In this paper, we will compare and contrast two academic papers presented on the courses, they are Task uncertainty and its interaction with budgetary participation and budget emphasis: some methodological issues and empirical investigation" (hereinafter referred to as Paper 3) and "Activity-Based Costing and Central Overhead Cost Allocation in Universities: A case study" (hereinafter referred to as Paper 6). We will mainly concentrate on subject matter, role of theory, methodology, paradigm and methods using in two academic papers. Moreover, we will criticize the strengths of conclusions, the strengths and weaknesses of approach and give the conclusion.
First of all, the subject matter in two academic papers is both on the range of management accounting. Paper 3 re-examines Brownell and Hirst (Journal of Accounting Research, Autumn 1986) that is when task uncertainty is low, low budget participation should be accompanies by low budget emphasis for effective managerial performance. However, the results are not expected to hold when task uncertainty is high. The paper aimed to find a strong support for the hypothesis by using variations in measurement and sampling methods and managerial performance. On the other hand, Paper 6 examines the development of ABC in the university accounting system and evaluates the contribution to solve the problems associated with central overhead cost allocation systems. A cast study using ABC methodology was developed and applied in the library of the University of Southampton. The results showed the differences by using ABC model to allocate overhead costs between academic faculties compared to the existing system.
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Secondly, the role of theory in Paper 3 is Contingent Theory whereas Activity-Based Costing Theory is used in Paper 6. The basic model of Contingent theory of management accounting involves the contingent variables and organizational structure to define accounting technical behavior in different environment and technology. Thus, the managerial effectiveness will be greatly improved. In this paper, the author examines whether there is a connection between variables such as task uncertainty, budget participation and budget emphasis to support the hypothesis. However, Paper 6 uses the ABC theory to develop a model in the library services of University of Southampton. The ABC theory identify the activities in all academic departments associated with central overhead cost and define the cost driver of each activity. Based on each cost driver, the central overhead costs are divided into a large quantities of parts allocated to each department. Compared to existing system, the model based on the ABC theory is more advanced and makes overhead cost allocations more accurate as real.
Thirdly, the methodologies used in Paper 3 are not only the measurement of task uncertainty but also sampling procedures as an empirical. First of all, the hypothesis predicts that there is a correlation between budgetary participation, budget emphasis and task uncertainty with managerial performance. Then, according to the prior theory, task uncertainty is divided into two dimensions of task difficulty and task variability to assess. Secondly, it used the sampling procedures choosing more than 100 people from two different areas in manufacturing to be investigated. Moreover, the ABC methodology in Paper 6 is used in the library service to allocate central overhead to all department faculties. The ABC model identified each activity in the academic departments and allocated the central overhead cost to those activities by cost drivers.
Fourthly, the Paper 3 uses functionalist paradigm whereas the Paper 6 uses the interpretive paradigm. In the functionalist research, it started with the theory such as definitions and set of assumptions. Then it deduced the hypothesis and used the quantitative method to collect data source. Finally confirmation leads to support for theory. However, theory never be proved absolutely. In the Paper 6, the paradigm conforms to interpretive. The case study aimed to do research in one real organization and researcher writes in an informal style and uses the personal voice whilst the process is inductive and theories are developed for understanding.
Fifthly, the methods in the Paper 3 included sampling procedures and variable measurement. First of all, they choose the sample of 120 managers' participations in the 61 firms. The responses to questionnaires are from most of firms and managers, which satisfies the distribution and age and department covered. Then, variable measurement is based prior theory related to task uncertainty and use the statistics to test and verify the correlation of each variable and task uncertainty. In this paper, researchers are using the three-way interaction including the task difficulty and task variability instead of two-way and the result confirmed the expectation. Otherwise, the method in the Paper 6 is mainly associated with developing an ABC model in the library service. At the beginning, data collection is involved with activity data, cost data and other information related to staff statistics. The method of allocating costs using activities was in two stages. The first stage is analyzing the staff activities within each of library's divisions. The second stage is to relate these service providers' activities to identify service users activities based on faculties and departments. From the data, a better understanding of main activities within the library was obtained and identified the most appropriate cost drivers afterwards.
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In the Paper 3, the results of this study support the expectation that Brownell's (1982) finding holds only under conditions of low task uncertainty. However, when task uncertainty is high, participation is having a positive role across all levels of budget emphasis. The implications of the results of the study are particularly useful in contemporary manufacturing settings where changes in technology are taking place. In addition, the measurement of budget emphasis in performance evaluation is far from settled. So the suggestion is that the result can exert considerable influence on the appropriate mix of accounting and non-accounting controls. More research can focus on this aspect of task technology.
In the Paper 6, the advantage for using ABC is outlined that cost is allocated to be verified and refuted. It could improve organizational efficiency and opportunity cost and would be charged for actual consumption that seemed more equitable. Meanwhile, the weaknesses are obvious such as adverse on the long-term executive and expensive cost associated with development and maintenance this system. It also involved the subjective and interpretative view in the development of ABC model. However, it is unavoidable that ABC is a breakthrough and did improve the efficiency of allocation relating to traditional approaches. More applicability of system in practice should be taken into consideration.