Staff perception on the impact of management control system changes in altering operating behaviour to align with strategic imperatives : a university case study

Abstract

The thesis explored the attempts of management to respond to stakeholder pressures through selection of strategies supported by revised management control systems. Particular emphasis was on understanding the implementation of the management control system in its organisational context. As part of that, the study examined the effectiveness of these efforts to realigning staff behaviour to match the strategic goals. Over the past three decades the rapid changes in political and economic environmental (external and internal) factors put pressures on the universities to adopt strategies, policies and performance measurement systems similar to any business organisation and this was also reflected in the change in leadership (management) positions within the organisation. The replication of the private sector performance measurement systems in the newly adopted MCS has significantly changed the reporting structures, responsibility and accountability measures of universities by replacing the traditional collegial-based model with a much more centralised management-imposed style. However, it is not known whether staff equally perceived the same pressures as legitimate enough for the implementation of the dramatic reconstitution and there is very little understanding of staff perceptions on how many of these factors were responsible for strategic changes in the higher education sectors. The motivation for the research therefore originated from curiosity to understand whether/how the staff at different levels perceived the impact of those strategic changes and whether they have significantly changed operational behaviours. An element of this case study was to identify, from staff perceptions, the major external and internal factors responsible for strategic changes of a university and their consequential impact on the Management Control Systems (MCS). It also addressed whether and/or how the change in the MCS has changed the operational behaviour of staff to achieve the University's strategic goals. The study is based on a social constructionist approach and has utilised the intellectual merits of Institutional Theory and Resource Dependence Theory to understand the legitimacy and resource dependency aspects of the change process. The two main theories have been complemented with the use of Silence Theory to understand the changes in staff operational behaviours. It is expected the in-depth understanding provided by the study would help in future strategy development and the implementation process with a stronger focus on the behavioural aspects of change. The major findings of the study show that the three groups of interviewees displayed a mix of attitudes towards identifying the major influential factors. The Government influence was identified as the strongest external factor that regulated the University's responses to the remaining influential factors. It was identified that staff attitudes towards any external factor was not influenced by the merit of that factor but rather the way the University implemented the changes within the organisation. Some staff at both the mid-level and the operational level displayed negative attitudes towards how the strategic changes were implemented. The study identified perception gaps among the three levels of staff on the impact of the Management Control Systems on staff operational behaviours. It was identified that the overall impact of the MCS changes tended to show the behaviour of the operating level group was often goal incongruent although the formal reporting indicators showed the opposite. The internal resource allocation process had been used as the major lever of control. Tone of communication had also been used by the top management as a control tactic. Decoupling behaviours emerged from the major external pressure (government) and was adopted by different levels of individuals in different ways. These differences created confusion and contributed to the perception gap between the top management and operating level staff. One of the most important findings of the study is the level of covert resistance among operating level staff. A significant number of them adopted the 'silent treatment' as a resistance strategy that had affected achievement of strategic goals; a behaviour that was overlooked and/or neglected by the management. The study also found that the strategy implementation based on the new business model approach adopted by the University was not accepted by staff as it conflicted with their traditional values. In this case it was found that the emphasis placed on the technical aspects of the MCS was inadequate in addressing the behavioural elements of achieving goal congruence.

Date of Award	2016
Original language	English