Unintended dysfunctional consequences of Management Control Systems – Organizational decline in post merger context

Abstract

This thesis explores the topic of unintended dysfunctional consequences of Management Control Systems (MCS) in post-merger context. It pursues to examine how MCS, generally recognized important for organizational success, can on the other hand contribute to organizational decline after mergers. The phenomenon is being examined by conducting a single-case study and collecting empirical evidence from an interview with an executive team member from Company X. The study is limited on focusing on cybernetic, planning and rewarding and compensation controls.

The findings of this study indicate that inadequate post-merger integration and unrealistic growth expectations contribute to significant organizational decline. In addition, it underlines the importance of managerial cognition in affecting post-merger integration, which consequently shapes the MCS configuration.