Determinants of the Use of Management Control Systems in Companies Operating Under Turbulent Conditions

This paper investigates the role that management control systems (MCS) play in the performance of the organizations operating under turbulent conditions. Two sets of companies are studied as turbulent conditions: international joint ventures (JVs) in the auto and motor industry and manufacturing companies located in a regional economy of a less developed country (LDC). Two surveys gathered data of 35 JVs and 45 industries in Cordoba (Argentina) that allowed testing a contingent framework. The results are concordant with the literature that holds that MCS helps to reduce uncertainty when the factors that generate it can be affected by the managerial decisions (Galbraith, 1973; Davila, 2000). Uncertainty is reduced by an appropriate use of MCS that implies a more intense use and a use orientated to coordinate rather than to control that in turn positively affects the organizational performance. Companies operating under turbulent conditions show that the use of MCS information improves their performance and is completely independent from factors not controllable by managers. The empirical study showed a clear association between previous exposure to a factor perceived as manageably and a high intensity of use of MCS with purposes of coordination to reduce the uncertainty understood as the difference between the information available and information needed to perform the task. The major limitations of this study are the lack of literature focused on the topic, testing of an ad-hoc contingent model, the small sample sizes and the measurement of latent variables through questionnaires based on perceptions