Amir Zakaria Consulting Group | Management Control Systems
Management Control Systems In the contemporary competitive, complex and changing global business environment, firms are being challenged to adopt business models that enable them to address the strategic uncertainties and risks they face in their business environments. Management accounting researchers argue that one of the ways firms can continually rejuvenate themselves to survive and succeed in these complex and uncertain environments is to understand the role of management control systems (MCS) in creating competitive advantages (Simons, 2000; Widener, 2007). amir zakaria, nazli monajemzadeh, اميرذكريا, امير ذكريا, نازلی منجم‌زاده
Management Control Systems, business, business models, MCS, amir zakaria, nazli monajemzadeh, اميرذكريا, امير ذكريا, نازلی منجم‌زاده
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Management Control Systems

Management Control Systems

In the contemporary competitive, complex and changing global business environment, firms are being challenged to adopt business models that enable them to address the strategic uncertainties and risks they face in their business environments. Management accounting researchers argue that one of the ways firms can continually rejuvenate themselves to survive and succeed in these complex and uncertain environments is to understand the role of management control systems (MCS) in creating competitive advantages (Simons, 2000; Widener, 2007). According to Simons (2000, p. 4) MCS are ‘‘the formal, information based routines and procedures used by managers to maintain or alter patterns in organizational activities.’’ MCS includes management accounting systems, budgetary practices, performance measurement systems, project management systems, planning systems, and reporting systems (Simons, 1990). The purpose of MCS is to provide information that is useful for managerial decision-making, planning, monitoring and evaluation of organisational activities to alter employee behaviour (Merchant & Otley, 2007). MCS also provide strategic direction to the innovative efforts of firms, and the efficiencies they produce can free up resources for innovative activities (Marginson, 2002). Strategy and accounting researchers, therefore, contend that MCS are critical in helping top managers formulate strategies, specify the operational actions required to implement these strategies, clarify mutual expectations, identify priorities for operational improvements, and set targets that may influence current and subsequent performance (Simons, 1994).

Reference

  • Simons, R. (1994). How top managers use control systems as levers of strategic renewal. Strategic Management Journal, 15(3), 169–189.
  • Simons, R. (2000). Performance measurement and control systems for implementing strategy. Upper Saddle River, NJ: Prentice-Hall.
  • Widener, S. K. (2007). An empirical analysis of the levers of control framework. Accounting, Organizations and Society, 32, 757–788.
  • Merchant, K. A., & Otley, D. T. (2007). A review of the literature on control and accountability. In C. Chapman, A. Hopwood, & M. Shield (Eds.), The handbook of management accounting research (pp. 785–804). Oxford, UK: Elsevier Press.
  • Marginson, D. E. (2002). Management control systems and their effects on strategy formation at the middle-management levels: Evidence from a UK organization. Strategic Management Journal, 23, 1019–1031.

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