The role of management control systems in a post-merger context

Abstract

The purpose of this thesis is to investigate the impacts of mergers and acquisitions (M&A) on the management control systems (MCS) of an IT company. Moreover, the aim is to also examine what kind of MCS are utilized in an IT company after a merger or an acquisition has taken place and how they contribute to preserving human capital. Studies have shown the importance of MCS in M&A success yet only a limited amount of research has taken place regarding the matter (Razi & Garrick, 2019).

Bauer & Matzler (2014) argue that among major factors that impacting M&A success is integration, and academic literature demonstrates the importance of MCS in this context (Razi & Garrick, 2019). Studies show that the design of MCS and use of human capital are closely related (Widener, 2004). Malmi & Brown (2008) recognize five different types of MCS, which are effective in terms of examining different aspects related to them.

Findings in this thesis demonstrate the great impact of a merger on the MCS of an IT company as they were completely restructured in order to make them more data driven. However, on general, the MCS of the newly merged entity seem to be rather typical. When it comes to preserving human capital by utilizing MCS, their main function is to build trust between the employees and motivate them.