| This dissertation contributes to the accounting literature by beginning to experimentally reconcile mixed empirical evidence concerning the relation between vertical (traditional) versus horizontal (non-traditional) management accounting systems design and the performance of cross-functional innovations. In addition, it introduces the public goods dilemma into the accounting literature called for by Murnighan & Bazerman (1990) and it examines the effect of management accounting systems on implicit (informal) organizational control, called for by Hopwood & Miller (1994), Birnberg (1998), Ittner & Larcker (2000), and Sprinkle (2000).; Although cross-functional innovation (i.e., innovations that span multiple departments within the firm such as total quality management, reengineering, just-in-time, etc.) is a primary source of competitive advantage, many firms are experiencing difficulties extracting the additional profits that are expected. A central problem is that, during the non-routine adoption process, these innovations have the structure of a public goods dilemma where department managers are better off free riding even though the firm and the group of department managers perform better if individuals participate fully. This paper reports an experiment wherein participation structure (superior-subordinate, cross-functional team) and accounting reporting structure (responsibility center, value chain) are found to interactively motivate interdepartmental cooperation and joint performance by affecting the formation of implicit contracts. |
