Management Control Systems Practices in Small and Medium Enterprises
Daryl S. Famacion-quinco
Discipline: business studies
Abstract:
Small and medium-sized enterprises (SMEs) comprise 99.6% of the Philippine economy. Many
studies have said that SMEs do not need and do not use management control systems (MCS)
due to their simple organizational structure and limited resources. Most MCS research and their
empirical evidence have nearly been completely founded on information from bigger organizations
or their sub-units. It has been expressed that modern Management Accounting Practices (MAPs)
and sophisticated systems may likewise be valuable for private ventures, albeit small firms may
have dissimilar needs than their larger counterpart. Thus, this study determines the MCS adopted
and used in SMEs in Misamis Occidental. A descriptive study using a survey questionnaire was
administered to 100 randomly selected SMEs in Misamis Occidental. The questionnaires were
personally delivered and administered to facilitate questions raised by the respondents regarding
the items in the survey. The result showed that SMEs in Misamis Occidental utilize a wide scope of
MCS practices and information. However, numerous practices are not incorporated as profoundly
and systematically into their business operations. The outcome also shows that MCS is themed
with financial, customer-oriented, and strategic-oriented controls. Thus, aside from designing
MCS suited to SMEs, there is a need to guide them in the technical application, adoption, and
utilization of MCS data. The data can be used as a base for additional scholarly examination in
business.
References:
- Ahmad, K., & Mohamed Zabri, S. (2016, November). Management accounting practices among small and medium enterprises.
- Anthony, R. N. (1965). Planning and control systems: A framework for analysis. Division of Research, Graduate School of Business Administration, Harvard University Boston.
- Anthony, R. N., & Govindarajan, V. (2007). Management control systems (12th ed.). McGraw-Hill/Irwin.
- Armesh, H., Salarzehi, H., & Kord, B. (2010). Management control system. Interdisciplinary Journal of Contemporary Research in Business (IJCRB).
- Baird, I. S., & Orris, J. B. (1994). Formalized planning in small business: Increasing strategic choices. Journal of Small Business Management, 31(2). https://digitalcommons.butler.edu/cob_papers/21
- Chenhall, R. H. (2003). Management control systems design within its organizational context: Findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2–3), 127–168. https://doi.org/10.1016/S0361-3682(01)00027-7
- Chenhall, R. H., & Langfield-Smith, K. (1998). Adoption and benefits of management accounting practices: An Australian study [SSRN Scholarly Paper]. https://papers.ssrn.com/abstract=55208
- Cugueró-Escofet, N., & Rosanas, J. (2011). The next generation of management control systems: Justice and fairness as antecedents for goal congruence.
- Davila, T., & Foster, G. (2006). Startup firms’ growth, management control systems adoption and performance [SSRN Scholarly Paper]. https://doi.org/10.2139/ssrn.875568
- Duréndez, A., Madrid-Guijarro, A., & Garcia-Perez-de Lema, D. (2011). Innovative culture, management control systems and performance in small and medium-sized Spanish family firms. Innovar: Revista de Ciencias Administrativas y Sociales, 21(40), 137–154.
- Garengo, P., Biazzo, S., & Bititci, U. S. (2005). Performance measurement systems in SMEs: A review for a research agenda. International Journal of Management Reviews, 7(1), 25–47. https://doi.org/10.1111/j.1468-2370.2005.00105.x
- Herath, S. K. (2007). A framework for management control research. Journal of Management Development, 26(9), 895–915. https://doi.org/10.1108/02621710710819366
- Jamil, C. M., & Mohamed, R. (2011). Performance measurement system (PMS) in small medium enterprises (SMEs): A practical modified framework. World Journal of Social Sciences, 1, 200–212.
- Jänkälä, S. (2007). Management control systems (MCS) in the small business context: Linking effects of contextual factors with MCS and financial performance of small firms.
- Langfield-Smith, K. (1997). Management control systems and strategy: A critical review. Accounting, Organizations and Society, 22(2), 207–232. https://doi.org/10.1016/S0361-3682(95)00040-2
- Pearce, J., Freeman, E., & Robinson, R. (1987). The tenuous link between formal strategic planning and financial performance. The Academy of Management Review, 12, 658. https://doi.org/10.2307/258071
- Phihlela, T. R., Odunaike, S., & Durban, O. (2012). A measurement framework to assess SME performance. https://www.semanticscholar.org/paper/A-Measurement-Framework-to-Assess-SME-Performance-Phihlela-Odunaike/be14b109c0eb41bb59965a1536fd41f5019ccf65
- Reid, G. C., & Smith, J. A. (2000). The impact of contingencies on management accounting system development. Management Accounting Research, 11(4), 427–450. https://doi.org/10.1006/mare.2000.0140
- Rufino, H. (2013). Management accounting practices (MAPs) of small and medium-sized manufacturing enterprises in the city of Tarlac [SSRN Scholarly Paper]. https://papers.ssrn.com/abstract=3172509
- Shields, J., & Shelleman, J. (2016). Management accounting systems in micro-SMEs. The Journal of Applied Management and Entrepreneurship, 21, 19–31. https://doi.org/10.9774/GLEAF.3709.2016.ja.00004
- Silva-Domingo, L. (2015). Management control: Unsolved problems and research opportunities. Innovar: Revista de Ciencias Administrativas y Sociales, 25(56), 11–20. https://www.jstor.org/stable/24329627
- Singh, R., Garg, S., & Deshmukh, S. G. (2008). Strategy development by SMEs for competitiveness: A review. Benchmarking: An International Journal, 15, 525–547. https://doi.org/10.1108/14635770810903132
- Tannenbaum, S. I., Beard, R. L., McNall, L. A., & Salas, E. (2010). Informal learning and development in organizations. In Learning, training, and development in organizations (pp. 303–331). Routledge/Taylor & Francis Group.
ISSN 2799-0583 (Online)
ISSN 2782-9413 (Print)