Management control systems in innovation companies: a literature based framework

Personnel- and action control in gazelle companies in Sweden

“…While personnel control (H1) strongly reflecting freedom and independence of work received significant support, it was more perplexing that these gazelles seem to be less supportive of the idea that action control depends on innovativeness (H2). We know that action control is less applicable to uncertainty and change, as well as requiring strong management skills (Haustein et al 2014). Earlier research has also indicated that personnel control may work differently for different organizations (Kolk and Schokker 2016) and that the more complex an organization is, the more different and specific controls are needed (Haustein et al 2014;Otley 1994).…”

“…We know that action control is less applicable to uncertainty and change, as well as requiring strong management skills (Haustein et al 2014). Earlier research has also indicated that personnel control may work differently for different organizations (Kolk and Schokker 2016) and that the more complex an organization is, the more different and specific controls are needed (Haustein et al 2014;Otley 1994). Gazelle companies in the early stages of becoming a larger organization with a complex structure may still be more strongly oriented by personnel control tied to operations and aligned with the corporate strategy, future mission, and goals.…”

“…Performance and performance goals can reflect organic growth (Geroski et al 1997), employees, sales, profits (Ittner and Larcker 1998), and the number of new products (Ryzhkova and Pesämaa 2015) and is often a result of the relative success of operations in specific markets (Ittner and Larcker 2003), industries (Janssen et al 2011), and companies' ability to position their products in the market (Cosenz and Noto 2015). The latter process involves both refining current products and developing new products towards commercial ends (Haustein et al 2014). It is often referred to as innovativeness, while the ultimate outcome in the market is the innovation (Janssen et al 2011).…”

“…Haustein et al (2014) found in their review that innovative companies are negatively related to results and action control but positively related to personnel control. Their inference was thus that innovative companies are determined by more creative and cultural leadership processes (Haustein et al 2014) than the strict administrative manuals sometimes found in action control (Abernethy and Brownell 1999). Furthermore, their study expects that innovative companies tailor their performance measures to obtain venture and public funding.…”

“…These commercial growth aspects have several implications for controls. A body of literature has emphasized the significance of growth for small (St-Jean et al 2008) and particularly technology-oriented firms (Haustein et al 2014). Many firms aspire to benefit rapidly, often through franchising, from their first-mover advantage (Michael 2003) or to grow faster and stay ahead of their competitors through strategic acquisitions.…”