Management control systems

Sophia Su, Kevin Baird and Herb Schoch

Journal of Accounting & Organizational Change, 2017, vol. 13, issue 1, 2-24

Abstract: Purpose - This paper aims to examine the association between the interactive and diagnostic approaches to using controls and Miller and Friesen’s (1984) organizational life cycle (OLC) stages (birth, growth, maturity, revival). Design/methodology/approach - Data were collected from a random sample of 343 general managers in Australian manufacturing organizations. Findings - The results indicate that both approaches are used to a greater extent in the growth and revival stages than the birth and maturity stages, whereas the interactive and diagnostic approaches are used to a similar extent in each of the four OLC stages. Research limitations/implications - This study contributes to the management control system literature by examining the use of the interactive and diagnostic approaches from an OLC perspective. The findings highlight that the complementary nature of the interactive and diagnostic approaches applies in each OLC stages, and suggest that similar attention should be placed on the use of both the interactive and diagnostic approaches in each OLC stage. Practical implications - The study provides managers with an insight into the prevalence of the use of interactive and diagnostic approaches across the birth, growth, maturity and revival stages. Originality/value - This study contributes to the management control system literature by adopting the configuration approach to examine how multiple contingent variables simultaneously affect the approach to using controls. Specifically, this study examines how organizations adjust their emphasis on Simons’ (1995) interactive and diagnostic approaches to using controls as they move across different development stages. These development stages were labelled as OLC stages and are determined based on the simultaneous consideration of multiple contingent factors.

Keywords: Diagnostic approach to using controls; Interactive approach to using controls; Organizational life cycle stage (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-03-2015-0032

DOI: 10.1108/JAOC-03-2015-0032

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