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25 Cards in this Set
- Front
- Back
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What does contingency theory focus on?
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- Focuses on the causal links between strategy, structure and performance
- Differentiates between exogenous environmental and endogenous firm-specific factors |
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What are the fucntions of inter-organisational management control systems?
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- Monitoring
- Co-ordination |
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What is the monitoring function of an IOMCS?
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- Performance measurement
- Intended to reduce opporunism and promote goal congruence |
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What is the co-ordination function of an IOMCS?
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Geographical and technological distriution combined with increased interconnectiveness calls for frequent, detailes and relevant exchanges of information
- intended to assist learning |
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What are the advantages of open-book accounting?
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Collaborative efforts create additional opportunities for cost reduction if a transparency of cost structures is present
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What factors affect open-book accounting?
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- external factors
- network-specific factors - firm-specific factors |
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What are external factors affecting OBA?
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- Degree of competition (high --> cost reduction pressure
- Economic trend (Growth/recession) |
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What are network specific factors affecting OBA?
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- Mutual trust among network members
- Maturity and hierarchy of network - diversity in cost accounting systems (tools, inter-organisational support) |
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What are firm-specific factors affecting OBA?
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- Firm size
- Capability in producing accurate data - Competitive policy (co-operation) - commitment (long-term view |
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What can outsourcing cause in networks and what can happen as a result?
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Outsourcing may cause information asymmetry between buyer and supplier. As a result buyer may ask for specificiations which unecessarily increases the cost of the supplier and the buyer may not know to what degree the component/material/activity contributes to the cost
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What are the components of trust?
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- Competence-based trust
- Goodwill-based trust |
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What is competence based trust?
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Resources, information, etc are shared because the parties see each other as having relevant and useful skills
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What is the goodwill-based component of trust?
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The parties establish mutual goals, norms and interests
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What are the four stages of trust dynamics?
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1. Pre-relationship
2. Exploratory 3. Developng 4. Stable |
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Why would trust diminish as networks mature and what could this cause?
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MCS initially increase trust but adding more MCS practices may signal lack of trust from one side in the other and damage trust. This could casue opportunistic behaviour which in turn requires more MCS
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How can MCS measures of action and control build trust?
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- They provide objective evidence
- Gives both side the same measuring scale which is good for comparison and analysis and communication with 3rd parties |
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What has OBA a means for?
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It has a means for improving cost efficiency of supply chains and building trust into customer-supplier relationships
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What is an effect of developing close co-operative relationships?
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Organisations are able to reduce vertical integration and concentrate on core competencies and enhancing competitiveness
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What has a shift towards co-operation implied?
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It implied the early involvement of major suppliers in the product development and a more comprehensive sharing of information
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Why could Japanese firms require more detail in cost data disclosure than western firms?
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Higher UA index
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What are the six major reasons for failure of OBA implementation?
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- Suppliers think that accounting information should be kept in house
- Network members cannot produce accurate cost information and see no sense in sharing poor cost information - Suppliers are afraid of being exploited if they reveal their cost structure - Suppliers do not have capable resources or resource support from main cotractors for the development of accounting systems - Network members cannot agree on a how OBA should be implemented |
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What is the primary objective of OBA?
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Cost-reduction
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What and where does this "what" have to be met for ensured fulfillment of OB expectations?
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Technical and social requirements have to be met at firm and network level
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What are technical requirements of OB expectation fulfillment?
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- Design of accounting system
- Support for improvement - support for data collection in case of deficiencies |
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What are the social requirements of OB expectation fulfillment?
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- Member's commitment to the network (other/competing networks)
- Mutual trust - Team-thinking |
