Field studies of management control systems change in two large Indonesian universities.

This thesis reports on the results of case studies on how management control systems (MCS) operate in two Indonesian autonomous universities. The study is motivated by the lack of management accounting research in Indonesia in specific and in the developing world in general. The aim of the study is to provide understanding on how the operations of management controls in the two institutions are shaped by changes in their institutional environments. A change in an organisational status (e.g. from government to autonomous) constitutes a change in the institutional template of the organisation which is likely to impact on the MCS. The Indonesian higher education sector is currently being deregulated in response to both internal and external pressures. Despite this, there is little evidence on how MCS function to support the new organisational status of the higher education institutions. This thesis filled the gap in the literature by exploring the impacts of the change of the universities' status on MCS. It thus investigates how MCS operate in response to the reforms and to other institutional factors. To achieve the aims of the study, the thesis uses a longitudinal case study approach. Data were collected using a triangulation approach that combines data from three main sources namely, interviews, observations and document analysis. The analysis is informed by the new institutional sociology (NIS) theory (Powell and DiMaggio, 1983). However to address the limitations of NIS, the analysis also examined the interplay between institutional, intra-organisational power relations, and competitive forces. This thesis highlights a number of empirical findings. First, pressure from the government as the biggest fund provider is the primary source of MCS change in the universities. Despite the reality that the universities now operate as autonomous institutions, they are still influenced by external forces, especially from governmental institutions such as Directorate General of Higher Education and Finance Ministry (for example, in the preparation of budget). Second, national and organisational cultures also have been identified to be influential in the decision to adopt new systems (including MCS) in the universities. Third, this study reinforced the opinion that the willingness of an organisation to conform with rules and requirements is not only for reasons of efficiency, but also may be necessary to increase its legitimacy, resources and survival capabilities. Fourth, this study also revealed that the complex and varied institutional factors confronting the organisations increased the use of informal controls. Overall, the thesis makes significant contribution to the literature on management controls in the developing world and in the higher educational environment.