Management control systems and innovation: a case study grounded in institutional theory

Abstract

Drawing on the growing literature that has addressed the role of Management Control Systems in innovation and the literature on institutional theory, this study explores the case of Amorim Cork Composites to analyse how the situated rationalities within the company get reflected in the management control practices in use, and then how these practices are used to communicate and provide guidance when innovation is part of the strategy. The study uses a single case study approach at an innovative company, collecting data from 32 interviews, direct observations, and documentation of the company. Based on that data, this study is able to perceive the existence of a rationality that is constructed around the importance of innovation, which becomes a paramount part of the defined strategy and leaves signs on to the internal control practices of the company. After that, through a mix of strategic objectives, well-defined cascaded process of these objectives, values, mottos, objectives related to that situated rationality within the company, and with the commitment created within the “signing” of objectives contracts, managers are able to communicate strategically and provide guidance to the collaborators, driving them to action that makes them more aware.

Enhancing Employee Efficiency Through Deep-Level Workforce Diversity: A Study of Selected Deposit Money Banks in Lagos State

“…The findings of this study are in agreement with the assumptions of institutional theory Barros and Ferreira (2023) posits that organizations are influenced by the social and cultural contexts in which they operate, shaping their structures, practices, and behaviours. In the context of this study, the observed influence of deep-level workforce diversity on employee efficiency corroborates the notion that organizational practices and outcomes are intertwined with broader societal norms and values (Gupta & Gupta, 2021).…”

Situated rationalities in response to institutional complexity: the role of management accounting practices

“…As such, situated rationality underpins the situated functionality of day-to-day practices” (Bogt and Scapens, 2019, p. 1803). In these terms, organizational actors deliberate among an unlimited nature of contextual and temporal situations in organizations, becomes the situated rationality an open concept with no fixed meaning, such as experience (Bertz and Quinn, 2022), professionalism (Pagliarussi and Leme, 2020) and innovation (Barros and Ferreira, 2023), inserted in a myriad of relationships, institutions and historical contingencies. This idea implies that the situated rationality of organizational actors can be shaped by organizational culture – local institutions – and the ways in which personal and organizational motivations occur – routines – and how multiple intentions are coordinated – rules (Ahrens and Chapman, 2007; Bogt and Scapens, 2019) between different actors and their aspirations (Busco et al , 2018; Cho et al , 2015), as well as different professional groups or experiences of a given organization (Bertz and Quinn, 2022; Bogt and Scapens, 2019; Pagliarussi and Leme, 2020).…”

“…From this perspective, we found that management accounting practices such as efficiency and control were recast in factory terminology as quality and safety, ensuring and retaining the cultural system inscribed in terms of emerging practices and roles. This emerging mode of self-government, stimulated by “situated rationality” (Barros and Ferreira, 2023; Bertz and Quinn, 2022; Bogt and Scapens, 2019; Pagliarussi and Leme, 2020), helped managers to inscribe objects in the construction of the meaning of factory performance, through questions and debates arising from the ambiguities and incompleteness found in management accounting practices (Englund et al , 2013; Quattrone, 2017; Wouters and Wilderom, 2008), where social issues could disappear, compared to the accounting sphere.…”

How managerial capabilities of cognitive and behavioural complexity enable dynamic tension between management controls

“…Management controls (MCs) are key scaffolds in organisations attempting to balance diverse aspirations (Akroyd et al , 2016; Barros and Ferreira, 2023; Mundy, 2010). Further, the dynamic tension countervailing MCs can create is central to this understanding.…”