Antecedents for defining management control system design: empirical evidence from Brazilian firms
This work analyzes the development profile of Brazilian firms regarding management accounting attributes. Much has been written in recent years about the design of management control systems and the use of management control artifacts, but there is a relevant antecedent that has been little explored, namely the profile of these attributes, involving aspects such as scope, timeliness, integration and aggregation (Chenhall & Morris, 1986; Silvola, 2008). These attributes define, limit and expand the power for management control to act (Berry, Broadbent & Otley, 2005) and they are interdependent, since each influences the others. They are the basis on which the organization’s management model is structured and developed. Within the universe of a firm’s management control, there are various artifacts that are implemented with the aim of providing support to managers’ decision-making process, besides coordination and influence on the employees (Anthony & Govindarajan, 2002; Hansen & Mouritsen, 2007). Among the existing artifacts cited in the literature as relevant for the planning and control process are strategic planning, budgeting, capital budgeting, profitability analysis, rolling forecasting and real options. In a changing environment, the attributes can change in terms of form and amplitude, demand and utilization, implying the need for integrated and proactive review and adjustment. The impact of the adequacy of these attributes on the design and use of management control systems is so relevant that they can distort and impair this design and use. To address the theme within a consistent theoretical framework, the idea of attribute in this article is based on some classic works (Chenhall & Morris, 1986; Silvola, 2008). This is a descriptive study, developed from an exploratory perspective, looking ahead to more comprehensive development in the future, given the absence of analogous works on Brazilian firms. The study was carried out through a survey of a sample composed of 125 Brazilian firms, with the data gathered by a structured questionnaire administered over the Internet. The data were analyzed by partial least squares path modeling (PLS-PM). The results suggest that the attributes examined are related in different ways, depending on the profile of the organization’s scope, influencing the existence of some management accounting artifacts, which should be taken into account in defining or updating the management information system. In short, if a firm wants to use artifacts for management control, it should review the structuring of its attributes.