Using the management control system to promote competitive advantage in organizations: Behavioral and sociological perspectives

Abstract

Recent research suggests that the firm's management control system (MCS) can have a significant and recursive influence on strategy formulation. We expand this discussion by arguing that the strategic role of MCS can be enhanced through its management of the firm's dynamic capabilities (Teece et al., 1997). Dynamic capabilities are the unique abilities to create and sustain competitive advantage based on a firm's processes (routines), positions (resources), and paths (strategic choices). We discuss various ways in which the MCS might more effectively help firms identify and build such dynamic capabilities. Specifically, we propose that this can be accomplished by: (1) increasing both management and employees' strategic understanding of the ongoing inventory of the firm's existing processes, positions, and paths, and (2) building new knowledge-generating mechanisms into these processes, positions, and paths. We offer a set of related research propositions for future studies and suggest behavioral research methods that can be used to investigate the propositions.

Citation

Pant, L.W. and Yuthas, K. (2001), "Using the management control system to promote competitive advantage in organizations: Behavioral and sociological perspectives", Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 4), Emerald Group Publishing Limited, Leeds, pp. 155-183. https://doi.org/10.1016/S1474-7979(01)04072-8