Lecture 2
- Contingency theory emphasizes the crucial fit role between a control system and contingency
factors.
- The match between the supply of the control system, and the firm's demand determines
effectiveness.
- Several contingency factors shape the demand for specific control system characteristics;
- External: environment (porters 5+1 forces), culture (culture differences), technology
(manufacturing (labor and capital-intensive) vs. information technology; knowledge-intensive)
- Internal: strategy (differentiation vs. low cost) & organizational structure (size of the firm or
decentralization vs. centralization)
- Design of a control system: contingent variables -> organizational design -> management control
system design -> organizational effectiveness.
- Ouchi framework helps decide the type of control
for a certain activity/business. Ouchi highlights
the efficiency benefits related to output controls.
There are two major contingencies determining
the suitability of the 3 control types; the ability to
measure outputs and the knowledge of the
transformation process.
-
- Strategy describes the general direction in which
an organization plans to move to attain its goals.
- Management control systems can be seen as a tool
that supports in execution of the strategy.
-
- Corporate strategy; industry diversification -> Related diversifiers lever operating synergies:
common production, common marketing. -> Unrelated diversifiers lever financial or
administrative synergies: independent production, independent marketing.
- Business strategy types:
- Porter: Differentiation strategy, cost leadership strategy
- Miles & Snow: Prospector, defender, analyser
-
, Lecture 4: Guest lecture Belsimpel
Monthly, quarterly, yearly closing procedurs
- Closing periods by checking finance, determine results and report on them to stakeholders
- audit by KPMG
- Budgeting and forecasting
Projects:
- improving infrastructure
- Cost and commercial management
- Performance measurement on the business – closed 5 retail stores this year
- Gomibo – sales outside the Netherlands
- CSRD- Comply with the new sustainability reporting standards in 2025
- Partnership management – ensuring proper execution of agreements made with our partners
What is management control?
Organizing and structuring the organization in such a way that people work in the best way toward
the organizational goals
This can be done in various ways;
- Using the organizational structure
Benefits of a small organization become a challenge for a large organization
- Agility: small org ( short lines for quick decision-making)
o Large org ( managers became too busy, which slowed down decision-making
- Management: small org; opportunity for young professionals to work close with management
o Large org: no clear career path
- Team collaboration: small: teams worked closely together due to short communication lines
o Large org: teams are becoming more isolated as the organization grows, making cross-
team collaboration less natural
- Authorizations: small: managers were involved in every decision
o Large: unclear who is allowed to authorize what
- Ownership and accountability: small: managers took ownership of almost every decision,
enabling fast decision-making
o Responsibilities are unclear causing delays and errors
- Expertise and knowledge: small: we hire mainly smart motivated recent graduates and young
professionals creating a start-up vibe
o Large: More complex issues result in a need for more expertise and knowledge
The organizational structure is divided into: operational, commercial, tech, and support. Above is a
management support team – mainly for HR purposes.
- Empowering the corporate culture
- Mission: making access to the digital world easier for everyone
- Contingency theory emphasizes the crucial fit role between a control system and contingency
factors.
- The match between the supply of the control system, and the firm's demand determines
effectiveness.
- Several contingency factors shape the demand for specific control system characteristics;
- External: environment (porters 5+1 forces), culture (culture differences), technology
(manufacturing (labor and capital-intensive) vs. information technology; knowledge-intensive)
- Internal: strategy (differentiation vs. low cost) & organizational structure (size of the firm or
decentralization vs. centralization)
- Design of a control system: contingent variables -> organizational design -> management control
system design -> organizational effectiveness.
- Ouchi framework helps decide the type of control
for a certain activity/business. Ouchi highlights
the efficiency benefits related to output controls.
There are two major contingencies determining
the suitability of the 3 control types; the ability to
measure outputs and the knowledge of the
transformation process.
-
- Strategy describes the general direction in which
an organization plans to move to attain its goals.
- Management control systems can be seen as a tool
that supports in execution of the strategy.
-
- Corporate strategy; industry diversification -> Related diversifiers lever operating synergies:
common production, common marketing. -> Unrelated diversifiers lever financial or
administrative synergies: independent production, independent marketing.
- Business strategy types:
- Porter: Differentiation strategy, cost leadership strategy
- Miles & Snow: Prospector, defender, analyser
-
, Lecture 4: Guest lecture Belsimpel
Monthly, quarterly, yearly closing procedurs
- Closing periods by checking finance, determine results and report on them to stakeholders
- audit by KPMG
- Budgeting and forecasting
Projects:
- improving infrastructure
- Cost and commercial management
- Performance measurement on the business – closed 5 retail stores this year
- Gomibo – sales outside the Netherlands
- CSRD- Comply with the new sustainability reporting standards in 2025
- Partnership management – ensuring proper execution of agreements made with our partners
What is management control?
Organizing and structuring the organization in such a way that people work in the best way toward
the organizational goals
This can be done in various ways;
- Using the organizational structure
Benefits of a small organization become a challenge for a large organization
- Agility: small org ( short lines for quick decision-making)
o Large org ( managers became too busy, which slowed down decision-making
- Management: small org; opportunity for young professionals to work close with management
o Large org: no clear career path
- Team collaboration: small: teams worked closely together due to short communication lines
o Large org: teams are becoming more isolated as the organization grows, making cross-
team collaboration less natural
- Authorizations: small: managers were involved in every decision
o Large: unclear who is allowed to authorize what
- Ownership and accountability: small: managers took ownership of almost every decision,
enabling fast decision-making
o Responsibilities are unclear causing delays and errors
- Expertise and knowledge: small: we hire mainly smart motivated recent graduates and young
professionals creating a start-up vibe
o Large: More complex issues result in a need for more expertise and knowledge
The organizational structure is divided into: operational, commercial, tech, and support. Above is a
management support team – mainly for HR purposes.
- Empowering the corporate culture
- Mission: making access to the digital world easier for everyone
