The Impact of Participation in Strategic Planning and Action Planning on Management Control Effectiveness: An Analysis of Independent and Joint Effects

27 Pages Posted: 9 Jan 2017 Last revised: 5 Sep 2017

See all articles by Christian Ax

Christian Ax

University of Gothenburg - School of Business, Economics and Law

David S. Bedford

University of Technology Sydney (UTS)

Piotr Bednarek

Uniwersytet Ekonomiczny we Wrocławiu

Rolf Brühl

ESCP Europe Business School Berlin

Andrea Dossi

SDA Bocconi; Bocconi University - Department of Accounting

Johan Dergard

Lund University

Angelo Ditillo

Bocconi University - Department of Accounting; SDA Bocconi

Maurice Gosselin

Université Laval

Jan Greve

Örebro University - School of Business

Sophie Hoozée

Ghent University - Department of Accountancy and Corporate Finance

Poul Israelsen

Aalborg University - Center for Industrial Production

Otto Janscheck

University of Vienna

Daniel Johanson

Norwegian School of Economics (NHH)

Tobias Johansson

Örebro University - School of Business

Dag Øivind Madsen

University of South-Eastern Norway

Teemu Malmi

Aalto University School of Business

Carsten Rohde

Copenhagen Business School

Mikko Sandelin

Aalto University - Department of Accounting and Finance

Torkel Strömsten

Stockholm School of Economics

Thomas Toldbod

Aalborg University

Jeanette Willert

Copenhagen Business School

Date Written: January 6, 2017

Abstract

This study investigates subordinate participation in the planning processes of top management. Specifically, this study examines the independent and joint effects of subordinate participation in strategic planning and action planning on management control (MC) effectiveness. While these planning processes have been subject to significant research, little is known about the interrelationships between strategic planning and action planning. This study hypothesizes that strategic planning and action planning have both independent and joint effects on MC effectiveness. This study draws on a large survey database of top managers across 11 countries. The analysis shows that participative action planning has positive, direct effects on MC effectiveness, while no significant association is found for participation in strategic planning. We also find that participative strategic planning and participative action planning are interdependent control choices. However, contrary to expectations, we find that they act as substitutes rather than complements.

Keywords: strategic planning, action planning, budgeting, participation, management control effectiveness, complementarity

Suggested Citation

Ax, Christian and Bedford, David S. and Bednarek, Piotr and Brühl, Rolf and Dossi, Andrea and Dergard, Johan and Ditillo, Angelo and Gosselin, Maurice and Greve, Jan and Hoozée, Sophie and Israelsen, Poul and Janscheck, Otto and Johanson, Daniel and Johansson, Tobias and Madsen, Dag Øivind and Malmi, Teemu and Rohde, Carsten and Sandelin, Mikko and Strömsten, Torkel and Toldbod, Thomas and Willert, Jeanette, The Impact of Participation in Strategic Planning and Action Planning on Management Control Effectiveness: An Analysis of Independent and Joint Effects (January 6, 2017). Available at SSRN: https://ssrn.com/abstract=2894850 or http://dx.doi.org/10.2139/ssrn.2894850

Christian Ax

University of Gothenburg - School of Business, Economics and Law ( email )

Vasagatan 1
Po Box 610
Goteborg, 40530
Sweden

David S. Bedford

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Piotr Bednarek

Uniwersytet Ekonomiczny we Wrocławiu ( email )

Komandorska 118/120
Wrocław, 53-345
Poland

Rolf Brühl

ESCP Europe Business School Berlin ( email )

Heubnerweg 8-10
Berlin, 14059
Germany

Andrea Dossi

SDA Bocconi ( email )

Via Bocconi 8
Milan, Milan 20136
Italy

Bocconi University - Department of Accounting

Via Roentgen 1
Milan, 20136
Italy

Johan Dergard

Lund University ( email )

Box 117
Lund, SC Skane S221 00
Sweden

Angelo Ditillo

Bocconi University - Department of Accounting ( email )

Via Roentgen 1
Milan, 20136
Italy

SDA Bocconi ( email )

Via Bocconi 8
Milan, Milan 20136
Italy

Maurice Gosselin (Contact Author)

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Jan Greve

Örebro University - School of Business ( email )

SE-701 82
Sweden

Sophie Hoozée

Ghent University - Department of Accountancy and Corporate Finance ( email )

Sint-Pietersplein 7
Ghent, 9000
Belgium

Poul Israelsen

Aalborg University - Center for Industrial Production ( email )

Fibigerstræde 16
Aalborg, 9220
Denmark

Otto Janscheck

University of Vienna ( email )

Bruenner Strasse 72
Vienna, Vienna 1090
Austria

Daniel Johanson

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Tobias Johansson

Örebro University - School of Business ( email )

Örebro, SE-701 82
Sweden

Dag Øivind Madsen

University of South-Eastern Norway ( email )

Bredalsveien 14
Hønefoss, Buskerud 3511
Norway

Teemu Malmi

Aalto University School of Business ( email )

P.O. Box 21220
Aalto, 00076
Finland
+358 40 5100827 (Phone)

Carsten Rohde

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Mikko Sandelin

Aalto University - Department of Accounting and Finance ( email )

P.O. Box 1210
Helsinki, 00100
Finland
+358 9 4313 8457 (Phone)
+358 9 4313 8678 (Fax)

Torkel Strömsten

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Thomas Toldbod

Aalborg University ( email )

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

Jeanette Willert

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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