Designing management control systems in product development: Initial choices and the influence of partners

Toni Davila (), George Foster and Mu Li
Additional contact information
Toni Davila: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
George Foster: Stanford University
Mu Li: Applied Micro Devices

No D/598, IESE Research Papers from IESE Business School

Abstract: Management control systems can hinder innovation. However, recent theoretical and empirical work indicates that these systems can also enhance it. Using two sequential empirical studies, this paper investigates this question. The first uses a field research design to examine the adoption of management control systems in the product development function of entrepreneurial firms. The data comes from questionnaires and interviews with the CEOs, financial officers, and business development managers of 69 firms. Analysis of the qualitative data indicates that managers adopt these systems not so much to fulfill a particular role as to solve particular needs that they face. These needs range from external contracting and legitimizing the process with external parties to internal drivers such as managers' background, learning by doing, need to focus, or reaction to problems. Furthermore, these reasons are associated with faster adoption of these systems and with product development performance. The objective of the second study is to extend and generalize the finding regarding the influence of external parties on management control system adoption to a population of mature firms. Using a survey design, the study finds an association between the importance of partners to product development and the level of formalization of management control systems.

Keywords: management control systems; product development; innovation (search for similar items in EconPapers)
Pages: 43 pages
Date: 2005-07-19
New Economics Papers: this item is included in nep-bec and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0598

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