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The Contemporary Controller: How does the control system interact with new role profiles?

English title The Contemporary Controller: How does the control system interact with new role profiles?
Applicant Möller Klaus
Number 189113
Funding scheme Project funding (Div. I-III)
Research institution Institute of Accounting, Control & Auditing Universität St. Gallen
Institution of higher education University of St.Gallen - SG
Main discipline Science of management
Start/End 01.01.2020 - 31.12.2021
Approved amount 225'420.00
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Keywords (5)

Organisational Learning; Controller; Management Control System; Complementarity Theory; Corporate Governance

Lay Summary (German)

Lead
Da das Unternehmensumfeld zunehmend weniger vorhersehbar wird, müssen Controller stärker in den Entscheidungs- und Strategieprozess eingebunden werden. Dadurch ändert sich die Rolle von einem eher passiven Erfüllungsgehilfen zu einem aktiv Beteiligten. Durch diesen Rollenwandel entstehen neue Möglichkeiten, aber auch Spannungsfelder und es kann unethisches Verhalten resultieren, wie z.B. die Manipulation von Finanzberichten. Dieses Forschungsprojekt untersucht unter welchen Rahmenbedingungen der Controller am effektivsten ist.
Lay summary

Unternehmen finden sich vermehrt in der Situation, Entscheidungen unter hoher Umweltunsicherheit zu treffen. Dies hat zur Folge, dass sich das Aufgabenprofil des Controllers geändert hat, um einen Wettbewerbsvorteil zu erlangen. Für die erfolgreiche Umsetzung der neu geschaffenen Rollenprofile müssten Chancen und Risiken bekannt sein, denn der Controller hat auch eine wichtige Kontrollfunktion im Unternehmen inne. Das Forschungsprojekt untersucht dazu die verschiedenen Rollen des Controllers auf Ebene der Organisation und des Individuums. Auf Unternehmensebene wird analysiert, ob und ggf. wie die traditionelle „Wachhund“-Rolle sowie die neue „Berater“-Rolle seine Wirkung beeinflussen. Diese Erkenntnisse werden anschließend auf der individuellen Ebene vertieft, wobei der Fokus auf der Interaktion zwischen Person und Steuerungssystem liegt. Durch verschiedene Rollenerwartungen kann es zu Konflikten kommen, die sich im Extremfall in der Manipulation von Zahlen und Berichten zeigen. Andererseits werden durch neue Rollenprofile Kompetenzen gefordert, die vielfach nur unzureichend vorhanden sind. Durch empirische Studien sollen Empfehlungen entwickelt werden, wie im Zusammenspiel zwischen Rollenerwartung, Rollengestaltung, Steuerungssystem und persönlichen Kompetenzen ein zeitgemässes Rollenbild für den Controller entstehen kann.

Direct link to Lay Summary Last update: 05.11.2019

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Employees

Abstract

Objective. Since the environment has become less predictable, the controller is increasingly involved in the strategy process to improve decision-making by advising the management. The controller’s new role profile has the potential to cause an ethical dilemma and partially substitutes the available time for her primary responsibilities, being the watchdog. We aim to deepen the understanding of the controller’s role in the organization to derive insights and recommendations for successful future role making practices. This project explores whether these roles enhance or impede organizational performance in general (package 1), the antecedents of the ethical dilemma (package 2), and which control configurations increase the controller’s learning ability (package 3). Novelty. We focus on how the control system and the organizational environment affect the controller and how the controller, in turn, influences organizational performance. Prior research that studies the controller has limited its scope mostly to governance issues, neglected the control system as a contingency factor, and avoided the question if the controller contributes to organizational performance. To study these relationships comprehensively, we first plan to take on a macro view by exploring how the controller’s roles affect organizational performance. In particular, to use organization theory for the analysis is a novel perspective on the ethical dilemma of being simultaneously advisor and watchdog. Subsequently, we also analyze the relationship between the control system and the controller. The idea to link the control system to the controller is a novel research undertaking and might expand the well-established system view. Relevance. Organizations are focusing on becoming more agile, being able to navigate more swiftly in uncertain environments. This change had the consequence that the controller increasingly involves herself as an advisor in the strategy process. The increase in participation, thus, promises better decision-making. But scholars have emphasized that the shift in the responsibilities of the controller also comes at a cost due to a higher likelihood of the engagement in unethical behavior. Through the lens of agency theory, this might impede organizational performance. However, organization theory proposes that unethical behavior to a certain degree might be even beneficial. As the advisory role becomes more important, we should also enhance our understanding under which conditions (e.g. the control system) the controller is most effective. Research plan. The work packages comprehensively study the controller’s responsibilities from a macro and micro perspective:(1) Macro perspective. This package intends to determine if the controller’s actions translate into organizational performance. To explore this relationship, we rely on organization theory to study the potential of slack as well as on the literature that examines participation in decision-making.(2) Governance. The goal is to enhance the understanding of what triggers unethical behavior. Prior literature provide evidence that reducing as well as increasing the dependency increases the likelihood of data-misreporting. Thus, we focus on the antecedents of unethical behavior to solve the conflict in the literature.(3) Learning. As sense-making is the preceding step of being able to advise the management, we want to explore how the control system can enhance the controller’s ability to learn.
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