Article review of “The adaptation of management control systems in sustainability-oriented innovation strategy”: a note
How to present
this article in Harvard reference format?
Pan Fagerlin, W.,
Wen, W., & Lövstål, E., 2026. The adaptation of management control systems
in sustainability-oriented innovation strategy implementation. Management
Accounting Research, 68, 100957. https://doi.org/10.1016/j.mar.2025.100957
[accessed 13 December 2025].
What are the key
research issues the article wants to address?
The article addresses key research issues related to how
management control systems (MCSs) can be adapted to effectively implement
sustainability-oriented innovation (SOI) strategies in organizations.
Specifically, it investigates:
1.
The difficulties organizations face in implementing SOI,
which integrates environmental and social objectives deeply into innovation
processes across products, services, and business models.
2.
The role of MCSs in translating sustainability strategies
into practice by influencing managerial decisions and employee behaviors, and
why firms typically adapt existing control systems instead of designing
entirely new ones for sustainability purposes.
3.
How the concept of "plasticity"—the capacity to
repurpose existing control mechanisms without altering their formal design or
structure—enables firms to implement SOI strategies.
4.
The applicability and analytical value of Tessier and
Otley’s (2012) refinement of Simons’ (1995) levers-of-control (LOC) framework
for understanding the dynamic process and phases of SOI implementation at
strategic and operational levels.
In essence, the research seeks to elucidate how MCS
adaptation and plasticity facilitate the organizational transition toward
embedding sustainability in innovation strategy, addressing the gap between
sustainability ambitions and effective organizational change [T1, p. 1].
Describe two main
theories employed in this article.
The article primarily employs two main theoretical
frameworks:
1.
Levers-of-Control (LOC) Framework
(Simons, 1995) and its Refinement by Tessier and Otley (2012):
The LOC framework is used to analyze how management control systems operate to
balance innovation and control within organizations. Simons originally
developed this framework to describe how organizations use different
levers—belief systems, boundary systems, diagnostic control systems, and
interactive control systems—to achieve strategic objectives. Tessier and Otley
(2012) refined this framework by enhancing its internal coherence,
distinguishing between strategic and operational levels of control, and separating
control objectives into performance and compliance. This refinement makes the
framework particularly useful for tracing how controls function across
different stages of sustainability-oriented innovation (SOI) implementation.
The article uses this refined LOC framework to examine how firms adapt or
repurpose existing control mechanisms (without formally changing their design)
to manage the complexities of SOI [T1, p. 1; T2, p. 2].
2.
Organizational Adaptation and
Plasticity Concept: The article adopts the concept of
"plasticity" from the broader literature on organizational adaptation
(e.g., Levinthal and Marino, 2015). Plasticity is defined here as an
organization's capacity to repurpose existing controls by changing their roles,
modes of use, and meanings without altering their formal design or structure.
This concept shifts the focus from creating entirely new management control
systems to strategically adapting and reframing existing ones, enabling greater
flexibility and responsiveness for sustainability transitions. This plasticity
lens provides a novel way to understand how MCS adaptation supports the dynamic
and complex process of implementing SOI strategies [T2, p. 2].
Together, these theories allow the authors to explore the
interplay between existing control structures and the evolving demands of
sustainability innovation, highlighting the importance of adaptative reuse of
controls for achieving organizational change.
Highlight 2 main
primary findings reported in this article.
Two main primary
findings reported in the article are:
1.
Adaptation of
Existing Management Control Systems (MCSs) to Support SOI Implementation: The study finds that organizations pursuing
sustainability-oriented innovation (SOI) under compressed time frames typically
adapt rather than replace their existing MCSs. By repurposing existing controls
through different modes of use (interactive or diagnostic) and aligning them
across strategic and operational levels, firms can simultaneously maintain
managerial oversight and foster organizational learning and innovation. This
highlights the plasticity of MCSs, showing how the same control mechanisms can
evolve in role and function to balance stability with change during SOI
implementation [T1, p. 2-3; T2, p. 2].
2.
Multi-level and
Dynamic Interplay of Control Systems in SOI Implementation: The study reveals that effective SOI
implementation requires nuanced coordination and alignment across different
organizational levels—strategic and operational—and among various control
systems targeting performance and compliance objectives. The revised LOC
framework allows unpacking this multi-level complexity, where top management
shapes legitimacy and strategic direction, while middle management and
operational employees translate these into practical actions. The dynamic
interplay and repurposing of controls over time foster both stability and
adaptability amid evolving external and internal contexts [T1, p. 3-4; T3, p.
8-9].
These findings
underscore the importance of viewing MCSs as malleable toolkits rather than
rigid systems and suggest practical managerial approaches to deliberately adapt
controls for sustainability transitions [T3, p. 9].
Describe 3 main
claims of the article in terms of Toulmin's model of argument.
Using Toulmin's
model of argument, which involves Claim, Data (Evidence), and Warrant (the
reasoning that connects data to claim), here are three main claims from the
article:
Claim 1: Existing management control systems
(MCSs) can be adapted (repurposed) rather than replaced to effectively
implement sustainability-oriented innovation (SOI).
- Data/Evidence: The case study of a Scandinavian polyethylene-packaging firm shows
that the firm rapidly implemented an SOI strategy by repurposing its
existing controls — a process termed “plasticity” — without redesigning
them formally [T1, p.1-2]. Empirical findings and literature support that
firms typically adapt controls to sustainability rather than create
entirely new systems [T1, p.1; T2, p.2].
- Warrant: Since organizations face compressed timelines and evolving
sustainability challenges, adapting existing controls allows quicker
strategic and operational alignment with new sustainability goals,
maintaining both control and flexibility [T2, p.2-3].
Claim 2: The revised Levers of Control (LOC)
framework by Tessier and Otley (2012) provides a more precise and useful
analytical tool for examining MCSs in SOI implementation than Simons’ original
framework.
- Data/Evidence: The article discusses how Tessier and Otley clarify conceptual
ambiguities in Simons' LOC framework by separating control systems
(belief, boundary, diagnostic, interactive) into strategic and operational
levels and distinguishing mode of use (interactive vs. diagnostic) as
independent [T2, p.2-3]. This improved conceptualization enabled the
authors to analyze the complex, multi-level SOI implementation process
effectively [T2, p.3].
- Warrant: Clearer conceptual distinctions in control systems and modes of
use facilitate empirical research and managerial understanding of how
controls can be leveraged dynamically across organizational levels during
sustainability transitions [T2, p.3].
Claim 3: Active and deliberate adaptation of MCS
controls fosters organizational learning and innovation while maintaining
managerial oversight during SOI implementation.
- Data/Evidence: The case study illustrates that shifting the mode of use and role
of controls at different implementation stages supported organizational
adaptation to external pressures and internal demands [T3, p.9]. Managers
benefited from maintaining clear documentation and explicitly defining
control objectives, modes of use, and roles to ensure alignment over time
[T3, p.9].
- Warrant: Because sustainability transitions often involve ambiguity and
complexity, adaptive control use encourages experimentation and learning
while allowing managers to guide progress and compliance effectively [T3,
p.9].
These claims
collectively position the adaptation and plasticity of MCSs, analyzed through
the revised LOC framework, as critical enablers of successful
sustainability-oriented innovation strategies.
** references: a collection of management accounting notes; a useful generative AI tool./ also consider another generative AI tool.
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