The Just Design and Use of Management Control Systems as Requirements for Goal Congruence

Abstract

Management control systems (MCS) are designed to achieve the greatest possible goal congruence, where people pursue personal goals that are conducive to the organizational goal. Use and design of MCS are crucial aspects for achieving goal congruence, but they are thought to be contingent to specific external situations. We analyze the basic concepts of justice and fairness, and argue that they need to be put in the context of MCS use and design. We label these two facets of justice "formal" and "informal" justice, respectively, and we show that both formal and informal (in)justice are determinants for MCS to achieve specific levels of goal congruence, independently of the situation. We conclude that there are two stable types of goal congruence, which we label "maximum goal congruence" - where both MCS design and MCS use are just - and "minimum goal congruence" - where both MCS design and MCS use are unjust. There are also two unstable types of goal congruence, which we label "occasional goal congruence" - where MCS design is unjust but MCS use is just - and "perverse goal congruence" - where MCS design is just and MCS use is unjust. This provides a framework for future empirical research on the subject.

Keywords: justice, fairness, goal congruence, management control systems