This paper argues that the discipline of management control is likely to benefit from theories that provide a more cogent and comprehensive perspective to address the issue of control structure variety, and examines the potential of Transaction Cost Economics (TCE) to inform such theories. Based on TCE, this paper proposes a framework that explicates the link between various archetypical configurations of control devices and the activities they are expected to control. In this framework, the nature of the organizational activities and the required contributions from organizational participants are defined along three dimensions: (1) the extent of programmability; (2) the degree of asset specificity; and (3) the intensity of ex post information impactedness. These attributes are associated with distinctive control problems that need to be dealt with. The control archetypes differ in their problem-solving ability, which makes them appropriate for the governance of some contributions, but not for others. Moreover, they differ in cost, and the framework explains the alignment of a contribution with a control archetype by delineating the efficiency properties of the match.

Accounting, Organizations and Society
Erasmus Research Institute of Management

Speklé, R. (2001). Explaining management control structure variety: A transaction cost economics perspective. Accounting, Organizations and Society, 26(4-5), 419–441. doi:10.1016/S0361-3682(00)00041-6