Flexibility versus formalization - The shape of the management control system in rapid growth companies

Abstract

Background Rapid growth companies are an important part of today´s society and and problem contribute to the increase of the welfare. These companies are in an unstable environment with many changes which creates a need for flexibility but at the same time they need control to achieve the goals. This can be seen as a tension which has to be taken into consideration when the companies shape their management control system. Research question How do successful rapid growth companies shape their management control system? Aim of study We want to give an understanding of how rapid growth companies shape their management control system with consideration to the affect of the growth. We also focus on how formal and informal management tools are balanced in the control package. Methodology The study is a qualitative interview study, where four companies are participating and the shape of their management control system is described. The empirical findings are analyzed with a model developed in the methodology part of the thesis. Empirical findings The study shows that rapid growth companies have to evolve their and conclusions management control system while growing, and that the evolvement often goes towards a more formalized system. The companies though express the need for flexibility and therefore the importance of also having informal control. Suggestions for It would be interesting to study the management control system in one further research rapid growth company, thereby being able to deepening the understanding of why changes occur with connection to the growth. It could also be of interest to perform the study in companies within the same industry, since it would ease the comparisons between the companies.