The role of the controller in strategic capital investment projects: bridging the gap of multiple topoi

Abstract

The literature on capital budgeting and investment proposals is rich with techniques, such as portfolio management and stage-gate project management, which rely on a rational approach to strategic capital investment projects. There is, however, a lack of research on the process of managing and coordinating strategic capital investment projects where investment proposals and decisions are seen as human constructions. The controller is an important but seldom noticed actor in this process. This paper draws on a pragmatic constructivist framework to create an understanding of the controller role in strategic capital investment projects and how the controller acts to contribute to create a functioning construct causality in such projects. We conducted a case study of a mining company, which had recently decided on strategic capital investments resulting in the moving of two towns to enable continued operations. Based on a two-step thematic data analysis, our results illustrate that the controller is an essential actor in strategic capital investment projects with high degrees of uncertainty and multiple decision-participants. By using the pragmatic constructivist framework we find that gap-bridging between multiple decision-participants is an essential role for controller, in order to create successful investment proposals. The case study further illustrates that controllers need to learn to speak technical and operational language and to become knowledgeable about business operations to gain trust in order create a functioning construct causality. Our study provides an actor-focused understanding of the organizational and managerial processes within strategic capital investment projects, illustrating how the controller contributes to construct causality therein.

What we know about management accountants’ changing identities and roles – a systematic literature review

“…Many findings underline difficulties for MAs in interpreting the expectations of managers and coping with tensions arising from situations where managers may not want such involvement (Amilin, 2017; Morales and Lambert, 2013; ten Rouwelaar et al , 2018). Greater involvement of MAs requires a common perspective of MAs and managers, but the business partner model still lacks this common understanding (Byrne and Pierce, 2007; Lambert and Sponem, 2012; Karlsson et al , 2019b).…”

“…The sample starts with conflicts between independence and involvement of MAs (Hopper, 1980) and conflicts are still being discussed 40 years later (Amilin, 2017; Byrne and Pierce, 2018; Horton and de Araujo Wanderley, 2018). Hybrid MAs are mentioned first by Caglio (2003) and are still themed by Karlsson et al (2019b). A possible reason for this hybrid picture can be that management accounting itself can be regarded as a hybrid as it was formed at the margins and out of a range of practices from other disciplines (Miller et al , 2008).…”

Budgeting under public scrutiny: tracing the justification work of stakeholder groups in the controversy of an Olympic candidature

“…While this study certainly gains much of its analytical capability precisely from this simplification, more research on an individual stakeholder level could potentially strengthen some of the arguments made, especially with regard to the adaptation of orders of worth in the justification work of stakeholders. While this is beyond the scope of this study, it would certainly warrant further research (see also Karlsson et al , 2019).…”

Controller involvement in a project management setting: effects on project functions and performance

“…A large number of researchers have studied how the role of controllers has evolved to attend to the needs of modern organizations (Burns and Baldvinsdottir, 2005; Lambert and Pezet, 2011; Graham et al , 2012; ten Rouwelaar et al , 2018). As discussed in the introduction, the management accounting literature has acknowledged that the role of controllers has evolved from a traditional and bean-counter archetype to a business partner (Karlsson et al , 2019). The traditional role of controllers as a supporting function that offers financial information and handles accounting tasks (Byrne and Pierce, 2007; De Loo et al , 2011; Karlsson et al , 2019) is well documented in prior research (Hopper, 1980; Friedman and Lyne, 1997; Granlund and Lukka, 1998; Baldvinsdottir et al , 2009; Hartmann and Maas, 2011; Weber, 2011; Linsley and Linsley, 2014).…”

“…Contrary to the traditional archetype, recent studies view controllers as a business partner (Zoni and Merchant, 2007; Goretzki et al , 2018). In this vein, controllers are being portrayed as critical counterparts to managers, communicating information and reducing asymmetries, scrutinizing problems and supporting peers or superiors to make better informed decisions (Karlsson et al , 2019). Empirical research indicates that controllers' functional accounting knowledge combined with a profound understanding of the business processes is now used to support decision-making toward the accomplishment of collective goals in different functional areas of the organizations (Horton and Wanderley, 2018).…”