Sustainability MAC essentially extends organisational information and decision-making to include social and environmental measures, in addition to conventional economic performance outcomes. Thus, the stream exists within the broader MAC field. Nevertheless, progress towards sustainable development has been criticised as limited within social and environmental accounting research (Bebbington and Larrinaga
2014). While some authors consider it self-evident that firms strive to incorporate such concerns into managerial systems (e.g. Burritt and Schaltegger
2010), others argue that the simplification of sustainability into accounting systems has been a deliberate, unrealistic attempt to support corporate aims (e.g. Gray
2010). However, if one pays attention to the dual role of control for the development process of SCS, both managerial and critical positions have merit. While the former emphasises the potential of formalised system design for performance outcomes, the latter promotes sociological issues (related to the individual) such as governance, accountability and responsibility to affect a sustainable (organisational) change. However, combining such viewpoints is rare, even if implicit in extant sustainability research. This is perhaps due to the empirical difficulty of exploring social practices in the development process of SCS.
Research into the interplay of system design and use, or what can be termed the exploration of MAC as a social practice, has existed within mainstream MAC research for years. For example, Ahrens and Chapman (
2007) emphasise how local managers within a restaurant chain “actively reconstitute their management control systems” (1) by “drawing upon the rules, procedures, ideals and targets … of management control practice” (24). Additionally, Burns and Scapens (
2000) assert that management accounting practices are also the product of internal institutionalised rules or routines as procedures for
groups of actors
within the organisation. Their argument assumes that change from the bottom-up is the product of collective or ‘taken-for-granted’ understandings of these established ways of working. Although these studies add much to the discussion on MAC as a social practice, the focus remains on the intra-organisational context and managerial tiers. Indeed, Burns and Scapens (
2000) recognise that external factors also affect management accounting change, although their framework focuses on change as an intra-organisational phenomenon. Moreover, the potential of
individual general employees to initiate change in situ as a response to contextual factors is also minimised through a focus on managerial tiers. The emphasis on individual employees, however, is necessary for engaging in true sustainability whereby sustainability management is everyone’s responsibility and sustainability values not only pertain to the organisation, but also the individual and other external institutions. To this end, Scapens (
2006, 25) recognises the limitation of an institutional perspective for individual agency given that “actions and thoughts are constrained by existing institutions [i.e. the organisation]”. This suggests that formalised systems or practices within the firm constrain action, and change from the bottom-up is confined to these boundaries.
Recent sustainability MAC research poses that for truly effective sustainable solutions, organisations need to embrace the initiatives and competences of
individual employees as change agents (see Johnstone
2018). Nevertheless, there is little research into sustainability MAC as a social practice. Even though sustainability research arguably requires bridging managerial and critical perspectives, extant empirical research tends to concentrate on the former. Particularly, the managerial viewpoint is often made explicit given that performance outcomes are inherent to definitions of SCS (e.g. Pondeville et al.
2013) and frameworks (e.g. Burritt et al.
2002), and many studies concentrate on cybernetic or diagnostic controls (Lueg and Radlach
2016). This infers a preoccupation with formalised systems that validate output based on technical control (e.g. Henri and Journeault
2010; Figge and Hahn
2013), rather than input (i.e. design, implementation and use) based on the system users beyond managerial tiers (see Ball
2007).
Evidently, there appears to be a predominance of functionalist uses of control (
over) which are easier to communicate both in research and practice given that they are often based on concrete measures. However, as corporate sustainability—and indeed the sustainability discourse in general—necessitates performance outcomes that are not only financial (Heggen et al.
2018), the iteration between input and output is essential. This is especially evident when adhering to rolling standards where validation is conditional on progressive improvements and employee involvement (e.g. ISO 14001: 2015), and static or standardised system designs can be considered inefficient. As Wijethilake et al. (
2017, 573) comment: “Well-designed SCS may help corporations to specify and communicate sustainability objectives, monitor sustainability performance through feedback and controls,
and motivate employees to participate in sustainability projects and practices by rewarding and appraising their sustainability achievements” (emphases added). This recent definition indicates that the system is not only there to guide employee behaviour in relation to performance outcomes, but also to develop general employee competence in sustainable behaviour. Nevertheless, the discussion of employee motivation through reward and compensation is often missing in theoretical and empirical discussions of the SCS (see Crutzen et al.
2017; Soderstrom et al.
2017).
2.1.1 SCS characteristics
As indicated, SCS suffer from ambiguity in terms definition, theory and performance outcomes (Lueg and Radlach
2016; Guenther et al.
2016). Therefore, it becomes of interest to outline some of their main characteristics as a baseline to move forward from.
SCS regard the combination of management accounting tools put together to meet sustainability performance outcomes by influencing the practices of individuals within the firm. However, conceptualisations of the SCS implicitly differ from the traditional MCS frameworks. First, there is the assumption that SCS are often decoupled from core MCS and are theoretically distinct (see Burritt and Saka
2006). To explicate, Riccaboni and Leone (
2010) comment that more attention is required on how SCS translate into sustainable strategies, finding that decentralised structures are key. This may be due to the highly contextual nature of sustainability goals and outcomes. Further, Gond et al. (
2012) suggest an array of SCS configurations from dormant-decoupled to fully-integrated where management control conditions affect the integration of sustainability into strategy.
Second, the analytical focus of SCS tends to be grounded in a bilateral relationship with the local environment. In contrast, most MCS frameworks are conceptualised at the organisational-level. This is with the exception of Broadbent and Laughlin (
2009) who recognise organisational context in the conceptualisation of their performance measurement system. Nevertheless, this framework has not yet been applied in sustainability stream. To detail, Wijethilake et al. (
2017) comment that SCS are the means for organisations to respond to strategic pressures from the institutional environment. Moreover, external stakeholders are often presented as instrumental for the design of sustainability MAC practices and systems (e.g. Rodrigue et al.
2013; Sands et al.
2016). There is also the viewpoint that organisational systems can influence the field (Burritt and Schaltegger
2010), or are part of a recursive political process to offer more sustainable futures (Moore
2013). In this sense, experiences learnt by the firm can also impact on the local context, indicating a governance perspective which is becoming increasingly relevant in accounting studies to link policy and practice (see Bebbington and Unerman
2017; Rinaldi
2019). Nevertheless, organisational-level (see Martyn et al.
2016) analytical tools such as Simons’ (
1995) functionalist levers of control (LOC) (e.g. Gond et al.
2012; Arjaliès and Mundy
2013; Rodrigue et al.
2013; Journeault et al.
2016) or Malmi and Brown’s (
2008) conceptual MCS-package (e.g. Baker et al.
2012) dominate SCS research to frame or explain findings. However, such frameworks appear in contrast to the wider analytical focus (i.e. the extra-organisational and inter-generational aspect) that SCS necessitate.
Particularly, Simons’ (
1995) LOC is the most common framework applied in the study of SCS. At the organisational-level, this can be seen as reflective of the dual role of control, balancing the tensions between flexibility/innovation/creativity and control. Here, the interactive or belief controls can be taken as
control in situ based on formalised system design through the diagnostic or boundary controls as
control over. However, this assumes that organisationally-bound values take precedence over those of the individual. The core of Simons’ argument relies on the tension between control and empowerment, recognising the need for
top management to control employee initiative that deviates from organisational strategy. Here, individual agency and values are minimised as employees actively (re)constitute the system through managerially-defined accepted patterns of behaviour, rather than individual initiative. Hence, an implicit importance is attached to control, rather than empowerment through conceptualisation of the levers. Consequently, the LOC framework is approached from a functionalist perspective in the sense that employees are agents constrained by the rules endowed upon them by top-management. This poses some challenges with regard to the broader discussion on conceptualisations of the SCS as characteristically distinct from MCS frameworks.
To detail, Simons LOC is conceptualised as confined within the organisation’s borders. Therefore, it neglects the inter-generational aspect inherent to SCS as the extra-organisational dimension is embedded into the organisation’s internal belief systems, rather than the individual employee beyond managerial tiers. Such belief systems, as Simons suggests, “articulate values and direction” (Simons
1995, 179). To this end, the alignment of external social, political and environmental sustainability values of stakeholders into organisational strategy and corporate culture is dependent primarily on top-management who make sense of external ‘beliefs’, incorporating those deemed most salient into organisational systems (see e.g. Arjaliès and Mundy
2013; Rodrigue et al.
2013). Yet, this can be considered limited for two reasons: (1) due to the rapid pace of sustainability policy developments in complex, multi-level governance architectures and (2), due to the fact that top management may not necessarily be the organisation’s sustainability experts. Consequently, there may also be a time-lag or misalignment between external sustainability values into organisational belief systems which are theoretically based on Simons’ functionalist approach to innovation and creativity as an organisational-level phenomenon.
The scholars who have used the LOC framework in sustainability MAC research implicitly recognise its limitation in assuming SCS as solely an organisational phenomenon. This is captured by coupling the framework with broader stakeholder or institutional perspectives in order to explain the findings (e.g. Rodrigue et al.
2013). Moreover, the LOC framework assumes that general employees are a
group of internal stakeholders whose concerns are integrated into the formal system
by management. This means that employees’ ‘viewpoints’ per se are not directly expressed in constructions of the system, thus attaching further importance to a managerial perspective rather than a true interaction between managers and employees for the development process of the system. Consequently, the use of Simons’ LOC for SCS research does not clearly address the interaction of sustainability values by individuals as embedded within both an intra-organisational and extra-organisational context
and formalised system design. This means that its use does not incorporate a critical viewpoint as its focus on managerial design indicates the dominance of ‘
control over’ where managers design systems to ‘coerce’ employees into acting in particular ways. Even if there is the viewpoint that this design can also empower employees (see also Adler and Borys
1996), the empowerment is unidirectional in the sense that it is only dictated by the system, rather than also the individual employee in a particular context. Thus, a social-constructivist perspective remains wanting.
Third, SCS design is frequently perceived as being more complicated given that firms often feel obliged to formalise what they perceive as ‘abstract’ sustainability objectives into local contexts. For example, international SDGs such as that of ‘zero hunger’ may appear detached from the locale. This means that more emphasis is placed on interpretation processes by organisational actors to formulate ‘appropriate’ performance outcomes to achieve corporate sustainability aims within a complex, overarching governance structure (Johnstone
2019). This is often viewed as difficult in practice and thus requires reiteration between system design and use due to the ‘experimental’ nature of SCS.
Finally, the conceptualisation of socio-ideological control within general MCS frameworks implicitly rests with treating employees as a homogeneous group to be controlled (e.g. Malmi and Brown
2008), rather than the individual actively constructing the system from the bottom-up in a response to both organisational
and personal values. This suggests that the SCS remains constrained within a strategic framework set out by top management, and neglects the viewpoint that general employees also have something to bring to its development. Nevertheless, recent studies suggest that SCS necessitate the involvement of
all employees for strategic design and internal change beyond managerial tiers (Pondeville et al.
2013; Sands et al.
2016), across organisational and generational boundaries (Johnstone
2018). To this end, there has been the recognition that communication, knowledge and commitment are features of sustainability management within organisations, thus bridging both strategic and operational levels (see Albelda Pérez et al.
2007; Ball
2007; Pondeville et al.
2013). Here, individuals at various tiers are paramount for embedding sustainability thinking into organisational practice (see Bouten and Hoozée
2013). This indicates that design decisions at the strategic level cannot be realised without the operational support of general employees and suggests that control, in essence, also rests in the individual, not only the system. However, little research attention has been dedicated to understanding the role of individual system users at the operational level (see Visser and Crane
2010; Catasús and Cäker
2016). This is especially significant for the development process of SCS because, as Schaltegger (
2017, 4) comments, “no single company or management decision is likely to create any sufficient [sustainability] solution” without the active participation of employees.
Taken together, conceptualisations of SCS are distinct from general MCS frameworks. Evidently, the processes (or inputs) of SCS, not only the outcomes, are important for corporate sustainability strategies and practices in intra and extra-organisational contexts. Nevertheless, there is the difficulty in formalising abstract sustainability goals into concrete measures. As such, the design and use of SCS are highly contextual as well as rely on the involvement of each and every corporate actor to affect a truly sustainable change beyond short-term, ‘managerialist’ performance concerns. Although, the majority of system theorisations within general MAC research are concentrated within the boundaries of a firm and neglect the input of the controlled. Therefore, building upon Guenther et al. (
2016) and Wijethilake et al. (
2017), the following definition of SCS is offered to guide this research:
SCS are the dynamic constellation of management accounting tools that connect organisational strategy with operations in a given context by providing information and direction, as well as monitoring and motivating employees to continually develop sustainable practices and procedures for future improved sustainability performance.
This definition infers that employees are not only guided by the system, but also have the capacity to develop the system from the bottom-up in a particular context which brings with it nuanced sustainability problems and attitudes. Thus, employees are motivated not only to participate in meeting objectives (see Wijethilake et al.
2017), but also to actively contribute to the development process of SCS and sustainability in general.
Ultimately, extending conceptualisations of the dual role of control based on formalised system design
and use by the individual employee therefore moves the discussion beyond accounting to accountability. This is not to say that specific controls are tailored to individual employees. Rather, it asserts that through flexible system designs, the individual employee has the power to affect a positive, sustainable change to the SCS from the bottom-up by being involved in its continual strategic (re)design (i.e. development) over time and space. Here, the general employee is an active component of the (re)design process by offering contributions through practice in situ at the operational level, rather than relying solely on formalised policy and procedure from the top. Such an argument also bridges managerial and critical perspectives, as well as suggests a movement from conventional functionalist assumptions embedded within traditional MAC research to more of a social constructivist approach. While the former assumes that system design itself it sufficient to achieve desired performance aims by directing employees, the latter poses that system success is also dependent not only on its understanding and use by operators from the bottom-up (i.e. the conventional accounting as a social practice approach), but also the recognition that individual employees are also active contributors to SCS (re)design in a particular context. This brings to light issues in relation to sustainability governance, accountability and responsibility. Nevertheless, most empirical studies within sustainability MAC still apply functionalistic frameworks (top-down) to frame their research and focus on short-term, managerial goals, founded upon the
intra-generational aspect. This is perhaps due to the borrowed models, concepts and tools from the mainstream strand that neglect temporality in their conceptualisation, as well as focus on either system design or use but do not confront the iterative relationship between analytical viewpoints. However, as sustainability poses “meeting the needs of present generations, without compromising those of the future” (Brundtland Commission 1987), a long-term scope is required that satisfices both an
inter-generational and
extra-organisational approach (see Guenther et al.
2016 positioning framework), founded upon the individual actor for effective change. This suggests that new theoretical perspectives are necessitated given increasing societal demands on the firm and the complexities sustainability control entails.