تأثیر متقابل بین مکانیسم های کنترل مدیریت و استراتژی

This paper examines the interrelationship between management control system (MCS) mechanisms and strategy. The traditional view is that the MCS is shaped by organisational strategy. More contemporary viewpoints, however, suggest that there may be a two-way relationship between the two variables. That is, MCS shapes, and is shaped by, strategy. We develop two research questions that describe the interrelationship between MCS and strategy, and test them using a public sector entity that experienced a strategic change. A retrospective longitudinal study, spanning five years and involving archival data, interviews and a questionnaire, was adopted. The analysis confirms the existence of a two-way relationship between MCS and strategy. We find that the interactive use of MCS mechanisms helps to facilitate a change in strategy, and that MCS mechanisms change to match a change in strategy.

While prior studies have highlighted the importance of achieving a fit between an organisation's management control system (MCS)3 and its strategy (e.g., see reviews by Chenhall, 2003, Dent, 1990 and Langfield-Smith, 1997), the interrelationship between MCS and strategy is not clear. Traditionally, the relationship between MCS and strategy has been viewed as a passive one, suggesting that the MCS is an outcome of organisational strategy. Hopwood (1987) and Dent (1990), however, speculated that the MCS might take a proactive role in influencing strategy. Hopwood (1987) suggested that management controls implemented for a particular reason could signal new potential, and thus unintentionally aid in the development of new directions. Macintosh (1994) recognised that the association between MCS and strategy could be more than a simple uni-directional relationship, and suggested that there may be a two-way relationship between MCS and strategy. However, while research had examined the one-way relationship, none has explored the more complex two-way association (Slagmulder, 1997). To date, the studies that have examined the relationship between MCS and strategy in organisations undergoing change (e.g., Archer and Otley, 1991 and Roberts, 1990) have concentrated on describing the controls utilised at the time of change. Consequently, these studies have described the controls used to achieve the intended strategic change but have not provided insights into the interrelationship between MCS and strategy. Our paper synthesises, and extends, the extant literature to develop two research questions to explain the interrelationship between strategy and MCS: (1) the interactive use of MCS mechanisms helps to facilitate a change in strategy, and (2) MCS mechanisms change to match a change in strategy. Chenhall (2003) stated that understanding the role of MCS in the strategic change process is important. Our study sheds light on the strategy–MCS relationship, thus enhancing the knowledge of organisational development and organisational change process. The research questions are tested using The Western Australian Centre for Pathology and Medical Research (known as PathCentre), which is a public sector pathology service provider that changed strategic typology in response to government reforms (i.e., the introduction of new public management (NPM) practices in the Western Australian public sector). What is interesting about this organisation is that its strategic typology evolved beyond what was originally envisaged by PathCentre management as necessary to align the organisation with the NPM reforms. While the NPM reforms created the need to change strategic direction, the reforms in themselves did not create the internal environment that enabled changes to occur. Our study examines the role of internal factors that impacted on the interrelationship between strategy and MCS at PathCentre. A retrospective longitudinal case study of the organisation's MCS prior to, during and after, its change in strategic typology is undertaken. Our study draws on the descriptive strengths of case study research as outlined by Ahrens and Dent (1998), and a longitudinal case study, in particular, is useful for “teasing out” the interrelationship between MCS and strategy (Dent, 1990). Furthermore, in the conduct of our study, we adopt between-methods triangulation encompassing documentation reviews, interviews, and a questionnaire. Drawing on the strengths of this mix of quantitative and qualitative methods facilitates a systematic and comprehensive analysis of the interrelationship between MCS and strategy. Specifically, while the questionnaire provides us with an understanding of strategy and the extent of use of MCS mechanisms, the inclusion of interviews and the review of documents enables us to understand and interpret the interrelationships within a rich and more meaningful context. As lauded by Modell (2005, p. 233), between-methods triangulation offers a “relatively potent means of assessing the degree of convergence as well as elaborating on divergences between results obtained”. The results reveal support for our research questions suggesting that MCS mechanisms used in an interactive manner help to facilitate a change in strategy and, when a change in strategy occurs, the MCS mechanisms change to match. Taken together, these results show the two-way relationship between MCS and strategy. That is, the MCS both shapes, and is shaped by, strategy. This paper is structured as follows. The next section provides a synthesis of the literature. In Section 3, we develop the research questions tested in this paper. Section 4 discusses the research method, and Section 5 provides a description of the organisation used to test the research questions and provides background on the external operating environment. Section 6 presents the results of the study. Section 7 provides the conclusions, as well as discussing the limitations and avenues for future research.

This study examined the interrelationship between MCS and strategy. Two research questions describing this interrelationship were developed and tested in the paper. The first research question stated that the interactive use of MCS mechanisms helps to facilitate a change in strategy, and the second stated that MCS mechanisms change to match a change in strategy. These research questions were tested using an organisation that experienced strategic change. The paper documented the changes in strategy and MCS that occurred in the organisation, tracing these changes over an extended time period which covered the periods prior to, during and after, the change. The results indicated changes in strategy over the time periods studied. PathCentre's initial strategic typology resembled that of a reactor. However, with the introduction of NPM reforms, PathCentre had to change its strategic direction. The organisation's response to these reforms was to pursue the provision of high-quality, cost-effective pathology services, which is consistent with a defender strategy. Interestingly, PathCentre evolved beyond this intention, and sought to differentiate itself from competitors so as to actively compete in its existing pathology market and seek out new markets (i.e., a prospector typology). The results also indicated a change in the usage of MCS mechanisms over the time periods examined. Specific mechanisms that were identified during interviews in connection with the strategic change process were then examined in detail to identify their role in the change process and thus test the two research questions. The study revealed an increased use of results monitoring and cost controls in an interactive manner which facilitated a change in strategy. The introduction of interactive meetings on business and operational matters promoted inter-hierarchical communication and discussion, and lower level managers interacted with their superiors in the development of budgets and the monitoring of variances. These interactive activities fostered discussion and debate, and promoted an awareness of the financial environment. In this way, they helped to facilitate a change in strategy. This finding is consistent with Research Question 1 (i.e., the interactive use of MCS mechanisms helps to facilitate a change in strategy) and lends support for Simons’ (1995) assertion that through the use of management control in an interactive manner, new strategies can arise. The interviews also identified resource sharing mechanisms and bureaucratic controls as playing a role in the strategic change process at PathCentre. Resource sharing (i.e., the formation of interdisciplinary workgroups) was, in part, introduced at PathCentre as a means of achieving cost efficiencies. In a similar way, more stringent bureaucratic controls were pursued as a means of enabling PathCentre to differentiate itself from its competitors. In both these examples, changes to the MCS mechanisms were made as a result of the strategy that was being pursed. Hence, MCS changed to match the strategy being pursued. These findings provide support for Research Question 2 (i.e., MCS mechanisms change to match a change in strategy) and are consistent with the traditional view of the role of MCS (e.g., Fiegener, 1994, Govindarajan and Shank, 1992, Kober et al., 2003 and Miller and Friesen, 1982). Taken together, our findings shed light on earlier literature that speculated on the strategy–MCS relationship (e.g., Hopwood, 1987, Dent, 1990 and Macintosh, 1994). By showing that MCS mechanisms used in an interactive manner help to facilitate a change in strategy and, when a change in strategy occurs, the MCS mechanisms change to match, we illustrate the interrelationship between MCS and strategy. Thus, we find support for Macintosh (1994) and Kloot (1997) who suggested a two-way relationship between MCS and strategy. That is, the MCS both shapes, and is shaped by, strategy. Several limitations of this study must be acknowledged. First, while case studies enable a detailed analysis of the strategic change process, and the use of the case study approach has been encouraged by researchers (e.g., Dent, 1990 and Shields, 1997), the generalisability of any findings may be limited due to the presence of various organisation-specific characteristics. Furthermore, this paper focused on describing the internal factors that facilitated changes to PathCentre's strategy and MCS. The initial impetus for PathCentre's change in strategy was externally imposed, but while these external institutional factors created a need for change they did not create the mechanisms within the organisation to enable the change to occur. Prior literature (e.g., Roberts, 1990) described instances where external factors created a need for organisational change but the organisation failed to change because internal factors did not support the required change. Nonetheless, we acknowledge that the external environment may have impacted on the organisational change process, but we could not control for these externalities. This study used a retrospective longitudinal study and necessarily relied on participants’ recall and memory of events in the time periods studied. While this enabled participants to “look back” and consider the relative magnitude of the changes that had occurred, they were doing so with the benefit of hindsight and this could have affected their recall of events. Therefore, it would be interesting to repeat a similar study in an organisation that is currently considering changing its strategic direction. Questionnaires could then be distributed to complement the timing of the change. Finally, a decision was also made to separate the time horizon surrounding the strategic change into three time-frames. The appropriateness of these time-frames may need to be considered. However, care was taken in their selection by seeking input from several senior managers who confirmed that employees could easily associate with the event periods. While the research questions developed in this paper were tested using a single organisation, future research needs to be conducted with other organisations that are presently undergoing change in order to validate the findings of this study. Future research may also investigate the role of MCS mechanisms used in a diagnostic manner in the MCS–strategy relationship. While this paper focused on the role of MCS mechanisms used in an interactive manner on the relationship, the results revealed that some MCS mechanisms used in a diagnostic manner had also increased in usage. It would be interesting to conduct future research on the effect of MCS mechanisms used in a diagnostic manner in the MCS–strategy relationship.