Management Control Systems in Multinational Corporations: an Exploratory Study on Italian Business Groups

ABSTRACT The main topic of this study is the analysis of the management control system adopted by large business groups. To develop this study we opted for the contingency framework, which is often applied by researchers to study the way control mechanisms function under different conditions. The purpose of this paper is to analyse those variables which determine similarities and differences in the management control systems used to control large groups of companies. We first analyzed the previous literature on the control of groups and multinational corporations in order to define the evolutionary path of these studies and to build a framework of rules to be used to design a control mechanism. We then observed the features and the way in which the management control systems function in four of the most important groups of companies in Italy. We developed our research by applying a qualitative method based primarily on interviews with management, case writing and cross case analysis. The principal result of this research is a number of inductions useful for enriching the entire framework of rules to apply when planning a group control mechanism.