Accounting, Organizations and Society 28 (2003) 127–168 www.elsevier.com/locate/aos

Management control systems design within its organizational context: findings from contingency-based research and directions for the future
Robert H. Chenhall
Department of Accounting and Finance, Monash University, Clayton, Victoria 3168, Australia

Abstract Contingency-based research has a long tradition in the study of management control systems (MCS). Researchers have attempted to explain the effectiveness of MCS by examining designs that best suit the nature of the environment, technology, size, structure, strategy and national culture. In recent years, contingency-based research has maintained its popularity with studies including these variables but redefining them in contemporary terms. This paper provides a critical review of findings from contingency-based studies over the past 20 years, deriving a series of propositions relating MCS to organizational context. The paper examines issues related to the purpose of MCS, the elements of MCS, the meaning and measurement of contextual variables, and issues concerning theory development. A final section considers the possibility that contingency-based ideas could encompass insights from a variety of theories to help understand MCS within its organizational context. # 2002 Elsevier Science Ltd. All rights reserved.

1. Introduction The three purposes of this paper are to provide a review of empirical, contingency-based research as it has developed since the early 1980s, to critically evaluate this work, and consider a variety of theoretical foundations that may assist in developing future research. The review is based, in the main, on research employing survey-based methods that has been published in a broad selection of accounting and management journals.1 The review

is selective and illustrative of issues pertinent to the