This dissertation brings together research on organizational control systems and research on organizational learning and organizational capabilities. In doing so, the question how control mechanisms and firm capabilities are associated with each other is examined. I acknowledge that organizational control mechanisms are organizational routines that can modify or leverage strategic capabilities of firms through the fostering of organizational learning. Analyzing the association of specific control strategies with specific organizational capabilities I argue that alternate configurations of organizational control systems differ in terms of their complementarity or fit to certain organizational capabilities and that competitive advantage can be gained when organizations achieve an appropriate match of both. My hypotheses are tested using data from a survey of 238 manufacturing firms in Austria and Germany.
Diese Dissertation verknüpft die bestehende Literatur zu den Themen Steuerungsmechanismen, Organisationales Lernen und Kompetenzen von Unternehmen. Insbesondere wird die Fragen untersucht, wie Steuerungssysteme und organisationale Fähigkeiten zusammenhängen. Im Rahmen der Arbeit wird die These aufgestellt, dass Steuerungsmechanismen, ähnlich wie organisationale Routinen wirken und die Fähigkeiten und Kompetenzen von Unternehmen beeinflussen bzw. deren Entwicklung fördern können. Im Rahmen einer empirischen Untersuchung wurden 238 Unternehmen der Maschinenbau- Branche in Deutschland und Österreich befragt. Basierend auf den Umfrageergebnissen lässt sich feststellen, dass verschiedene Konfigurationen von Steuerungsmechanismen besser zu bestimmten organisationalen Fähigkeiten passen als andere. Weiters wird argumentiert, dass Firmen durch passende Kombinationen von Steuerungssystemen und organisationalen Fähigkeiten einen langfristigen Wettbewerbsvorteil aufbauen können.
Table of Contents
1 Introduction
2 Literature review
2.1 An introduction to the theory of management control systems
2.1.1 Definitions of management control
2.1.2 Classifications of management control systems
2.1.3 MCS as a package
2.1.4 Contextual variables influencing MCS
2.1.5 MCS and learning
2.2 An introduction to the resource-based view theory
2.2.1 Background
2.2.2 Definition of key terms
2.2.3 Strategic recourses as source of competitive advantage
2.2.4 From competitive advantage to superior performance
2.2.5 Limitations of the traditional RBV
2.3 An introduction to the dynamic capability theory
2.3.1 Background
2.3.2 What are dynamic capabilities?
2.3.3 The development of dynamic capabilities
2.3.4 The dynamic capability theory as extension of the traditional RBV
2.3.5 Limitations of the dynamic capability theory
2.4 Management control systems and firm capabilities – State-of-the-art
2.4.1 MCS as valuable, rare, inimitable and non-substitutable resources
2.4.2 MCS and strategic resources as related variables
2.4.3 MCS as antecedents of dynamic capabilities
3 Theory development and hypotheses
3.1 Definition of key variables
3.1.1 Operationalizing MCS
3.1.2 Operationalizing dynamic capabilities
3.1.3 Operationalizing performance
3.2 The association between certain types of MCS and certain dynamic capabilities
3.2.1 Management control systems and the development of dynamic capabilities
3.2.2 The association between results controls and market-oriented capabilities
3.2.3 The association between cultural controls and innovation capabilities
3.2.4 The association between action controls and DC
3.3 The association between packages of MCS and certain dynamic capabilities
3.4 The concept of fit in contingency research
3.5 Gaining sustained competitive advantage through matching dynamic capabilities and MCS
3.6 Empirical design overview
4 Data set and measures
4.1 Overview of the manufacturing industry
4.2 Sample
4.3 Variables
4.4 Cronbach alpha and factor analysis
4.5 Avoidance of bias
4.6 Descriptive statistics
4.7 Correlation matrix
5 Hypotheses 1-3: Analyzing the association between certain types of MCS and certain DC
5.1 An introduction to regression analysis
5.2 Method
5.3 Results
6 Hypothesis 4: Analyzing the association between packages of MCS and certain DC
6.1 Step 1: Deriving MCS clusters
6.1.1 An introduction to cluster analysis
6.1.2 Method
6.1.3 Results
6.2 Step 2: Comparing the DC of the two clusters
6.2.1 An introduction to ANOVA/MANOVA
6.2.2 Method
6.2.3 Results
7 Hypothesis 5: Comparing the performance of firms with matching / non-matching MCS and DC
7.1 Step 1: Deriving actual DC clusters
7.1.1 Method
7.1.2 Results
7.2 Step 2: Deriving predicted DC clusters
7.2.1 An introduction to logistic regression analysis
7.2.2 Method
7.2.3 Results
7.3 Step 3: Building two groups of firms: firms with matching/non-matching MCS and DC
7.3.1 Method
7.3.2 Results
8 Summary of findings
9 Discussion
10 Conclusion and implications for future research
11 References
Objectives and Topics
The primary objective of this dissertation is to examine the interrelationship between management control systems (MCS) and firm capabilities. It explores how specific configurations of control mechanisms can foster organizational learning and knowledge management processes, thereby supporting the development of dynamic capabilities. The research aims to demonstrate that a strategic match between MCS and dynamic capabilities contributes to sustained competitive advantage and superior firm performance.
- Theoretical integration of management control systems, resource-based view, and dynamic capability theory.
- Identification of management control systems as antecedents to organizational learning and dynamic capabilities.
- Empirical analysis of the association between specific MCS configurations (results, cultural, and action controls) and market-related as well as innovation capabilities.
- Investigation of the contingency fit between MCS and dynamic capabilities in relation to firm performance.
Excerpt from the Book
1 Introduction
The question how firms can gain a sustained competitive advantage to outperform their competitors and survive in the long run is at the heart of strategic management research. One of the most important strategic management theories is the resource-based view (RBV). The RBV sees the source of a sustained competitive advantage in the possession of strategic capabilities. Strategic capabilities are defined as firm-specific, organizational processes that are not tradable without the organization itself and that have the potential to be the source of a sustained competitive advantage through being valuable, rare, inimitable and non-substitutable (Barney, 1991; Amit and Schoemaker, 1993; Makadok, 2001).
Lately, the RBV has been criticised for being a static concept. The main argument of the dynamic capability (DC) theory, a recent extension of the RBV, is that sustained competitive advantage cannot be gained though the simple possession of valuable, rare, inimitable and non-substitutable capabilities, as capabilities that have been very successful in the past need not be the source of sustained competitive advantage in the future because of the changing market environment. In order to stay competitive firms need the ability to change their existing capabilities and to quickly develop new organizational capabilities. (Newbert, 2007; Schreyögg and Kliesch-Eberl, 2007; Morgan et al., 2009)
These organizational processes that modify and leverage strategic capabilities of firms through the fostering of learning within the organization in order to match changing market needs are called dynamic capabilities (Teece et al., 1997; Eisenhardt and Martin, 2000; Helfat, 2007; Danneels, 2008).
Dynamic capability theory tries to shed some light on how firms alter their resource base by adding, reconfiguring, and deleting resources or competences. As Eisenhardt and Martin (2000, 1107) put it, “dynamic capabilities are the organizational and strategic routines by which firms achieve new resource configurations as market emerge, collide, split, evolve, and die”. Dynamic capability theory points out that some firms are better able than others at altering their resource base and hence enjoy superior performance, particularly in dynamic environments (Teece et al., 1997; Eisenhardt and Martin, 2000).
Chapter Summaries
1 Introduction: Provides an overview of the research background, the motivation for investigating the relationship between management control systems and dynamic capabilities, and outlines the structure of the dissertation.
2 Literature review: Presents a comprehensive review of existing theories on management control systems, the resource-based view, and the dynamic capability theory, setting the stage for the research hypotheses.
3 Theory development and hypotheses: Develops the core arguments and theoretical framework by linking specific management control systems to dynamic capabilities and formulating hypotheses regarding their interrelationship and impact on firm performance.
4 Data set and measures: Describes the empirical research design, the selection of the manufacturing industry sample, the survey methodology, and the operationalization of variables and constructs used in the study.
5 Hypotheses 1-3: Analyzing the association between certain types of MCS and certain DC: Details the empirical testing of the relationship between specific MCS configurations and market-related as well as innovation capabilities using regression analysis.
6 Hypothesis 4: Analyzing the association between packages of MCS and certain DC: Explores the grouping of management control systems into clusters and examines how these distinct MCS packages differ in their association with dynamic capabilities.
7 Hypothesis 5: Comparing the performance of firms with matching / non-matching MCS and DC: Investigates whether firms with a consistent alignment between their management control systems and dynamic capabilities achieve superior performance compared to non-matching firms.
8 Summary of findings: Synthesizes the empirical results obtained across the study and provides a discussion on the support for the formulated hypotheses.
9 Discussion: Evaluates the theoretical and practical implications of the findings, positioning the research within the context of current academic literature and offering management insights.
10 Conclusion and implications for future research: Concludes the dissertation by summarizing the core findings, acknowledging study limitations, and proposing directions for future empirical and theoretical research.
11 References: Contains the full bibliography of academic literature and sources cited throughout the dissertation.
Keywords
Management control systems, MCS, Dynamic capabilities, DC, Resource-based view, RBV, Organizational learning, Competitive advantage, Strategic capabilities, Market orientation, Innovation capabilities, Contingency theory, Strategic management, Firm performance, Manufacturing industry
Frequently Asked Questions
What is the core focus of this dissertation?
The research focuses on the interrelationship between management control systems (MCS) and the dynamic capabilities of firms. It examines how specific control systems influence the development of strategic capabilities to gain a competitive advantage in changing environments.
What are the central thematic fields?
The core themes include management control theory (specifically results, cultural, and action controls), the resource-based view (RBV), the dynamic capability theory (DC), organizational learning, and strategic fit.
What is the primary research question?
The study investigates how certain configurations of management control systems foster organizational learning and whether matching combinations of MCS and dynamic capabilities lead to superior firm performance.
Which scientific methods were applied?
The research uses a multi-method empirical approach, including descriptive statistics, correlation analysis, multiple regression analysis, cluster analysis, ANOVA/MANOVA, and logistic regression to test the hypotheses.
What does the main body address?
The main body systematically explores the theoretical foundations, develops hypotheses linking MCS to specific dynamic capabilities (market-oriented and innovation capabilities), and conducts an extensive empirical investigation using survey data from 238 medium-sized manufacturing firms.
Which keywords characterize this work?
Key terms include management control systems, dynamic capabilities, resource-based view, organizational learning, competitive advantage, and contingency theory.
Does the study distinguish between different types of innovation capabilities?
Yes, the research differentiates between radical innovation capability and incremental innovation capability when analyzing the impact of cultural controls on organizational development.
How does the dissertation contribute to the "MCS as a package" literature?
It addresses the research gap regarding how different types of control systems interact with one another. It empirically demonstrates that results controls and cultural controls function as complements, whereas action controls may act as substitutes.
- Quote paper
- Margret Stix (Author), 2010, How Control Fosters Learning, Munich, GRIN Verlag, https://www.grin.com/document/189077
