Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-26T20:54:46.942Z Has data issue: false hasContentIssue false
  • English
  • Français

Management control systems from an organisational life cycle perspective: The role of input, behaviour and output controls

Published online by Cambridge University Press:  21 May 2014

Sophia Su ,
Kevin Baird  and
Herb Schoch
Sophia Su*
Affiliation:
Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Australia
Kevin Baird
Affiliation:
Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Australia
Herb Schoch
Affiliation:
Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Australia
*
Corresponding author: sophia.su@mq.edu.au
Get access Rights & Permissions [Opens in a new window]

Abstract

This study examines the association between the use of three types of controls (input, behaviour and output) and Miller and Friesen's organisational life cycle (OLC) stages (birth, growth, maturity, revival and decline). Data were collected by a survey questionnaire from a random sample of 1,000 General Managers in Australian manufacturing business units. The results indicate that the extent of use of different controls is associated with OLC stages. Specifically, both behaviour and input controls were found to be used to a significantly greater extent than output controls in both the birth stage and the growth stage, while all three types of controls were used to a similar level in the maturity and revival stages. An examination of the extent of use of controls across OLC stages revealed that each type of control was used to a significantly greater extent in the growth and revival stages than the birth and maturity stages. The study contributes to the literature by linking management control system studies to OLC studies. Most importantly, the study assists Australian manufacturing business units in identifying the appropriate use of controls both in and across OLC stages.

Keywords

organisational life cycle stageinput controlsbehaviour controlsoutput controls
Type
Research Article
Information
Journal of Management & Organization , Volume 19 , Issue 5 , September 2013 , pp. 635 - 658
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abernethy, M. A., Brownell, P. (1997). Management control system in research and development organisations: The role of accounting, behaviour and personnel controls. Accounting, Organisations and Society, 22, 233–248.Google Scholar
Abernethy, M. A., Schulz, A. K.-D., Bell, S. (2007). Translating organisational learning orientation into performance: The role of management control systems, Presented at Macquarie University Research Seminar 2007, Sydney.Google Scholar
Adizes, I. (1979). Organisational passages – Diagnosing and treating lifecycle problems of organisations. Organisational Dynamics, Summer, 8, 3–25.Google Scholar
Anthony, R. N. (1965). Planning and control systems: Framework for analysis. Boston, MA: Harvard University Press.Google Scholar
Anthony, R. N., Govindarajan, V. (2001). Management control systems (10th ed.). USA: McGraw-Hill/Irwin.Google Scholar
Auzair, S. M., Langfield-Smith, K. (2005). The effect of service process type, business strategy and life cycle stage on bureaucratic MCS in service organisations. Management Accounting Research, 16, 399–421.Google Scholar
Bailyn, L. (1985). Autonomy in the industrial R&D lab. Human Resource Management, 24, 129–146.Google Scholar
Bartol, L., Tein, M., Mathews, G., Sharma, B. (2008). Management: A pacific rim focus (5th ed.). Sydney: McGraw-Hill.Google Scholar
Beatson, A., Lings, I., Gudergan, S. P. (2008). Service staff attitudes, organizational practices and performance drivers. Journal of Management & Organization, 14, 168–179.CrossRefGoogle Scholar
Bonner, J. M. (2005). The influence of formal controls on customer interactivity in new product development. Industrial Marketing Management, 34, 63–69.CrossRefGoogle Scholar
Brignall, S. (1997). Contingent rationale for cost system design in services. Management Accounting Research, 8, 325–346.Google Scholar
Cardinal, L. B. (2001). Technological innovation in the pharmaceutical industry: The use of organisational control in managing research and development. Organisational Science, 12, 19–36.Google Scholar
Cardinal, L. B., Sitkin, S. B., Long, C. P. (2004). Balancing and rebalancing in the creation and evolution of organisational control. Organisation Science, 15, 411–431.Google Scholar
Challagalla, G. N., Shervani, T. A. (1997). A measurement model of the dimensions and types of output and behaviour control: An empirical test in a salesforce context. Journal of Business Research, 39, 159–172.CrossRefGoogle Scholar
Christ, M. H., Sedatole, K. L., Towry, K. L., Thomas, M. A. (2008). When formal controls undermine trust and cooperation. Strategic Finance, January, 89, 39–44.Google Scholar
Churchill, N., Lewis, V. (1983). The five stages of small business growth. Harvard Business Review, 61, 30–50.Google Scholar
Ciavarella, M. A. (2001). Linking high involvement environments to the organisational life cycle: A descriptive and prescriptive approach. Academy of Management Proceedings, 2001, 1–6.Google Scholar
Davila, T. (2005). An exploratory study on the emergence of management control system: Formalizing human resources in small growing firms. Accounting, Organisations and Society, 30, 223–248.CrossRefGoogle Scholar
Dillman, D. A. (2007). Mail and internet surveys: The tailored design method. New York, NY: John Wiley and Sons.Google Scholar
Dodge, H. R., Robbins, J. E. (1992). An empirical investigation of the organisational life cycle model for small business development and survival. Journal of Small Business Management, 1, 27–37.Google Scholar
Eisenhardt, K. M., Bourgeois, L. J. (1988). Politics of strategic decision making in high velocity environments: Towards a mid-range theory. Academy of Management Journal, 31, 737–770.Google Scholar
Euske, K. J., Riccaboni, A. (1999). Stability to profitability: Managing interdependencies to meet a new environment. Accounting, Organisations and Society, 24, 463–481.Google Scholar
Farr-Wharton, R., Brunetto, Y. (2007). Organisational relationship quality and service employee acceptance of change in SMEs: A social exchange perspective. Journal of Management & Organization, 13, 114–125.CrossRefGoogle Scholar
Flamholtz, E. G. (1990). Growing pains: How to make the transition from an entrepreneurship to a professionally managed firm. San Francisco, CA: Jossey-Bass Publishers.Google Scholar
Flamholtz, E. G. (1995). Managing organisational transitions: Implications for corporate and human resource management. European Management Journal, 13, 39–51.Google Scholar
Galbraith, J. R. (1977). Organisation design. Reading, MA: Addison-Wesley.Google Scholar
Gerdin, J. (2005). Management accounting system design in manufacturing departments: An empirical investigation using a multiple contingencies approach. Accounting, Organisations and Society, 30, 99–126.Google Scholar
Gordon, L. A., Miller, D. (1976). A contingency framework for the design of accounting information systems. Accounting, Organizations and Society, 1, 59–69.Google Scholar
Greiner, L. E. (1972). Evolution and revolution as organisations grow. Harvard Business Review, 50, 37–54.Google Scholar
Hanks, S. H., Watson, C. J., Jansen, E., Chandler, G. N. (1993). Tightening the life-cycle construct: A taxonomic study of growth stage configurations in high-technology organisations. Entrepreneurship Theory & Practice, 18, 5–30.Google Scholar
Henri, J. (2009). Taxonomy of performance measurement systems. Advances in Management Accounting, 17, 247–288.Google Scholar
Horngren, C., Bhimani, A., Datar, S. M., Foster, G. (2002). Management and cost accounting. Harlow, Essex: Prentice Hall, Pearson Education Limited.Google Scholar
House, R. J. (1996). Path-goal theory of leadership lessons, legacy, and a reformulated theory. The Leadership Quarterly, 7, 323–352.CrossRefGoogle Scholar
Jaeger, A. M., Baliga, B. R. (1985). Control systems and strategic adaptation: Lessons from the Japanese experience. Strategic Management Journal, 6, 115–134.Google Scholar
Jensen, M. C. (1998). Foundations of organisational strategy. Cambridge, MA: Harvard University Press.Google Scholar
Johnson, W. H. A. (2011). Managing university techology development using organisational control theory. Research Policy, 40, 842–852.Google Scholar
Kallunki, J. P., Silvola, H. (2008). The effect of organisational life cycle stage on the use of activity-based costing. Management Accounting Research, 19, 62–79.Google Scholar
Kazanjian, R. K. (1988). Relation of dominant problems to stages of growth in technology-based new ventures. Academy of Management Journal, 31, 257–279.Google Scholar
Kazanjian, R. K., Drazin, R. (1990). A stage-contingent model of design and growth for technology based new ventures. Journal of Business Venturing, 5, 137–150.Google Scholar
Ketchen, D. J., Shook, C. L. (1996). The application of cluster analysis in strategic management research: An analysis and critique. Journal of Management &Organization, 17, 441–458.Google Scholar
Kimberly, J. R., Miles, R. H. (1980). The organisational life cycle. San Francisco, CA: Jossey-Bass.Google Scholar
Kober, R. (2010). The emergence and utilization of management control systems in a high growth firm. Working paper presented at Accounting and Finance Association of Australia and New Zealand. New Zealand: Christchurch.Google Scholar
Kober, R., Ng, J., Paul, B. (2003). Change in strategy and MCS: A match over time? Advanced Accounting, 20, 199–232.Google Scholar
Kober, R., Ng, J., Paul, B. (2007). The interrelationship between management control mechanism and strategy. Management Accounting Research, 18, 425–452.Google Scholar
Kompass Australian Database. (2010). Victoria: Peter Isaacson Publications.Google Scholar
Lester, D. L., Parnell, J. A., Carraher, S. (2003). Organisational life cycle: A five-stage empirical scale. The International Journal of Organisational Analysis, 11, 339–354.Google Scholar
Liao, Y. S. (2006). The effect of fit between organisational life cycle and human resource management control on firm performance. The Journal of American Academy of Business, Cambridge, 8, 192–196.Google Scholar
Lippitt, G. L., Schmidt, W. H. (1967). Crises in a developing organisation. Harvard Business Review, November–December, 102–112.Google Scholar
Macintosh, N. B. (1994). Management accounting and control systems. New York, NY: Wiley.Google Scholar
Malmi, T., Brown, D. A. (2008). Management control systems as a package – Opportunities, challenges and research directions. Management Accounting Research, 19, 287–300.Google Scholar
Manufacturing Industry Brief. (2008–2009). Department of Innovation Industry, Science and Research. Retrieved from http://www.innovation.gov.au/Section/Industry/Documents/DIISR_manuf_rpt_web_version.pdf.Google Scholar
Merchant, K. A. (1981). The design of the corporate budgeting system: Influences on managerial behaviour and performance. The Accounting Review, LVI(4), 813–829.Google Scholar
Merchant, K. A. (1984). Influences on departmental budgeting: An empirical examination of a contingency model. Accounting, Organisations and Society, 9, 291–307.Google Scholar
Merchant, K. A. (1998). Modern management control systems. Upper Saddle River, NJ: Prentice-Hall.Google Scholar
Merchant, K. A., Van der Stede, D. T. (2007). Management control systems (2nd ed.). Prentice Hall, Pearson Education Limited: Harlan, Essex, England.Google Scholar
Merchant, K. A., Van der Stede, W. A. (2003). Management control systems: Performance measurement, evaluation and incentives. London: Prentice-Hall.Google Scholar
Miller, D., Friesen, P. H. (1984). A longitudinal study of the corporate life cycle. Management Science, 30, 1161–1183.Google Scholar
Mital, A., Desai, A., Subramanian, A., Mital, A. (2008). Product development: A structured approach to consumer product. Oxford: Elsevier.Google Scholar
Moores, K., Yuen, S. (2001). Management accounting systems and organisational configuration: A life-cycle perspective. Accounting, Organisations and Society, 26, 351–389.Google Scholar
Otley, D. T., Berry, A. (1994). Case study research in management accounting and control. Management Accounting Research, 5, 45–65.Google Scholar
Ouchi, W. G. (1977). The relationship between organisational structure and organisational control. Administrative Science Quarterly, 22, 95–113.Google Scholar
Ouchi, W. G. (1978). The transmission of control through organisational hierarchy. Administrative Science Quarterly, 21, 173–192.Google Scholar
Ouchi, W. G. (1979). A conceptual framework for the design of organisational control mechanisms. Management Science, 25, 833–848.Google Scholar
Ouchi, W. G. (1980). Markets, bureaucracies, and clans. Administrative Science Quarterly, 25, 129–141.Google Scholar
Perrow, C. (1986). Complex organisations. New York, NY: Random House.Google Scholar
Phoenix, T. (2006). Benefits compensation. International Foundation of Employee Benefit Plans, 43, 11–14.Google Scholar
Quinn, R. E., Cameron, K. (1983). Organisational life cycles and criteria of effectiveness. Management Science, 29, 33–51.Google Scholar
Samson, D., Daft, R. L. (2005). Management. Sydney: Thomson.Google Scholar
Sandelin, M. (2008). Operation of management control practices as a package – A case study on control system variety in a growth firm context. Management Accounting Research, 19, 324–343.Google Scholar
Silvola, H. (2008). Do organisational life-cycle and venture capital investors affect the management control systems used by the firm? Advances in Accounting, Incorporating Advances in International Accounting, 24, 128–138.Google Scholar
Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic renewal. Boston, MA: Harvard Business School Press.Google Scholar
Singleton, R. A., Straits, B. C. (2005). Approaches to social research. New York, NY: Oxford University Press.Google Scholar
Smith, K. G., Mitchell, T. R., Summer, C. E. (1985). Top level management priorities in different stages of the organisational life cycle. Academy of Management Journal, 28, 799–820.Google Scholar
Snell, S. A. (1992). Control theory in strategic human resource management: The mediating effect of administrative information. Academy of Management Journal, 35, 292–327.CrossRefGoogle Scholar
Snell, S. A., Youndt, M. A. (1995). Human resource management and firm performance: Testing a contingency model of executive controls. Journal of Management, 21, 711–737.Google Scholar
Sproles, G. B., Kendall, E. L. (1986). A methodology for profiling consumers’ decision-making styles. Journal of Consumer Affairs, 20, 267–279.Google Scholar
Thompson, J. D. (1967). Organisations in action. New York, NY: McGraw-Hill.Google Scholar
Walsh, J. P., Seward, J. K. (1990). On the efficiency of internal and external corporate control mechanisms. Academy of Management Review, 15, 421–458.Google Scholar
Whitley, R. (1999). Firms, institutions and management control: The comparative analysis of coordination and control systems. Accounting, Organisations and Society, 24, 507–524.Google Scholar
Wiesner, R., McDonald, J., Banham, H. C. (2007). Australian small and medium sized enterprises (SMEs): A study of high performance management practices. Journal of Management & Organization, 13, 227–247.Google Scholar