Management control systems and strategy change in buyouts

Abstract

The impact of management buy-outs (MBO) on strategy and management control systems (MCS) is little understood. Previous research by Jones (1992) focused on efficiency-enhancing buy-outs that were a feature of the early development of the market. However, MBOs are heterogeneous and more recent developments have involved ownership changes that stimulate entrepreneurial practices. The novel contribution of this paper is to use Simons' (1995) classification of beliefs systems, boundary systems, diagnostic and interactive control systems to extend Jones’ study to these newer forms of MBO. Within-case analysis and cross-case comparisons from four buyout firms are used to capture the interaction between management control systems and competitive strategy formulation, implementation and modification. This evidence supports arguments that buy-out managers undertake efforts in balancing the traditional feedback systems with the newer systems that stimulate opportunity seeking and learning. 5001-6182 Business 5546-5548.6 Office Organization and Management Library of Congress Classification (LCC) HD 28 Management M Business Administration and Business Economics M 10 L 2 Business Administration: general Firm Objectives, Organization and Behaviour Journal of Economic Literature (JEL) L 2 Firm Objectives, Organization and Behaviour 85 A Business General 100B 240 B Organization Theory (general) Information Systems Management European Business Schools Library Group (EBSLG) 270 L Management buy-outs Gemeenschappelijke Onderwerpsontsluiting (GOO) 85.00 Bedrijfskunde, Organisatiekunde: algemeen 85.05 85.08 Management organisatie: algemeen Organisatiesociologie, organisatiepsychologie Classification GOO 85.10 Strategisch management Bedrijfskunde / Bedrijfseconomie Organisatieleer, informatietechnologie, prestatiebeoordeling