The role of management control systems in situations of institutional complexity

Abstract

Purpose

This study investigates in depth how decision-making of different organisational members is shaped by various management control systems (MCSs) that reflect different institutional logics, how the entire organisation deals with the arising institutional complexity and which role different management controls as a system play in such situations.

Design/methodology/approach

A case study was conducted on a German Mittelstand firm whose MCSs were shaped by three different logics over time: a family logic, a stakeholder logic and a shareholder logic.

Findings

This paper shows how different actors of an organisation confronted with institutional complexity used selective coupling of different MCS components and compartmentalizing MCS components to deal with clashing institutional logics. Thereby, it was possible for the actors to balance different sub-communities within the firm that were shaped by conflicting but yet complementary logics that were required for organisational survival.

Research limitations/implications

This study contributes to the understanding of how an MCS can be exploited for organisational structural responses to multiple logics. Due to this research design, the present study deals with challenges of ex post rationalization.

Practical implications

The results show options for organisational leaders to deal with different kind of worldviews (i.e. logics) that shape employees’ behaviour. Particularly, this paper explains how leaders can restructure their MCSs to influence human behaviour in times of radical change.

Originality/value

This paper contributes to the literature on MCSs by showing what role MCSs play in structural responses to institutional complexity.

Citation

Schäffer, U., Strauss, E. and Zecher, C. (2015), "The role of management control systems in situations of institutional complexity", Qualitative Research in Accounting & Management, Vol. 12 No. 4, pp. 395-424. https://doi.org/10.1108/QRAM-01-2015-0010