Essay on Management Control Systems as a Package—Opportunities,

10077 Words Feb 28th, 2010 41 Pages
Management Accounting Research 19 (2008) 287–300

Management control systems as a package—Opportunities, challenges and research directions
Teemu Malmi a,∗ , David A. Brown b a Department of Accounting & Finance, Helsinki School of Economics, Finland b School of Accounting, University of Technology, Sydney, Australia

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,
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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 what level, the organisation, business unit, management, or individual? When the definition parameters of MCS are set, the second issue arises of what conceptually constitutes an MCS package; what is included, what is left out, and why? An analytical conception, which provides a sufficiently broad yet parsimonious approach, is required to study the empirical phenomenon. In addition, while studies have looked at control systems individually and at times in combination, the challenge is to understand how all the systems in an MCS package operate as an inter-related whole. Abernethy and Brownell (1997) captured this issue in stating: “It is clear that organisations rely on combinations of control mechanisms in any given setting, yet virtually nothing is known about how the effects of any one control are governed by the level of simultaneous reliance on other forms” (p. 246). Thirdly, there are challenges in empirically studying an MCS package as they are often very large and complex systems. This creates difficulties in how field and/or case study researchers gather and make sense of the complexity that exists

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