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Misaligned control: the role of management control system imitation in supply chains
Reusen, Evelien Stouthuysen, Kristof
Reusen, Evelien
Stouthuysen, Kristof
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2017
Journal
Accounting Organizations and Society
Book
Publication Volume
61
Publication Issue
August
Publication Begin page
22
Publication End page
35
Publication NUmber of pages
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Abstract
This study investigates how interorganizational imitation influences management control decisions in a supply chain setting. Control design in interfirm exchanges is traditionally thought to be based on the principle of matching, where organizations install MCS that align with the transaction context. However, despite these theorized interrelationships, misaligned transactions commonly exist in practice. In this study, we propose a framework on the potential sources of such misalignment. We argue that control misalignment can be attributed to imitating behavior, by which organizations adopt MCS following the example of other organizations. Based on survey data collected from firms involved in a supply chain triad, we demonstrate that buyers control their upstream suppliers partially by imitating how their downstream customer controls them. Notably, buyers appear to imitate despite variations in transaction context, creating a basis for misalignment in line with our predictions.
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Keywords
Accounting & Finance, Management Control, Management Controlling, Management Control Systems: Performance Measurements and Incentive Systems