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Management control systems effect on the micro-level processes of product innovation

Management control systems effect on the micro-level processes of product innovation Using institutional theory, this study aims to understand how the management control systems (MCSs) designed by top managers influence the micro-level process practices of organization members during product innovation.Design/methodology/approachThis paper reports on a case study carried out at NZMed to examine the design and use of MCSs and their product innovation practices. Simons’ levers of control was used to understand the ways in which MCSs were designed and used in a product innovation setting.FindingsThe findings indicate that the everyday micro-level processes of organization members encoded MCS when their espoused values aligned with those of top managers. However, when the perspectives within the organization differed, variations to the micro-level processes of organization members emerged. The authors show how this resulted in an increase in innovation capabilities necessary to meet organizational goals.Practical implicationsThe misalignment between espoused values and enacted values had a positive effect as it helped the organization maintain their innovation culture, and build long-term trusting relationships with suppliers which enabled the achievement of organizational goals.Originality/valueBy focusing on the relationship between MCS and the micro-level processes of organization members in product innovation, the paper shows how the lack of alignment between the espoused values of top management and the enacted values of project managers explained the variations between the MCS used by top managers and the practices of project teams at our case study company. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting & Organizational Change Emerald Publishing

Management control systems effect on the micro-level processes of product innovation

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1832-5912
eISSN
1832-5912
DOI
10.1108/jaoc-07-2021-0093
Publisher site
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Abstract

Using institutional theory, this study aims to understand how the management control systems (MCSs) designed by top managers influence the micro-level process practices of organization members during product innovation.Design/methodology/approachThis paper reports on a case study carried out at NZMed to examine the design and use of MCSs and their product innovation practices. Simons’ levers of control was used to understand the ways in which MCSs were designed and used in a product innovation setting.FindingsThe findings indicate that the everyday micro-level processes of organization members encoded MCS when their espoused values aligned with those of top managers. However, when the perspectives within the organization differed, variations to the micro-level processes of organization members emerged. The authors show how this resulted in an increase in innovation capabilities necessary to meet organizational goals.Practical implicationsThe misalignment between espoused values and enacted values had a positive effect as it helped the organization maintain their innovation culture, and build long-term trusting relationships with suppliers which enabled the achievement of organizational goals.Originality/valueBy focusing on the relationship between MCS and the micro-level processes of organization members in product innovation, the paper shows how the lack of alignment between the espoused values of top management and the enacted values of project managers explained the variations between the MCS used by top managers and the practices of project teams at our case study company.

Journal

Journal of Accounting & Organizational Change – Emerald Publishing

Published: Mar 21, 2023

Keywords: Management control systems; Institutional theory; Innovation; Levers of control; Micro-level processes; Case study; L21; M41; O36

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