Cascading Control Changes, Incoherence, and Dialogue: Insights from a Longitudinal Case Study

European Accounting Review, Forthcoming

Posted: 20 Oct 2020

See all articles by Thomas Toldbod

Thomas Toldbod

Aalborg University Business School

Berend van der Kolk

IE Business School, department of Accounting and Management Control

Date Written: August 17, 2020

Abstract

Environmental shifts regularly urge organizations to adapt, which may entail management control (MC) changes. Changes to an MC element such as a performance measurement system, however, may in turn create incoherence with other, non-changed elements, generating a need for more changes, and thus trigger a cascade effect. To date, however, we know little about how this sequential process unfolds and what managers can do to deal with incoherence. This paper contributes by enhancing the understanding of sequential changes, drawing on the organizational ecology literature, and we empirically inform our research with a five-year longitudinal case study. Our data illustrates in detail how initial MC changes, to cope with an environmental shift, trigger a cascade effect. This sequential process results in an extensive change period, during which various incoherent MC elements coexist. Our study acknowledges that incoherence among MC elements can decrease control effectiveness by creating intra-organizational frictions, yet we highlight the role of managers in mitigating such negative effects. Specifically, we show how managers can alleviate the unfavorable effects of incoherence by changing their use of performance measures in order to better facilitate organizational dialogue, learning and problem solving.

Keywords: Change, Management Control, Organizational Ecology, Performance Measurement

Suggested Citation

Toldbod, Thomas and van der Kolk, Berend, Cascading Control Changes, Incoherence, and Dialogue: Insights from a Longitudinal Case Study (August 17, 2020). European Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3675460

Thomas Toldbod (Contact Author)

Aalborg University Business School ( email )

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

Berend Van der Kolk

IE Business School, department of Accounting and Management Control ( email )

Calle Pedro de Valdivia 21
Madrid, Madrid 28006
Spain

HOME PAGE: http://www.ie.edu/business-school/faculty-and-research/faculty/berend-van-der-kolk/

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