Advanced

(a) Contingency theory has frequently been used to explain variations in the functioning of organizations. It has been criticised on a number of grounds, including whether suffi¬ cient attention has been given to people and culture.

Requirement:

Explain and discuss from a management control perspective, the criticism that contin¬ gency theory pays insufficient attention to the people in organizations and to organizational culture. (10 marks)

(b) Some organizations have long-standing prac¬ tices of promoting from existing staff, as a consequence of which they rarely recruit outsiders to any senior position. Staff turn¬ over is very low. Other organizations have frequent management and structural changes, and often recruit senior managers from outside the organization.

Requirement:

Explain the differences in control systems and approaches to management control that could be expected with these alternative practices.

CIMA Stage 4 Management Accounting Control Systems LO1