Loughborough University
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Mobilising management control systems to manage stakeholder relationship and sustainability challenges: an empirical case study of a major construction product company

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posted on 2019-02-05, 11:10 authored by Fong Lam
An emerging stream of management accounting research has investigated how management accounting techniques can be used to manage sustainability. Because of the transformative nature of sustainability, the subject area embraces a significant breadth of issues across different research disciplines. While literature suggests there is a lack of definitive texts for thinking about sustainability in management accounting studies, scholars see potential to help organisations identify social and environmental risks and opportunities by using extant accounting mechanisms and engaging with business. The research identifies literature that borrows insights from Professor Freeman s Stakeholder Theory (1984) and recognises its potential to enrich the current understanding of accounting for sustainability. Therefore, the aim of this research is to augment Simons Levers of Control (LOC) framework to incorporate greater depth on the role of interactions between managers and stakeholders in the implementation of (sustainability) management control systems. The research undertakes a qualitative approach that uses empirical case study data from a major construction product company. Using interview data from 29 semi- structured interviews (where 7 interviews were conducted with external stakeholders) and documentary evidence (such as sustainability reports and policy) to provide a useful track of what has happened within the case organisation. LOC is employed as the theoretical lens to investigate how managers use management control systems (MCS) for sustainability-related, strategic decision-making. The research provides empirical findings that indicate Stakeholder Theory can augment Simons LOC framework, as an analytic framework that used by the managers. The research responds to calls to investigate the potential of using extant accounting mechanisms to cope with sustainability challenges through exploring the relationships between: (a) sustainability, (b) MCS, and (c) strategic decision-making. The empirical material is an example used to illustrate the theoretical framework in one case study organisation. Firstly, the research identifies organisational use of MCS to address stakeholders sustainability requirement for stakeholder management. This study explores a range of MCS used by the case organisation to consider and weigh stakeholders concerns and expectations in the process of stakeholder management. Aligning with Simons LOC literature, strong evidence is found to suggest MCS can be used in a dynamic and multi-layered way in managing stakeholders sustainability requirements. Secondly, the influences of the external use of MCS on the case organisation s sustainability strategy have been revealed. Empirical evidence provides comprehensive understanding of three key stakeholders levels of influence (i) top- down, (ii) mediated and (iii) collaborative relationship, to case organisation s sustainability strategy. Each is provided with specific strategic motivation(s) and is achieved through the mobilisation of MCS between the case organisation and stakeholders. Lastly, the research comprehends the use of MCS by the managers to manage sustainability-related strategic decision-making. Findings show that MCS are used in a variety of ways to manage strategy formation and strategy implementation. Both positive and negative controls are important for an intended sustainability strategy to be successful. The academic literature suggests that interactive control systems can be deployed to manage strategy formation, as originated by Simons (1995). This research suggests that such systems are also used by external stakeholders, namely for strategic decision-making; and this allows managers to cope with both the fluidity of a sustainability strategy, as well as responding to external changes.



  • Business and Economics


  • Business


Loughborough University

Rights holder

© Lam Fong-Ching

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date



A Doctoral Thesis. Submitted in partial fulfilment of the requirements for the award of Doctor of Philosophy of Loughborough University.


  • en


Suzana Grubnic ; Jacqui Glass

Qualification name

  • PhD

Qualification level

  • Doctoral

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