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Book part
Publication date: 3 July 2017

Emer Curtis, Anne M. Lillis and Breda Sweeney

Despite extensive adoption of Simons’ Levers of Control (LoC) framework, there is still considerable diversity in its operationalization which impedes the coherent…

Abstract

Purpose

Despite extensive adoption of Simons’ Levers of Control (LoC) framework, there is still considerable diversity in its operationalization which impedes the coherent development of the literature and compromises its value to researchers. The purpose of this paper is to draw researchers back to the conceptual core of the framework as a basis for stable, consistent definitions of the domain of observables.

Methodology/approach

We derive the conceptual core of the framework from Simons’ writings. We highlight instability in existing operational definitions of the LoC, weaknesses in the extent to which these definitions reference this conceptual core, and inconsistencies in the restriction of LoC to formal information-based routines.

Findings

We draw on the inconsistencies identified to build the case for commensuration or a “common standard” for the framework’s use on two levels: the constructs within the framework (through reference to the conceptual core of the framework) and the framework itself (through explicit inclusion of informal controls).

Research implications

We illustrate the benefits of commensuration through the potential to guide the scope of the domain of observables in empirical LoC studies, and to study LoC as complementary or competing with other management control theories.

Originality/value

Our approach to resolving tensions arising from inconsistencies in the empirical definitions of LoC differs from others in that we focus on the strategic variables underlying the framework to define the conceptual core. We believe this approach offers greater potential for commensuration at the level of the constructs within the framework and the framework itself.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78714-530-6

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Article
Publication date: 26 June 2019

Kevin Baird, Sophia Su and Rahat Munir

This study aims to reinforce the important role of management control systems (MCSs) in managing change through adopting a unique approach to the conceptualisation of

Abstract

Purpose

This study aims to reinforce the important role of management control systems (MCSs) in managing change through adopting a unique approach to the conceptualisation of Simons’ (1995) levers of control, specifically focussing on the enabling (beliefs and interactive) and constraining (boundary and diagnostic) levers of control and empirically examining their association with management innovation and organisational performance.

Design/methodology/approach

A mail survey questionnaire was used to collect data, with the Dillman (2007) tailored design method used in regards to the development of questions, and the personalisation and distribution procedures. A total of 645 questionnaires were distributed to either the Financial Controller or Chief Financial Officer of manufacturing business units identified in the OneSource database.

Findings

The findings reveal that the use of enabling controls was directly associated with organisational performance and with three management innovation dimensions (new structures, processes and practices) with new structures positively associated with organisational performance. It was also found that the use of constraining controls was indirectly, through the extent of adoption of new management techniques, associated with organisational performance.

Practical implications

The findings have important implications for managers in respect to how they use controls to enhance innovation and organisational performance.

Originality/value

The findings highlight the importance of the use of MCS, specifically both enabling and constraining controls, in facilitating change (management innovation) and performance. Hence, the findings provide empirical evidence in support of Simons’ (1995, 2000) theoretical assertion that the levers coexist to provide benefits to organisations.

Details

Pacific Accounting Review, vol. 31 no. 3
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 28 August 2021

Rúben Silva Barros and Ana Maria Dias Simões da Costa Ferreira

Building on the growing body of research that has addressed management control systems and innovation, the purpose of this study is to assess the extent and nature of the…

Abstract

Purpose

Building on the growing body of research that has addressed management control systems and innovation, the purpose of this study is to assess the extent and nature of the use of controls in an innovative setting and how they work together unveiling the relationships and tensions amongst the Simons’ levers.

Design/methodology/approach

This study resorts to an in-depth and single case study in a company that has both a strong orientation to innovation and stable control practices in place. Evidence was collected from 32 interviews, visits to the company and internal documentation.

Findings

At the case company, it was possible to find the presence of controls according to all the levers of control. Likewise, joint effects of controls used according to interactive and beliefs approaches and diagnostic and boundary controls showed a consistent reinforcement that push the organization in a single direction. Signs of some countervailing reinforcement between these pairs were also detected, creating tensions. This in general shows that innovation can be weighed against the necessity of goal achievement taking place within fields in which the company can exploit the effort developed.

Originality/value

This study documents the collective use of controls in a context in which innovation is needed and how the combination of the levers of control with their inner workings and tensions allow the company to have a corporate environment of innovation that is friendly.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 20 July 2020

Binh Bui, Thu Phuong Truong and Ellie J. Chapple

This study aims to understand the organisational benefits of carbon-focussed management control systems (carbon MCS) under a regulatory context.

Abstract

Purpose

This study aims to understand the organisational benefits of carbon-focussed management control systems (carbon MCS) under a regulatory context.

Design/methodology/approach

The authors conduct a survey of 85 New Zealand (NZ) organisations covering different industries, sizes and compliance obligations.

Findings

The results suggest a significant direct positive impact of carbon MCS on organisations’ non-financial benefits and an indirect impact on financial benefits via non-financial benefits. The impact on non-financial benefits is strongest when a whole carbon MCS package is used rather than individual carbon controls. However, the highest impact on financial benefits are attained when only diagnostic controls are used rather than other controls or the whole MCS package. Firms in primary, manufacturing and energy sectors and those with export activities are less likely to achieve organisational benefits, while those with a compliance obligation under the emissions trading scheme are more likely to perceive such benefits.

Research limitations/implications

The study has a limited sample size (85 firms), a unique context (NZ) and coves only large firms. Further, there are no objective performance measures to validate survey responses regarding organisational benefits.

Practical implications

The findings provide a business case for managers and practitioners in formulating their strategic and MCS responses to climate change issues.

Originality/value

The authors focus on carbon MCS and adopt a wider range of carbon MCS levers than previous research. The authors discern not only non-financial benefits but also financial benefits from MCS use.

Details

Meditari Accountancy Research, vol. 29 no. 2
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 5 September 2016

Patricia Martyn, Breda Sweeney and Emer Curtis

Tremendous change has taken place in organisational structures, networks and strategy over the past 25 years. Yet, a strategic management framework developed 25 years ago…

Abstract

Purpose

Tremendous change has taken place in organisational structures, networks and strategy over the past 25 years. Yet, a strategic management framework developed 25 years ago has increased in popularity among researchers in the past decade. This paper aims to review how Simons’ Levers of Control (LOC) framework has been used in empirical research studies over the past 25 years.

Design/methodology/approach

The findings are based on electronic database searches of papers adopting Simons’ framework published in accounting and management journals.

Findings

A total of 45 empirical studies adopting the LOC framework are presented chronologically by research method. The review highlights the far greater use of the framework in qualitative compared to quantitative studies. Qualitative studies have extended the application of the framework to broader organisational issues such as sustainability, environmental accounting and inter-organisational controls. The quantitative studies have mainly sought to add to our understanding of the antecedents and outcomes of the use of interactive control systems.

Originality/value

This paper furthers our understanding of Simons’ framework by synthesising and analysing the literature over 25 years. It provides insight into the varying interpretations of the concepts underlying the framework in empirical studies including differences in operationalisation of the concepts in quantitative studies. In addition, it highlights the application of the framework beyond the original domain in which it was developed. Fruitful areas for future research are pointed to in the paper.

Details

Journal of Accounting & Organizational Change, vol. 12 no. 3
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 23 March 2010

Winnie O'Grady, Paul Rouse and Cathy Gunn

The purpose of this paper is to investigate the holistic nature of control systems to understand how they operate across organizational levels and manage change.

Abstract

Purpose

The purpose of this paper is to investigate the holistic nature of control systems to understand how they operate across organizational levels and manage change.

Design/methodology/approach

This paper takes an analytical approach using the viable system model (VSM) to assess the two main frameworks of control reported in the accounting literature.

Findings

The VSM provides an elegant framework for management control systems with explicit consideration of: multiple levels of control, communication channels, interactions with the environment, and the mechanisms for attaining balance between stability and change.

Practical implications

The evaluation of current management control systems produces specific suggestions for improving the levers of control framework

Originality/value

The VSM has not previously been aligned with management control frameworks.

Details

Measuring Business Excellence, vol. 14 no. 1
Type: Research Article
ISSN: 1368-3047

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Article
Publication date: 15 June 2012

Zahirul Hoque and Maybelle Chia

The purpose of this article is to explore how the strategic change following a corporate takeover impacted the nature and extent of use of the firm's management control

Abstract

Purpose

The purpose of this article is to explore how the strategic change following a corporate takeover impacted the nature and extent of use of the firm's management control systems (MCS), in particular its performance measurement system (PMS).

Design/methodology/approach

This paper uses Michael Porter's theory of competitive advantage and Robert Simons' levers of control framework to illustrate and interpret changes in the PMS within an Australian multinational subsidiary following its takeover by an overseas corporation. To provide empirical evidence on this issue, face‐to‐face interviews and archival data are used.

Findings

The findings reveal that the takeover resulted in changes in the firm's competitive forces (threat of potential entrants, bargaining power of buyers, threat of substitute products or services, bargaining power of suppliers, and rivalry among existing firms), and therefore the firm altered its strategy to change the rules of competition in its favor. Corresponding to the strategic change, the PMS was affected, with specific implications on Simons' four levers of control: interactive, diagnostic, beliefs, and boundary systems.

Practical implications

The findings suggest that a corporate takeover is an important phase for any organization, as it involves a change in the competitive environment and strategy, and needs to be facilitated by a change in the MCS to create and sustain superior performance.

Originality/value

This case study demonstrates how interactive and beliefs systems work together with diagnostic and boundary systems in the context of change in an organization. Past research devoted to strategic change and MCS has not documented this phenomenon.

Details

Qualitative Research in Accounting & Management, vol. 9 no. 2
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 9 July 2018

Kevin Baird and Sophia Su

The purpose of this paper is to contribute to the contingency-based literature examining the effectiveness of the intensity of control, which represents the combined use of

Abstract

Purpose

The purpose of this paper is to contribute to the contingency-based literature examining the effectiveness of the intensity of control, which represents the combined use of Simons’s (1995) four levers of control: beliefs, boundary, diagnostic use of controls and interactive use of controls. Specifically, the study examines the association between the intensity of control with multidimensional performance measures (financial, customer, learning and growth, quality and internal business processes) and organisational performance (cost, delivery and flexibility).

Design/methodology/approach

A survey questionnaire was distributed to either the chief financial officers or financial controller within 645 Australian manufacturing organisations identified in the Onesource online database. Structural Equation Modelling was used to analyse the association between the intensity of control with multidimensional performance measures, and the association between multidimensional performance measures with organisational performance. The mediating effect of multidimensional performance measures on the association between the intensity of control and organisational performance was tested using the bootstrapping with bias-correct confidence intervals method.

Findings

The intensity of control is associated with the extent of use of multidimensional performance measures with the latter found to mediate the association between the intensity of control and performance (cost, delivery and flexibility). Additional analysis suggests that the extent of use of financial and quality measures mediates the association between the intensity of controls and cost performance; the extent of use of internal process and quality measures mediates the association between the intensity of controls and delivery performance; and the extent of use of internal process measures mediates the association between the intensity of controls and flexibility performance.

Practical implications

The findings imply that management should employ a broader perception towards the use of performance measures both as a means of supporting the implementation of controls and facilitating enhanced organisational performance.

Originality/value

The study addresses the concern raised that the existing management control systems (MCSs) literature remains “piecemeal” due to the lack of recognition of the interdependency between different controls and the inability of researchers to examine MCSs as a holistic package. Specifically, this study provides insights into how the combined use of the four levers of controls and multidimensional performance measures can enhance specific aspects of organisational performance.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 6
Type: Research Article
ISSN: 1741-0401

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Book part
Publication date: 8 April 2010

Rosa Alba Miraglia and Antonio Leotta

Purpose – This study attempts to explore further the relation between performance information and trust as the main control levers in inter-firm transactional…

Abstract

Purpose – This study attempts to explore further the relation between performance information and trust as the main control levers in inter-firm transactional relationships.

Design/methodology/approach – After discussing the interaction between information and trust from different theoretical perspectives, the study examines the case of a multinational company working in the pharmaceutical industry. Material has been collected through interviews with managers and documental analyses, focusing on the relations between the company and its partner suppliers.

Findings – A theoretical systematisation is provided, distinguishing three main perspectives: (1) the transactional perspective, strictly derived from transaction cost economics assumptions, which denies any role to trust; (2) the relational perspective, which, in examining inter-firm trust, assumes similarities with inter-personal trust; (3) the institutional perspective, which, based on the sociological distinction of “trust in abstract systems” and “trust in persons”, is intended to identify institutional factors explaining management accounting changes. Case discussion shows that the institutional propositions fit the empirical evidence better, for both trust in persons and in systems are important as control levers, but their relevance differs along the value chain: while trust in persons is more relevant in the less-programmable phases, trust in systems is more developed in the more programmable one.

Research implications – The paper contributes to the literature on inter-organisational control by providing more insights into the interaction between information and trust as control levers.

Originality/value – The focus on value chain phases enables us to analyse how different control patterns or archetypes can be co-present in a given relationship.

Details

Performance Measurement and Management Control: Innovative Concepts and Practices
Type: Book
ISBN: 978-1-84950-725-7

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Article
Publication date: 4 June 2020

Kaveesha Rathnasekara and Tharusha Gooneratne

The purpose of this paper is to identify the complementariness and tensions in the use of management control systems diagnostically and interactively, using a budgetary…

Abstract

Purpose

The purpose of this paper is to identify the complementariness and tensions in the use of management control systems diagnostically and interactively, using a budgetary control example, drawing empirical evidence from a clustered firm, “Pattern On”, which is engaged in the manufacture of apparels.

Design/methodology/approach

This paper uses the qualitative methodology and case study approach. Face-to-face in-depth interviews were carried out as the main source of data collection, supplemented by an analysis of internal documents.

Findings

The field data from this study shows that both diagnostic and interactive controls appear in the clusters of PatternOn. However, the extent of use, the way they are perceived by employees, consequences, complementariness and tensions differ among the clusters. It further suggests that interactive and diagnostic controls have their own positive and negative implications on organisational activities. Therefore, rather than ruling one type as superior; what is best depends on the particular organisational circumstances.

Research limitations/implications

This paper is a useful addition to the current body of management accounting literature, particularly to budgeting and to the levers of the control framework and highlights the use of a domain theory in a research study.

Practical implications

It provides insights to practitioners regarding the simultaneous use of controls, diagnostically and interactively, and how any resulting tensions are managed.

Originality/value

Using a budgetary control example, this paper shows how controls are used diagnostically and interactively while emphasising the complementariness and tensions created by such levers. This is important as most prior research has explored diagnostic and interactive use in isolation, while budgetary control, as well as the role of domain theory has not been their focus.

Details

Measuring Business Excellence, vol. 24 no. 3
Type: Research Article
ISSN: 1368-3047

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