The evolution of management control combination in the transformation toward hybridity: a case study

Abstract

This paper investigates how management control (MC) practices evolve in nature and interrelationship as control problems develop in a dynamic environment. Drawing on coupling theory, it examines how three MC practices – cultural control, budgeting control, and performance measurement – are (re)coupled across two distinct periods in a Chinese state-owned company. During the organisational transition from a government-oriented model to a more complex hybrid-business model, the findings indicate that control problems increase in both scope and complexity. Correspondingly, the combination of MC practices shifts from more informal culture control loosely coupled with budgeting, towards a more rigid and comprehensive budgeting and performance measurement system, supported by more formal culture control in a tightly coupled combination. The study illustrates how MC combinations evolve from loose to tight coupling through simultaneous adjustments in individual practices themselves and in their responsiveness and distinctiveness when combined. This suggests that flexibility in control may lie in an organisation’s capability to adapt – by revitalising existing MC practices, introducing new ones, and reshaping their combinations – rather than in the fixed nature of any single practice or type of coupling. The findings contribute to the literature on MC combination in general, and on MC in hybrid organisations in particular, while offering important practical insights into enhancing the effectiveness of MC in organisations.

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Identifiers

ORCID for Yaobo Wang: orcid.org/0009-0002-4339-6423

ORCID for Pingli Li: orcid.org/0000-0001-5020-9126

ORCID for Yu (Jack) Gong: orcid.org/0000-0002-5411-376X

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