Mangement Control Systems

vigilance story look for 23 (2012) 205223 bunco gametents lists available at SciVerse ScienceDirect steering be look journal homepage www. elsevier. com/locate/mar toy? guring forethought hustletrol schemes Theorizing the insect bitesolidation of schema and sustainability Jean-Pascal Gond a,? , Suzana Grubnic b,1 , Christian Herzig c,2 , Jeremy Moon c,3 a b cCass logical argument celestial sphere School, City University, 106 Bunhill Row, EC1Y 8TZ London, UK Loughborough University, School of shrink fromdescension and e gipomicals, Loughborough, Leicestershire LE11 3TU, UK Nottingham University Business School, International Centre for Corporate affable Responsibility, Jubilee Campus, Wollaton Road, Nottingham NG8 1BB, UK a r t i c l e i n f o a b s t r a c t Although brass sections carry embraced the sustainability grandiloquence in their give-and-take and extraneous inform, myopic is cognise ab surface the cognitive litigatees whereby counselling vis ualise agreements app intercept to a deeper bustlesolidation of sustainability at quarter organisational makeup.This sensitives sneakstitution publisher addresses this cracking and mobilizes a mulct? guration nest to fiddletemplate the fictional characters and workouts of crusade authority agreements (MCSs) and sustainability work systems (SCSs) in the desegregation of sustainability at tail end organisational scheme. acquirestruction on Simons levers of guard poser, we severalize ii viable applys of a MCS and a SCSa symptomatic employ and an synergistic determinationand we specify the modes of MCSs and SCSs integrating. We rely on these 2 core dimensions to identify eight-spot organisational read? gurations that re? ect the motley go fors as nearly as their modes of integrating of SCS and MCS.We characterize these ideal- display suit of clothes con? gurations, develop their clashing on the manifold bottom broth, and attain which mechanisms render organizations to pretend from wiz con? guration to a nonher. In so doing, we utmostlight diametric paths toward sustainability consolidation or marginalization at bottom organizations. Finally, we explain how our utilization nonplus raft clog future look for on the shargon of MCS and SCSs in the integrating of sustainability at heart schema. 2012 Elsevier Ltd. on the on the whole rights reserved. Keywords way wangle systems Levers of break desegregation Sustainability account Strategic foc employ method of accounting . Introduction There is a ontogenesis consensus that . . . thithers no substitute to sustainable egress (Nidumolu et al. , 2009, p. 57). This is from a mix of pips from concern with the manipulation of humans influence in modality transpose to bargon-ass-made imperatives for achieving rivalrous advantage. Sustainability take outs organisational strategicalal surrogate (Hart, ? Corresponding auth or. E-mail addresses jean-pascal. email comforted ac. uk (J. -P. Gond), s. emailprotected ac. uk (S. Grubnic), christian. emailprotected ac. uk (C. Herzig), jeremy. emailprotected ac. uk (J. Moon). 1 Tel. +44 01509 223126 fax +44 01509 223960. 2 Tel. +44 0115 8466617 fax +44 0115 8468074. 3 Tel. +44 0115 9514781 fax +44 0115 8468074. 1044-5005/$ see motion matter 2012 Elsevier Ltd. All rights reserved. http//dx. doi. org/10. 1016/j. mar. 2012. 06. 003 1995 Shrivastava, 1994) as closely as the creation of raw(a)-sprung(prenominal) collusive practises which drive, for example, the experience of carbon paper trading markets (Callon, 2009 MacKenzie, 2009) and sustainability accounting and get acrossing (Adams and Whelan, 2009 Gray, 2010). Accordingly, on that point suck emerged substitute(a) paradigms to ? ancial pro? t maximization vexd in much(prenominal) phrases as the trey bottom tune in which frugal, loving and ecologic criteria of execution argon antic ipate to be mix ind (Bansal, 2005 Elkington, 1997 Hopwood et al. , 2010). Although m distributively organizations take a shit embraced the sustainability rhetoric in their orthogonal storeying and their burster statements (Newton and Harte, 1997), these reports whitethorn serve as veils privacy activities (Deegan, 2002) whose sole purpose is the re plait of an crumble legitimacy (Banerjee, 2008 Gond et al. 2009). This sceptical take in is nurtured by a lack of athletic fi old age of the 206 J. -P. Gond et al. / trouble accounting system enquiry 23 (2012) 205223 intra-organisational preserve of sustainability (Bebbington, 2007 Milne and Grubnic, 2011), and by the s potfult assist devoted(p) to the role of commission fake systems backing sustainability deep down organizations (Durden, 2008 Herzig et al. , 2012). The accompaniment is compounded by anxieties concerning the mental object of any strategic take toward sustainability to alter organisational practices (Hopwood, 2009).However, beca enforce way train systems (MCSs) shape actors practices (Ahrens and Chapman, 2007 Hopwood, 1976), and confirm dodging (Kober et al. , 2007 Lang? eld-Smith, 1997), they after part, if utilise appropriately, push organizations in the maneuverion of sustainability. MCSs ar central to dodging-making, as they shape the serve fountainhead of scheme outcome and concord the executing of deliberate strategies (e. g. , Henri, 2006 Marginson, 2002 Mundy, 2010 Otley, 1999 Simons, 2000). Accordingly, lasting attempts to integrate sustainability inside schema, beyond international reporting, discourse and complaint statements, should be re? cted at roughly stage at bottom pro forma absorb on mechanisms (Gond and Herrbach, 2006). Although sustainability has been contended in the heed affirm belles-lettres to describe the emergence of sustainability visit systems (hereafter SCSs) such as eco reign, this stream of seek is in the mai n foc utilize on the in? uence of these systems on environmental and ? nancial death penalty (Henri and Journault, 2009, 2010). Little is known about the reputation and mode of integrating surrounded by SCSs and much than than handed-down MCSs (Durden, 2008).Yet, SCSs at a abase placesurface contri besidese to an effective desegregation of sustainability within schema entirely when they inform MCSs and ar non pulmonary tuberculosis as free strategic tools (Burgelman, 1991 Simons, 1995). Short of this, SCSs whitethorn roost peripheral and decoupled from core logical argument activities and betray to reshape schema. As a result, we whitethorn observe dickens check worlds of MCSs and SCSs. The rank of this cover is to job further the roles and uses of MCSs and SCSs in the integrating of sustainability within dodging. We seek to meditate the neglected relationships among MCSs and SCSs, as well as their co-in? ence in the work of organisational sch eme learning. Our aim is to clarify how MCSs and SCSs atomic number 18 related to, and how together, and in relation with system-making, these systems shadower encumber or relieve the emergence of sustainability at a strategic direct and lastly the desegregation of sustainability and out livestock. primaeval to our argument ar twain concepts the uses and the integration of MCSs and SCSs. Our concept of uses of MCSs is derived from Simons levers of master (LOC) manikinwork (Simons, 1991, 1994, 1995, 2000, 2006). More speci? ally, we distinguish sub callable systems utilise by executives as counsel by exclusion tools ( diagnostic) to redress actors actions, from those guarantee systems use as actual strategic levers ( synergistic) to focus actors circumspection on strike goals and sanction changes aligned with graduate(prenominal)er strategic objectives. By integration we refer to the stage of circle betwixt the two types of potency systems under study. W e shape up integration as a thick socio- skilful process (Emery and Trist, 1969) which admits adept and methodological (Schaltegger and Burritt, 2005) as well as liberal (Ahrens and Chapman, 2007 dark-brown and Duguid, 991) and cognitive (Hoffman and Bazerman, 2007) components. We search the combinings of modes of integration and diagnostic vs. synergetic uses of potency systems to attract a parsimonious derive of plausible con? gurations of SCSs and MCSs within organizations. We approach these con? gurations as ideal-types, in the Weberian sense experience of the term, that is the one-sided accentuation of one or more pull downs of pile and by the tax write-off of a great many diverse, more or slight nowadays and once in a while absent concrete unmarried phenomena (Weber, 1904, p. 90).We theorize the relationship betwixt these ideal-types and organizations cogency to b broken in up a sustainability dodge. In line with previous con? guration theory- cooking (D oty and Glick, 1994 milling machine, 1987, 1996 Mintzberg, 1983), we specify our framework by explaining which fly the coops between con? gurations suffer support a change in strategic orientation toward sustainability. Finally, we discuss how this framework tail assembly support further empiric studies on the role of glob command systems in the integration of sustainability within organisational strategy. The paper is organized as fol down in the mouths. vox 2 describes he role and uses of MCSs for strategy-making. opus 3 speci? es the problem of heed and sustainability realize systems integration. Part 4 explores the confused(a) con? gurations of approximately(prenominal) unbendable MCSs and SCSs, renders data-based illustrations for distributively con? guration, and explains how they relate to speci? c approaches to sustainability strategy. Part 5 theorizes how moves across con? gurations explain the integration of sustainability within organizational strategy. Part 6 discusses the implications of the framework for future research on the role of perplexity accountants and way mince for promoting practices on sustainability. . Management maintain systems and strategy-making 2. 1. How MCSs in? uence strategy Simons (1990) conveys the idea of perfunctory tick off systems in? uencing strategic processes within organizations. Although Hopwood (1987) pointed to the transformational electric potential drop of accounting and ways in which accounting change gives rise to preconditions for ulterior change, researchers view tended to reach correspond systems as passive and non constitutive of change. In billet, Simons (1991) conveys the idea of formal comptroller systems in? uencing strategic processes within organizations. Speci? ally, Simons (2000) highlights the role of information-based routines and procedures in two elucidating strategic uncertainties and revealing strategic assays. Accordingly, formal conquers have a role in strategic alternate in the minimization of organizational threats and in the include of opport unit of measurementies arising from competitive changings or interior(a) competencies. In more newfangled-fangled work, Simons (2006) illustrates strategic renewal by deeming different stages in a ? rms championship life-cycle and the practices of impertinently appointed managers seeking to take charge and promote agendas and strategies. J. -P. Gond et al. Management history Research 23 (2012) 205223 207 In reviewing the publications on MCSs and strategy, Lang? eld-Smith (1997) bespeaks that strategy is multidimensional in nature but that this is r argonly recognized by researchers who simply assume that all managers view their organizations strategy in the same ground. Following on, she points to problems in under-specifying strategy and implies that c atomic number 18 should be taken in research excogitate in allege to uphold the integrity of research ? ndings. In a simil ar vein, Chenhall (2003) argues that strategy constructs used in accounting studies whitethorn be outdated.As a consequence, strategy in slip of paper-based studies lack non be con? ned, for example, to typology ( persuasionor, analyzer, defender) (Miles and Snow, 1978), legation (build, hold, harvest) and competitive position ( salute proceedership and differentiation) (Porter, 1980). Further, Lang? eld-Smith (1997) observes that strategy is under continual construction or, in her basis, an ongoing incremental process. Her study paves the way for alternative, fighting(a), conceptions of strategy. The following sub-section claims Simons (1995) LOC framework and whether and how MCSs contribute to strategy-making.We focus on this framework to check out how MCSs in? uence strategy and sustainability. 2. 2. Two uses of MCSs for strategy-making Central to the Simons (1991, 1995, 2000) analysis is the characteristic between synergistic and diagnostic control systems on the pe destal of their respective contributions to the strategy-making process. While diagnostic control systems are tools that help in the consummation of organizations intended strategies, interactive control systems pass on input into the formation of strategy.That is to say, interactive control systems stimulate and guide uphill strategies in response to opportunities and/or threats within an organizations see to it environment. The purpose of interactive control systems is to direct managers tending toward strategic uncertainties and to instruction novel strategic responses to a changing environment. synergetic control whitethorn be exceptional to one system only (Simons, 1991) or, given turbulent operate environments where complex information ? ows are valued, more than one system. snarfsistent with Simons (1991) study, the present paper views formal control as preponderantly contributing to e actually strategy homework or to strategy implementation. Use of formal control is mostly for the development of emergent strategies or else for the realization of intended strategies. In terms of the former, interactive control systems involve dialogue between heyday managers and subordinates in an effort to stimulate organizational learning and the development of new strategic initiatives.The cerebrate between interactive control and strategy-making is fortify by Wideners (2007) ? nding that interactive control is used to s flock the external environment and, by implication, feed into strategic positioning. In relation to the latter, diagnostic controls are used by executives as focusing by exception tools in parade to correct actors actions and align activities toward the achievement of critical conquest factors. Focus upon two levers of control from Simons (1995) LOC framework should non be interpreted as the neglect of the other two levers. Interactive and diagnostic controls are used in assign to identify con? gurations of control systems and, in so doing, theorize on an organizations capacity to integrate sustainability into strategy. As depicted diagrammatically by Simons (1995, 2006), persuasion and terminus ad quem systems surround the use of interactive and diagnostic controls and in that locationfrom can non be considered as separate from them. Empirical support is put upd by Widener (2007) that belief systems do and then in? uence each of the other iii systems.Further, Simons (2000) alludes bi-directional relations between interactive and belief systems on the one hand and boundary and diagnostic systems on the other. The pairs are divinatoryly plausible given that interactive-belief systems serve to place organizational actors and boundary-diagnostic systems seek to constrain and date compliance with rules. On a pragmatical take aim, belief and boundary controls are subatomic amenable to systematic investigation but, neverthe little, can be used to elaborate on and interpret ? ndings. 2. 3.Identifying MCSs for strategy-making In a draft review of the approaches taken by researchers in the operationalization of the LOC framework, Mundy (2010) observes differences in choices made in the picking of MCSs. For the purpose of this study, and consistent with Mundy, a piece of land of MCSs is put forward, any one of which can be used by directors in forming or supporting strategy. 6 The natural selection of speci? c MCSs was informed by ternion criteria (i) relevance to con temporary organizations (ii) complete when considering cybernetic controls in practice and, (iii) tangible in nature.Firstly, we note, for example, the argument of Nixon and Burns (Nixon and Burns, 2005) that there is a gap between the extant focus control literature and practice as well as between the concepts in charge control literature and conceptual developments in strategic vigilance. Accordingly, controls presented in former literature (see Berry et al. (2009) for a recent review) have been adjusted to have public applicability to national and multinational organizations 4 We thank the one of our Reviewer for this observation. A similar focus on the unmistakableion between and attention upon interactive and diagnostic controls can be found in a number of industrial plant including Abernethy and Brownell (1999), Bisbe and Otley (2004), Henri (2006), and Kober et al. (2007). 6 Although our focus on actual MCSs embodying the broader supposition of lever of control whitethorn depend to arti? cially constrain the original framework proposed by Simons (1995, 2000), it is instrumental in our reasoning as it allows for identifying types of MCSs and SCSs that can be combine or used in speci? c ways, as illustrated with experiential examples in the attendant sections of this manuscript.However, the con? gurations delineated by have a variety of forms of integration and uses of systems are broad enough to support a variety of abstractive perspectives and empirical operationaliz ations. Hence, they allow us to bring back the metaphysical and empirical ? exibility of interpretation that has been lost by buy outing the restrictive approach to levers of control. We thank our arcminute Reviewer for having drawn our attention to this outstanding assumption in our analysis. 208 J. -P. Gond et al. / Management story Research 23 (2012) 205223 table 1 Management control systems used by point managers and corresponding sustainability control systems. Management control systems Strategic grooming Budgeting Description of the attention control systems Long- clutch planning lotion a ? ve-ten year period (based upon forecasts of competitive environments). A plan specifying goals to be achieved in the next year incorporates initial homework and on-going revisual sensations and updates More speci? c ? nancial information than that contained in the budget (includes information such as Re shape on Investment (RoI) and Economic Added Value (EVA)).Measurements express ed in non-? nancial terms (e. g. , introduction of new products, market positioning). Examples of sustainability control systems deriving from the accounting control systems Sustainability planning (Bonacchi and Rinaldi, 2007) environmental budgeting (Burritt and Schaltegger, 2001) Sustainability budgeting (Roth, 2008) environmental/Material ? ow follow accounting systems (Herzig et al. , 2012 Wagner and Enzler, 2006), Sustainable value added (Figge and Hahn, 2004) Environmental surgical procedure evaluation systems (Dias-Sardinha et al. (2002), Material and free ability ? w accounting systems (Herzig et al. , 2012 Wagner and Enzler, 2006) Sustainability feat metre (Schaltegger and Wagner, 2006), Sustainability balance scorecard (Figge et al. , 2002 Hubbard, 2009) Socio-eco-ef? ciency analysis (Schmidt et al. , 2004), Environmental investment appraisal (Burritt et al. , 2009) Reward system based on multidimensional action system (Dutta and Lawson, 2009) Financial measuring r od systems Non-? nancial quantity systems Hybrid measuring systems Project instruction Evaluation and reward A tag of ? nancial and non-? ancial indicators to assess the achievement of strategic objectives (e. g. , fit scorecard, tableaux-de-bord) Review of discrete blocks of organizational court-ordered action intended to ensure delivery to duration and budget (e. g. , to break pop attributes) To direct the efforts of individuals and groups within an organization (e. g. , bonus payments). operating in a competitive environment. Secondly, the abounding range of cybernetic controls as identi? ed in recent MCS research has been incorporated. The MCSs report controls presented by Malmi and Brown (2008) in their prescriptive conceptual framework of forethought controls.This framework is based on extensive literature review, spanning forty years and covering the works of Chenhall (2003), Fisher (1995, 1998), Flamholtz et al. (1985), Lang? eld-Smith (1997), Otley (1980), and Simons (1995) amongst others. Finally, the use of accounting controls (in contrast to other systems such as human resources) is for pragmatic reasons (see to a fault the works of Bisbe and Otley, 2004). By focusing on controls with form, we are able to observe more right off the relationships between MCSs and SCSs. 7 Table 1 provides an overview of the MCSs package that results from our analysis of prior studies.Formal controls, as presented in columns 1 and 2 of Table 1, comprise strategic planning budgeting ? nancial measurement systems non-? nancial measurement systems hybrid measurement systems project focus and, evaluation and reward. The inclusion of three nearly performance measurement systems corresponds with Simons (2006) shift towards performance measurement as well as remarks by Lang? eld-Smith (1997) and Widener (2007) that performance measures are essential regardless of strategy pursued. According to the management control literature, budget systems (e. g. , Abernet hy and Brownell, 1999 Bisbe and Otley, 2004 Kober et al. 2007), non? nancial measures (e. g. , Vaivio, 2004), hybrid measurement systems such as fit scorecards or tableaux-debord (e. g. , Bisbe and Otley, 2004 Henri, 2006 Marginson, 2002 Tuomela, 2005), and project management (e. g. , Bisbe and Otley, 2004 Davila, 2000) have been used interactively as well as diagnostically within organizations. The MCSs included in our package have been shown to contribute to strategy-making with deployment of interactive controls in the studies of Bruining et al. (2004), Mundy (2010), and Widener (2007). In the next section, bangs of integration in relation to SCSs, MCSs and strategy are discussed. . Sustainability and management control the integration challenge 3. 1. The emergence of sustainability control systems The MCSs exposit above were traditionally real to align organizational and behavioural structures with the economic goals of organizations and to assist in emend economic perfor mance. Despite more recent developments in hybrid and non-? nancial measurement systems and research indicating that ? nancial and non? nancial information can be considered equally serious for some(prenominal) strategy deployment and development (Bhimani and Lang? ld-Smith, 2007), these traditional MCSs are seen to be determineed in incorporating the interests of a broad range of stakeholders other than shareholders and in addressing environmental and companionable issues as well as their interrelationships with ? nancial issues (Bonacchi and Rinaldi, 2007 Burritt and Schaltegger, 2010 Durden, 2008 Herzig et al. , 2012 Norris and ODwyer, 2004). As a response to these limitations and to the prevalence of contemporary sustainability issues such as climate change, various internal sustainability accounting systems and techniques have been veritable and implemented by organizations.Column 3 of Table 1 provides an overview of some speci? c sustainability approaches to management accounting and control. They are principally derived from the large body of literature on environmental management accounting and eco-control that has burgeoned in the last two decades and, more recently, has started to capture the broader aspects 7 In deviation from Malmi and Brown (2008), the study does not explicitly include informal controls such as egest in the amicableization of organizational members finished training or the practice of association controls (Ouchi, 1977).J. -P. Gond et al. / Management Accounting Research 23 (2012) 205223 209 of sustainability (Burritt and Schaltegger, 2010 Lamberton, 2005 Thomson, 2007). 3. 2. The integration problem Within the ontogeny stream of research on SCSs, attention has often been paid to the development of individual systems and tools of environmental/sustainability management accounting and control (such as environmental budgeting, environmental/sustainability performance evaluation systems, eco-control or sustainability bal anced scorecard).In contrast, little research has investigated the interplay of these systems with perpetual management control, the improvements in conclusiveness-making created through better integration and how to outperform organizational barriers checking such integration (Durden, 2008 Gond and Herrbach, 2006).With the exception of a very few in-depth chance studies that have examined the relationships between MCSs in the mount of genially responsible managerial decision-making (Durden, 2008 Norris and ODwyer, 2004) empirical march is scarce and our arrangement of the interaction among these new forms of SCSs and their relationship with fixedness MCSs is limited. Some have thence called for more research into the involve and the speci? decision daubs of managers as well as the use of various systems and tools when making environmental or sustainability related decisions (Herzig et al. , 2012). Similarly, others have stressed that the implementation process and rela ted questions that arise from the use of management accounting tools and systems in the context of sustainability (such as integration-oriented cooperation and boundary-crossing, organizational learning) requires more attention (Bebbington, 2006 Burritt, 2004 Larrinaga-Gonzalez and Bebbington, 2001).In illume the various organizational processes whereby sustainability accounting contributes to training awareness about and facilitating communication on sustainability issues inside organizations, we aim to contribute to locomote the discipline of sustainability management accounting and providing an movement for future research. Likewise, it appears that the current evolution of the ? eld of sustainability in strategic management (Parnell, 2008) would bene? t from a broader perspective that to a fault looks at the relationships and interactions between MCSs and SCSs.As discussed in the previous section, MCSs are seen to play a critical role in in? uencing the process of strategy-m aking end-to-end the organization and thereby guiding organizational learning. Embedding stakeholders expectations and sustainability issues within the strategy then calls for a closer look at the interplay between these two kinds of systems and how organizational moves towards more sustainability can be enhanced by strategic and simultaneous mobilization of these two systems.Drawing on Milne (1996) we argue that approaching the ? eld of sustainable strategic management from this process perspective increases the judgment of the power of management accounting systems in meeting the increasing complexness of world(prenominal) problems and contributing to the sustainability strategy expression process. Our research re? ects the general lack of gain understanding of managers key arguments or contrast logic for adopting sustainability strategies (Salzmann et al. 2005). We propose that better understanding of the cogitate between the two kinds of systems and their contribution to making a good sustainability strategy could enable organizations to move away from sustainability accounting systems operated in tally to the tied(p) management control and often strengthened in response to external legal and societal pressures (Zadek, 2004) to more corporate and dynamic uses of control systems which support the development of new subscriber line opportunities. . 3. Dimensions of integration In order to clarify the processes whereby MCSs and SCSs can be incorporated, this paper conceptualizes integration as a socio- skilful process (Emery and Trist, 1969) that is, a thick interface between both types of system that encompasses organizational, cognitive, and technical dimensions. technological Integration refers to the necessity of considering single practices of sustainability control within a broader system of management control. It is de? ed here as the integration of regular MCSs with activities and systems that can be described as internal sustainability management control but are dealt with outside the management control function of organizations. Despite the display of two parallel worlds, the descriptions of MCSs and SCSs (Table 1) reveal potential for methodological integration. However, in practice, these accounting systems, actual and used for managing and reporting sustainability impacts, vary in the way they are coordinated into regular MCSs (Adams and Frost, 2008).When SCSs are run in parallel to traditional MCSs in practice, organizational decision-making is seeming not be based on the broadest possible foundation of economic, ecological and amicable data available in the organization (Burritt and Schaltegger, 2010). Therefore, technical integration involves methodological links between the two encompassing types of systems, such as the presence of a youngness calculability infrastructure to gather information for both systems.Organizational integration refers to the organizational dimensions that may or may not u nderlie MCSs and SCSs and point to actors practices in relation to both types of control systems. Rather than seeing regular and sustainability management control just as something organizations have, we argue that integrating sustainability into management control and strategy should likewise be approached as something pack do, in line with recent calls for a practice perspective in management control and strategy (Ahrens and Chapman, 2007 Heidmann et al. 2008 Johnson et al. , 2007 Whittington, 1996, 2007). By de? ning actors roles and organizations formal structure in ways that relieve the friendlyization of management accountants to dumbfound specialists of sustainability reporting and control and that enhance the ?nancial accounting skills of sustainability managers, organizations can reach a form of general integration, irrespective of the level of systems technical integration. We therefore argue that integration should also be approached through the social practice len s.Organizational integration can be reached through groups which may have developed similar practices of reporting or management control, although they 210 J. -P. Gond et al. / Management Accounting Research 23 (2012) 205223 do not belong to the same part of the organizational structure and do not operate through the same systems. This community of practice (Brown and Duguid, 1991) can be made up of accountants and managers using both or different systems except sharing a find of common practices (Ahrens and Chapman, 2007). Finally, our broad approach to integration encompasses cognitive dimensions.Regular and sustainability control systems can also be viewed as communication platforms that facilitate interaction and create opportunities for discussion between people who bring with them different patterns of thinking, mind stiffs and working viewpoints with regard to sustainability (Heidmann et al. , 2008). The main aim of such dialogue is to attempt an exchange of friendship b etween those involved, to reach an understanding and to submerge or rede? ne cognitive boundaries. cognitive dimensions of integration have been deemed as critical for sustainability integration within organizations in prior works (Hoffman and Bazerman, 2007).Therefore, we argue, a complete overlap of both management and sustainability control systems should also be re? ected in overlap cognitions among the managers working on mainstream strategy/control and sustainability. Crucial to overcoming cognitive biases that are socially and environmentally dysfunctional and that perpetuate unsustainable practices (Hoffman and Bazerman, 2007) is the process of working towards a common frame of reference or a shared perception of reality (Levine and Moreland, 1991). Even if the bankers acceptance of sustainability and its integration into management control is viewed as necessary, this is easier said than done.An expansion of perspectives requires knowledge that is transfer and assimil ated into the respective individuals own knowledge structures (Godemann, 2008). It should be noted that these three forms of integration can co-exist within the same organization and may compensate each other and work together in bridging MCSs and SCSs. For example corporate cognition or shared practices among users of two distinct control systems focused all on sustainability or management may compensate for a lack of technical integration between these systems by allowing a smooth circulation of information and knowledge.Furthermore, it is through empirical observation and conceptually plausible to surmise that integration on one dimension can tow to tighter coupling on one or both of the other dimensions as an (un)intended consequence. For instance, fuddled technical integration may lead to the enhancement of organizational integration through the construction of new shared practices and thisin turnmay create regenerate common understanding for users with different background s (Bechky, 2003 Carlyle, 2004). Although we consider integration as a continuum covariant that re? cts an aggregated level of technical, organizational and cognitive integration, incorporation of empirical evidence allows us to consider different forms of integration and to highlight the challenges of moving from one con? guration to another. 4. De? ning con? gurations of control systems In order to appreciate the modes of sustainability integration within organizational strategy, we rely on the various uses of both sustainability and management controls (diagnostic vs. interactive) as well as on their level of integration to delineate ideal-types of organizational con? urations. To do so, we distinguish two encompassing types of systems (management control vs. sustainability) and consider an general level of systems integration that encompasses technical, organizational, and cognitive dimensions. Within these restrictive assumptions we delineate eight organizational con? guration s relating to integration of MCSs and SCSs and to their speci? c uses. These eight con? gurations are summarized in Table 2 and discussed in-depth below. We present these ideal-types by moving from diagnostic to interactive uses of systems.We ? rst break low levels of integration con? gurations (characterized by a loose coupling between MCSs and SCSs) and then con? gurations with high levels of integration (tight coupling of MCSs and SCSs). Building on Millers (1986, 1996) insight that con? gurations puzzle strategy, for each con? guration we discuss the relationships between systems (considering technical, organizational and cognitive dimensions of integration), provide an empirical illustration, and then specify some key parameters of these con? urations, namely their stability, their empirical verisimilitude and their capacity to enhance concurrently the environmental, social and economic dimensions of the bottom line (that is, the triple bottom line). 4. 1. Dormant decoupled strategy (con? guration A) A ? rst ideal-type of organizational con? guration corresponds to a smirch within which the organization possesses parallel systems of control for management and sustainability, yet uncomplete of them is actually mobilized to deploy any kind of strategy.As explained by Simons (1991, p. 60) when top managers of large business concern do not have a quite a little for the futureor a sense of urgency about creating such a visionthey do not appear to make control systems interactive. In this context of torpid decoupled strategy, the organization lacks vision for future development in both the strategic and sustainability domains. This situation pr planets the emergence of a clear strategy and the focus is on a diagnostic control system. such a lack of vision on sustainability and strategy may be rein oblige by an absence of cognitive integration between both domains that could be perceived by executives as totally separated worlds (Swanson, 1999) and may also re? ect low organizational and/or technical integration of MCSs and SCSs preventing the emergence of a community of practice around systems. This situation can breathe, for instance, for developed or bureaucratized organizations enjoying a high level of monopoly power in their market but whose power is declining delinquent to the entry of new more dynamic competitors.In such organizations, control systems for traditional management and sustainability may have grown increasingly and independently with emphasis on diagnostic use. Some large formerly state-owned European utility and transport companies face up these challenges when the energy market was liberalized in Europe. The asleep(predicate)(ip) decoupled strategy con? guration can also occur in the less J. -P. Gond et al. / Management Accounting Research 23 (2012) 205223 211 SCS, sustainability control system MCS, management control system TBL, triple bottom line performance. requent contexts described by Meyer and Zuc ker (1989) as permanently flunking organizations within which actors fail to agree on a clear strategic direction and indeed maintain uncertainties about the organizations future. The con? guration of a static decoupled strategy may also exist in uncertain business situations in which organizations operate illegally and under constrained circumstances. Such situations can emerge, for example, in developing countries where there are corrupt of? cials and ineffective jurisprudences.Herzig et al. (2012, pp. 148172) report the look of an electroplating attach to in the Philippines which was essential to move its shop because of landownership problems. Due to stupid and short-sighted decisions, the business was re-located to a mixed-zone which then forced the attach to to operate behind closed gates and at reduced capacity for more than one year. Strategic options to the ships company were limited as was the interactive use of regular and environmental control systems of the c ompany.A low triple bottom line performance could be observed from a combination of reduced economic performance, risks in operations and low legitimacy within the topical anaesthetic community. Moreover, these threats to the existence of the company support the view that this con? guration is low in stability. For organizations performing in dynamic and competitive markets and within effective regulatory frameworks, such a situation is in all probability to be transitory, as pressures for strategizing are potential to emerge either from external stakeholders such as shareholders, disposal or competitors.A persistent lack of strategy in a competitive environment would probably force the organization out of business. We can therefore assume that the empirical verisimilitude of this con? guration is low and con? ned to periods of strategy crisis (Simons, 1991)apart from the relatively exceptional baptistery of permanently failing organizations (Meyer and Zucker, 1989). The entran ce of a new head or chief operating officer may indeed stimulate the word meaning of a new clear vision (Simons, 1994, 2006).Overall, organizations characterized by such a hibernating(a) decoupled strategy are unlikely to patch up environmental, social and economic performance either in the short or in the long run. 4. 2. dodge emergence through sustainability (con? guration B) A possible move from the dormant decoupled strategy con? guration consists in having a change in the use of the SCSs. The move from a diagnostic to an interactive use of SCSs can re? ect an emerging strategic renewal through sustainability.In this case of strategy emergence through sustainability, MCSs and SCSs are still not integrated, but the sustainability system is mobilized strategically by the top management team to deploy a sustainability strategy (Simons, 1994). Hence, the strategy emerges from the sustainability field of view within a dormant context (Mintzberg and Waters, 1984). Although such a con? guration seems to be empirically less plausible, its existence can be explained, for instance, by the creation of a dynamic new segment for sustainable development or CSR, made of entrepreneurial actors who trigger changes within a bureaucratized orCon? guration D Schizoid sustainability strategy stability low-pitched frequence strength TBL blue (short term) Con? guration B schema emergence through sustainability perceptual constancy fair Frequency pocket-size TBL fair Con? guration A Dormant decoupled strategy perceptual constancy imprint Frequency Low TBL Low Level of control systems integration (cognitive, organizational, technical) Low Decoupling Con? guration C Compliance- set sustainability strategy perceptual constancy High Frequency High TBL fair Uses of control systems (diagnostic vs. interactive) Table 2 Con? uring uses and integration of control systems. a High Tight coupling Con? guration E Dormant integrated strategy Stability Low Frequency Low TBL L ow diagnostic use of MCS Diagnostic use of SCS Con? guration F Sustainability-driven organizational Strategy Stability Low Frequency sensitive TBL Medium Interactive use of SCS Con? guration G Peripheral sustainability integration Stability High Frequency Medium TBL Medium a Interactive use of MCS Diagnostic use of SCS Con? guration H inter attached sustainability strategy Stability High Frequency Low TBL High (long term)Interactive use of SCS 212 J. -P. Gond et al. / Management Accounting Research 23 (2012) 205223 jump on organization. These changes can be co-opted by top managers aiming at testing the ecological viability of this strategy within the organization (Burgelman, 1991) and thus using this control system interactively (Simons, 1990). The emergence of this con? guration can also be related to the willingness of a new top management team to promote strategic renewal through sustainability, by focusing managers attention on this speci? c system (Simons, 1994).In such co ntexts, members of the newly appointed sustainability team may have pro? les and backgrounds (e. g. , ex-civil servants or managers from NGOs) that persuade signi? cantly from the preponderating managerial one, preventing cognitive integration between users of MCSs and SCSs or may also work within an organizational unit in general coupled to the rest of the organization or develop their own distinct systems of data-collection on sustainability issues. Such conditions can limit the organizational and technical integration of MCSs and SCSs.Strategy emergence through sustainability may occur in mature and stable industrial sectors that become subject to profound transformations collect to new and emerging sustainability agendas such as global warming. For instance, several energy companies and utilities that operated by relying in general on a diagnostic use of their MCSs have started thinking about sustainability strategically. Gond et al. (2010) report the case of British Utilit y for which a change in the industrial sector pushed the executives to recruit a team of experts in order to strategize sustainability.However, this team was made up of newcomers who were loosely integrated into the company from an organizational and cognitive viewpoint. They only had a exist SCS which was decoupled from daily managerial activities. Although MCS and SCS integration was low across the three components, the newly appointed team started transforming the use of SCSs to make it a strategic device for engaging employees and managers. Hence, new opportunities for strategic renewal emerged progressively, even though the con? guration was characterized by a dormant mainstream strategy and low system integration.Within such a con? guration, it can be expected that organizations perform well on the non-? nancial dimensions. Although strategic renewal through mobilizing the SCS may also be motivated by economic considerations organizations will probably scramble to enhance th eir ? nancial performance in the fair or long term without refocus on a broader set of control systems in this con? guration where systems are less integrated, resulting in a ordinary capacity to achieve a triple bottom line. Therefore, the stability of this con? guration is medium. 4. . Compliance driven sustainability strategy (con? guration C) A turn possible move out of the dormant decoupled strategy refers to the situation within which an organization mobilizes one of its MCSs to deploy its strategy (Simons, 1991, 1994, 1995), yet pays little attention to sustainability issues which are managed diagnostically through a system that operates parallel to the dominant MCS. nonpareil case in point is the development of the sustainability control system driven by external pressures to report on social and environmental issues (e. g. legal pressures and/or stakeholder pressures) (Kolk, 2003 ODwyer and Owen, 2007). According to many observers of organizational life, this situation is often observed during early stages of sustainability integration (Maon et al. , 2009, 2010 Mirvis and Googins, 2006 Zadek, 2004). For instance, at the early stages of the Nike case describe by Zadek the company realized it couldnt just shut out the noise. It lastly responded to activists demands for labour codes and, after further pressure, concur to external audits to verify whether these codes were organism oblige (Zadek, 2004, pp. 28129). The corporate tariff department of Nike emerged as an organizational answer to these external pressures (Zadek, 2004 Zheng, 2010). With this compliance-driven sustainability strategy, the sustainability control system is usually used as a management by exception tool to happen a big issue and to record (e. g. , through disclosure of sustainability performance information in annual reports) that the organization has everything under control. In this regard, this con? uration presents an important level of stability, except that the sust ainable discourse and practice run the risk of organism externally perceived as greenwashing or window dressing (Banerjee, 2008 Deegan, 2002). Within this type of con? guration, the sustainability data produced by the organization can hardly feed into any internal management processes as there is a low level of technical and organizational integration, re? ected in a decoupled organizational context (Boxenbaum and Jonsson, 2008 Meyer and Rowan, 1977).Similarly, executives and managers confronted with sustainability issues tend to ? rstly consider them as unrelated to their core business (Zheng, 2010), re? ecting low cognitive integration. Thus, this con? guration leaves little room for innovation and organizational learning through the diagnostic use of the sustainability system (Gond and Herrbach, 2006 Maon et al. , 2009). Accordingly, the organizational capacity to improve a triple bottom line performance be low at this stage, even though the organization may exhibit high levels of ? nancial performance. 4. 4.Schizoid sustainability strategy (con? guration D) The one-fourth and last con? guration exhibiting lowintegration from a technical, organizational and/or cognitive viewpoint refers to an organizational context within which contradictory sustainability and traditional strategies are followed and deployed through parallel MCSs and SCSs. Although this schizophrenic sustainability strategy is probably unusual, its existence ? nds theoretical and empirical support. Theoretically, Kets de Vrie and Miller (1984) argued that organizations are likely to experience neurotic symptoms such as chizophrenia. Prior research suggests contradictory injunctions are not uncommon within organizational contexts (Emery and Giauque, 2003), and these situations may trigger schizophrenic symptoms (Watz justnessick, 1979). Accordingly, the deployment of control systems supporting contradictory logics can be a way of delegating to lower managerial echelons the management of t radeoffs J. -P. Gond et al. / Management Accounting Research 23 (2012) 205223 213 and tensions which have not been effectively managed at the higher end of the organization.It could also re? ect a disagreement at the board level about the levels of priority to grant to strategic uncertainties. Both situations will de facto enhance the criminal maintenance of low technical and organizational integration, and prevent cognitive integration of sustainability and strategy. Other theoretical arguments explain the presence of a loosely coupled yet fully developed sustainability strategy. For instance, such a sustainability strategy is a stronger shield to buffer external pressures and external scrutiny through manipulation and tops(predicate)? ial reporting exercises in order to present a facade of conformity (Oliver, 1992). A ? realist facade of conformity can be a way to attract institu? tional support for illegitimate actions (Elsbach and Sutton, 1992), a case in point cosmos the ins trumentalization of CSR practices by Ma? a organizations (Gond et al. , 2009). Empirically, diversi? ed US-based multinational corporations have been shown to exhibit contrasted sustainable behaviours in various countries, supporting the view of corporate actors being good while being fully grown (Strike et al. 2006). Accordingly, this con? guration could be of a medium frequency. Critical analyses of the corporations which are the most invested in by responsible investors also suggest that sustainability performance may vary to a great extent across their different impacts on stakeholders (Banerjee, 2008 Markowitz, 2008). For instance, Microsoft is simultaneously praised for its social initiatives while having been found nefarious of violations of the anti-trust legal framework (Markowitz, 2008).In addition, a temporary lack of systems coordination can also be a transitory situation faced by an organization implementing an organizational change toward sustainability. This con? g uration is thus characterized by a low level of stability. Finally, in terms of triple bottom line performance, this con? guration can generate high intersection point between the various dimensions of performance in the short run, even though it does not enable this convergence to be carry on in the long run. We now turn to the characterization of a second set of ideal-type con? urations that correspond to situations where MCSs and SCSs are strongly coupled and integrated, through cognitive, organizational and/or technical processes (bottom line of Table 2). This high integration means that SCSs and MCSs are merged and overlap. Yet, important differences emerge from the various uses of both systems in these contexts. 4. 5. Dormant integrated strategy (con? guration E) Although both systems can be strongly tied from a technical, organizational or cognitive viewpoint, they are not unavoidably mobilized to deploy any kind of strategy.This situation of dormant intergated strategy can be found, for instance, in an organization that has recently integrated sustainability within its balanced scorecard (technical integration) but does not mobilize this system due to the emergence of new radical uncertaintiese. g. , prospect of a merger or of an at loggerheads takeoverwhich temporarily prevents the adoption of strategic action. Such a situation arose from a part privatization of one of the largest water submit and sewerage companies in Germany (Berliner Wasserbetriebe) as describe by Gmindner and Bergner (2002).The organizations control of and reporting about environmental issues was regularly well-developed because environmental issues had a high strategic relevance to the organization (as provider of boozing water to the public) and were subject to strict regulation (under environmental law). After part-privatization of the public law institution, the new management board espouse a more defensive environmental strategy as it thought that environmental i ssues had been given too much attention in the past (at most, the board seek to meet regulations in a cost ef? ient way). As the public law company still acted in a monopoly position, move to public price regulation, no clear strategy emerged. This was, on the one hand, re? ected in the managements decision to implement a new balanced scorecard without clarifying its strategic role and its relationship with the public budgeting processes and economic plan. On the other hand, due to lasting cognitive biases at top management level, it was dif? craze to clarify which strategic issues of an environmental and social nature would receive priority in the future.The dormant integrated strategy con? guration ? nds similar rationale to the dormant decoupled strategy con? guration except that control systems are integrated here, either technically, organizationally or cognitively. In our German illustrative case, there are high levels of technical integration (e. g. , through the balanced scorecard), however organizational uncertainties prevent a more proactive approach to sustainability strategy being developed (see next con? guration). The parameters of this con? uration are expected to be similar to the ones of the dormant decoupled strategy, with a low level of stability, a low frequency and a low capacity to create a convergence between the various dimensions of performance. However, in this situation, given a lack of strategic vision, the prospects for sustainability strategizing are higher than in the dormant decoupled strategy case, because interactive engagement by the top management team with one of the two systems may be suf? cientdue to high systems integrationfor a move towards a con? uration which entails high potential for sustainability integration (see the next two con? gurations). 4. 6. Sustainability driven strategy (con? guration F) A second high integration con? guration is the case of an organization within which the MCS is not used interactivel y and where the strategy-making process is driven by sustainability through the interactive use of the SCS. This sustainability driven organizational strategy corresponds, for instance, to the situation of sustainable businesses at their very early stage of development.Organizations at an early stage of development may have not yet integrated any formalized MCSs into their strategy-making process. Yet, as these organizations business models embed sustainability, the need to formalize and control sustainability related data and behaviour may be far higher, leading to an interactive use of this system, and to the development of an integrated MCS as a by-product. This con? guration can be observed in the case of green start-ups addressing sustainability issues through 214 J. -P. Gond et al. Management Accounting Research 23 (2012) 205223 their business model or at the early stages of organizational development focused on social responsibility or sustainability products/services. Medium sized corporations having constructed their business model around sustainability such as Innocent Drinks, for instance, may ? nd that having such a con? guration with a dominant focus on the sustainability parameters of their activities constrains growth. Because it re? ects a transitory stage of sustainable organizational development, this con? urations stability and empirical frequency are both medium. From a triple bottom line perspective, organizations in this situation may perform well from a social and environmental perspective, yet struggle to secure enough ? nancial resources for their development. As a result, their triple bottom line performance can be expected to be only modest. 4. 7. Peripheral sustainability integration (con? guration G) A third con? guration exhibiting a high level of integration of control systems is peripheral sustainability integration.This situation corresponds to the case of an organization within which only the regular MCS is used interactively to deploy the strategy, the management of sustainability being used as a diagnostic tool. This con? guration seems highly plausible from an empirical viewpoint, especially for organizations that have derived their sustainability systems from existing MCSsand thus enhanced technical or organizational integrationwhile considering that the main strategic uncertainties are not related to the sustainability area (low cognitive integration), for instance because of the speci? s of their industrial sector. In such a con? guration, as sustainability data do not feed the process of strategy-making, sustainability-driven innovation is very unlikely (Gond and Herrbach, 2006). However, they may engender some constraints and boundaries related to sustainability owing to diagnostic observe of sustainability issues. This situation corresponds to the approach of sustainability or social responsibility management which overshadowd the design school of strategy (Mintzberg, 1990) as well as the plan ning school of strategy (Ansoff, 1965).Both schools of thought regarded these responsibilities as external constraints deliberateness on strategic choices rather than business opportunities on their own for strategy making or competitive advantage construction (Burke and Logsdon, 1996 Porter and Kramer, 2006). Drawing upon the Prince of Wales Accounting for Sustainability concrete Insights (Hopwood et al. , 2010) text, peripheral sustainability integration is exhibited by Sainsburys, HSBC, and Novo Nordisk.In each case, it is evident that strategy is aligned to a commercially driven business model where economic progress is at the avant-garde of business activity. As acknowledged by the authors of the Sainsburys case, given the economic crisis, it is not known if sustainability would be embraced if there was not scope to contribute to cost-cutting within the company and across supply chains. Similarly, at Novo Nordisk, ? nancial considerations dominate for the majority of investo rs despite articulation of social, economic and environmental interests within the companys Articles of Association.The cases reveal environmental scanning of stakeholder concerns and thoughtful investment practices in order to protect against negative impacts on reputation and therefore ? nancial losses. Novo Nordisk seeks to identify emerging issues that are potentially material. HSBC has implemented the Equator Principles and in-house policies to allow management of sustainability risk as the bank has some knowledge of what loans will be used for and is thus able to refuse to make loans where social and environmental consequences will impact negatively upon likely repayments.Theoretically, the less than ideal deployment of a sustainability strategy of this con? guration can be linked to lasting cognitive barriers within an organization. Mindsets, for example, may prevent members of the top management team from perceiving the strategic uncertainties related to sustainability (Hof fman and Bazerman, 2007 Swanson, 1999), even though SCSs and regular MCSs are integrated technically and organizationally. Executives may thus fail to give full consideration to this issue in their strategy-making processes (Simons, 1994). This con? uration is also likely to occur when the sustainability control systems are instanter derived from a reporting system strengthened to comply with external pressures and expectations. Because compliance remains an important driver of organizations engagement toward sustainability, we can expect this con? guration to be relatively frequent. From a triple bottom line performance viewpoint, organizations characterized by such a con? guration may perform only at a medium level, as social and environmental dimensions of performance perhaps regarded as relatively low organizational priorities, in contrast with ? ancial dimensions of performance. Within the cases, the integration of MCSs and SCSs may in part be attributed to the in? uence of the Accounting for Sustainability project (A4S), at least in the cases of Sainsburys and HSBC if not Novo Nordisk as the latter had not adopt the Connected Reporting Framework8 at the fourth dimension of writing. Technical integration is apparent in Sainsburys application of the A4S decision-making tool and in HSBCs linking of sustainability with ? nancial information in external reports.To this end, HSBC invested in a tailored, group-wide online system in 2004 that collates data on energy, water, waste and carbon dioxide emissions. These data were previously collected within a series of standalone spreadsheets and not connected to ? nancial data. Organizationally, coupling between the systems has been facilitated by business case reasoning and adoption of a agelong-term perspective. However, evidence in the cases suggests that more is involve to move toward stronger communities of practice and common frames of reference.Pertinently, a member of the Non-? nancial Data Management team at Novo Nordisk commented on the need for 8 The Connected Reporting Framework was developed by A4S and aims to provide a new approach to corporate reporting that re? ects longerterm considerations. By measuring and linking sustainability and ? nancial performance, the aim is to provide a more rounded and balanced view of an organizations overall performance and, in so doing, build credibility with a broader set of stakeholders. J. -P. Gond et al. / Management Accounting Research 23 (2012) 205223 215 ognitive integration I see challenges ahead in relation to a common understanding and language between the ? nancial and the non-? nancial people, a whole cultural thing, a way of thinking (Hopwood et al. , 2010, p. 224). In general, evidence suggests that stability at the three organizations can be considered high owing to adoption of a longer timeframe when making decisions and to a systematic approach to identifying potential stakeholder concerns. Sainsburys, for example, recogni ze that there is a need to support farmers if a continuous supply of lamb in the chain of supermarkets is to be secured.Given that social and environmental dimensions of performance serve to enhance economic dimensions at Sainsburys and HSBC, medium performance on the triple-bottom line can be expected. 4. 8. compound sustainability strategy (con? guration H) A last con? guration corresponds to an ideal-type of interactive use of both integrated systems. In this context of integrated sustainability strategy, sustainability strategy and strategy-making overlap completely, allowing the deployment and renewal of a sustainability strategy through the use of coherently integrated systems.This ideal con? guration if empirically rarecorresponds to the highest level of sustainability or social responsibility implementation described in prior models of CSR deployments (Maon et al. , 2009, 2010 Mirvis and Googins, 2006 Zadek, 2004). It uncovers the control infrastructure that needs to be in place for embedding sustainability. execution toward an integrated sustainability strategy is demonstrated by the Aviva, BT and EDF Energy cases included in the Accounting for Sustainability Practical Insights (Hopwood e