This study analyses the use of management control systems (MCS) across different business-level strategies. Adopting a contingency approach, the study seeks to get insights on the theoretical assumption that management control systems should be designed and used to suit the firm’s business strategy (Otley, 1980; Langfield-Smith, 1997). We conceptualise MCS in terms of Simon’s level of control framework and strategy in terms of Miles and Snow’s typology in order to investigate the differences in MCS attributes among four groups of firms adopting specific business strategies. Using data collected from a survey of top managers in 227 middle firms of North-East Italy, this study demonstrates that the interdependencies among control levers slightly differ depending on the business-level strategy in use. Findings show that all the control levers are used by firms and are independently associated with business strategy, suggesting the capacity of firms to balance different use of MCS (Mundy, 2010). Diagnostic lever of control is shown to be more associated with “analyzer” and “reactor” business strategy typologies. Furthermore, evidences suggest that the combined and complementary use of the all the levers of control contribute to generate a dynamic tension necessary for managing different business strategies simultaneously

Management control systems and Strategy. A missed link? An empirical investigation of Italian middle firms

Filippo Zanin
;
Antonio Costantini
2016-01-01

Abstract

This study analyses the use of management control systems (MCS) across different business-level strategies. Adopting a contingency approach, the study seeks to get insights on the theoretical assumption that management control systems should be designed and used to suit the firm’s business strategy (Otley, 1980; Langfield-Smith, 1997). We conceptualise MCS in terms of Simon’s level of control framework and strategy in terms of Miles and Snow’s typology in order to investigate the differences in MCS attributes among four groups of firms adopting specific business strategies. Using data collected from a survey of top managers in 227 middle firms of North-East Italy, this study demonstrates that the interdependencies among control levers slightly differ depending on the business-level strategy in use. Findings show that all the control levers are used by firms and are independently associated with business strategy, suggesting the capacity of firms to balance different use of MCS (Mundy, 2010). Diagnostic lever of control is shown to be more associated with “analyzer” and “reactor” business strategy typologies. Furthermore, evidences suggest that the combined and complementary use of the all the levers of control contribute to generate a dynamic tension necessary for managing different business strategies simultaneously
2016
Proceedings of the 22th IAMB Conference
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10278/3703483
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