UNIVERSITI UTARA MALAYSIA

COLLEGE OF BUSINESS
SCHOOL OF ACCOUNTANCY
BKAM 3033 ADVANCED MANAGEMENT ACCOUNTING
A142
SECOND SEMESTER 2014/2015
CHAPTER 6 MANAGEMENT OF CONFLICT
Group C
Lecturer Name: Mr Amin Bin Ali

GROUP C6
NAME

Ibrahim Aimanuddin bin Ahmad Ramdzani

Fitri Merlinda binti Mohd Ilham
Nur Ain binti Haris

MATRIC NO

221342
221486
230257

BKAM 3033 ADVANCED MANAGEMENT ACCOUNTING

Table of Contents
1.

Introduction.............................................................................................................2

2.

Objective of Study..................................................................................................3

3.

Methodology...........................................................................................................4

4.

Company Background............................................................................................6

5.

Literature review.....................................................................................................7
5.1.

Management and motivtion.............................................................................7

5.2.

Performance measurement system design.....................................................10

5.3.

Human resource planning in organizations...................................................13

5.4.

Chances of layoff in a corporation................................................................14

5.5.

The Adoption Of Japanese Recruitment Practices In Malaysia....................16

6.

Finding..................................................................................................................17

7.

Limitation..............................................................................................................25

8.

Recommendation..................................................................................................26

9.

Conclusion............................................................................................................27

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1. Introduction
Every company has their own organization, and every organization has their
own management control system (MCS). The (MCS) is a system used in an
organization which collects and uses information to evaluate the performance of the
organizational resources that will eventually influence the behaviour of the
organization to implement organizational strategies.
IBRAHIM PUNYA INTRO, LEBIH KURANG MCM RUMUSAN
To resolve the conflict, there have a few approaches that can be used by management.
Before the firm going to choose the type of approach that suitable for the firm, they
need to identify a few factors that may influence management in order to choose
suitable approaches for the firm. These approaches are importance for the firm in
order to avoid decreasing in productivity and the performance of the firm. So, this
project is to study what may be the approaches that being used by the firm and why
they choose that approaches and based on what factor.

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2. Objective of Study
The purpose of this research project is to: To identify management control
system being used by the company, To explore the factors that can lead to conflict
between manager and employees related to the goals oriented and To identify the
approaches that suitable to resolve the conflict in order to avoid decreasing in
productivity and the performance of the firm.
For this all purpose of objective, we already come out with the interview
question that we want to ask to the company.
The first issue we basically we want to know the management control system
being used by the company in order to achieve their goal. Basically we want to know
what kind of management control system being used in that company and how that
system can manage and control their business. Furthermore, we also want to know
who has the authority in their management control system in order to make the
decision, and the importance of this authority toward this company.
Next, the second issue about the factor of the conflict between manager and
employees related to the goals oriented. In this issue, we ask about the factor that can
lead to the conflict between manager and employees related to the goals oriented and
how this conflict will affect the decision making in organization.
Lastly, the third issue is we want to know the approaches that being used by
the company in order to to avoid decreasing in productivity and the performance of
the firm. It has a few of approaches that can be used by company, and we want to
know why their choosing that approach to resolve the conflict in order to avoid
decreasing in productivity and the performance of the firm.

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3. Methodology
To get the finding for this project, we need to gather as much as information.
In order to get the information, we used two type of data, which is primary data and
secondary data. Primary data was collected through direct personal interview. To
gather information about a company, we had conduct as management of conflict to
interview that the company we choose which the CHIN HIN (JITRA) SDN. BHD.

Data Collection
1

Primary data

Interview
The study will identify how management control user or implement at Chin Hin
(Jitra) Sdn. Bhd Sintok, Kedah. The manager of company will be contacted for
conducting an interview. A letter seeking for permission will be sent in the meantime.
Data will be obtained from structured interviews, posing open ended question from
us. Then, from the data will be made a qualitative and descriptive analysis to find the
most of organizations currently using management control system and the type of
management control of company used; the factors that can lead to conflict between
manager and employees related to the goals oriented and how the conflict will impact
the decision making of the firm; the approaches that suitable to resolve the conflict in
order to avoid decreasing in productivity and the performance of the firm.
This interview was carried out on 5 May 2015 in Chin Hin (Jitra) Sdn. Bhd
that located at G-6, Tingkat Bawah, No.1, Pekan Changloon, 06010 Changloon,
Kedah. We had the opportunities to conduct this interview with the manager of the
firm, Muhammad Zahiruddin bin Zahalan, Branch Manager, which is graduates of
UUM in course of Economy.

Mailing and phone network

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Besides that, the method that we used to get the information is via email and by phone
call. Before we go for interview, we have made a phone call to clerk office to make
sure and get a permission to make an appointment for interview. The company also
attach or mail to us the information that we couldnt get while interview due to the
some constraint such as time. We also emailed to the company the interview question
early before we go there to ensure the company is prepared with the question that we
are going to ask.

Secondary data

Internet surfing
We also referred the Chin Hin (Jitra) Sdn. Bhd website to know the location for
interview the company. The company website enables us to know the organization
history, vision and mission, company activities and company policy.
Journal and article
This source is used as guidelines to us in order to finish this project and also as
supportive documents to support our research. After we get an idea, we search the
related journal, articles related to the issue.

4. Company Background
Chin Hin Sdn. Bhd. was established on April 2005. Chin Hin Sdn. Bhd is the firm that
sold the a lot of type motorcycle. Chin Hin Sdn. Bhd was located at G-6, Tingkat
Bawah, No.1, Pekan Changloon, 06010 Changloon, Kedah.

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5. Literature review
5.1. Management control system
Based on the thesis from Hamed Armesh Faculty of Management,
MMU,Malaysia

and Dr. Habibollah Salarzehi , Dr.Baqer Kord

Faculty of

Management, University of Sistan and Baluchestan. The journal study about

management control system. The purpose of the task was to examine the applicability
of management control and how the organization use the management control to
achieve their goal and understanding the importance of management control system.
We know that, in the present globalized world, organizations need to use management
control systems that go beyond the strategies that focus on acquisition of technology
and logistics which are not sufficient to give the organization sustained long-term
competitive edge over its competitors. As discussed many type of management
control the organization used. A management control systems (MCS) is a system
which gathers and uses information to evaluate the performance of different
organizational resources like human, physical, financial and also the organization as a
whole considering the organizational strategies. Finally, MCS influences the behavior
of organizational resources to implement organizational strategies. The keyword is
Management, Control, Systems.
On the journal, management control system: Effectively and efficiently in the
accomplishment of the organization objectives.
Management Control Systems (MCS) as defined by Anthony (cited by
LangfieldSmith, 1997) is the process by which managers ensure that resources are
obtained and used effectively and efficiently in the accomplishment of the
organization s objectives. MCS is a system used in an organization which collects and
uses information to evaluate the performance of the organizational resources that will
eventually influence the behavior of the organization to implement organizational
strategies. These four different management control systems are identified recently by
companies as effective categories of controlling system, companies must apply them
in a way that maximizes operational effectiveness without limiting employee
creativity such as :

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1.

Beliefs system should be used to define a corporation's character and mission

and to set guidelines both for performance targets and for acceptable employee
behaviour in pursuing such targets.

2.

The interactive system should be used to adjust the organization guidelines to

changing market conditions, while the diagnostic and the boundary systems
should be used to set standards for improving efficiency and creativity.
With management control business can respond quickly and efficiently.

Company can more systematic and strategies because have management control.
Besides that, one of the most important issues in management is controlling. Control
is one of the tasks of managers (Fayol, 1949).Management control system (MCS) is
use as a tool for controlling in administration.

5.2. Factor of conflict (IBRAHIM)

The paper, Performance measurement system design, which is written by
Andy Neely, Mike Gregory and Ken Platts is discusses about the literature review of
performance measurement, research agenda and the type of performance
measurement. In addition, the paper also states that are three different levels of the
performance management system, which are consist of individual performance
measurement, the set of performance measurement, and the relationship between the
performance measurement system.
A performance measurement system is includes of a number of individual
performance measures. Individual performance measures can be categorized in
various way, which is ranging from Kaplan and Nortons balanced scorecard through
to Fitzgerald et al.s framework of results and determinants. Next, Leong et al. claim
that it is widely accepted that the manufacturing task. Meanwhile, the key dimensions
of manufacturings performance can be defined in terms of quality, delivery speed,
delivery reliability, price (cost), and flexibility.
Performance measures relating to quality is focuses on the issues such as the
number of defects produced and the cost of quality. Feigenbaum was the first to
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suggest that the true cost of quality is a function of the prevention, appraisal and
failure costs. The cost of quality is a measure of the extra cost incurred by the
organization because it is either under- or over-performing.
Performance measures relating to time. Time has been explained as both a
source of competitive advantage and the fundamental measure of manufacturing
performance. Under the just-in-time (JIT) manufacturing philosophy the production or
delivery of goods just too early or just too late is seen as waste. In addition, the
objective of optimized production technology (OPT) is the minimization of
throughput times. Galloway and Waldrons phisophy is that contribution should be
measured in terms of the rate at which money is received rather than as an absolute.
Meanwhile, they define the key throughput accounting ratio as return per factory hour
divided by cost per factory hour.
Performance measures relating to cost. Garners review of the accounting
literature practices had been developed by 1925. For example, return on investment
(ROI). In 1903 the three DuPont cousins decided to adopt a decentralized structure for
their diverse business interests and had to face the problem of how they could control
them at the same time. As a result of the criticisms leveled at traditional management
accounting Cooper developed an approach known as activity-based costing
(ABC).Jeans and Morrow explain that ABC overcomes many of management
accounting problems.
Performance measures relating to flexibility. Slack identifies range, cost, and
time as dimensions of flexibility, although he later modifies this model so that it
includes only range and response. Gerwin observes that very little is known about the
implications of flexibility for manufacturing management and suggests that part of
the problem arises from the lack of operational measures of flexibility.
Simons [107-109] extends the notion that performance measures can be used
to influence behavior. He argues that management control systems can also be used as
a means of surveillance, motivation, monitoring performance, stimulating learning,
sending signals or introducing constraints.
A performance measurement system is constituted by the individual measures.
This will be slightly different slant and examine the performance measurement system
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as a whole. This is start with identifying the various dimensions of a performance
measurement system. Leong, et al. have suggested that the manufacturing task, and
hence the key dimensions of manufacturing performance, can be defined in terms of
quality, time, price (cost), and flexibility. Fitzgerald et al. suggest that there are two
basic types of performance measure in any organization, those that relate to results of
competitiveness and financial performance and those that focus on the determinants
of the results that consists of quality, flexibility, resource utilization and innovation.
Keegan et al. proposed a similar, but lesser known performance measurement
framework, the performance measurement matrix. As with the balanced scorecard, its
strength lies in the way it seeks to integrate different dimensions of performance, and
the fact that it employs the generic terms internal, external, cost, and noncost enhances its flexibility.
The performance measurement system will be implemented while it has been
developed. Among other things this means that the performance measurement system
will have to interact with a wider environment, which are categorized in two
environment, internal and external environment.
Internal environment is refers to the environment that within the organization.
Business strategists argue that the wider system has to match the business strategy.
Organizational culturists, such as Weick suggest that the strategies and cultures are
synonymous. Hence once can argue that the performance measurement system has to
be consistent with the organizations culture.
External environment is consist of two distinct elements, which are customers
and competitors. Measures customer satisfaction is discussed as performance
measures relating to quality. Benchmarking is being used in measures of competitors
but it do not focus on competitors. Four type of benchmarking, which are internal,
competitive, functional, and generic. Benchmarking studies are first documented by
Garvin. He collected data on the performance of USA and Japanese air conditioning
manufacturers in the early 1980s.
5.3. Approaches to resolve the conflict of management
The journal Effects Of Individual Characteristics And Organizational Context
On Superiors' Use Of Conflict Styles And Subordinates' Satisfaction With
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Supervision, which is written by Lee Kim Lian and Low Guan Tui. The literature
review if this journal is discuss about how superiors individual characteristic and
organizational contextual variable can influence the conflict handling styles of the
firm, and relationship between them can lead to the subordinates satisfaction with
supervision. This section reviews the relevant constructs and variables as well as their
interactions involving:
1. Typologies of conflict handling styles
2. Organizational contextual variables
3. Superior's individual characteristics
4. Satisfaction with supervision
For our project, we will focus on typologies of conflict handling styles which
is the approach to resolve the conflict, superiors individual characteristics and the
organizational contextual variables, toward satisfaction with supervision. And we will
discuss about what factor that influences the firm in order to choose approaches to
resolve the conflict, and how that approaches will help organization to avoid
decreasing in productivity and the performance of the firm.
There have a lot of dimension for the style of handling of conflict, but for this
study, the researcher focus on Rahim and Bonoma (1979), and Rahim (1983a, 1983b,
1983c, 1983d, 1983e, 1985, 1986a, 2001) styles of handling interpersonal conflict on
two basic dimensions: concern for self and concern for others.
Rahim (1983a, 1986a, 2001) defines styles of handling conflict as integrating,
obliging, dominating, avoiding and compromising. It was Rahim's idea that
"organizational participants must learn the five styles of handling conflict to deal with
different conflict situations effectively" (Rahim, 1986a, p. 30). The five conflict styles
that emerge from various combinations of these two dimensions are described below:

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Integrating / Collaborating style

High concern for self and others reflects openness, exchange of information,
and examination of differences to reach an effective solution acceptable to both
parties. This style concentrates on problem solving in a collaborative manner. Thus,
the integrating style is believe to be both effective and appropriate in managing
conflicts and, therefore, is perceived as highly competent (Lawrence & Lorsch, 1967;
Tutzauer & Roloff, 1988).
Obliging / Accommodating style
Low concern for self and high concern for others style is associated with
attempting to play down the differences and emphasizing commonalities to satisfy the
concern of the other party. Obliging is associated with accommodating behaviors. It
can be used as a strategy when a party is willing to give up something with the hope
of getting something in exchange from the other party when needed (Blake &
Mouton, 1964).
Dominating / Forcing style
High concern for self and low concern for others style has been identified with
win-lose orientation. Within interpersonal context, the dominating (competing/
distributive) style has been found to be associated with low levels of effectiveness and
appropriateness (Blake & Mouton, 1964).

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Avoiding style
Low concern for self and others style has been associated with withdrawal
when a person fails to satisfy his/her own concern as well as the concern of the other
party. This style is useful when the issues are trivial or when the potential
dysfunctional effect of confronting the other party outweighs the benefits of the
resolution of conflict.

Compromising style
Intermediate in concern for self and others style involves give and take
whereby both parties give up something to make a mutually acceptable decision. It
may be appropriate when the goals of the conflicting parties are mutually exclusive or
when both parties who are equally powerful (e.g. labor and management). This style
may be of some use in dealing with strategic issues, but heavy reliance on this style
may be dysfunctional.
Organizational Contextual Variables
Span of control
Span of control is the number of subordinates reporting to a superior. Narrow
span will provide closer supervision and tighter "boss-oriented" controls and therefore
provide greater chances for building shared goals as well as coaching and feedback
(Likert & Likert, 1976; Tannenbaum, 1968; Porter & Lawler, 1964). On the contrary,
wide span of control provides managers with larger number of subordinates reporting
to them. Managers with larger spans were more likely to handle problems with
subordinates in a more formalized, impersonal manner, using warnings and
punishments instead of coaching and feedback (Kipnis & Cosentino, 1969; Kipnis &
Lane, 1962; Goodstadt & Kipnis, 1970; Ford 1981; Heller & Yukl, 1969).
Organizational structure
The study of organizational structure is influenced by Weber's (1946) work on
bureaucracy, which depicted precise and impersonal structures of tasks, rules, and
authority relations as central to rationalizing the real world (Hall, 1969; Meyer, 1972;
Pugh, Hickson, Hinings, & Turner, 1968). In this study, structure is conceptualized on
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a

mechanistic-organic

continuum.

In

mechanistic/bureaucratic

organizations,

employee alienation and strict adherence to roles often mean avoiding conflict by
resorting to intransigence. Burns and Stalker (1961) called the opposite type
"organic". This strategy tends to emphasize horizontal specialization and coordination
and there are comparatively few rules enforced in the organization. The benefit of the
organic structure is its flexibility, adaptability and early recognition of external change
(Burns & Stalker, 1961; Lawrence & Lorsch, 1967; Webb & Dawson, 1991).
Satisfaction with supervision
Numerous research findings suggest that conflict management style is related
to various aspects of employee satisfaction are of interest and represent an important
extension to the job satisfaction literature (Johnson, 1993; Locke, 1976). Smith,
Kendall, and Hulin (1969), in their Cornell Job Descriptive Index (Cornell JDI)
described five areas of satisfaction: the work itself, the supervision, the co-workers,
the pay and the opportunities for promotion on the job. Since the theme of the present
study is on the superior-subordinate relationships, the job-facet satisfaction is most
relevant to satisfaction with supervision.
The conflict handling styles which superior uses in supervising their subordinates can
have a broad impact on the subordinates' attitude towards work. Many studies
recorded that supervision to the extent that the superior exercises dominating and
avoiding is found to have a negative impact on the subordinates' satisfaction (Kahn,
Wolfe, Quinn, Snoeck, & Rosenthal, 1964; Likert, 1961).
Superior's Individual Characteristics: Hierarchy Level, Age, Length of Service,
Gender and Race
Hierarchy level
Hierarchy level indicates the ranking position of superior in terms of reporting
structure. Bellis-Junes and Hand's (1989) study suggest that execution of certain task
at the appropriate hierarchy level will increase motivation and boost the moral of the
employee. This implies that personnel at different hierarchy level would execute the
managerial style differently and possibly with different result. According to Aquino
(2000), superiors in higher hierarchy status usually interact with subordinates using
both integrating and obliging styles.
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Age and length of service
Age and length of service were evaluated to enhance understanding of the manner in
which the physiological and psychological changing of aging influence human
behavior and perception.
Gender
There is evidence that male are more dominating and less compromising than female
in conflict situations (Imler, 1980; Kilmann & Thomas, 1977). While few researchers
have investigated the relationship between gender role and conflict management style,
those who have done so found that:
(a) Feminine individuals disapproved of conflict more than masculine (Baxter &
Shepherd, 1978),
(b) Androgynous individuals reported more frequent use of integrating or
compromising styles than feminine or undifferentiated individuals (Yelsma & Brown,
1985), and
(c) Masculine individuals were more likely to report a dominating style, while
androgynous individuals were more likely to report an integrating style (Portello &
Long, 1994).
Thus, since it is clear that gender roles do not conform to the principal of
biopsychological equivalence (Korabik, 1990), many previous studies of the
relationships between biological sex and conflict style in organizational are open to
reinterpretation.

Race
In a multi-racial society like Malaysia, employees bring into the organization different
system of values. Differences in the perception of conflict handling style and
satisfaction with supervision along the racial line will be investigated in the present
study.

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6. Finding
Management Control System
Management Control Systems (MCS) as defined by Anthony (cited by LangfieldSmith, 1997) is the process by which managers ensure that resources are obtained and
used effectively and efficiently in the accomplishment of the organization s
objectives. MCS is a system used in an organization which collects and uses
information to evaluate the performance of the organizational resources that will
eventually influence the behaviour of the organization to implement organizational
strategies. Management control it is concerned with the human effort of plan
implementation it entails ensuring that relevant resources are well utilized and
workers are well motivated. Besides that, control or controlling is one of the
managerial functions like planning, organizing, staffing and directing. It is an
important function because it helps to check errors and to take the corrective action so
that deviation from standards are minimized and stated goals of the organization are
achieved in a desired manner.
Management control system (MCS) is a system that provides useful
information for managers to do their duties. This information helps organization in
performance. (Otley. 1999) MCS was first described by Anthony (1965). In his study,
he distinguished the management control system from strategic planning and
operational control. Management control (MC) itself is defined in many ways such as:
a combination of tools and process that influence on actors behaviors within an
organization to achieve organizational objectives. Management control systems
(MCS) include techniques and mechanisms which organizations use to pursue
objectives, accomplish goals and successfully pursue strategies. Management control
systems help to integrate, motivate, support in decision making, communicate
objectives, give feedback, etc. Management controls (MC) can be sub-divided into
two most important subcategories. The first category involves output controls or
results controls, in which specific outcomes are measured, monitored and compared
against expectations. This will enable corrective action to be undertaken as and when
needed. This category also includes administrative controls or action controls that
involve formal rules, standard procedures and manuals and monitoring compliance.

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The second category involves behavior controls, personnel controls and social
contracts.

Management control of Chin Hin (Jitra) Sdn. Bhd.

The purpose of this study is to examine the how the organization use the
management control to achieve their control and management control can help the
organization. Besides that, to measure of performance of the company, Yamaha
Motorcycle. The system of management control use for Yamaha Motorcycle to
achieve their goal is the company use bottom up and top down management control in
organization.
A bottom up approach is the piecing together of system to give rise to more
complex system, thus making the original system sub-system of the emergent system.
Bottom-up processing is a type of information processing based on incoming data
from the environment to form a perception. From a cognitive psychology perspective,
information enters the eyes in one direction (sensoryinput, or the bottom), and is
then turned into an image by the brain that can be interpreted. In easy word the
manager explain bottom up is top manager give information or all resources to the
staff or employee. Add manager of Yamaha Motorcycle in a bottom up approach the
individual base elements of the system are first together to form larger subsystem,
which then in turn are linked, sometimes in many level, until a complete top-level
system is formed.
Besides that, the company also use top down approach. In a top down
approach an overview of the system is formulated, specifying but not detailing any
first-level subsystem while the top down mean is employee give information or all
resources to the top management. Add, manager tell when use the top down or bottom
up depend on situation. . Reason why manager choose that system is easy and the
staff can cooperate with top management and each other. Not only that managers also
say can change and received opinion each other. Managers says their used the
management system control to manages and control the business means that manager
say this is general knowledge, he says out company have top management such as
marketing, financial department, and etc. but the staff dont have knowledge about
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marketing and financial, then the company give information to staff to do task. For
example, our company have staff know about the operational and technical such as
maintenance the product, for me top management our company has known about
maintenance too. Mr. Ali says our company share each other, means top management
known what staff do and staff known what top management do. Sometimes, we help
each other and share knowledge each others. Before the manager continue their
explanation, I explain little bit what I known about authority is the legitimate power
of supervisor to direct subordinates to take action within the scope of the supervisors
position. Formal authority in the organization can be traced all the way back to
constitutional right to own property. The owner of the organization has the authority
to make decision. For example, entrepreneur firms have an informal arrangement of
employees and centralization of decision making authority, the owner. Mr. Ali explain
more about who has the authority in making decision to their company. Our company
have three form of authority such as line authority, staff authority and team authority.
Line authority is direct supervisory authority from superior to subordinate. Authority
flows in a direct chain of command from the top of the company to the bottom. Chain
of command is an unbroken line of reporting relationships that extends through the
entire organization that defines the formal decision making structure. It helps
employees know to whom to whom they are accountable, and whom to go to with a
problem. Line departments are directly linked to the production and sales of specific
products. Supervisor in line departments, such as marketing and production give
direct orders, evaluate performances, and reward or punish those employees who
work for them. Unity of command within the chain states that each person in an
organization should take orders from and reports to only one person. This helps
prevent conflicting demands being placed on employees by more than one boss.
However, the trend toward employee empowerment, fueled by advances in
technology and changes in design from downsizing and reengineering have tempered
the importance of being accountable to only one superior. Span of control refers to the
number of employees that should be placed under the direction of one manager. Spans
within effective organizations vary greatly. The actual number depends on the amount
of complexity and the level of specialization. In general, a wide span of control is
possible with better-trained, more experienced, and committed employees. Then, the
staff authority is more limited authority to advice. It is authority that is based on
expertise and usually involves advising line managers. Staff members are advisers and
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counselors who aid line department in making decision but do not and how to do it.
They coordinate and provide technical assistance or advice to all advisors such as
accounting, human resources, information technology, research, advertising, public
relations and legal services. Last is team authority is granted to committees or work
teams involved in an organizations daily operations. Work teams are groups of
operating employees empowered to plan and organize their own work and to perform
that work with a minimum of supervision. Team-based structure organize separate
functions into a group based on one overall objective. Mr. Ali conclude the authority
in making decision based on each department. For example, when marketing decision
want to do promotion to our product mean the staff under marketing department
follow, but the financial or human resources department dont have power to manage
them.
Based on journal, top-down set of metrics that can be deployed by top
management to guide middle management decisions and actions. Their four
dimensions of performance are innovation/growth, customer, financial, and
operational. Once again, the external stakeholder perspective is ignored in the model,
creating a critical weakness in the competitive arena. If Drucker is right, this is a fatal
flaw in that the only place an organization exists is on the outside. The performance
wheel expanded in Figure 3 adds value creation to the CSFs, thereby creating a
linkage to external stakeholders.
On the right side of the diagram the emphasis shifts away from abstract
measurement concepts to the organizational structure and related incentive systems.
The integrated model is subdivided into three sub-groups:
(1)

Those controlled by top management;

(2)

Those under the purview of middle management; and

(3)

Those that only operational managers and employees can affect.

These three divisions coincide with strategic obligations, CSFs, and KPIs
found in the traditional control literature (Thomas 1988; Dearden 1988; Stonich 1988)
Added to the measurement and structure logic is a reflection of the most
effective forms of incentives. As noted by Stonich (1988, pp. 468-9):
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[y] (in many control systems) the necessary performance measurement and
reward system that completes the control cycle is often missing [y] These
measurements and rewards should reflect the firms strategy, but this is not enough,
the system must also be consistent with or specifically designed to help modify,
certain of the firms internal characteristics.
Therefore, the systems must be designed to ensure continual growth,
innovation, and improvement.Defined market metrics that may, or may not, capture
the value-creation process. Similarly, Lynch and Crosss (1991) version of a PMM
emphasizes internally defined metrics of performance but relies heavily on a bottomup or process focus in defining its measurements and their relationships.
As attention shifts to the external environment and its definition of success, we
encounter both the traditional world of shareholder value measurements and the
modern focus on externally driven performance. The DuPont, economic value-added
(EVA), and market value-added (MVA) models of performance measurement place
their emphasis on the factors that affect external stakeholders wealth. They are, by
definition, top-down in nature as they deal with the gestalt, or the entirety of
organizational performance reduced to a few key financial metrics. In sharp contrast,
the modern world of lean management and process improvement, as embodied in the
CAM-I Integrated Performance Management models, place the customer inside the
organization, determining direction and defining success.
This provides four measurement models, four unique perspectives on the
concept of success, and four forms of control, seeming in juxtaposition and contrast
rather than blending into one unified whole. If there are four unique models, then a
manager must decide which set of assumptions and methods most adequately capture
their world of work which will most likely lead to sustainable superior performance.
Each model, and each proponent, will forcefully argue that their approach will result
in success, leaving the practitioner with little more to go on than entrepreneurial
instinct and common sense. Compare with Yamaha Motorcycle, the managers
conclude the bottom up and top down of organization need each other because each
other give information and help each other. To conclude, we see that management
control systems and management accounting are constantly evolving in designing and
using information and performance management systems for organizational control.
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All in all, management control system can be summed up as an integrated technique
for collecting and using information to motivate employee behaviour and to evaluate
performance. This paper explores the issues surrounding management control
systems.
IBRAHIM

Approaches to resolve the conflict

Based on the interview, the manager concluded as general that, it was
irrelevance if the management used avoiding approach and accommodating approach
to resolve the conflict of management. If management using avoiding approach to
solve the conflict, the conflict will never been solve for a long period of time in future
and may affect the company, the more management avoid the conflict, the more cost
that will incurred by the management to resolved this conflict in future, and it can
become one of the factor for company to failed to achieve the company objective and
goals. Meanwhile, if management using accommodating approach to solve the
conflict, there is no improvement that management will achieve and their will lost the
opportunities to others company. And this approach will affect the company
performance and reputation in future, and show that the company did not have their
own principle.

The manager state that the most favorable approaches that should used to
resolve the conflict of management is by using collaborating or win win situation,
because this approach was provide equal and fair satisfaction for both parties that
involve in the conflict. But in reality, this approach was rarely happen because there is
no hundred percent satisfaction result that will achieve in any solution, if this
approaches was exist, it must be rarely happen. Compromising approach was been
suggested by the manager as the suitable approach to resolve the conflict of
management. This approach is similarity with collaborating approach, but this
approach did not fulfill hundred percent of satisfaction but the solution was fair for
both parties that involve in the conflict. In view of the manager, he said that majority

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of company in this world using compromising in order to solve the conflict to avoid
decreasing in productivity and the performance of the firm.

Next, use forcing approach to resolve the conflict of management, in the view
of manager is also favorable approach besides using compromising approach. But
there is a few of condition that must be fulfill before using this approach such as span
of control.
Based on literature review, before the organization decide the type of approach
that they are going to used in the organization, there have factors that they need to
take into consideration in aspect of organization contextual variables which is span of
control, organizational structure and satisfaction with supervision, and aspect of
superiors individual characteristics which is hierarchy level, age and length of
service, and gender, and race.
Based on manager, company has narrow span of control because the company
was not in branch only that not need a lot of staff to handling the company, using
bureaucratic organization as their organization structure, and employees was satisfied
with supervision of the company by looking at their low rate of employee turnover.
Chin Hin Sdn Bhd take seriously about their staff welfare. They will be given the
promotion, bonus, and commission to their staff, this is make the staff feel a sense of
belonging toward the company. Based on above, we can conclude that Chin Hin Sdn
Bhd was using compromising approaches, dominating approach and collaborating
approaches to resolve the conflict.
Then, based on manager, the company has execution of certain task at the
appropriate hierarchy level for example like procedure to approved discounted sales
more than the standard for customer that buy motorcycle in large quantity. For age
and length, the company was establish in 2005, and the manager already has
experience in their field, same goes to their staff, this is because they have low rate of
employee turnover. For gender and race, this company did not take into the
consideration, because they more focus on skills, attitude and ability of an individual

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itself. Based on criteria that explain by the manager, we can conclude that Chin Hin
Sdn Bhd was using compromising and collaborating.
In addition, the manager said that, they not take the gender and race into
consideration because it was irrelevance. Even thought the staff in management of
parent company which is Chin Hin (Jitra) Sdn Bhd was Chinese and staff in branch
which is Chin Hin Sdn Bhd in Changloon was Malay, there is no issue, conflict and
discrimination of staff between them. And they also not consider gender as one of the
factor to choose the approach, because even thought the product of company is
motorcycle, but majority of the staff was female. In view of this company, the conflict
exist is not because of gender and race, it exist because the attitude of the staff itself.
So, there is no point to take this factor into consideration to choose the approaches
that suitable to handling conflict.
Next, our finding is the manager has the high concern about himself, but also
high concern about the staff. Based on the literature review, we can conclude that the
manager is using either collaborating or compromising approaches to resolve the
conflict. The result of finding was closely to the literature review but the manager said
the company was used another approaches, which is forcing or dominating style in
certain circumstances that related with policy, law and reputation of company. For
example, the staff was compulsory to wear the uniform of company even thought the
company was small and was a branch company only. If the conflict related to the
policy of company, the company automatically will used forcing approaches.

7. Limitation
Our group has faced some limitations in preparing and carrying out this
assignment. Because of the interview session is carried out in Malay language, it
difficult for us to match the term that used by the manager with our study. The
problems is when we want to related our finding with our literature in journal.
Next, the company that we interview is the branch company. So the finding
that we get may not represent other company in Malaysia. In addition, we only
interview one company, so we cannot say that our finding sample was representative

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the population of company in Malaysia. We can just make the discussion about our
project in the scope of Chin Hin Sdn. Bhd only.
Next, the limitation of the research is relevance of previous study, which used
in this research might lack of accuracy of relevant to this research. In this research, we
had found 5 articles for our research objectives. Due to we are lack of experience to
determine the accuracy and usefulness of the articles or journal, it might bring effect
to the accuracy or reliable of our study.

8. Recommendation
From our research and observation, management control system in Chin Hin
Sdn Bhd was unique and flexible. This is because their used both type management
control system which is bottom-up and top-down in their organization. But there has
disadvantage if the company using both of the because there may arise new issue in
future and may increase the confusing for decision making process.
Next, our recommendation for the next researcher, we suggested to pick more
sample of company which is better more than one company. This might can help the
researchers to analysis the management applied by the companies. If they lack of
time, we are suggested to interview the company that have high reputation in
Malaysia.
Furthermore, to gain more information about the management of conflict of
the company, we suggested the next researcher to interview the staff or employee of
the company. By doing this, the researcher can know the opinion them about of
effectiveness and efficiency of management control system and approaches that used
by company in order to resolve the conflict in order to avoid decreasing in
productivity and the performance of the firm.
Researcher also can increase their study about the previous papers to gain the
knowledge in research and prevent conducts the similar research which will consumes
the time. Suggestion by previous study also can help the next researchers to gain new
idea in research. Relevance of previous papers picked is also helps the accuracy of a
study.
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BKAM 3033 ADVANCED MANAGEMENT ACCOUNTING

pg. 24

BKAM 3033 ADVANCED MANAGEMENT ACCOUNTING

9. Conclusion
MERL

IBRAHIM

AIN
Human resources or human capital plans and planning are crucial and have
positive impact on organization success. They can therefore be used effectively to
achieve organization goals.
We conduct this research to investigate approach, procedure, performance
measurement system, companies planning for employee recruitment and lay off. We
gather much information from many sources to ensure our reserve conduct
successfully. We found that UPSB is using several theories in motivate employee such
as Maslow hierarchy of needs and Herzberg two-factor theories.
From the company that we interview, we found that UPSBprovide reward and
training to employee as motivation. Motivation is an important element in improving
work productivity, every industry needs to have a firm understanding of how it relates
to job satisfaction and reward systems. Understanding job satisfaction and employee
motivation can be key elements to improving productivity and efficiency.
A performance measurement system is constituted by the individual
measures.Fitzgerald et al. suggest that there are two basic types of performance
measure in any organization, those that relate to results of competitiveness and
financial performance and those that focus on the determinants of the results that
consists of quality, flexibility, resource utilization and innovation. UPSB measure
performance of employee based on 4 principles, which are efficient, commitment,
knowledge, and skill. UPSB lay off employee based on result evaluation. Employee
being lay off will be given 1 month to find a new job.
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BKAM 3033 ADVANCED MANAGEMENT ACCOUNTING

Recruitment and lay off employees, as a human resource management
function, is one of the activities that impact most critically on the performance of an
organisation. From the interview, UPSB will recruit people through several way when
there is any vacancy of any position. Warning letter will be given to employee who
make fault and they will be layoff if continuous repeat the mistake. UPSB layoff
procedure is bind with Employee Act 1955.

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