A Field Study of Control System 'Redesign': The Impact of Institutional Processes on Strategic Choice

Abstract

This paper studies the role of an organization's accounting control system (ACS) as part of an interrelated control "package", in which other control systems function either as substitutes or complements. Drawing on resource dependence and institutional theories, it argues that this control mix is not only contingent on the organization's technical environment but on its institutional environment. In addition, the paper draws on empirical evidence to demonstrate how the design of the "package" is actively shaped by the strategic choices of its dominant coalition. The empirics are based on a longitudinal field study of one large, public, teaching hospital in Australia, which underwent material changes in its governance structure, culture, and accounting control systems.

JEL Classification: M40, M46, L31