Investing in strategic development

Abstract

The study explores management control in the strategic development of business model and managerial innovations. The issue is approached from the perspective of managerial work, aiming to outline what managers consider as essential elements of management control in these often iterative and learning-intensive developmental activities. Design The study is based on the views of 20 managers engaged in strategic development and its control in various organisations. The interview data consist of the respondents' experiences and project cases involving non-technological innovations. Qualitative content analysis (QCA) is used to identify three key concepts of management control of business model and managerial innovations. Findings The findings suggest that, with managerial and business model innovation, appropriate management control could be established by: (1) aligning the innovation being developed with the strategic story of the organisation, (2) leveraging co-creational projects, and (3) experimentation with close customer contact. Research limitations/implications The focus of this qualitative research is on building an initial framework. Future research could expand our understanding of managerial work and accounting by examining this study's outcomes in more practical detail in various contexts. Practical implications The findings of this study lead managers and researchers to consider management control of non-technological innovations as an enabling system supporting successful innovations. Originality/value This study adds a unique perspective to the literature by conceptualizing and offering managerial implications for management control in the context of strategic development of non-technological innovations.

The relationship between management control systems and innovativeness in start-ups: evidence for product, business model, and ambidextrous innovation

“…However, the negative effect of the combined use of these two levers is consistent with the argument that excessive use of interactive control systems and relational norms leads to unfocused organizational activities, resulting in a decline in strategically purposeful innovation (Ayers et al , 1997; Müller-Stewens et al , 2020). BMI start-ups might be especially vulnerable to this momentum, as this type of innovation tends to be more radical, and precise goals are hard to formulate and monitor (Aaltola, 2018; Markides, 2006). Furthermore, the negative effects of the combined use of two positive control levers might occur through greater emphasis on interactive control systems.…”

“…However, PI no longer guarantees success, given the increased competition, shortened product lives and rising development costs (Amit and Zott, 2012; Chesbrough, 2007). Companies that want to succeed with innovative products often need to align their business model to reach relevant customers (Aaltola, 2018). For start-ups, matching the business model with innovative technologies can become a powerful mechanism in the venture development process (Hock-Doepgen et al , 2021; Trimi and Berbegal-Mirabent, 2012).…”

“…Third, intense debates within a start-up facilitated by the interactive use of MCSs may lead to a re-evaluation of the building blocks of the current business modelsuch as customer segments, key partners and revenue streams (Heider et al, 2021;Osterwalder and Pigneur, 2010). The resulting increased understanding of the current business model enables employees to identify areas that need improvement and may serve as a trigger for the innovative reengineering of routines, practices and structures through co-creational projects with customers (Aaltola, 2018;Tang et al, 2013). Fourth, interactive controls support experimentation and stimulate continuous debate across hierarchical levels and may result in new resource allocations because employees from different areas face challenges that exist outside their own narrow domains.…”

“…However, simultaneous emphasis on both positive levers may create an innovation momentum resulting in excessive experimentation and innovation redundancy, especially in highly innovative firms (Bisbe and Malagueño, 2009;Hock-Doepgen et al, 2021). The ideas generated may not always be compatible with managerial intentions and company objectives, and therefore, they may waste resources instead of translating them into effective innovations (Aaltola, 2018;Chenhall and Morris, 1995). In addition, the interactive use of MCSs and relational values may lead to unfocused innovation efforts that can draw attention away from overall goals (Müller-Stewens et al, 2020).…”

Use of Enabling Levers and Constraining Levers to Radical Innovation: Intervention of Knowledge Sharing and Technological Turbulence

“…Third, contentious discussions by in startups made possible by interactive MCS might outcome in a reevaluation of present elements like client segments, important partners, and revenue streams (Zarzycka et al, 2019). Employees be able to identify areas for improvement thanks to the current enterprise model's enhanced comprehending, and it be able to act as a catalyst for reengineering creative routines, practices, and structures by using joint creation initiatives by clients (Aaltola, 2018). Fourth, experimentation is encouraged via interactive control, which also encourages interaction and the emergence of ideas.…”