The development of MCS packages – balancing constituents' demands
Abstract
Purpose
This study aims to consider how emerging management control systems (MCS) form the MCS package of start‐up firms. Based on institutional theory, the authors aim to better understand reasons for introducing MCS and the reciprocity between the parts of the firm's overall MCS package.
Design/methodology/approach
The authors apply a qualitative cross‐sectional field study approach involving 74 interviews with key stakeholders in 20 young start‐up firms with venture capital financing. Interview data are fully transcribed, analysed, checked, and triangulated.
Findings
The results uncover the main constituents of start‐up firms in three different institutional fields (nascent, start‐up, post start‐up), which substantially impact on the introduction of new MCS and the subsequent MCS packages. The introduction of formal MCS seems to be divided into different phases.
Research limitations/implications
This study is subject to the limitations of case‐based research. Moreover, the theoretical underpinning of institutional theory potentially underestimates the influence of agency on social behaviour and structures.
Practical implications
The study highlights the major drivers of establishing a set of control systems through which the interests of different stakeholders are aligned. A multitude of concrete examples of managing controls are given, including reasons for their introduction and their effects.
Originality/value
This paper sheds light on the introduction of MCS in young firms. This complements prior research, which has almost exclusively focused on MCS in more mature and established firms. Moreover, the authors deepen prior insights that are primarily focused on isolated formal components of MCS, by understanding MCS as a package.
Keywords
Citation
Strauss, E.R., Nevries, P. and Weber, J. (2013), "The development of MCS packages – balancing constituents' demands", Journal of Accounting & Organizational Change, Vol. 9 No. 2, pp. 155-187. https://doi.org/10.1108/18325911311325942
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited