Learning and the loosely coupled elements of control

Abstract

Purpose

The purpose of this paper is to examine how a parent company ensures reliable accounting information from its subsidiaries located in a significantly different environment, analyzing the process and its outcomes.

Design/methodology/approach

The paper employs the conceptualization of management control as a loosely‐coupled system to explore the integration of accounting‐related work between a parent company and subsidiaries. Three Western firms and their subsidiaries in the territory of the former Soviet Union are studied, focusing on the couplings between different elements of control and their outcomes, and taking accounting as an object and element of control.

Findings

The results show how other elements of control can steer accounting‐related work. As the organizational structures made possible personnel controls in the form of informal training in accounting, results controls were responsive to these personnel controls. This constructed common models of thinking, meaning that cultural controls were responsive to results controls. The responsiveness also supports generative learning, since accounting‐related training includes and introduces Western business thinking.

Originality/value

The findings show that loose couplings within management control systems may lead to generative learning due to the rules imposed by the parent company. Elaborating the dual role of accounting as an object and element of control illustrates a relationship different from the earlier view that loose coupling between parent's rules and what is locally done tends to foster local stability based on preservation of existing ways of thinking, i.e. adaptation instead of adaptability.

Citation

Moilanen, S. (2012), "Learning and the loosely coupled elements of control", Journal of Accounting & Organizational Change, Vol. 8 No. 2, pp. 136-159. https://doi.org/10.1108/18325911211230344