Management control systems: The role of interactive and diagnostic approaches to using controls from an organizational life cycle perspective

Abstract

Purpose

This paper aims to examine the association between the interactive and diagnostic approaches to using controls and Miller and Friesen’s (1984) organizational life cycle (OLC) stages (birth, growth, maturity, revival).

Design/methodology/approach

Data were collected from a random sample of 343 general managers in Australian manufacturing organizations.

Findings

The results indicate that both approaches are used to a greater extent in the growth and revival stages than the birth and maturity stages, whereas the interactive and diagnostic approaches are used to a similar extent in each of the four OLC stages.

Research limitations/implications

This study contributes to the management control system literature by examining the use of the interactive and diagnostic approaches from an OLC perspective. The findings highlight that the complementary nature of the interactive and diagnostic approaches applies in each OLC stages, and suggest that similar attention should be placed on the use of both the interactive and diagnostic approaches in each OLC stage.

Practical implications

The study provides managers with an insight into the prevalence of the use of interactive and diagnostic approaches across the birth, growth, maturity and revival stages.

Originality/value

This study contributes to the management control system literature by adopting the configuration approach to examine how multiple contingent variables simultaneously affect the approach to using controls. Specifically, this study examines how organizations adjust their emphasis on Simons’ (1995) interactive and diagnostic approaches to using controls as they move across different development stages. These development stages were labelled as OLC stages and are determined based on the simultaneous consideration of multiple contingent factors.

Citation

Su, S., Baird, K. and Schoch, H. (2017), "Management control systems: The role of interactive and diagnostic approaches to using controls from an organizational life cycle perspective", Journal of Accounting & Organizational Change, Vol. 13 No. 1, pp. 2-24. https://doi.org/10.1108/JAOC-03-2015-0032