The Role of Boundary Systems and Diagnostic Control in Controlling Achievement of Performance Targets

Document Type: Case Study

Authors

Department of Accounting, Graduate School, Widya Mandala Catholic University Surabaya, East Java, Indonesia

Abstract

Boundary systems and diagnostic controls are two levers used to control the achievement of performance targets. We use these levers to analyze how Collection Department of PJ Property achieves the performance targets. PJ Property’s revenue relies to rent revenue. The firm faces difficulty to collect rent revenue from tenants. The collection of rent revenue has decreased in period 2018. This research is a qualitative research with case study method. The case study we used in this study is on Collection Department. Collection Department is underperformed in 2018. The results showed that the underperformance of Collection Department is caused by first; there are no consequences for performing or underperforming of in achieving department’s performance targets. Second, boundary systems are weakly implemented. Third, the diagnostic controls are also poorly implemented.

Keywords


Agostino, D. and Arnaboldi, M. (2012). Design Issues in Balanced Scorecards: The “what”and “how”of Control, European Management Journal Elsevier.
Anthony, N. R. dan Govindarajan, V. (2011). Management Control System Sistem Pengendalian Manajemen, Salemba Empat: Jakarta.
Anthony, R., dan Govindarajan, V. (2012). Sistem Pengendalian Manajemen, Karisma Publishing Group: Tangerang.
Baird, K. and Su, S. (2018). The association between controls, performance measures and performance, International Journal of Productivity and Performance Management: Emerald Publishing Limited.
Chenhall, R. H. (2003). Management Control Systems Design within its Organizational ContePJt: Findings from Contingency-based Research and Directions for the Future, Accounting, Organizations and Society.
Ferreira, A.dan David O. (2009). The Design and Use of Performance Management Systems: An Extended Framework for Analysis, Management Accounting Research, Volume 20, Issue 4, Pages 263-282
 Handoko, T. H. (2011). Manajemen Personalia dan Sumber Daya Manusia, BPFE: Yogyakarta.
Hasibuan, Malayu S.P., (2013). Manajemen Sumber Daya Manusia, Bumi Aksara: Jakarta.
Langfield-Smith, K. (1997). Management Control Systems and Strategy: A Critical Review, Accounting, Organizations and Society, vol. 22, issue 2, 207-232
Malmi, T. dan Brown, D. A. (2008). Management Control System as a Package-Opportunities, Challenges and Research Directions, Management Accounting Research, Volume 19, Issue 4, Pages 287-300
Merchant, Kenneth A., dan Wim A. Van der Stede, (2007). Performance Measurement, Evaluation and Incentives, Boston: Prentice-Hall.
N. Stone, D., N. Nikitkov, A. and C. Miller, T. (2014), "Strategy, IT and control @ eBay, 1995-2005: The management control system (MCS) as consumer product", Qualitative Research in Accounting & Management, Vol. 11 No. 4, pp. 357-379
Pešalj, B., Pavlov, A. and Micheli, P. (2018), "The use of management control and performance measurement systems in SMEs: A levers of control perspective", International Journal of Operations & Production Management, Vol. 38 No. 11, pp. 2169-2191
Rezania, D., Baker, R. and Burga, R. (2016), "Project control: an exploratory study of levers of control in the context of managing projects", Journal of Accounting & Organizational Change, Vol. 12 No. 4, pp. 614-635
Simons, R. (2000). Performance Measurement & Control Systems for Implementing Strategy, New Jersey: Prentice-Hall, Inc.
Sugiyono (2018). Metode Penelitian Kombinasi (Mixed Methods), Penerbit: Alfabeta, Bandung.
Tuomela, T. (2005). The interplay of different levers of control: A case study of introducing a new performance measurement system, Management Accounting Research, Volume 16, Issue 3, Pages 293-320.