The MCS package in a non-budgeting organisation: A case study of Mainfreight
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Purpose - Budgets are commonly viewed as a central component of management control systems (MCS). The beyond budgeting literature argues that managers can develop other controls to replace budgets. The purpose of this paper is to examine the MCS package of an organisation which has never in its history had a traditional budget. Design/methodology/approach - The authors carry out an ethnomethodology informed case study at Mainfreight, a large multinational logistics company headquartered in New Zealand. Data were collected from interviews with managers and accountants, internal company documents, published corporate histories, a company presentation, the corporate Web site and site visits. Findings - The authors found that Mainfreight's MCS package was explicitly designed based on cultural and administrative systems which supported the planning, cybernetic and reward systems managers used to monitor key drivers of short-and long-term performance with a focus on profitability. Research limitations/implications - The implication of the finding is that a more holistic view of the MCS package is necessary to understand how control is achieved within organisations that have moved beyond budgeting. Practical implications - The authors show that organisations can operate without traditional budgets and still maintain a high level of control by developing appropriate cultural and administrative control systems that are internally consistent with their planning, cybernetic and reward systems. Originality/value - The scarcity of organisations that have never had budgets limits opportunities to investigate an MCS package intended to function without budgets. This unique case setting reveals the design of an integrated non-budgeting MCS package.
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Fields of Research::35 - Commerce, management, tourism and services::3507 - Strategy, management and organisational behaviour::350701 - Corporate governance
Fields of Research::35 - Commerce, management, tourism and services::3501 - Accounting, auditing and accountability::350101 - Accounting theory and standards
Fields of Research::35 - Commerce, management, tourism and services::3501 - Accounting, auditing and accountability::350105 - Management accounting
Fields of Research::35 - Commerce, management, tourism and services::3507 - Strategy, management and organisational behaviour::350711 - Organisational planning and management
Fields of Research::35 - Commerce, management, tourism and services::3503 - Business systems in context::350303 - Business information systems
Fields of Research::35 - Commerce, management, tourism and services::3503 - Business systems in context::350304 - Business systems in context