Towards Horizontal Archetypes of Management Control: A Transaction Cost Economics Perspective
Ed G. J. Vosselman
Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)
Management Accounting Research, Vol. 13, No. 1, March 2002
This paper offers an economic explanation of an observed tendency to adopt and (re)design horizontal management control systems. To this end, the paper first describes generic vertical and horizontal management control templates: archetypes of management control. These archetypes draw on bureaucratic control mechanisms and some of them also on a market mechanism. Next, the observed tendency towards horizontalisation is explained by making a differential transaction cost economics (TCE) analysis of the movement towards horizontal archetypes of management control. This is not with the intention to generate general normative statements nor to generate a general positive economic theory of choices in management control systems design. Rather, the paper aims at acquiring a richer understanding of the economics of the horizontal direction into which management control systems are developing. In particular, it throws some light on the importance of various transactional and behavioural features for an efficient adoption and tailor-made design of management control systems in practice.
Keywords: Management control; Institutional theory; Transaction cost economics
JEL Classification: M40, M46Accepted Paper Series
Date posted: February 14, 2002
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