Author : Saurav K. Dutta
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Book Synopsis A Conceptual Foundation for Management Accounting Information to Support Sustainability Strategies by : Saurav K. Dutta
Download or read book A Conceptual Foundation for Management Accounting Information to Support Sustainability Strategies written by Saurav K. Dutta and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper derives an actionable model that serves as a basis for cost variance analysis to support the pursuit of environmental and traditional financial goals within a decentralized organization. The model identifies two distinguishable departures from optimality. The first consists of what might be considered a natural outcome of pursuing the traditional economic goal of efficiency through cost-minimization, a “waste” variance. The second part consists of sustainability gains that produce societal benefit but may be incongruent with short-term economic goals, a “sustainability” variance. While elimination of waste variances can be encouraged using a traditional performance evaluation and reward structure, elimination of sustainability variances requires re-design of performance evaluation tools and reward structures. We demonstrate that differing production functions across operational units within organizations can impact the relative magnitude of the two variances. The failure to recognize and incorporate these differences can lead to inefficient allocation of resources and/or only partial fulfillment of the strategic environmental goals of the organization.