The MCS package in a non-budgeting organisation: a case study of Mainfreight

Winnie O’Grady · Chris Akroyd

50 citations0/0 files storedQualitative Research in Accounting & Management

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Accounting and Organizational Management Accounting Theory and Financial Reporting Corporate Governance and Management

Abstract

Purpose Budgets are commonly viewed as a central component of management control systems (MCS). The beyond budgeting literature argues that managers can develop other controls to replace budgets. The purpose of this paper is to examine the MCS package of an organisation which has never in its history had a traditional budget. Design/methodology/approach The authors carry out an ethnomethodology informed case study at Mainfreight, a large multinational logistics company headquartered in New Zealand. Data were collected from interviews with managers and accountants, internal company documents, published corporate histories, a company presentation, the corporate Web site and site visits. Findings The authors found that Mainfreight’s MCS package was explicitly designed based on cultural and administrative systems which supported the planning, cybernetic and reward systems managers used to monitor key drivers of short-and long-term performance with a focus on profitability. Research limitations/implications The implication of the finding is that a more holistic view of the MCS package is necessary to understand how control is achieved within organisations that have moved beyond budgeting. Practical implications The authors show that organisations can operate without traditional budgets and still maintain a high level of control by developing appropriate cultural and administrative control systems that are internally consistent with their planning, cybernetic and reward systems. Originality/value The scarcity of organisations that have never had budgets limits opportunities to investigate an MCS package intended to function without budgets. This unique case setting reveals the design of an integrated non-budgeting MCS package.

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References

2004Case Study Research 1999Performance management: a framework for management control systems research 2008Management control systems as a package—Opportunities, challenges and research directions 2009The design and use of performance management systems: An extended framework for analysis 2002Ethnomethodology's Program: Working Out Durkheim's Aphorism 2017Management control systems 1985Toward an integrative framework of organizational control 2001The performance prism in practice

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