Design of management control elements in Finnish software startup

Abstract

The thesis studies a management control system of a case company. It aims to provide thorough and coherent overall evaluation of management control system’s functionality and identify its essential features. Further, the thesis attempts to assess how the current management control system manages to fulfil its purpose and what potential flaws or pitfalls it contains.

The case company is described as a growth company including its specific characteristics. They have their own professional technicians and IT-department to obtain devise inspection and develop online market, but their business is to combine a large product selection with low prices and reliability. Due to the nature of their business, employees and customers are emphasized as their main assets. Evaluating the ability of case company to design their control system in the most efficient way is relevant since the prior literature has not been able to provide coherent theory about management control systems in the context of growth companies.

In order to achieve deep understanding from the case company’s management control systems, multiple interviews were conducted. Interviews were gathered from every organization level in order to receive opinions across the whole organization. The theoretical framework of the thesis relies on Malmi and Brown’s (2008) consideration regarding management control systems as a package. They believe that different control elements within the organization should not be considered in isolation from other elements, but rather control elements create a control package together. The thesis conducts a literature review regarding management control systems and defining a growth company to be used in this thesis. The results of the study pointed out the powerfulness of the partnership, common mindset across the organisation and autonomy as the control element. Moreover, although the organization’s discussing culture, they seemed to have issues regarding communicating expectations to employees which tend to leave room for the interpretations of desired actions.