The relationship between management control systems (MCS) and the strategy process is a largely unexplored area of strategic management. This paper reports the findings of an in-depth, longitudinal case study of a major British-based organization operating within the increasingly globalized telecommunications industry. Informed by Simons' (1991, 1994, 1995) theoretical model of the strategy process-MCS relationship, the study examines the nature and extent of this relationship at middle-and lower-management levels. Of particular interest were the effects that the design and use of three groups of MCS have on the development of new ideas and initiatives. Findings suggest that beliefs systems influence managers' initiation or 'triggering' decisions, the use of administrative controls affects the location of strategic initiatives and may lead to the polarization of roles, and simultaneous emphasis on a range of key performance indicators can create a bias towards one set of measures and against another.

The debate on short-termism has focused on the economic factors of capital markets and performance measurement systems. Laverty (1996) has advocated the inclusion of individual and organizational dimensions to extend the debate. We reorient Laverty's extended debate by drawing upon a broad management and accounting literature and thereby develop testable theoretical explanations of short-termism. The resulting hypotheses are tested in a telecommunications company. Our findings provide support for Laverty's (1996) argument that individual and organizational factors are important determinants of short-termism.develop hypotheses that have the potential to address the questions raised. The second contribution is to report exploratory empirical research at the intrafirm level. We present sections that describe a research program that we conducted and we present the findings. The final section presents conclusions, implications, limitations, and recommendations for future research. Our findings support Laverty's (1996) argument that a limited focus on economic causes, as represented by capital markets and performance measurement systems, provides an inadequate basis for understanding short-termism, while an extended debate that includes individual-and organizational-level factors provides an excellent opportunity to advance our ability to respond to this arguably pervasive feature of strategic activity. ). In other words, it is not accounting information per se that influences behavior, it is the importance that is attached to accounting information, as one of a number of possible communication channels, that conditions behavior. This gives rise to the following hypothesis:Hypothesis 2: Short-termism is positively associated with the importance that is attached to accounting information as one among a number of possible communication channels.

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