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The contingent nature of complementarity between results and value-based controls for managing company-level profitability: A situational strength perspective
Örebro University, Örebro University School of Business. (CEROC)ORCID iD: 0000-0003-3466-5273
Örebro University, Örebro University School of Business. (CEROC)ORCID iD: 0000-0002-3922-578X
Örebro University, Örebro University School of Business. (CEROC)ORCID iD: 0000-0003-3256-3097
2019 (English)In: Accounting, Organizations and Society, ISSN 0361-3682, E-ISSN 1873-6289, Vol. 79, p. 1-17, article id 101058Article in journal (Refereed) Published
Abstract [en]

Integrating recent theorizing on complementarity and situational strength with management control system (MCS) theory, we investigate how, why and under what circumstances companies may beneficially combine results control and two value-based controls (the use of belief systems and employee socialization practices) to handle the goal alignment problem that typically arises when managing company-level profitability. Drawing upon a survey of MCS practices in 103 strategic business units within the largest companies in Sweden, we find that the use of socialization practices reinforces the marginal return of results control, and vice versa. We also find that higher levels of environmental unpredictability both strengthen this synergetic effect, and reveal a similar complementarity effect of the simultaneous use of results control and the belief system. Our study thus contributes to the MCS literature by showing that; (i) results control may beneficially interact with two important, yet largely unexplored value-based controls, (ii) situational strength theory is highly useful for analytically disentangling the (dis)abilities of these controls in terms of them conveying clarity, consequentiality, consistency and constraint, respectively, and; (iii) the extent to which these controls convey non-overlapping, yet complementary abilities to address the goal alignment problem (required to produce synergetic effects on company-level profitability) is dependent on environmental context.

Place, publisher, year, edition, pages
Elsevier, 2019. Vol. 79, p. 1-17, article id 101058
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:oru:diva-78014DOI: 10.1016/j.aos.2019.101058ISI: 000501616700004Scopus ID: 2-s2.0-85071494344OAI: oai:DiVA.org:oru-78014DiVA, id: diva2:1372345
Funder
The Jan Wallander and Tom Hedelius Foundation, P2015-0031:1
Note

Funding Agency:

Örebro University

Available from: 2019-11-22 Created: 2019-11-22 Last updated: 2020-01-28Bibliographically approved

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Gerdin, JonasJohansson, TobiasWennblom, Gabriella

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