Management Control Systems and Entrepreneurship in Lusaka - A Minor Field Study in Zambia

Abstract

Problem Discussion: Today the pace of changes is increasing dramatically in the society and because of this entrepreneurship is becoming more important for the society’s development. African entrepreneurs experience serious difficulties in developing and sustaining effective organizational arrangements and this is an obstacle to entrepreneurial development and the balance needed for survival, growth and competitiveness. Zambia is a developing country where measures need to be taken at all levels and fields of the society to reduce the poverty and one step is to increase the economic growth, innovation and job creation. Management accounting is needed to help decision makers to make good decisions and management control systems are the process where these decisions and strategies are implemented by managers. Entrepreneurship is a management process and encouraging entrepreneurial behavior is one step to long-term vitality of economies. Purpose: The main purpose with this minor field study is to investigate how companies in Zambia are managed and if the companies are managed in an entrepreneurial way. The authors also aim to investigate how managers in Zambian companies define entrepreneurship and what they believe is needed for future business and entrepreneurial development in the companies and in Zambia. Methodology: The research is based on a qualitative method with personal interviews with eleven company managers in small and middle-sized companies acting in the formal sector in Lusaka, Zambia. Conclusion: The authors’ conclusion is that small and middle-sized companies in the formal sector in Lusaka, Zambia are managed in a more traditional way than entrepreneurial. However the authors draw the conclusions that there are many entrepreneurial possibilities in Zambia but the Zambian context and business environment makes the entrepreneurial process complicated. The authors believe that reasonable interest rates, consistency in inflation and exchange-rates, less bureaucracy as well as education and access to skilled labor are some of the most vital requirements needed for entrepreneurial development in Zambia. Proposals for Further Research: As this research indicates the informal sector in Zambia is large and therefore the authors would find a similar research within the informal sector in Zambia interesting. The authors also suggest that it would be interesting to identify similarities and differences in a comparative study with company management in industrialized countries. Additionally, the authors would find it interesting to compare the Zambian managers’ management to the management performed by the foreign investors acting in Zambia.