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Management Control System Essay

8720 words - 35 pages

Management control systems design within its organizational context: findings from contingency-based
research and directions for the future
Robert H. Chenhall
Department of Accounting and Finance, Monash University, Clayton, Victoria 3168, Australia
Abstract
Contingency-based research has a long tradition in the study of management control systems (MCS). Researchers
have attempted to explain the effectiveness of MCS by examining designs that best suit the nature of the environment, technology, size, structure, strategy and national culture. In recent years, contingency-based research has maintained its popularity with studies including these variables but redefining them in contemporary terms. This paper provides a
critical review of findings from contingency-based studies over the past 20 years, deriving a series of propositions relating MCS to organizational context. The paper examines issues related to the purpose of MCS, the elements of MCS, the meaning and measurement of contextual variables, and issues concerning theory development. A final sec- tion considers the possibility that contingency-based ideas could encompass insights from a variety of theories to help
understand MCS within its organizational context.# 2002 Elsevier Science Ltd. All rights reserved.
1. Introduction
The three purposes of this paper are to provide a review of empirical, contingency-based research as it has developed since the early 1980s, to criti- cally evaluate this work, and consider a variety of theoretical foundations that may assist in devel- oping future research. The review is based, in the main, on research employing survey-based meth- ods that has been published in a broad selection of accounting and management journals.1 The review
is selective and illustrative of issues pertinent to the development of a contingency-based frame- work for the design of MCS, and does not attempt a comprehensive coverage of relevant research The paper is structured as follows. The next
section introduces the area of contingency-based MCS research and provides an overview of find- ings over the past 20 years. The following nine sections review articles in terms of their contribu- tion to understanding topics considered within contingency-based research. These are: the meaning
0361-3682/02/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved. PI I : S0361-3682(01 )00027-7
Accounting, Organizations and Society 28 (2003) 127-168
www.elsevier.com/locate/aos
E-mail address: Robert.Chenhall@buseco.monash.edu.au 1 The journals include: Accounting, Organizations and Society; Accounting and Business Research; Accounting and Finance;
Accountability and Performance, Behavioral Research in Accounting; Journal of Accounting Research; Journal of Accounting and
Economics; Journal of Accounting and Public Policy; Journal of Cost Management; Journal of Financial Economics; Journal of Man-
agement Accounting Research; Management Accounting...

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