THE EFFECT OF MANAGEMENT CONTROLS ON WORK-RELATED …

THE EFFECT OF MANAGEMENT

CONTROLS ON WORK-RELATED

STRESS IN COMPANIES STRIVING

FOR AMBIDEXTERITY

FIELD STUDY IN THE CONSULTING SECTOR

Aantal woorden/ Word count: 24847

Rani Vanhaelst Stamnummer/ student number : 01300064

Promotor/ Supervisor: Prof. dr. Werner Bruggeman

Masterproef voorgedragen tot het bekomen van de graad van:

Master’s Dissertation submitted to obtain the degree of:

Master of Science in Business Economics

Academiejaar/ Academic year: 2016 - 2017

THE EFFECT OF MANAGEMENT

CONTROLS ON WORK-RELATED

STRESS IN COMPANIES STRIVING

FOR AMBIDEXTERITY

FIELD STUDY IN THE CONSULTING SECTOR

Aantal woorden/ Word count: 24847

Rani Vanhaelst Stamnummer/ student number : 01300064

Promotor/ Supervisor: Prof. dr. Werner Bruggeman

Masterproef voorgedragen tot het bekomen van de graad van:

Master’s Dissertation submitted to obtain the degree of:

Master of Science in Business Economics

Academiejaar/ Academic year: 2016 - 2017

Deze pagina is niet beschikbaar omdat ze persoonsgegevens bevat.Universiteitsbibliotheek Gent, 2021.

This page is not available because it contains personal information.Ghent University, Library, 2021.

Nederlandse samenvatting

Dit onderzoek analyseert het effect van beheerscontroles op werk-gerelateerde stress in bedrijven die zowel

moeten presteren op korte termijn als innoveren en strategisch nadenken op lange termijn. Deze situatie

komt voor in consultingbedrijven, omdat zij voortdurend moeten innoveren en tegelijkertijd deadlines

behalen om zo optimaal mogelijk advies te kunnen geven aan hun cliënten. Vandaar dat deze studie zich

richt op de consulting sector. Dit onderzoek bevat twee case studies m.b.v. persoonlijke interviews. De

eerste case bevind zich in de accountancy consulting afdeling van een groot consulting bedrijf en de tweede

situeert zich in de operationele afdelingen van een groot IT consulting bedrijf. Beide cases bevinden zich

in België.

Deze studie verduidelijkt o.a. dat deadlines, druk en een zware werklast in de eerste plaats de stress

oorzaken zijn. In project-gerelateerd werk komt er nog een hoofdzakelijke stressor bij, namelijk de

“Fragmentatie van het werk”. De beheerscontroles zorgen ervoor dat deze stress nog verder verhoogt,

doordat het namelijk schrik creëert voor slechte evaluaties, het geeft extra druk en omdat de managers niet

altijd de volledige controle hebben over de resultaten van bepaalde evaluatiemetingen. Deze paper stelt dat

dit effect verminderd kan worden door participatie van de leden en door de internalisering van de waarden

en geloofssystemen van het bedrijf.

In verband met de soorten managementcontroles, kan dit onderzoek vaststellen dat naarmate de bedrijven

meer “ambidextrous” worden, meer innoveren en groeien, de managementcontroles evolueren naar een

hybride controle configuratie zoals deze beschreven werd door Bedford en Malmi (2015, p.16). In Case 1

werd een “results control” vastgesteld. Maar naarmate ze steeds meer met innovatie te maken zullen hebben

en in de mate dat de omgeving turbulenter zou worden, zullen ze meer organische structuren moeten

implementeren. Hierdoor zouden ze geklasseerd worden als een hybride controle. Case 2 heeft momenteel

een “devolved control”, maar aangezien dit bedrijf sterk aan het groeien is, stijgt de nood aan uniformiteit.

Hierdoor zouden ze ook evolueren richting een hybride controle. Verder ontwikkelde dit onderzoek ook

enkele termen, zoals “ambidexterity spectrum”, “innovation range”, “supervised autonomy” en

“fragmentation of work” en formuleerde het enkele voorstellen.

I

Woord vooraf

Dit onderzoek was mogelijk dankzij de hulp van mijn promotor, Prof. Dr. Bruggeman. Mijn oprechte dank

voor uw begeleiding en ondersteuning. Ook wil ik u bedanken om mij in contact te brengen met het IT

consulting bedrijf in dit onderzoek. Verder ben ik zeer dankbaar voor de enorme bijdrage van de twee

consultingbedrijven en hun leden. Zonder hun hulp zou deze studie niet mogelijk geweest zijn. Bedankt

voor jullie medewerking.

Daarnaast wil ik ook mijn broer bedanken. Dankzij hem ben ik namelijk in contact gekomen met het

consultingbedrijf in Case 1. Bovendien wil ik Cheyenne Kersmaekers, Thomas Beullens, Lieselot

Dumarey, Tania Compernolle en Kim Steyaert bedanken voor hun hulp in dit onderzoek. Ten laatste gaat

er nog een bijzondere dank uit naar mijn ouders, die mij gedurende 4 jaar door dik en dun gesteund hebben.

Rani Vanhaelst

31 mei 2017

II

Index

Woord vooraf ................................................................................................................................................ I

Index ............................................................................................................................................................. II

I. Introduction .......................................................................................................................................... 1

II. Literature review (Framework) ............................................................................................................ 3

A. Ambidexterity ................................................................................................................................... 3

1. Ambidexterity: exploitation and exploration ................................................................................ 3

2. Implications of ambidexterity....................................................................................................... 4

B. Stress and role ambiguity ................................................................................................................. 4

1. Stress ............................................................................................................................................ 4

2. Causes of Work-Related stress ..................................................................................................... 5

3. Role ambiguity ............................................................................................................................. 5

C. Management control ......................................................................................................................... 6

1. How to manage ambidexterity ..................................................................................................... 6

2. Definition ..................................................................................................................................... 8

3. Motivation .................................................................................................................................... 8

4. Management controls ................................................................................................................. 11

5. Management control process ...................................................................................................... 11

6. Management control configurations of Bedford and Malmi (2015) .......................................... 13

III. Research question ........................................................................................................................... 15

IV. Research method ............................................................................................................................ 16

V. Description cases ............................................................................................................................ 17

VI. Discussion Case 1 ........................................................................................................................... 19

A. Striving for ambidexterity .............................................................................................................. 19

1. Changes ...................................................................................................................................... 19

2. Ambidexterity ............................................................................................................................. 19

B. Work-related stress ......................................................................................................................... 22

1. Causes of stress .......................................................................................................................... 22

III

2. Participation................................................................................................................................ 25

C. Management control configuration ................................................................................................ 26


2. Motivation .................................................................................................................................. 28

3. Feedback ..................................................................................................................................... 29

4. Rewards ...................................................................................................................................... 29

5. Classification of the management controls ................................................................................. 30

D. Conclusion Case 1 .......................................................................................................................... 33

VII. Discussion Case 2 ........................................................................................................................... 35

A. Ambidexterity ................................................................................................................................. 35

1. Changes ...................................................................................................................................... 35

2. Ambidexterity and Role ambiguity ............................................................................................ 35


1. Causes of stress .......................................................................................................................... 38

2. Participation................................................................................................................................ 39

C. Management control configuration ................................................................................................ 40


2. Motivation .................................................................................................................................. 42

3. Feedback ..................................................................................................................................... 43

4. Rewards ...................................................................................................................................... 44

5. Classification of the management controls ................................................................................. 45

D. Conclusion Case 2 .......................................................................................................................... 48

VIII. Cross-case analysis ......................................................................................................................... 49

A. Ambidexterity ................................................................................................................................. 49


C. Management control ....................................................................................................................... 51

D. Schedule ......................................................................................................................................... 53

IX. Conclusions .................................................................................................................................... 54

References .................................................................................................................................................. VI

IV

Appendix .................................................................................................................................................... IX

1. Questionnaires ............................................................................................................................ IX

2. Theoretical categorization of management controls. .................................................................... X

3. Comparison Cases with hybrid control (Bedford and Malmi, 2015) ......................................... XI

4. Schedule Cross-Case Analysis ................................................................................................ XIV

V

Abbreviations

BSC Balanced Scorecard

FTE Full-time equivalents

KPI Key Performance Indicator

LT Long term

SMART Specific Measurable Achievable Realistic and Timed

SDT Self-Determination Theory (Deci & Ryan, 2000)

ST Short term

Tables and Figures

Tables

Table 1. Characteristics of the interviews .................................................................................................. 18

Table 2. Theoretical categorization of management controls (Bedford & Malmi, 2015, p.6) ..................... X

Table 3. Comparison Cases with Hybrid Control (Bedford & Malmi, 2015, p.6, p.13) .......................... XIII

Figures

Figure 1. Self-Determination Continuum (Gagné & Deci, 2005, p.336) ..................................................... 9

Figure 2. Malmi and Brown's management control system package (2008, p.291) ................................... 13

Figure 3. The evolving character of management control configurations .................................................. 52

Figure 4. Schedule Cross-Case Analysis .................................................................................................... 53

Figure 6. Questionnaire Partners ................................................................................................................ IX

Figure 7. Questionnaire Managers ............................................................................................................. IX

Figure 8. Cross-Case Analysis ................................................................................................................ XIV

1

The effect of management controls on work-related stress in

companies striving for ambidexterity

Field study in the consulting sector

s the environment becomes more challenging, companies strive for ambidexterity in order to balance

exploitation of current activities and exploration of new technologies and innovations. As companies

become more ambidextrous, increase their innovativeness and become bigger, their management control

configuration will evolve towards a hybrid control. This paper found that management controls add stress.

However, this increase can be mitigated by letting managers participate and by internalizing values and

belief systems. This study further introduces some new concepts: “ambidexterity Spectrum”, “innovation

range”, “supervised autonomy” and “fragmentation of work”.

I. Introduction

The last decades have been characterized by globalization, higher competitiveness (Cooper & Jackson,

1997), extra demand and the power of the customer’s wishes (Rebele & Michaels, 1990), an increased use

of information technology at work, restructuring organizations, etc. (Sparks et al., 2001). Likewise, the

enormous expansion of information technology has produced an information overload and inflated the pace

of work (Cooper & Jackson, 1997). As the environment is generally unstable and uncertain, companies will

have to innovate if they want to prosper in the long run (O’Reilly & Tushman, 2004). These changes have

led to an increased job insecurity, which has lowered motivation and increased stress (Domenighetti et al.,

2000; Sparks et al., 2001).

64% of all Belgium employees suffer from stress (Securex, 2014). Stress at work can influence the

psychological health, physical health and life expectancy (Fletcher, 1988). Securex (2014) claims that for

one out of four Belgian employees, stress leads to physical and psychological problems, e.g. headaches,

insomnia, heart palpitations, lower concentration, etc. These problems caused by excessive stress explain

37% of absence because of sick leave (Sparks et al., 2001; Securex, 2014). When an employee experiences

too much stress there is a surplus cost of min. 3.750 euros per year for the employer (Securex, 2014). Taking

into account that this applies for one out of four employees (Securex, 2014), we can conclude that this has

a major financial impact for companies.

The big question today is how to manage this effectively (e.g., Jansen et al., 2006; Tushman & O’Reilly,

1996). Sparks et al. (2001) wrote that methods have to be found to help people deal with unstable work

environments, so that the negative health effects can be reduced.

Davila (2000) and Tushman and Nadler (1978) suggested that management controls are useful tools to

manage uncertainty, since they provide the necessary data to reduce the information asymmetry.

A

2

Bruggeman, Slagmulder and Hoozée (2014, p.13) defined management control as “the process of

motivating members of the organization in order to tune their activities to the strategy of the organization.

So that she can realize the goal settings in an efficient and effective manner.” (Bruggeman et al., 2014,

p.13). Some studies have shown empirical evidence of a need for management controls in uncertain

situations (e.g., Cardinal, 2001; Davila et al. 2009a). Therefore, this essay will analyse the effect of

management controls on work-related stress in an ambidextrous environment.

This research contributes to the literature by expanding on prior research in the fields of management

controls, stress and ambidexterity (Bedford & Malmi, 2015; De Baerdemaeker &Bruggeman, 2016; March,

1991; O’Reilly & Tushman, 2004-2013; Ryan & Deci, 2000; Sparks et al., 2001; Ylinen & Gullkvist, 2014;

House & Rizzo, 1971), by providing case study evidence on how management controls affect job related

stress in organizations striving for ambidexterity.

This paper also contributes to practice as it is interesting for companies to know the effects of management

controls on stress, since stress has an enormous impact on both the health of the employees and the financial

health of the company.

This research applies an exploratory case study method, on two cases, by taking interviews in an

accountancy consulting department of a big multinational consulting firm (Case 1) and in the operations

departments of an IT consulting firm (Case 2), which are both located in Belgium. In the department of

Case 1, an innovation by implementing a new software recently took place, which hints to ambidexterity.

The second case is active in IT consulting on a project base. They constantly have to adapt to new

technologies, while attaining results, which also indicates a setting of ambidexterity.

The empirical evidence indicates that management controls add stress, but are not the main stressors in the

consulting sector. This increase in stress caused by the management controls can be mitigated by using

participation and internalization of values and belief systems.

This paper is structured as follows: Section II gives an overview of the literature in the fields of

ambidexterity, stress and management controls. Section III discusses the research question followed by a

description of the research method in section IV. Section V describes the cases and sections VI and VII

include an analysis and discussion of the findings in Case 1 and Case 2. The next section will cover a cross-

case analysis. The contributions, limitations and suggestions for future research are considered in the last

section.

3

II. Literature review (Framework)

Central in this research are the terms ambidexterity, stress and management control. Section A of the

literature review deals with ambidexterity. In the introduction, some of the important effects of stress in the

context of an organization have already been included. This will be elaborated on in the section B of the

literature review. The following section will introduce management control (section C).

A. Ambidexterity

1. Ambidexterity: exploitation and exploration

The overall meaning of ambidexterity is the “ability to pursue two apparently contradictory objectives

simultaneously” (Turner, Maylor, & Swart, 2015, p.178).

House and Rizzo (1972) discussed a case which payed much attention to short-term productivity in which

day-to-day problems had to be met. Unfortunately, this was at the expense of long-term or creative efforts

that could enable continuous growth. This long-term versus short-term dilemma is an illustration of

ambidexterity.

Another example is that top managers and executives have to guard the products and processes of the past,

while getting ready for the innovations that will determine the future (O’Reilly & Tushman, 2004). This

concept is called the Productivity Dilemma1 (Abernathy, 1978; Adler et al., 2009).

Managers have to balance between exploring new opportunities and exploiting existing activities (O’Reilly

& Tushman, 2004). Exploitation involves short-term time horizons, improvement and efficiency.

Exploration on the other hand refers to long-term time horizons, experimentation, innovation and

adaptability (McCarthy & Gordon, 2011, p241). Exploration has been linked with search, discovery,

innovation, experimentation and risk taking while exploitation refers to efficiency, production and selection

(Cheng & Van de Ven, 1996; March 1991). Firms that have the capability to let exploitation and exploration

coexist are referred to as ambidextrous firms (O’Reilly & Tushman, 2004, p.80).

March (1991, p.71) defined ambidexterity as “the attainment of a balance between exploitation and

exploration, whereby organizations make explicit and implicit choices between the two to attain an ‘optimal

mix’”. He referred to exploitation as refining existing knowledge and exploration as developing new

solutions (March, 1991, p.71; Turner et al., 2015).

1 The Productivity Dilemma claims that short-term efficiency and long-term adaptability are inherently incompatible

(Abernathy, 1978). Companies have to augment efficiency by sticking to proven processes, thereby creating stability

and predictability (e.g., Taylor, 1911; Deming, 1986). This can provide companies with a rigid and inflexible state of

being. However, beside efficiency companies also have to be able to learn and innovate, which is not easy in a rigid

and inflexible company.

4

2. Implications of ambidexterity

Creating ambidexterity has many advantages. First and foremost, ambidexterity allows both exploration

and exploitation. Second, it can generate superior financial performance (e.g. He & Wong, 2004; Morgan

& Berthon, 2008) and allows a longer life of the company (O’Reilly & Tushman, 2011). Third, it

ameliorates sales revenues, profits, customer satisfaction and new product introductions (Sarkees &

Hulland, 2009). It is thus valuable to create an ambidextrous organization.

In this context of ambidexterity, this study investigates the impact of management controls on work-related

stress. First, this paper will elaborate on the concept of stress.

B. Stress and role ambiguity

1. Stress

Based on Oxford Dictionary’s definition of stress, work-related stress could be defined as: “a state of mental

or emotional strain or tension resulting from adverse or demanding work circumstances.” Different levels

of workplace stress exist due to three factors: 1) the amount of work that has to be done (job demand), 2)

the level of authority in decision-making and 3) the boundaries between which the person can choose to

activate his or her skills (OECD, 2012).

“Changes in the labour market and working conditions could have led to less stable employment with

increased workloads over time, thereby contributing to increased workplace stress with potential adverse

effects on mental health.” (OECD, 2012)

The numbers and information in the introduction showed that stress is omnipresent in the workplace in

Belgium and has negative effects on both the health of the organizational members and on the financial

health of the company. The problems caused by excessive stress explain more than one third of absence

because of sick leave (Securex, 2014). The OECD (2012) stated that there are high costs associated with

mental health problems caused by stress. These cost caused by absenteeism and lower productivity at work.

It also has an impact on the colleagues and on the training and recruitment of new employees (OECD,

2012). This shows the importance of handling stress in a way that the negative consequences are kept to a

minimum.

Securex (2014) wrote that an employee with excessive stress costs around 3750 euros more each year and

thus has a major financial impact on companies since this accounts for one out of four employees. Work-

related stress is a serious issue and if adequately handled, it can result in major benefits for companies

(Hicks & McSherry, 2006).

The OECD (2012) announced that the most stressful situation is when rewards do not match the work that

is done. Therefore, attention should be paid to the rewarding system in order to lower stress. Another finding

is that good leadership helps employees to better deal with workplace stress (Kelloway & Barling, 2010;

OECD, 2012).

5

The OECD (2013) and Calnan, Wadsworth, May, Smith and Wainwright (2004) mentioned that work-

related stress is dominant and highest in functions of high skilled managerial and professional occupations.

Therefore, this study will focus on managers located in higher levels of the hierarchy.

2. Causes of Work-Related stress

There have been several studies about the causes of work-related stress (e.g. Bhatti, Shar, Shaikh, & Nasar,

2010; Hicks & McSherry, 2006). A case study in Pakistan investigated the main stressors for employees in

different industries (Bhatti et al., 2010). They showed that 67% of employees’ stress was due to factors

within the organization and only 33% due to external factors, such as family, the economy and the climate.

Within the internal factors, the principal cause of stress is workload followed by timings, which indicates

the number of hours worked (Bhatti et al., 2010). The element timings was most significant in the service

sector.

Hicks and McSherry (2006) also mentioned the workload and timings as stressors. Beside these two, they

also noted other factors that cause stress, such as:

Targets, deadlines and standards;

Role conflict and role ambiguity (see next paragraph);

Technology;

Cover during staff absence;

Inadequate training;

Lack of control over workload;

Lack of variety leading to boredom;

Low pay;

Flexitime when abused by employers;

Excessive hours of overtime;

Job insecurity;

Pace and flow of work.

3. Role ambiguity

In a context in which the environment is unstable, dynamic and has more challenging customers’ wishes, a

lot of managers undergo role ambiguity (Rebele & Michaels, 1990). When there is strict control and too

much emphasis on short-term goals, managers might forget long-term goals (Bruggeman et al., 2014).

When managers have to both perform in the short term (exploitation), which is often linked with rewards,

and innovate (exploration) at the same time, they might get confused concerning their role in the

organization. This is role ambiguity. Kahn et al. (1964) described role ambiguity as “a lack of clarity in the

sent roles” or “lack of necessary information available to a given organization position”. However, attention

should be paid to the difference between role conflict and role ambiguity. Role conflict refers to

incompatible tasks that one has to fulfil, whereas role ambiguity means a lack of clarity of one’s role (Kahn

et al., 1964; Schuler, Aldag & Brief, 1977, p.112). House and Rizzo (1972) mentioned that in spite of the

6

fact that the literature focusses more on role conflict than on role ambiguity, it should be the other way

around. Role ambiguity can be due to different reasons. Either the manager does not know what his job

goals include, how to reach his job goals or how his performance will be evaluated (De Baerdemaeker &

Bruggeman, 2016). Kahn et al. (1964) (Schuler, Aldag & Brief, 1977) argue that role ambiguity can create

tension and dissatisfaction. According to the role theory (Kahn et al, 1964) ambiguity increases the

probability that someone will be unsatisfied with one’s role causing anxiety and resulting in a decreased

performance.

C. Management control

The section starts with discussing some ways to manage ambidexterity followed by defining management

controls and elaborating on motivation. Then some general information about management controls and its

process are discussed, followed by an explanation of the management control figurations of Bedford and

Malmi (2015).

1. How to manage ambidexterity

Before having a look at the management controls, this section will first list some suggestions on handling

ambidexterity that were found in prior literature (e.g. House, 1971; O’Reilly & Tushman, 1996; Gibson &

Birkinshaw, 2004; McCarthy & Gordon, 2011; Turner et al., 2015; De Baerdemaeker & Bruggeman, 2016).

O’Reilly and Tushman (1996) insinuated that few companies can succeed at managing ambidexterity,

considering the fact that exploration and exploitation need dissimilar strategies and structures. This can

create tension. Ambidextrous organizations have to manage these tensions well, otherwise they might end

up with a negative interaction effect between exploration and exploitation (Tushman & O’Reilly, 1996).

O’Reilly and Tushman (1996) are not the only ones stating that exploration and exploitation require other

structures. The contingency theory claims that efficient company structures differ in varying organizational

surroundings factors, such as technology and environment (Waterhouse & Tiessen, 1978). The structures

depend on the organization’s context (Waterhouse & Tiessen, 1978). Ancona et al. (2001), Brown and

Eisenhardt (1998) and Lewin et al. (1999) phrase that exploration is usually linked with organic structures,

loose systems, autonomy, emerging markets and technologies. Exploitation on the other hand is more

affiliated with mechanistic structures, strict systems, procedures, control and bureaucracy in secure markets

(Ancona et al., 2001; Brown & Eisenhardt, 1998; Lewin et al., 1999). McCarthy and Gordon (2011, p. 240)

mentioned that diagnostic control systems2 generate exploitation behaviour by sacrificing exploration

behaviours that are necessary for future survival. Exploration and exploitation behaviours have to be

effectively balanced (March, 1991, p.71).

2 Diagnostic control system: performance measurement systems; (McCarthy & Gordon, 2011, p.240-241); feedback

systems to control outcomes and ameliorate based on deviations from present standards of performance. (Simons,

1994, p.170)

7

Although organic structures are usually connected with exploration, Ylinen and Gullkvist (2014) showed

that an organic control is important for both exploitation and exploration. Moreover, they suggest that the

interaction effect of organic and mechanistic controls3 ameliorate both explorative and exploitative

performance.

In 2004, O’Reilly and Tushman had a look at some companies that handled this situation quite successfully.

These companies were able to build an organization in which they clearly distinguish exploratory units

from their traditional exploitative ones. This enabled them to use different structures, processes and cultures

in the two “parts”. However, an integrated senior team has to form the link between the two parts. According

to O’Reilly and Tushman (2004), these organizations are called ambidextrous organizations. In order to be

a successful ambidextrous organization, senior teams and managers need to be ambidextrous (O’Reilly &

Tushman, 2004). Moreover, a good vision is vital to building designs in ambidextrous organizations as they

provide an overarching objective that allows coexistence of exploitation and exploration. This vision should

be well-communicated together with its strategy (O’Reilly &Tushman, 2004).

Nevertheless, other views than that of O’Reilly and Tushman (2004) exist as well. Gibson and Birkinshaw

(2004) for example looked at the possibility of coexistence of the “parts”. In this case, managers and

employees show “the behavioural capacity to simultaneously display alignment (exploitation) and

adaptability (exploration)” (Gibson & Birkinshaw, 2004, p.209). This view does not separate different units

as suggested by O’Reilly and Tushman (2004).

The paper of McCarthy and Gordon (2011, p.241) distinguishes between structural ambidexterity and

contextual ambidexterity. Structural ambidexterity refers to ambidexterity as described by O’Reilly and

Tushman (1996). As discussed before, this includes separating exploitation and exploration into different

organizational units that were connected through senior managers. Contextual ambidexterity on the other

hand is complementary to structural ambidexterity and refers to producing an organizational environment

that inspires and rewards members to act in a certain way (Ghoshal & Bartlett, 1997). McCarthy and Gordon

(2011, p. 241) have linked contextual ambidexterity with a ‘clan control’.

Another view comes from Turner et al. (2015). In the context of projects, they showed that even if managers

do not realize it, i.e. when they do not have a conscious strategy to be ambidextrous, ambidexterity still

exists in their practices. In their research, Turner et al. (2015, p.177) focused on intellectual capital. They

showed that ambidexterity is not always installed explicitly. It can be present, even when managers do not

realize it.

3 Mechanistic controls are based on formal procedures and rules, standardization and routines while organic controls

are more informal, adaptable, have less rules and procedures (Chenhall, 2003, p.131). Organic controls are situated in

a context in which the main objective is to get things done and comprise open communication, decentralization,

autonomy and empowerment (Burns & Stalker,1961, p.1).

8

Another way to deal with role ambiguity is through good and efficient leadership. Research of House (1971)

implied that if roles are ambiguous, a leader that initiates structure will have a positive effect on members’

satisfaction and performance. Besides, this good leadership is also needed in situations where there is a

high level of stress and anxiety (House, 1971). Participative budgeting can reduce work-related stress when

there is role ambiguity. De Baerdemaeker and Bruggeman (2016) proved that participative budgeting in

Belgian companies can decrease the negative effect of role ambiguity on work-related stress.

In summary, there are different approaches to managing ambidexterity in companies. The idea of O’Reilly

and Tushman (1996) was to split exploitation and exploration into different organizational units that were

connected through senior managers, so that distinguished structures could be applied. Gibson and

Birkinshaw (2004) found that exploitation and exploration can coexist without structural separation.

McCarthy and Gordon (2011, p. 241) made a distinction between structural and contextual ambidexterity.

House (1971) showed the importance of leadership. Turner et al. (2015) argued that ambidexterity is not

always installed explicitly, but can be present even when managers do not realize it. De Baerdemaeker and

Bruggeman (2016) stated that by using participative budgeting, work-related stress that was caused by role

ambiguity can be decreased.

2. Definition

Bedford and Malmi (2015) described management control as “A set of processes and mechanisms used by

managers to influence the behaviour of individuals and groups towards more or less predetermined

objectives”. Another definition comes from Bruggeman et al. (2014, p.13) who defined management

control as “The process of motivating members of an organization in order to tune their activities to the

strategy of the organization. So that she can maximize the realization of the goal settings in an efficient and

effective manner.” This definition emphasizes that the management controls should be consistent with the

strategy of the firm and that motivation is key in management controls (Bruggeman et al., 2014). Therefore,

this paper will first elaborate on the concept motivation before continuing on management controls.

3. Motivation

According to the paper of Ryan and Deci (2000, p.69), “Motivation concerns energy, direction, persistence

and equifinality – all aspects of activation and intention.” People are motivated when they are energized to

do something (Ryan & Deci, 2000). Consequently, management controls will have to activate an

organization’s members so that they strive to reach goals that are congruent to those of the organization

and its strategy (goal congruence, Bruggeman et al., 2014, p.19).

The Self-Determination Theory (SDT; Deci & Ryan, 1985) states that individuals have three essential

psychological needs. These are the need for competence, autonomy and relatedness. Skinner (1995) and

White (1959) described the need for competence as succeeding at challenging assignments and attaining

the desired outcomes. The need for autonomy implies that someone experiences choice and feels as if he

was the initiator of his own actions (Charms, 1968; Deci, 1975). The need for relatedness concerns feelings

of mutual respect and reliance with others (Baumeister & Leary, 1995; Harlow, 1958). These intrinsic needs

9

will promote self-motivation, because they facilitate internalization of values and regulatory processes

(Deci & Ryan, 1985; Ryan & Deci, 2000). When these needs are hindered, motivation decreases (Baard,

1994; Ryan et al., 1996; Sheldon, Ryan, & Reis, 1996).

Furthermore, the SDT (SDT; Deci & Ryan, 1985) distinguishes autonomous motivation and controlled

motivation. As mentioned before autonomy refers to having the experience of choice (Gagné & Deci, 2005).

Intrinsic motivation is an illustration of autonomous motivation (Gagné & Deci, 2005). According to the

SDT, intrinsic motivation refers to the fact that all people have a natural tendency to work, because of the

satisfaction they get from it (Ryan & Deci, 2000). People engage in activities because they like them or

find them interesting (Gagné & Deci, 2005). On the other hand, controlled motivation implies feelings of

pressure and a sense of having to engage in the actions (Gagné & Deci, 2005). Autonomous motivation

makes managers and employees act because they want to themselves, whereas in the situation of controlled

motivation they act because they have to (Bruggeman et al., 2014, p.32). Extrinsic motivation can vary

between autonomous or controlled motivation. The study of Gagné & Deci (2005) has included a self-

determination continuum from the SDT (see Figure 1) that ranges from amotivation, to intrinsic motivation.

Between amotivation and intrinsic motivation there is extrinsic motivation (Gagné & Deci, 2005). Extrinsic

motivation is defined as “Performance of an activity in order to attain some separable outcome” (Ryan &

Deci, 2000, p.71). Gagné and Deci (2005) distinguished four kinds of extrinsic motivations. External

regulation is the original type of extrinsic motivation and a prototype of controlled motivation (Gagné &

Deci, 2005). Within external regulation, the goal of acting is to acquire desired outcomes or to avoid

undesired ones (Gagné & Deci, 2005). People will perform due to the pressure of rules and procedures or

because of bonus or sanction measures (Bruggeman et al., 2014, p.32).

Figure 1. Self-Determination Continuum (Gagné & Deci, 2005, p.336)

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The following three forms of extrinsic motivation are related to internalization. This means that people are

taking in attitudes, values etc. (Gagné & Deci, 2005; Ryan & Deci, 1985). The more internalized the

attitudes, values and belief systems, the more autonomous they become.

The second motivation, Introjected regulation, is the most controlled of the internalized motivation, which

a person has taken in, but does not see as his or her own yet (Gagné & Deci, 2005). In this regulation,

people act on behalf of guilt, fright or in order to be proud (Bruggeman et al., 2014, p.32).

Third, identified regulation, is the lightest form of autonomous motivation (Bruggeman et al., 2014), which

occurs when the behaviour is more congruent with their own personal objectives and identities (Gagné &

Deci, 2005). Finally, the most autonomous extrinsic motivation is integrated motivation, in which the

behaviour is an integral part of who they are (Gagné & Deci, 2005). Integrated regulation does not evolve

in intrinsic motivation, since it is still extrinsic motivation. Integrated regulation is not defined as being

interested in the activity, but rather as the instrumental importance of the activity for the personal goals

(Gagné & Deci, 2005).

Research implies that autonomous motivation, composed of both intrinsic motivation and internalized

extrinsic motivation, is better in contexts where there are both complex activities that are interesting and

less complex tasks that require discipline (Gagné & Deci, 2005). Even in the case of monotonous functions

within a factory, autonomous motivation leads to greater work satisfaction. For non-interesting jobs, there

is also an advantage concerning job satisfaction and well-being (Breaugh, 1985; Karasek & Theorell, 1990;

Matteson & Ivancevich, 1987; Sherman, 1989; Gagné & Deci, 2005). Consequently, autonomous

motivation is preferable in organizations. The SDT (Deci & Ryan, 2000) states that it is possible to

internalize a part of the extrinsic motivation. The incentive of internalizing extrinsic motivation is that

intrinsic motivation, relative to external motivation, creates confidence and excitement, which in turn

enhances performance, creativity, self-esteem and general well-being (Deci & Ryan, 2000). Top

management also needs to pay attention to creating supportive conditions to maintain and enhance intrinsic

motivation, as it can quickly be disrupted by non-supportive conditions (Ryan & Deci, 2000). The SDT

postulates that interpersonal happenings, such as intangible rewards and positive feedback (Deci, 1975) can

ameliorate intrinsic motivation when it contributes to feelings of competence during the activity (Ryan &

Deci, 1985). However, feelings of competence will only enhance intrinsic motivation if they coexist with

a sense of autonomy or relatedness (Charms, 1968).

Bruggeman et al. (2014, p.33-47) mentioned certain methods to stimulate autonomous motivation. Some

methods developed from inspiring and coaching leadership, bottom-up-determination of performance

measures and goals and interactive use of performance reports. Other options consist of group dynamic

processes where manager groups determine a vision for the future together and of constructive feedback

for performance-information, which was also stated by Ryan and Deci (2000). Ryan and Deci (2000)

additionally specified that acknowledgement, choice and the chance of self-direction improve intrinsic

motivation, because it creates feelings of autonomy. Additionally, tangible rewards, but also threats,

11

deadlines, directives, pressured evaluations and imposed goals decrease intrinsic motivation (Ryan & Deci,

1985).

In short, the SDT splits amotivation from motivation. Within motivation it distinguishes between

autonomous motivation and controlled motivation. Autonomous motivation refers to motivation by one’s

interest in an activity (Gagné & Deci, 2005). Controlled motivation, on the other hand, includes external

motivation and introjected extrinsic motivation. Autonomous motivation and controlled motivation depend

on elements of the social context, such as job and work climate, and on personal differences (Gagné &

Deci, 2005). Autonomous motivation is preferable (Gagné & Deci, 2005).

4. Management controls

In the beginning of this section, management controls were defined. This paragraph discusses some insights

concerning management controls.

A management control is optimal if managers concentrate on putting the overall company strategy into

effect and if this structure avoids dysfunctional behaviour (Bruggeman, Hoozée, Slagmulder, 2017). This

also refers to goal congruence, which means that the personal goals of individuals, in this case managers,

are aligned with the overall goals of the organization (Bruggeman et al., 2017). The terms “enabling” and

“coercive” have been used in prior literature to define work processes (Adler & Borys, 1996, p.61-89).

Enabling can be compared with autonomous regulation and coercive with controlled regulation. Enabling

formalization has been linked with positive effects, for instance an increased motivation and performance

(Van der Hauwaert & Bruggeman, 2013). Enabling processes try to give information in order to make it

possible for managers to handle activities more effectively (Adler & Borys, 1996). Hempel et al. (2012)

showed that regulation is seen as positive when they enable managers to master their own activities. When

managers perceive true participation then the BSC will be seen as enabling (Van der Hauwaert &

Bruggeman, 2013). Agyris (1953) described “true participation” as the capacity of free and spontaneous

discussions, participating in the decision to accept or reject new things as a group (Agyris, 1953; Van der

Hauwaert & Bruggeman, 2013).

5. Management control process

The management control process has six phases (Bruggeman et al., 2014, p.133):

Strategic planning;

Programming;

Preparing approval of the budget;

Result of the measurement and follow-up of the budget;

Variance analysis and reporting, which investigates the deviation between reality and the budgets;

Evaluation of performance and the rewards attached to it.

The first two steps in the management control process are strategic planning and programming (Bruggeman

et al., 2014, p133). The third step concerns the approval of the budget. The budget is key in a management

control system (Abernethy & Brownell, 1999; Bisbe & Otley, 2004). It helps to allocate resources within

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the company, communicates information on plans and it establishes performance criteria (Waterhouse &

Tiessen, 1978, p.65).

Budgets or other management controls are used to motivate managers to attain the predetermined goals.

When they succeed, they should be rewarded. Budgets must have a motivating effect and may not be

perceived as a bureaucratic administrative process imposed by top management (Bruggeman et al., 2014,

p.155-173).

Furthermore, it is interesting to know that taking part in the budgeting process leads to more work

satisfaction, positive attitudes, engagement and motivation of the managers. The paper “Budgeting and

work-related stress” by De Baerdemaeker and Bruggeman (2016) concluded that participative budgeting

significantly decreases stress in turbulent surroundings.

The Balanced Scorecard is a frequently used tool, which is a framework for integrated performance

measurement (Bruggeman et al., 2014, p.186–187; Kaplan & Norton, 1996). As it is a part of management

control systems, it must motivate managers as much as possible. When this measurement is used to reward

managers, it can strongly influence management behaviour (Bruggeman et al., 2014). Performance

measures and feedback both have to be present in order to have a complete control process with a

comparison between actual achievements and what was planned (Waterhouse & Tiessen, 1978, p.73).

The last step in management control systems is evaluating and rewarding managers (Bruggeman et al.,

2014). Managers that succeed in realizing their goals should be rewarded. The purpose of rewards is to

maximize their motivation and make their behaviour consistent with the company goals and strategy. This

purpose is thus compatible with the definition of management control and goal congruence (Bruggeman et

al., 2014, p.16-19). Managers can be financially and non-financially rewarded by means of promotion, more

responsibilities, autonomy, acknowledgement of performances, etc. (Bruggeman et al., 2014, p.231). In

general, performance dependent rewards have a positive influence on performance motivation. As

mentioned in the section about stress, the OECD (2013) states that the most stressful situation is when

rewards do not match the work that is done. In consequence, rewards should be linked with the right activity

or effort made by the managers. The rewards can be financial rewards, esteem rewards, promotion prospects

and job security (Siegrist, 1996; OECD, 2012).

According to the Agency Theory, these rewards improve goal congruence. Unfortunately, this theory does

not take intrinsic motivation into account. On the other hand, the SDT (Deci & Ryan, 2000) suggests that

by inviting people to think about the organization and clearly underlining the importance of their work,

people will enjoy their work more and will be stimulated. Rewards, such as bonuses, can decrease

motivation when managers do not get them. In bonus systems the three basic needs, namely competence,

relatedness and autonomy may not be threatened (Bruggeman et al., 2014, p.238-240). In high-performing

organizations, extrinsic motivation is needed on top of intrinsic motivation. Extrinsic motivation goals and

actions have to be internalized as much as possible via the development of identified and integrated

motivation (Bruggeman et al., 2014).

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Another aspect of management control is company culture. A good company culture can improve

performance in the long run (Bruggeman et al., 2014).

Having discussed the concepts of management control, motivation and management control process, the

next section will cover the classifications of management controls, focusing especially on those of Bedford

and Malmi (2015).

6. Management control configurations of Bedford and Malmi (2015)

There have been many frameworks classifying management controls. Merchant (1982, 1985) distinguished

results control, action control, personnel controls and cultural controls based on the findings of Ouchi

(1979) (Bruggeman et al., 2017). Simons’ four levers of control are belief systems, boundary systems,

interactive control systems and diagnostic control systems (Bruggeman et al., 2017). This research will

apply the configurations of Bedford and Malmi (2015), since these are quite recent and build on important

prior typologies4.

Figure 2. Malmi and Brown's management control system package (2008, p.291)

Malmi and Brown (2008, p.287) were the first to recognise that “management control systems operate as a

package”. They created a new typology for management control systems constructed around on five

categories: planning, cybernetic, reward and compensation, administrative and cultural controls (Figure 2)

(Malmi & Brown, 2008, p.287). Bedford and Malmi (2015) build on their idea and recognized that different

types of management control are interrelated. They have a joint effect which enables them to neutralize or

reinforce each other. Bedford and Malmi (2015) suggest not to look at the control mechanisms separately,

but to look at them as a combination or cluster of different control mechanisms.

Based on this idea and existing typologies Bedford and Malmi (2015) developed a taxonomy of five control

configurations used by top managers. These configurations were formed based on empirical research, which

4 Bedford and Malmi based their configurations on typologies of Mintzberg (1979, 1989), Burns and Salker (1961),

Bruns and Waterhouse (1975), Merchant (1981), Ouchi (1977, 1979), Eisenhardt (1985), Speklé (2001) and

Vosselman (2002) (Bedford & Malmi, 2015).

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considered the most used combinations of management controls in companies. Bedford and Malmi (2015)

clustered these in: simple, results, action, devolved and hybrid control.

Simple control is mainly informal and is attained through centralized decision- and strategy making, direct

supervision and restricted autonomy. Top management may be involved in task execution. Personnel

selection is highly important because a lot of trust is placed in the competence and knowledge of

subordinates since the guidelines for task completion are quite vague. Simple control is mainly seen in

small, non-listed companies (Bedford & Malmi, 2015).

Results control is a more top-down performance-related control, which uses output and administrative

controls. Strategy-making remains a task of top managers, but in this case limited participation is possible.

Short-term financial performance gets a lot of attention. There is a higher autonomy than in the simple

control, which creates some flexibility. Managers will intervene when the performance deviates from the

expected outcomes. This control is used when the environment is predictable and stable. Firms that use

results control are strongly tied to short-term performance, which can be ambidextrous when they need to

achieve innovation (Bedford & Malmi, 2015).

Action control has the same level of bureaucracy as the results control. However, there is more direct

monitoring and centralized authority to ensure flexible adjustment. This control is standardized and formal,

has routines, well-defined boundaries of conduct and procedures. The use of performance-based

compensation is lower than in the results control, accounting only supplements the monitoring of managers.

Action control is used in relative turbulent, hostile and unpredictable environments (Bedford & Malmi,

2015).

The fourth form of control is devolved control. Companies that employ this kind of control are characterized

by lateral communication, autonomy, long-term performance emphasis, social control and a reduced use of

performance targets. There is a shift of authority from managers towards their subordinates. These

subordinates participate in strategic planning and communicating the values of the organization. Yet, formal

control mechanisms are of strong presence and boundary controls are used in a similar way as the action

control. Measurement systems are important in order to direct attention. It is mainly present in big

companies with unpredictable and turbulent environments with a high importance of innovation (Bedford

& Malmi, 2015).

The last type of control is the hybrid control. Accounting systems and bureaucracy are frequently used,

combined with strong performance-based incentives. Nevertheless, there is a high rate of participation in

strategic planning and high authority delegation. Hybrid controls are generally used in big and more mature

companies. Especially management consultancy firms use hybrid control since this interweaving of

bureaucratic and socio-ideological controls helps organizing in a dynamic, challenging and ambidextrous

environment where mechanistic and organic structures have to be combined to balance competing targets

(Bedford & Malmi, 2015).

Although it is not proven that the hybrid control is used in ambidextrous companies, Bedford and Malmi

(2015) imply that it seems logical. The data used in this case study was obtained from ambidextrous

15

consulting firms, which leads to assume that the consulting firms use a hybrid control structure. This will

be reviewed by using the schedule in Appendix 2 during the interviews.

In the following sections, the research questions and the method and analysis will be discussed, followed

by an analysis and discussion of Case 1 and Case 2.

III. Research question

Although there has been prior research in the field of management controls and stress (e.g., Alvesson &

Kärreman, 2004; De Baerdemaeker & Bruggeman, 2015; etc.), these were not in the setting of consulting

firms.

There have also been studies about management control and innovation (e.g., Fried et al., 2017; Lövstal &

Jontoft, 2008; Tervala et al., 2016, etc.), but neither of these studies are placed in the setting of the

consulting sector, nor do they focus on the link between management controls and work-related stress. In

the paper of McCarthy and Gordon (2011) they investigated ambidexterity in R&D. They distinguished

structural ambidexterity and contextual ambidexterity. The difference with this study is that it was in an

R&D setting and they did not link the management control to stress.

When searching for research about consulting firms, there was an article about control in a global

management consulting firm (Alvesson & Kärreman, 2004), in which they discussed the types of control

used. They stated that the following forms of control were present in the management consulting firm:

Hierarchy;

Standardized work procedures;

Output measures: strong emphasis on delivering assignments on time, deadlines are very important.

There is a strong “delivery culture”. Deadlines are a form of control in two ways. It is a control for

clients and for the company;

Financial control: budgets for project groups;

HRM system: recruitment, promotion and career structure, appraisal and evaluation systems;

Planning and staffing;

Monitoring;

Project evaluation.

Alvesson and Kärreman (2004) concluded that consulting firms use a variety of formal controls that are not

always used as intended. This study differs from theirs, since they only discussed the management controls

present, but there is no link with its effect on stress. Furthermore, their research is in the area of management

consulting, while this study covers two other consulting areas, namely IT- and accountancy consulting.

The study by De Baerdemaeker and Bruggeman (2015) combined budgeting as part of a management

control with work-related stress. They concluded that participative budgeting can serve as a good

mechanism when there is high role ambiguity, in order to reduce work-related stress (De Baerdemaeker &

16

Bruggeman, 2015). Their study differs from this one, as it focuses on the budget and collected data from

the 10000 biggest companies in Belgium, whereas this study focuses on management controls within the

consulting sector. Moreover, there is a difference in research method as they used a survey method.

The existing studies about management controls have mostly covered R&D, IT or management consulting

settings (e.g., Alvesson & Kärreman, 2004; McCarthy & Gordon, 2011). There is barely any literature on

accountancy consulting departments (Case 1). Moreover, these studies that discuss management controls

have not often been linked with their effect on stress. In the existing literature there have been no studies

that discuss the effects of management controls on work-related stress within consulting firms. The goal of

this research is to help fill this gap by finding an answer on the following research question:

“What is the impact of management controls on work-related stress in consulting companies

striving for ambidexterity?”

This question is operationalized by structuring questions in Appendix 1, that were used during the

interviews. The table in Appendix 2, provided by Prof. Dr. Bruggeman, based on the paper of Bedford and

Malmi (2015), was also used during the interviews in order to identify the management control

configuration.

IV. Research method

The purpose of this paper is to generate theoretical insights. Therefore coding the data is not necessary

(Glaser & Strauss, 1967). Glaser & Strauss (1967, p.105) named this approach “Inspection for hypothesis”.

As the emphasis of this study is to better understand the underlying mechanisms of the effect of

management controls on work-related stress, this research conducts face-to-face interviews. Using an

exploratory case study with interviews, is an appropriate method for the following reasons. First, an

exploratory case study can find different interpretations of the management controls used. These interviews

should allow us to get a better view on the “why” of what is happening (Eisenhardt, 1989). A case study is

a research strategy that concentrates on understanding the dynamics within this context (Eisenhardt, 1989).

The results may be qualitative, quantitative or both (Yin, 1984). In this case, a qualitative method is used,

which allows a richer insight in the underlying components and relationships (Eisenhardt, 1989). The use

of qualitative data allows us to explain the mechanisms, it permits discussions concerning the kind of

exploitation and exploration, the context, the motivations of managers, etc. Second, using interviews allows

us to give rich descriptive answers to the research question of this study. Third, another strength of this

method is that, if this research finds theory, this will be an empirically valid one (Eisenhardt, 1989). Fourth,

there is a comparative advantage over the survey method, because this research is exploratory in nature, it

provides real-life situations. Fifth, unexpected interesting data can pop up, since it is a flexible data

collection (Eisenhardt, 1989). Sixth, if confusing or conflicting elements arise, there is the opportunity to

immediately further investigate this during the interviews (Lillis & Mundy, 2005). These reasons indicate

the advantages of the use of an exploratory case study in this investigation. According to Glaser and Strauss

17

(1967, p.229) “the standard approach to describe data is to present data as evidence for conclusions”, in this

field study this is possible through quoting (Glaser & Strauss, 1967, p.229). Therefore, this study will use

quotes in the discussions of the cases and in the cross-case analysis.

As formerly noted, an exploratory case study has many advantages. Nevertheless, it has some disadvantages

as well such as problems concerning external validity. This is why this research handles two cases instead

of one in order to increase external validity (Gibbert & Ruigrok, 2010). Another limitation is the fact that

this process is more judgmental in theory-building, because it is based on soft data and not on hard statistics.

Despite these limitations, this research method has many advantages, gives a good insight in the underlying

mechanisms and uses an adequate method in this stage of the research. Therefore, this paper can be

considered valuable and usable in future research.

V. Description cases

This study is applied to an accountancy consulting of a multinational consulting firm (Case 1) and a

multinational IT consulting firm (Case 2). These companies are suitable for this study for the following

reasons. First, they are both situated in the consulting sector. Second, they are using similar management

controls, such as the BSC. Third, they are both in situations of ambidexterity, which gives this study the

perfect opportunity to compare results and increase external validity. Consulting firms like the ones in this

exploratory case study are ambidextrous firms. Especially Case 2, since it is situated in operations of IT

consulting that is active in high technological uncertainty in which they permanently have to innovate

(O’Reilly & Tushman, 2013). As there is a high importance of both performing well (short term) and

innovating (long term), this is an ideal context to see which management controls are used and which effect

they have on stress. The accounting department (Case 1) has recently introduced a new software to increase

effectivity in the future and to stay competitive in their field, which is going through a significant

digitalization process. While this new software is being installed and the managers and employees are being

trained, the department still needs to realize short-term performance. This could create role conflict and

role ambiguity, because the managers have to keep on performing, while adapting to the new software

system. Knowing that they will have to continue innovating and take part in the digitalization process, they

are striving for ambidexterity, to better deal with both exploitation and exploration.

The OECD (2013) mentioned that work-related stress is dominant in high-skilled managerial functions and

professional functions. For this reason, this research focuses on people in managerial positions.

The level of analysis is the accountancy consulting department (Case 1) and IT operations consulting (Case

2) of big consulting firms in Belgium. The units of analysis are managers.

Table 1 displays the characteristics of the interviews. In each case there is one interview with the partner,

to obtain a view from higher up in the hierarchy. Interviewee two had been promoted Director one month

before the interviews were conducted. Therefore, the same questions as used for the managers and senior

consultant were used to structure the interview. The second director had five years of experience. A mix of

18

the questions of both questionnaires in Appendix 1 were asked, since his answers also display a view from

higher up in the hierarchy.

After taking six interviews in Case 1 and nine in Case 2, the same information and ideas recurred, theoretical

saturation was reached (Glaser and Strauss, 1967; Eisenhardt, 1989). The average duration of the interviews

in the first case was 31 minutes, in the second case 47 minutes. The interviews were fully recorded and

transcribed, since transcribing is a necessity in this kind of research (Glaser & Strauss, 2009). These

transcriptions were then translated.

Case Interviewee Function Years of experience

in their function

Interview

duration

Gender

interviewee

Case 1 Interviewee 1 Director < 1 25 min. Female

Interviewee 2 Manager 11 29 min. Male

Interviewee 3 Partner 25 57 min. Male

Interviewee 4 Senior Consultant 6 30 min. Male

Interviewee 5 Manager 6 24 min. Male

Interviewee 6 Director 5 23 min. Male

Case 2 Interviewee 7 Project manager 15 54 min. Female

Interviewee 8 Solution lead 5 20 32 min. Male

Interviewee 9 Project manager 7 44 min. Female

Interviewee 10 Solution lead 6 39 min. Male

Interviewee 11 Partner 7 1h 17min. Male

Interviewee 12 Solution lead 8 1h 7min. Male

Interviewee 13 Project manager 17 46 min. Male

Interviewee 14 Solution lead 5 31 min. Male

Interviewee 15 Project manager 9 33 min. Male

Table 1. Characteristics of the interviews

The discussion of both cases will be structured as follows: first, it will analyse ambidexterity, followed by

discussing work-related stress and the management controls. These will be classified according to the

configuration described in the paper by Bedford and Malmi (2015).

5 The function of a Solution lead is similar to that of a business unit manager

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VI. Discussion Case 1

A. Striving for ambidexterity

1. Changes

This paragraph will first give an overview of the changes that were mentioned during the interviews.

Firstly, according to the partner, there is quite a change in the role of the accountant.

“It is a digital revolution. One of the questions in this matter is for example what will happen with the

typical job of a bookkeeper. We expect that the function of bookkeeper will change, since their job can be

robotized. He will become more of an analyst.” (Partner, personal communication, 10th of February 2017)

“Mainly, the digitalization [...] whereby the focus is rather on added value of the closest figures instead of

the figures themselves.” (Director, personal communication, 9th of February 2017)

The partner mentioned that there are two trends in the digitalization stream.

“The first one is that all systems will be attached to each other. If you put something in one programme it

will automatically also be present in attached programmes” (Partner, personal communication, 10th of

February 2017)

He described the second trend as “real time”, “in which everyone can open their IPad, for example, and see

what is going on whenever they want. This creates a totally new architecture” (Partner, personal

communication, 10th of February 2017)

Along with the digitalization and technological changes in the sector, Case 1 has recently installed a new

software programme. Another change is that taxation rules are continuously revised.

Summarized, there are changes in the environment coming from the digitalization stream and changing

technologies and software, which causes the role of a bookkeeper to change into that of an analyst.

Additionally, there are constant changes in taxation rules to which the interviewees have to adapt.

2. Ambidexterity

In this section some of the structuring questions of Appendix 1 were processed, regarding the long-term vs.

short-term emphasis, the environment, the impact of the innovation on the feasibility of the goals and the

matter of the management controls being adapted to the changes.

Long-term vs. Short-term emphasis

Concerning the question if there is more emphasis on short-term goals or long-term goals, most opinions

indicate that both short- and long-term goals are significant, though some argued that the long-term goals

are more important.

"They are actually both of equal importance. The short term is important to achieve all deadline, with

which we are faced with every day. The long term is important, because we want to be the number one and

the most innovative player in our domains, then there is no other option than to think on the long term

about what our business will look like in 5 or 10 years." (Director, personal communication, 9th of February

2017)

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“Both are emphasized, but there is a higher focus on the long term. We always have a growth plan for the

next years (mostly 3 years). At the moment we have a growth plan for a period up to 2020, we know where

we want to go.” (Director, personal communication, 9th of February 2017)

During some interviews, a sub question was asked about if the long-term thinking often clashes with

deadlines. These short-term and long-term goals often have to happen at the same time, which could cause

role conflict and role ambidexterity. Nevertheless, not everyone gets stress from that. In principle time is

made to work on long-term goals. However, that depends on the amount of work that has to be done on the

short term.

“Yes, indeed it is a combination of both. From what is written in the growth plan, action plans have to arise

which can collide with deadlines that have to be met. I do get a bit more stress, because these action plans

provide work that has to be done on top of the short-term performances and deadlines.”(Director, personal


Summarized, both short- and long-term goals are important and they often have to happen at the same time,

which is similar to the long-term versus short-term dilemma (House & Rizzo, 1972) described in the

literature review. According to the productivity dilemma (Abernathy, 1978) short-term efficiency and long-

term adaptability are incompatible and managers have to balance exploration and exploitation (O’Reilly &

Tushman, 2004), i.e. become ambidextrous.

Stable vs. turbulent environment

In general, the environment of the accounting department is viewed as stable, despite the fact that there are

some changes. It is considered stable, because the environmental changes are planned.

“I think that is quite stable. There is some change, but if you plan all the digitalization in time, [...] If you

have a plan in advance, then you will not suddenly find yourself in restless waters. So actually, I think that

addressing the long term vision will ensure that change will not be experienced as too turbulent.” (Senior

Consultant, personal communication, 10th of February 2017)

Despite all the changes, the environment of the accounting department is still considered rather stable,

because they plan the changes and the future quite well. This indicates the importance of anticipating and

planning what is about to come.

Which impact did the innovation have on the feasibility of the goals?

Concerning the recently installed software, the interviewees were asked about the impact of it on the

feasibility of the goals. The answers were unanimous. They all indicated that in the long run this innovation

will bring positive results on the efficiency. However, in the short term it has an opposite effect and it will

be more difficult to meet deadlines, because they have to adapt and learn how the new system works.

“We have introduced a new software in order to meet deadlines more easily and work more efficiently in

the future. However, in the first year of the introduction, there will be an opposite effect. Everyone has to

learn and start from zero, everything has to be transferred from the old system to the new system, there are

21

always bugs and elements that do not work well yet, etc.” (Director, personal communication, 9th of

February 2017)

Good communication about the purpose of the new software and the results it will have, is of paramount

importance. This should also motivate the interviewees to be more willing to adapt. When the partner was

asked what could motivate the employees he answered the following.

“In principle, by communicating the long-term goal of this new implementation. More specifically, we

mention that the job content of managers will become more interesting because of this new

implementation.” (Partner, personal communication, 10th of February 2017)

Since they all mentioned that in the short run, this innovation would make it more difficult to reach the

goals, it is interesting to ask whether the management controls were adapted to that. The answers on this

question differed according to the level in the hierarchy. The partner and director knew that there would be

extra KPIs to test the adaptability of the people to changing technology. Yet, no manager mentioned this.

They either thought that the management controls would stay the same or answered that they did not know.

“Existing KPIs stayed the same but new ones were added concerning digitalization, because this becomes

a very important factor in the sector where we are located.[…] these digitalization KPIs were added to

evaluate if managers are willing to go along with the new software, which is important because there is no

use in introducing a new software, if managers do not want to work with it.” (Director, personal


So, in the short run it will be more difficult to reach the goals, while the evaluation methods stay the same.

This is contradictory, because they are stimulated to still fulfil the same goals, but the way in which they

are evaluated is not adapted according to the managers, this is conflicting and could make the managers

resist to change. Nevertheless, the long-term results are clearly communicated in order to motivate them. It

might also be a good idea to let them know that they are evaluated on the digitalization KPIs and the

teamwork KPI, in order to increase the incentive to adapt to the change and to decrease possible role

ambiguity. Another aspect that might help increase motivation, is letting the managers participate in

determining which KPIs are important to let the company adapt to the changes that it will encounter, since

participation in the way that they are evaluated can boost motivation and efforts (Van der Hauwaert &

Bruggeman, 2013).

Another consequence of the fact that they have to reach the same goals while the work becomes more

difficult in the short term is that it will be a hard year, where extra effort is necessary to take on the increased

workload. A possible consequence of this is an increase in stress.

Ambidexterity

Ambidexterity is the capability of letting exploitation and exploration coexist (O’Reilly and Tushman,

2004, p.80). In Case 1, exploitation involves reaching deadlines, contenting clients and working efficiently,

while exploration includes adapting to the digitalization stream, implementing new software and changing

the job content of accountants.

22

In previous sections we saw that both the short-term and long-term goals are important for this company.

This can create some conflict between the two and introduces ambidexterity.

“Well this is a bit difficult of course. If you have short term deadlines, then you do not have time to think

about the long term. From the moment that you have extra time, you have to deal with long-term issues

such as strategy, innovation, IT, etc.” (Manager, personal communication, 9th of February 2017)

The situation in which a new software is installed, generates role conflict and possibly also role ambiguity,

because the managers need to learn how to work with the new system while continuing to meet the

deadlines.

“We first have to handle our tasks, but we also have to get training. That creates some ambidexterity”

(Manager, personal communication, 9th of February 2017)

“These deadlines have to be reached and at the same time there is a need of extra time to get acquainted

with the new system.” (Partner, personal communication, 10th of February 2017)

Although the environment is still viewed as quite stable, there are already some ambidexterity features

present. This will not stop after the whole implementation process of the new software.

“It is a continuous process, it will no longer stop innovating or changing. So we have to include that in our

way of working. The goal is to decrease that perception of turbulence and we have to point out that we are

improving and moving forward so that this fear of change can be reduced.” (Partner, personal


“We want to be the number one and the most innovative player in our domains,” (Director, personal


This department is striving for ambidexterity to deal with the continuous change that they will encounter,

while meeting the large amount of deadlines and goals that are a part of their profession. When the changes

continue they will have to find a way to balance both exploitation and exploration in order to become an

ambidextrous firm. They can do so, by using one of the methods explained in the section “How to manage

ambidexterity”.

B. Work-related stress

1. Causes of stress

Most interviewees indicated that they have stress.

“I think that everyone here has a lot of stress. [...] That's just the way it is.” (Manager, personal

communication 10th of February 2017)

The principal reasons for stress are deadlines, pressure and workload.

“Stress comes from deadlines and from pressure of the timesheets, because you have to perform well,

especially towards clients. You have to keep them satisfied, you cannot make mistakes.” (Manager, personal


23

“They all have a relatively heavy schedule. In an environment in which everything is a routine, a problem

is easily managed, but in an environment in which there is a lot of ‘change’ everything will be a bit more

difficult.” (Partner, personal communication, 10th of February 2017)

Additionally, the directors both indicated that they get stressed if they do not have things under control.

“The main reason is that you cannot keep everything under control that you would want due to all kinds of

factors.” (Director, personal communication, 9th of February 2017)

According to the partner, other stress factors are change, people management in a context of change and

the ambidexterity that comes along with that change.

“Every ‘change’ is a moment of stress. […] Especially in an accounting department people hate change.

[…] The second stress element is that the change of implementing a more efficient system will not yet be

efficient in its first year, because the people need to get familiar with the new system.” (Partner, personal


Concerning the implementation of the new software, the following was mentioned.

“So we just started it and the ultimate stress factor is change. […] Which means that people that have

worked here for a couple of years or longer are familiar with it and now they find themselves in a situation

in which they have to try to manage things starting from scratch.” (Partner, personal communication, 10th

of February 2017)

“At the moment the pressure of work is a bit higher. However, we act upon this. For example, we have two

meetings today to see how it is going and how we can handle it. I think that the stress is mostly present in

“people management” […]In the routinized context it was by exception that they have to point something

out to their people, but in a changing environment this is no longer by exception, but it happens

daily.”(Partner, personal communication, 10th of February 2017)

However, he believes that this is only temporary and should create more efficient situations in the future.

“Next year, in principle we should be “destressed” because we should normally be able to work faster on

files and should have a time margin in which we can do other useful work, but this year it can be a stress

moment, because of the combination of the high volume and deadline-relatedness of our business.”

(Partner, personal communication, 10th of February 2017)

Another possible stressor is employee turnover. When someone leaves the company, their files are

transferred to their colleagues, which creates an extra workload for them.

“There is also a coming and going of colleagues, there has been a period when there was less turnover,

now there is a little bit more. So that gives some friction and additional work pressure.” (Manager, personal


Hicks and McSherry (2006) noted role ambiguity as one of the stressors in their research. In order to find

out if the interviewees experience role ambiguity, the interviewees were asked whether their tasks and

responsibilities were clear, if they know the priorities and if they have full control over their tasks.

In general, everyone believes that they have a clear view on what their tasks and responsibilities include.

24

“Yes, definitely.[…]there is a clear distribution of tasks, concerning who takes which tasks and who is the

back-up in case something goes wrong. This is defined but the person still has to list priorities by him or

herself.” (Director, personal communication, 9th of February 2017)

“That is fairly well agreed on. Every year, there are goal settings which are drawn up and based on these

we will determine “these are the tasks or the objectives we want reach this year but also the years that

follow.” [...] Also, if there are projects, then it is clearly agreed on what your position is within the project.”

(Senior Consultant, personal communication, 10th of February 2017)

When they were asked about how they prioritize tasks, almost everyone replied that “Learning to prioritize

matters, comes with experience.” (Director, personal communication, 9th of February 2017)

Concerning the question “Do you feel like you have complete control over the tasks?”, the answers were

mostly negative. They feel that they get stressed if they do not have full control.

“As a person, I am very control minded. I would not feel good if I would not have complete control over

everything. But of course this depends on the person’s character.” (Director, personal communication, 9th

of February 2017)

Most of the interviewees state that there is clarity concerning their responsibilities and tasks, which would

imply that there is no role ambiguity (Kahn, 1964). However, during the interviews some information

indicated role conflict and role ambiguity, since it is unclear for managers how to perform and adapt

simultaneously, which implies role ambiguity

“The deadlines have to be reached and at the same time there is a need of extra time to get used to the new

system.” (Partner, personal communication, 10th of February 2017)

All respondents have the feeling that they know which tasks have priority over others. Most interviewees

feel that they do not have full control over their tasks. For directors this increases stress. This is in line with

the paper of Hicks and McSherry (2006) which also noted this as a stressor.

Despite the fact that most interviewees answered that they are under stress, one interviewee convincingly

stated that he does not have stress. This shows that stress is a matter of personal perception.

“You know that when you come to work in such a company that there is a certain pressure, but how you

face it is personal.” (Senior Consultant, personal communication, 10th of February 2017)

One of the other interviewees mentioned that he cannot really determine if he has a lot of stress or not

because he has no reference, since he has only worked in this company.

“Well it is hard to determine this, since this is the only place I have worked and so I have no reference. I

was “raised” in this environment, but I believe that it will be more difficult for people to work here if they

come from other companies.” (Manager, personal communication, 9th of February 2017)

By training employees, they learn to better cope with stress. Moreover, when going over the schedule in

Appendix 2, it was stated that during the selection, they focus on how stress resistant certain applicants are.

To deal with stress they combine selecting stress resistant applicants and letting them grow within the

system.

25

Overall, this is a stressful working environment of which the deadlines, pressure and workload are the main

causes. Moreover, change, clients, employee turnover, role ambiguity, the feeling of not having things

under control are also stressors in this department. Most stressors were also found in the literature review.

Bhatti et al. (2010) and Hicks and McSherry (2006) have already mentioned workload as one of the main

stress factors. Hicks and McSherry (2006) have also indicated deadlines, role ambiguity, technology

(change), covering staff when absent (linked with employee turnover), lack of control over the workload

and the pace and flow of the work as causes of stress. Stress from clients and people management were not

mentioned in their papers, but were present in Case 1. There is stress in this department. However, the

perception of stress and how to deal with it is very personal.

The opinions concerning the impact of management controls on stress varied. Some interviewees indicated

that the management controls do not necessarily have an impact on stress.

“Personally, no. The criteria (KPIs) are partly related to attitude. If you want to grow and make a

promotion, then you will be motivated. I do not believe that stress comes from the management controls.”

(Director, personal communication, 9th of February 2017)

Others believe that it can have an impact. The outcomes of that effect are rather divers, since some indicated

that management controls have a positive effect on stress, because that control is seen as a check on the

work before showing it to the client. Others indicate that it increases pressure. Pressure was one of the

stressors mentioned in the previous section, which implies that management controls increase stress.

“Well the KPIs urge you to constantly perform, it gives “performance pressure.” (Project manager,

personal communication, 9th of February 2017)

“This is indeed partly linked with that, because you know that there is still control from our entire

organization on the tasks that we carry out. You know that, if you make a mistake somewhere, someone else

will pick it up.[…] Of course, you prefer that no one has to correct your errors.” (Senior consultant,


One interviewee stated that it can have some impact, but not as much as the external factors.

“Stress increases slightly. That stress usually has less to do with those KPIs, but is largely determined by

external factors, clients or staff.” (Director, personal communication, 10th of February 2017)

Summarized, management controls can add stress, but can also lower it when it is used as a final check

before files are transferred to the clients. However, for some interviewees there is little to no impact of

management controls on their stress.

One possible way in which they might be able to decrease that stress is by letting the organizational

members participate in how they are evaluated, since Van der Hauwaert and Bruggeman (2013) indicated

that participation in the way that they are evaluated can boost motivation and efforts.

2. Participation

All interviewees indicated that there is some room for participation during the goal setting at the beginning

of the year, in which they can discuss with their superior what they want to focus on this year, linked with

their strengths.

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“Partly yes, actually by drawing up the goal setting at the beginning of the year, you can place a particular

focus. For example, "I would like to work on that, I want to perform on that." Then there might also be

more focus on this at the time that they are going to review it.” (Senior Consultant, personal


This limited participation only determines part of their evaluation.

“There are KPIs that are not optional, for example the two about teamwork and IT. These are not optional,

everyone is evaluated on these.” (Partner, personal communication, 10th of February 2017)

During the interviews it was mentioned that there is an enormous amount of KPIs present. As the

interviewees do not exactly know on which of these they will be evaluated, this might create role ambiguity,

since role ambiguity can be caused by not knowing how a person’s performances will be evaluated (De

Baerdemaeker & Bruggeman, 2016). This can have negative impacts on the satisfaction and on stress (e.g.,

Fisher, 2001; Jones et al. 2010; Van Sell et al., 1981). De Baerdemaeker and Bruggeman (2016) have shown

the importance of participation of the members in the budgeting process. As in Case 1 the members

participate in the goal setting, this participation of members might be expanded to other areas of

management controls as well.

C. Management control configuration

In this section the management controls in Case 1 will be discussed and analysed, taking into account the

aspects motivation, feedback and rewards. The next part of this section will make the link with the

management control configurations defined by Bedford and Malmi in 2015.


In this accountancy consulting department, various management controls are combined.

According to the partner, there are two outputs that can be controlled:

“The first of the two outputs is weekly, consisting of timesheets that are filled in by the managers. In those

timesheets we can see what the person has done during that week, on how many files he has worked and if

a lot of time that was spent on a certain file. The second output is on a monthly basis, in which we see

invoice proposals per client and this is based on the timesheets of all the people that worked on it and the

hourly rate per level of the people that worked on it.” (Partner, personal communication, 10th of February

2017)

However, during the interview, the responses to the question “How are you being controlled” gave various

responses. The use of a BSC with KPIs was mentioned in almost every interview.

“Every year there is an evaluation in which we are reviewed on quite a number of categories. […] They

look at how you score on certain points. Only on certain points, because these lists are very long and not

everyone can get a good score on every KPI. Based on this they look at how you deal with a certain KPI

and dependent on this score a financial compensation can arise” (Director, personal communication, 9th

of February 2017)

27

This year, two KPIs were added, because of the recent implementation of a new software and in general

because of the digitalization stream in the sector.

“The KPIs are based on how members are assimilating and handling technology. It is important that they

have a good score on these KPIs, both in execution and mentality, since new technology is mainly a question

of attitude.[… ]For the last two years we also have a KPI for teamwork, especially for managers.” (Partner,


Additionally, there are also controls from clients, internal checks of files by a superior reviewer and the use

of timesheets.

“A part of the control consists of the fact that we have to give our file to a reviewer to be checked. Another

way in which we are controlled is through the use of timesheets. Each day you have to indicate at which

file you worked. Subsequently, this is also used to invoice customers based on the time that was spent on

their file. Because of these timesheets, supervisors can see how much time was spent on which file. This

can be compared with previous years and perfectly allows supervisors to follow what we do.” (Manager,

personal communication, 9th of February 2017).

In between we are mostly checked by our customers. As long as the customers stay positive and do not

launch comments to the Executive Board, that is actually the best feedback you can have.” (Manager,


“Well they check some of the files to see if you have indeed followed all internal procedures.” (Director,


The system of goal setting, mid-year evaluation and end-year evaluation was mentioned by half of the

interviewees and was viewed as effective and motivating. A possible reason for this might be the fact that

they jointly decide on the goals that the managers will strive after. Thus the participating effect that was

present in the study by De Baerdemaeker and Bruggeman (2016) concerning budgets might also be

present in the case of participating in other management controls as well. As they can participate in setting

their own goals they might be more motivated to attain them.

“In the beginning of the year we have to fill in a goal setting ourselves, by which I mean in fact

advancing our goals for the next year. [...] So basically, you can partly determine some factors on which

you will be evaluated.” (Manager, personal communication, 10th of February 2017)

Despite that the budget is key in a management control system (Abernethy & Brownell, 1999; Bisbe &

Otley, 2004), the budget was only mentioned as a management control, by the partner. The use of the budget

is in terms of time, i.e. the number of man hours.

“We have budgets in the sense of the implementation time, meaning the time of developing, testing and

training.” (Partner, personal communication, 10th of February 2017)

28

When going over the schedule in Appendix 2, it became clear that there are a lot of procedures and rules

present in this department, which is also part of the management control system. This will be further

elaborated on in the paragraph about the management configurations of Bedford and Malmi (2015).

To summarize, there are several control mechanisms present in Case 1. There are controls via KPIs,

timesheets, file checks from superiors, goal settings followed by a mid- and end-year feedback, internal

procedures and rules. On top of that the interviewees are also controlled by the clients concerning the

follow-ups of deadlines.

In comparison with the literature review, we can conclude that this management control system can be

classified as coercive, rather than enabling according to the definitions of Adler and Borys (1996). Another

finding is that contrary to the literature review, the budget is not key in this management control system

(Abernethy & Brownell, 1999; Bisbe & Otley, 2004).

2. Motivation

The interviewees get their primary motivation from client satisfaction.

“I am most motivated by client satisfaction. I believe that the satisfaction from pleased clients is more

important than attaining/meeting a KPI.” (Manager, personal communication, 9th of February 2017)

Some did not get any motivation from the management controls. Others thought that goal settings combined

with follow-up, feedback, and the KPI digitalization do motivate them.

“Certainly not by the time registration [...] What management control motivates me the most? I would

rather say the fact that your goals and what you actually have agreed on in the beginning of the year, that

this is clearly followed-up.” (Senior Consultant, personal communication, 10th of February 2017)

“I am most motivated by the digitalization, therefore the new KPIs concerning digitalization are most

motivating for me.” (Director, personal communication, 9th of February 2017)

“Feedback is a good motivator, that can come from customers or internally. That is the biggest motivator.”


This is in accordance to the statement that positive feedback increases motivation (Deci, 1975; Ryan &

Deci, 1985).

In the situation in which they have to deal with the new software, the partner points out that by

communicating long-term goals, the managers will be more motivated to adapt to the change.

“I would say, communicating the long-term goal of this new implementation a lot. More specifically that

we mention that because of this new implementation the job content of managers will become more

interesting.” (Partner, personal communication, 10th of February 2017)

In general, the interviewees do not get their primary motivation from management controls. To motivate

members of the organization, the feelings of competence, autonomy and relatedness need to be fulfilled

(SDT; Deci & Ryan, 1985). When these are hindered, motivation will decrease (Baard, 1994; Ryan et al.,

1996; Sheldon, Ryan & Reis, 1996). So it is important during the feedbacks and when using other

29

management controls that these three needs are guaranteed. When we want to classify Case 1 in the Self-

Determination continuum (Gagné & Deci, 2005), this case will be located in the controlled motivation part

of the continuum. According to Gagné and Deci (2005) controlled motivation means that members will act

because of feelings of pressure and the sense of having to engage in actions. As one of the main stressors

is pressure, this might imply that Case 1 is considered to have controlled motivation. This is part of the

extrinsic motivation, since the managers work to attain certain goals (Bruggeman et al., 2014).

3. Feedback

Two times a year there is a formal feedback. That is the mid-year and end-year evaluation following the

goal setting of the beginning of the year.

“There is a goal setting, a mid-year conversation and an end-year conversation. So those are actually three

formal conversations per year (Senior consultant, personal communication, 10th of February 2017)

Beside these two formal feedbacks, the director mentioned that he tries to give as much feedback as

possible.

"As much as possible. I want to see or hear the people that I coach and guide every day at least once a

month." (Director, personal communication, 10th of February 2017)

When asked if this feedback is mostly positive or negative, most interviewees indicated that it is either

positive, or constructive. It was mentioned several times that this feedback is constructive feedback. During

one interview it was also responded that they are trained in how to give and receive feedback.

"You have to try to formulate it in a positive way. If it is negative, then it is negative but you have to try to

bring it positively. Constructive criticism works better than destructive criticism." (Manager, personal


"We are actually constantly coached and trained on how to give feedback, how you should accept feedback,

how you can engage in a dialogue with each other, etc. So it is not always positive feedback, it can also be

constructive feedback if something can be done in a better way." (Senior Consultant, personal


Summarized, the managers and directors receive formal feedback twice a year, as a follow-up of the goal

settings at the beginning of the year. The director tries to give at least one (informal) feedback per month.

The feedback is given in a constructive way. Furthermore, all employees are trained and coached on how

to give and receive feedback. Consequently, they are very aware of the fact that positive and constructive

feedback is important. This adheres to the idea that positive feedback increases motivation (Deci, 1975;

Ryan & Deci, 1985).

4. Rewards

The respondents acknowledged roughly the same rewards: Pay rise, financial compensation through a

bonus system and promotion.

“Based on the criteria tackled during the evaluation, you receive a bonus if you meet the KPIs.” (Director,


30

“At the end of the year, there is also an end-year conversation. It is reviewed whether you have achieved

your objective or performed your tasks and dependent on that, a bonus, a pay raise or a promotion is

attached.” (Senior consultant, personal communication, 10th of February 2017)

“Every level has certain criteria that have to be attained. If you want to change level or be promoted then

you have to meet these criteria.” (Director, personal communication, 9th of February 2017 )

Beside the tangible financial rewards (bonus and pay rise) and the intangible reward by promotion, the

partner also mentioned good feedback and a tap on the shoulder as a reward.

According to Ryan and Deci (1985), tangible rewards and imposed goals decrease intrinsic motivation, so

attention should be paid to this when they want to increase intrinsic motivation. These tangible rewards

also lower motivation when managers do not get it (SDT, Deci & Ryan, 2000). The most stressful situation

is when the rewards do not match the work that is done (OECD, 2013). By using the goal setting combined

with follow-up feedbacks or evaluations, and afterwards rewarding managers based on the outcome of those

goals, they avoid this negative situation. Furthermore, Bruggeman et al. (2014) argued that, when the

measurement of the BSC is used to reward managers, this can strongly influence the management

behaviour. So, by linking the rewards to the KPIs, the managers’ goals will become congruent to the

company’s goals. This is in effect in Case 1.

5. Classification of the management controls

In order to be able to classify the management controls according to the management control configurations

of Bedford and Malmi (2015), the schedule in Appendix 2 was used during the interviews. The interviewees

had already mentioned certain aspects of the schedule during the interview. Furthermore, some additional

questions were asked concerning this schedule. The results are summarized in Appendix 3 and will be

described in this section according to the structure of Table 2 and 3.

In Case 1, the measurements can be described as diagnostic with tightness of attaining the predetermined

“SMART” goals.

“We would not say “you have to be in contact with as many new clients as possible”, because this is quite

vague. We are handling this in a “SMART” way by e.g. mentioning a specific number.” (Director, personal


“The procedures are quite strict. You have to operate within the boundaries, there is no other way.”


This indicates a mechanistic and diagnostic control system.

As we saw before, when discussing the rewards of the interviewees, pay, promotion and bonuses are

attached to evaluations of the KPIs that are reached. So their compensation is performance related.

Concerning the structure, the interviewees were asked about the hierarchy, if authority is centralized or

rather decentralized and if the communication is more formal or informal. The directors indicated that both

centralization and decentralization of authority is present in the company.

31

“Decentral, because the staff has a lot to say regarding their own clients, how they are addressed, etc. But

because of the way in which we work, procedures and strategies are fairly centralized.” (Director, personal


However, the interviewees of lower levels indicated that it is mainly centralized.

“Definitely centralized. The decisions are still taken centrally by the management.” (Manager, personal

communication, 10th of February 2017).

Since only the interviewees of the higher level indicate that both centralized and decentralized decisions

are present, while lower managerial levels argue that it is mainly centralized, this leads to the conclusion

that it is mainly centralized. Moreover, most of the interviewees responded that there is a clear structure

and hierarchy.

“There is definitely a clear hierarchy with different levels. There are a lot of functions and every three

years you can be promoted. So in that aspect there is a clear insight in the different functions and the tasks

they have to complete.” (Manager, personal communication, 9th of February 2017)

The opinions about the communication varies. For instance, some argue that both formal and informal

communication is present at the office, others say that it is clearly informal.

Concerning the policies and procedures it is quite clear that there are a lot of strict procedures.

“This is a business where everything is strictly regulated. Internally, there are a lot of rules that have to be

followed. Overall, there are a lot of internal processes. I think this is related to the size of the company.”


“We have a big office, we work with 40 to 45 people. Anyhow we need procedures to manage everything

because if everyone would freewheel, then it would not work.” (Manager, personal communication, 9th of

February 2017)

Nevertheless, despite that there are many management controls and on top of that a lot of procedures, the

respondents still have the feeling that they all have a considerable amount of autonomy. Maybe this is not

real autonomy. This paper rather calls it “supervised autonomy”. In “supervised autonomy”, the superiors

succeed in making their subordinates feel autonomous, eventhough they are still subjected to many

controlling mechanisms.

Having a lot of procedures has its advantages and its disadvantages, as mentioned in the following

statement. “This can be seen as both good and bad. Good because if a colleague is sick, then someone else

could take over his work more easily. If his work is in the standard format then the back-up person can

simply take the file and start working in it without really knowing the file. If everyone would work in his

own way, it would not work. It can also be seen as bad, in the sense of having too many procedures and

that at a certain point, you do not know what is the right way.” (Manager, personal communication, 9th of

February 2017)

In order to understand the socio-ideological aspects of the company and its management controls, the

interviewees were asked how they select employees, what the values of the company are and if there is

social control at the office.

32

The directors stated that they look for employees who are stress resistant and who want to have contact

with clients.

“We have a KPI that says that from a certain management level, managers have to be with clients for a

certain percentage of their time instead of at the office. If we put something like this in a KPI then we need

to recruit people that can handle this.” (Director, personal communication, 9th of February 2017)

“Stress is often linked with either work pressure or dealing with changes. Therefore I ask about a number

of things, ranging from family life to other issues [...] from which I can deduce how they deal with stress.”


When the interviewees were asked what the values of the company are, they only gave one or maximum

two values, some of which did not match the company’s official four values that are written on their

company website. Some interviewees were unable to give any of the official values. This might indicate

that the values were imposed top-down and that these might not be the real values that are present at the

company. This suggests that the values are not internalized, which indicates that Case 1 is not part of the

integrated motivation on the SDT continuum of Gagné and Deci (2005).

Most respondents indicated that there is social control at the office. The company actually creates social

control via the strategic placement of the people at the office.

“Usually they are strategically grouped on different ‘islands’, so that we can easily follow up if everything

works well. [...] So in that sense there is a certain degree of social control. They are really thinking

thoroughly on how they are going to organize those islands. They put different people with different

personalities together: starters, then someone with some more experience, possibly even a manager, etc..

That way, they can motivate each other.“ (Senior Consultant, personal communication, 10th of February

2017)

The structuring questions (Appendix 1) about the environment and the emphasis on long-term or rather on

short-term goals are also relevant when trying to classify the management control. In the previous section

about ambidexterity in Case 1 it was summarized that most interviewees still see the environment as rather

stable, in spite of the current changes. Furthermore, both the short-term and the long-term goals were

considered important.

All these characteristics are compared with those of the different management control configurations of

Bedford and Malmi (2015). The management control system is closest to the results control configuration.

However, there are some aspects that differ between the results control configuration and the controls of

this accountancy consulting department. First of all, in this case, both the short term and the long term are

important, while the results control configuration defined by Bedford and Malmi (2015) is more focused

on the short term. Another difference is that in Case 1 there is some social control created and there are a

lot of procedures and rules. These procedures and rules are not mentioned in the description of the results

control.

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D. Conclusion Case 1

To summarize this section, there is quite a lot of stress present in this department. The main reasons are

deadlines, pressure and workload. Management controls act as an extra increase in stress. There is limited

participation of the members in how they are evaluated, by mutually placing the emphasis on certain strong

characteristics of the person during the goal setting at the beginning of the year. By increasing this

participation it is possible to reduce that stress (De Baerdemaeker & Bruggeman, 2016). If their

environment continues to change, they will have to balance exploitation and exploration and strive for

ambidexterity.

The management control configuration of Bedford & Malmi (2015) that fits best with the management

control systems of Case 1 is the results control. However, there are some differences between the

description of the results control of Bedford and Malmi and the actual controls that are in effect.

In their paper, Bedford and Malmi (2015) suggested that in ambidextrous situations, such as management

consulting, companies probably have a hybrid control. However, this is not the case here, as a hybrid control

configuration is more applicable to fast changing and turbulent environments, has higher participation of

the managers and stronger socio-ideological mechanisms. These differences are displayed in Appendix 3.

Consequently, the suggestion of Bedford and Malmi (2015) is not generalizable to all consulting activities,

stages of innovation and company size in the consulting business. It is possible that there is a hybrid control

configuration present instead of a result control in, for example, the IT- or management consulting

department of that same consulting firm. The partner also indicated that the management controls in the IT

department or management consulting department are totally different and more project based.

“In our business a big part is recurrent business. A management consultant will have a project, when this

is finished, a new project will start, while we have the same clients every year and consequently have to

perform every year.” (Partner, personal communication, 10th of February 2017)

According to Bruns and Stalker (1961) companies in stable environments are better suited with formalized

and vertical structures of a mechanistic organization. The informal and lateral structure of organic

organizations, however, is better in changing and uncertain environments. As Case 1 is still in a stable

situation, they are in a well-suited mechanistic organization. However, the environment is changing. If this

continues to change, this accountancy consulting department might have to use a mix of both mechanistic

and organic elements, since ambidexterity requires both mechanistic and organic structures (Ylinen &

Gullkvist, 2014). If this department implements some organic structures, it will evolve towards a hybrid

control. Besides, organic controls are good for both exploitation and exploration (Ylinen & Gullkvist,

2014). The diagnostic control systems that they have now sacrifices exploration in favour of exploitation

(McCarthy & Gordon, 2011, P240). If the environmental changes require them to install some organic

structures, their management control configuration will transform towards a hybrid control. For that to

happen, the culture and participation of the organizational members have to become stronger.

Internalization of the values and belief systems can contribute to strengthening the culture.

34

Another statement that indicates that this case might change control systems is the following. Ouchi (1977)

wrote that “When the actions required to achieve effective task outcomes are known, control can be

achieved by closely monitoring adherence to standardised rules and procedures, however, when actions are

non-routine or the environment is uncertain, then individual discretion may be restricted by using

boundaries of conduct or by implementing formal approval procedures (Bedford & Malmi, 2015, p.7). As

the function of the accountant is changing towards that of an analyst and becomes less controllable, this

might indicate a future change in control systems in order to be more optimal.

Beside the fact that their environment is still stable, Bedford and Malmi (2015) provide another possible

explanation for why Case 1 has not transformed into a hybrid control yet. They mentioned that internal

consistency is often preferred over external alignment. Shifts in conditions indicate that companies might

not be in an optimal position (Bedford & Malmi, 2015). As long as this department is able to stabilise the

changing environment by planning and anticipating the turbulence of their sector, they might be good in

the mechanistic type. Nevertheless, when it becomes turbulent, in which they can no longer foresee what

will happen, it might be more optimal to switch to a mix of both mechanistic and organic elements.

Bruns and Waterhouse (1975) wrote that the bigger and more divers a company, the more it requires

administrative controls. This partly explains why there are so many administrative controls in Case 1, as it

is a big company with different activities. The constraining nature of the many controls provide another

possible explanation of why socio-ideological mechanisms are of lower importance in Case 1 (Malmi &

Bedford, 2015).

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VII. Discussion Case 2

A. Ambidexterity

1. Changes

In this IT consulting firm, they continuously have to work with changing technologies.

“At the moment there is a completely new SAP on the market. The whole team, must switch from one system

to another.” (Project manager, personal communication, 31st of March, 2017)

“Microsoft has just released a new version which has to be discovered by everyone. It has to be discovered

technically and this causes some difficulties […] In terms of IT, it goes quite quickly.” (Project manager,

personal communication, 20th of April 2017)

“In SAP, there is a real revolution going on. S4hana is something that SAP only experiences every 30 years.

It is a revolution” (Solution lead, personal communication, 7th of April 2017)

Some of the recent changes are a new version of SAP, called S4hana, also a new Microsoft version is

recently being used. A couple of years ago they also engaged in the e-commerce story.

“If we look at everything that has grown with e-commerce, this is a rather new world.” (Partner, personal

communication, 7th of April 2017)

Furthermore, they are currently also installing a new internal software.

2. Ambidexterity and Role ambiguity

Long-term vs. Short-term emphasis

Most of the interviewees state that both short- and long-term goals are important. However, the emphasis

on both is not the same. For some the short term is more prevalent.

“We do a strategic session twice a year, […] At those moments there is a lot of emphasis on the long term.

The main focus, however, remains on "delivery". It is believed, that if you work on innovation for one or

two hours a week, you will already reach quite far.“ (project manager, personal communication, 7th of April

2017)

“Both. In the short term, there are the projects, "that must be ready by then, now we are busy with this,

etc." […] I think that there is a continuous interaction between the short term and the long term.” (Project

manager, personal communication, 31th of March 2017)

However, others mention that the long term is the most important.

“I think it is mainly the long term. Sometimes people will have the impression that especially the short term

is important, because you have projects, margins, etc. people see that as primary importance, but for the

organisation, the long-term is more important.” (Solution lead, personal communication, 12th of April

2017)

A possible explanation of why some focus more on the long term than on the short term is because the

opinions differ according to the position the interviewee has in the company.

36

“I think that this is well balanced. It depends a bit on your role that you might have a tendency to focus

more on short term goals. It is the job of the solution leads or the partners to ensure that those long-term

goals are also attained.” (Partner, personal communication, 7th of April 2017)

In this company both short-term and long-term goals are strived for. Depending on their position, members

will focus more on the projects (short term) or long term corporate goals. It was also noticed that this long-

term thinking often collides with the short-term thinking. When this happens, the short term prevails the

long term.

“Yes, first the short term and if you have more time, then the long term.” (Project manager, personal


The following quote provides an explanation for why the short-term is prioritized.

“The long term is actually more important, but the emphasis is more on short term because of the monthly

follow-up, with monthly numbers of how performing you are, etc.” (Solution lead, personal communication,

7th of April 2017)

Stable vs. turbulent environment

The answers indicated that the environment is quite turbulent. Nevertheless, most interviewees view it as

stable. The turbulence comes from technological evolutions such as those mentioned in the paragraph

“Changes”.

“Technology is evolving and offers more features, but that is normal with technology. Therefore, this is

actually stable to me.” (Project manager, personal communication, 7th of April 2017)

Eventhough the technological environment is quite turbulent, the perception of the interviewees indicates

a stable environment. A possible explanation is that the interviewees are so used to changing technologies,

that they no longer perceive change as turbulent anymore.

“I can imagine that someone, who has not looked at what is happening around him for two to three years,

is lost. Technology evolves very quickly and in the positive sense, but you have to try to continuously tackle

it, and make it gradual.” (Solution lead, personal communication, 7th of April 2017)

By continuously adapting and anticipating the environment, they learn to stabilise their turbulent

environment. You could say that they are so used to working in ambidexterity that they themselves work

ambidextrously. This is in line with the idea of Turner et al. (2015) that showed that in the context of

projects, even if managers do not realize it and when they do not necessarily have a specific strategy to

handle ambidexterity, and ambidexterity still exists in their practices.

Which impact did the innovation have on the feasibility of the goals?

The interviewees were asked about the impact of the recent innovations on the feasibility of the goals in

the short and long term. They indicated that in the short run they have to invest time in training and adapting.

“That can thwart a bit on the short term. Imagine that you have to work on innovation in the long term, for

example S4hana, for which everyone in your team has to be trained. In that situation you cannot process

37

as much external work, which decreases the chargeability of your people.” (Solution lead, personal


Nevertheless, the interviewees all immediately acknowledged the substantial benefit and necessity of

innovating.

“Those innovations are needed in order to continue to grow. Imagine that we would do nothing, […]

nothing of innovation and always bring the same story to the clients. After a certain period of time those

clients will know the story and they will no longer be able to ameliorate. Therefore we need to invest in

innovation. […] That is the whole business model of a consulting company.” (Solution lead, personal


The budget is adapted to the innovations that will take place, to incorporate the short term impacts of

innovation.

“Innovation is an investment that you bring along in your budget.” (Solution lead, personal communication,

6th of April 2017)

The business they are in requires them to constantly innovate. The interviewees know how important that

is, despite the short term investment that is needed. The respondents view innovation as a normal investment

that has to be included in their annual budgets.

Ambidexterity

Ambidexterity is “the ability to pursue two apparently contradictory objectives simultaneously” (Turner

et al., 2015, p.178) The following quote clearly reflects this, as they have to work with the current

technologies while trying to find better solutions for the future.

“IT and definitely also the pressure of innovation, forces us […] to make sure that we are ready, not only

for today, but also for tomorrow […] It is guarding the furniture while on the other hand making sure that

tomorrow’s more modern furniture is being made.” (Solution lead, personal communication, 7th of April

2017)

Exploitation consists of applying the current solutions and meeting deadlines, while exploration comprises

innovations and developing new IT solutions. This firm is able to combine both exploitation and exploration

and may therefore be called an ambidextrous organisation (O’Reilly & Tushman, 1996).

Summarized, the environment of an IT consulting firm is filled with technological changes. In these kind

of firms the combination of both short-term and long-term goals is very important. The members of this

organisation are so used to dealing with continuous changes that they no longer view the environment as

turbulent. They adapt and learn to deal with it.

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1. Causes of stress

All interviewees indicated that every now and then they experience stress. However, some mentioned that

they need a bit of stress, because it triggers them.

“At certain moments, I think so, yes. Can I personally cope with it? I think so. We are in an organisation

in which stress also drives us a bit.” (Solution lead, personal communication, 12th of April 2017)

“Every now and then I have stress. But then again, I also need stress to have adrenaline. I need some

pressure, but I do not experience uncomfortable stress.” (Solution lead, personal communication, 7th of

April 2017

The main reasons for stress are deadlines, pressure, workload and the fact that they get various assignments

from different sides simultaneously, because they work on multiple projects. This paper formulates this as

“fragmentation of work”.

“The reasons for stress are the deadlines that need to be met. Clients also become more and more

unrealistic when it comes to setting deadlines.” (Solution lead, personal communication, 7th of April 2017)

“Pressure is the problem and the workload that is never finished. You can work for 12 or 14 hours a day,

there will always be work left and that gives stress.” (Solution lead, personal communication, 7th of April

2017)

“The big stress factor in our team is that we work on smaller projects, which leads to the fact that people

work on multiple projects at the same time.” (Solution lead, personal communication, 7th of April 2017)

The partner is aware of this “fragmentation of work” and stated that they are working on it. They aim to

broaden the competences of their employees. So that they will be able to complete more tasks within one

project instead of one task on multiple projects. Then the members will have to work on a lower amount of

different projects.

“If people are active on five projects at once, this is madness. We are trying to counteract this problem by

letting people focus on more tasks within a project. “Let us focus people within that fast team, not only on

one process, but beside purchase, maybe also take on quality […] that way, you can make sure that they

cover a bigger part of that pie and that they will need less projects.” (Partner, personal communication, 7th

of April 2017)

According to the partner another stress factor is transportation, the number of hours the managers are on

the road. However, this was not mentioned by one of the managers. Some interviewees also argued that

unforeseen changes increases stress.

“For me the continuous change of planning due to unexpected things create stress.” (Project manager,

personal communication, 31st of March 2017)

Often clients also increase stress levels of the managers.

“Yesterday I had a day off and all clients expect an answer at once. That is the problem of the digital world.

If clients send an e-mail, they immediately want an answer.” (Project manager, personal communication,

7th of April 2017)

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In conclusion, the members of this consulting firm have stress that triggers them. Deadlines, pressure and

workload are the main stressors, which complies with the findings of Hicks and McSherry (2006) and Bhatti

et al. (2010) that stated these as main stressors in their papers as well. In this case there is also another main

stress factor, which is the “fragmentation of work”, in which the interviewees receive work from different

sides, often because they are active in multiple projects in the same period. Other stressors consist of

unforeseen changes and stress from clients. A stress factor that was mentioned by Hicks and McSherry

(2006) that is surprisingly not present in Case 2, is technology. This is probably also linked with the

statement in the previous section that they are used to working with changing technologies. It is what they

do, in an ambidextrous manner and no longer causes them stress.

Most respondents implied that the management controls do not really have an impact on stress. This is not

where the primary stress comes from. For others, however, it has a slight effect on stress.

“Personally, I do not feel a lot of influence of whether or not management controls exist. However, you

always keep in mind that your actions need to be chargeable enough.” (Project manager, personal


“Yes and no, because you still want to meet those expectations.” (Project manager, personal


Nevertheless, the minor effect that it has on stress, consists of an increase in stress.

“If you are in a situation in which the numbers were not that good, then will you feel pressure. […] and

that pressure causes stress.” (Solution lead, personal communication, 12th of April 2017)

“I noticed that chargeability creates stress, because people do not have full control over it yourself.”

(Project manager, personal communication, 31th of March 2017)

To summarize, the management controls do not have a strong effect on the stress level of the respondents.

However, for some it has a negative effect on stress. Management controls increase stress, because it

increases pressure and because of the fact that the interviewees are evaluated on things that they do not

fully have under control. This last aspect is also a stressor noted by Hicks & McSherry (2006).

2. Participation

The managers are able to participate in two ways. First, they cooperate or determine the budget themselves.

If this budget would be unrealistic, this will be challenged.

“The budget is established together. I make the budget for the next year, this will be validated by the

management, so this happens in consultation.” (Solution lead, personal communication, 6th of April 2017)

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The second way in which they participate is by choosing how they fill in the manage impact6 part of their

evaluation.

“We are being coached by someone. […] During the year we set personal targets, not specifically with

KPIs, and at the end of the year we are evaluated on that.” (Solution lead, personal communication, 7th of

April 2017)

On top of these two aspects, the members always have the possibility to explain the results to their

counsellor, who brings the results to the evaluation.

“We do have a say in the project part. […] That is in consultation with the reviewer. You cannot guide the

evaluation, but you can explain the reasons.” (Project manager, personal communication, 20th of April

2017)

Although the structure of the evaluation is fixed and the weights of the different parts in the evaluation are

fixed, the respondents can still participate in determining the budget, chose how to fill in the manage impact

KPI and explain their results.

“The weight given to each of those parts is more or less fixed depending on the level you are at. But how

they fill that in, is actually completely in their hands.” (Partner, personal communication, 7th of April 2017)

The members also participate in the strategic planning of the firm. This will be elaborated in the next

section.

By letting their members participate, they might be able to lower the stress (De Baerdemaeker &

Bruggeman, 2016).

C. Management control configuration


Consistent with the literature study (Abernethy & Brownell, 1999; Bisbe & Otley, 2004) most interviewees

mentioned the budget as a control mechanism. In Case 2, the budget is determined bottom-up, which reflects

participation of the interviewees.

“In October / November 2016 we made the budgets for 2017. That concerns people, investments, sales and

margin budgets that we would get.” (Solution Lead, personal communication, 12th of April 2017)

“We do that bottom-up, from every solution that thinks about what we will need in the market.” (Partner,


Another important mechanism is the BSC with KPIs. The respondents obviously have had a clear

communication about this, since almost every interviewee mentioned the same three main parts (KPIs) of

the BSC. The first part concerns the reviews of project performances, called EPR (expectation performance

review). A second part is about how many hours can be invoiced to customers, this is the KPI

6 Manage impact is one of the three main parts on which they are evaluated. This is a non-project-related part. This

will be explained in the section about management controls.

41

“chargeability”, sometimes referred to as “utilisation”. The third part is about what the members have done

for themselves, their colleagues and the company beside the previous two KPIs, which is called “manage

impact”.

“In the review there are three rounds. The first round concerns the "EPRs", which shows how well you

have performed on your projects. The second round is called "chargeability", which reflects the number of

hours you have actually been chargeable. The third round is, what have you have done internally.” (Project

manager, personal communication, 31th of March 2017)

“Then there is an aspect which is called “manage impact”. That is everything that does not concern project

related work. That can be about personal development, certificates that are followed, participation in

conferences, etc.” (Project manager, personal communication, 20th of April 2017)

Other KPIs that were mentioned during the interviews are “fee per hour” and the “number of FTEs”. For

the interviewees in the position of Solution lead there are also some KPIs concerning profitability, such as

gross margins and turnover.

Another control comes from their clients.

“Of course you have a continuous control from the client.” (Project manager, personal communication,

31th of March 2017)

Moreover, social control is also present in this IT consulting firm.

“Because of the structures that we have in our organization, we are also controlled in an informal way and

regular briefings are held.” (Solution lead, personal communication, 12th of April 2017)

Timesheets were also mentioned in the context of invoicing clients, but were not replied by any solution

lead or project manager as a control mechanism. Furthermore, all members of this company are guided by

a “counsellor”.

“Basically, the aim of the counsellor is to guide people in the next steps and to help them work towards

those next steps. It is the counsellor who collects everything of the counselee at the end of the year and

brings this to the evaluation.” (Project manager, personal communication, 31th of March 2017)

“From the counsellor we know how we are doing. That is more on a personal level, concerning our

functioning, expectations, career path, etc. That is not experienced as threatening, but as supportive.”

(Solution Lead, personal communication, 7th of April 2017)

Summarized, the control mechanisms that are present are the budget, a BSC with ERP, chargeability and

manage impact as most important KPIs, social control, control from clients, etc. Other KPIs that were

mentioned are fee per hour and FTE. The solution leads are also evaluated on some profitability KPIs.

Additionally, the interviewees are guided throughout their career by their counsellor. This is also the person

who brings the information of the different management controls to the round table where the managers are

evaluated.

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2. Motivation

The main motivator is appreciation from the company and the clients.

“Actually, the most important thing for me is purely the appreciation for the work that has been done.”


The company should keep promoting intangible rewards like appreciations, since interpersonal happenings

such as intangible rewards can enhance intrinsic motivation, because it contributes to feelings of

competence (Ryan & Deci, 1985).

Motivation also spurs from corporate growth, innovation, generated output, satisfaction of the

organizational members, client satisfaction, freedom, independency and from having the possibility to place

your own focus.

“You get the chance to determine the content on which you want to focus yourself. That can be anything,

for example a new technology, another role in the company, etc.” (Solution manager, personal


“I am mostly motivated by growth.” (Solution lead, personal communication, 6th of April 2017)

“Because of having the opportunity to work on innovations.” (Project manager, personal communication,

20th of April)

Most interviewees indicated that they are not motivated by the management controls. However, two

solution managers noted the profitability KPIs as motivators to strive for profitability.

“Output, ultimately, it is the value that a company creates. Profitability and the money that it generates are

extremely important.” (Solution lead, personal communication, 7th of April 2017)

The interviewees acknowledged intangible rewards as motivating, especially the appreciation.

While some interviewees stated that management controls do not or only partly motivate them. Others

argued that management controls have the exact opposite effect of motivating. In fact, one of the Solution

leads stated that he is motivated from the fact that there are so few management controls.

“I am motivated because of the feeling of little management controls. They are present, but I have a feeling

that they are not for punishment, nor for controlling. They rather have a vigilant role. [ …] If you do your

thing and you do it well, then you have all the freedom to do so. I think that is the beauty of it.” (Solution

manager, personal communication, 12th of April 2017)

To conclude, management controls are not the primary motivators in this company. They only guide some

managers to stay profitable. The main motivators are actually the intangible rewards, especially

appreciation. The partner has mentioned that he hopes that the members are not mainly motivated by the

bonuses, but are intrinsically motivated. This is the case for the most part. For example, innovation and

technology were noted as motivators, which is also consistent with one of the company values,

entrepreneurship. The company should continue its intangible rewards, since they clearly have a strong

motivating effect and increase intrinsic motivation. This will raise self-motivation, because it facilitates

internalization of values (Ryan & Deci, 1985 – 2000).

43

The motivation in Case 2 can be classified as autonomous motivation in the SDT Continuum of Gagné and

Deci (2005). Depending on the person, the members will have integrated motivation or intrinsic motivation.

Since some mentioned that they highly value innovation because they are interested in it (intrinsic

motivation) others have indicated coherence of goals and values (Integrated regulation). This coherence

will be elaborated in the paragraph “Classification of the management controls”.

3. Feedback

As positive feedback also increases intrinsic motivation, the interviewees were asked if they receive a lot

of feedback. Most interviewees responded that they do not get enough feedback.

“There are a lot of compliments given when a project is started up properly. However, feedback on your

functioning is rather limited, even too limited.” (Solution lead, personal communication, 7th of April 2017)

“On some level you get enough freedom to do your thing, so that feedback might not always be deemed

necessary. However, I find a yearly feedback is not enough.” (project manager, personal communication,

20th of April 2017)

Some interviewees also indicated that the few feedback that they receive, often mainly exist of

compliments.

“I always say too little, but it is not easy. You should always find a balance between too much feedback

that have become pure compliments and not enough feedback. Compliments are important, but what is also

important is that people get feedback on things that are not good. I think that maybe, our company is a bit

too soft in that matter. [...] I would much rather have some working points emerging.” (Solution lead,


In paragraph 2, about motivational factors, this research found that appreciation as an intangible reward is

very effective. However, the interviewees feel the need for some more guidance and constructive working

points in order to learn from feedback.

Unlike the other respondents, two interviewees argued that they do get enough feedback. When they were

asked about the amount of feedback they get, it became clear that they get feedback more often than the

other interviewees.

“I think enough. Often by the managing partner of our solution [...] of customers too and by other project

managers [...] I find that I get enough feedback. [...] take 6 times a year.”(Project manager, personal


This interviewee gets about 6 feedbacks a year. This is more than the interviewees that stated that they do

not get enough feedback (one to three times a year).

To conclude, most interviewees indicated that they do not get enough feedback and that the feedback that

they do get is often too “soft”. They prefer to have more constructive working points. Other interviewees

mentioned that they do get enough feedback, but that is because they actually get more feedback from the

people surrounding them than the other interviewees. Compared to the literature this company pays a lot of

attention to appreciation, which increases intrinsic motivation (Ryan & Deci, 1985). Positive feedback has

44

that same effect (Ryan & Deci, 1985). So in comparison to the literature, they are doing a good job to

promote intrinsic motivation. Nevertheless, the number of feedbacks are not enough for most of the

respondents.

4. Rewards

Two main rewards were mentioned by the interviewees: bonuses and appreciation. The bonuses are based

on the KPIs that were described in the previous paragraphs. The results on the different KPIs are

transformed into an overall value. This value is compared with peers and placed on a Gauss curve.

Depending on the position of the individual on the Gauss Curve, a bonus will be attributed.

“It is the counsellor who collects everything about the counselee at the end of the year and brings it to the

evaluation […] There the person is presented as objectively as possible. All counsellors sit together with

all the team leads in order to obtain a complete picture of that person. Per half day 50 people of the same

level are evaluated. Afterwards, these are ranked and based on that ranking bonuses are awarded.”


There is also a bonus that depends on the overall performance of the company. This is not directly related

to the performance measures above.

“Everyone at (name company) enjoys a bonus depending on the result of the company.” (Solution lead,


Although the bonus was mentioned as a reward by most interviewees, the partner still hopes that this is not

where they get their primary motivation from, since “the long term effect of a bonus or a pay rise is actually

surprisingly short. In that respect it is much more important to make people feel good, give them

opportunities and reward them in such a way.” (Partner, personal communication, 7th of April 2017)

This was the case. In fact, appreciation was acknowledged under different forms. First there is the

appreciation from their clients.

“What we usually see, after a "go life7”, is the appreciation of the client. Usually, the client organises a

particular event or a dinner party to thank us.” (Project manager, personal communication, 31th of March

2017)

Second, appreciation also comes from the organisation itself. This can be in the form of events, team

activities, getting more freedom and career opportunities or simply by expressing gratitude and recognition.

“Going to dinner with the team, we have been to an escape room, etc. […] This is a form of appreciation

to the people.” (Project manager, personal communication, 31th of March 2017)

The partner has also indicated that they stimulate these team buildings.

“The more the merrier and we are really not screwy on that. Any project manager that would like to do

something with their project team to reward or motivate them [...] they can.” (Partner, personal


The following quotes also confirm the other forms of appreciation that were detected during the interviews.

7 The “go life” is the moment at which a implemented IT solution is used by their clients.

45

“On the other hand, I think the reward is mainly in the context of opportunities. People who prove that they

are good at what they do get opportunities more easily.” (Solution lead, personal communication, 7th of

April 2017)

”On the other hand, reward can be found in the recognition formulated on your project performances.”

(Project manager, personal communication, 11th of April 2017)

“It happens that the partner asks you to go to dinner. I see this as a form of appreciation, because he also

invests his time in it.” (Project manager, personal communication, 7th of April 2017)

Another reward that was mentioned by some interviewees is promotion.

“Someone who, year after year, gets a good evaluation, may be eligible for promotion.” (Solution

manager, personal communication, 7th of April 2017)

However, a lot of the interviewees also argued that there are standard durations before someone can be

promoted and that the members of that organisation should not wait until promotion is offered to them. The

initiative should come from the members themselves.

“It is the person himself who should be the requesting party, because more will be asked of you. […] so

you should really support it and really want it.” (Project manager, personal communication, 31th of March

2017)

“There are standard durations of, for example, three years to become senior consultant. If you have

incredibly strong scores, this can already happen after 2 years for example.” (Solution manager, personal


In conclusion, both tangible, but especially intangible rewards were mentioned by the members of this IT

consulting company. Those intangible rewards are in the form of appreciation coming from both the clients

and the company itself. As was also acknowledged in the previous paragraphs, these intangible rewards are

very important for intrinsic motivation.

5. Classification of the management controls

In order to be able to classify the management controls of Case 2 as one of the management control

configurations of Bedford and Malmi (2015), the schedule in Appendix 2 was used during the interviews.

Its structure will be followed in this paragraph.

The first part of the schedule is about strategic planning and participation of the managers in it. Every five

years, a strategic study is conducted by an external party. Additionally, Case 2 also has yearly meetings to

determine the budgets for the next year.

“Beside the strategic study that we do every five years, we have an annual exercise that is more budget

oriented, concerning what we want to achieve the next year. This is not only in terms of numbers, but also

in terms of content.“ (Partner, personal communication, 7th of April 2017)

There is participation in the strategic planning of this consulting firm. Last year, for example, they organized

a weekend in which the managers could engage in the strategic planning.

46

“Last time we have also involved senior managers and managers, which is also called “coalition of the

willing”, to work on such a strategy so that it is carried more widely in the organization and that it captures

more ideas.” (Partner, personal communication, 7th of April 2017)

Furthermore, on the level of the solutions they also sit together every year, in which the managers are also

included.

“If you look purely within the solutions, […] in which we mostly look ahead for one or two years, we look

at the concrete goal setting for the next year and possible dreams for the following years.” (Solution lead,


In conclusion, there is participation of the managers in both the corporate strategy and the strategy on the

level of solutions.

The next part of the schedule concerns the measurements. The managers are not controlled in a tight

manner.

“There are always rules, but you are not constantly checked if you have applied them.” (Project manager,


Compensation is determined in quite an objective manner, because of the evaluation procedure. For each

project a member receives an evaluation. That is the first way in which it is made more objective. Then

there is also the counsellor who gives some extra information about the person and who has to bring an

objective image of that person in front of a group of 20 to 40 people. If the counsellor mentions something

that is not objective, then these will probably put this straight. After this a ranking is made of the member

and his peers and a bonus is attributed depending on the position of the member within that group. So,

compensation is performance related and objective.

Concerning the structure, the interviewees were asked if authority is more centralised or decentralized and

how they would describe the hierarchy and the internal communication. Practically all the interviewees

acknowledged that there is a decentralisation of decision-making in the company.

“I think that a lot of responsibilities are given to the solutions, where there is also decision power.”

(Solution lead, personal communication, 12th of April 2017)

Also concerning the hierarchy the answers were quite uniform. This IT consulting wants to keep the

hierarchy as flat as possible, by splitting up parts when they become too big.

“We maintain the hierarchy as flat as possible. Every time that a group becomes too big, we cut it into

pieces.” (Solution lead, personal communication, 7th of April 2017)

Concerning the communication, the interviewees indicated that the communication is mostly informal.

However, because of the growth of the company, some say that it is becoming more formalized.

Nevertheless, within the teams the communication is primarily informal. Additionally, it was also noted

that along with the growth of the company, there are too many communication channels. But the company

is aware of this and is currently working on it.

“Today there are so many channels. We are working on ameliorating the communication. […] but that is

a challenge of a growing company.” (Solution lead, personal communication, 7th of April 2017)

47

“I think that we have reached a point at which we no longer know if we have seen all the important

information.” (project manager, personal communication, 11th of April 2017)

Nevertheless, most of the interviewees indicated that it is still more organic rather than mechanic

communication.

The following statement links the structure of the hierarchy with the informal communication.

“The fact that we have made separate solutions with their own characteristics in our organisational

structure, creates a good communication within these solutions.” (Solution lead, personal communication,

12th of April 2017)

The next part of the schedule in Appendix 2 is about policies and procedures. The interviewees stated that

they have a lot of autonomy. There are definitely not a lot of procedures and rules. Moreover, these are not

always applied either. Some interviewees argued that there are too few and would prefer some more

uniformity.

“For me, there may be more. […]Handling project A in a way and project B in another way is not always

easy. If you are a consultant and you are on two projects, then you have to do that twice in a different way.

So personally, I am in favour of a bit uniformity and harmonisation.” (Solution lead, personal


But that comes with a price.

“As we are growing more and more it can be useful. On the other hand, I think that that could destroy the

DNA of (name company) a bit if there would be too many controls.” (Solution manager, personal


Overall, there are not a lot of procedures and rules, the measures are not strict and there is a flat hierarchy.

Consequently, this makes it more difficult for new employees to integrate in the company, especially if

they come from a company where there are a lot of procedures and where they have a high hierarchy.

“For people that have been working in a fixed structure for years, with a manager telling them what to do

or that have more KPIs, it will be more difficult to fit in our organisation and they do not get integrated

that easily.” (Project manager, personal communication, 7th of April 2017)

The interviewees were also asked about some socio-ideological aspects, such as the selection, values and

beliefs and social control within the company. The selection procedure consists of three conversations. The

choice is mainly based on a “gut feeling” and there is a strong focus on cultural fit.

“You just have to feel that there is competence and that there is a fit with the company. […] if that is

consistent with the values and how the team lives, that is what we are looking for.” (Solution lead, personal


This company has five official values. The average number of matching values mentioned by the

interviewees is three. Some of the interviewees knew all 5 of the values.

Concerning social control, the opinions varied. Some argued that there is little social control at the office,

because of the fact that the company is becoming bigger and because of practical reasons “because we are

48

mostly at client and we often have several projects at the same time.” (Project manager, personal

communication, 31th of March 2017).

Other respondents acknowledged that there is in fact social control present, especially within the teams.

“As you can see, we work in an open space, where people cannot separate themselves. […] and because

we work in a project business, there is a lot of social interaction, either with the clients or with your project

team. So automatically there is some social control.” (Solution lead, personal communication, 7th of April

2017)

The answers on the socio-ideological questions display that this company is culturally strong.

In order to classify this management control according to the configurations of Bedford and Malmi (2015)

the short-term vs. long-term emphasis and the environmental stability needs to be taken into account. As

noted in previous sections, most answers indicated that the environment is quite turbulent, eventhough most

interviewees still view it as stable and both short-term and long-term goals are strived for.

Based on all these characteristics, we can conclude that this case has most in common with the devolved

control as described by Bedford and Malmi (2015).

D. Conclusion Case 2

The main stressors are deadlines, pressure, workload and fragmentation of work. This firm realizes

ambidexterity without explicitly installing a structure for it, but because of its ambidextrous members and

its strong culture. This company uses organic controls, which is consistent with the statement of Ylinen and

Gullkvist (2014) that organic controls are important for both exploitation and exploration. The members of

this consulting firm are used to continuous changes, which makes them better at balancing both exploitation

and exploration. The structure in which they have implemented ambidexterity is not by distinguishing

exploratory units from exploitative ones (O’Reilly and Tushman, 2004). It is rather consistent with the idea

of Gibson and Birkinshaw (2004) who indicated that organizational members have the capacity to show

both exploitation and exploration behaviour simultaneously, without having separate units for exploitation

and exploration. This is also similar to the idea of contextual ambidexterity (McCarthy & Gordon, 2011,

p.241) or the producing of an environment that inspires and rewards members to act in a certain way.

McCarthy and Gordon (2011) have associated this with clan control. Also the vision of Turner et al. (2015)

seems in effect in Case 2. In project-based activity, ambidexterity exists, even if the managers do not realize

it, even if they do not have a conscious strategy. However, the fact that they create a strong company culture

might be their conscious strategy to handle ambidexterity.

The management controls are closest to the devolved control, but also have a lot in common with the hybrid

control. Bedford and Malmi (2015) implied that ambidextrous companies, such as management consulting,

would probably have a hybrid control. Therefore, we would expect a hybrid control in this case as well.

However, this case has more characteristics in common with the devolved control, such as the tightness of

measurements, which is not tight at all in this IT consulting firm, and the lack of standardization by

procedures and rules. This comparison is also displayed in Appendix 3.

49

As this consulting company is growing and has an increasing need for uniformity, it is possible that they

will evolve towards a hybrid control, which would comply with the suggestion of Bedford and Malmi

(2015).

VIII. Cross-case analysis

A. Ambidexterity

Case 1 is striving for ambidexterity, since their environment is changing. Case 2 is in a turbulent

technological environment and handles this well, by being an ambidextrous firm. Case 1 is thus more at the

beginning stage of the “ambidexterity spectrum” than Case 2. This paper defines the “ambidexterity

spectrum as the range that describes the degree of ambidextrousness of a company, going from “striving

for ambidexterity” to “ambidextrous”. The different positions of the cases on the spectrum can be explained

by increased continuous innovations and by the difference in activity. In accountancy consulting,

technology is only a support for the core activity. For IT consultants it is their core business. Another factor

that might explain the difference in stage of ambidexterity in the “ambidexterity spectrum” is the company

culture. In Case 1 is mainly diagnostic. The respondents were not able to sum up the values and they did

not mention cultural fit as a selection criteria, while in Case 2 they know the values better and they all

indicated that they search for candidates that have a cultural fit with the company. Moreover, the belief

system is different. In Case 1 they believe that they have to stay stable, by planning the future, while in

Case 2 they believe that they have to change.

Proposition 1: The position on the “ambidexterity spectrum” depends on the importance of innovation and

technology in the core activity.

Proposition 2: The stronger and the more the company culture, the more likely the company becomes

ambidextrous.


In both cases the members have stress. The only difference that was noticed during the interviews is that

when they were asked if they have stress, in Case 2 they immediately stated that they need stress, because

it triggers them. According to Quick et al. (2003) this is positive stress or eustress. Although this study

cannot state that in Case1 there is negative stress, based on the difference in responses between Case 1 and

Case 2, this research can only assume that Case 2 has more positive stress than Case 1.

The main stressors are deadlines, heavy workload, pressure and fragmentation of work when it is project-

based consulting (Case 2). Pressure primarily comes from the other three factors, but can also come from

clients. Other stressors are employee turnover, change, clients and unforeseen changes to the daily planning.

Employee turnover increases the workload, since the work of leaving colleagues is transferred to the others.

50

Change (innovations, etc.) and daily changes to planning increase the pressure via deadlines that become

more difficult to meet and clients also increase pressure.

“Deadlines are the main reason.” (Director, Case 1, personal communication, 9th of February 2017)

“Pressure is the problem and the workload that is never finished. You can work for 12 or 14 hours a day,

there will always be work left and that gives stress.” (Solution lead, personal communication, 7th of April

2017)

“The big stress factor in our team is that we are working on small projects, which causes people to work

on multiple projects at the same time.” (Solution lead, Case 2, personal communication, 7th of April 2017)

Proposition 3: Deadlines, heavy workload and pressure are main stressors in the consulting sector. When

it concerns project based consulting, there is an additional factor, named fragmentation of work.

Another stressor is role ambiguity, because it is not always fully clear for managers on what they will be

evaluated. This is deduced from the fact that in Case 1 the managers did not mention the same controls and

were not all aware of the new digitalization and teamwork KPIs. Not knowing exactly how managers are

evaluated triggers role ambiguity. The interviewees of Case 1 all indicated that it is clear what their tasks

and responsibilities are, which implies that there is no role ambiguity (Kahn et al., 1964). However, some

statements did indicate role ambiguity and role conflict.

“These deadlines have to be reached and at the same time there is a need of extra time to get used to the

new system.” (Partner, Case 2, personal communication, 10th of February 2017)

In Case 2 the interviewees all gave the same framework of KPIs, which indicates that they know exactly

on what they will be evaluated. Letting the managers participate in how they will be evaluated can lower

the effect of role ambiguity on stress (De Baerdemaeker & Bruggeman, 2016). In Case 2 there is more

participation than in Case 1, while there is more role ambiguity and role conflict in Case 1 than in Case 2.

Proposition 4: Role conflict and role ambiguity increase stress

Proposition 5: Role ambiguity decreases by clearly communicating how the managers will be evaluated

and by participation, which lowers the negative effect of role ambiguity on stress.

Depending on the controllability of the consulting activity, certain management controls are needed. These

management controls can, however, increase stress, since it generates pressure, fear for bad evaluations and

because of the fact that managers are evaluated on elements that they themselves cannot fully control. For

example, in Case 2 it was mentioned that they are evaluated on the KPI “chargeability” while this also

depends on other elements and other people.

“Well the KPIs urge you to constantly perform, it gives “performance pressure.” (Project manager,


“I noticed that chargeability creates stress, because people do not have full control over it yourself.”


51

Proposition 6: Management controls add stress for managers.

This study still emphasizes that management controls are definitely not the main stressors, but it adds stress.

C. Management control

The control configurations that fit best with Case 1 and Case 2 are respectively the results control and the

devolved control. The Reasons for these differences can be explained by three factors. First there is a

difference in core activity that affects the controllability of it. In Case 1 this is a very controllable activity,

with a lot of external rules imposed by e.g. the government. In Case 2, the environment is quite turbulent

and they continuously deal with changes. Therefore they cannot easily control their activity. A second factor

is the position of the cases in the “innovation range”. This paper has defined the innovation range as a range

that determines the speed and amount of innovations that firms experience, ranging from not regularly

innovating to continuously innovating. While the innovation life cycle (Abernathy & Utterback, 1978)

focuses on the stages in a product innovation, the innovation range concerns the speed and amount of all

the innovations within companies. Case 1 is only at the beginning of the whole digitalization process, while

Case 2 is further in the range. Another factor is the internalization of the values and belief systems. In Case

1 the values are not internalized, while in Case 2 they are. In Case 1 they have more tightly followed rules

and procedures while in Case 2 they only have few rules and procedures, because they have internalized

values and belief systems. This internalization became apparent since most of the interviewees were able

to sum up the company values during the interviews.

Proposition 7: The more internalization of the values and belief system, the more the situation becomes

controllable, the less need for rules and procedures and the lower the impact of management controls on

stress.

While Bedford and Malmi (2015) suggested a hybrid control for ambidextrous firms, this was not identified

in either of the cases. In Case 1 they are striving for ambidexterity and are missing the organic controls in

order to be classified as a hybrid control. Case 2 is not classified as a hybrid control, since it does not have

the tight procedures and rules that are part of a hybrid control. However, Case 1 is striving for ambidexterity

and when they are no longer able to plan future changes, they might have to add organic structures. Case 2

is growing and might add procedures to create some uniformity. These management controls will evolve

towards a hybrid control. This confirms the suggestion of Bedford and Malmi (2015) that the hybrid control

is optimal for ambidextrous organizations. However, they should add the size of the company in their

statement, since it is optimal for big ambidextrous organizations. If the company is already further in the

innovation range (Case 2), with a fast changing environment, it will have a devolved or hybrid control

configuration, depending on the size of the company.

“It is a continuous process, it will no longer stop with innovating or changing.” (Partner, Case 1, personal

communication, 10th of February)

52

“Personally I am in favour of a bit uniformity and harmonisation.” (Solution lead, Case 2, personal

communication, 12th of April 2017))

Proposition 8: The more ambidextrous, the further in the innovation range because of more turbulent

environments and the bigger the need for uniformity (company size), the more management controls will

evolve towards a hybrid control.

Figure 3. The evolving character of management control configurations

The variables that determine the management control configuration are: the level of ambidexterity in the

ambidexterity spectrum, the position in the innovation range, the size of the company, the core activity and

the environmental turbulence.

During the interviews it was mentioned that the members are able to participate in the goal setting (Case

1), in determining the budget (Case 2) and in strategic planning (Case 2). In Case 2 the managers have the

possibility to explain their results before being evaluated, which is also a form of participation. As there is

more positive stress in Case 2, where there are more participation possibilities for the members, this paper

proposes that participation decreases stress. This is in accordance with the study of De Baerdemaeker and

Bruggeman (2016).

Proposition 9: Participation mitigates the negative effect of management controls on stress.

In both cases there is stress, but in Case 2 it is more positive stress. Case 2 uses organic controls, while

Case 1 mainly uses mechanistic controls. This leads to the following proposition.

Proposition 10: When more organic controls are used, the company and its members become more

ambidextrous and have more positive stress that triggers them.

Proposition 10 is consistent with the paper of Ylinen and Gullkvist (2014).

53

Another aspect of management controls that have not been discussed so far is whether they work with cost

centers, profit centers, etc. in consulting firms. Only in Case 2 it was clear that they use profit centres, in

which each solution lead is responsible for the profit and loss account.

“From the solution you have a profit and loss responsibility.” (Solution lead, Case 2, personal


This is reflected in the KPIs, as the solution leads are evaluated on KPIs concerning profit, such as the gross

margin.

It would seem logical that using profit centers increases stress because of extra focus on management

controls. However, this interviewee argued that he has no uncomfortable stress and that he actually needs

this stress, because it triggers them.

Proposition 11: If organizational members are ambidextrous, having profit centers does not necessarily

increase stress.

This study researched the impact of management controls on work-related stress. The findings indicate that

management controls increase the already existing stress. It is not the main stressor, but is an “extra”. This

is the case for both firms that are either striving for ambidexterity or are ambidextrous.

The more the environment changes, the more stress arises. However, the members seem to become more

ambidextrous, because they get used to the continuous changes, which decreases that effect on stress.

D. Schedule

The cross-case analysis is visualized in figure 4 and in Appendix 4.

Figure 4. Schedule Cross-Case Analysis

54

IX. Conclusions

The aim of this research was to examine the effect of management controls on work-related stress in a

company that is striving for ambidexterity. Overall, the outcome of this investigation shows that

management controls add stress, because it increases pressure, fear of bad evaluations and because

managers are sometimes evaluated on aspects that they cannot fully control themselves. This study proposes

that this negative effect on stress can be mitigated by increasing participation and internalization of the

values and belief systems.

This research has identified the main stressors in the consulting sector: deadlines, pressure and a heavy

workload. Moreover, “fragmentation of work” is also recognised as a main stressor in project-based

consulting. Furthermore, this study has also introduced the terms “innovation range”, “ambidexterity

spectrum” and “supervised autonomy’. This paper also formulated some propositions based on the findings

and the existing literature.

As with all case studies there are some limitations. The limitations concerning the method have been

discussed in section V. Despite these limitations, this study still has a strong explanatory power that can be

used for future research.

This study contributes to the literature in several ways. First, this research builds on the existing literature

in the fields of management control, ambidexterity and stress (e.g., Bedford&Malmi, 2015;

O’Reilly&Tushman 2004 - 2013; McCarthy&Gordon, 2011; Malmi&Brown, 2008; Hicks & McSherry,

2006; etc.). By using a qualitative method, which often gives richer insights, this study enriches the

literature in these domains. Secondly, it fills a gap in literature that was discussed in part three about the

Research question. A series of propositions were formulated, which contribute to the existing literature”

(Glaser & Strauss, 1967, p.97).

This research also has managerial contributions as it shows the effect of management controls on stress,

but also how this can be reduced, by participation and internalization of values and belief systems.

Future research can build on this study by using another research method, for example survey methods, in

order to increase external validity of this study (Glaser & Strauss, 1967, p.233). Another possible future

investigation might use a longitudinal study to examine how the change of the management control

configuration over time affects stress or other variables such as corporate profitability.

During the interviews in Case 1, it was noticed that this consulting firm has a problem of employee turnover.

Without asking, some of the interviewees mentioned that a lot of colleagues leave the company. Future

research could try to identify why there is such a huge employee turnover and how to increase the retention

of the members of their organization, followed by an investigation of its impact on stress. Possible future

research could broaden the research of De Baerdemaeker and Bruggeman (2016) to other management

control areas, such as goal settings, BSC, etc.

Despite the limitations and the need for future research, this study contributes to and is relevant for the

literature and practice.

VI

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IX

Appendix

1. Questionnaires

Should have

a negative

effect

Questionnaire (Managers):

1) Is there clarity concerning the tasks you have to carry out?

2) How are you being controlled?

3) How are you rewarded for good performances?

4) Do you have stress? What is the reason?

5) What is the influence of the management controls on stress?

6) Is there more emphasis on short-term goals or long-term goals?

7) How would you describe the environment of the department?

8) Are you allowed to participate in determining how you are evaluated?

Can you participate in determining the budget/ BSC?

9) Which impact do innovation have on the feasibility of the goals?

10) Are the management controls adapted to the fact that there is an innovation?

11) By which management control are you motivated the most?

12) Do you often receive (good) feedback?

Questionnaire (partners):

1) Which management controls are used?

2) How do you determine the budget and BSC ?

3) How are the managers motivated?

4) How are the managers rewarded for good performance?

5) Is there more emphasis on attaining short-term goals or long-term goals?

6) Do you describe the environment of the department rather as stable or as turbulent?

7) Do managers have a say in how they are evaluated? Do they participate in establishing the BSC/ budget?

8) What are the stress factors for the managers?

9) Could you give me some more information about how the innovation (new software) was implemented?

10) Are the management controls adapted to the fact that there is innovation?

11) Are the management controls used in this department the same as in the other departments (IT &

management consulting)? (Case 1)

12) Figure 5. Questionnaire Partners

Figure 6. Questionnaire Managers

X

2. Theoretical categorization of management controls.

(Bedford and Malmi, 2015, p.6)

This schedule is based on the paper of Bedford and Malmi (2015, p.6), received from Prof. dr.

Bruggeman

Construct Theoretical definition

Strategic planning

Mode Mode of developing the long-term ends and means of the firm

Participation Involvement of subordinates in strategic planning processes

Measurement

Diagnostic Monitoring activity through deviations from preset standards of performance

Interactive Regular involvement in subordinate activities by management to encourage

debate, creative behaviours and address strategic uncertainties

Tightness Individual accountability for meeting pre-established performance targets

Cost Control Financial performance measures of cost efficiency and effectiveness

Measure Diversity Broad scope and non-financial performance measures

Compensation

Performance Pay Performance-contingent rewards and incentives

Subjective/Objective Method of determining individual compensation

Short/Long Term Time horizon used for individual compensation

Structure

Decentralization Locus of authority – centralised to decentralized

Hierarchy Vertical differentiation of firm structure – flat to tall

Communication Nature, direction and content of communication patterns – mechanistic to organic

Integrative Liaison Devices Horizontal structural arrangements overlaying traditional functional structures

Policies and procedures

Autonomy Work activities conducted in the absence of direct observation or involvement by

management

Boundary Systems Statements defining acceptable or unacceptable domains of activity

Standardization Rules and procedures specifying the means of conducting work activities

Pre-action Reviews Processes of scrutinization and authorization prior to activity performance

Socio-ideological

Selection Search, evaluation and recruitment of employees according to a set of criteria,

such as value alignment

Socialization Processes whereby individuals come to appreciate prevailing norms and beliefs

in the firm

Belief Systems Statements communicating the basic values and premises for action of the firm

Social Control Reliance on shared values, norms and beliefs to direct work activities

Table 2. Theoretical categorization of management controls (Bedford & Malmi, 2015, p.6)

XI

3. Comparison Cases with hybrid control (Bedford and Malmi, 2015)

Based on Table 2 and Table 7 of the paper “Configurations of control: An exploratory analysis” by

Bedford and Malmi (2015, p.6, p.13) this table compares the two cases with the hybrid control.

Construct Theoretical definition Hybrid

8control Case 1 Case 2

Strategic planning

Mode (inf./form.) Mode of developing the long-

term ends and means of the firm Very formal Limited

participation (goal

setting)

High participation

(strategic, solution,

budget) Participation Involvement of subordinates in

strategic planning processes Highest

Measurement

Diagnostic

Monitoring activity through

deviations from pre-set standards

of performance

Highest

Diagnostic

structures (BSC,

SMART goals,

procedures)

Some diagnostic

elements (budget,

KPIs)

Interactive

Regular involvement in

subordinate activities by

management to encourage debate,

creative behaviours and address

strategic uncertainties

Highest

Create interaction

through strategic

placement in office

& regular meetings

High interaction

(project teams)

Tightness

Individual accountability for

meeting pre-established

performance targets

High

High

(SMART goals,

check on

application

procedures)

Low

Cost Control

Financial performance measures

of cost efficiency and

effectiveness

Highest High (KPIs)

Semi (profitability

KPIs, but no cost

control on team

activities f.e.)

Measure Diversity Broad scope and non-financial

performance measures Highest

Financial and some

non-financial KPIs

(teamwork,

technology)

Measurement from

different sides

(project,

counsellor, manage

impact, budget,

KPIs, etc.)

8 All the statement in this column are in comparison with the other management control configurations.

XII

Compensation

Performance Pay Performance-contingent rewards

and incentives Highest

Performance-

related incentives

like bonus

Performance-

related incentives

like bonus

Subjective/Objective Method of determining individual

compensation High

High objectivity

(process of

evaluating)

Short/Long Term Time horizon used for individual

compensation ST/LT

Deadlines are very

important, but also

LT

Both ST and LT

Structure

Decentralization Locus of authority – centralised

to decentralised Decentralized Mainly centralized Decentralized

Hierarchy (flat/tall) Vertical differentiation of firm

structure – flat to tall

Flat, but

taller than

devolved

control

Tall Flat

Communication

(mech./org.)

Nature, direction and content of

communication patterns –

mechanistic to organic

Organic

Some informal

communication,

but not organic,

because a lot of

procedures and

rules

More organic

Policies &

procedures

Autonomy

Work activities conducted in the

absence of direct observation or

involvement by management

High "supervised

autonomy" High

Standardization

Rules and procedures specifying

the means of conducting work

activities

High High Low

Socio-ideological

Selection

Search, evaluation and

recruitment of employees

according to a set of criteria, such

as value alignment

Highest

Very important,

find stress-resistant

people that seek a

lot of contact with

clients

Very important,

cultural fit

XIII

Socialization

Processes whereby individuals

come to appreciate prevailing

norms and beliefs in the firm

Highest

Teambuilding,

events,

appreciation, etc.

Belief Systems

Statements communicating the

basic values and premises for

action of the firm

highest

Norms and beliefs

not that uniform,

values are not

internalized.

Know the values

quite well

Social Control

Reliance on shared values, norms

and beliefs to direct work

activities

Highest

Increase social

control through

strategic

positioning the

people on islands

in an open office,

however, low

internalization of

values

Project team, a lot

of

social control and

shared values

Difference between

the Cases and the

hybrid control

configuration

Lower

participation,

lacks organic

structures, high

hierarchy with

centralization and

lower socio-

ideological

strength than

hybrid

Less procedures,

rules (used),

lower tightness,

and lower

standardization

than hybrid

Table 3. Comparison Cases with Hybrid Control (Bedford & Malmi, 2015, p.6, p.13)

XIV

4. Schedule Cross-Case Analysis

Figure 7. Cross-Case Analysis

THE EFFECT OF MANAGEMENT CONTROLS ON WORK-RELATED …

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