Management control systems for exploration? A paradox and a challenge for research

Anteprima

In this article the Authors review the relationship between strategy and management control (MCS) by confronting the two most largely accepted lines of thinking in the literature – the so-called “contingency” and “alternative”. Authors identify conceptual and methodological limitations of both approaches, analysing critiques coming from both sides and identifying complementarities within epistemological differences. In the light of the radical changes in the business environment that firms have faced in the last two decades, the ability to change both in the exploitation and exploration directions is considered to be crucial. For the purpose of adaptation, we argue that strategy and MCS interact in a two-way relation rather than being linked by a hierarchy, and their evolution over time can therefore be seen as a co-evolution. This approach shifts attention to dynamism and poses at least two main challenges to scholars addressing the MCSstrategy relationship. Firstly, at the methodological level, non-positivistic approaches may offer a prominent contribution to understanding change, nevertheless they are taken with an amount of suspicion by the mainstream academic community; this problem must be faced by promoting reciprocal comprehension and by supporting dialogue in dedicated editorial indicatives. Secondly, at the conceptual level, MCS is designed to support the implementation of strategic exogenous targets. However, if we consider strategy formulation and strategy implementation as part of a single process of mutual creation, scholars are asked to deploy the paradox of systems designed to control goals that are dynamic, unstable and imprecise in nature. This requires to rethink the form and components of MCS, and their desired degree of specification.

Bibliografia
  1. Ahrens T., Chapman C.S. (2005), Management Control Systems and the crafting of strategy: a practice based view, in Chapman C.S. (a cura di), Controlling strategy: Management, accounting and performance measurement. Oxford: Oxford University Press
  2. Ahrens T., Chapman C.S. (2007), Management accounting as practice, Accounting, Organizations and Society, 32, pp. 1-27. DOI:10.1016/j.aos.2006.09.013.
  3. Ansoff H.I. (1965), Corporate Strategy, Mc-Graw Hill.
  4. Anthony R.N. (1965), Planning and Control Systems: A Framework for Analysis, Harvard Business School Division of Research.
  5. Archer S., & Otley D. (1991). Strategy, structure, planning and control systems and performance evaluation – Rumenco Ltd. Management Accounting Research, 2, pp. 263-303. DOI:10.1016/S1044-5005(91)70038-3
  6. Becker, M.C. Knudsen, T. & March, J.G. (2006). Schumpeter, Winter, and the sources of novelty, Industrial and Corporate Change, 15, 2, pp. 353-371. DOI:10.1093/icc/dtl003.
  7. Bergamin M. (1992), Il controllo di gestione in un’ottica strategica, UTET, Torino
  8. Bergamin M., Collini P. (1993), Gli sviluppi negli studi di management accounting, Sistema Impresa, 8, marzo-aprile, pp. 12-24.
  9. Boynlon A.C., and Zmud R.W. (1984), An Assessment of Critical Success Factors. Sloan Management Review (25:4), pp. 17-27.
  10. Brunetti G. (1979), Il controllo di gestione in condizioni ambientali perturbale, FrancoAngeli, Milano.
  11. Chapman C.S. (2005), The relationship between management control systems and strategy, in Chapman C. S. (a cura di), Controlling Strategy: Management Accounting and Performance Measurement, Oxford University Press.
  12. Chenhall R.H. (2003), Management control system design within its organizational context: findings from contingency based research and directions for the future, Accounting Organizations and Society, 28, pp. 127-168. DOI:10.1016/S0361-3682(01)00027-7.
  13. Chua, W. F. (2007). Accounting, measuring, reporting and strategizing – re-using verbs: a review essay, Accounting, Organizations and Society, 32, pp. 487-494. DOI:10.1016/j.aos.2006.03.010.
  14. Cinquini L., Tenucci A. (2010). Strategic management accounting and business strategy: a loose coupling? Journal of Accounting and Organizational Change, 6, 2, pp. 228:259. DOI:10.1016/j.aos.2006.03.010.
  15. Cooper R. (1988), The rise of activity-based costing-Part one: What is an activity-based cost system?, Journal of Cost Management, Summer, pp. 45-54.
  16. Cyert R.M., March J.C. (1992), A behavioral theory of the firm, 2nd ed. Blackwell Publisher Inc. Malden, MA
  17. Dent J. (1990), Strategy, organization and control: Some possibilities for accounting research, Accounting, Organizations and Society, 15, 1-2, pp. 3-25.
  18. Donaldson L. (1966), The normal science of structural contingency theory, in Clegg S.R., Hardy C., Nord W.R. (a cura di), Handbook of Organizational Studies, SAGE
  19. Dosi G. (1982), Technological paradigms and technological trajectories, Research Policy, 11(3), pp. 147-162. DOI:10.1016/0048-7333(82)90016-6.
  20. Frigotto ML., Coller G., and Collini P. (2011), The Strategy and Management Control Systems relationship as emerging dynamic process. Journal of Management & Governance, pp. 1-26.
  21. Garud R. and Ruppa M. (1994), A socio-cognitive model of technology evolution: the case of cochlear implants, Organization Science, 5(3), pp. 344-362. DOI:10.1287/orsc.5.3.344.
  22. Gavetti G., and Levinthal D. (2000), Looking forward and looking backward: Cognitive and experiential search, Administrative science quarterly, 45, 1, pp. 113-137., DOI:10.2307/2666981
  23. Hedberg B. (1981), How Organizations Learn and Unlearn. In Starbuck, W.H. and Nystrom, P.C. (eds) Handbook of Organizational Design, Oxford University Press, New York, NY, pp. 3-27.
  24. Hopwood, A. G. (1987), The archaeology of accounting systems, Accounting Organizations and Society, 12, pp. 207-234. DOI:10.1016/0361-3682(87)90038-9.
  25. Johnson H.T., Kaplan R.S. (1987), Relevance lost: the rise and fall of management accounting, Harvard Business School Press, Boston Massachusetts
  26. Jørgensen, B., Messner, M. (2010), Accounting and strategising: a case study from new product development, Accounting, Organizations and Society, 35, pp. 184-204. DOI:10.1016/j.aos.2009.04.001.
  27. Kaplan R.S., Norton D.P. (1996), The Balanced Scorecard, Harvard Business Press, Boston Mass
  28. Katila R., Ahuja G. (2002), Something old, something new: A longitudinal study of search behavior and new product introduction, Academy of Management Journal, 45, pp. 1183- 1194. DOI:10.2307/3069433.
  29. Langfield-Smith K. (2006), Understanding management control systems and strategy, in Bhimani A. (a cura di), Contemporary issues in Management Accounting, Oxford University Press. DOI:10.1093/acprof:oso/9780199283361.003.0011.
  30. Langfield-Smith K. (2007), A review of quantitative research in management control system and strategy, in Chapman C.S., Hopwood A.G., Shields M.D. (a cura di), Handbook of Management Accounting Research, Elsevier, pp. 753-783
  31. Langfield-Smith K. (1997), Management control systems and strategy: a critical review, Accounting, Organizations and Society, 22(2), pp. 207-232. DOI:10.1016/S0361-3682(95)00040-2.
  32. Langfield-Smith K. (2007), A review of quantitative research in management control system and strategy, in Chapman C. S., Hopwood A. G., and Shields M. D., (Eds.), Handbook of Management Accounting Research (pp 753-783). Elsevier
  33. Levinthal D.A., March J.G. (1993), The myopia of learning, Strategic Management Journal, 14 (special issue), pp. 95-112. DOI:10.1002/smj.4250141009.
  34. Malmi T., Brown D.A. (2008), Management control systems as package – opportunities, challenges and research directions, Management Accounting Research, 19, 4, pp. 287- 300. DOI:10.1016/j.mar.2008.09.003.
  35. Malmi, T., and Brown, D. A. (2008), Management control systems as package – opportunities, challenges and research directions, Management Accounting Research, 19 (4), pp. 287-300. DOI:10.1016/j.mar.2008.09.003.
  36. March J. Simon H. (1957), Organizations, Wiley, New York, NY (USA).
  37. March J.C., Simon H.A. (1958), Organizations, Whiley, NY
  38. March J.G. (1991), Exploration and Exploitation in Organizational Learning. Organization Science, 2, 1, pp. 71-87.
  39. March J. G. (2006), Rationality, Foolishness, and Adaptive Intelligence. Strategic Management Journal, 27, pp. 201-214. DOI:10.1002/smj.515.
  40. Mintzberg H. (1978), Patterns in Strategy formulation, Management Science, 24, 9, pp. 934- 48. DOI:10.1287/mnsc.24.9.934.
  41. Mintzberg H. (1990), The Design School: Reconsidering the Basic Premises of Strategic Management, Strategic Management Journal, 11, 3, pp. 171-195. DOI:10.1002/smj.4250110302.
  42. Modell S. (2010). Bridging the paradigm divide in management accounting research: the role of mixed methods approaches. Management Accounting Research, 21, pp. 124-129. DOI:10.1016/j.mar.2010.02.005.
  43. Nanni J., Miller J.G., Vollmann T.E. (1988), What Shall We Account for?, Management Accounting, 69, pp. 42-48
  44. Nelson R., Winter S. (1982), An Evolutionary Theory of the Firm, Harvard University Press, Cambridge, Ma. (USA); Teece DJ, Pisano G., Shuen A. (1997), Dynamic capabilities and strategic management, Strategic Management Journal, 18(7), pp. 509-533.
  45. Nørreklit H. (2003), The balanced Scorecard: what is the score? A rhetorical analysis of the Balanced Scorecard, Accounting Organization and Society, 28, pp. 591-619. DOI:10.1016/S0361-3682(02)00097-1.
  46. Ocasio W. (1997), Towards an attention-based view of the firm, Strategic Management Journal, 18, Summer (special issue), pp. 187-206
  47. Paolini A. (1993), Il controllo strategico. Uno schema d’analisi; Giuffré editore, Milano
  48. Quattrone P. and Busco C. (2010), How management practices diffuse: The balanced scorecard as a rhetorical machine, paper presented at the EIASM conference “New Direction in Management Accounting”, Bruxelles, December 15-17.
  49. Schatzki T.R. (2002), The site of the social: A philosophical account of the constitution of social life and change, University Park: Pennsylvania State University Press.
  50. Schatzki T.R. (2005), The sites of organizations, Organization Studies, 26, 3, pp. 465-484. DOI:10.1177/0170840605050876.
  51. Shank J.K, Govindarajan V.G. (1992), Strategic Cost Management: Tailoring Controls to Strategies, Journal of Cost Management, 6, 3, Fall, pp. 14-25.
  52. Simon H.A. (1955), A behavioral model of rational choice, The Quarterly Journal of Economics, 69, 1, February, pp. 99-118. DOI:10.2307/1884852.
  53. Simons R. (1995), Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal, Boston: Harvard Business School Press.
  54. Simons R. (1990), The role of management control system in creating competitive advantage: new perspectives, Accounting Organizations and Society, vol. 15, No. ½, pp. 127-143.
  55. Slagmulder R., (1997). Using management control systems to achieve alignment between strategic investment decisions and strategy, Management Accounting Research, 8, pp. 103-139. DOI:10.1006/mare.1996.0035.
  56. Thompson J. D. (1967), Organizations in action: Social science bases of administrative theory. Transaction Pub
  57. Tripsas M. and Gavetti G. (2000), Capabilities, Cognition, and Inertia: Evidence from Digital Imaging. Strategic Management Journal, 21, 10/11, pp. 1147-1161. DOI:10.1002/1097-0266(200010/11)21:10/11<1147::AID-SMJ128>3.0.CO;2-R.
  58. Weick K. E. (1195), Sensemaking in organizations. Vol. 3. Sage Publications, Incorporated.
  59. Womack J.P., Jones D.T., Roos D. (1990), The Machine that changed the World, The Free Press, New York, NY.