Ideology vs. Formal Systems as a Control Mechanism: A Case Study

Abstract

This paper applies Pettigrew's 'context, content, process' model to evaluate, using a case study approach, the use of management control systems (MCS) for FDI decisions. The organisational control mix included both formal, financially quantifiable information and explicit references to the company's ideology. The context of our study is the external and internal environment of the FDI of a Greek manufacturing company which invested in the Balkans during the 1990s. The company is characterized by a very powerful CEO, who is also the majority shareholder, and an innovation and quality ideology. The content of the change is the FDI itself while the process refers to the usage of MCS in the organizational environment. The analysis illustrates that conflict and political behaviour emerge during strategic decision-making tasks in response to changing environmental conditions; sectarian demands are generated during those decision processes and power is mobilized through the control of resources and references to the company ideology. Dominant actor groups try to bring about their favourite decision outcomes, by affecting other participants' perceptions with reference to the company ideology. The paper concludes that the change of the business affected by the FDI increased the influence of both the formal MCS and those who controlled them.