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Management control systems: a review

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Abstract

The purpose of this paper is to review analytical conceptualizations of management control systems (MCS) that have been developed in the academic literature. By means of a systematic review (Tranfield et al. in Br. J. Manag. 14: 207–222, 2003), a comprehensive analysis that encompasses both textbook approaches and research papers is provided. As a result, this article presents a landscape of possible MCS understandings. For the selection of textbooks a survey among accounting researchers and a syllabi search were conducted (Hoffjan and Wömpener in Schmalenbach Bus. Rev., 58: 234–258, 2006). Merchant and Van der Stede (Management control systems: Performance measurement, evaluation and incentives, 2nd edn. Prentice Hall, Harlow, 2003), Anthony and Govindarajan (Management control systems, 12th edn. McGraw-Hill, Boston, 2007), and Simons (Performance measurement and control systems for implementing strategy. Pearson, Upper Saddle River, 2000) as the three top-ranked textbooks were analyzed and used to generate criteria for the subsequent identification of relevant articles. Additional conceptual papers were included in the analysis. Accordingly, this paper contributes to the management control literature by presenting a review of analytical conceptualizations of MCS. In contrast to previous reviews, we compare analytical concepts of MCS at different categories such as definitions, purposes, types, and frameworks. Moreover, our review was conducted in a systematic manner, i.e. it follows a transparent and thorough process and, by doing this, it complements prior not primarily objective reviews. Finally, we outline a map of the fragmented MCS landscape.

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Notes

  1. An exception is the review by Merchant and Otley (2007), which portrays different MCS concepts. However, they do so in a consecutive manner without explicitly highlighting commonalities and differences of those concepts.

  2. It is worth mentioning that also the Massachusetts Institute of Technology (MIT) and the University of Chicago have contributed to the development of management control. However, the influence of the HBS was more important due to the governmental programs it ran and the success of the textbooks by Anthony. Therefore, we decided to focus only on HBS for the purpose of our paper. For more information about the MIT and University of Chicago’s influence see Zeff (2008).

  3. For a review of management control concepts before 1965 see Bedeian and Giglioni (1974) who trace the development of management control theory to the early 1900s. Similarly, Parker (1986) examines the conceptual development of management control from 1900 until 1979. The evolution of management control from 1908 until 1980 at HBS as well as at the Massachusetts Institute of Technology and at the University of Chicago is discussed in a historical study by Zeff (2008). Parker (1986, Appendix A) provides an overview of control-related sections in 21 management accounting texts.

  4. Overviews over the progress in MCS research in the 1970s and 1980s are provided by Machin (1983) and Merchant and Simons (1986). For a review of more current developments in MCS research, see, for instance, Otley et al. (1995), Merchant and Otley (2007) and Berry et al. (2009).

  5. For more information about the Hasselback Directory please visit www.jrhasselback.com or www.hasselback.org.

  6. Due to the history of the topic management control and its roots in accounting, we focus our analysis on accounting academics as they still dominate the teaching of and research on management control systems.

  7. Hoffjan and Wömpener (2006) focused on management accounting lecturers from Germany, UK, USA, Australia, Switzerland, Austria, and Canada since their aim was to a comparative textbook analysis on strategic management accounting. In contrast, we extended the population to individuals in the areas of controllership and cost accounting to account for the broader scope of the term MCS (Merchant and Otley 2007).

  8. For an overview about the given rationales see Appendix D.

  9. We did not use the term “management control” because we realized that many syllabi contain abbreviations or university-specific adaptations to management control. Therefore, we decided to use the broader term “control” in order to capture all relevant syllabi.

  10. For an detailed overview about studies that make a relevant contribution to MCS conceptualization see Appendix C.

  11. Simons’ (2000) textbook is essentially based on his monograph (Simons 1995) that, in turn, elaborates on his conceptual ‘levers of control’ model based upon several empirical studies (Simons 1987, 1990, 1991, 1994). In order to give a comprehensive review of Simons’ model, references are sometimes made to his earlier publications.

  12. This bottom-up perspective has been inspired by Simons’ Ph.D. supervisor Henry Mintzberg, who differentiated between emergent and planned strategies (see Mintzberg and Waters 1985).

  13. Section 5.2.2 elaborates on the different controls proposed by Ouchi (1977, 1979).

  14. Although Speklè (2001) is discussed in Sect. 5.2.2, we excluded his MCS definition here because he only refers to already presented authors such as Ouchi (1979), Flamholtz et al. (1985), and Whitley (1999).

  15. For a more detailed description of the different dimension see Whitley (1999, pp. 509–512).

  16. Please note that the figure just gives some kind of graphical illustration. The distances between the different articles cannot be strictly interpreted in the sense of equidistance to other articles or to the end of the continuum.

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Acknowledgements

We would like to thank Lukas Goretzki, Maik Hamann, Stephan Kramer, Matthias D. Mahlendorf, Pascal Nevries, Andreas Veit, Elmar Wyszomirski, and Stephen A. Zeff for their insightful comments on earlier versions of this paper. The second author gratefully acknowledges the financial support of the Foundation of German Business (Stiftung der Deutschen Wirtschaft). The responsibility for any errors in the resulting work remains our own.

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  1. Institute of Management Accounting and Control (IMC), WHU—Otto Beisheim School of Management, Valendar, Germany

    Erik Strauß & Christina Zecher

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Strauß, E., Zecher, C. Management control systems: a review. J Manag Control 23, 233–268 (2013). https://doi.org/10.1007/s00187-012-0158-7

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