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Management Control Systems and Strategy Change in Buyouts

Author

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  • Bruining, J.
  • Bonnet, M.
  • Wright, D.M.

Abstract

The impact of management buy-outs (MBO) on strategy and management control systems (MCS) is little understood. Previous research by Jones (1992) focused on efficiency-enhancing buy-outs that were a feature of the early development of the market. However, MBOs are heterogeneous and more recent developments have involved ownership changes that stimulate entrepreneurial practices. The novel contribution of this paper is to use Simons' (1995) classification of beliefs systems, boundary systems, diagnostic and interactive control systems to extend Jones' study to these newer forms of MBO. Within-case analysis and cross-case comparisons from four buyout firms are used to capture the interaction between management control systems and competitive strategy formulation, implementation and modification. This evidence supports arguments that buy-out managers undertake efforts in balancing the traditional feedback systems with the newer systems that stimulate opportunity seeking and learning.

Suggested Citation

  • Bruining, J. & Bonnet, M. & Wright, D.M., 2002. "Management Control Systems and Strategy Change in Buyouts," ERIM Report Series Research in Management ERS-2002-113-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:264
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    management buyouts; management control systems; strategy change;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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