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Out of control? Strategy in the NFP sector: the implications for management control

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  • Basil P. Tucker
  • Lee D. Parker

Abstract

Purpose - This aim of this study is to explore the relationship between management control systems (MCSs) and the formulation of strategy in not‐for‐profit (NFP) organisations. Design/methodology/approach - The paper views the relationship between MCS and strategy through the contrasting lenses of new‐institutional and contingency theory, using data collected from semi‐structured interviews of CEOs and senior executives in 32 Australian NFPs. Findings - Strategy is formulated predominantly by intended means, through structured strategic planning processes. Emergent strategy is typically a rare means by which strategy is developed, and is in fact often actively discouraged in the NFPs investigated. Contrary to expectations, control is predominantly exercised through informal means, rather than by formally designed systems. Originality/value - With strategy and control being central concerns for most NFPs, this sector provides a unique vehicle for exploring the “robustness” of prior MCS strategy empirical findings. Investigating the MCS strategy relationship within a highly complex NFP context is thus an “acid test” of existing understanding of the MCS‐strategy nexus. As one of the few studies to investigate the relationship between control and strategy as it may apply in this context, this study refines and further develops extant management control theory.

Suggested Citation

  • Basil P. Tucker & Lee D. Parker, 2013. "Out of control? Strategy in the NFP sector: the implications for management control," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 26(2), pages 234-266, February.
    • Handle: RePEc:eme:aaajpp:v:26:y:2013:i:2:p:234-266
    DOI: 10.1108/09513571311303729
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    Citations

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    Cited by:

    1. Elmassri, Moataz Moamen & Harris, Elaine Pamela & Carter, David Bernard, 2016. "Accounting for strategic investment decision-making under extreme uncertainty," The British Accounting Review, Elsevier, vol. 48(2), pages 151-168.
    2. Graeme Harrison & Lu Jiao & Jinhua Chen, 2022. "Performance measurement systems and client performance in fee‐generating not‐for‐profit human service organisations," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 931-957, March.
    3. Dellaportas, Steven & Xu, Lina & Yang, Zhiqiang, 2022. "The level of cross-disciplinarity in cross-disciplinary accounting research: analysis and suggestions for improvement," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 85(C).
    4. Conaty, Frank & Robbins, Geraldine, 2021. "A stakeholder salience perspective on performance and management control systems in non-profit organisations," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 80(C).
    5. Devesh Baid & S. V. D. Nageswara Rao, 2017. "Management Controls of Teachers—Scale Development and Validation," Global Business Review, International Management Institute, vol. 18(3), pages 719-733, June.
    6. Daff, Lyn & Parker, Lee D., 2021. "A conceptual model of accountants' communication inside not-for-profit organisations," The British Accounting Review, Elsevier, vol. 53(3).
    7. Berend Van der Kolk & Tom Schokker, 2016. "Strategy implementation through hierarchical couplings in a management control package: an explorative case study," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 27(2), pages 129-154, May.

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