Abstract – AOCRJ-V3I4P1

Management Control Systems in an Innovative, Fast-
Growing, Retail Business – A Case Study

Carl Olsmats
Self-employed Management Consultant, Stockholm, Sweden

Abstract:
Good management control systems (MCSs) are important to increase the probability that the organization’s objectives will be achieved. The objective with this study was to explore and put into a corporate and market perspective, the MCS in use at a fast growing, innovative, small or medium-sized business (SME) in the service sector, with a view to add and deepen the qualitative understanding of the MCS perspective in the context of strategies, competitiveness and performance. Further to add empirical insight to the successful application of MCSs in innovation companies. A combined explanatory and exploratory case study approach was applied to study MCSs in Alewalds Sports AB, a Swedish, fast-growing, innovative, high quality and service outdoor and sports retail business. Informal processes, personnel and cultural control were identified as important elements in the MCS implemented in this well performing company. Tight results control was primarily applied in the revenue dimension, and this was well in line with company objectives to prioritize growth. As the business grows and becomes more complex, Alewalds may have to implement a more formalized MCS with more emphasis also on costs and assets/risks. Alewalds may also, in a more regularly and structured manner, have to evaluate performance on a broader set of parameters reflecting progress in e.g. customer relations, quality, service and sustainability. The research approach was found useful to investigate and improve the understanding of the MCS perspective in the context of strategy, competitiveness and performance for innovative, fast-growing SMEs in the retail service sector. Results are not necessarily generalizable as only one case was studied. It is also difficult to relate company performance solely to the MCS used, whereby management approaches used in strategy and other areas as well as integrative aspects may also be very significant to explain and understand company success. The study may nevertheless be important as it contributes with empirical data and understanding to support future theory building in the field of strategy and MCSs.

Key Words: Management control system (MCS); Innovation; Retail; Fast-growing; Case study

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