Management control systems as a package—Opportunities, challenges and research directions

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Abstract

There has been very little explicit theoretical and empirical research on the concept of management control systems (MCS) as a package despite the existence of the idea in management accounting literature for decades. In this editorial we discuss a range of ways researchers have defined MCS and the problems this has created. We provide a new typology for MCS structured around five groups: planning, cybernetic, reward and compensation, administrative and cultural controls. The typology is based on the distinction between decision-making and control and addresses those controls managers use to direct employee behaviour. We discuss the conclusions of the articles included within this special issue and provide ideas for further research.

Section snippets

Why study management control systems as a package?

The idea of management control systems (MCS) operating as a package1

Challenges in studying MCS as a package

While there are good reasons to study MCS as a package there are a range of challenges in doing so; three of which will be explained in this editorial. The first involves the difficulty of clearly defining the concept of MCS. This includes making a distinction between MCS and information/decision-support systems. Furthermore, if we focus on control rather than decision-support, what is it that MCS is supposed to control; is it human behaviour or artefacts, such as cash or material flows; and at

MCS definition

The first challenge in undertaking research on MCS packages is the difficulty of defining what is meant by MCS (Fisher, 1998). A number of definitions and descriptions of MCS exist; some of which contain overlaps, while others are quite different from each other (Abernethy and Chua, 1996, Alvesson and Karreman, 2004, Anthony, 1965, Chenhall, 2003, Emmanuel et al., 1990, Fisher, 1998, Flamholtz et al., 1985, Green and Welsh, 1988, Langfield-Smith, 1997, Merchant and Van der Stede, 2007, Otley

A New MCS package conceptual framework

With this clearer definition of the parameters of MCS, the second issue of what conceptually constitutes an MCS package can now be considered. Based on the work of Brown (2005), Table 1 and Fig. 1 provide a conceptual typology of an MCS package. The typology was developed by analysing and synthesising nearly four decades of MCS research (for examples and reviews see Chenhall, 2003, Fisher, 1995, Fisher, 1998, Flamholtz et al., 1985, Langfield-Smith, 1997, Otley, 1980, Simons, 1995). This

Paper reflections

When we first decided to send out the call for papers for this special issue we were motivated by the fact that little empirical research has addressed the issue of MCS as a package of controls, and this contrasted with the research experiences of ourselves and others, which suggested that organisations use large and complex combinations of MCS. We believe that the three papers we have selected after the review process, together with the Kennedy and Widener9

Research opportunities

While the five groups of controls in our MCS package individually perform the function of controlling the behaviour of employees, it is important that they are understood as a package. We will outline some of the major opportunities for research along two main themes. The first is the configuration of an MCS package, and the second is how the systems within the package relate to each other. Both configurations and linkages between systems need to be addressed against the outcomes and/or

Acknowledgments

We would like to gratefully acknowledge the comments provided by David Bedford, Paul Brown, Isabella Grabner, Markus Granlund, Seppo Ikäheimo, Katja Kolehmainen, Taru Lehtonen, Mikko Sandelin, Bob Scapens, Heidi Sundin, Nicole Sutton, and James Wakefield on this work.

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