A group's acquisition of a family business -Change in the Management Control Systems at an operative level

Abstract

Background and problem: Changes in the ownership structure and growth are two examples of variables that can change the management control systems. There are literatures that carefully describe how the controlling elements change when growing internally. These literatures combined with acquisition theories have been used to discuss the changes in the management control systems in this case study. Most of earlier researches have been done on the top-level management. Purpose: The purpose of this thesis is to see how the management control systems change at an operative level when a family business transforms into a unit of a big group trough an acquisition. Methodology: This research is a qualitative case study on a gym facility in Askim, Gothenburg. The theoretical framework is based on theories from experts within the concerned field. Most of the empirical data have been collected by in-depth interviews with employees and customers. Discussion and Conclusion: The family business was mainly controlled by corporate culture with shared values. After the acquisition this informal control changed to formal control with formalized routines and strict budgets. The facility went from using interactive to diagnostic control were goals got explicit and individual goals connected with rewards got introduced. After the acquisition the employees and managers did not feel supervised anymore and were able to work more independently. Further research: It could be interesting to do further research on a big company with a more controlling top-management. Studies about rewards systems combined with acquisition would also probably contribute to the research.