How to Reconcile Management Accounting and Performance in the Municipal Public Services of African Cities? an Empirical Study

By Avele, Donatien | Academy of Accounting and Financial Studies Journal, January 2013 | Go to article overview

How to Reconcile Management Accounting and Performance in the Municipal Public Services of African Cities? an Empirical Study


Avele, Donatien, Academy of Accounting and Financial Studies Journal


INTRODUCTION

An organization is a system that encourages the distribution of formal and informal information with the aim of assisting managers in attaining their objectives. Accordingly, for this reason, managers implement a management accounting system as a tool to aid decision making. During the 1980's, researchers in the field of management accounting studied the characteristics of their management control systems (Gosselin, 2000). These studies were conducted on different aspects of management accounting systems such as price costing, budgets, and the degree of decentralization (Lukka and Granlund, 1996; Mevellec, 1995). Moreover, a municipality possesses a large number of services necessary for the proper functioning of the community, but is required to provide even greater varied needs (Van Ryzin and Immerwahr, 2004). One of the purposes of management accounting is to better coordinate the diverse group of activities that are part of the same organization (Lebas and Mevellec, 1999). Management accounting, as stated by Bouquin (2000), is far from being just a simple technology for a better financial or day-to-day management. It is also used as part of a set of tools for performance control and for cost reduction (Nanni and al, 1992). On the other hand, the determinants justifying the use of non-financial criteria to evaluate or guide performance are numerous with diverse theoretical explanations (Pointet and Wegmann, 2005). The interest accorded to these criteria is justified in the current context (financial scandals, accrued market volatility), indicating the limits of accounting and financial information as a means of communicating performance (Depoers, 2002). Researchers such as Kaplan and Norton (1998), whose principal subject is non-financial indicators, explain that they complement the financial indicators that concentrate excessively on guiding short-term actions. One current theme in literature, regarding management accounting and monitoring, concerns non-financial indicators (Lorino, 2003); they are supposed to reflect company strategy and performance orientation. These are non-financial since they do not directly express the financial objectives of the organization as opposed to profit indicators based on results or total sales. Furthermore, the non-financial indicators that are included in a company's strategic prospect, based on human resource management or environmental concerns, in general can, respectively, be qualified as social and (Martory, 1999) and societal (Oxibar and Dejean, 2003).

However, very few studies, to our knowledge, have been undertaken to date to help better understand which factors are susceptible to influence the performance of municipal public services of African cities in general, and in particular Cameroonian cities. Thus, we include in the scope of this study an effort to understand why management accounting, despite its approximate and contingent character, has not yet been included in the management of these local entities. The object of this study is, specifically, to attempt to understand to what extent the structural and behavioural contingent factors can influence the performance of public municipal services. Finally, the research will also allow us to better determine how these local entities use their cost analysis systems.

PERFORMNCE CONTINGENCIES OF MUNICIPAL PUBLIC SERVICES AND RESEARCH HYPOTHESES

Dependent Variables

The dependent variables are chosen by taking into account the organizational distinctiveness of African municipalities. Due to the reticence of African municipal officials in general, and in particular, Cameroonian public servants to communicate financial statements, we measured the performance using a set of six criteria (These criteria are as follows: Q371_IMO (importance of objectives, 1 = satisfaction of patients; Q372_IMO (importance of objectives 2 = ensure garbage collection), Q373_IMO (importance of objectives 3 = ensure continuance of civil acts), Q374_IMO (importance of objectives 4 = satisfaction of personnel), Q375_IMO (importance of objectives 5 = delivery of potable water), Q38_RO: realizing objectives. …

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