Enhancing innovation in organization by management control systems
Juottonen, Miia (2023-04-28)
Enhancing innovation in organization by management control systems
Juottonen, Miia
(28.04.2023)
Julkaisu on tekijänoikeussäännösten alainen. Teosta voi lukea ja tulostaa henkilökohtaista käyttöä varten. Käyttö kaupallisiin tarkoituksiin on kielletty.
avoin
Julkaisun pysyvä osoite on:
https://urn.fi/URN:NBN:fi-fe2023050239949
https://urn.fi/URN:NBN:fi-fe2023050239949
Tiivistelmä
Innovation is vital to organization’s success in today’s highly competitive and constantly changing business environment. Organizations need to drive value creating activities to be able to guarantee their long-term success and improve performance. This increasing need for change and growth provides a great deal of opportunity and many possibilities for businesses to renew themselves. However, innovation is a complex phenomenon, that involves high degree of uncertainty, high investments, and long-term approach. This has created a need for organizations to establish procedures that enable to control their processes and ensure the efficient use of their limited resources, balancing between the need for control and need to remain flexible and creative. Hence, the characteristics of management control systems and their suitability for innovation has raised an interest of organizational participants and researchers. This thesis aims to explore how management control systems can enhance innovation in organization. This study is based on the assumption that management control systems support innovation in organizational set-up and controls applied to innovation may have enabling and coercive design. Additionally, the use of management control systems is not limited to management but covers all organizational participants. Management control systems were studied as a package according to framework by Malmi & Brown (2008). This study was conducted as a qualitative study, having semi-structured interviews as chosen data collection method. Four interviews were carried out in one company´s innovation unit. The data gathered from interviews was analysed using thematic analysis. According to findings of this study organizations could benefit from comparing their management control systems to factors affecting their innovation management practises and balance the usage of enabling and coercive forms of control on them. Innovation is favouring the use of enabling control, but the balance is based on optimal fit. Management control systems applied to innovation should offer advanced visibility, communication, information sharing and collaboration, which are characteristics supported by enabling design of management control systems. The role of coercive controls is providing necessary limits to action and compliance. Management control systems package can also be applied to advance measuring innovation performance and generate metrics for assessing the value of innovation, which have been considered challenging tasks. This study’s empirical findings support the theoretical framework of this study at large extent. The results of this study should be reflected when considering how management control systems can enhance innovation in organization.