Research proposal
The role of management control systems in a strategic change situation
Salla Siivonen
University consortium of Pori
Pohjoisranta 11A, PL 180, 28101 Pori
tel. +358 2 627 2911
Abstract
The term “Strategic management accounting” (SMA) arrived into management accounting literature over 20 years ago. The debate about what SMA really is originated in the 1980s and it has been going on ever since. The accounting literature emphasizes the role of management control system as an organizational mechanism that supports strategic change but the empirical research about topic is still scarce. As Ahrens & Chapman (2007, 2) point out the organisational members know the limitations of accounting and reporting practices but they draw on them when making decisions. So accounting can potentially make significant contributions to the ways in which organisations coordinate action. The objective of this study is to examine the role of management control systems in a strategic change situation and to define the consequences of using management control systems in the strategic change situation. The study uses Simons (2000) classification of different types of control systems: diagnostic control systems and interactive control systems. The concept of strategy is based on the thoughts of the positioning school, which uses Porter’s (1996) and Kim & Mauborgne’s (2004) definition of strategy. The study will take a practice-based view using a practice theory approach and institutional theory. The empirical evidence will be collected from two to three Finnish case-companies. The researcher has gained a preliminary access to one Finnish company. The company is a global operator in the log home business.
Key words: management control systems, strategic management accounting, practice theory, institutional theory, strategic change
1. BACKGROUND
1. 1 Strategic management accounting
Since the 80s a new term has arrived into management accounting literature. “Strategic management accounting” (SMA) (Simmond 1981). In the following decades a debate about what SMA comprises has been originated. It is accepted that SMA is identified as a generic approach to accounting for strategic positioning (Roslender & Hart 2003). CIMA (2002, 50) gives the definition about strategic management accounting saying that it is a form of management accounting in which emphasis is placed on information which relates to factors external to the firm, as well as nonfinancial information and internally generated information. Nilsson & Rapp (1999, 65) see that strategic management accounting is one of the two lines of research to study management control systems from a strategic perspective. A particular feature of this school is the emphasis on the idea that management control systems should provide information on the cost structure, product markets and strategies of a firm’s competitors.
