انتخاب های تکمیلی و کنترل مدیریت: تحقیقات میدانی در یک محیط تولید انعطاف پذیر

This paper examines the complex relations between the production environment and management control system design. The complementarity principle is used to develop a theoretical framework for the field research. The devised framework identifies production characteristics that are relevant for management control system design and specifies the design in a flexible as well as a conventional production environment. Overall, the empirical evidence provided by three case studies is consistent with the predictions made in the framework. The results show that the management control system of the company operating in the most flexible production environment matches best the specified flexibility-complementing design. In addition, the high level of change with regard to non-complementary design aspects and the observed direction of these changes lend support to the stated expectations. However, the findings revealed by one case study demonstrate an apparent lack of complementarity and give insight into the related struggle within this company to improve the situation. The paper ends with a discussion of the opportunities and limitations of the described contributions.

The current fast-paced business climate and the vast amount of opportunities created by technological progress are forces driving many firms to transform their production environments. In these firms, the focus of the production strategy changes and emphasizes market conditions such as product assortment, quality and delivery performance. The production organization becomes more flexible, while the equipment and machinery that are used become more technologically advanced. The transformations into a flexible production environment are generally expected to have implications for management control systems. The value of alignment between the production environment (PE) and the management control system (MCS) of an organization has been discussed by many accounting researchers (e.g., Kaplan, 1983, Howell and Soucy, 1987, Daniel and Reitsperger, 1991 and Hemmer, 1996). The relevance of empirical research on how performance measures and reward systems may be used to support particular operational strategies and new production philosophies has been emphasized by Langfield-Smith (1997). There have been already several empirical studies on the link between production strategy and control system design. Nevertheless, a lack of knowledge in this area may still be noted, especially with regard to how these variables work together to determine performance (Sim and Killough, 1998 and Ittner and Larcker, 2001). A specific problem with most empirical work in this field is that it typically assumes a sequential process, which may not be sufficient to capture the complex nature of the relations between the production environment and MCS design (Ittner and Larcker, 2001). This paper draws on the complementarity principle in order to examine how production environment elements and design features of the management control system work together in practice. Activities are considered complements if they are related in such a way that when the level of one activity increases, then the marginal return to any of the other activities increases. Milgrom and Roberts, 1990 and Milgrom and Roberts, 1995 use this principle to explain the effects of changing various elements of the production environment. For example, having a flexible production strategy and using flexible technology are complementary actions: each is more valuable when done with the other. The authors use the notion of complementarity to demonstrate the interdependencies between elements of the production environment. Their application of the complementarity principle offers the opportunity to study many related variables and their mutual interdependencies. It also puts forward a theoretical basis for the distinction between conventional and flexible production environments. This distinction is determined by the design choices with regard to production strategies, technologies and organizational forms (Milgrom and Roberts, 1990). According to Drake et al. (1999), research on complementary choices within accounting and control is beginning to appear. An important attribute of research on complementary choices is the assumption of reciprocal interdependencies between characteristics of the accounting and control system and other organizational characteristics. All these characteristics are determined jointly and not sequentially. Drake et al. state that accounting and control systems appear to offer rich ground for future study and that factors that contribute to complementary management choices are not well understood. This paper aims to provide a deeper insight into the complementarities between production environment elements and management control aspects. The study uses a theoretical framework that builds on the dichotomy of the conventional versus the flexible production environment. Drawing on the notion of complementarity, the framework identifies PE elements that are relevant for MCS design. It then specifies a complementary MCS design for a conventional as well as for a flexible production environment, with particular regard to performance criteria, the evaluation process and the reward system. In a flexible environment, more decision rights are likely to be placed at lower levels and the subsequent need for more horizontal as well as vertical information sharing is expected to affect the MCS design. The field study was conducted in three companies chosen from different industries. The findings suggest that firms differ in the extent to which they have adopted a flexible production approach and a flexibility-complementing MCS design. The levels of complementarity encountered in the three case studies also seem to vary. Comparisons and contrasts made among firms provide a basis for a discussion on the complementarity principle in relation to management control. The main contribution of the paper lies in the exploration of the complementarity notion by in-depth case studies. The case studies provide evidence that complementarity is a useful notion for the analysis of current business practice. The developed framework demonstrates some predictive ability in the case studies. Also, many interdependencies between PE elements and MCS design are observed in the case studies. In addition, the case studies show many changes into more complementarity, while in general the companies seem to be moving towards a higher level of flexibility in both production environment and MCS design. Furthermore, the case studies indicate that the empirical study of complementarity is a complex issue. This paper identifies some issues related to the use of the complementarity notion that provide interesting research challenges. The remainder of the paper is organized as follows. The second section reviews the literature on complementarity and presents the research questions. Section three proceeds with an outline of the literature on the relations between production environment and management control system design. Section four reports the evidence obtained from three case studies. In section five, a synthesis of the cases leads to a reflection on the theory used. Section six ends with the conclusions.

Motivated by the observation that the complementarities between production environment and MCS design are not fully understood, a theoretical framework was developed for the research. The framework mentions several important characteristics of the production environment that affect some salient MCS features. It also formulates expectations with regard to the relationship between MCS design and production environment. From the theory as well as from the case research, it is clear that determining the type of production environment, conventional or flexible, is difficult. It is not always possible to draw rigid boundaries (e.g., between conventional and flexible production technologies). Following on from this, the conclusions will have to be interpreted in the light of the exploratory nature of the case research and the relatively unrefined data analysis. Nevertheless, the combination of the variables in the three case studies gives a good overall view of the type of production environment. All companies feature some flexible production environment characteristics, but the level of flexibility clearly varies across cases. The paper provides insight into the role of management control systems in modern production settings. One of the main benefits of the study is that we see that both flexible production and management control systems are multi-dimensional phenomena. The case research thus shows the potential of extension of the complementarity principle to MCS design. The case results indicate that the theoretical framework is valuable, because it facilitates analysis of company practice and has some predictive value. This, in turn, suggests that the complementarity principle offers a good basis for the development of such a framework. The case results also indicate that complementarity is difficult to define, precisely because PE and MCS are multidimensional phenomena. Another important contribution of the case research is that it points out that for a good understanding of MCS design the use of only one possible conventional-complementing and one possible flexibility-complementing design is almost certainly too straightforward. The case-based evidence supports the idea of some variables being substitutes and others being complements. More specifically, the cases allow the theory to be refined in several ways. One of the cases shows that the flexible production environment may cause a higher level of information asymmetry, which, in turn, asks for more financial control. This case also reveals that the flexible production environment may lead to a rise in spending on technology, which, again, requires more financial control. Another case study points out that a flexible production environment demands management control systems that are more flexible by design, easier to adapt, as more MCS changes are considered necessary in such an environment. Another noteworthy contribution of the case studies is that they provide insight on the MCS changes that are implemented in flexible production settings. The case studies show some of the dynamics of MCS design, suggesting that change is an important issue in current business practice. The three case studies together, especially the interviews with the controllers, lead to the conclusion that MCS changes follow from a perceived non-complementarity with the production environment. These changes are nearly always in the direction of the expectations in the flexible production environment stated in the theoretical framework. Although the production environment and MCS aspects are part of a system of mutually enhancing elements, MCS adaptation seems to follow the changes in the production environment. Nevertheless, the observed MCS changes could also be explained by company management setting in motion a more centralized change both for production environment and for MCS design (as recommended by Milgrom and Roberts, 1995). In that case, the observed pattern of moves towards a more flexibility-oriented design would follow primarily from centrally directed change and, only in the second place, from decentralized adaptations that follow from a perceived misfit. More empirical information would be necessary to confirm this alternative explanation. The study of changes in MCS design seems a fruitful research avenue, as much (managerial) time and effort is spent on these changes. The general theme of management control dynamics provides a challenge for further work, viz., to see where the changes come from, what the triggers are for the changes, and who is involved in the decision-making processes. Future research in the field of control system design may also focus on further application of the complementarity principle. Complete complementarity is not found in any of the cases. This might follow from the difficulty of changing a system marked by strong and widespread complementarities. The observed lack of complementarity in the cases would then indicate a general phenomenon. The study of these non-complementary situations would offer interesting research directions (see also Milgrom and Roberts, 1995). How can the control system help to overcome or mitigate the adverse consequences of a non-complementary production environment? An important contribution of future studies will be determining how we can estimate empirically what factors explain a system to be (non-)complementary, and what specific (non-)complementary combinations of elements occur more or less frequently and more or less successfully. Future lines of inquiry should also consider the issue of complementary practices that are appropriate in different contextual settings.