Management Control Systems for exploration? A paradox and a challenge for research

In this article the Authors review the relationship between strategy and management control (MCS) by confronting the two most largely accepted lines of thinking in the literature - the so-called "contingency" and "alternative". Authors identify conceptual and methodological limitations of both approaches, analysing critiques coming from both sides and identifying complementarities within epistemological differences. In the light of the radical changes in the business environment that firms have faced in the last two decades, the ability to change both in the exploitation and exploration directions is considered to be crucial. For the purpose of adaptation, we argue that strategy and MCS interact in a two-way relation rather than being linked by a hierarchy, and their evolution over time can therefore be seen as a co-evolution. This approach shifts attention to dynamism and poses at least two main challenges to scholars addressing the MCSstrategy relationship. Firstly, at the methodological level, non-positivistic approaches may offer a prominent contribution to understanding change, nevertheless they are taken with an amount of suspicion by the mainstream academic community; this problem must be faced by promoting reciprocal comprehension and by supporting dialogue in dedicated editorial indicatives. Secondly, at the conceptual level, MCS is designed to support the implementation of strategic exogenous targets. However, if we consider strategy formulation and strategy implementation as part of a single process of mutual creation, scholars are asked to deploy the paradox of systems designed to control goals that are dynamic, unstable and imprecise in nature. This requires to rethink the form and components of MCS, and their desired degree of specification.

Keywords: Strategy, Management Control, Contingency Theory, Alternative Control Theory

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Paolo Collini, Maria Laura Frigotto, Management Control Systems for exploration? A paradox and a challenge for research in "MANAGEMENT CONTROL" 1/2013, pp 27-44, DOI: 10.3280/MACO2013-001003