Navigating the Divide: A qualitative case study on management control systems in product and process innovation

Abstract: This thesis examines a company's use of management control systems in product and process innovation, and to what extent they are applied in enabling and constraining manners. In addition, we investigate how the application of management control systems affects the interplay between product and process innovation, and how the firm manages the interplay. The study was conducted as a qualitative single case study through interviews with employees from a listed manufacturing company. Our theoretical framework was based on Simons' (1995) research on management control systems through his four levers of control, Mundy's (2010) research on dynamic tensions, and our addition regarding how companies manage these tensions. Similar to previous research, our study highlights that the company balances all four levers of control across the company, and balances an enabling and constraining application of them. However, as opposed to earlier research, our study shows where the balance of management control systems can appear in the firm to create productive dynamic tensions. Additionally, we introduce the concept of coupling mechanisms between product and process innovation that enables seamless operations between the two innovation types.