The Impact And Mechanism Of Task Uncertainty On Management Control System

With the further development of enterprises’market transition, management control system becomes more and more important. An effective management control system is helpful for enterprises to carry out strategy and obtain competition advantages. However, an invalid management control system causes opportunities disappear and resource waste. It is found that based on the same organization target and strategy, different management control system will lead to different human performance and different organization’s overall performance. In the meanwhile, the same management control system will also give rise to different effectiveness, and it seems that there is no uniform optimal system. Currently, there are urgent choice problems and resource allocation problems in Chinese enterprises’management control system, and the related theory guidance is needed to deal with these problems. So how to design and implement management control system is always the focus of theoretical and practical field.The fundamental factor of making management control system take effect is up to its integration condition, including the integration of system, organization target and strategy, the integration of system and organization environment and the system’s internal integration. It is generally accepted that the researches of management control system, which is based on Contingency Theory, began with Khndwalla’s research in 1972. In his research, he studied the influence of different competition on the application of management control. After that, Gordon & Miller(1976) researched the contingency variables of designing accounting information system, and these factors included environment factors, organization factors and decision-making style. Ouchi (1977) pointed out that control conditions are the basis of selecting control mode, and different control condition requires for different control mode. For more than three decades, management control system researches, which are based on Contingency Theory, roughly followed the research mode of "contingency variables—organization design—management accounting—organization effectiveness" (Otley,1980). While Eisenhardt (1985) believed that the former researches have studied the control problems from the perspective of Organization Theory and Agent Theory, so his research combined with both of these two perspectives, and task features have been considered in the research. The hypothesis included "with the degree of task’s programmable improves, the possibility of behavior control will amplify", and so on.Management control system researches, which are based on Contingency Theory, do not demand for research background or theory researches of abstract and simplified research background, and most researches’background are manufacturing industry, the minority are based on medical or hospitality industry, and scarcely researches are based on building industry. The operation and project organization of building industry have the following obvious characteristics: disposable, uniqueness, openness, dynamisms, and so on. So when design and carry out management control system, specially complicated and shifting contingency variables should be considered. For these reasons, building industry is an ideal experimental field to research the design and implement of management control system in the condition of target uncertainty.The research object of this dissertation is the matching relationship of management control system and task features, and the management control system’s validity conditions of Chinese construction enterprises will be examined. The research conclusions have significantly theoretical and practical meanings for understanding the design and implement of management control system.This research uses field research to test the relationship of management control system and task feature, and specific arrangements are as follows:Chapter One:introduction. According to the analysis of building industry’s external environment and the existing problem, the research questions are introduced, and the important meanings of the research are also presented. In the meanwhile, the main research methods, the basic structure of the research, and the theoretical and practical contribution have also been introduced.Chapter Two:literature review. Review and criticize the current research situation of foreign and domestic management control system research from the following four angles:the intension and extension of management control system, classification method, contingency variables and practical effect, and then comment the influence and action mechanism of task uncertainty variable on management control system.Chapter Three:theoretical analysis and research hypothesis. Since in the process of the research development of management control system, different scholars have different understanding for management control system in different period, this chapter classifies the developing process of task uncertainty and management control system, and the management control method, which is defined in this dissertation, is cleared. The influence and action mechanism of task uncertainty variable on management control system are analyzed. Based on this analysis, the research hypotheses are presented.Chapter Four:research design. In this chapter, field research method is mainly introduced, the progressive research steps of on-the-point interviews and directional survey are presented, and research model are designed.Chapter five:research analysis and findings. This chapter divides into two parts:one part is composing data and analyzing, and the other part is questionnaire data statistic analysis, including non-reply deviation test, reliability and validity test, descriptive statistic, relative analysis, regression analysis, and so on. In the end, report empirical result and get the research conclusions.Chapter six:research conclusions and future research. Find the internal discipline of how task uncertainty influences management control system by field research results, and explain the research results related with the theoretical background of management control system research. Provide specific suggestions for Chinese enterprises based on these research results. Combined with the difficulties and problems appears in the field research process, analyze limitations of the field research and propose the development direction of this field’s future researches.According to the test of on-the-spot interviews and questionnaire investigation data, the conclusions of this dissertation are as follows:At large, building industry has relatively blurry task features, the following four control methods are used at different degree:behavior control, result control, personnel control and process control. Specifically, when the task is conventional, all of the four control methods have significantly positive influence on control performance. When the uncertainty degree of the task is low (especially when there is few exceptions), the formal control methods (behavior control and result control) have significantly positive influence. As the number of exceptions becomes larger and larger, the informal control methods (personnel control and process control) have more significant effectiveness.The contributions of the dissertation can be embodied as the following four aspects:(1) The dissertation proposes the new dimensionality structure of management control system under the task uncertainty condition. Based on Contingency Theory and the relative literatures, the dissertation defines the four factors of control methods as behavior control, result control, personnel control and process control by the process of abstraction, conceptualization and term unification. And then conduct the theoretical analysis for control methods under different task features (four table cells), construct an integrated theory model at the first time. The four control methods are not only the results of theoretical analysis, but also pass the test of investigation research. In the meanwhile, the subsequent empirical models manifest that the good matching of these control methods and task features can generate good control performance. The theoretical models have good reliability validity, and have good explanation and forecast effects under different task features.(2) The dissertation especially pays attention to and deal with the choice problem of control methods under the blurry task features in some degree. In the existing few literatures which consider the relationship of the task uncertainty and control methods, scholars pay more attention to the situation of extreme task features which refers to the choice problem of management control methods under task certainty and task uncertainty. Actually, the control methods under the above situation are easy to choose. However, enterprises usually have more blurry tasks in practice. And it is difficult to deal with these problems by conventional and traditional management control method. In this dissertation, the discussions about the control methods of blurry conditions have exploratory and pioneering contributions in some degree.(3) The dissertation makes use of two-stage progressive research of field research and directional survey. It is stated that conducting researches by field investigation can help researchers perceive practical problems, conduct theoretical thinking, realize theory focus and the constructed targets. However, the conclusions, which are obtained by field research, may have especial feature, and do not have strongly external validity. That means the conclusions can not be extended and applied for the same or similar research objects without biases. The investigation researches, which apply scientific sampling methods and systematical test for large samples unbiased to gather the overall cognition, are supposed to have relatively strong external validity. The two stage field research—deep interview and directional investigation, which is used in this dissertation, combines the advantages of these two research methods. By promising the theory focus, a wide range of investigation has been conduct with pointed references, and this helps to increase the depth and university of the research.(4) The dissertation pays attention to special industry, and a comprehensive examination for the enterprise practice has been conducted closely. This dissertation makes building industry as its research background. This research background is rarely.In the meanwhile, this dissertation makes use of Chinese enterprises’data to test and verify the relative hypotheses. This can provide empirical evidences for analyzing the design and implement of management control system under Chinese culture, system and market background. This research observes the nature state of enterprises’ management control work in the long term (28 months), multisource proves are collected. The proves themselves and the content analysis, empirical test for these proves are all precious experience and morals, and these have important inspiration for practical work.