Da diversi anni, le societ\ue0 di revisione pongono grande attenzione al tema delle nuove tecnolo... more Da diversi anni, le societ\ue0 di revisione pongono grande attenzione al tema delle nuove tecnologie, con l\u2019obiettivo di garantire un migliore accesso ai dati in possesso dei clienti e utilizzare tali dati per migliorare la qualit\ue0 del loro lavoro. L\u2019avvento della tecnologica implica poter considerare nuove evidenze, quali informazioni tratte dai social network, dataset provider, immagini ecc. Non sar\ue0 facile e immediato il processo di accettazione di tale fonti da parte dei revisori, almeno fino a quando i principi di revisione (audit standard) non saranno adattati e disciplineranno nel dettaglio anche tali aspetti. L\u2019evoluzione tecnologica, tuttavia, ha tempi molto pi\uf9 rapidi rispetto all\u2019evoluzione degli standard. Fino a quando tale disallineamento temporale permarr\ue0, \ue8 improbabile che le societ\ue0 di revisione riusciranno a incorporare totalmente nei propri processi le nuove tecnologie e, di conseguenza, a immergersi integralmente nella rivoluzione tecnologica
We use a field research design to examine management control systems in creative teams working in... more We use a field research design to examine management control systems in creative teams working in fashion firms. The study is structured as an in-depth case study followed by five additional cases. We find management control systems to be deeply embedded in the work environment of creative teams. They are designed to define, negotiate, and legitimize the designs that emerge from the creation process. We identify a set of systems (directional) that define the creative space of design teams and that work as interfaces with the rest of the company. We also find a set of systems (inspirational) that guide the creative process to enhance novelty and provide a common vision to support consistency across the overall collection of products designed. In addition, our analysis documents how firms following different strategies—fine fashion versus mass market—design these systems differently to adapt their creative process to their strategic demands.
How audit teams are structured and function plays a crucial role in determining the level of audi... more How audit teams are structured and function plays a crucial role in determining the level of audit service quality. Despite this claim, little empirical research has been conducted on this effect. Using private data from two of the Big 4 audit firms, we fill this gap and document how diversity of audit teams influences audit quality. By combining the existing work in psychology and sociology with that in auditing, we develop our model by arguing that teams are composed not simply of single auditors but of sub-teams of individuals whose various combinations affect team performance. Starting from this premise, we study how the diversity of audit teams in terms of the different mix of work assigned to staff, seniors, managers, and partners influences audit quality and how this effect varies depending upon years of tenure. We also show that the proportion of leading auditors characterized by a common educational background and the percentage of female leading auditors affect audit quality. As an additional analysis, we examine how team diversity affects audit efficiency. The same elements found relevant for audit quality also affect audit efficiency. Based on more than ten years of oversight, the Board knows that, even within a single firm and notwithstanding firm-wide or network-wide quality control systems, the quality of individual audit engagements varies. PCAOB inspectors have observed a wide variation in the quality of auditing by many engagement teams. (PCAOB,
Creativity and Survival of the Firm Under Uncertainty 2009 Isbn 978 84 692 5174 4, 2009
Innovation is an essential source of competitive advantage for many firms. It is important becaus... more Innovation is an essential source of competitive advantage for many firms. It is important because it is the critical process by which members of organizations reinvent their firms to match evolving markets and environmental conditions. Different streams of research have been developed over time to study this phenomenon, evolving from different sources and focusing on somewhat different aspects. Also the accounting research has recently started to investigate these issues, concentrating on how to record, manage and evaluate innovation practices. While financial accounting has mainly focused on the determinants and effects of different financial reporting solutions related to innovation efforts in the light of the existing accounting regulations, management accounting has mainly tried to investigate how to fruitfully combine innovation and control systems to enhance organizational performance. Our purpose is to illustrate the main findings of accounting studies in these fields and to highlight areas ripe for future research.
This chapter argues that designing management control systems to enhance creativity requires a fu... more This chapter argues that designing management control systems to enhance creativity requires a fundamental shift in how these systems are conceptualized, namely, as enablers of creativity. Concepts such as diagnostic and interactive, enabling and coercive, and inspirational and directional provide a head start in this respect. A new research agenda is proposed around three main lines: first, the exploration of traditional control concepts in an environment where intrinsic motivation dominates; second, the study of how management control systems are designed and used in settings where aesthetic creativity plays a central role; and, third, an investigation of the differences across management control systems as creativity, organizational design, and people’s characteristics vary. Research focused on the link between management control systems and intrinsic motivation, aesthetic creativity, and contextual variables will enhance our understanding of a topic that is central to innovation and increasingly important in establishing competitive advantage.
This article explores the specific characteristics of knowledge-based organizations and describes... more This article explores the specific characteristics of knowledge-based organizations and describes the features of their management controls. Control mechanisms may act as effective means to integrate knowledge and coordinate activities. One of the key variables of control choices is the nature of the knowledge used to perform a task and its level of complexity. Keywords: knowledge; control; accounting
Advances in Environmental Accounting & Management, 2014
Abstract Although companies are increasingly embracing the sustainability discourse in their exte... more Abstract Although companies are increasingly embracing the sustainability discourse in their external reporting and disclosures, little is known about how management control systems support sustainability within organizations. This is unfortunate, given the important role that properly designed Sustainability Control Systems (SCS) may play in helping firms to better face their social and environmental responsibilities. Starting from these premises, the aim of this essay is twofold. On the one hand, we present a review of the emerging stream of research on sustainability and management control mechanisms, in order to identify and discuss the link between the two. On the other hand, we try to illustrate the main unaddressed issues in this literature as a premise to exploring one possible way to advance research in this area. Specifically, we make a call for a more holistic approach to the study of SCS, which considers also their organizational and cultural dimensions in addition to their technical properties. A framework for informing future work on the topic is proposed, based on the concept of ‘control package’ (Malmi & Brown, 2008; Sandelin, 2008) complemented with notions from the complementarity-based approach developed in organizational economics (Grandori & Furnari, 2008; Milgrom & Roberts, 1995). By enhancing our understanding on how SCS operate as a package, the application of our framework should allow researchers to develop better theory of how to design a range of controls to support organizational sustainability objectives, control sustainability activities, and drive sustainability performance.
ABSTRACT In the last ten years, the management accounting literature has devoted extensive attent... more ABSTRACT In the last ten years, the management accounting literature has devoted extensive attention to control forms applied in cooperative agreements between partner organizations. While originally contributors developed a theoretical approach focused on pure control archetypes, more recently this approach was criticized because not sufficiently powerful to explain the variety of forms and trajectories that inter-organizational controls can assume. The aim of our paper is to study the possible coexistence of inter-organizational control types existing in practice and to explore their determinants. From an empirical point of view, we conducted a survey on Italian municipalities and investigated their relationships with service providers in the areas of waste management and social services. Our results show that control combinations are more multifaceted than the theoretical configurations presented in the literature, and that in practice while some mechanisms related to certain archetypes are found in some combinations and not in others, some other mechanisms are common to all patterns. In addition, our evidence shows a composite framework where task characteristics come together with specific party characteristics and institutional factors to explain controls portfolios.
A framework for analyzing case studies and providing some guidelines for designing accounting inf... more A framework for analyzing case studies and providing some guidelines for designing accounting information networks and control systems is presented in this chapter. Data suggest that the collaborating firms that specialize in a particular function have access to others in the systems performing complementary tasks and this creates a level playing field within the network. Original modes of exchanging information may lead to new ways of doing business together, providing a source of competitive advantage. The availability of information on many aspects of the business facilitates more rapid responses to market opportunities. In contrast, the firms of the sample did not indicate that the sharing of management accounting information led to adversarial consequences, for example, the use of shared information for one's own advantage, without reciprocating, the exploitation to create superior bargaining positions, or, finally, in extreme situations, the utilization of shared information to activate a rival collaboration to the detriment of the original information provider. As a whole, data seem to suggest that collaborating partners activate networks in which a firm plays a central role in coordinating the activities of the counterparts and designs a network structure (the accounting information network) that provides an environment favorable for information to be generated and exchanged. The information exchanged in the network seems to be thicker than that condensed through the brokerage market, but is freer than that in the hierarchy.
This chapter aims at understanding firm collaboration by describing how the underlying interactio... more This chapter aims at understanding firm collaboration by describing how the underlying interaction is organized. The recognition of the hybrid nature of these organizational forms is another fundamental step towards the clarification of their control peculiarities. The growing importance of interfirm relationships in the last decades has motivated a rethinking of the logic of economic organization, that is, the existence of firms and the determinants of the choice between hierarchical governance, market governance, and hybrid governance. In fact, the organization of economic activities in practice appear to be increasingly moving away from the pure models of markets and firms towards hybrid models. These latter form a specific class of governance structures and are instantiated in a variety of cooperative interfirm arrangements that execute a broad range of activities that were previously completely carried out within organizations or through market exchanges. Notwithstanding the impressive set of organizational studies on hybrids referenced so far, this terrain is still a shifting one and the vocabulary is not well stabilized. Indeed, there is a sense of common knowledge regarding the concepts of both market, centered on the mechanics of supply and demand, and on the role of prices as key to its functioning, and firms, with the importance of hierarchical authority in sustaining activities and decision-making processes. On the contrary, the set of arrangements that rely neither solely on prices nor on authority for organizing transactions is broad and potentially confusing.
Research on management control has emphasised the relevance of controls for knowledge integration... more Research on management control has emphasised the relevance of controls for knowledge integration on a project-by-project basis. This work contributes to this field by proposing a framework to explain how management control systems foster knowledge transfer between organisational units in knowledge-intensive firms. By combining network theory and knowledge network research, this study suggests that the design of management control systems
The purpose of this paper is to explain the reasons why collaborating firms "open their books" an... more The purpose of this paper is to explain the reasons why collaborating firms "open their books" and share management accounting information. We investigate the effect of variables related to the tasks and relationships of single individuals of the partner firms (i.e., task interdependence and analysability, team interdependence and relationship duration) on open book accounting (OBA). Our model controls for firm-level variables (i.e., asset specificity, degree of economic dependence, contract presence, contract comprehensiveness, and firm size) known to influence management accounting information exchanges. By using social network analysis (SNA), the data collected from a fashion firm and its entire set of suppliers shows that the quantity of management accounting information is positively related to task interdependence while having an inverted U-shape relation with the duration of the relationship. In addition, it provides evidence of a positive association with task analysability, whereas we find no relation with team interdependence. The analysis also confirms the importance of firm-level factors in explaining the exchanges of management accounting information. Our conclusions have important implications for the design of OBA in inter-organisational relationships.
These days, the locus of business operations is difficult to define and is subject to continuous ... more These days, the locus of business operations is difficult to define and is subject to continuous modifications. On the one hand, firms form clusters of quasi-integrated partners; on the other, they outsource internal activities to external entities. Such inter-firm relationships have been studied in both the strategic and organizational fields, because they possess specific characteristics that challenge the extant theoretical
Da diversi anni, le societ\ue0 di revisione pongono grande attenzione al tema delle nuove tecnolo... more Da diversi anni, le societ\ue0 di revisione pongono grande attenzione al tema delle nuove tecnologie, con l\u2019obiettivo di garantire un migliore accesso ai dati in possesso dei clienti e utilizzare tali dati per migliorare la qualit\ue0 del loro lavoro. L\u2019avvento della tecnologica implica poter considerare nuove evidenze, quali informazioni tratte dai social network, dataset provider, immagini ecc. Non sar\ue0 facile e immediato il processo di accettazione di tale fonti da parte dei revisori, almeno fino a quando i principi di revisione (audit standard) non saranno adattati e disciplineranno nel dettaglio anche tali aspetti. L\u2019evoluzione tecnologica, tuttavia, ha tempi molto pi\uf9 rapidi rispetto all\u2019evoluzione degli standard. Fino a quando tale disallineamento temporale permarr\ue0, \ue8 improbabile che le societ\ue0 di revisione riusciranno a incorporare totalmente nei propri processi le nuove tecnologie e, di conseguenza, a immergersi integralmente nella rivoluzione tecnologica
We use a field research design to examine management control systems in creative teams working in... more We use a field research design to examine management control systems in creative teams working in fashion firms. The study is structured as an in-depth case study followed by five additional cases. We find management control systems to be deeply embedded in the work environment of creative teams. They are designed to define, negotiate, and legitimize the designs that emerge from the creation process. We identify a set of systems (directional) that define the creative space of design teams and that work as interfaces with the rest of the company. We also find a set of systems (inspirational) that guide the creative process to enhance novelty and provide a common vision to support consistency across the overall collection of products designed. In addition, our analysis documents how firms following different strategies—fine fashion versus mass market—design these systems differently to adapt their creative process to their strategic demands.
How audit teams are structured and function plays a crucial role in determining the level of audi... more How audit teams are structured and function plays a crucial role in determining the level of audit service quality. Despite this claim, little empirical research has been conducted on this effect. Using private data from two of the Big 4 audit firms, we fill this gap and document how diversity of audit teams influences audit quality. By combining the existing work in psychology and sociology with that in auditing, we develop our model by arguing that teams are composed not simply of single auditors but of sub-teams of individuals whose various combinations affect team performance. Starting from this premise, we study how the diversity of audit teams in terms of the different mix of work assigned to staff, seniors, managers, and partners influences audit quality and how this effect varies depending upon years of tenure. We also show that the proportion of leading auditors characterized by a common educational background and the percentage of female leading auditors affect audit quality. As an additional analysis, we examine how team diversity affects audit efficiency. The same elements found relevant for audit quality also affect audit efficiency. Based on more than ten years of oversight, the Board knows that, even within a single firm and notwithstanding firm-wide or network-wide quality control systems, the quality of individual audit engagements varies. PCAOB inspectors have observed a wide variation in the quality of auditing by many engagement teams. (PCAOB,
Creativity and Survival of the Firm Under Uncertainty 2009 Isbn 978 84 692 5174 4, 2009
Innovation is an essential source of competitive advantage for many firms. It is important becaus... more Innovation is an essential source of competitive advantage for many firms. It is important because it is the critical process by which members of organizations reinvent their firms to match evolving markets and environmental conditions. Different streams of research have been developed over time to study this phenomenon, evolving from different sources and focusing on somewhat different aspects. Also the accounting research has recently started to investigate these issues, concentrating on how to record, manage and evaluate innovation practices. While financial accounting has mainly focused on the determinants and effects of different financial reporting solutions related to innovation efforts in the light of the existing accounting regulations, management accounting has mainly tried to investigate how to fruitfully combine innovation and control systems to enhance organizational performance. Our purpose is to illustrate the main findings of accounting studies in these fields and to highlight areas ripe for future research.
This chapter argues that designing management control systems to enhance creativity requires a fu... more This chapter argues that designing management control systems to enhance creativity requires a fundamental shift in how these systems are conceptualized, namely, as enablers of creativity. Concepts such as diagnostic and interactive, enabling and coercive, and inspirational and directional provide a head start in this respect. A new research agenda is proposed around three main lines: first, the exploration of traditional control concepts in an environment where intrinsic motivation dominates; second, the study of how management control systems are designed and used in settings where aesthetic creativity plays a central role; and, third, an investigation of the differences across management control systems as creativity, organizational design, and people’s characteristics vary. Research focused on the link between management control systems and intrinsic motivation, aesthetic creativity, and contextual variables will enhance our understanding of a topic that is central to innovation and increasingly important in establishing competitive advantage.
This article explores the specific characteristics of knowledge-based organizations and describes... more This article explores the specific characteristics of knowledge-based organizations and describes the features of their management controls. Control mechanisms may act as effective means to integrate knowledge and coordinate activities. One of the key variables of control choices is the nature of the knowledge used to perform a task and its level of complexity. Keywords: knowledge; control; accounting
Advances in Environmental Accounting & Management, 2014
Abstract Although companies are increasingly embracing the sustainability discourse in their exte... more Abstract Although companies are increasingly embracing the sustainability discourse in their external reporting and disclosures, little is known about how management control systems support sustainability within organizations. This is unfortunate, given the important role that properly designed Sustainability Control Systems (SCS) may play in helping firms to better face their social and environmental responsibilities. Starting from these premises, the aim of this essay is twofold. On the one hand, we present a review of the emerging stream of research on sustainability and management control mechanisms, in order to identify and discuss the link between the two. On the other hand, we try to illustrate the main unaddressed issues in this literature as a premise to exploring one possible way to advance research in this area. Specifically, we make a call for a more holistic approach to the study of SCS, which considers also their organizational and cultural dimensions in addition to their technical properties. A framework for informing future work on the topic is proposed, based on the concept of ‘control package’ (Malmi & Brown, 2008; Sandelin, 2008) complemented with notions from the complementarity-based approach developed in organizational economics (Grandori & Furnari, 2008; Milgrom & Roberts, 1995). By enhancing our understanding on how SCS operate as a package, the application of our framework should allow researchers to develop better theory of how to design a range of controls to support organizational sustainability objectives, control sustainability activities, and drive sustainability performance.
ABSTRACT In the last ten years, the management accounting literature has devoted extensive attent... more ABSTRACT In the last ten years, the management accounting literature has devoted extensive attention to control forms applied in cooperative agreements between partner organizations. While originally contributors developed a theoretical approach focused on pure control archetypes, more recently this approach was criticized because not sufficiently powerful to explain the variety of forms and trajectories that inter-organizational controls can assume. The aim of our paper is to study the possible coexistence of inter-organizational control types existing in practice and to explore their determinants. From an empirical point of view, we conducted a survey on Italian municipalities and investigated their relationships with service providers in the areas of waste management and social services. Our results show that control combinations are more multifaceted than the theoretical configurations presented in the literature, and that in practice while some mechanisms related to certain archetypes are found in some combinations and not in others, some other mechanisms are common to all patterns. In addition, our evidence shows a composite framework where task characteristics come together with specific party characteristics and institutional factors to explain controls portfolios.
A framework for analyzing case studies and providing some guidelines for designing accounting inf... more A framework for analyzing case studies and providing some guidelines for designing accounting information networks and control systems is presented in this chapter. Data suggest that the collaborating firms that specialize in a particular function have access to others in the systems performing complementary tasks and this creates a level playing field within the network. Original modes of exchanging information may lead to new ways of doing business together, providing a source of competitive advantage. The availability of information on many aspects of the business facilitates more rapid responses to market opportunities. In contrast, the firms of the sample did not indicate that the sharing of management accounting information led to adversarial consequences, for example, the use of shared information for one's own advantage, without reciprocating, the exploitation to create superior bargaining positions, or, finally, in extreme situations, the utilization of shared information to activate a rival collaboration to the detriment of the original information provider. As a whole, data seem to suggest that collaborating partners activate networks in which a firm plays a central role in coordinating the activities of the counterparts and designs a network structure (the accounting information network) that provides an environment favorable for information to be generated and exchanged. The information exchanged in the network seems to be thicker than that condensed through the brokerage market, but is freer than that in the hierarchy.
This chapter aims at understanding firm collaboration by describing how the underlying interactio... more This chapter aims at understanding firm collaboration by describing how the underlying interaction is organized. The recognition of the hybrid nature of these organizational forms is another fundamental step towards the clarification of their control peculiarities. The growing importance of interfirm relationships in the last decades has motivated a rethinking of the logic of economic organization, that is, the existence of firms and the determinants of the choice between hierarchical governance, market governance, and hybrid governance. In fact, the organization of economic activities in practice appear to be increasingly moving away from the pure models of markets and firms towards hybrid models. These latter form a specific class of governance structures and are instantiated in a variety of cooperative interfirm arrangements that execute a broad range of activities that were previously completely carried out within organizations or through market exchanges. Notwithstanding the impressive set of organizational studies on hybrids referenced so far, this terrain is still a shifting one and the vocabulary is not well stabilized. Indeed, there is a sense of common knowledge regarding the concepts of both market, centered on the mechanics of supply and demand, and on the role of prices as key to its functioning, and firms, with the importance of hierarchical authority in sustaining activities and decision-making processes. On the contrary, the set of arrangements that rely neither solely on prices nor on authority for organizing transactions is broad and potentially confusing.
Research on management control has emphasised the relevance of controls for knowledge integration... more Research on management control has emphasised the relevance of controls for knowledge integration on a project-by-project basis. This work contributes to this field by proposing a framework to explain how management control systems foster knowledge transfer between organisational units in knowledge-intensive firms. By combining network theory and knowledge network research, this study suggests that the design of management control systems
The purpose of this paper is to explain the reasons why collaborating firms "open their books" an... more The purpose of this paper is to explain the reasons why collaborating firms "open their books" and share management accounting information. We investigate the effect of variables related to the tasks and relationships of single individuals of the partner firms (i.e., task interdependence and analysability, team interdependence and relationship duration) on open book accounting (OBA). Our model controls for firm-level variables (i.e., asset specificity, degree of economic dependence, contract presence, contract comprehensiveness, and firm size) known to influence management accounting information exchanges. By using social network analysis (SNA), the data collected from a fashion firm and its entire set of suppliers shows that the quantity of management accounting information is positively related to task interdependence while having an inverted U-shape relation with the duration of the relationship. In addition, it provides evidence of a positive association with task analysability, whereas we find no relation with team interdependence. The analysis also confirms the importance of firm-level factors in explaining the exchanges of management accounting information. Our conclusions have important implications for the design of OBA in inter-organisational relationships.
These days, the locus of business operations is difficult to define and is subject to continuous ... more These days, the locus of business operations is difficult to define and is subject to continuous modifications. On the one hand, firms form clusters of quasi-integrated partners; on the other, they outsource internal activities to external entities. Such inter-firm relationships have been studied in both the strategic and organizational fields, because they possess specific characteristics that challenge the extant theoretical
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Papers by Angelo Ditillo