Configuration of control : an exploratory analysis
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NO FULL TEXT AVAILABLE. This thesis contains 3rd party copyright material. ----- In recent years, there has been growing interest in how controls operate together as a system of interrelated mechanisms (Malmi & Brown, 2008). Despite extensive theoretical development dating back to the seminal paper of Otley (1980), there has been little empirical analysis of the operation of controls as a package, with the majority of quantitative studies in management accounting isolating elements from the wider control structure. It is argued that an aggregation of these circumscribed analyses is insufficient in itself to provide an understanding of how organisations achieve control outcomes. The aims of this study are to explore commonly occurring combinations of control in practice, how accounting integrates into these broader control arrangements, the contexts in which these configurations are likely to appear, and the potential for a control arrangement to exhibit functional equivalence or equifinality. Drawing on structural configuration theory and control literature, control configurations are conceptualised as an arrangement of planning, measurement, compensation, administrative and socio- ideological controls. From a cross-sectional sample of 400 medium-to-large strategic business units, three analyses are conducted. The result of the first analysis yields five control clusters, labelled Simple, Results, Action, Devolved, and Hybrid. These clusters have an intuitive and logical appeal in their resulting patterns and in relation to prior frameworks of organisational structure, while providing insights into the role that accounting plays as part of a broader control configuration. In contrast to prior frameworks of structural diversity, the analysis indicates that accounting-based mechanisms have a presence and relative importance in enabling managerial control in all configurational forms. However, the particular role that accounting plays is quite distinct to each arrangement. The second analysis enhances the validity of these clusters as meaningful representations by demonstrating their predictive utility and variation in contextual settings. However, variation in application and emphasis of accounting appear to have greater association with the logic underpinning the broader control structure than with contextual conditions. The implication is that to develop understandings of accounting diversity requires knowledge of the wider control practices in organisations. For the final analysis, a theoretical framework is built from structural- functionalist and systems theory literatures to examine whether there are multiple, equally viable control configurations within a given context. Employing the Miles and Snow (1978) categorisation, the analysis suggests there are multiple control configurations that perform equally well given certain strategic orientations. There is also evidence to indicate the presence of multifinality - that the same control configuration may be feasible in distinctly different contexts.
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