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A configuration approach to management control systems design in service organizations

Sofiah Md. Auzair (School of Accounting, National University of Malaysia, Bangi, Malaysia)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 2 March 2015




The purpose of this study is to utilize a configuration approach to examine the relationships between multiple contingent variables and management control systems (MCS) in service organizations from various industries. The contingent variables include service process type, cost leadership and differentiation strategies, environmental unpredictability, change and complexity and organizational life cycle stage.


Questionnaires were administered to the financial controllers of service organizations operating in Australia. Cluster analysis is utilized to reveal the MCSs fit.


The data reveals that high-performing service organizations are those firms that place high emphasis on a differentiation strategy. The lower performers, on the other hand, are firms with a lack of emphasis on both cost leadership and differentiation strategies. Overall, the data demonstrates that strategic orientation plays an important role in high-performing organizations and the ability to incorporate various contingent situations determines the effectiveness of an organization.

Practical implications

The potentially broad framework offered in this study allows managers from various service industries to relate the variations in the combination of situations to those of their firms. The service managers’ experience with certain type of combinations can assist them to identify the strategic position of their respective organizations. Consequently, service managers can estimate the prospect for further development to enhance the firm performance.


This study offers a holistic view of the multiple and simultaneous relationships between contingent factors and MCS design in service organizations using a configuration approach. This paper contributes to the literature on organizational configurations in particular by studying the systematic nature of effective MCSs in service organizations when adapting to the contextual settings of the organizations.



The author is grateful for the support and advice Professor Kim Langfield-Smith and various assistance by La Trobe University during the duration of this study. The author would like to also acknowledge the comments made by the reviewer and participants of the Global Accounting and Organizational Change Conference held in Kuala Lumpur, Malaysia, in July 2012.


Auzair, S.M. (2015), "A configuration approach to management control systems design in service organizations", Journal of Accounting & Organizational Change, Vol. 11 No. 1, pp. 47-72.



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