Actividad exploratoria

Moores and Yuen (2001) apply the Miller and Friesen (1984) life cycle model in their explorative study. This study has configurational approach, examining the relationship of variables strategy, structure, leadership and decision-making styles to MAS. Although this study does not focus on small companies, it provides fundamental insights to the life

cycle model in MCS research. Their method consists of survey and selective interviews to support the survey and provide deeper insights. Life cycle model and contextual approach are both considered, but assumes that the contextual factors are included in the different life cycle stages, in other words, the life cycle stage itself includes the contextual factors that then again differ between the different stages.

The key finding of Moores and Yuen is that 12 examined MAS attributes vary significantly between the life cycle stages. Quantitative analysis defines distinctive patterns of organizational characteristics and MAS formality across life-cycle stages. The use of more formal MAS increases from birth to growth, then decreases when turning mature, increases in revival and again reduces in decline stage.

Based on Moores and Yuen (2001) results, growth firms typically focus on long-term growth and development, less on short-term profitability. Mostly used systems in the growth firms are monthly profit and loss statement, capital budgeting, long-term planning and forecasts, financial information for performance evaluation and long-term criteria for performance evaluation. Results also indicate that growth firms have stronger focus on performance evaluation than any other group. In this study, growth firms do rely on a broader set of MA tools than in any of the other stages. The formalization of MCS comes usually with transition to computerized systems. Noteworthy is, that in formalization process firms used professionals in management or external consultation. Moores and Yuen (2001) results show that mature firms utilize somewhat less formal controls than the growth firms do. The underlying reason is that the operating environment and organization becomes more stable and more focus is put in operational efficiency. However, formal controls are complemented with informal controls, especially regarding business intelligence (scanning external environment). Mature firms have the threat that they become stagnated and bureaucratic, specifically if they continue to implement and rely heavily on formal controls, which could lead to decline. Perhaps surprisingly, this study shows that mature companies rely less on financial information (for example performance indicators) than growth firms do. The most used MAS in mature companies are monthly P&L and cash flow statements. Second most utilized MAS include monthly balance sheet, cost accounting, authoritative budgetary control, capital budgeting, long-term planning and forecasts, responsibility accounting and quality controls.

The limitations of this study are the quite small sample, generalizability of results outside this industry and geographical location, low response rate, self-assessment and partly relying on respondents recollection. Nevertheless, the authors state that this approach of bringing dynamics to the research by using the life-cycle theory was successful.

To sum up, the results show that the MAS attributes do vary between the different life- cycle stages. Moores and Yuen say that the changes in MAS are probably both due to need for internal consistency (equilibrium) and external contingencies. They need to be balanced by the management.

Collier (2005) conducted a 10-year longitudinal field study of TNA, an owner-controlled multinational packaging equipment supplier. TNA is an Australian company, at the end of the study having a turnover of 60 million Australian dollars and 120 employees. It had grown from six millions sales level during the study. Collier uses Simons 1995 and Otley 2005 frameworks.

Data was gathered through interviews, observation and data triangulation. The entrepreneurial characteristics of the owner are strong and he is growth-minded. This results in very strong social control through informal meetings, telephone calls, and high level of communication. A downside is reported to be high turnover of personnel, not everyone adapts to this kind of management style and control.

Collier reports in results that formal, system-based controls were not significant. Important were long-term sales growth and market share. MA and non-financial KPI were not important except for expense follow-up. The entrepreneur used a sophisticated spreadsheet model for accounting based controls, but the role of the entrepreneur through social control was dominant.

Nor was there any attempt to gain more information about MA, the owner did not see it worthwhile. Collier sees as the main weakness of this system its total dependence on one single individual. However, this study provides a good example of a control package suitable for this particular company, resulting in good performance. Even though formal controls were almost non-existing, the package builds on the “fundaments” of MCS: very clear vision and mission leading to targets and strategy to achieve those. Collier concludes that life cycle factors are important in understanding the management controls used. Although, it should be noted that the development of MCS did not happen through crisis, nor due to shifts between the stages, but during the lasting growth phase.

Collier concludes that more attention should be paid to attention to belief systems (social controls) (Simons, 1995), which are significant in relatively small entrepreneur controlled companies.