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Using management control systems to maintain traditional banking institutions
Accounting is a science of measurement, empowerment and evaluation toward the direction and goals desired by the organization. Accounting expertise is often related to company strategies to obtain optimal profits.
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Putu Yudha Asteria Putri
Lecturer at the school of Economics and Business, Warmadewa University
Accounting is a science of measurement, empowerment and evaluation toward the direction and goals desired by the organization. Accounting expertise is often related to company strategies to obtain optimal profits. The running of a company must be distinct from the existence of adequate accounting knowledge. Just like science has no edges, it is the same as accounting, which has various theories and branches in scientific fields. Before making a profit, a company needs a strategy to achieve the desired profit. One way is to empower employees, prepare plans and report up to the evaluation stage, termed management accounting, and in particular management control systems (MCSs). MCS focuses on achieving the organizational vision and mission of an institution, which must align with the vision and mission of individual employees. This concept should not only contain ethics based on something material physical but also spiritually, namely accountability to God.
All cultures have certain ways of managing relationships. Society does not differentiate between social life in small and large groups. So, in regulating relationships, rules are needed that are based on what is considered good or appropriate and what is considered bad or inappropriate. These rules are the benchmark regarding what is permissible so that they can limit the attitudes, behavior and actions of one human being toward another. Public awareness of the existence of living and binding rules in social life creates an orderly, safe and peaceful life. This is because society is a developing life process, and the existing rules of life are expected to adapt to the development of society itself.
In social life, the existence of interconnected coordination is often overlooked. There is a need for deconstruction to create a perfect control system in the existence of financial institutions, especially traditional financial institutions, which are embedded with cultural values. The deconstruction that is formed in this context places small narratives as equal and complementary to large narratives, just like male–female, positive–negative, earth–sky. All of these things are a form of binary opposition that actually complement each other, which is called synergy. A synergy does not cancel out another – the existence of synergy complements other opposing elements. MCS based on cultural values is a new deconstruction of MCS theory, which can be applied to the operational activities of traditional financial institutions as a control and boundary system. Global elements cannot be implemented in a traditional group if there are no local elements to accompany them. Likewise, local elements inherent in local community customs cannot be a guide in defending an institution if there are no global elements to rely on.
MCS based on cultural values has not been developed by a social scientist or philosopher. Still, it exists as a social reality, a social interaction that acts and synergizes and is expressed in the context of a control system. The elements contained in MCS, which are paired with cultural values, will hold each other, creating new meaning in the interactions and dynamic processes in organizational life. MCS is expected to play a role in becoming a system that can create justice, transparency, objectivity and accountability in an organization on the basis of economic benefits.
The application of rules based on accounting science, including MCS, which give indications of ineffectiveness due to self-control, both external social control and oneself, can give rise to a crisis of confidence. Referring to the culture of indigenous people in the formation of control system postulates, it is hoped that culture-based MCS can become a reference for traditional banking institutions in carrying out their operational activities.
