Effects of Organizational Process Change on Management Control Systems and Revelations of Managers' Private Knowledge
69 Pages Posted: 3 Aug 2005 Last revised: 29 Nov 2013
Date Written: November 1, 2005
This paper presents theoretical analysis and longitudinal field-study evidence that the effect of responsibility-center performance measurement and management control system (MCS) boundaries on organizational performance depends on whether organizations have a strategy of continuous or discontinuous organizational process change. Using social psychology theory, we develop a model consisting of three expectations of how continuous or discontinuous organizational process change influences responsibility-center performance measurement and competitive or cooperative MCS boundaries. In turn, these measurements and MCS boundaries have a disordinal interactive effect on responsibility-center managers' revelations of their private knowledge that is needed to identify and extract organization-wide performance gains from the organizational process change. The evidence presented from the longitudinal field study provides support for the theoretical model.
JEL Classification: M49
Suggested Citation: Suggested Citation