A review of the article on “Management control systems as a package”
How to
present this article in Harvard reference format?
The article can be cited in Harvard reference
format as follows:
Malmi, T. and Brown, D.A., 2008.
Management control systems as a package—Opportunities, challenges and research
directions. Management Accounting Research, 19(4), pp.287–300. https://doi.org/10.1016/j.mar.2008.09.003
What are the
key research issues the article wants to address?
The key research issues the article
"Management control systems as a package—Opportunities, challenges and
research directions" by Malmi and Brown (2008) aims to address are:
1. Definition and Conceptualization of MCS as a Package The article highlights the difficulty in clearly defining what constitutes a Management Control System (MCS) and distinguishing MCS from related concepts like information or decision-support systems. It stresses the need to clarify what behavior or processes MCS are supposed to control, and at what organizational level (individual, managerial, or organizational) this control operates.
2. Studying MCS Components Individually vs. As a Package The authors argue that previous research focusing on individual control systems (e.g., balanced scorecards, budgeting) limits the understanding of the overall functioning and impact of MCS. They call for more research exploring how different elements of MCS interact and function together as a package, rather than in isolation.
3. Configuration and Interrelationships of MCS There is a need to investigate the typical configurations of MCS packages in organizations. This includes understanding which types of cybernetic, administrative, cultural, and other controls commonly coexist and how their relationships affect organizational performance and control effectiveness.
4. Challenges in Empirical Research and Theoretical Development The article discusses challenges such as the weak and fragmented findings from contingency-based research on MCS, and the lack of consistent typologies for MCS packages that would allow comparison across studies and contribute to theory building.
5. Exploring Substitution and Complementarity among Controls The article raises questions regarding how different control systems within the package act as substitutes or complements to one another, and how this affects their design and effectiveness.
6. Methodological Approaches for Studying MCS Packages Due to the complexity of MCS packages, the authors suggest the need for longitudinal case studies, large-sample empirical research, and possibly more qualitative methods such as interviews to collect high-quality data.
7. Need for Developing a Consistent Typology and Framework The article proposes a new typology organizing MCS into five groups (planning, cybernetic, reward and compensation, administrative, and cultural controls) to facilitate coherent comparison and further theory development.
In summary, the article urges for conceptual clarity, integrated study of MCS components as packages, empirical research on configurations and relationships within MCS packages, and improved methodologies to build more comprehensive and effective theories on management control systems.
The article "Management control systems
as a package—Opportunities, challenges and research directions" by Malmi
and Brown (2008) employs two main theoretical perspectives to frame its
analysis of management control systems (MCS):
1. Control Theory (Focus on Behavioural Control) The article conceptualizes MCS as systems that managers use primarily to influence and control employee behavior in alignment with organizational objectives and strategies. This perspective builds on the idea that controls are designed to direct people's actions and decisions, rather than merely providing decision-support information. It emphasizes that MCS should be distinguished from pure decision-support systems and highlights that control is about aligning behavior to goals across multiple organizational levels. This behavioral control approach is evident in the authors' preference for defining MCS as mechanisms that managers use to ensure congruence in behavior, rather than only tools for decision-making.
2. Package or Configurational Theory of Control Systems Rather than studying management control systems as isolated elements, the article adopts a configurational or package approach to MCS. This theory views MCS as a set or package of multiple control mechanisms—planning, cybernetic controls, reward and compensation systems, administrative controls, and cultural controls—that interact and collectively influence organizational outcomes. The article proposes a new typology to capture this broad but parsimonious conceptualization and emphasizes the importance of understanding how these controls fit together, substitute for, or complement one another, and are configured in different organizational contexts. This configurational view reflects earlier calls in the literature to study MCS holistically and address empirical challenges related to the interdependencies among different control mechanisms.
In short, the two main theoretical
lenses are: (1) a behavioral control theory focusing on managerial influence
over employee actions; and (2) a configurational theory viewing MCS as a
dynamic package of complementary and interrelated control systems, rather than
isolated tools.
Highlight 2
main primary findings reported in this article.
The article "Management control systems
as a package—Opportunities, challenges and research directions" by Malmi
and Brown (2008) primarily serves as an editorial and conceptual overview
rather than an empirical study presenting primary findings. However, based on
the reflections and synthesis of the papers included in the special issue and
the authors' own analysis, two main primary findings can be highlighted:
1. MCS Packages Form
Configurations with Interrelated Elements Empirical studies reviewed (such as Kennedy
and Widener’s case study) demonstrate that organizations use large and complex
packages of management control systems that form distinct configurations. These
configurations comprise multiple interrelated control mechanisms—such as
accounting practices, performance measurement, operating procedures, and social
controls—that interact with each other in both unidirectional and bidirectional
ways. This supports the idea that MCS should be studied as a system of
interlinked controls rather than as isolated practices. Moreover,
configurations can differ while still achieving equifinality, i.e., different
MCS packages may produce equally effective outcomes as long as there is
internal consistency among elements.
2. Contextual and Functional
Factors Shape the Form and Effectiveness of MCS Packages The studies show that the design and use of
MCS packages are influenced by contextual factors such as organizational
growth, environmental uncertainty, and task characteristics. For example, in
collaborative alliance settings characterized by high uncertainty and risk, cultural
controls like trust complement formal governance and control mechanisms.
Functional demands, such as lean manufacturing, also influence the shape and
relationships within a control package. These findings emphasize that the
effectiveness of MCS packages depends on their fit with both external
contingencies and internal functional needs, and that different control
packages may be required across organizational units and levels.
In summary, the two primary
findings are: (1) MCS operate as complex, internally consistent configurations
of multiple control systems rather than isolated controls; and (2) these
packages are shaped by contextual and functional contingencies including trust,
environmental uncertainty, and organizational strategy, which influence their
design and effectiveness.
Describe 3
main claims of the article in terms of Toulmin's model of argument.
Using Toulmin's
model of argument (which includes the elements: Claim, Data/Evidence, and
Warrant), the article "Management control systems as a package" by
Malmi and Brown (2008) presents at least three main claims as follows:
Claim 1: Management control systems (MCS) should be studied and understood as a package of interrelated control mechanisms rather than isolated systems.
· Data/Evidence: The authors cite empirical findings (e.g., Kennedy and Widener’s case study) demonstrating complex configurations of MCS with multiple interrelationships between accounting practices, social controls, performance measurement, and procedures. They also refer to the lack of cumulative theory from single-system studies to explain MCS effectiveness adequately.
· Warrant: Since controls interact and influence each other, analyzing them as a whole package provides a more accurate and comprehensive understanding of how organizations achieve control and alignment with objectives. Studying individual controls in isolation risks overlooking system-wide effects and misinterpreting effectiveness.
Claim 2: Existing MCS research is limited by inconsistent and overly broad definitions of MCS, which hampers theory development and empirical analysis.
· Data/Evidence: The paper highlights the many different definitions and conceptualizations of MCS in the literature, some encompassing almost everything (budgets, culture, organizational structure, values, governance), leading to conceptual confusion and contradictory findings, e.g., contingency relationships which are weak or fragmentary.
· Warrant: Clear, parsimonious, yet sufficiently broad typologies and definitions are necessary to build cumulative knowledge and conduct meaningful empirical studies that distinguish between decision-support and control systems and clarify what managers aim to control.
Claim 3: The design and effectiveness of MCS packages are contingent on organizational context, task characteristics, and functional requirements, including external relationships.
· Data/Evidence: Case studies show that different organizational settings, such as growth firms or collaborative alliances, require different configurations of MCS. For example, cultural controls like trust complement governance structures under uncertainty . Also, the concept of equifinality is supported, where different packages can achieve similar performance outcomes when internally consistent.
· Warrant: The effectiveness and appropriateness of control systems depend on the alignment between an organization's environment, strategy, and internal demands. Ignoring contingency factors or external actor relationships leads to incomplete understanding of MCS functioning.
These claims
collectively build the argument that more precise conceptualization and
empirical examination of MCS as complex packages, tailored to context and
organizational needs, are crucial for advancing management control research.
Describe 2
main research limitations of the study.
The article
identifies several challenges and limitations related to studying management
control systems (MCS) as a package, which can be viewed as research limitations
of the study. Two main research limitations are:
Limitation 1: Complexity and Difficulty in Empirical Study of MCS Packages
· The authors point out that MCS packages are typically large, complex systems consisting of multiple interrelated control mechanisms. This complexity creates significant practical difficulties in empirical research, especially in data gathering, analysis, and reporting. Field studies and case research struggle to capture and communicate the multifaceted interrelationships at a sufficient level of abstraction. Survey research faces challenges in developing instruments that can meaningfully capture the phenomena and obtaining adequately large samples.
· This limitation restricts the ability to systematically study MCS packages across various organizations and contexts and to generate generalizable or quantifiable findings.
Limitation 2: Lack of Conceptual Clarity and Definition of MCS
· There is wide variation and inconsistency in how MCS are defined across the literature, ranging from narrow to extremely broad definitions that include everything from budgets and accounting systems to culture and organizational structure . This definitional ambiguity causes difficulties in distinguishing management control systems from decision-support systems and hinders the development of cumulative theory. Without agreed-upon boundaries and clear typologies, empirical research can produce contradictory or unclear results, limiting progress in understanding MCS packages.
· This conceptual challenge also affects the design of research instruments and studies, complicating valid and reliable measurement of MCS components.
Together, these
limitations emphasize the need for improved theoretical frameworks, research
designs, and empirical methods tailored to the complexity and conceptual
breadth inherent in studying MCS as integrated packages rather than isolated
systems.
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