INTERRELATIONSHIP BETWEEN MANAGEMENT CONTROL MECHANISMS AND STRATEGY: CASE STUDY OF CV. ISTIQOMAH PRIMARY

Abstract

ABSTRACT

This study mainly discusses about the interrelationship between management control mechanisms (MCS) and strategy. In this current years, business environment keep moving rapidly affected by globalization, technology, and national and international policy, so there are a state when organization is being pushed to a condition when they should develop themselves to survive. Traditional researchers claimed that between management control mechanisms (MCS) and strategy only has one way interrelationship which management control mechanisms (MCS) is an outcome from organization’s strategy. In opposite way, different point of view brought by modern researchers, stated that the interrelationship could be more complex and involving two – way relationship.

In this research, there are three research questions to reveal the interrelationship between MCS and strategy, and tested towards a small medium enterprise (SME) organization that have undergoing change process. This research conducted using qualitative method in single case study, and involving interviews as it has the strong side in exploring and understanding the situation/condition in the organization. The results, reveals the complexity of interrelationship between MCS and strategy, that interactive controls of MCS help to facilitate in strategy change, but strategy that have been changed did not affecting MCS to change, instead this MCS usage is based on CEO or top managers decision making.

Keywords: Management control mechanisms, Strategy: Strategy change, Interactive control