Management control systems design within its organizational context: ﬁndings from contingency-based
research and directions for the future
Robert H. Chenhall
Department of Accounting and Finance, Monash University, Clayton, Victoria 3168, Australia
Contingency-based research has a long tradition in the study of management control systems (MCS). Researchers
have attempted to explain the eﬀectiveness of MCS by examining designs that best suit the nature of the environment, technology, size, structure, strategy and national culture. In recent years, contingency-based research has maintained its popularity with studies including these variables but redeﬁning them ...view middle of the document...
section introduces the area of contingency-based MCS research and provides an overview of ﬁnd- ings over the past 20 years. The following nine sections review articles in terms of their contribu- tion to understanding topics considered within contingency-based research. These are: the meaning
0361-3682/02/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved. PI I : S0361-3682(01 )00027-7
Accounting, Organizations and Society 28 (2003) 127-168
E-mail address: Robert.Chenhall@buseco.monash.edu.au 1 The journals include: Accounting, Organizations and Society; Accounting and Business Research; Accounting and Finance;
Accountability and Performance, Behavioral Research in Accounting; Journal of Accounting Research; Journal of Accounting and
Economics; Journal of Accounting and Public Policy; Journal of Cost Management; Journal of Financial Economics; Journal of Man-
agement Accounting Research; Management Accounting Research, The Accounting Review. In addition, several articles are drawn
from management journals: Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly,
Decision Science, Management Science and OMEGA.
of MCS, outcomes of MCS, and the contextual variables of external environment, technology (tra- ditional and contemporary), organizational struc- ture, size, strategy and national culture. Each section comprises two parts: ﬁrst, ﬁndings from the extant literature are presented and a series of propositions summarizing these ﬁndings are oﬀered; and second, critical issues concerning each variable are examined with a view to identifying areas that provide challenges for improvement and opportunities for future research. Following these sections, issues concerning theory develop- ment are examined. Finally, the potential role of a variety of theories in progressing understanding of contingency-based research in MCS is considered.
2. An organizational framework for contingency- based MCS research
The identiﬁcation of contextual variables potentially implicated in the design of eﬀective MCS can be traced to the original structural con- tingency frameworks developed within organiza- tional theory. Theorists such as Burns and Stalker (1961), Perrow (1970), Thompson (1967), Lawr- ence and Lorsch (1967), and Galbraith (1973) focused on the impact of environment and tech- nology on organizational structure. Early accounting researchers drew on this work to investigate the importance of environment, tech- nology, structure and size to the design of MCS. Reviews conducted 20 years ago by Waterhouse and Tiessen (1978) and Otley (1980) were able to structure their commentaries by categorizing the early research into these key variables. In considering MCS research since 1980, it is
apparent that these key variables have been con- ﬁrmed as descriptors of fundamental, generic ele- ments of context. Many...