Management Control towards Innovation in Chinese Bank Industry

Abstract: Purpose: With the intention to compare and analyse the differences between how state-owned and private-owned banks deploy MCS to foster their innovation, and why they use MCS in particular manner. Methodology: This master thesis is a multiple case studies which are done through collecting and analyzing archival data and telephone interviews with personnel in four Chinese banks. Empirical foundation: The MCS-related data are accumulated from archival data and telephone interviews with personnel in four banks. These MCS-related data are separated into enabling and coercive control basing on their features, and compared their usage in different types of banks in supporting different kinds of innovations. Conclusions: The findings show that the gap between MCS between state-owned and private-owned banks is eliminated. What‘s more, the MCSs they deployed to support innovation no matter in state-owned banks or private-owned banks are combination of enabling and coercive controls. The differences between different portion of enabling and coercive controls are in line with their strategic innovation goals. However, the cultural differences between state-owned and private-owned banks which influence reward and compensation are still obvious.