Top management impact on management control

Abstract

Management control systems—defined by Simons (1990) as formal, information based routines and procedures managers use to maintain or alter patterns in organizational activities—have been the basis of a long-standing and popular research stream to which the Journal of Management Control is committed. In the last decades, a considerable amount of contingency-based research focused on rather “technical” issues regarding the development, adoption, use and impact of MCS. These studies tend to argue that organizational and environmental contingencies determine the design and use of MCS. In contrast, the upper echelons approach of strategic choice (Hambrick and Mason 1984; Carpenter et al. 2004; Finkelstein et al. 2009) notes that organizations do not make choices, but key actors—such as CEOs and CFOs—do. So far, theoretical insights and empirical findings about the relevance of top executives in designing, perceiving and using MCS are still rare. Notable exceptions include recent studies which analyzed for example the relationship between individual CFO characteristics and the usage of innovative management accounting systems (Naranjo-Gil et al. 2009) or the impact of leadership style on senior management’s use of planning and control systems (Abernethy et al. 2010). The related question of how top management characteristics relate to the organization and management of the Finance Function also remains largely unanswered. Last but not least, we find it a worthwhile avenue for research to investigate in how far findings from an American management setting hold in continental European countries. Differences in culture, management philoso-