Title: The role of managerial control in innovation processes: an empirical analysis among Italian firms

Authors: Anna Maria Arcari; Anna Pistoni; Stefano Peluso

Addresses: Department of Economics, Insubria University, Italy ' Department of Economics, Insubria University, Italy ' Department of Statistic Science, Università Cattolica del Sacro Cuore, Italy

Abstract: This paper investigates the link between the managerial control system (MCS) and product/service innovation. The aim is to provide an empirical analysis of MCS role in innovative firms, highlighting MCS characteristics that better support the innovation processes. The sample consists of 104 Italian manufacturing firms belonging to those sectors featuring the largest number of registered patents. The results show that an MCS can enhance innovation but it can also inhibit it depending on the role it plays. Indeed, an MCS may hamper innovation if it is limited to pursuing diagnostic functions. Conversely, innovation is positively associated to an interactive use of the MCS. The results of this study may have major implications for practitioners. Organisations hoping to enhance their innovation performance should develop an MCS able to stimulate free thinking and search for opportunities, while avoiding a strict compliance with rules and rigid performance evaluation.

Keywords: innovation; management control systems; diagnostic control; interactive control; formal control mechanisms; informal control; Italy.

DOI: 10.1504/IJBPM.2018.092760

International Journal of Business Performance Management, 2018 Vol.19 No.3, pp.349 - 370

Received: 10 Feb 2016
Accepted: 27 Dec 2016

Published online: 29 Jun 2018 *

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