Durden, Chris (2008) Towards a socially responsible management control system. Accounting, Auditing & Accountability Journal, 21 (5). pp. 671-694.

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Abstract

Purpose – The purpose of this paper is to investigate the measurement and monitoring of social responsibility within the management control system (MCS) of an organisation that subscribes to a stakeholder and social responsibility approach and to propose a framework that provides for the integration of the MCS with social accounting and social responsibility aspects.

Design/methodology/approach – The paper is based on a case study of a small privately owned New Zealand manufacturing business that subscribes to social responsibility and stakeholder principles.

Findings – Overall, the paper finds that the MCS of the case organisation did not measure or monitor social responsibility. Building on the case findings and the literature examined, a framework is proposed that provides for the integration of the MCS with social responsibility. A significant finding is that both formal measurement and informal control are key aspects in developing a MCS that incorporates social responsibility considerations.

Research limitations/implications – The findings relate to a single manufacturing organisation based in New Zealand. Future research could examine different settings (i.e. country, organisation type, etc.) and investigate application of the proposed framework in relation to particular performance measures and controls that organisations may possibly adopt.

Practical implications – Organisations following a stakeholder and social responsibility approach should also consider the design of their MCS.

Originality/value – This paper helps to fill a gap in the literature concerning knowledge about the design and operation of MCSs in relation to stakeholder and social responsibility issues. Few studies in this area have been based on a case study approach. The paper further contributes to the literature by proposing a framework that provides for the integration of the MCS with social responsibility aspects.

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