PurposeThis study analyses the link between product/service innovation, partnerships and Managerial Control System (MCS). Particularly, it aims to analyse empirically the role of MCS in supporting the innovation partnership successful functioning and management.Design/methodology/approachThe sample of this study consists of 106 Italian manufacturing firms belonging to the sectors of the Italian economy with the largest number of registered patents according to the European trend chart on innovation.FindingsThe results show that MCS may play a key role in reducing risks and lowering the likelihood of failure of innovation partnerships. Particularly, the authors found a positive correlation between the use of informal control mechanisms and a partnership’s successful performance. Moreover, among informal control, the findings show that trust is the only true informal mechanism that can guarantee a successful collaboration. The results of this study may offer relevant implications for practitioners. With regard to the control of the partnership’s activities, the initiatives and creativity of those who are actively involved in the innovation process should not be inhibited; therefore, stifling them with strict rules and procedures would be ineffective but if a firm is not willing to give up formal control mechanisms altogether because it does not believe that a trust-based coordination is sufficiently reassuring, it should opt for “weak”, albeit formal, control mechanisms based on a shared production and management of plans and reports, thus ensuring a perfect information symmetry among different partners.Originality/valueNotwithstanding the different opportunities provided by partnerships and strategic alliances to support there is a growing body of evidence of a high failure rate in such organisational forms. One of the causes cited in the literature is the high level of risk associated with alliances as compared to internal development of innovation. The risks mainly arise from the difficulties to obtain cooperation with partners that might have different objectives, and from the potential opportunistic behaviour of some of the partners. This is particularly true in innovation networks where the uncertainty of producing an interesting result is very high and the investments that the partners make are considerable. In this context, MCS could play a relevant role in reducing the risks and decreasing the likelihood of failure.
Management control in SMEs and external consultantsThe issue of management control in small and medium-sized enterprises has long been the subject of scientific debate, as well as a key point of professionals' interest. Starting from the recognition of the role played by the latter, this paper aims to investigate the type and level of dissemination of management control tools in SMEs by adopting the perspective of external professionals, namely, Public Chartered Accountants and Accounting Experts who are called to support the entrepreneurs in implementing these tools. The analysis of prior literature allowed us to acknowledge the gaps in the diffusion of management control systems among SMEs and the weaknesses that affect the consulting services provided by small accounting practitioners. Therefore, to further deepen this area, still under investigated, we performed an exploratory survey on a territorially circumscribed sample (Central-Southern Italy) of professional accountants registered in the National Order. Findings point out a professional approach mainly focused on the provision of traditional services (i.e. accounting and tax services), despite the awareness of the need to promote a broader consulting action that includes the adoption of appropriate management control tools, thus contributing to enhance the managerial culture of SMEs.
The paper aims to highlight the characteristics of a Managerial Control System (MCS) that can better support innovation processes. The topic is not new, but it has been analysed by previous literature mostly from a theoretical perspective. There is, instead, a lack of empirical evidence supporting the different approaches. This study, through the analyses of a sample of Italian firms, tries to contribute in this direction. The sample of this study was chosen from Italian manufacturing firms operating in the sectors with the largest number of registered patents according to the European innovation trend chart. The results show that MCS can enhance product/service innovation but can also inhibit it depending on the role the MCS fosters. MCS can be an obstacle for innovation when limited to pursuing diagnostic functions. On the contrary, product/service innovation is positively associated with an interactive role of MCS. These, although necessary to evaluate business performance, become effective innovation drivers only when they are proposed to stimulate coordination, communication, and learning inside the groups devoted to innovation
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