Abstract
The impact of management buy-outs (MBO) on strategy and management control systems (MCS) is little understood. Previous research by [Ace. Org. Soc. 17 (1992) 151] focused on efficiency-enhancing buy-outs that were a feature of the early development of the market. However, MBOs are heterogeneous and more recent developments have involved ownership changes that stimulate entrepreneurial practices. The novel contribution of this paper is to use Simons’ [Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal, Harvard Business School, Cambridge, MA, USA] classification of beliefs systems, boundary systems, diagnostic and interactive control systems to explore management control in these newer forms of MBO.Within-case analysis and cross-case comparisons from two buyout firms are used to capture the interaction between management control systems and competitive strategy formulation, implementation and modification. This evidence supports argumentsthat buy-out managers undertake efforts in balancing the traditional systems with the newer systems that stimulate
opportunity-seeking and learning.
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Keywords: Management control systems; Strategy change; Management buyouts
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