Qualitative Research in Accounting & Management

Relational systems between actors in the face of management control’s contradictory injunctions
Fabienne Oriot
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Fabienne Oriot, (2005),"Relational systems between actors in the face of management control’s contradictory injunctions",
Qualitative Research in Accounting & Management, Vol. 2 Iss 1 pp. 108 - 128
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 108 QRAM Vol 2, No 1, 2005

RELATIONAL SYSTEMS BETWEEN ACTORS IN THE FACE OF

MANAGEMENT CONTROL’S CONTRADICTORY INJUNCTIONS

Fabienne Oriot*

Abstract

Many French organisations have recently chosen to decentralise their

management control systems, extending them into the middle-management
level. This “irrigation” of management structures by management control
systems called for a study of the articulation between central management
control practices (at the head-office level) and local management control
practices (at the unit level). This exploratory study investigates the meaning that
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the actors in the organisational units—local controllers and operational

managers—give to their practices aimed at implementing the central
management control system

Starting from the standpoint of the subjectivist contingency theory, this research
is founded on an interpretive epistemology and is based on a comparative
analysis of eight case studies conducted at the regional level of a large French
bank’s distribution network. The “Findings” section shows that the central
management control system, developed at the bank’s head office, conveys a
good many “contradictory injunctions”. A typology of the differentiated regional
implementation practices is proposed. Next, the interactions between local
actors exert a complex influence on these practices. Finally, a qualitative
typology of the relational systems in play between management controllers and
operational managers is proposed.

_________________________________________________________________________
*Fabienne Oriot is a Professor of Management Accounting and Management Control at Ecole
Superieure de Commerce de Toulouse (Toulouse Business School), France.
 Oriot 109

INTRODUCTION

This contribution proposes to study both the practices aimed at

implementing a management control system in an organisation and the actors
who originate those practices. Indeed, over the last few years, many
organisations have chosen to “irrigate” their structures with management control
tools, to create responsibility centres at middle-management level and to assign
management controllers to them. Working closer to operational managers,
management controllers should, indeed, be in a better position to take into
account the specific contexts of their decisions.
In such a context, then, it is important to establish what role operational
managers and management controllers actually play during the implementation
of a management control system in the intermediate-level units of an
organisation, as well as to enquire into the relations between these two
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categories of actor (Hofstede, 1967; Hopwood, 1974; Otley, 1978; Ouchi, 1978;
Simon et al., 1978; Sathe, 1982). Finally, this exploratory contribution shows
how these local actors influence the implementation of a management control
system in an organisation.
Starting from subjectivist contingency, this study falls within the
framework of interpretativist epistemology. It is based on eight case studies
examining the sales directorates of the distribution network of a large French
bank. The research was conducted over approximately two years in the late
nineties.

THE INFLUENCE OF THE ACTORS ON THE PRACTICES AIMED AT

IMPLEMENTING A MANAGEMENT CONTROL SYSTEM

Subjectivist Contingency as a Means to Understand the Differentiation of

Practices

The objective of this contribution is, first, to describe how middle-

management organisational units implement the “central management control
system” that they receive from the management control function at head office.
Implementation by a unit is here seen as a process of appropriation of the
received central control system. This process occurs before the intermediate unit
transmits, in its turn, the control system to the units accountable to it.
Implementation thus corresponds to the transition from a “head office” to a
“local” orientation of the management control system. The main
“implementation variables” examined in this study can be summarised as
follows:
- composition, place in organisation chart, mode of organisation, scope for
discretionary action, role of the local management control function;
 110 Management Control's Contradictory Injunctions

- local use of the central management control system received from head office;
- management control practices developed locally by the units;
- “relations”1 between the intermediate units and head office in terms of
forecasting and following-up of results;
- “relations”2 between the intermediate units and the units that are accountable
to them, in terms of forecasting and following-up of results.
The second objective of this contribution is to understand why these local
practices can be differentiated. The representation adopted is contingent, and
postulates that each unit is liable to appropriate the management control system
received from head office in terms of the specificities which characterise the
particular unit. The contingency theory proposes, schematically, two broad sets
of explanatory factors: on the one hand, the so-called structural, objectivist
contingency factors; and on the other, the so-called behavioural, subjectivist
contingency factors. The objectivist factors refer to the differentiated elements
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of local contexts and have, by far, been the most studied in management
control (Otley 1980, 1995). Sharp criticism has also been levelled at these
“disembodied factors” which impose their determinism on individuals reduced
to passive entities deprived of all intentionality (Crozier and Friedberg, 1977).
It is the very aim of subjectivist factors to strive to address this criticism.
In management control, French research studies that fall within the sphere
of subjectivist contingency3 emphasise the influence of actors on practices, and
endeavour to take into account their profiles, their representations, or their
intentions (Löning, 1994; Bessire, 1995, 1998; Bergeron, 1996; Dupuy, 1999;
Chapellier, 1999; Oriot, 2003). Our contribution falls within this theoretical
framework, and proposes to explore more particularly the local factors of
subjectivist contingency which characterise the actors in the organisational
units. In sum, the objective of this contribution is to show how local actors—
operational managers and management controllers—influence the practices
aimed at implementing a central management control system received from
head office.

Management Controllers and Operational Managers, Actors and Subjects

The outcome is to give actors a greater place in management control

research, and a more “active” role in relation to practices, beyond any simple
determinism. Indeed, actors were all too often considered as passive resources,
in whose behaviour or, more recently, interpretations, the management control
system strives to bring about some change. The influence most often studied
remains that of management control systems on actors, according to an
instrumental representation. This contribution, in contrast, proposes to study the
inverse relation: that of the influence of the actors on the system, even if we do
recognise the interdependence of the two relations.
 Oriot 111

Cartwright (1959) defines influence as an interpersonal transaction in which

a person acts to modify the behaviour or attitude of another person in a desired
way. This definition is eminently intentional and interactional. Similarly, the
definition of actor adopted is that of Crozier and Friedberg (1977): that of a
being active in the full sense of the term, that is to say never totally determined,
who plays a role in the organisation, but who also plays with his role by
pursuing his own particular strategies and safeguarding his room to manoeuvre.
The power of this actor is defined through his “games” with other actors, in a
permanent context of interdependencies. The representation of the two
sociologists is, however, essentially political, and cannot completely describe
the organisational individual. For this, the latter must also be defined as a
subject endowed with cognitive specificities concerning his knowledge, will,
and affectivity (Bouchiki, 1990). The subject, in short, is he who builds his
interpretations not only from his experiences and intentions, but also from his
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interactions with other subjects (Piaget, 1962, 1988; Le Moigne, 1995; Lorino,
1995; Ollivier, 1995; Enriquez, 1997; Chanlat, 1998). The subject’s leeway for
interpretation thereby complements the actor’s leeway for exercising power, and
thus enables one to avoid the trap of a fragmented representation of the
individual (Chanlat, 1990; Ollivier, 1995). The subject who interprets then joins
the actor who acts, interpretive activity and action mutually fueling each other
(Weick, 1979)4.
The definition of an individual as simultaneously “an actor who acts” and
“a subject who interprets” is thus the one that is adopted in this study.
Henceforth, for the sake of simplicity, we will speak of an “actor”, but each time
what must be understood is “actor and subject”. In line with this approach, each
operational manager and each local management controller was studied in terms
of several variables, thus taking into account this dual status:

- background, experiences, and knowledge (gender, age, education and

training, professional background);
- professional ambitions, in order to identify his projected positioning in
terms of the various functions and other actors in the organisation;
- actions and undertakings: what meaning do they ascribe to the practices
aimed at implementing the management control system, and how do they
interpret their role?

The concept of role being an eminently relational one (Crozier and Friedberg,
1977; Katz and Kahn, 1978), the two categories of actors were also questioned
about their reciprocal expectations. We studied how each interpreted their
relations with the other actors (frequency, direction, intensity, finality), and then
compared their varying interpretations of these expectations and relational
schemes (Oriot, 2003).
 112 Management Control's Contradictory Injunctions

Eight Case Studies in a Retail Banking Distribution Network

The exploratory pursuit—“to make visible” the meaning actors ascribe to

their practices—has led us to adopt an interpretativist epistemological position
(Burrell and Morgan, 1979; Covaleski et al., 1990, 1996; Macintosh, 1995;
Girod-Séville and Perret, 2001), to better take into account experience (the
phenomenological hypothesis), intentions (the teleological hypothesis), and the
interactions of actors (Berger and Luckman, 1966; Le Moigne, 1995).
Starting from an ethnographic position (Reeves Sanday, 1979; Hopwood,
1983; Otley et al., 1994, 1995; Humphrey and Scapens, 1996; Jönsson et
Macintosh, 1997), our study focuses on the eight Regional Sales Directorates
(RSDs5) of a large, centrally-structured French bank. The chosen distribution
network, with its multi-site, multi-level organisation, had the advantage of being
particularly well-suited to the issues under study. The RSDs are units at an
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intermediate hierarchical level, between the Central Network Directorate (CND)

located at the Paris head office and the groups of local branches. They
correspond to a first level of local implantation, a social and economic reflection
of their geographic region.
The RSDs are similar in terms of their business, their portfolio of financial
products and services, and their formal organisation. The eight centres differ,
firstly, in terms of their actors, and secondly, in terms of the local factors of
structural contingency which make up their specific context (size, composition
of client base by category of client, degree of competition, outlook for economic
growth for the region, and prior-year performance). After having consulted
several actors in the bank, both at head office and in the network, we grouped
the eight centres under study into three families of “local sales strategy”. These
were factors of objectivist contingency and assimilated each local context to a
reality conventionally shared between these different actors:

Ö RSD having a high growth market: RSD5, RSD6

Ö RSD having a growth market: RSD3, RSD4, RSD7
Ö RSD having a stable market: RSD1, RSD2, RSD8.

Various qualitative techniques for gathering data were used: documentary

analysis, participant and non-participant observation, semi-structured interviews
with 78 actors, including 36 operational managers (members of the senior
management teams of the RSDs or the branch groups) and 42 management
controllers (from the head office, regional, and branch group level). The analysis
of the data was organised on a thematic and then on a comparative basis, in order
to identify the main similarities and differences, as regards both practices and
actors, between the eight cases studied. A number of qualitative typologies were
constructed representing these two categories of variables and their interrelations.
 Oriot 113

FINDINGS

The results that we will now present are largely based on the interactional
representation of the social world proposed by the Palo Alto School, and in
particular by two of its most well-known researchers, Bateson and Watzlawick.

The Management Control System Received From Head Office

A first finding shows how the actors in the RSDs perceive the received
management control system. This system is formalised at the level of the central
management control functions located at the bank’s head office in Paris.
A Central Management Control System Undergoing Standardisation
Two levels of central management controllers contribute to this
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formalisation and concomitantly express their expectations vis-à-vis the regions

(Figure 1):
- on the one hand, the Group Management Controllers (GMC), who report to
the top management team and work for the bank as a whole;
- on the other hand, the management controllers who report to the central
management structure of the distribution network, the Central Network
Directorate (CND), who work specifically for the retail banking business.

We interviewed management controllers from these two structures, and we

also analysed all the documents and tools that make up the formal control
system addressed uniformly to the eight RSDs.
Figure 1: Organisation of the management control function in the bank under study

CHAIRMAN & CEO

Head of
Group Management Head of Human Head of Head of Head of
Head of Large
Control Department Ressources Information Technical International
Finance Corporate
(GMCD) Management System Operations Business
Accounts

Central Network Directorate

(CND)
Metropolitan France
Management Control Department
of the CND

Regional Sales Subsidiaries

RSD 8
Directorate 1
Management Control of
the RSD
Branch
Branch
Groups
Groups

117 Branch Groups

Branches

Over 2,000 branches

 114 Management Control's Contradictory Injunctions

The fact that the research was conducted in a bureaucratic-type organisation in a

highly-regulated sector led us to suppose that its central management control
system would be very standardised. This preconception, however, had to be
greatly qualified. Indeed, management control is a relatively new function in the
French banking sector where—thanks to deregulation and the acceleration of
international competition—profitability only became a priority in the 1980s. In
the bank under study, it was only at the beginning of the 1990s that management
control became a clearly identified function at head office level. As for its taking
root in the distribution network, this only happened gradually, starting from the
privatisation of the bank at the end of the 1990s.
When this research was begun, the central management control system was
still in the process of being formalised and thus standardised to only a small
degree. It consisted mainly in instruments for measuring profitability and tools
for monitoring and consolidating performance, largely for use by the top
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management. In contrast, forward-looking management tools were only in the

early stages of adoption. The Group Management Control Department
developed the monitoring tools, while the management controllers at the Central
Network Directorate were in charge of the forward-looking management of the
sales entities. Regional actors thus found themselves involved with two different
categories of interlocutor, according to whether they were dealing with
establishing forecasts or following up past performance.

A Central Management Control System Bearing Contradictory Injunctions

The RSDs received the monitoring tools that were developed by the Group
Management Control Department (GMCD) without any intermediate adaptation
by the management controllers of the Central Network Directorate. The CND
argued that they preferred to leave the RSDs the freedom to organise their own
local performance management practices. Moreover, their expectations vis-à-vis
the local management controllers were barely formalised, and they took no more
initiative when it came to assuring coordination of the different practices that
had arisen locally. In sum, the management controllers of the Central Network
Directorate declared themselves in favour of a “decentralisation of management
control at the regional level” so as not to “deny their specific character of the
regional directorates”.
Alongside this message, however, the RSDs received a different message
from the Group Management Controllers. Indeed the latter endeavoured to raise
the profile of their function within the bank. They wished to make the central
management control system a strong means of coordination, in order to avoid
the development of coteries with a “my territory first” mentality, which would
have promoted the geographic fragmentation of the structure. They therefore
tried to reinforce the standardisation of the performance monitoring tools, and
 Oriot 115

had drawn up a handbook of standards and methods in order to promote the

uniformisation of practices. They also conducted an in-house training
programme that aimed to coordinate the initiatives of all the bank’s management
controllers.
Thus the RSDs received from head office, on the one hand, a message of
decentralisation via the management controllers from the CND, and on the
other hand, a message of centralisation via the Group Management Controllers.
This double language was further reinforced by the rivalry that prevailed
between the two central management control departments, their information
needs being different. In the face of such ambiguity, many local management
controllers expressed a certain perplexity as to their raison d’être.
Moreover, because of their intermediate hierarchical position in the
network, the RSDs were divided between their role of reporting to head office
and that of supervising the sales activities of the branch groups. The CND
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established the sales offer and the network sales strategy. The RSDs were
then responsible for implementing and adapting it according to the potential
of their regional market. Their scope for initiative was strictly limited by the
national definition of the products, campaigns, and prices, as well as by the
national sales force recruitment policy. At the same time, it was recognised
that they had been delegated a certain authority, thanks to their status as profit
centres, to their appraisal that was based on a specific profit and loss account,
and to an explicit policy of decentralisation of responsibilities. Thus it was
that the RSDs were subject to a tension between independence and
dependence.
The central management control system, then, bore two different
messages that were difficult to obey simultaneously. The regional actors were
thus caught up in a system of “contradictory injunctions” (as defined by
Watzlawick et al., 1967, 1974, 1981), since the messages from head office, in
the framework of relations marked by material dependence and social norms,
were likely to conflict with each other. The local actors, however, did have
the possibility of making a choice6: they could favour one of the solutions,
even if it meant ignoring the other, or suffering from it.

Differentiated Management Control Practices in the Regions

The actors of the eight RSDs have thus a relatively homogeneous

representation of the central management control system. In the face of the
contradictory injunctions that they perceive, however, they adopt locally
differentiated implementation practices. The systematic comparison of local
practices reveals significant differences between the eight regions, which we
have summarised in a qualitative typology. This typology is elaborated from the
aims of the regional actors to local management control:
 116 Management Control's Contradictory Injunctions

1. to compensate for the deficiencies in the central management control

system;

2. to extend the central management control system while remaining rooted

in its rationale;

3. to complement the central management control system with new

performance management practices aimed at boosting the sales and
marketing initiatives at the branch-group level.

Each RSD chooses to focus on one or more of these aims. The first aim
corresponds to minimal implementation practices, which are the direct
consequence of the insufficient standardisation of the received management
control system and of the lack of coordination between the two central
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management control departments. It involves, for example, the correction of

anomalies or inconsistencies in the data received from these two departments.
Similarly, as the Group management control statements refer only to
performance “achieved”, the RSDs have to reconcile them with the “targeted
objectives”, for which, moreover, they are accountable to the CND. The
minimal practices associated with the first aim thus result from the unanimously
perceived deficiencies of the received control system, and are common to the
eight RSDs. Two RSDs (RSD 3 and 8), however, pursue only this one aim. They
thus constitute a first family of practices, which we will call “Type A”.
A second family (“Type B”) corresponds to the RSDs who pursue the
second aim in addition to the first, namely RSD 2, 4, 5 and 6. These RSDs
systematically conceive their local practices as an extension of the central
management control system, in accordance with a logic of “conformity” as
defined by Simon (1961): the received system is interpreted as a constraint
towards which all local practices must converge. Thus, for example, these four
RSDs, to monitor the performance of their branch groups, use management
control tools identical to those received from head office, in order to monitor
their own regional performance. They adopt the same financial and
comparative reporting logic, going as far as to include certain ratios directly
inspired by the head office scorecard. Likewise, these four RSDs reproduce,
vis-à-vis their branch groups, management practices akin to those that the
CND uses in dealing with them: the role of warning of poor performance, for
example, is given higher priority to that of analysing or advising. Finally, the
organisation of the management control function in the RSDs (place in
organisation chart, team size, role of management controllers) is very close to
that of the management control function in the CND.
A final family of practices (“Type C”) is made up of RSD 1 and 7, which
differentiate themselves by pursuing the third aim: that of complementing the
 Oriot 117

management control practices received from head office with new

performance management practices aimed at boosting the sales and marketing
initiatives at the branch-group level. The constraint of conformity is thereby
abandoned in favour of a logic of “openness” as defined by Simon (1961): the
central system is interpreted as an initial framework, which spurs creativity
and facilitates the conception of possibilities for local action. Indeed, RSD 1
and 7 provide the units they supervise with real assistance in analysing their
results and identifying the levers for corrective action. They simplify, for
example, the tools received from head office before sending them on to their
branch groups: they focus their attention on high-priority information, within
the scope of their real room to manoeuvre; they translate profitability
objectives into sales targets.
Indeed, for the branches, it is more meaningful to hear “sell home-
ownership savings plans to retail clients, because it brings in such and such
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an amount of profit” than “increase your operating coefficient by x%”. Thus,

in order to complement the logic of a cost-cutting drive promoted by head
office with a logic of revenue generation, RSD 1 and 7 created sales
promotion forecasting tools for their branch groups. Likewise, they developed
operational plans for implementing their medium-term sales strategy that,
beyond annual budgets, propose sales reorientation initiatives and investment
plans. Thanks to these action plans, they were led to perform an in-depth,
cross-functional analysis of the strengths and weaknesses of each branch
group. The revelation of these specific characteristics then enabled the
management controllers of RSD 1 and 7 to differentiate their role vis-à-vis
their units. Underperforming groups were then more closely monitored and
received greater assistance. The management control practices of these two
RSDs are thus a far cry from those of head office, which are addressed
uniformly to the eight RSDs.
To summarise, local practices, for the most part, fall within the
framework of the central control system: most of the RSDs adopt the received
approach and make it their own in order to manage their units. This finding
must be seen in the light of the bureaucratic context of the organisation under
study. We put forward the hypothesis that it could also be accounted for by
the fact that the central management control system is still in the process of
being standardised: the time spent making up for its deficiencies is time that
is no longer available for developing local management.
Two RSDs, however, had no reluctance in implementing the matrix
received from head office, according to their own interpretations of the
specific needs of their units. These specific needs were partly summarised in
the “local sales strategy” agreed on for each RSD. However, as shown in
Table 1, RSDs that have similar management control practices belong to
different families of sales strategies.
 118 Management Control's Contradictory Injunctions

Even if there is no obvious correspondence, it would be unwise to

conclude that there is no link between the practices and the local factors of
structural contingency summarised in the sales strategy. This finding, then,
calls for further analysis of the second characteristic that differentiates the
eight RSDs: the local actors.

Table 1: Different sales strategies for common management control practices

Type A Type B Type C

RSD3 (growth market) RSD2 (stable market) RSD1 (stable market)
RSD8 (stable market) RSD4 (growth market) RSD7 (growth market)
RSD5 (high growth market)
RSD6 (high growth market)
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The Complex Influence of Actors on the Differentiation of Practices

The influence under study here is not that of any particular actor, but
rather that jointly exercised by all the local actors involved in management
control practices in each RSD. In order to show how this complex influence
is exercised, we have used the interactional representation of the social
world proposed by the Palo Alto School, with its model of “The New
Communication” (Bateson et al., 1981).

The Influence of the Relational Systems Constituted by the Local Actors

Bateson et al., (1981) propose an orchestral model of communication,
in contradistinction to the mechanical model of the telegraph7. The metaphor
of the orchestra considers communication as a system in which the social
actor participates at all times, whether he wants to or not, in accordance with
the principle that “one cannot not communicate”. The actor is part of this
system just as the musician is part of the orchestra, but there is neither a
conductor nor a score, and each plays by attuning to the other.
Communication thus involves highly interdependent relations between many
participants. The structure of interpersonal relations remains inaccessible to
the partners themselves, due to its reflexivity. However, it is discernible to
an outside observer, such as a researcher, who can gradually capture it in a
written score8 (Watzlawick, 1967, 1991; Bateson et al., 1981).
The harnessing of such a referent in the framework of a research study
on management control remains relatively rare, and may surprise some. It is
justified, first, by the fact that actors are here also studied as subjects; and
secondly, by the necessity to consider several subjects in interaction, as the
implementation practices involve, concurrently, both management
 Oriot 119

controllers and operational managers. Bateson (1958, p.175) defines

interactions as “the reactions of individuals to the reactions of other
individuals”, adding “We have to consider, not only A’s reactions to B’s
behaviour, but we must go on to consider how these affect B’s later
behaviour and the effect of this on A”. Finally, the Palo Alto School
representation enables one to gain greater understanding into the
contradictory injunctions borne by the management control system under
study.
Indeed, confronted with such injunctions, inherent in human
communication, Watzlawick (1967, 1981, 1991) and Bateson (1979, 1981)
advocate examining, not the psychological nature of the monadic subject,
but rather the system (family, institution, culture…) of which he is a
member. Therefore, instead of trying to identify illusory relations of linear
causality between the descriptive variables of each actor (age, professional
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background, etc.) and the management control practices, we have chosen to

analyse these variables within the framework of the relational systems
formed by the different local actors in interaction in each RSD. Watzlawick
(1991) defines a “relational system” as an eminently complex phenomenon,
one which in no way can be reduced to the sum of the characteristic traits of
each partner, just as water is other than, and more than, the simple addition
of the properties of two hydrogen atoms and one oxygen one.

The Dyadic Interactions between Management Controllers and Operational

Managers

Given that the reference framework of the orchestral model is that of a

dyadic interaction system (mother and son, husband and wife, therapist and
patient), it lends itself well to the analysis of the interactions between local
operational managers and management controllers. The field data show that,
schematically, there are two scenarios that could describe the relations
between management controllers and operational managers. For the majority
of the RSDs (six out of the eight), at least one of the operational managers
from the senior management team, most often the Director of the RSD, said
he was involved in the definition of local management control practices, and
this affirmation was confirmed by the unit management controllers. For the
sake of simplicity, we will call this manager the “operational manager” of
the RSD, because of his involvement in local management control. For two
of the RSDs, however, one or more operational managers said they were
involved in local implementation practices, but the unit management
controllers contested this. In the first case, it is thus possible to identify
“management controller–operational manager” dyads; later, we will show
their influence on local practices. In the second case, however, a rupture in
 120 Management Control's Contradictory Injunctions

relations between operational managers and management controllers has

taken place. As summarised in Table 2, RSD 3 and 8, characterised by a
rupture in relations, both correspond to Type A practices. The second set of
RSDs, that characterised by dyadic interactions, corresponds to Type B or
Type C practices.

Table 2: Differentiated relational schemes between management controllers

and operational managers

“Rupture in relations” “Management controller – operational

manager” dyadic interactions

RSD3 (Type A) RSD1 (Type C)

RSD8 (Type A) RSD2 (Type B)
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RSD4 (Type B)
RSD5 (Type B)
RSD6 (Type B)
RSD7 (Type C)

According to Watzlawick (1976, 1987, 1988), in “sick” relations, each

party tries desperately to avoid being submitted to the definition of his reality
that the other tries to impose, whereas in “healthy” relations, the partners agree
on an implicit definition of their experience. To understand each other, in fact, is
to have the same interpretation of interpersonal reality, the same
“intersubjectively shared signification”, which may correspond to a temporarily
established convention between individuals of the same culture or social milieu.
To understand the various interactional schemes observed between management
controllers and operational managers, we must therefore proceed to analyse the
interpretations of these actors.

A Minimal Common Interpretation of the Regional Role

Let us begin by comparing, RSD by RSD, the representations that local

management controllers and operational managers, as members of a senior
regional management team, have of their role. It must be remembered that the
RSD are divided between their mission vis-à-vis head office and their mission
vis-à-vis the branch groups. In the case of RSD 3 and 8, no minimal common
interpretation could be detected, certain actors giving priority to their role vis-à-vis
the branches and others to their role vis-à-vis head office. The situation led to the
rupture in relations mentioned earlier, as the actors could not agree on adopting as a
convention either of these two missions. But as the organisational culture is a
bureaucratic one, the two RSDs play the role of a “passive channel” for head office.
 Oriot 121

They correspond to the minimal implementation practices of Type A (Table 3).

For the six other RSDs, in contrast, management controllers and operational
managers share a same minimal common vision of their role as senior managers,
which facilitates their interaction. The minimal convention identified, however,
is not the same for these six RSDs. Indeed, in the case of RSD 2, 4, 5 and 6, the
management controllers and operational managers are of one accord in giving
priority to their role vis-à-vis head office. In the case of RSD 1 and 7, however,
the same actors agree on according equal importance to their role vis-à-vis the
branch groups as to their role vis-à-vis head office. Faced with the contradictory
injunction in the definition of their role, then, only two RSDs choose to consider
the two levels of requirement as complementary, and endeavour to meet both of
them. The others give priority to one of the two points of view, namely their role
vis-à-vis head office. This finding is to be interpreted within the framework of
the type of organisation under study, i.e. a rather bureaucratic one.
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RSD 2, 4, 5 and 6, then, consider that their chief role is to be head office’s
liaison channel to the distribution network. We have dubbed them head office’s
“frontline antennae”. They are, as one would expect, the RSDs whose local
practices extend the management control practices received from head office
(Type B). RSD 1 and 7, in contrast, consider their role vis-à-vis head office and
their role of supervising the sales activities of the branch groups to be of equal
importance. They strive to integrate the informational needs of their hierarchical
superiors, largely financial, with the more operational needs of their
collaborators, largely sales oriented. We have dubbed them “integrators”, as
defined by Follett9 (1937, 1970), in order to reflect the fact that they try to take
into account the requirements of each of the two parties without sacrificing those
of either of them, in other words without considering that the two alternatives
are mutually exclusive. The practices of these two RSDs are, as one would
expect, those which complement the management control practices received
from head office with new performance management practices aimed at
optimising the sales and marketing initiatives of the branch-groups (Type C).

Table 3: The link between the interpretations of the regional role and
management control practices.
Interpretation of the role of Passive Channel Frontline Antennae Integrator
RSD senior management
Management Control Practices Type A Type B Type C

Finally, in the light of this variable—”role of senior management of a

RSD”—it is now possible to understand the link between management control
practices and local sales strategy. In fact, only RSD 1 and 7, because they see
themselves as “integrators”, develop practices that take into account their local
sales strategy, in other words the specific regional context in which their
 122 Management Control's Contradictory Injunctions

branches operate. Thus, only the minority practices that complement the
received control system (Type C) can effectively justify the existence of a
regional management control. Herein lies the difference between a simple
“delocalisation” of the management control function (localising it in the regions)
and its effective decentralisation.

The Interaction of Actors’ Professional Cultures

Let us now try to understand why the actors have a differential representation
of their roles and consequently develop distinct management control practices.
We will do so by undertaking a detailed analysis of the dyadic interactions.
Earlier, we emphasised the necessity of considering the descriptive variables
of each actor within the framework of the relational systems, where his
experiences and intentions interact with those of other actors. Indeed, every
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individual, to the extent that he interacts with others, enriches his

representations, and also contributes to the enrichment of those of other actors.
Three variables have proven to be particularly useful, in this research, in
understanding how the interpretations of local actors interact: on the one hand,
educational background and prior professional experience, which concern
knowledge and experience, and on the other hand, projected career progression,
which expresses intended evolution within the organisation. These three
variables have been aggregated into one, dubbed “professional micro-culture”
(Jaques, 1951), which enables the identification of each actor by his belonging
to a profession, one which has its own language and values, and a homogeneous
system of representations (Segrestin, 1980; Mélèse, 1990). Courpasson (1995)
has shown that the banking sector lends itself particularly well to this
“professional community” configuration.
In this research study, two main types of professional culture have been
identified: one a financial culture, the other a sales-oriented one. Thus, to each
operational manager and management controller was ascribed a financial or a
sales culture, according to his educational background, his professional
background, and his intended career evolution. We then considered the
interaction of these professional cultures within the different relational systems
identified in each RSD. We were thus able to develop a typology of relational
systems, which distinguishes three scenarios:
1. a complementary relational system between management controllers and
operational managers;
2. a redundant relational system between management controllers and
operational managers;
3. a rupture in relations between management controllers and operational
managers.
 Oriot 123

A relational system is termed complementary if the management controllers

and the operational managers that constitute it have different professional
cultures (financial-sales). If they have the same culture (financial-financial), it is
termed redundant. Here we are referring to “complementary” behavioural
systems (different but compatible behaviours forming a “couple”) versus
“symmetrical” ones (similar, mirror-image behaviours, forming a “pair”), as
identified by the Palo Alto researchers (Bateson, 1972; Watzlawick et al., 1967,
1981).
As shown in Table 4, the RSDs where there is a rupture in relations all have
Type A practices, whereas those in which management controllers and
operational managers form a redundant relational system all have Type B
practices. As one would expect, given that the redundant systems identified here
are only of the “finance-finance” type, the actors concerned have focused on
their role as “frontline antennae”, and have implemented practices that extend
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those of head office. Finally, the two RSDs having a complementary relational
system, in which we find a sales culture and a financial one, have both
developed Type C practices characterised by a concern to integrate the needs of
head office and those of the branches.

Table 4: The identification of management control practices and actors’

relational systems
Ruptured relations Redundant relational system Complementary relational system
Passive Channel Frontline Antennae Integrator
Type A Type B Type C
(compensate) (compensate and extend) (compensate and complement)

We emphasise that complementary relational systems can be interpreted as a

solution to the contradictory injunctions contained in the central control system.
Indeed, a team made up of actors with different professional cultures, but
nevertheless sharing a minimal common vision, is probably in a better position
to satisfy the dual demands that arise from their simultaneous participation in
different interdependent “sets of roles”10 within the organisation.

CONCLUSION

Our contribution is part of a recent current body of French research which

endeavours to give actors a more prominent place in management control
literature by trying to understand the meaning they ascribe to their practices, and
then to propose a less abstract representation of it. It partakes in the effort to
clarify the organisational identity of management accounting by showing how
the actors based in the units can influence management control practices.
 124 Management Control's Contradictory Injunctions

The practices identified, here in the distribution network of a large French

bank, throw into question the effectiveness of decentralising management
control, beyond simply locating the function in the local regions. Indeed, the
practices that succeed in fulfilling the informational needs of both top
management and operational managers are rather rare, even if this finding must
be seen in the light of the specific organisational context in which this research
was done, namely that of a centrally-structured bureaucratic organisation.
This study has also revealed a new local factor of subjectivist contingency,
that of professional cultures, which characterise actors according to
homogeneous systems of shared representations, derived from their experiences
and intentions. Moreover, as the influence under study is not that of any
individual actor but rather that of relational systems involving several actors, it
is in fact the interactions of the professional cultures of the “management
controller—operational manager” dyad which here constitute the relevant
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subjectivist contingency factor. Therefore the banking organisation studied, or

more exactly the retail bank, can no longer be considered a homogeneous whole,
since it is made up of the heterogeneous realities of the professional cultures of
its different actors.
Finally, in conclusion, it is important to emphasise that this contribution
highlights the complementarities of subjectivist contingency and
interpretativist epistemology, which constitutes a new point of view
compared to classical currents of contingency. It is not a question of
opening up here the thorny subject of the epistemological status of
contingency, and thereby broaching the question of the link between
knowledge and reality. This contribution does, however, in its modest way,
invite one to represent the subject and his environment as the two
indissociable poles of a dialectical relation (Piaget, 1988), and to consider
that knowledge is not limited to a reflection of reality, but rather integrates
the experiences and aims of the actor who strives to know.

Endnotes
1
Frequency and nature of formal and informal relations, intensity and degree of
formalisation of budgetary follow-up (sporadic or sustained; loose or tight),
transmission of practices, comparative reciprocal expectations and representations of
existing circumstances, etc.
2
Idem endnote n°1.
3
We prefer to speak of “subjectivist contingency” rather than “behavioural contingency” so
as to avoid any confusion with Skinner’s (1969) behavioural contingency model, which
advocates making changes in the environmental contingency variables in order to change
behaviours (Oriot, 2003).
 Oriot 125

4
According to Weick (1979), the expression “social psychology”, in its full meaning, takes
precise account of the fact that organisational phenomena are simultaneously psychological
and sociological.
5
In order to preserve their anonymity, the RSDs were assigned a number from 1 to 8.
6
“Contradictory injunctions” must not be confused with “double binds”, which exclude the
very possibility of choice (Watzlawick, 1967).
7
In Shannon’s (1949) model, termed the “telegraph model”, a sender sends a message to a
receiver who becomes in turn a sender.
8
The score, however, remains highly complex. In this contribution, we have endeavoured to
represent the interactions between the different actors on the basis of our own
interpretations as a researcher, but without ever claiming to be in possession “the truth”.
9
Follett (1937, 1970) defines “integration” as the only option which opens the way to a win-
win game, wherein no party is sacrificed.
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10
The expression is that of Katz and Kahn (1978).

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