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This study aims to explore why certain firms can transition successfully to more sophisticated accounting and management control systems than others.Design/methodology/approachThis study uses 20 semi-structured interviews with senior executives of former and present SMEs in the construction industry and business advisory firms to explore the factors behind making sophisticated control systems a permanent organizational feature.FindingsSophisticated control systems function based on the compliance of lower-level employees, whose lack of buy-in is a major hurdle for smaller firms. Foundational controls of basic human resources and systematic communication routines facilitate their buy-in through accountability, participation and information-sharing, without which firms fail to transition successfully to sophisticated control systems.Research limitations/implicationsThe results are based on firms in a single industry and subject to the limitations of cross-sectional research. The transition strategy to more sophisticated control systems is important. This study suggests that foundational controls are necessary to successfully transition to more sophisticated controls.Originality/valueThis study focuses on smaller firms seeking to transition to more sophisticated control systems. This study identifies the key roadblock of noncompliance by lower-level employees, elaborates the role of foundational controls and describes the underlying mechanism behind gaining employee buy-in.
Qualitative Research in Accounting & Management – Emerald Publishing
Published: May 4, 2023
Keywords: SMEs; Transparency; Management control systems; Employee buy-in; HR controls; Systematic communication routines
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