Executing Management Control through Decision Technology

When competition is tough and resources are scarce, management may seek ways to systematise their decision-making process so as to control their operations and resource allocations. Yet little is known about how decision technology is used as a means to administer managerial control. This research investigates how an organisation used decision technology to execute management control to manage the work activities of their employees in a group decision-making setting. It assesses the impact decision technology has had at the firm level focusing on the transformation of the formalised decision process and the individuals involved. The research is carried out using case study, where the data is collected from multiple sources including passive observations in board meetings and functional team meetings, and interviews with decision makers of different hierarchal levels. We found that the decision technology not only enabled management to execute management control vertically across different hierarchal levels but also horizontally over their fellow peers. We also learned that product development decisions that were previously avoided (due to fear of project failure) are now made. This is noted from the increased number of radical (for the firm) new products commercially launched

Core values as a management control in the construction of “sustainable development”

AcceptedArticleThis is the author's post-print version of a manuscript accepted for publication in Qualitative Research in Accounting & Management (2015) Vol 12 Issue 2 doi: 10.1108/QRAM-04-2015-0040Purpose: This paper examines a management control constructed by senior managers, a core value focused on sustainability, as it travels through time and space. The criticality of sustainable development suggests the need to understand the effects that core values have on organisational actions. Design/methodology/approach: We utilise a case study methodology carried out at a multinational organisation. Our analysis was informed by actor-network theory which allowed us to place the organisation’s sustainability focused core value at the centre of our research. Findings: We found that management control, in the form of a sustainability focused core value, took on an active role in the case organisation. This enabled the opening of space and time that allowed actors to step forward and take action in relation to sustainable development. We show how the core value mobilised individual actors at specific points in time but did not enrol enough collective support to continue its travel. The resulting activities, though, provided a construction of sustainable development within the organisation more in line with traditional profit seeking objectives rather than in relation to sustainability objectives, such as inter- and intra-generational equity. Research limitations/implications: These findings suggest possibilities for future research that examines the active role that management controls may take within sustainable development. Originality/value: This paper shows the active role a management control, a sustainability focused core value, took within an organisation. This builds on the research that examines management control in relation to sustainability issues and sustainable development as well as the literature that examines core values

The network effects of core values on management controls

Paper presented at American Accounting Association Management Accounting Section Conference 2013, New Orleans, 10-12 Jan 2013Simons’ (1995b, 2000) levers of control have become one of the most prominently utilised management control system frameworks in the accounting literature. In this paper we focus on core values, which guide and motivate an organisation, an area of the framework not examined in the accounting literature. Specifically we examine the process through which a new core value develops. We also show how this process is influenced by and acts upon the other levers of control. We highlight how this process initially involves few actors, little complexity and creates a descriptive definition for the core value. Based on this descriptive definition more actors become involved, resulting in more complexity and focuses on these actors trying to develop an understanding of the practical relevance of the new core value. The process of developing the core value and the search for practical relevance necessitates the creation and transformation of other management controls. These management controls in turn change the core value and other actors within the process. The process of search and discovery provides belief control through embedding elements of the core value in the management controls that were created or transformed. While the core value may be displaced its effects on other controls remain in place thus showing how and why controls embody both technical and social elements

The Temporal Effect of Organizational Controls in an Uncertain Environment

In this paper we explore the effect of organizational controls in an uncertain environment by focusing on their temporal dimension. We do this by examining a product innovation setting, which is difficult to control due to fast changing customer preferences and competitor actions. We focus on how the timing of two organizational controls – accounting-based budgets and operational-based roadmaps – influence mangers’ actions. We show how these controls creates a space for the knowledge of managers to be made actionable thus influencing the tempo (timing and intensity) of product innovation activities. We carry out this research using a case study of Buffalo, a Japanese firm who is a market leader in the highly competitive computer peripherals market. Case study data was collected at Buffalo over a two-year period and included observations, interviews and company documents. We follow the situated practices of marketing managers who were accountable for the accounting-based budgets and product development managers who were accountable for launching products according to the operational-based roadmaps. At the start of the financial year budgets and roadmaps were linked as managers developed them simultaneously. During the year the budgets and roadmaps became disconnected when product development projects were delayed or when there were changes in the market. This opened up a space for the knowledge of managers to become actionable, thus influencing the tempo (timing and intensity) of product innovation activities. This facilitated organizational control and empowered managers to respond quickly to their highly competitive and uncertain environment

Executing management control through decision technology

When competition is tough and resources are scarce, management may seek ways to systematise their decision-making process so as to control their operations and resource allocations. Yet little is known about how decision technology is used as a means to administer managerial control. This research investigates how an organisation used decision technology to execute management control to manage the work activities of their employees in a group decision-making setting. It assesses the impact decision technology has had at the firm level focusing on the transformation of the formalised decision process and the individuals involved. The research is carried out using case study, where the data is collected from multiple sources including passive observations in board meetings and functional team meetings, and interviews with decision makers of different hierarchal levels. We found that the decision technology not only enabled management to execute management control vertically across different hierarchal levels but also horizontally over their fellow peers. We also learned that product development decisions that were previously avoided (due to fear of project failure) are now made. This is noted from the increased number of radical (for the firm) new products commercially launched

The roles of management control in a product development setting

The purpose of this paper is to examine the ways in which management control is enacted in a product development setting, to provide new insights into the different roles that control can play in this context. A nine-month, in-depth field study was carried out at a subsidiary of an Australasian multinational firm which operates in the consumer foods industry. A participant observation approach was used to collect field notes and documents from the organisation, which were analysed through the lens of ethnomethodology. The results indicate that the role of management control during product development is mainly focused on reducing uncertainty at each stage and promoting goal congruence at the decision gates. The authors argue that this helps explain why management control has a positive effect in a product development setting. The implication of this finding is that the role of management control changes during product development due to the involvement of different organisational members (communities of practice) and the activities that they carry out. This helps build a more holistic understanding of control in product development. As this is a field study of a specific company, the findings are not generalizable to other companies or settings. Future research needs to investigate other possible roles which management control may play in this context. The paper extends the research in this area by showing how and why management control can take on multiple roles in practice. © 2011, Emerald Group Publishing Limite

Management control systems and the strategic management of innovation

Purpose. This paper aims to understand the strategic management of innovation by examining the effect that management control systems (MCS) have on innovation activities during the strategic change process. Design/methodology/approach. A case study was carried out at an innovative company as they undertook a strategic change from closed innovation to open innovation. Simons’ levers of control was used to frame the ways in which MCS were designed and used by managers and the effect MCS have on the innovation activities of organization members. Findings. The findings indicate that while managers designed and used MCS to support a drive toward open innovation, organization members did not change their innovation activities. Instead, the findings show that new MCS enabled improvements to their closed innovation strategy. This led to a decrease in the time taken to develop new products, which resulted in increased customer satisfaction, which contributed to the achievement of organizational goals. Originality/value. By focusing on the relationship between MCS and innovation activities in the strategic change process, the paper sheds new light on the ability of MCS to change the innovation activities of organization members. Even though the innovation activities at our case company did not change the interactions between the MCS enabled organizational goals to be achieved as they provided the necessary information infrastructure and motivated goal congruence

The governance of inter-firm co-development projects in an open innovation setting

Purpose: The purpose of this paper is to examine the governance of inter-firm co-development in an open innovation setting and show how a stage-gate product development process can be used to support this relationship. Design/methodology/approach: The authors adopt a qualitative case-study approach informed by ethnomethodology. Data were obtained via semi-structured interviews and document analysis. Findings: They found that in an open innovation setting – where the producing partner relies on a research partner for all product development activities – a stage-gate product development process can act as a governance mechanism, as it enables the development of trust and cooperation which supports the co-development relationship. Research limitations/implications: The implication of this finding is that a stage-gate process can be a flexible governance mechanism, which can adapt over time in relation to the needs of the co-development partners in an open innovation setting. This also lays the groundwork for future research to explore the applicability of this tool in other settings, e.g. outsourcing arrangements as well as help guide the design and implementation of future governance mechanisms. Originality/value: In the context of accounting research, this paper helps practitioners and academics understand how a stage-gate process can be used as a governance mechanism to manage and control co-development projects in an open innovation setting

The MCS package in a non-budgeting organisation: A case study of Mainfreight

Purpose - Budgets are commonly viewed as a central component of management control systems (MCS). The beyond budgeting literature argues that managers can develop other controls to replace budgets. The purpose of this paper is to examine the MCS package of an organisation which has never in its history had a traditional budget. Design/methodology/approach - The authors carry out an ethnomethodology informed case study at Mainfreight, a large multinational logistics company headquartered in New Zealand. Data were collected from interviews with managers and accountants, internal company documents, published corporate histories, a company presentation, the corporate Web site and site visits. Findings - The authors found that Mainfreight's MCS package was explicitly designed based on cultural and administrative systems which supported the planning, cybernetic and reward systems managers used to monitor key drivers of short-and long-term performance with a focus on profitability. Research limitations/implications - The implication of the finding is that a more holistic view of the MCS package is necessary to understand how control is achieved within organisations that have moved beyond budgeting. Practical implications - The authors show that organisations can operate without traditional budgets and still maintain a high level of control by developing appropriate cultural and administrative control systems that are internally consistent with their planning, cybernetic and reward systems. Originality/value - The scarcity of organisations that have never had budgets limits opportunities to investigate an MCS package intended to function without budgets. This unique case setting reveals the design of an integrated non-budgeting MCS package

Imprinting founders’ blueprints on management control systems

In this paper we seek to understand the influence of founders on the design and use of management control systems (MCS) through a theoretical lens known as imprinting. The organizational literature shows that founders are a source of imprinting, since their unique background informs the blueprint for their organization, which can affect patterns of organizational design and development. We undertake a case study of an innovative early-stage growth-focused manufacturing firm established by founders who espoused a commitment blueprint (one of five possible blueprints). Founders who have a commitment blueprint aim to establish a workplace where employees feel an intense emotional attachment to each other and the firm and are passionate about the firm's vision. We examine how founders’ commitment blueprint influences the design and use of MCS. We show that the imprint of a founder's commitment blueprint is reflected in the design and use of cultural controls and employee selection to establish a workplace that fosters an intense emotional attachment and identification comparable to a family's, with an organizational culture where employees are committed and passionate about the firm. While these controls have previously been shown to make up the central components of a commitment blueprint, our results reveal a reliance on cultural controls and employee selection is not exclusive, but supported and reinforced through managers’ design and use of personnel controls, results controls, action controls, penalties, and informal controls. We also find a reluctance to implement controls that are seen as bureaucratic, since it is felt they would negatively influence the organizational culture