Special Issue on Contemporary Developments in Management Control

Citation

Nixon, B. and Burns, J. (2015), "Special Issue on Contemporary Developments in Management Control", Qualitative Research in Accounting & Management, Vol. 12 No. 4. https://doi.org/10.1108/QRAM-09-2015-0073

Special Issue on Contemporary Developments in Management Control

Article Type: Editorial From: Qualitative Research in Accounting & Management, Volume 12, Issue 4

In a different journal, over a decade ago (Nixon and Burns, 2005), we guest-edited a special issue on the theme of management control. Back then, we argued in our brief editorial that there was not only a worrying perceived gap between practice and the management control literature but also a gap between the extant management control literature and broader control-related literatures. Ten years on, notwithstanding many valuable contributions to the field of management control research, though too many to mention here, it still seems reasonable to ask similar questions today of such gaps.

It is not for want of trying to bridge such perceived gaps, for instance, we have already acknowledged the many valuable research contributions over the past decade. But, the main obstacle in this challenge is the pace of change in the environment within which management control locates itself. This environment (with multiple key drivers such as technological improvement, economic conditions, management styles, regulation and more) is having fast and far-reaching implications for organisational arrangements – including management control. In addition, this, in turn, begs the question still of the extent to which (or not) management control practices and research are remaining “in touch”, both with each other and, respectively, with the runaway environment. Suffice to say, we felt that a review of contemporary developments in management control was timely.

This special issue comprises a collection of papers which investigate, question and theorise about multiple dynamics of the management control process. The nexus of management controls in tomorrow’s organisation is still hugely under-explored, and the subject of exploration is a moving and largely unpredictable complex. There is clearly, for example, a great deal more to understand about the interdependencies across management (and other) controls in organisations, and the notion of control as a “package” is still fundamental but probably only captures a part of the dynamics and complexities involved. The broader context, within which management control is played out, influenced and influences, is continuously changing and re-defining.

The paper written by Friis and Hansen considers some of the positive aspects of adopting line-item budgeting systems, set in an interesting and rather under-explored case setting of film (movie) production. More specifically their findings complement others’ recent works which suggest that traditional management controls can actually bring beneficial traits to the creativity process within this complex and risk-ridden organisational field. The case study gives fascinating insight into how the line-item budgeting systems were positively welcomed, and even further developed, by the film director, mostly because it advanced his self-control and directed creativity in the filmmaking process. The management controls also assisted the director through continually reminding him of the importance of planning, prioritising and adapting to the changing conditions in the filmmaking process; this importance was defined in such ways as avoiding unnecessary costs from delays or additional finance and steering away from “trouble with the money men”. Moreover, Friis and Hansen’s paper also demonstrates how constraints built into the line-item budget can actually enhance the creative process by generating more viable creative ideas and illuminating that sometimes “less is more”.

Evans and Tucker’s paper explores the respective roles played by formal management control systems and informal control in managing organisational change. Their case is a renewable energy company in Australia which faces significant challenges in its operating environment from the government’s introduction of carbon tax. Interestingly, they present findings which indicate an organisation whose formal management control systems and informal controls play complementary roles in its response to change. The formal control systems provided a means via which carbon tax compliance was achieved but, as one interviewee stated, it was the informal controls which particularly helped to “get things done”. The case organisation’s situation was characterised by significant ambiguity and uncertainty, but this was found to be with an organisational culture that promotes participation, co-ordination and open communication across geographic, hierarchical and functional boundaries. Moreover, as Evans and Tucker developed, such organisational culture not only underpinned both the genesis and evolution for formal control systems but also the key informal control mechanisms.

Lapsley and Rios’s paper investigates an extremely novel, highly-topical and under-explored aspect of management control, namely, the issue of transparency in government budgeting. They draw upon evidence from the business committees of the Scottish Parliament, with a combined-methods approach, involving documentary analysis, observation and elite parliamentary interviews. Rather than follow most extant research in exploring transparency as an external, outward-facing phenomenon by which state bodies are held publicly accountable for their activities, Lapsley and Rios address the importance of internal transparency in public services organisations. Drawing on extant theory, they concentrate on more nuanced interpretations of what transparency means in practice, focussing on different levels of transparency and considering “beyond” more traditional ideas that transparency can be achieved by key actors who understand the nature of disclosed information. The findings of this study are both striking and alarming, in particular, evidence that suggests politicians are seldom interested in transparency, even if they publicly declare so. Such lip service to fundamental tenets of contemporary public finance such as transparency raises major concerns, the authors argue, over the extent to which electorates can trust politicians.

Schäffer et al.’s paper was motivated by the authors’ intrigue into how organisational members deal with institutional complexity but also, more specifically, the role that management control systems play in such situations. The authors conducted an in-depth case study of a German Mittelstand firm, where the actors were faced with multiple aspects of institutional complexity. The case study is an interesting account of the dynamics involved when there are competing institutional logics within the same organisational setting, over time. The authors’ found that management control systems’ components can be selectively coupled or compartmentalised, following an extension to the larger control system, a finding which complements prior research of the different use of single management controls such as budgeting. The results of this study also complement recent insights which stress the importance of leaders, particularly, those with a “pluralist identity”, in situations of institutional complexity, and suggest that the influence of a control system not only rests on its own configuration but also on the characteristics of the those in front.

The paper written by Oliveira and Clegg brings two key contributions to the field. First, by means of a case study, it adds new knowledge to the emerging literature on shared service centres (and related technologies, such as enterprise resource planning systems) and their organisational control consequences. Second, the paper contributes towards the literature on power, providing a novel and explicit perspective, suggesting revised understandings of “circuits of power”, more specifically through clarifying how structural circuits of power may emerge and operate. Interestingly, this paper articulates why routine, transactional and typically low value-adding activities associated with shared service centres should not conceal their profound organisational consequences for control and wider relations of power.

The theme of “management control” will continue to (re-)develop and present new challenges, both in practice and in research (not to mention the oft-lag between them); we hope that you enjoy reading the following collection of papers covering recent developments in this field. Our thanks are especially due to all of the participating authors, but also the many reviewers who helped us along by means of outsourcing their expertise and advice.

Bill Nixon - School of Business, University of Dundee, Dundee, UK

John Burns - Business School, Exeter University, Exeter, UK

Reference

Nixon, B. and Burns, J. (2005), “Management control in the 21st century”, Management Accounting Research, Vol. 16 No. 3, pp. 260-268.