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1 – 10 of over 65000Markus Brenner, Andreas Wald and Ronald Gleich
Process orientation is important for improving organizational performance. The process view is considered a key enabler of digital transformation, and thus management control…
Abstract
Purpose
Process orientation is important for improving organizational performance. The process view is considered a key enabler of digital transformation, and thus management control systems (MCS) are expected to incorporate this view. However, the existing body of knowledge is fragmented, as different process approaches are often considered independently following a reductionist view of control practices. This paper aims to provide recommendations for further research as well as guidance for practice by a systematic review of the state of research of MC for process orientation. It is based on both a comprehensive view to MC using an MCS package approach and a comprehensive view of process orientation.
Design/methodology/approach
A systematic literature review addressing major types of process orientation approaches was performed by applying the comprehensive MC framework of Malmi and Brown. The results were synthesized and propositions were developed.
Findings
All components of the MC framework, as well as MCS packages, are highly relevant for process orientation. Propositions regarding configurations of MC for process orientation show directions for future research. However, comprehensive considerations of packages and of individual components, especially cultural controls, remain scarce in the literature.
Originality/value
To the best of the authors‘ knowledge, this paper is the first of its kind to provide a comprehensive, structured overview of MC for process orientation, applying a nonreductionist view, based on an MCS Package approach, and consolidating the so far fragmented view of different process approaches.
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Winnie O’Grady and Chris Akroyd
Budgets are commonly viewed as a central component of management control systems (MCS). The beyond budgeting literature argues that managers can develop other controls to replace…
Abstract
Purpose
Budgets are commonly viewed as a central component of management control systems (MCS). The beyond budgeting literature argues that managers can develop other controls to replace budgets. The purpose of this paper is to examine the MCS package of an organisation which has never in its history had a traditional budget.
Design/methodology/approach
The authors carry out an ethnomethodology informed case study at Mainfreight, a large multinational logistics company headquartered in New Zealand. Data were collected from interviews with managers and accountants, internal company documents, published corporate histories, a company presentation, the corporate Web site and site visits.
Findings
The authors found that Mainfreight’s MCS package was explicitly designed based on cultural and administrative systems which supported the planning, cybernetic and reward systems managers used to monitor key drivers of short-and long-term performance with a focus on profitability.
Research limitations/implications
The implication of the finding is that a more holistic view of the MCS package is necessary to understand how control is achieved within organisations that have moved beyond budgeting.
Practical implications
The authors show that organisations can operate without traditional budgets and still maintain a high level of control by developing appropriate cultural and administrative control systems that are internally consistent with their planning, cybernetic and reward systems.
Originality/value
The scarcity of organisations that have never had budgets limits opportunities to investigate an MCS package intended to function without budgets. This unique case setting reveals the design of an integrated non-budgeting MCS package.
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Erik R. Strauss, Pascal Nevries and Juergen Weber
This study aims to consider how emerging management control systems (MCS) form the MCS package of start‐up firms. Based on institutional theory, the authors aim to better…
Abstract
Purpose
This study aims to consider how emerging management control systems (MCS) form the MCS package of start‐up firms. Based on institutional theory, the authors aim to better understand reasons for introducing MCS and the reciprocity between the parts of the firm's overall MCS package.
Design/methodology/approach
The authors apply a qualitative cross‐sectional field study approach involving 74 interviews with key stakeholders in 20 young start‐up firms with venture capital financing. Interview data are fully transcribed, analysed, checked, and triangulated.
Findings
The results uncover the main constituents of start‐up firms in three different institutional fields (nascent, start‐up, post start‐up), which substantially impact on the introduction of new MCS and the subsequent MCS packages. The introduction of formal MCS seems to be divided into different phases.
Research limitations/implications
This study is subject to the limitations of case‐based research. Moreover, the theoretical underpinning of institutional theory potentially underestimates the influence of agency on social behaviour and structures.
Practical implications
The study highlights the major drivers of establishing a set of control systems through which the interests of different stakeholders are aligned. A multitude of concrete examples of managing controls are given, including reasons for their introduction and their effects.
Originality/value
This paper sheds light on the introduction of MCS in young firms. This complements prior research, which has almost exclusively focused on MCS in more mature and established firms. Moreover, the authors deepen prior insights that are primarily focused on isolated formal components of MCS, by understanding MCS as a package.
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Anderson Betti Frare, Ana Paula Capuano da Cruz, Carlos Eduardo Facin Lavarda and Chris Akroyd
This study aims to understand the relationship between the elements of a startup firms’ management control system (MCS) package, its entrepreneurial orientation (EO) and firm…
Abstract
Purpose
This study aims to understand the relationship between the elements of a startup firms’ management control system (MCS) package, its entrepreneurial orientation (EO) and firm performance.
Design/methodology/approach
The authors collected survey data from a sample of 100 Brazilian startups who had exited technology-based parks and incubators. The authors used two data analysis techniques, namely, partial least squares structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA).
Findings
The findings show that cultural and planning controls were the only two MCS elements that were included in all high-performing startup firms’ MCS packages. The authors also found that EO has a positive influence on firm performance through the MCS package.
Research limitations/implications
The mixed-method approach allowed for a holistic view of the analyzed phenomenon. PLS-SEM analysis was applied to the symmetric relationships between the proposed relationships while fsQCA was used to analyze the asymmetric combinations between EO dimensions and MCS package elements, which promoted high firm performance.
Practical implications
The authors show how different combinations of MCS elements form a package, mediating EO, which can enable high performance.
Originality/value
Using fsQCA and PLS-SEM, the authors were able to better understand the important role that MCS package adoption has on a startups’ performance and provide new evidence regarding the interface between MCS and EO. This extends the understanding of the importance that cultural and planning controls have in an MCS package to support startup performance.
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Nathalie Bénet, Aude Deville and Gerald Naro
Kaplan and Norton proposed the strategy map as a way to overcome the weaknesses of the balanced scorecard (BSC), but this approach may not be enough. The purpose of this paper is…
Abstract
Purpose
Kaplan and Norton proposed the strategy map as a way to overcome the weaknesses of the balanced scorecard (BSC), but this approach may not be enough. The purpose of this paper is to present a strategic management control package composed of three systems from strategic management and management control. This conceptual approach operationalizes strategic alignment, which is the core interest of the BSC.
Design/methodology/approach
The rationale for this research is derived from the literatures on business models (BMs), the BSC and management control packages. The authors first identified gaps in the BSC literature, which has underlined the BSC’s insufficient connection to strategy, and the strategic literature, which has criticized the BM as being too conceptual. The authors propose to fill these gaps through contributions from the management control package literature.
Findings
The findings are in line with the current literature on the interdependencies of management control systems. In response to the criticism of the BSC because of its weak strategic foundations, the authors provide a framework comprising three management systems: the BM, the strategy map and the BSC. This framework ultimately promotes two feedback loops that provide a dynamic view of the reciprocal influences of the BSC and strategy.
Research limitations/implications
Several authors note that the BSC suffers from a lack of conceptualization. The underlying assumptions and the conceptual and empirical validity of the cause-and-effect relationships are particularly questioned. Therefore, the purpose of this paper is to overcome the criticism linked to the “low” strategic alignment of the strategy map, and then of the BSC, by proposing a conceptual framework based on a package including three management systems: the BSC, the strategy map and the BM. A major limit lies in the purely conceptual dimension of this research, and it will be interesting to empirically investigate the conceptual package through longitudinal case studies.
Practical implications
The authors propose guidelines to develop a strategically aligned BSC through a three-step operationalization process to achieve a non-linear strategic management control. Moreover, the authors suggest empirical research avenues to address the weaknesses of Kaplan and Norton’s BSC and to enhance its connection to strategy through an integrated strategic management control package that includes a BM.
Originality/value
This paper adds value by proposing a package of management systems that includes both strategic management and management control perspectives. The authors, therefore, offer a way to bridge the gap between these research streams and highlight the interest of recent developments in the literature regarding the management control package.
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Sylvie Héroux and Jean-François Henri
While the idea of control packages goes back to the early 1980s, empirical management accounting researchers have been reluctant to examine this broader view of management control…
Abstract
While the idea of control packages goes back to the early 1980s, empirical management accounting researchers have been reluctant to examine this broader view of management control. Past research has addressed the use of management control for the organization as a whole, as well as for specific objects of control. While those objects of control typically involve information available for internal uses, we do not know much about the role of management control when the object of control is comprised of information intended to be disclosed outside the organization. This study aims to examine the role of a control package to manage web-based corporate reporting. More specifically, this study aims to examine the antecedents and consequences of a management control package related to web site content. The results suggest that perceived environmental uncertainty and stakeholder orientation are key factors that influence the extent of use of the management control package. Moreover, the extent of use of a management control package is associated with the quality of web site content but not the quantity of information disclosed.
This paper addresses the issue of management control (MC) of collaborative innovation. It attempts to fill this gap in MC literature by considering both contingency and internal…
Abstract
Purpose
This paper addresses the issue of management control (MC) of collaborative innovation. It attempts to fill this gap in MC literature by considering both contingency and internal consistency perspectives influencing the MC setting, especially in the context of R&D alliances. Opening the boundaries of R&D has implications for the design of MC. It involves particular challenges and raises specific tensions of competing demands between control and innovation.
Design/methodology/approach
Based on a quantitative survey of sponsored European consortia and using the structural equation modeling method, we design an interfirm MC model to support collaborative innovation.
Findings
Our results show that the innovation ecosystem plays a critical role as an institutional element shaping the MC design. We also infer based on our findings that the package approach is more suitable than the system one to set up control practices within a collaborative innovation context. Thus, the package allows several configurations of MC in an ongoing process that, in turn, leads to deal with organizational tensions and conflicting pressures in a dynamic way. Accordingly, the package's effectiveness seems to be related to its “fit” with the alliance context rather than its “internal consistency”.
Research limitations/implications
This study advances MC literature by combining two theoretical perspectives to address interfirm MC, especially in the field of innovation that raises specific challenges. The findings lead also to build a bridge with a new perspective, i.e. evolutionary perspective, as the package suggests an ongoing process of resolving dynamic tensions between control requirements and innovation needs.
Practical implications
The study suggests a model of MC package that provides managers with a range of viable configurations and alternatives to support collaborative innovation, control activities, adapt to changes, resolve tensions and drive performance.
Originality/value
Instead of prior studies, the study relies upon both contingency and internal consistency perspectives to examine the MC design and structuring mode. In addition, the empirical part of this research deals with the case of European sponsored R&D consortia as a form of collaborative innovation. Unlike traditional R&D alliances, management control within sponsored consortia seems to be more complex to address as the consortium is multilateral, the grants are public and the goals may diverge given the broad variety of organizations the consortium involves.
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Terje Berg and Dag Øivind Madsen
This paper examines the evolution of a company's management control package (MCP) over time. The overall aim is to gain a deeper understanding of internal and external factors…
Abstract
Purpose
This paper examines the evolution of a company's management control package (MCP) over time. The overall aim is to gain a deeper understanding of internal and external factors shaping a company's management control package.
Design/methodology/approach
This paper employs a retrospective single-case methodology where a company is followed over a ten-year period (2005–2015). Theoretically, the paper builds on Malmi and Brown's (2008) MCP framework while also utilizing Simons' (1994) levers of control framework as well as Abrahamson's (1991) management fashion theory.
Findings
The company's MCP evolved in several ways. First, there was a change from using an interactive to a diagnostic budget. Second, the Balanced Scorecard approach was replaced by a narrow, strong focus on shareholder value. Finally, the quality system was reduced from a system for continuous learning and improvement to a system for compliance purposes only.
Research limitations/implications
This paper offers naturalistic generalization to enable a holistic understanding of the changes to a management control package over time. The findings suggest that history matters in the design and configuration of MCPs. The MCP has evolved from being balanced and interactive, resembling Beyond Budgeting, to a diagnostic approach resembling traditional budgetary control. In 2005, the different controls were complementary and used for different purposes, while in 2015 the controls solely support the creation of shareholder value. The findings also indicate that management accounting innovations such as The Balanced Scorecard and Beyond Budgeting in this specific context may be considered fashions or even fads.
Practical implications
The findings of the paper could be useful for CFOs and other managers who are involved in the design and configuration of MCPs. The findings show that internal and external events shape how much leeway managers have in the design and configuration of MCPs.
Originality/value
The paper answers a call for more empirical studies on MCPs. By adopting a retrospective approach, the paper can provide insight into the temporal evolution of a control package.
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Shafique Ur Rehman, Hamzah Elrehail, Kiran Nair, Anam Bhatti and Abdallah Mohammad Taamneh
This paper draws on resource-based theory (RBV) to examine the impact of the management control system (MCS) package on business performance through the mediating role of…
Abstract
Purpose
This paper draws on resource-based theory (RBV) to examine the impact of the management control system (MCS) package on business performance through the mediating role of entrepreneurial competencies and the interaction role of business strategy in small and medium-sized enterprises (SMEs).
Design/methodology/approach
A total of 372 questionnaires were used in this research for analysis purposes using partial least square–structural equation modelling. Cluster sampling was used and nine states out of 16 states were selected randomly, including Kelantan, Johor, Sarawak, Selangor, Kedah, Kuala Lumpur, Penang, Perak and Sabah, because the nine states cover 84.4% of the total SMEs.
Findings
The results revealed that only cultural and administrative control has no relationship with business performance. Moreover, in the MCS package, all elements have a significant and positive influence on entrepreneurial competencies. Furthermore, business strategy (cost leadership and differentiation strategy) significantly moderates, while entrepreneurial competencies mediate between, cultural, planning, cybernetic, rewards and compensation, administrative control and business performance.
Originality/value
SMEs in Malaysia are contributing 36.6% to gross domestic product. Further, as this sector is important, less attention has been paid to this area of MCS package with business strategies to determine organisational performance. This study fills these gaps, and the recommendations and findings for further research are discussed in detail accordingly. Moreover, the findings of the current research provide guidelines for the management of SMEs.
研究目的
本文應用資源基礎理論,來探討管理控制系統套裝對經營績效的影響;研究的進行,乃透過探討企業家才能所扮演的中介角色以及在中小型企業裡,經營策略所扮演的交互作用角色。
研究的設計/方法/理念
研究共分析了372份調查問卷, 研究使用的方法為偏最小平方法PLS-SEM。使用集體抽樣法,從16個州屬中隨機抽取9個州,該9個州包括吉蘭丹州、柔佛州、砂拉越、雪蘭我、吉打、吉隆玻、檳城、霹靂和沙巴;這是因為該9個州已涵蓋整體中小型企業的84.4%。
研究結果
研究結果顯示,只有文化和行政管制是與業務績效沒有關聯的。而且,在管理控制系統套裝裡,所有元素對企業家才能均有顯著和正面的影響。再者,經營策略 (成本領先戰略和差導化戰略) 在文化、策劃、神經機械學、獎勵和補償、行政管制與經營績效之間起著顯著的緩和作用;而企業家才能則於當中起中介的作有。
研究的原創性/價值
在馬來西亞,中小型企業佔國內生產總值的36.6%。再者,這個部門至為重要,唯對管理控制系統套裝這範疇 (組織的業績如何取決於經營策略) 的關注則不足 。本研究彌補這研究的差距,因應為進一步研究仔細討論了建議和研究結果。另外,本研究的研究結果,為管理中小型企業提供了指引。
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Paula van Veen-Dirks and Anneke Giliam
Purpose – This study focuses on the relationship between local governments and public sector joint ventures (JVs). Public sector JVs are separate administrative entities that…
Abstract
Purpose – This study focuses on the relationship between local governments and public sector joint ventures (JVs). Public sector JVs are separate administrative entities that undertake public service activities on behalf of local governments. The aim of this study is to examine the vertical management control packages that are used by local governments to control the relationship with their public sector JVs.
Design/methodology/approach – Two case studies have been conducted in two public sector JVs, owned jointly by more than 20 local governments. The analysis of the two cases is informed by an integrated conceptual framework describing how transactional and relational factors influence control, trust, and risk in the context of public sector JVs.
Findings – The case studies provide a nuanced understanding of the interplay between the vertical management control packages, trust between the parents and the public sector JVs, and risks as perceived by the local governments. The case findings not only reveal how local governments struggle with adequate outcome control but also highlight how and why they rely on behavioral control. A related finding is that while the probability of poor business performance does not have a significant impact on the design of the vertical control packages, the social impact of failure has the potential to create a sense of urgency with regard to changes in the design of vertical management control packages.
Originality/value – This study adds to the literature on interorganizational relationships by providing insight into the use of vertical management control packages in the specific, but relevant, setting of public sector JVs.
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