Portfolio Company CEOs as Boundary Spanners in Private Equity: An Institutional Logics Perspective on Inter-Organizational Management Control

Abstract: This paper responds to the call for further research into management control mechanisms (MCMs) used in inter-organizational relationships between private equity (PE) firms and portfolio companies (PCs). Drawing on a cross-sectional field study consisting of 10 PC CEOs of a large Nordic PE firm, this paper investigates how PC CEOs use inter- organizational MCMs to achieve a functional alignment between the different parties' institutional logics. By doing so, we contribute to four literatures: First, we contribute to PE management accounting (MA) literature providing evidence for two main institutional logics present in the PE-PC inter-organizational relationship: a PE logic and an operational logic. Further, expanding on previous findings, we show that the "Troika" is an MCM which provides an informal venue for inter-organizational interactions. Second, we contribute to inter-organizational literature by showing that the interplay between inter-organizational MCMs is integral to their functioning. Third, we contribute to the institutional logics literature by providing evidence that institutional complexity can be sustained across organizational boundaries. Further, we conceptualize boundary spanners as social actors who mediate between different institutional logics across organizational boundaries. Fourth, we contribute to the overall MA literature by sharing insights from multiple PC CEOs, who are considered to be a social elite group that is difficult to access.