Risk Profile Contingent Analysis of Management Control Systems (eBook)

Preface 6
Table of contents 9
List of figures 13
List of tables 15
List of equations 17
List of abbreviations 18
Abstract 20
1 Introduction 21
1.1 Research questions and design 23
1.2 Structure and outline 27
2 Literature Review 30
2.1 Introduction to management control 30
2.1.1 Control problem in management 31
2.1.2 Definitions and evolution of management control 33
2.1.3 Uncertainty, risk and management control 36
2.1.3.1 Risk management and management control 38
2.1.3.2 Kaplan & Mikes’ conceptualization of risk types
2.1.4 Overlaps with other fields in management literature 46
2.1.4.1 Cybernetics and management control 47
2.1.4.2 Agency theory and management control 49
2.1.4.3 Organizational theory and management control 53
2.1.4.4 Contingency theory and management control 55
2.2 Design of management control systems 60
2.2.1 Control systems and package view in management control 60
2.2.2 Conceptualizations and evolution of MCS frameworks 65
2.2.3 Simons’ levers of control framework 73
2.2.3.1 Beliefs systems 77
2.2.3.2 Boundary systems 78
2.2.3.3 Diagnostic control systems 80
2.2.3.4 Interactive control systems 82
2.2.3.5 Interrelationship of the levers of control 84
2.2.3.6 Criticism of the LOC framework 87
2.3 Contingency-based studies in management control 89
2.3.1 The concept of fit in contingent control theory 91
2.3.2 Drivers of the emergence of MCS 100
2.3.2.1 MCS and uncertainty 101
2.3.2.2 MCS and strategy 104
2.3.2.3 MCS and size 107
2.3.2.4 MCS and age 108
2.3.2.5 MCS and ownership 109
2.3.3 Contingency-based performance analysis of MCS – state-of-the-art 109
2.3.4 Interim conclusion on contingency-based studies in MC 117
3 Theory Development and Hypotheses 120
3.1 Development of a risk-based MCS framework by extension of the LOC framework 121
3.2 Development of propositions 131
3.2.1 Risk profile and (risk-based) MCS design and use 132
3.2.1.1 Association between preventable risks and (risk-based) controls 132
3.2.1.2 Association between strategy execution risks and (risk-based) controls 135
3.2.1.3 Association between external risks and (risk-based) controls 138
3.2.2 Risk profile and packages of (risk-based) MCS 140
3.2.3 Superior performance through matching risk profile and (risk-based) MCS 142
3.2.4 Overview of hypotheses 144
3.3 Theoretical model of this study 145
4 Methods 148
4.1 Data set 148
4.2 Data collection 150
4.2.1 Internal and external validity 151
4.2.2 Survey 153
4.2.3 Database 158
4.3 Variable measurement 159
4.3.1 Conceptual specification and epistemic relationships in constructs 160
4.3.2 Construct validity and reliability 165
4.3.3 Risk profile 168
4.3.4 MCS design and use 173
4.3.5 Strategy 182
4.3.6 Performance 186
4.3.7 Control variables 189
4.3.8 Summary of constructs 190
4.3.9 Descriptive statistics 192
4.4 Data analysis 194
4.4.1 Multiple regression analysis 194
4.4.2 Cluster analysis 198
4.4.3 Logistic regression analysis 201
4.5 Research framework of this study 205
5 Results 207
5.1 Risk profile contingent design and use of MCS 207
5.1.1 Theoretical model and quantitative techniques 207
5.1.2 Analysis 213
5.1.2.1 LOC framework 213
5.1.2.2 Risk-based MCS framework 218
5.1.2.3 Additional results on MCS design and use 221
5.1.3 Discussion of hypotheses 225
5.2 Risk profile contingent packages of MCS 231
5.2.1 Theoretical model and quantitative techniques 232
5.2.2 Analysis 236
5.2.2.1 LOC framework 236
5.2.2.2 Risk-based MCS framework 242
5.2.2.3 Additional results on predictability of MCS cluster membership 248
5.2.3 Discussion of hypotheses 251
5.3 Risk profile contingent performance analysis of MCS 253
5.3.1 Theoretical model and quantitative techniques 253
5.3.2 Analysis 261
5.3.2.1 LOC framework 261
5.3.2.2 Risk-based MCS framework 267
5.3.2.3 Additional results on superior performance through matching MCS and risk profile 271
5.3.3 Discussion of hypotheses 272
6 Conclusions 275
6.1 Findings and contributions 275
6.2 Limitations and implications for future research 278
Appendix 281
References 288