Browsing by Author "Abu Theeb, Eyad"

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The Role of Management Control Systems in Supply Chain Risk Management: A Case Study of Hospitals in Saudi Arabia
(RMIT University, 2024-07) Abu Theeb, Eyad; Rana, Tarek; Elbashir, Mohamed; Lal Ukwatte Jalathge, Sarath
An effective supply chain risk management (SCRM) system has increasingly become a necessity for organisations to effectively address and navigate the inherent risks and disruptions in their supply chains. Management accounting research has highlighted how certain accounting technologies facilitate a proactive, data-driven, strategic SCRM system. For instance, the integration of business intelligence and analytics (BIA) technologies with management control systems (MCS) has resulted in the incorporation of risk management and control systems into business processes and supply chain activities. However, the prior literature in accounting highlights the limitations of formal MCSs, such as legal contracts, in managing supply chain risks. Formal MCSs bring unintended outcomes and hinder flexibility and information access and processing, which in turn limit the ability of an organisation to make better strategic decisions and respond quickly to changes in the business environment. To date, the role of a BIA-enabled MCS to support the strategic focus of risk management in inter-organisational relationships of the supply chain has been conspicuously lacking. SCRM systems are viewed as a dynamic capability shaped by organisational resources. Drawing on dynamic capability theory, this thesis posits that BIA-enabled MCS provides a dynamic capability by enabling processes and activities that foster sensing, seizing, and transforming capabilities. This study employs an exploratory sequential mixed-method design in two phases. The first qualitative method phase uses interviews to investigate managers’ experience of risk management controls, culture, processes, and practices towards the factors supporting strategic SCRM systems. The second quantitative method phase uses surveys to (i) empirically test the factors; (ii) investigate the extent of BIA-enabled MCS in enabling a dynamic knowledge-creation risk culture capability; and (ii) investigate the consequential effect of SCRM on business processes, supply chain performance and hospital performance. In order to deeply understand business processes and control systems, I conducted semi-structured interviews with 18 strategic and operational managers. Interviewees indicate that supply chain partners change organisational processes, procedures, and operations. The results reveal that BIA-enabled MCS facilitates knowledge development, learning processes, and activities that develop a dynamic capability. A deductive thematic analysis of the interview data reveals that top management, BIA and MCS are critical factors for supporting an effective SCRM system, which enhances performance. The findings validate the conceptual framework and provide a basis for a further examination of the relationships between the constructs. My analysis of the survey data collected from 191 managers working in the healthcare industry in Saudi Arabia suggests that BIA-enabled MCS significantly supports a data-driven, strategic SCRM system. Higher quality BIA systems also develop higher levels of an organisation’s absorptive capacity to leverage joint knowledge and share information across the supply chain relationship. An organisational absorptive capacity significantly strengthens risk management and supply chain processes by leveraging and assimilating integrated BIA into an organisation’s decision-making and supply chain activity. Top management support is antecedent to and conditional on successfully implementing quality BIA systems in organisations. Results further show that an effective SCRM system provides managers with information about current and anticipated obstacles, threats, or opportunities, determines how to use resources wisely and justifies the most appropriate decisions. Its consequential effect is improvement in the efficiency and effectiveness of business processes. Consequently, when an organisation effectively controls risks, mitigates volatility and disruptions, and uses resources efficiently, supply chain performance and overall hospital performance is improved. The results further indicate that an effective SCRM system provides managers with valuable information about current and anticipated obstacles, threats, or opportunities. This information can help in making wise resource allocation decisions and justifying appropriate actions. The positive impact of effective SCRM can be seen in improved flexibility, internal and external coordination, and responsiveness in business processes. Consequently, when an organisation strategically chooses the right controls for managing risks and disruptions and using resources efficiently, it can enhance supply chain performance and overall hospital performance. The study suggests that the relationship between SCRM and supply chain performance and overall hospital performance is contingent on improvements in business processes and activities. The study findings enrich and extend the findings of prior studies to provide a comprehensive understanding of the factors that contribute to effective risk management in inter-organisational relationships of the supply chain. The study also provides new insight and reinterpretation about the potential impact and recent changes that BIA technology has brought to management, individuals, organisational structure, control mechanisms and decision-making. The study enriches the understanding of BIA's role in enabling both formal and informal risk controls within inter-organisational relationships. The findings are valuable to various stakeholders, including management accountants, organisations, and regulators, by providing timely perspectives on the increasing contemporary responsibilities for management accountants, which now include risk management and supply chain. The most straightforward message is that future management accountants should increase their ability to leverage and gain deep insights from data, as well as effectively visualise and communicate data with both internal and external stakeholders.
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