The Complexity of Management Control -A case study of Volvo Trucks, Tuve Plant
Background and Problem: There have been multiple studies encouraging further research of management control systems as a package. These studies imply that there has been focus towards specific controls instead of how different controls affect each other and work as a package. Organizations might find that the controls work properly independent of each other, but if they not consider how the controls affect each other this could result in incorrect conclusions. It is especially hard to make management control work properly in large corporations where middle level managers face pressure from other parts of the corporation, which creates a complexity within their management control system. This thesis investigates how a management control system could be structured and identifies the main problem areas for a middle level management team. Aim of study: The aim of this thesis was to expand the empirical knowledge about problems arising within a management control system. We conducted our research at a middle level management team to investigate the additional complexity within their management control system, which arise when being a part of an organization within a corporate group. Methodology: This thesis is based on a case study in an organization, Tuve Plant, within a corporate group, Volvo Group. The empirical data was collected mainly through a qualitative approach, where one observation and three semi-structured interviews from parts of the middle level management team were conducted. Analysis and conclusion: In this study four main problem areas were identified: the integration of the controls, the culture, the work with sorting out the right information and the amount of measures. There were also lack of knowledge and problems with the integration of the controls indicating that the management control systems were not being viewed as a package. To create a functional management control system this study highlights the importance of working with cultural control and information system. Cultural control since it has great impact on employee’ behavior, affecting the acceptance of different changes, and information as it decreases the risk of misfits between the actual work and main targets affecting the whole system. If these controls are working properly we argue that the management control systems package will be improved since these controls support other controls. An important acknowledgement is that a middle level management team does not have the authority to make all decisions; we find that these restrictions increase the complexity of working with improvements in the management control system.
KeyManagement Control, Management Accounting, Management Control System, Management Control Systems Package.
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