values affect the design and use of a responsibility accounting system; second by illuminating how these competing values are enacted in the practice of the MCS at the lower management level; third by illustrating a more nuanced understanding of dynamic tensions by showing the relative and multi-directional forces exerted by the MCS; and finally by adding another type of inherent tension that MCS should manage to those between efficiency and flexibility, that is, inherent tensions between community values and market concerns.