How a multiple orientation of control reduces governance failures: a focus on monastic auditing

Abstract

This paper considers multiple control systems at the organizational level and argues for a nuanced and multifaceted approach for internal governance. For this undertaking, we look at a little-examined control and auditing instrument, the formalized audit procedures of Roman Catholic orders. These so-called visitations are one important pillar in the monastic governance system to counter aberrations. Utilizing surveys and interviews, we examine 106 Roman Catholic religious communities in Austria, Germany and Switzerland, and connect these visitations procedures with rule violations and sexual abuse cases. We argue that communities unaffected by scandals and rule violations rely strongly on process and clan control to address inefficiency and misconduct; whereas, affected communities focus more on business issues. We caution against the trend of relying predominantly on output-based processes while suggesting a balance between different types of control systems. Furthermore, we enhance the current discourse by considering implementation procedures of control. The religious orders attach great importance to the way control measures are carried out. To steer the behavior of their members, many successful orders even complement controls with personal support and identity strengthening.

The Mediated Effect of Formal and Informal Control on Governance Forms

“…Langfield-Smith and Smith (2003) affirmed that informal control is present in every organization simultaneously with formal, explicit controls, whether as outcome controls (market) or behavior controls (hierarchy); and Tessier and Otley (2012) propose that social and technical controls are part of all the various control systems of an organization. Also, Inauen, Osterloh, Frey, and Homberg, (2014) state that management control systems can be seen as packages, i.e., they relate to contingency variables depending on the balance between different types of control systems. Formal and informal control are complementary mechanisms (Calabrò & Mussolino, 2013) and firms adapt their control structure to deal with contingency characteristics (Jokipii, 2010).…”