The role of management control systems in situations of institutional complexity

Abstract

Purpose – This study investigates in depth how decision-making of different organisational members is shaped by various management control systems (MCSs) that reflect different institutional logics, how the entire organisation deals with the arising institutional complexity and which role different management controls as a system play in such situations. Design/methodology/approach – A case study was conducted on a German Mittelstand firm whose MCSs were shaped by three different logics over time: a family logic, a stakeholder logic and a shareholder logic. Findings – This paper shows how different actors of an organisation confronted with institutional complexity used selective coupling of different MCS components and compartmentalizing MCS components to deal with clashing institutional logics. Thereby, it was possible for the actors to balance different sub-communities within the firm that were shaped by conflicting but yet complementary logics that were required for organisational survival. Research limitations/implications – This study contributes to the understanding of how an MCS can be exploited for organisational structural responses to multiple logics. Due to this research design, the present study deals with challenges of ex post rationalization. Practical implications – The results show options for organisational leaders to deal with different kind of worldviews (i.e. logics) that shape employees’ behaviour. Particularly, this paper explains how leaders can restructure their MCSs to influence human behaviour in times of radical change. Originality/value – This paper contributes to the literature on MCSs by showing what role MCSs play in structural responses to institutional complexity.

Constructing institutional performance: a multi-level framing perspective on performance measurement and management

“…Support for the conjecture that institutional complexity has a major impact on the evolution of contradictory PMM practices can also be summoned from research that relates the development of such practices to institutional logics (Rautiainen and Järvenpää, 2012, Schäffer et al 2015, Carlsson-Wall et al 2016, Beer and Micheli 2017, Rautiainen et al 2017. Much of this research shows that conflicting constituency demands, that underpin competing logics, breed contradictory PMM practices.…”

“…Evidence of such a pattern has been found in various parts of the public sector, including local government (Rautiainen and Järvenpää 2012) and law enforcement (Rautiainen et al 2017), where growing political demands for cost containment privilege a narrow set of efficiency-centred goals and performance metrics over the ones linked to a broader range of competing constituency demands. Not surprisingly, perhaps, Schäffer et al (2015) show that such tendencies to confine PMM practices to a single set of narrowly focussed, financial goals and performance metrics can be even more pronounced in private sector, for-profit organisations exposed to increasing demands for returns to shareholders. Examining the role of such practices in a German firm, that underwent a shift from family to private equity ownership, they observed how this development suppressed extant PMM practices recognising a broader range of constituency demands.…”

Utilização da folga organizacional para o alcance dos objetivos financeiros e não financeiros de uma empresa familiar

“…Esses aspectos têm recebido pouca atenção na literatura de folga. A maioria dos estudos desenvolvidos sobre a temática investigou esse fenômeno em empresas listadas na bolsa, em que predomina o modelo de gestão mais impessoal, formal e burocrático, aderente a uma perspectiva tradicional, pautada na racionalidade dos agentes, e foco no desempenho de curto prazo (Zelleweger & Astrachan, 2008;Schäffer et al, 2015).…”

“…Práticas baseadas em metas de rentabilidade, sistemas de incentivos dos gestores e funcionários. Fonte: Adaptado de Thornton et al (2005) e Schäffer et al (2015).…”

“…A pesquisa predominante sobre folga organizacional na área de controle gerencial é desenvolvida numa lógica do shareholder (George, 2005), com raízes na teoria da agência (Jensen & Meckling, 1976). A separação entre propriedade e gestão e o foco na maximização do retorno dos acionistas são destacados como pressupostos desta vertente (Schäffer, Strauss & Zecher, 2015). Este recorte limita a investigação da folga à uma configuração específica de estrutura, mecanismos, procedimentos e ritos, que não necessariamente se aplica a todas as formas de organização.…”