Reconstruction of decision-making behavior in shareholder and stakeholder theory: implications for management accounting systems

Abstract

This paper focuses on two interrelated research questions. First, an analysis of managerial decision-making is incorporated into shareholder and stakeholder theory. Secondly, the paper investigates what consequences result for management accounting from inherent conceptions of managerial decision-making behavior. These research questions are based on assumptions of complex interrelationships among decision-making managers, management accountants, and techniques they employ. The findings of this research support that tenets of management accounting systems correspond best with shareholder theory. In doing so they apply financial measures, pursue the goal of profit maximization, and focus on decision-making behavior resulting from the agency relationship between shareholder and manager. Stakeholder theory, however, is fundamentally different from shareholder theory in terms of goals, management philosophy, relationships, behavioral assumptions etc. For these reasons differences with respect to managerial decision-making behavior are reasonable and different requirements related to management accounting systems appear appropriate.

Business freedom, corruption and the performance of trusting cooperation partners: empirical findings from six European countries

“…This leeway for opportunism grows with environmental uncertainty (Lee 1998;Sako and Helper 1998). However, the opportunistic threat only materializes according to the partners' inclination to exploit the existing leeway, which rises with behavioral uncertainty (Rausch 2011;Fink and Kessler 2010;Goshal and Moran 1996). Therefore, the core concept underlying the idea of an opportunistic threat in the context of interfirm cooperation is behavioral uncertainty between the boundary-spanning agents who are in charge of managing the interfirm relation.…”

CSR Monetary Accounting Impact Mechanism: A Conceptual Model

“…This is complemented by the increasing awareness of organisations about the importance of sustainable business practices and their impact either on CSR or financial performance, as well as on company and stakeholder value created (Artiach, Lee, Nelson, & Walker, 2010;Attig, Cleary, Ghoul, & Guedhami, 2013;Dhaliwal, Radhakrishnan, Tsang, & Yang, 2012;El Ghoul, Guedhami, Kwok, & Mishra, 2011;Guney & Schilke, 2010;Platt, Demirkan, & Platt, 2010;Rausch, 2011;Roberts & Mahoney, 2004;Shum et al, 2009;Surroca & Tribó, 2008). Sustainable business practices are generally based on the business life cycle performance, which is a tool used to assess the business sustainable development and by using sustainable accounting systems as the main generators of accounting information.…”

“…On the other side, recent increases in CSR reporting and auditing practice indicate the increased awareness of firms about the importance of being accountable to all stakeholders at every stage (Belal, 2002), using reporting as an instrument for promoting stakeholder accountability (Cooper & Hopper, 2007). Although this is compatible with distinctive features of AccountAbility 1000 (2008) and GRI (2010;2011), firms have different motivations to undertake stakeholders' reporting, such as improving their economic performance (Roberts & Mahoney, 2004) or contributing to the citizenship perspective and treating stakeholders in a morally acceptable manner (Wall & Greiling, 2011). ISSN 2162-3082 2016 Further, the reporting literature indicates that companies are socially responsible and engage in ‗profit-maximising' sustainability because they contemplate a return from sustainability activities (McWilliams & Siegel, 2001;Shum et al, 2009).…”

“…Maintaining good relationships with stakeholders leads to more effective use of a firm's resources, while enhancing profit and creating organisational value (Benson & Davidson, 2010;Berman, Wicks, Kotha, & Jones, 1999). Stakeholders who are supplying critical resources or can affect the achievement of the firm's objectives are considered legitimate and should be involved in the decision-making process due to their powerful effect upon the continued viability of the company (Artiach et al, 2010;Deegan & Blomquist, 2006;Rausch, 2011). As a result, stakeholders as system drivers have the capacity to affect corporate resources and legitimate continuing existence; therefore, their desired information should be incorporated into disclosures in both financial and non-financial forms.…”

“…In simple terms, stakeholder groups supply companies with ‗contributions' and they have the expectation of being rewarded with some sort of ‗inducements'. The stakeholder view, as an all-inclusive broader approach, tries to accommodate the diversity of involvements and motivations, while shareholder agency theory is postulated with wealth-related arguments in favour of a certain class of stakeholders (Rausch, 2011). The evaluative norm chosen by shareholder agency theory to assess organisational activities is the unique criterion of economic efficiency exposed in the language of profit, while stakeholder theory considers justice distribution, where an ethics-related criterion is tied up with the basic economic efficiency criterion to address the multiplicity of a large number of corporate participants' motivations in an organisational coalition (Harrison, Bosse, & Phillips, 2010;Mallik & Mitra, 2009;Roberts & Mahoney, 2004;Wall & Greiling, 2011).…”