Changes In Management Control Systems Research Articles

HOW BUSINESS INTELLIGENCE AND ANALYTICS SHAPE MANAGEMENT CONTROL SYSTEMS. A SYSTEMATIC LITERATURE REVIEW.

ABSTRACT Academic discourse on IT-based developments and their connection to management control systems (MCS) has grown substantially over the last two decades. Business intelligence & analytics (BI&A) are considered technologies that enable companies to plan and control processes even more precisely, which is why their use should lead to massive changes in management control systems. This article aims to identify concrete links between BI&A and MCS, as well as to analyze how BI&A affect MCS, and what consequences result from their use in order to identify potential change trends for MCS. This systematic literature review is based on 38 publications and uses the MCS framework of Malmi and Brown (2008) to cluster its key findings. The paper identifies various connections between MCS and BI&A, assigning them to the elements of the MCS framework. Although this allows first concrete statements about the effects of BI&A and the consequences for MCS, the insights gained must be interpreted against the background of a wide variety of contextual factors and the fact that many conceptual papers provide normative statements, specific conclusions about massive change trends for MCS cannot be drawn at present. This study is the first literature review that establishes the connection between MCS and BI&A from the perspective of a widely accepted MCS framework and therefore enables focused statements, based on the typology of Malmi and Brown (2008), regarding the effects and consequences of BI&A on MCS. Keywords management control systems, business intelligence, business analytics, literature review

Integrated reporting and changes in management control systems in large Japanese companies

Purpose This study aims to examine the integration of integrated reporting (IR) into the formal control systems (FCSs) early adopters use to implement IR, and investigate whether it drives informal control systems (ICSs) change at this early stage. Design/methodology/approach A case study was conducted in seven large Japanese companies. Data were gathered through semi-structured interviews and e-mail exchanges with the managers responsible for developing integrated reports in Japanese companies that excel in IR practices. Content analysis was adopted to analyze the data. Findings The results showed incremental changes to the integration of IR into FCSs. However, the integration may not cause radical changes to ICSs because all sample companies recognized the importance and necessity of embedding integrated thinking in all levels of companies to put it into practice for value creation over time. Originality/value This study contributes to IR research from an internal corporate perspective. Specifically, this study provides new knowledge on the relationships between IR and MCSs. This research also gives new insight into operationalization and internalization of sustainability in terms of IR and MCSs in companies, not only in Japan, but also worldwide.

Big data and management control systems change: the case of an agricultural SME

Nowadays big data (BD) represents a hot topic which receives great interest from both scholars and practitioners, due to its capabilities to affect managerial practices in both large corporations and small and medium enterprises (SMEs). In management control field of study, the use of BD can induce important managerial changes. However, no univocal consensus exists in literature regarding BD effects on managerial practices. In particular, some scholars highlighted the opportunities related to BD application while others question the real benefits of BD. Accordingly, in the current debate, there is no clear understanding of the real effects that BD may have on Management Control Systems (MCS). This ambiguity is even more pronounced in SMEs, given their reluctance to adopt both formal MCS and BD technologies. Consequently, this paper aims to analyze whether and how BD affects MCS and which drivers are involved in such interaction. To this end, we developed a case study on a SME, adopting the theoretical lens of Quinn (J Account Organ Change 7(4):337–357, 2011; Manag Account Res 25(1):76–92, 2014). Our study contributes to the present literature providing three main findings. Firstly, we showed that BD affects differently the formal and informal dimensions of MCS. Secondly, this study demonstrated that an exogenous shock, such as the adoption of a BD technology, can lead to MCS stability and not only to MCS change. Finally, we identified some micro-level mechanisms that triggered changes in formal and informal MCS. In particular, we found that leadership and managerial culture could play pivotal role in MCS change.

Stages of management control in a large public organization: from top to frontline managers

We examine how the preferences of managers in using management control systems change at every hierarchical level and how these changes affect strategic alignment. Based on an extensive case study in a large Belgian public organization where performance management is a core philosophy, we report data from observations and interviews of managers to examine the differences in how managers use controls at each level. We find three principal trends in the use of controls, each representing a challenge in creating hierarchical alignment and consistency using management control systems. First, controls designed as boundaries tend to get progressively stricter down the hierarchy despite the intentions and efforts of top management. Second, while top management favours the design and use of diagnostic controls, frontline managers prefer to use interactive controls and direct information. Therefore, more effort is required at the frontlines in order to activate the control systems. Finally, boundaries create empowerment for managers at lower hierarchical levels, but only when they are able to find both a sense of direction and a sense of security and predictability in organizational control systems.

Using management control to understand public sector corporate governance changes

PurposeWithin the context of recent post-localism developments in the English local government, this paper aims to show, first, how management controls have become more enabling in response to changes in rules of public sector corporate governance and, secondly, how changes in management control systems gave rise to new corporate governance practices.Design/methodology/approachTheoretically, the paper mobilises the concept of enabling control to reflect on contemporary changes in public sector corporate governance. It draws on the International Federation of Accountants’ (IFAC) and Chartered Institute of Public Finance and Accountancy’s (CIPFA) new public sector governance and management control system model and data gathered from a longitudinal qualitative field study of a local authority in North East England. The field study used interviews, observation and documentation review.FindingsThis paper suggests specific ways in which the decentralisation of policymaking and performance measurement in a local authority (present case) gave rise to enabling corporate governance and how corporate governance and management control practices went some way to aid in the pursuit of the public interest. In particular, it shows that the management control system can be designed at the operational level to be enabling. The significance of global transparency for supporting corporate governance practices around public interest is observed. This paper reaffirms that accountability is but one element of public sector corporate governance. Rather, public sector corporate governance also pursues integrity, openness, defining outcomes, determining interventions, leadership and capacity and risk and performance management.Practical implicationsInsights into uses of such enabling practices in public sector corporate governance are relevant for many countries in which public sector funding has been cut, especially since the 2007/2008 global financial crisis.Originality/valueThis paper introduces the concept of enabling control into the public sector corporate governance and control debate by fleshing out the categories of public sector corporate governance and management control suggested recently by IFAC and CIPFA drawing on observed practices of a local government entity.

Innovative management control systems in knowledge work: a middle manager perspective

Integrating theorizing in sensemaking and conceptual or contextualized metaphor theory, this study investigates how middle managers in knowledge work settings support or contest the implementation of changes in management control systems (MCS) by examining how they make sense of the new control roles allocated to them. It draws on case study evidence from an organizational unit of a US multinational technology company. Results from qualitative analysis show that managers employed contextualized metaphors as collective symbols to make sense of and deal with differing views of changes in MCS and the impact on their roles, responsibilities and identity at work. Specifically, the results indicate that individuals’ acceptance of innovative control practices varied and that by remaining unaware of managers’ dilemmas, the organization ran the risk of failing to properly implement the changes, even though the system had been deemed appropriate for knowledge work. Because of their fundamental role in the success of implementing MCS-related changes in knowledge work settings, realizing how middle manager develop an understanding and react to changes in MCS is a critical endeavor for both researchers and practitioners alike.

Organizational culture and post-acquisition changes in management control systems: An analysis of a successful Brazilian case

This paper analyzes the effect of organizational culture on the post-acquisition management control system (MCS) of the Brazilian company Extrativa Metalquímica Inc. after its acquisition by the FASA Participações Group. The results herein reported add to discussions of the subject and contribute to reducing the research gap in this area in Brazil. The analysis supports two major conclusions: (1) changes in the acquired company's MCS were derived from the new financial results-oriented culture introduced by the acquirer; and (2) the implementation of this culture implied modifications in production, financial and quality controls.

Changes in Management Control Systems and Diffrential Impact on Performance: A Test Modeling

This article aims to present the main results of an empirical study done in Morocco and attempts to highlight: - What explains the variety of practices in management control? - And what is the impact of adopting these practices of management control systems on corporate performance. To begin, a brief review of the literature allow us to better define the problem of our research is in the field of contingency theory. In a second step, we present the methodology of our investigation and the variables that can explain the changes of management control systems. Finally, we present the main results of the research.

Changes in control systems assessed by publicly employed dentists in comparison with other professionals

In the public service sector in Sweden, including dentistry, changes in management control systems have occurred. The extent and content of such self-assessed changes are described and analyzed for dentists in relation to other academicians. A questionnaire was answered by 306 dentists in the Public Dental Health Service and 3600 other academicians in Sweden. The response rate was 67%-77%. Three areas of change were found in factor analysis: management by objectives, by dialogue, and by hierarchy. In logistic regression models, dentists reported fivefold increases in management by objectives as compared with other academicians. Reported increases in management by dialogue were less for dentists. Having a female supervisor was related to increase of management by hierarchy. It is concluded that clear changes in management style have occurred and that dentists are notable for increase of management by objectives.