Search results

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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).

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.

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.

The authors show how different combinations of MCS elements form a package, mediating EO, which can enable high performance.

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.

The purpose of this paper is to investigate how the management control system, the bank’s control package, influences opinion about the usefulness of risk measurement (RM) in different control contexts before and after a financial crisis, to understand what influences the usefulness of enterprise risk management (ERM) manifested in RM.

The study is based on semi-structured interviews in 2000-2010, with senior bank managers of two international banks (Bank A and Bank B) – both ranking among the top 100 in the world but differing structurally and culturally.

The two banks took opposite trajectories. Bank A went from high to low expectations of usefulness; Bank B went from low to high expectations. The different attitudes toward RM exhibited by Bank A and Bank B are explained by differences in their control packages, manifested by technocratic control and socio-ideology.

This study reveals that there are not merely different degrees of RM usage in the two banks but that they also show two diverting trajectories. Given this finding, the significance of the organization structure and its control packages (especially the alignment between these two factors) is analyzed to find a plausible explanation for the different experiences of senior managers toward the usefulness of RM. This study contributes to ERM research and to the contingency theory of management accounting.

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

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

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.

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.

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

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.

The purpose of this study determines how environmental management control system (MCS) packages influence ecological sustainability and sustainable performance through the mediating role of environmental strategies. Furthermore, this applies organizational capabilities as moderating variables between environmental strategies, ecological sustainability and sustainable performance in a sample of 373 construction firms.

The authors apply quantitative questionnaire data from construction firm representatives (from project, sales and construction managers and contract managers, executive directors and engineers) to structural equation modeling and SmartPLS for our analysis.

The results demonstrate that recourse to environmental MCS packages significantly influence ecological sustainability, sustainable performance and environmental strategies. Additionally, environmental strategies and organizational capabilities significantly influence ecological sustainability and sustainable performance. Moreover, environmental strategies mediate between environmental MCS packages, ecological sustainability and sustainable performance. Organizational capabilities significantly moderate the relationship between ecological sustainability and sustainable performance.

This research highlights the issue of how the management of construction organizations deploy environmental MCS packages, organizational capabilities and business strategies to measure ecological sustainability and improve their sustainable performance. This study fills a gap in the literature and facilitates the management of construction organizations in strengthening their internal resources in terms of environmental MCS packages, environmental strategies and organizational capabilities able to help improve their ecological sustainability and sustainable performance.

There are few studies building theoretical frameworks for incorporating environmental MCS packages, organizational capabilities, environmental strategies, ecological sustainability and sustainable performance into a single study. Although the influence of various types of intangible resources on ecological sustainability and sustainable performance receive considerable examination in the literature, there is a dearth of attention paid to understanding the role of environmental MCS packages, environmental strategies and organizational capabilities in determining the ecological sustainability and sustainable performance of construction organizations.

The organizations focus on environmental factors as stakeholders exert pressure to reduce the environmental influence arising from production tasks. This study aims to see the influence of the environmental management control system (MCS) package and perceived environmental uncertainty on green performance with the mediating role of green dynamic capabilities in Pakistani manufacturing organizations. Moreover, this study aims to see the moderating role of investment in environmental management between green dynamic capabilities and green performance.

The partial least square structural equation modeling technique is used to test hypotheses. The data was collected through questionnaires using simple random sampling, and a total of 404 questionnaires were used in the final analysis. The data was collected from September 2021 to November 2021. Multiple regression analysis followed to see the influence of environmental MCS package, perceived environmental uncertainty, green dynamic capabilities and investment in environmental management on green performance.

Environmental MCS package, green dynamic capabilities and investment in environmental management are positively related to green performance. Despite this, perceived environmental uncertainty is negatively related to green performance. Moreover, green dynamic capabilities significantly mediate between environmental MCS package, perceived environmental uncertainty and green performance. Finally, investment in environmental management significantly moderates between green dynamic capabilities and green performance.

This research covers vital issues that how top management uses the environmental MCS package, perceived environmental uncertainty, green dynamic capabilities and investment in environmental management in determining green performance.

This research adds value to the existing literature by focusing on predictors that determine green performance. This pioneering study observes the influence of environmental MCS package and perceived environmental uncertainty on green performance and green dynamic capabilities as mediators by applying natural resource-based view theory. Moreover, investment in environmental management is used as a moderator between green dynamic capabilities and green performance. Finally, this study can benefit management, industrial policymakers and academicians.

This paper aims to contribute to the construction of a framework that makes risk management (RM) more effective and visible. This is done by investigating how the concept of “risk” is included in various activities in the management accounting and control (MA&C) system.

A cross-sectional analysis of 72 Danish organisations extracted from an alumni database is conducted together with a factor analysis and a partial least squares structural equation modelling approach.

The authors find four latent variables, namely, expectation, attitude, subjective norms, processes and culture, which all have risk activities in MA&C as the depending variable. Attitude seems to be a powerful antecedent, whereas supporting processes and culture play a crucial partial mediator role for the inclusion of risk.

The findings add to the understanding of the interrelationships between risk and MA&C. An important caveat is that the authors use soft and self-reported data for the dependent variable and for the various independent variables.

The authors propose a dynamic and holistic framework for the analysis of risk. This framework eliminates the limitations found in many prior studies that have neglected the interrelated importance of attitude and supporting processes and culture. The results of this study also provide valuable insights for managers who wish to consider and to explore the interrelations of a number of antecedent risk issues that influence different risk activities in MA&C.

This paper is one of the few papers that assess the impact of different risk issues on firms’ different MA&C activities by including the theory of planned behaviour. The potential key role that supporting processes and culture play as partial mediators for risk inclusion is particularly interesting. The research extends prior research by constructing a framework that makes that implementation of RM processes in the MA&C system more effective. It also proposes a validation process that can lessen the model risk possible.

Management control system, corporate performance management, budgeting, planning, multinational organization.

Graduate and executive education level management programs.

General Motors India (GMI) operations established in 1994 and grew steadily, unlike her startling global performance. In 2007, GMI unveiled its new vision and mission for aggressive growth, expansion and establishing presence across all segments. With increased globalization of General Motors Corporation (GMC), the strategic importance of GMI for sourcing was envisaged. The case describes the organization structure and management control systems at GMI and the changes onto new strategy and vision. The case narrates the unique futures of its control systems such as dual reporting and matrix organization, business plan deployment (BPD), budgeting, performance measurement and compensation system.

The financial planning and control system in a large decentralized multinational subsidiary. Typical organizational responsibility structure and administrative and functional, dual-control mechanism. Appreciate strategic planning and budgeting process and how the strategy is cascaded through multiple key result areas and the BPD board. The business environment and strategy dynamics and its relationship with the prevalent control system. Opportunity for students to speculate the changes in control system in wake of radical changes in the business and company environment. Opportunity to introduce Simmons (1995) levers of controls and management control system package.

Teaching notes.