Design of Management Control Elements in Professional Service Firm Context

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Journal Title

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Volume Title

School of Business | Master's thesis

Authors

Ylönen, Artturi

Date

2020

Major/Subject

Mcode

Degree programme

Accounting

Language

en

Pages

102

Series

Abstract

The thesis investigates a management control systems 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 professional service firm including specific characteristics. They do not manufacture physical products but their business is based on providing consulting and expert services to corporate clients. 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 professional service firms. 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, professional service firms and management control systems in professional service firm context. 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.

Description

Thesis advisor

Malmi, Teemu

Keywords

MCS, management control, PSF, johdon ohjausjärjestelmät

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