Management control and the production environment: a review

Abstract

A modern production environment reasonably requires a management control system that is tailored to fit the specific circumstances of this kind of organization. A modern environment relates to many elements: flexible machines, low inventories, production to order, etc. This paper reviews and discusses the literature that addresses the relationship between elements of the production environment and aspects of management control systems. This review of the relevant conceptual and empirical research in the field reveals limited and inconclusive evidence on the extent to which organizations have aligned management control systems with the production environment. The review indicates that new forms of production and inventory control (e.g., just in time) are not always easily captured by the conventional classifications of technology that are commonly used in the empirical literature. The paper also addresses problems and issues related to the existing literature, and makes suggestions for avenues of future research.