Management control systems in joint ventures: literature review and description of three cases

摘要

This paper explains how management control systems (MCS) can be understood as made up of five distinct subsystems but why only three are relevant for joint ventures (JV). It explores the reasons that have been advanced in the academic literature to support the identification of each MCS component as a coordination mechanism in Barnard's (1938) terms (information versus control). One component, performance measurement, is conceived as a control mechanism; while budgeting/planning and transfer pricing are perceived as information mechanisms. The paper offers a coherent but brief literature review of MCS components as identified in the management accounting literature. This study presents the theory behind three MCS's components and describes them in real companies. The literature review is based mainly on Kaplan (1982), Demski (1994) and Chapman et al. (2007). The study contributes to literature by organising previous and relevant work in the field around three MCS components that are critical in JVs.