Strategy and Control: Findings from a Set-Theoretical Analysis of High-Performance Manufacturing Firms

Abstract

We examine how management control systems combine with the organizational context, particularly strategy, to result in firm performance, and introduce fuzzy-set Qualitative Comparative Analysis (fsQCA) to accounting research as an alternative empirical tool for testing and building contingency theory. Using fsQCA on data from U.S. manufacturing firms, we provide not only novel large-sample confirmatory evidence for two high performance configura-tions that are primarily based on Simons’ field research (1990, 1991), but also exploratory evidence that is useful for extending contingency research. Specifically, we identify alternative configurations that consistently lead to high performance, and find that the collection of equally-well performing configurations changes depending on the level of performance. In addition, we illustrate some appealing features of fsQCA in relation to other quantitative statistical methods hitherto commonly used in this line of research. Conceptually, our study speaks to the notion of “contingent configurations” by drawing on tenets from both the configurational and contingency views of organizations.

Keywords: Management control systems, strategy, organizational configurations, qualitative comparative analysis

JEL Classification: L22, M41, M52