Management control systems effect on the micro-level processes of product innovation
Journal of Accounting & Organizational Change
ISSN: 1832-5912
Article publication date: 10 June 2022
Issue publication date: 21 March 2023
Abstract
Purpose
Using institutional theory, this study aims to understand how the management control systems (MCSs) designed by top managers influence the micro-level process practices of organization members during product innovation.
Design/methodology/approach
This paper reports on a case study carried out at NZMed to examine the design and use of MCSs and their product innovation practices. Simons’ levers of control was used to understand the ways in which MCSs were designed and used in a product innovation setting.
Findings
The findings indicate that the everyday micro-level processes of organization members encoded MCS when their espoused values aligned with those of top managers. However, when the perspectives within the organization differed, variations to the micro-level processes of organization members emerged. The authors show how this resulted in an increase in innovation capabilities necessary to meet organizational goals.
Practical implications
The misalignment between espoused values and enacted values had a positive effect as it helped the organization maintain their innovation culture, and build long-term trusting relationships with suppliers which enabled the achievement of organizational goals.
Originality/value
By focusing on the relationship between MCS and the micro-level processes of organization members in product innovation, the paper shows how the lack of alignment between the espoused values of top management and the enacted values of project managers explained the variations between the MCS used by top managers and the practices of project teams at our case study company.
Keywords
Acknowledgements
The authors would like to thank the participants at NZMed who made this study possible. Authors would like to note that they do not have any links or affiliations with the organization and no funding was received to carry out this research. Authors would also like to thank seminar participants at The University of Auckland, Doshisha University and Kyoto University for their comments and feedback on earlier versions of this paper. Finally, they would like to thank Zahirul Hoque (Editor) and the anonymous reviewers for their feedback and support.
Citation
Biswas, S.S.N., Akroyd, C. and Sawabe, N. (2023), "Management control systems effect on the micro-level processes of product innovation", Journal of Accounting & Organizational Change, Vol. 19 No. 2, pp. 326-350. https://doi.org/10.1108/JAOC-07-2021-0093
Publisher
:Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited