Out of control? Strategy in the NFP sector: the implications for management control

Abstract

Purpose -This aim of this study is to explore the relationship between management control systems (MCSs) and the formulation of strategy in not-for-profit (NFP) organisations. Design/methodology/approach -The paper views the relationship between MCS and strategy through the contrasting lenses of new-institutional and contingency theory, using data collected from semi-structured interviews of CEOs and senior executives in 32 Australian NFPs. Findings -Strategy is formulated predominantly by intended means, through structured strategic planning processes. Emergent strategy is typically a rare means by which strategy is developed, and is in fact often actively discouraged in the NFPs investigated. Contrary to expectations, control is predominantly exercised through informal means, rather than by formally designed systems. Originality/value -With strategy and control being central concerns for most NFPs, this sector provides a unique vehicle for exploring the "robustness" of prior MCS strategy empirical findings. Investigating the MCS strategy relationship within a highly complex NFP context is thus an "acid test" of existing understanding of the MCS-strategy nexus. As one of the few studies to investigate the relationship between control and strategy as it may apply in this context, this study refines and further develops extant management control theory.

Accountants’ proactivity in intra-organisational networks: a strong structuration perspective

“…The emphasis on face-to-face contact, along with the creation of opportunities to build staff relationships, such as morning teas, may have greater prominence in NFP organisations, as prior research has noticed the desire for consensus and dialogue in the NFP sector (Stein, 2002;Oster, 2010;Tucker & Parker, 2013;Hiebl & Feldbauer-Durstmüller, 2014). Robust and extensive relationship networks were seen among the interviewees.…”

A Heuristic Model to Measure Nonprofit Management Deficiency

“…Poor communication can lead to conflict and confusion between the board and the members of the organisation. 5) Strategic planning (Bhardwaj and Vuyyuri 2005;Brown 2005;Brown and Iverson 2004;Forbes 1998;Green and Griesinger 1996;Herman and Renz 2002;Jackson and Holland 1998;Langabeer and Galeener 2007;Tucker and Parker 2013;Willems, Huybrechts, Jegers, Weijters, Vantibborgh, Didee and Pepermans 2012). There is broad agreement in the literature that having a strategic plan in place and board participation in the strategic planning process are major factors contributing to good organisational performance.…”

“…3) Income generation (Forbes 1998;Harrison and Sexton 2004;Productivity Commission 2010;Tucker 2010;Tucker and Parker 2013). Income generation is directly related to sustainability.…”

Financial Accounting and Management Control

“…Gupta et al, 1994;Ketokivi and Schroeder, 2004;Albu and Albu, 2012;Tucker and Parker, 2013), showing that they provide different and complementary perspectives since "neither perspective can, on its own, explain the success of firm behavior and the firm's relationship with the environment" (Volberda et al, 2012, p. 1040 f). By contrasting our findings with the insights from institutional theory and contingency theory, as well as PA theory, we believe that the analysis will be richer and deeper, since it is built on different and complementary perspectives.…”