Public Welfare vs Return on Shareholders´Equity -A Case Study of the Translation & Implementation of the Management Control Systems in Systembolaget

Abstract

Background and problem: Higher and other demands are made on management control systems in organizations which have a superior non-financial objective. Systembolaget, a state-owned company with monopoly to sell alcoholic beverages in Sweden, combines two main objectives which can be considered as conflicting, one financial target and one superior non-financial public welfare target. The research questions are focused on the translation of information through the organization’s levels and if the management control system makes it possible to run the organization according to both of the two main conflicting objectives. Purpose and Delimitations: To describe, analyze and evaluate how management control can be used in an organization, which is not profit maximizing and has both non-financial and financial objectives. The essay does not try to describe or draw generalized conclusions regarding general perspectives on Systembolaget’s assignment and objectives. Method: A qualitative and evaluative case study based on interviews with five employees at different levels in Systembolaget has been carried through. The empirical findings has been analyzed and structured by relevant theories regarding translation, balanced scorecard and management control in non-profit organizations. Analysis and Conclusions: It can be concluded that the translation of the non-financial objective is incomplete and only a few aspects are captured in the management control system. The most evident translation is when Systembolaget tries to quantify the abstract objectives into performance measurements and thereafter it is relatively unchanged through the organization’s levels. The respondents have the opinion they work in accordance with both the non-financial objective and the return on shareholders’ equity demand. However, the translation of the assignment is incomplete and it is impossible to determine if they really run the organization according to the assignment or not. It can be concluded that the management control system capture all aspects of the financial objective and that it is possible to run the organization according to it.