Article,
Management control systems and strategy: A resource-based perspective
Accounting, Organizations and Society, 31 (6): 529 - 558 (2006)
DOI: http://dx.doi.org/10.1016/j.aos.2005.07.001
Abstract
The aim of this study is to examine, from a resource-based perspective, the relationships between the use of management control systems (MCS) and organizational capabilities. More specifically, the study focuses on the diagnostic and interactive uses of one important aspect of MCS, namely performance measurement systems (PMS), and four capabilities leading to strategic choices (i.e., market orientation, entrepreneurship, innovativeness, and organizational learning). Three research questions are investigated in this study: (i) to what extent do the diagnostic and interactive uses of \MCS\ contribute specifically to the creation and maintenance of capabilities leading to strategic choices? (ii) To what extent do the diagnostic and interactive uses of \MCS\ act in combination to produce dynamic tension which contributes to the creation and maintenance of these capabilities? (iii) To what extent does the use of \MCS\ contribute to organizational performance? The results suggest that an interactive use of \PMS\ fosters the four capabilities by focusing organizational attention on strategic priorities and stimulating dialogue. Also, by creating constraints to ensure compliance with orders, the diagnostic use of \PMS\ exerts negative pressure on these capabilities. Furthermore, some evidence suggests the influence of dynamic tension resulting from the balanced use of \PMS\ in a diagnostic and interactive fashion on capabilities and performance.
