The contingent nature of complementarity between results and value-based controls for managing company-level profitability: A situational strength perspective

Gerdin, Jonas; Johansson, Tobias; Wennblom, Gabriella

doi:10.1016/j.aos.2019.101058

Cited by 32 publications

(52 citation statements)

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“…The answer is important for several reasons. First, it seems that despite considerable research on the subject, knowledge of the influence of environmental characteristics on management controls can be elaborated onboth in terms of changes in control design and the impact of different environmental characteristics (Gerdin et al, 2019;Granlund and Lukka, 2017;Otley and Soin, 2014). Second, it can be argued that the rate of environmental change is increasing (Otley, 2016) and events that exert large-scale influence on environmental characteristics happen more frequently.…”

Section: Introductionmentioning

confidence: 99%

Management controls and crisis: evidence from the banking sector

Ríkharðsson

Rohde²,

Christensen³

et al. 2021

AAAJ

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PurposeThis paper investigates the use of management controls when environmental uncertainty and hostility increase abruptly. Specifically, it explores this in the context of the 2008 financial crisis in six banks located in two countries.Design/methodology/approachThe paper is based on 26 qualitative interviews with selected managers employed by the six banks. Eight interview guides were developed based on the typology of controls in Malmi and Brown (2008). Respondents explained which changes in management controls occurred after the crisis.FindingsBoth organic and mechanistic management controls were mobilized at the same time to deal with the change. The use of controls played three main roles: (1) guide and control behavior, (2) change internal and external perceptions and (3) discharge accountability. Finally, control use during a crisis evolves as individual managers design and implement controls. There is no “grand design” rationally guiding the design of the overall system of controls.Originality/valueThe use of management controls in dealing with an increase in uncertainty and hostility cannot be labeled either organic or mechanistic, but will depend on the specific type of change in environmental characteristics. Management controls evolve by interaction with outside actors, as well as internal techniques.

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Section: Introductionmentioning

confidence: 99%

Management controls and crisis: evidence from the banking sector

Ríkharðsson

Rohde²,

Christensen³

et al. 2021

AAAJ

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“…The identified mechanisms also contribute to research and provide new insights into the dynamics of MCSs' interrelationships in practice (Grabner and Moers, 2013; Pfister and Lukka, 2019) and what it means to achieve a balance and fit between MCSs (Friis et al , 2015; Van der Kolk et al , 2020). Finally, empirical studies on MCSs have primarily focused on the interplay between two types of MCSs, such as value-based and result-based controls (Gerdin et al , 2019), technocratic (administrative) and socio-ideological controls (Alvesson and Kärreman, 2004), or accounting and structural controls (Bedford et al , 2016). Our study contributes to the research on interrelationships between MCSs by illustrating how the functioning of a broad range of MCSs converges on PI.…”

Section: Discussionmentioning

confidence: 99%

“…Interrelations among MCSs that involve conflicts can lead to tensions (i.e. tension complexity) (Van der Kolk et al , 2020), thereby impairing the “fit” (Gerdin et al , 2019), “internal consistency” (Grabner and Moers, 2013), or “balance” (Van der Kolk et al , 2020) among the MCSs.…”

Section: Theory: Multiple Management Control Systems For Productivity Improvementmentioning

confidence: 99%

“…Third, the paper contributes to MCS research in more general terms (e.g. Malmi and Brown, 2008; Grabner and Moers, 2013; Gerdin et al , 2019; Van der Kolk et al , 2020). In particular, our study contributes to case study MCS research that already focuses on MCS interrelationships and their construction in other types of organisational setting (e.g.…”

Section: Introductionmentioning

confidence: 99%

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Productivity improvement and multiple management controls: evidence from a manufacturing firm

Güldenpfennig

Hald

Hansen

2021

IJOPM

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PurposeThe present paper explores the multiple management control systems (MCSs) involved in productivity improvement (PI) in manufacturing and how they interrelate. Research has largely neglected the multiplicity and interrelationships of these MCSs.Design/methodology/approachDrawing on an abductive case study approach, the authors collected empirical data from a global automotive supplier that produces complex systems for passenger cars. Recent PI activities are analysed to identify and explain the interrelationships among the multiple MCSs affecting these activities.FindingsThe study shows how a broad range of MCSs are involved in PI. The study identifies and explores both complementary and conflicting relationships among the MCSs and demonstrates how managers rely on a set of mechanisms to alleviate tensions and strengthen complementarities among these MCSs.Research limitations/implicationsAs this paper is based on a single case study, future research can contribute further generalisations (analytical and statistical) with respect to the MCSs involved in PI, how they are interrelated and which mechanisms managers use to manage their interrelationships.Practical implicationsManagers seeking to control and improve productivity should consider the complete control package and its interrelationships instead of focussing on each MCS separately.Originality/valueThe present paper contributes to the knowledge of the multiplicity and interrelationships of MCSs involved in PI and the type of managerial work required to manage their interrelationships.

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“…One strand of literature argues that management control systems should be studied as a 'package' (Malmi and Brown, 2008), meaning that the various parts of the management control system do not operate in isolation, but interact with each other (Bedford et al, 2016;Malmi and Brown, 2008). In general, the rationale for studying "management control packages" (MCP) is to understand how the complementarity of controls may, or may not, affect organizational outcomes (Akroyd et al, 2019;Gerdin et al, 2019). Fundamentally, the MCP should contribute to company performance either via supporting decision making (Labro, 2015) or by guiding the behaviour of subordinates with the aim of achieving organizational goal alignment (Zimmerman, 2001(Zimmerman, , 2014.…”

Section: Introductionmentioning

confidence: 99%

The evolution of a management control package: a retrospective case study

Berg

Madsen

2020

JAAR

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PurposeThis paper examines the evolution of a company's management control package (MCP) over time. The overall aim is to gain a deeper understanding of internal and external factors shaping a company's management control package.Design/methodology/approachThis paper employs a retrospective single-case methodology where a company is followed over a ten-year period (2005–2015). Theoretically, the paper builds on Malmi and Brown's (2008) MCP framework while also utilizing Simons' (1994) levers of control framework as well as Abrahamson's (1991) management fashion theory.FindingsThe company's MCP evolved in several ways. First, there was a change from using an interactive to a diagnostic budget. Second, the Balanced Scorecard approach was replaced by a narrow, strong focus on shareholder value. Finally, the quality system was reduced from a system for continuous learning and improvement to a system for compliance purposes only.Research limitations/implicationsThis paper offers naturalistic generalization to enable a holistic understanding of the changes to a management control package over time. The findings suggest that history matters in the design and configuration of MCPs. The MCP has evolved from being balanced and interactive, resembling Beyond Budgeting, to a diagnostic approach resembling traditional budgetary control. In 2005, the different controls were complementary and used for different purposes, while in 2015 the controls solely support the creation of shareholder value. The findings also indicate that management accounting innovations such as The Balanced Scorecard and Beyond Budgeting in this specific context may be considered fashions or even fads.Practical implicationsThe findings of the paper could be useful for CFOs and other managers who are involved in the design and configuration of MCPs. The findings show that internal and external events shape how much leeway managers have in the design and configuration of MCPs.Originality/valueThe paper answers a call for more empirical studies on MCPs. By adopting a retrospective approach, the paper can provide insight into the temporal evolution of a control package.

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The contingent nature of complementarity between results and value-based controls for managing company-level profitability: A situational strength perspective

Cited by 32 publications

References 95 publications

Management controls and crisis: evidence from the banking sector

Management controls and crisis: evidence from the banking sector

Productivity improvement and multiple management controls: evidence from a manufacturing firm

The evolution of a management control package: a retrospective case study

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