A configuration approach to management control systems design in service organizations. Issue 1 (2nd March 2015)

• Record Type: Journal Article
• Authors: Auzair, Sofiah Md.
• Is Part Of: Journal of accounting & organizational change. Volume 11:Issue 1(2015)
• Page Start: 47
• Page End: 72
• Publication Date: 2015-03-02
• Subjects: Organizational change -- Periodicals; Accounting -- Periodicals; 658.1511
• DOI: 10.1108/JAOC-08-2012-0064
• Languages: English
• ISSNs: 1832-5912

Abstract

<abstract> <title> <x content-type="archive" xml:space="preserve">Abstract</x> </title> <sec> <title content-type="abstract-heading">Purpose</title> <p> – The purpose of this study is to utilize a configuration approach to examine the relationships between multiple contingent variables and management control systems (MCS) in service organizations from various industries. The contingent variables include service process type, cost leadership and differentiation strategies, environmental unpredictability, change and complexity and organizational life cycle stage. </p> </sec> <sec> <title content-type="abstract-heading">Design/methodology/approach</title> <p> – Questionnaires were administered to the financial controllers of service organizations operating in Australia. Cluster analysis is utilized to reveal the MCSs fit. </p> </sec> <sec> <title content-type="abstract-heading">Findings</title> <p> – The data reveals that high-performing service organizations are those firms that place high emphasis on a differentiation strategy. The lower performers, on the other hand, are firms with a lack of emphasis on both cost leadership and differentiation strategies. Overall, the data demonstrates that strategic orientation plays an important role in high-performing organizations and the ability to incorporate various contingent situations determines the effectiveness of an organization. </p> </sec> <sec> <title content-type="abstract-heading">Practical implications</title> <p> – The potentially broad framework offered in this study allows managers from various service industries to relate the variations in the combination of situations to those of their firms. The service managers' experience with certain type of combinations can assist them to identify the strategic position of their respective organizations. Consequently, service managers can estimate the prospect for further development to enhance the firm performance. </p> </sec> <sec> <title content-type="abstract-heading">Originality/value</title> <p> – This study offers a holistic view of the multiple and simultaneous relationships between contingent factors and MCS design in service organizations using a configuration approach. This paper contributes to the literature on organizational configurations in particular by studying the systematic nature of effective MCSs in service organizations when adapting to the contextual settings of the organizations.</p> </sec> </abstract>