Davilla (2017) Management Control Systems For Creative Teams

JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH American Accounting Association
Vol. 29, No. 3 DOI: 10.2308/jmar-51806

Fall 2017
pp. 27–47
Management Control Systems for Creative Teams:

Managing Stylistic Creativity in Fashion Companies
Antonio Davila
University of Navarra
Angelo Ditillo
Bocconi University
ABSTRACT: We use a field research design to examine management control systems in creative teams working in
fashion firms. The study is structured as an in-depth case study followed by five additional cases. We find
management control systems to be deeply embedded in the work environment of creative teams. They are designed
to define, negotiate, and legitimize the designs that emerge from the creation process. We identify a set of systems
(directional) that define the creative space of design teams and that work as interfaces with the rest of the company.
We also find a set of systems (inspirational) that guide the creative process to enhance novelty and provide a
common vision to support consistency across the overall collection of products designed. In addition, our analysis
documents how firms following different strategies—fine fashion versus mass market—design these systems
differently to adapt their creative process to their strategic demands.
Keywords: creativity; control; management accounting; fashion.
INTRODUCTION
F
irms often rely on teams to develop creative solutions (Hargadon and Bechky 2006; Adler and Chen 2011). An
important aspect of managing these teams is designing their organizational environment to foster creativity. Extant
contributions in management accounting have shown the impact that management control systems (MCS) have on the
broader phenomenon of innovation (Davila 2000; Davila, Foster, and Li 2009) and have studied settings where technology
knowledge plays an important role in the development of new solutions (e.g., Abernethy and Brownell 1997; Davila 2000).
Only recently, MCS research has focused specifically on creativity and in particular on the effect of alternative reward systems
(Toubia 2006; Kachelmeier, Reichert, and Williamson 2008; Kachelmeier and Williamson 2010; Chen, Williamson, and Zhou
2012; Kachelmeier, Wang, and Williamson 2014; Grabner 2014; Grabner and Speckbacher 2016). However, with the notable
exception of Jeacle and Carter (2012), the study of creativity and control systems other than incentives is scarce, even though
these systems may also influence and be even more relevant to explain creative team performance. This paper explores how
MCS support creative teams that have to simultaneously enhance individual creativity, contribute to team outcomes, and
embrace the dependencies associated with being part of a company.1 In line with interpreting creativity as a diverse set of
phenomena, each one requiring a particular management approach (Unsworth 2001), this study focuses on stylistic creativity, a
We appreciate the comments and suggestions of Sally K. Widener, Karen L. Sedatole, and the two anonymous reviewers. We are also grateful for the
comments of Stanley Baiman, Martine Cools, Miles Gietzmann, Kristof Stouthuysen, Alexandra Van den Abbeele, Clara Xiaoling Chen, as well as those
received during presentations at the 2010 European Accounting Association Annual Meeting, 2017 Journal of Management Accounting Research Forum
Management Accounting Section Midyear Meeting, IESE Business School, ESADE Business School, University of Bologna, Bocconi University, IE
Business School, HEC Paris, University of Bath, University of Venice, St. Gallen University, The University of Edinburgh Business School, and Harvard
Business School.
Editor’s note: Accepted by Karen L. Sedatole.
Submitted: October 2016
Accepted: April 2017
Published Online: June 2017
1
Management control systems are defined as formal information-based routines used to direct the organization toward the achievement of its objectives
(Simons 1995; Merchant and Van der Stede 2012). They include action (behavioral) controls and results (output) controls (Merchant and Van der Stede
2012), as well as other processes and artifacts employed ‘‘to maintain or alter patterns in organizational activities’’ including ‘‘patterns of ongoing
creativity and innovation’’ (Simons 2000, 4–5).
27
28 Davila and Ditillo
type of creativity characterized by newness in style (Cappetta, Cillo, and Ponti 2006).2 In particular, we address the following
research questions: How are MCS designed and used in creative teams of organizations that develop products characterized by
stylistic innovation? What are the primary contextual variables that explain their variations?
We use a field research design based on multiple case studies (e.g., Jönsson 1998; Malina and Selto 2001; Granlund and
Taipaleenmäki 2005) in the fashion industry. Our research design starts with an in-depth case study and then contrasts the
findings with field data from five companies. These additional cases allow us to contrast and enrich the findings from the first
case with evidence that provides further insights into the design and use of MCS in creative teams. They also allow comparing
different organizational solutions to the design of MCS and the potential contextual characteristics that shape them.3 Fashion
firms have creative teams whose purpose is to design collections of products that are then commercialized. In contrast to other
industries where creativity is intermingled with other activities, creativity in fashion firms is explicit, focused on style, and one
of its organizational units specializes in creating the collection for the upcoming season (Cappetta et al. 2006). While the
findings are unique to our sample, conceptual generalization can provide insights into organizations that operate in other
industries where stylistic creativity also plays an important role (e.g., design companies, advertising agencies, marketing
consulting firms) and all organizations that rely on stylistic creativity as a competitive advantage.4
We find that MCS for stylistic creativity rarely include extrinsic rewards. Actually, all of our research sites use a flat salary
to compensate designers and do not trace particular designs to individual designers, but rather see them as teamwork. The
economic incentives that play an important role in other settings appear to have a minor one in our environment where the
intrinsic motivation to create dominates:5
To be a stylist is a work that takes your heart, if the money comes good, otherwise it doesn’t matter. (Giorgio Armani
May 31, 2012 during his visit to the Academy of Arts & Design of Tsinghua University in Beijing.)
Our evidence shows that the purpose of MCS in the creative teams we study is not to provide external rewards, but rather
to guide the intrinsic motivation underlying the creativity of team members toward designs that are collectively aligned and in
harmony with the firm’s objectives and market trends.
We identify two different types of MCS. The first set of systems—which we refer to as directional systems—aim to
establish the boundaries (Simons 1995) that define the creative space within which the creative individuals work (Drazin,
Glynn, and Kazanjian 1999; Jørgensen and Messner 2009).6 These systems also work as interfaces with the rest of the
company. In contrast to MCS in more traditional settings, these systems in our research sites put much less emphasis on
executing predefined plans and addressing low effort and misconduct concerns. Their objective is neither to reduce variation
nor to motivate effort to achieve defined objectives, because these objectives only emerge as the creative process evolves, but
rather to align team members’ creative efforts. They differ from Simons’s (1995) boundary systems in that they do not focus on
behavior or strategic restrictions; rather they act as interfaces with the rest of the organization. These directional systems
combine traditional behavioral and output controls (Dekker and Van den Abbeele 2010; Merchant and Van der Stede 2012).
Thus, certain directional systems act on individuals’ behavior, while others act on the results of their work. In contrast to
traditional results control, directional systems do not have predefined targets, rather the output emerges over time and is
negotiated with the rest of the organization.
The second set of systems—which we refer to as inspirational systems—guide the creative process to enhance the novelty
of the end results and generate the variation required to surprise the customer (and society more broadly) while developing
consistent stylistic ideas and meanings (Stacey, Ekert, and Wiley 2002; Mete 2006). They introduce constraints to specifically
coordinate individuals’ creative work, which ‘‘needs to enable integration while also allow for ‘de’-integration, or individually
disrupting a sense of predictability and common understanding in the pursuit of a new idea’’ (Harrison and Rouse 2014, 1258).
At the same time, they inspire individuals to develop novel solutions through new experiences and stimuli. Without these novel
2
Stylistic innovation is ‘‘the reassignment of social meaning to an existing product’’ and/or ‘‘the change of the aesthetic characteristics of a product
generating both a new product—from a physical point of view—and a new meaning’’ (Cappetta et al. 2006, 1275). In contrast to technology innovation
where technical knowledge moderates the relevance of creativity, stylistic innovation puts less emphasis on technical knowledge (Cappetta et al. 2006)
(see Section II for more detail on this distinction). Therefore, settings where stylistic innovation dominates offer a more attractive environment to
examine the influence of MCS on creative teams.
3
The research design is also consistent with the claim that creative engagements in organizations can be fruitfully studied through qualitative
methodologies (Drazin 1990).
4
Stylistic innovation is present in any industry where design plays a role, from the use and feel of a mobile phone to the user interface of a website.
5
This is not to say that there are no economic incentives. A very small proportion of these designers will become famous and highly paid designers
(much as it happens in sports). Others may lose their job in a market where the supply of jobs in large firms is smaller than the demand from people
wanting to have them. Yet, this vision of future economic rewards does not appear to play a relevant role at this stage in their careers.
6
Given the negligible structure of the designers’ activities, rather than interpreting these activities as organized as a defined process, they are better
interpreted as happening within a creative space bounded by directional MCS.
Journal of Management Accounting Research

Volume 29, Number 3, 2017
Management Control Systems for Creative Teams: Managing Stylistic Creativity in Fashion Companies 29
settings, people revert to the familiar, experimented, and consolidated responses to reduce cognitive complexity (Stokes 2005;
Harrison and Rouse 2014). From the perspective of sensemaking theory (e.g., Weick 1969; Balogun and Johnson 2004;
Stigliani and Ravasi 2012), these systems provide a new and shared vision to the effort of team members so that each novel
product they create fits in the overall collection. Inspirational systems support individuals in their effort to exchange tentative
understandings and to find an agreement on consensual interpretations and a course of action. In this way, they facilitate
individual interpretive endeavors feeding collective ones and turning individual sensemaking into collective sensemaking
(Stigliani and Ravasi 2012). They shape and affect creative ideas and the social meanings of the products designed. They are
complementary and distinct from social or cultural controls that are directed at shaping and affecting values, norms, and beliefs
(Elbashir, Collier, and Sutton 2011). They differ from Simons’s (1995) belief systems in that they are short term and do not
refer to credos and values.
We also find that these two sets of MCS, directional and inspirational, vary with the market positioning of firms. Fine
fashion firms (firms targeting the high end market) design MCS that define more flexible creative spaces compared to mass
market firms (firms targeting the low end market). In particular, directional controls are looser and inspirational controls
provide richer sources of ideas.
Our findings speak to the importance of designing directional and inspirational controls in contexts where stylistic
creativity matters and where combining the two forms of controls is necessary to reconcile creativity and business needs. The
conclusions achieved are consistent with existing results in the psychology literature on the relevance of intrinsic motivation for
creative activities (Mainemelis and Ronson 2006; Dewett 2007), and reinforce the insights from creativity literature on the need
for creative spaces to balance inspiration, the compatibility of ideas, and existing constraints (Cappetta et al. 2006). They are
also consistent with findings in the management literature. The increasing relevance of creativity directed to the aesthetic and
symbolic elements of products or services to competitive advantage (Djelic and Ainamo 2005; Verganti 2009) suggests that
organizations cannot simply hope that creativity will happen spontaneously. Rather, they need to consider how to design the
mechanisms (where MCS play a central role) that shape it (Runco 2004; Cillo and Verona 2008).7
CREATIVITY AND MANAGEMENT CONTROL SYSTEMS RESEARCH

Research on creativity has evolved from identifying personal traits of creative people (Tierney, Farmer, and Graen 1999;
C. Manz, K. Manz, Adams, and Shipper 2010; Singh and Sarkar 2012) to the importance of intrinsic motivation to team
creativity (Hargadon and Bechky 2006), organizational environments to stimulate creativity (Amabile and Gryskiewicz 1989;
Isaksen, Lauer, Ekvall, and Britz 2001), and social construction of creative outcomes (Oldham and Cummings 1996; Drazin et
al. 1999). Most of this work has only indirectly addressed MCS design.
A fundamental concept to explain creativity is intrinsic motivation (Deci 1972; Shin and Zhou 2003; Dewett 2007), i.e.,
‘‘the motivation to work on something because it is interesting, involving, exciting, satisfying, or personally challenging’’
(Amabile 1997, 39). Intrinsic motivation requires a hiring process that brings in creative people and then an organizational
design that guides them to deploy their creativity along the needs of the company.8 Van den Steen’s (2010) insights on the
economics of organizations highlight differences in objectives as driving agency problems, and the role of shared purpose and
culture to eliminate these differences. Akerlof and Kranton (2005) predict lower incentives for employees who ‘‘identify’’ with
the firm, and Falk and Kosfeld (2006) experimentally show that economic incentives are suboptimal relative to trusting agents
of the intrinsically motivated type.
A finding consistent across the previous contributions is the crowding out of intrinsic motivation by certain types of
extrinsic motivators: the perception of doing a particular activity for an external reward lowers intrinsic motivation and
creativity. However, the creativity field introduces an important distinction between the controlling extrinsic motivators
associated with mechanisms that reduce freedom, deviate attention from the task toward external concerns, and support close
supervision (Deci, Connell, and Ryan 1989) and the enabling extrinsic motivators that reinforce self-determination (Deci and
Ryan 1985; Amabile 1997).9 MCS have often been interpreted as controlling extrinsic motivators and therefore as detrimental
to creativity. The autonomy and freedom that creative environments require cannot be easily reconciled with the boundaries,
incentives, and workplace obligations typically associated with MCS (George and Zhou 2001; Gagné and Deci 2005). Yet,
7
For instance, an industry apparently driven by technology such as the mobile phone industry has, for a number of years, been significantly transformed
by the transposition of the logic of fashion (Djelic and Ainamo 2005).
8
Our research design focused on the management control systems that shape the creative space, rather than the selection mechanisms that determine the
mix of people in the team. Prior work has emphasized selection mechanisms as control systems (Campbell 2012) and our data collection also identifies
selection as important; however, our interview protocol did not explore this aspect in detail in order to focus on other systems that have received much
less attention.
9
The accounting literature differentiates between coercive and enabling systems (Jørgensen and Messner 2009) as systems that constrain the ability to
act versus systems that support the actions of people in organizations.

MCS can potentially behave as enabling extrinsic motivators through clearly defined project goals, reward and recognition for
ideas, constructive feedback, support from supervisors and the work group, and enough resources (Amabile, Conti, Coon,
Lazenby, and Herron 1996).
Creativity in teams adds the interaction between individuals as another layer of complexity (Shalley and Gilson 2004).
Team participation over several periods generates implicit incentives from the repeated interaction of team members (agents)
that are predicted to lead to low-powered, group incentives (Che and Yoo 2001). Collective creativity captures the shift that
teams experience when the exchange between participants leads to new and valuable insights (Hargadon and Bechky 2006).
More creative teams show a higher degree of commitment toward shared goals and have a climate more supportive of creativity
(Gilson, Mathieu, Shalley, and Ruddy 2005); external demands are neither too low nor too high and they are more diverse in
access to knowledge (West 2002). Yet, team work can also lead to social dynamics that act as controlling extrinsic motivators:
factors such as groupthink, social anxiety, social loafing, lack of respect, time pressure, unrealistic expectations, or downward
comparison have often been associated with team performance lower than individual performance (Paulus, Brown, and Ortega
1996; Rickards and De Cock 1999). MCS can support creativity in teams through the creation and communication of shared
goals, autonomy, enough resources, rewards and evaluation, or encouragement for originality (Witt and Beorkrem 1989;
Csikszentmihalyi 1997; Sethi, Smith, and Park 2001; Shalley and Gilson 2004). Furthermore, teams with the highest
conversion of ideas into products ability focus on a moderate number of ideas, in areas in which they have expertise, and devote
a moderate length of time on promising ideas (Chandy, Hopstaken, Narasimhan, and Prabhu 2006).
MCS research has only recently examined the relationship between creativity and control (Davila and Ditillo 2017). Most
studies have explored the link between incentive systems and creativity (Toubia 2006; Kachelmeier et al. 2008; Kachelmeier
and Williamson 2010; Chen et al. 2012; Grabner 2014; Grabner and Speckbacher 2016). Only Jeacle and Carter (2012) take a
broader perspective; drawing on Goffman’s (1956) theoretical perspective, they suggest that, within fashion product
development teams, MCS facilitate and strengthen the interactions between key actors to manage the tension between the
creative and cost dimensions of products.
The broader phenomenon of innovation has received more attention in the MCS literature.10 This literature has analyzed
the various stages of the process translating creativity into a business opportunity, from idea generation to market introduction.
Research settings in this stream of work often have a technology aspect that confounds stylistic creativity with technical
knowledge (Cappetta et al. 2006).11 Technological innovation involves the addition or the alteration of tangible features and
functionalities; stylistic innovation is related primarily to a change in the stylistic features and social meaning assigned to the
product. In stylistic innovation, the tangible features of the product may change—its aesthetic characteristics often change—but
what matters more is the creation of different meanings. Stylistic innovation exists only when recognized and adopted by a
specific social community. Style is more important as the aesthetic and symbolic elements are increasingly influential, even for
technology driven products. Mobile phones and computers are instances where new functionalities come together with the
evolution of stylistic elements. The aesthetic features refer to forms, colors, proportions, and patterns, whose combination
generates a specific aesthetic value that takes various and unexpected meanings. The aesthetic of a product or service is the
sensory experience it generates and is the result of those elements that determine its appearance; whereas the symbolism is
related to the meanings or associations the product/service activates—such as elegance, youthfulness, and durability (Cappetta
et al. 2006; Cillo and Verona 2008). Therefore, the conclusions that have been developed in contexts where technology is the
main driver of innovation, including the role and characteristics of MCS in these contexts, do not necessarily extend to settings
where stylistic creativity dominates, given style’s unique features. In particular, first, style is a temporal phenomenon with a
short life span and an obligatory transformation of taste (Simmel 1957) that depends on scouting and interpreting society to
propose changes in meaning. Second, it requires aesthetic compatibility, which is the visual coherence in the aesthetic
appearance of the elements of a certain product or product portfolio (Veryzer and Hutchinson 1998). Third, style requires social
compatibility, the attribute expressing the coherence between a system of social meanings and the social context where it is
used. People want not only differentiation and distinction, but also they want to be part of a social community and share habits
and behaviors that have similar characteristics, to be identifiable (Barthes 1982; Bourdieu 1984). For example, Giorgio
Armani’s style of simple lines, soft colors, and the strong presence of jackets and suits is always recognizable in his collections
10
The creativity literature separates creativity and innovation as distinct phenomena. The former refers to the generation of novel concepts, while the
latter refers to the successful implementation of these concepts into new marketable solutions or better processes (Woodman, Sawyer, and Griffin 1993;
Oldham and Cummings 1996). Illustrative papers in this stream of research include Davila’s (2000) study of performance measurement systems in
product development as tools for learning and reducing uncertainty, rather than inspection and monitoring. Jørgensen and Messner (2009) highlight the
relevance of enabling controls (as opposed to coercive controls) for product innovation. Mouritsen, A. Hansen, and C. Hansen (2009) explain how
management control systems mobilize innovation activities. Ditillo (2004, 2012) finds that MCS in software development teams vary with the type of
complexity of projects.
11
For a more thorough discussion on the difference between technological and stylistic innovations, see Cappetta et al. (2006).

(Cillo and Verona 2008). Thus, MCS facilitate creative efforts and contribute to achieving aesthetic and social compatibilities,
which are necessary for effective stylistic innovation.
RESEARCH SETTING AND METHODS

Our unit of analysis is the creative team of companies in the fashion industry.12 People in these teams (fashion designers)
translate the ‘‘feelings’’ that they perceive in society into designs. As a famous designer described it, ‘‘I’m an accomplice to
helping women get what they want.’’ They capture social trends and moods with few, if any, business criteria in mind.13 These
teams offer a unique setting in a business environment where creativity plays a dominant and almost exclusive role.
In contrast to other industries, the relevance of critical insights around domain-specific knowledge such as technology is
much lower (Richardson 1996; Uzzi 1997; Djelic and Ainamo 1999; Saviolo and Testa 2002; Cappetta et al. 2006). Fashion
designers reassign social meaning to existing products and/or change the aesthetic characteristics of a product, generating both
a new physical product and a new meaning (Cappetta et al. 2006). Creativity can be interpreted as socially constructed through
historical, cultural, and social elements (Shalley and Gilson 2004). Studying one industry keeps constant environmental
variables, so as to focus on organizational aspects that may affect the creative process. The fashion industry is also particularly
interesting because creativity is central to the competitiveness of these companies. In fact, fashion apparel is a highly
competitive business, and differentiation strategies built on brand image and product styling can be quickly eroded. Thus,
fashion companies continuously carve their positions through creative efforts as a basis for short-lived differentiation
advantages (Richardson 1996).
Creative departments bring together a small group of creative designers (between four and ten) under the guidance of the
chief designer. The chief designer has a central role in terms of coordinating the efforts and defining the elements and the
‘‘theme’’ of the collection. As such, the chief designer is the person responsible for inspiring the creative team and adapts both
available management systems and informal mechanisms (such as personality and leadership) to achieve it. The management
systems themselves are common across the industry and the chief designer selects and adapts them to the needs of the team.
The chief designer and the product manager (who sits on the business side) select and adapt the management systems that
define the creative space and act as interfaces with the rest of the organization. The influence of each of these people varies
across companies and depends on the prestige of the chief designer.
Case Study Research Design

Because of the emerging nature of the research questions and to enhance the sensitivity of the research design to qualitative
aspects of the design of MCS, we adopt an in-depth case study with replication. The six cases are companies regarded as
leaders and known in the market for their ability to propose unique and innovative products (Saviolo and Testa 2002).
The selection process for the case studies is purposeful, with the objective of observing relevant realizations of the
phenomenon (through the selection of companies known for their creative outcomes) and maximizing variance through variety
in terms of market positioning (Eisenhardt 1989). We draw our sample from two different segments: ‘‘Prêt à porter,’’ which
offers off-the-shelf designs (e.g., Armani, Dior, Gucci ) that an average person would consider as expensive but affordable (fine
fashion), and ‘‘low end’’ (e.g., Benetton, Zara), which delivers fashion at much lower price points (mass market).14 The fact that
all companies belong to the same industry allows for (1) literal replication (predict similar results), and (2) theoretical
replication (predict contrasting results but for predictable reasons) (Yin 2003). The sample selection provides enough
regularity, as well as variety, to examine the role of MCS in creative settings.
We applied this methodology in two steps. As a first step, we identified an in-depth case study (Yin 2003). This is related
to a company that has a wide product mix ranging from shoes, bags, trousers, shirts, and suits, with various brands positioned
differently on the market, thus providing a variety of contexts. The purpose of this in-depth case study was to develop an initial
framework to address the research questions. In this company we carried out an initial 12 interviews with ten managers in four
brand divisional departments. The interviews aimed to (1) define the structure and work practices within and around the
creative department, (2) describe the MCS that were used to manage the creative activities, and (3) capture additional
information on the business model, strategy, organization, and culture of the company. The mix in the positions of the
12
The creative team includes the roles of chief designer, creative director, and designers with different levels of seniority. This team is responsible for the
image, conceptualization, and development of a collection of products.
13
Creative teams’ main objective is to come up with novel concepts that will differentiate the collection and capture the attention of customers. Business
criteria come as constraints to the creative process. The fact that creative teams focus on novel collections does not mean that fashion firms are not profit
oriented; the goal of the rest of the firm is to take these creative products and structure the value creation processes around them.
14
Some teams are involved in haute couture. They produce custom, one-off designs targeting wealthy customers. They serve a market ‘‘above’’ the prêt à
porter segment and are not part of our sample.

managers interviewed gives a diversity of perspectives into control and creativity. We went back to managers several times to
clarify issues and contrast our interpretations of the data and the control process of creativity. We also had privileged access to
process observation. We observed creative teams’ activities and their facilities and collected written information from the
company on team activities and intermediate results. These observations gave us insights into the social interactions that
underlie the creative process, including the role of the chief designer and of the MCS in place. The data collection lasted more
than 12 months. We also had access to written and graphic material that illustrated the enactment of the various MCS. This
material included designs, photo, posters, and more traditional management reports. These data helped to better capture the
design of MCS.
In the second step, we applied ‘‘two-tail’’ logic to select the additional cases to refine our framework (Yin 2003). On the
basis of this logic, we selected cases at both extremes of market positioning: three firms were chosen at the ‘‘prêt à porter’’ and
two at the ‘‘low end’’ endpoints. The relevant managers varied across companies because each company organizes its creative
efforts differently. Each team is organized with a chief designer and various designers. In all companies, we carefully selected
informants in order to interview people closest to the creative process (Uzzi 1997; Djelic and Ainamo 1999). Table 1 describes
the data-collection process across the six companies.
The creative team is where the fashion design process takes place. Teams in fashion firms are made up of a small
group of creative designers, who are in charge of doing the creative work, coordinated and guided by a chief designer,
who plays an important role in terms of defining the elements of the collection to be developed. This structure
guarantees that the creative solutions are in line with the marketing and planning needs and that the chief designer can
provide guidelines for the development of the collection. The fashion design process includes research, design, paper
pattern drafting, prototyping, and sampling (Parsons and Campbell 2004; Bonacchi and Bambagiotti Alberti 2006).15
The process is structured around the autumn/winter and the spring/summer seasons. In some companies the cycle is
shorter if they have one or two pre-collections midway through the main seasonal collections.16 Appendix A describes
this process in more detail.
For stylistic creativity to flourish, creative teams identify new trends and respond to them through their creations. The
development of a collection is an iterative and continuous activity of idea gathering that explores multiple potential directions.
Team members exchange, compare, and integrate provisional ideas in multiple iterations until they converge on the theme of
the collection. The collection needs to be socially and aesthetically compatible. The focus of data collection was to identify the
design and use of MCS throughout these creative activities.
The Cases’ Data Analysis

We adopted an iterative logic of cycling between the data, emerging theory, and relevant literature. In analyzing
interview transcripts and field notes, we identified the control mechanisms used and examined how they related to
creativity. The process included an iterative analysis of the evidence, each time refining the interpretation of the data as
well as going back to the field to clarify questions. Through the process, we contrasted our findings with existing
concepts in MCS. When these concepts did not offer a plausible explanation, we developed tentative concepts and
relationships grounded on the data. We cycled through this data-gathering and analysis process until new data showed
little incremental contribution. This iterative process led us to identifying various MCS used within creative teams of
the pilot case. After identifying these systems, we focused on better understanding their purposes. Each system had its
idiosyncratic aspect, yet as we questioned the data and contrasted the initial findings with field data, a common theme
emerged. The various systems converged in their purpose around either stimulating creativity or delineating the creative
space.
Next, we used replication logic to contrast these initial findings with new data from the additional case studies,
questioning, supplementing, validating, and refining our initial analysis. MCS across companies were comparable,
although each one had its unique design. We contrasted differences in the realization of these systems by going back to
the companies, especially to the managers from the pilot case, to understand why their practices differed and how these
differences modified our initial conclusions.17 As we added new observations to our database, the two purposes of MCS
15
The fact that the process is well structured does not mean that it is repetitive or that the objectives are clear at the start. Variation, selection, and
retention happen within the process. The existence of a process does not imply the absence of freedom, inspiration, and creativity. Rather, to the
contrary and consistent with the findings in the creative literature, the existence of a stable process enables creativity to happen more fully.
16
A new type of fashion company catering to the ‘‘low end’’ segment has eliminated these seasons and introduces new products weekly and in some cases
daily (e.g., H&M and Zara).
17
We report the final results from the analysis of the data without differentiating at which stage of the research process the particular concept or insight
emerged. The final results are a combination of the iterative process from Deep-Fashion, together with the iterative process including the additional five
case studies. The analysis is illustrated using evidence from all six case studies.

TABLE 1
Case Studies’ Data Collection
Length of
Company Managers Interviewed Interviews
Deep-Fashion Italian Commercial Director 1 hour
Foreign Technical Director 1 hour
Italian Technical Director 1 hour
Group Controller 1 hour
Group Controller (II interviewa) 4 hours
Group Controller (focus group) 2 hours
J-Brand Collections Coordinator 3 hours
M-Brand and Commercial Director 2 hours
Sub-Brands M-Brand Controller 1 hour
M-Brand Controller (II interviewa) 1 hour
Creative Director 1 hour
P-Brand Collections Director 1 hour
A-Brand Product Manager (shoes and bags) 2 hours
Total 21 hours
Documents Analyzed
Financial statements, company profile, management control manuals and procedures, segment income
statements, collection briefing, collection calendars, product technical cards, designs, and patterns.
Processes Observed
Design process, pattern development process, cut process, sewing process, and prototype development process.
Best-Fashion Group Controller 2 hours
Group Controller (II interviewa) 1 hour
Technical Director 3 hours
Total 6 hours
Documents Analyzed
Financial statements, company profile, product technical cards, collection calendars, designs, and patterns.
Processes Observed
Design process, pattern development process, cut process, sewing process, and prototype development process.
Even-Fashion CEO 3 hours
CEO (presentation) 1 hour
Chief Designer 3 hours
Total 7 hours
Multi-Fashion CFO 2 hours
Controller (presentation) 2 hours
Controller 1 hour
Total 5 hours
Trendy-Fashion CEO 2 hours
Creative Director 2 hours
Controller 1 hour
Human Resources Director 1 hour
Total 6 hours
Luxury-Fashion Marketing Director 2 hours
Product Director 3 hours
Manufacturing Director 2 hours
CFO (focus group) 2 hours
Total 9 hours
Interview Total 54 hours
a
It is a second interview.

identified in the first case were reinforced. Differences emerged around the boundaries of the creative space and themes
for inspiration, but we observed that these two types of MCS happened in all six companies.
For the five replication case studies we used a similar method to the one used in the in-depth case study. We
collected data from three sources: (1) interviews with key informants, (2) documents of the organization, and (3)
observations of processes and facilities. These multiple sources allowed us to contrast and triangulate the data providing
‘‘multiple measures of the same phenomenon’’ (Yin 2003, 99). Table 2 provides a description of each of the six
companies.
FINDINGS: CONTROLLING CREATIVITY IN FASHION FIRMS

Fashion firms compete through the symbolic value of their style embedded in the aesthetic characteristics of the individual
elements of a collection and their combination. Style is the result of choices concerning textiles and fabrics, weavings, colors,
volume, shape, and silhouette (Volli 1990; Davis 1992). Fashion designers use their expressive freedom to develop a coherent
and distinctive style in their collections.
First of all a designer has to use an expressive method, an expressive vehicle in the design. Creativity has an
expressive freedom in work techniques, volume, colors. (Chief Designer, Trendy-Fashion)
It is necessary to create a global, dynamic, and cohesive image also across accessories, bags, to have something
complete. The starting point of this image can be anything; it can start with an idea out of an exhibition or a book.
(Creative Director, Trendy-Fashion)
Having a consistent image across the collection of products requires coordinating the ideas and intuitions of the
design team. Furthermore, fashion designs need to be compatible with the style of the firm and consistent with industry
trends.
The design leader is ‘‘the voice,’’ but the voice in an orchestra. The creative individual that can work in team is a
creative person that generates synergies. (Controller, Trendy-Fashion)
You cannot avoid knowing how the creativity process proceeds, with the need to make a product that is feasible,
saleable, in line with what the market requires. (Chief Designer, Trendy-Fashion)
If in a certain period, the market proposes a little mask; all companies have to use a little mask. (Creative Director of
M-Brand, Deep-Fashion in reference to glasses)
Existing MCS concepts are a fruitful starting point to analyze these observations. Yet, interpreting these systems as
fulfilling roles similar to those that they fulfill in other settings fails to capture the uniqueness of our research setting. The
traditional emphasis on inducing effort and extrinsic motivation is less relevant in our research context. Shirking and rent
appropriation are not dominant concerns. Fashion designers like to create and have a strong intrinsic motivation. In all the cases
that we analyzed, designers were not rewarded with explicit economic incentives.
Designers are satisfied and happy because they see that their creations are successfully sold and included in
publications. (Marketing Director, Luxury-Fashion)
All that is given to designers is freedom in creativity. It is taken as a gift, a gift in terms of trust from the
creative director. It is an opportunity for them to emerge and show their ability. (Creative Director, Trendy-
Fashion)
Therefore, looking at MCS from the perspective of motivating effort-averse and risk-averse agents concerned with
rent allocation does not fully capture the relevance of MCS. Inspiring, creating a community spirit through common
metaphors, interpreting moods and feelings, and shaping, negotiating, and legitimizing meanings are much more salient.
Thus, to understand MCS in these environments, existing concepts have to be reconsidered in order to focus on these
unique aspects.
Directional and Inspirational Controls for Creativity

We identified two sets of MCS in our research sites designed to support creative teams pursuing stylistic creativity:
directional and inspirational systems. The former structure the creative space of the team (directional), while the latter stimulate
creativity and support consistency in ideas generation (inspirational).

TABLE 2
Case Studies’ Description
a
Deep-Fashion (in-depth case study)
‘‘From the elegance of women to a provocative style that combines both contemporary and innovative dimensions, focusing on both
image and price in the realm of the leading global luxury brands.’’ (company presentation)
Founded in early 1980s in Milan. Today, the company designs and distributes luxury goods, ranging from women’s wear, lingerie and
beachwear, men’s underwear, leather goods, bags, footwear, eyewear, kids wear, fragrances, watches, neckwear, umbrellas, sport chic
apparel, ski and après-ski apparel, and fitness clothing. Consolidated revenues are € 259.6 million, with an EBITDA of 8 percent of
revenues. Its portfolio of international luxury brands includes five owned brands and four licensed brands. These nine brands are
complementary, positioned at the high end of the market, and ranging from the idea of contemporary feminine elegance and glamour
to provocative collections. Owned brands come from acquisitions, while licensed brands are associated with partnership and licensing
agreements. The design activities are carried out by in-house designers (for some brands) and longstanding cooperation with leading
international designers (for other brands).
Best-Fashion
‘‘For people that love a combination of style, quality and passion and strive for clean and elegant collections.’’ (company website)
It operates in more than 100 countries, producing and selling about 130 million garments per year. The firm is also involved in the
manufacturing and distribution of accessories and other items for casual and home wear, footwear, cosmetics, eyewear, watches,
stationery, bags, umbrellas, games, and toys. Consolidated revenues are about €1.6 billion, with an EBITDA of 6 percent of revenues.
Even-Fashion
‘‘For a happy life, happy environment, happy friends, happy existence.’’ (company website)
Founded in the early 1980s, it began its large growth in 2002. It designs and sells clothes and accessories such as bags, belts, and purses.
It operates with one brand sold through three channels: 157 mono-brand stores, 4,500 multi-brand stores, and 450 corners and shop-in-
shop in 65 different countries. It employs 1,500 people from 25 different countries. It uses nonconventional marketing initiatives and
its quality in logistics has been recently recognized with an award for excellence. Revenues are € 828 million, with an EBITDA of 29
percent of revenues.
Multi-Fashion
‘‘For sensual, strong and successful women, who like to emphasize their evolution characterized by quality and passion.’’ (Director of
Strategic Planning)
It is a multi-brand luxury goods company, born in the 1920s when the founder opened a leather goods store. It offers a diversified
portfolio of products including apparel, lingerie, scarves, shoes, bags, leather accessories, eyewear, jewelry, watches, fragrances, and
furniture. Multi-Fashion sells through nine different brands. Consolidated revenues are €3.56 billion, with an EBITDA of 35.8 percent
of revenues.
Trendy-Fashion
‘‘Focused on the idea of a world of fashion, glamour and sex-appeal.’’ (company website)
Founded in the 1970s, it produces clothing collections, complemented by a range of accessories such as bags, shoes, and belts. There is
also a collection of scarves that is regularly updated and that features designs from the company archives. In a new development for
the group, a concept for dedicated watch and jewelry boutiques has been pioneered in Dubai. The company owns more than 100
boutiques in the most exclusive cities in the world. Consolidated revenues are €479.2 million, with an EBITDA of 14.4 percent of
revenues.
Luxury-Fashion
‘‘A style that recalls fairytales where a touch of freshness and of classic styles are recalled, emphasizing the glamorous, romantic and
playful dimensions of an alternative world where anything is possible.’’ (company website)
It is a leading company in the luxury clothing segment with a diversified portfolio of products including classic menswear, women’s
apparel and luxury goods, sportswear, and accessories. More than two-thirds of sales are generated in Europe, mainly through the
wholesale channel. The company acquired numerous firms over the years, offering and having different brands, to diversify its
products. Some of them are owned (eight), whereas some others are licensed (two). The company also owns a substantial portion of a
U.S. brand company. The company operates in over 110 countries, with more than 1,600 boutiques and 433 directly managed shops.
Consolidated revenues are € 488 million, with an EBITDA of 13.3 percent of revenues.
a
For confidentiality, all the names of the companies have been disguised. To avoid easy identification of companies, we have rephrased the original
wording of public statements. In particular, all quotes describing the positioning of the companies have been rewritten to maintain anonymity. Financial
information is for 2013.

Directional Systems
Directional systems configure the creative space by making explicit the degrees of freedom available to the team. They are
neither intended to extrinsically motivate nor meant to constrain certain behaviors because of shirking or asset misappropriation
concerns.18 Rather they define the rules of the game, clarifying resources available and the expectations and support from other
parts of the organization. They make explicit the constraints that the creative team faces. Certain directional systems are
accounting based. More specifically, expense budgets set financial constraints for each of the phases of the creative process and,
in some cases, for discretionary activities.
Basically, we look at the achievement of budgeted costs and the level of efficiency achieved. In the development of a
product, there is the possibility of an assigned budget and of efficiency in the achievement of an objective, in line with
a lower cost to get there. (Human Resources Manager, Trendy-Fashion)
Cost cards report the costs associated with the choice of materials and product design options and reconcile the designers’
proposals with manufacturing and the marketing departments’ needs:
In the cost cards you have to report all the materials, the working phases, the ironing, all the maintenance that is
necessary during the process, the fixed costs, and then the firm’s markups. (Collections Coordinator, J-Brand, Deep-
Fashion)
The product manager who knows about the costs of the designs manages the ‘‘crazy’’ designer on the one hand, and
the marketing director on the other. (Product Manager, Luxury-Fashion)
Reports on the previous year’s sales also provide fashion designers with an indication about the most successful fabrics,
colors, and patterns. This information helps in understanding those dimensions of creativity that the market particularly
appreciated:
When a collection is closed, commercial people collect ‘‘sell out’’ data; in other words what did not work in the
previous season. (Collections Coordinator, J-Brand, Deep-Fashion)
A small ‘‘conclave’’ analyzes the sales of the previous season. The design manager is informed about the length of the
skirts that sold best or the details of the jackets that were more liked. He receives a sort of input to consider in the
development of the collection. (Product Manager, Luxury-Fashion)
Other directional systems further shape the creative space through interfaces with the rest of the organization. The
collection brief lists the number of models per category such as skirts, shirts, or suits. This input comes from the marketing
department and is based on past experience and the strategy going forward:
Each brand must agree to develop a plan indicating the number of articles, the number of options, values, deliveries,
etc. (Technical Director, Best-Fashion)
We receive a briefing, where we are told how many fabrics we can use in the collection, fabrics combined with prints,
average price, also the different categories of clothes. (Assistant Chief Designer, Deep-Fashion)
The collection calendar describes the timing of the various phases of the design process to meet the deadline of
presentation, manufacturing processes, and distribution to shops. The collection calendar is anchored by the timing of fashion
shows. This explicit timing defines deadlines for each of the stages (except for minor or unexpected iterations) and provides a
rhythm to the process that disciplines the creative effort.
The operational calendar indicates the dates by which, with no exception, the products should be ready. (Collections
Coordinator, J-Brand, Deep-Fashion)
18
Traditional control systems’ frameworks address issues of inducing effort through extrinsic motivation. The alternatives most often adopted include
reducing the consequences of effort aversion and risk aversion either (1) explicitly dictating actions (behavior MCS), or (2) rewarding specific
objectives (output MCS) (Merchant and Van der Stede 2012). While our data could be interpreted to fit this particular framework, it would fail to reflect
the particular challenge of controlling creativity, which is not to address inducing effort or extrinsic motivation but rather to define the creative space
and align the creative forces of the fashion designers in a team. Similarly, our observations could also be interpreted using an agency framework. Yet,
its basic assumptions of effort aversion, risk aversion, and economic contracting between principal and agent are of minor relevance in our research
sites.

Additional MCS are used to negotiate and legitimize the choices along the creative process. Meetings and gates at the start
and at the end of each phase involve managers from other departments to provide feedback and redirect the thrust of the
collection if needed, with the aim of negotiating and legitimizing the remaining stages of the creative process.
We have the meetings to try the clothes, where you meet the designer and you start to revise things. From then on,
there is a second meeting and then a third meeting for final coordination. (Collections Coordinator, J-Brand, Deep-
Fashion)
In sum, directional systems shape the creative space of design teams through guides such as collection calendars and
collection briefs of the creative process and boundaries such as expense budgets.
Inspirational Systems
Inspirational MCS aim at stimulating individual ideas and transforming them into a coherent collection that is consistent
from an aesthetic point of view and compatible with market trends. They shape collective creativity, those moments where
creativity draws from each of the participants to create new and valuable insights (Hargadon and Bechky 2006). They do not
define the creative space but rather stimulate creativity within it. They support the exchange and combination of ideas as
creative individuals collectively engage in the construction of shared new perceptions and the development of a new collection.
They support the gradual integration of individual ideas into the collective effort required for developing a consistent collection.
In addition, inspirational MCS support designs that are socially compatible, balancing uniqueness and social acceptance:
consumers expect novelty, but this novelty needs to be familiar and thus consistent with existing artistic and aesthetic trends
(Lampel, Lant, and Shamsie 2000):
It is not possible to combine a drawing of a dress of the ‘20s, a silhouette of the ‘50s, trousers of the ‘80s. (Assistant
Chief Designer, M-Brand, Deep-Fashion)
Some of these systems support designers’ exposure to stimulating environments, immersing the team in their customers’
environment, having them travel together to places relevant to the theme of the collection, reviewing magazines, internet and
other information sources, and searching archives. Companies provide time and financial resources for this search process to
take place.
Thanks to internet, we have webcams in the best points of sales in the world. They help us understand current trends,
what customers are looking at, what they are buying, and what other fashion companies are bringing out. (Product
Manager, Luxury-Fashion)
Research takes place through vintage, by means of dresses that can be found in various antique markets, so that you
can take some ideas from there for a material, a color, a pattern, or a proportion. (Creative Director, Trendy-Fashion)
Things that could be interesting for me now are art exhibitions or even books, which for a moment activate a process
that may recall an idea that you have in your mind but you are unaware of. (Creative Director, Trendy-Fashion)
They do a lot of trips everywhere: Tokyo, Los Angeles, New York, Paris, Milan, Las Vegas, and a week in St. Tropez.
(CEO, Even-Fashion)
For the C&C line, a person, Francesca, scouts the historical archive to look for inspiring designs. (Controller, M-
Brand, Deep-Fashion)
The firm gives creative people moments, moments that are used to do research trips. This is useful for them to
understand what is happening in the world. (Creative Director, Trendy-Fashion)
Ideas are then formalized through the development of a theme or mood of the collection by the chief designer. It
inspires designers to create around a common vision. A head of the designers’ department defined this theme or mood
as:
What is the theme of the collection that I would like as inspiration? Theme: It is the starting point that the designer
gives and everybody refers to. (Collections Coordinator, J-Brand, Deep-Fashion)
Themes are then made visible. The workspace of the creative teams has posters where team members hang pictures,
drawings, and photos to create a collage that visualizes the theme. These posters facilitate the provision of common visual
referents for the structuring and management of the creative effort. For instance, if the theme is water, then the collage will
show different representations of water, pictures of objects inspired on water.

Before letting the pencil go, posters are prepared, moods are developed, and in this preparation there is a collection of
images, materials, colors, in some cases verbal downward strokes. In the company [where] I used to work, the chief
designer used to tell rhymes and fairytales to make us understand the spirit of the collection. (Product Manager,
Luxury-Fashion)
Another important part of the creative activity and source of inspiration is to embed the team in the fashion environment
(Caglio and Ditillo 2012) by means of direct interaction with trendsetters, opinion leaders, suppliers, and retailers in a virtuous
cycle of grasping and spreading a certain trend. Team members participate also in key events such as fashion fairs, materials
exhibitions, and social events such as galas that have echo in the press. This latter, in fact, plays a critical role as arbiter and
witness of the success, playing the function of ‘‘gatekeeper’’ of accepted creative ideas (Solomon and Rabolt 2004). The
objective is to converge toward the trends of the fashion community and society:
We are all, how can I say, rather embedded in how the other companies are behaving in terms of trends, what they plan
to do, what they are doing, and what they are not doing. (Product Manager, Luxury-Fashion)
Milan is a world in which all the guys working in design departments, overall the youngest that come from the same
schools, know each other and know everything about each other. In Milan they are all in the same place, in the same
bar, in the same disco; you find them always there. Regarding higher levels, the chief designer participates in social
events. She is a friend of Miuccia Prada, in other cases there are more formal relationships. They are all friends on
Facebook, Twitter, and so on. (Creative Director, Trendy-Fashion)
Inspirational systems are the processes and visual and textual artifacts that contribute to materializing the designers’ ideas
and to engaging the team in the development and understanding of an aesthetic state (Stigliani and Ravasi 2012). For instance,
pictures, drawings, and photos help with visualizing ideas and the aesthetic elements of the collection. Moreover, inspirational
systems reinforce intrinsic motivation and shared goals (Gilson et al. 2005). For instance, designers travel together to share
common experiences that will guide the theme of the collection. This common theme has an important impact on the success of
the products designed. In fact, the collective effort to turn an overarching theme, such as the colors of spice markets in Turkey,
into specific design characteristics of products strongly affects the perception of the collection in the market.
In sum, inspirational systems leverage both external and internal sources of information to shape the consistency and
novelty of the collection and contribute to the success of collections. Table 3 reports additional evidence of controls across the
six companies.
Contextual Variables and the Design of Management Control Systems

As described in the previous subsection, companies in our research used comparable MCS. Yet, their design varied across
companies. In particular, in analyzing our cases, we examined the effect of the firm’s strategy in terms of market positioning
(Cillo and Verona 2008) (see Figure 1). The six companies in our research compete either as mass market (low end) with lower
price points to more price sensitive segments, or as fine fashion (prêt à porter), targeting the middle and upper segments of the
market. Fine fashion companies are perceived as trendsetters, making bolder and riskier designs. The role and reputation of the
chief designer in these companies is paramount, and this person is often a high-profit public figure in the industry.19
Fine fashion firms’ MCS set a broader creative space with designers facing wider operating constraints. The interaction
between creation and business happens through a process of negotiation and legitimization where designers and their business
counterparts discuss the design ‘‘experiments’’ as they progress. More items are proposed and then progressively discarded to
fine tune the contents of the final collection:
We want to have trials . . . and try different designs. (Collections Coordinator, J-Brand, Deep-Fashion)
There are always adjustments to make during the process and at the end things that are really interesting may emerge,
those that make the sales. (Collections Director, Luxury-Fashion)
Designers in fine fashion firms have more freedom to choose colors, fabrics, and patterns. As strategy moves to fine
fashion, directional controls become progressively more flexible. The creative space is characterized by boundaries that are
constantly negotiated throughout the design process:
19
The contrast between the fine fashion and mass market approach to creativity is akin to the differences between voice of the product (Goldenberg,
Mazursky, Horowitz, and Levav 2003) versus voice of the customer in the innovation literature.

TABLE 3
Selected Additional Comparative Case Studies’ Evidence
Panel A: Directional Controls: Output and Behavioral

Best-Fashion (mass market) ‘‘Within the firm there are two key roles, technical department and time and methods department,
which elaborate a series of statistics on historical sales data.’’ (Controller, Best-Fashion)
‘‘If we leave the complexity free we generate a lot of costs.’’ (Controller, Best-Fashion)
‘‘We define the rules within which the design office will operate, we provide them with the
collection brief, merchandising plan, calendars, activity plans.’’ (Technical Director, Best-
Fashion)
‘‘(Designers) become part of a system and to work in the system they need to understand the
method of work that we have. They need to acquire the method, to understand the design
rules, the design tools.’’ (Technical Director, Best-Fashion)
Deep-Fashion (mass/fine market) ‘‘In line with the brief we select the colors, the fabrics, trying to comply with the average price as
much as possible.’’ (Creative Director, M-Brand, Deep-Fashion)
‘‘Collection income statement, split into wholesale and retail, quantity and sales, country by
country.’’ (Creative Director, M-Brand, Deep-Fashion)
‘‘Report on ‘best seller’ and ‘worst seller’.’’ (Creative Director, M-Brand, Deep-Fashion)
‘‘One thing that we certainly analyze is the collection of last year.’’ (Collection Director, A-
Brand, Deep-Fashion)
‘‘Why it didn’t work and in addition what was not liked, what are the technical problems
encountered in selling the product—and this can include anything from the fabric, the weights,
the appearance, the colors, the themes. All this information concerning sensations, emotions,
what has been collected is written. So before starting with the spring-summer collection, I
consider all the reports of last season. Of course it is just indicative, because this season could
be completely different.’’ (Collections Coordinator, J-Brand, Deep-Fashion)
‘‘We are provided with a collection brief, with a split in categories of the collection, so you
should give us, 10 drawings of coats, 25 drawings of jackets, 30 designs of suits.’’ (Creative
Director, M-Brand, Deep-Fashion)
‘‘There is a general meeting in which all the pieces are tried, defects are removed, they are
shortened, lengthened, shrunk.’’ (Creative Director, M-Brand, Deep-Fashion)
‘‘The commercial office sets up the collection brief, together with the collection office, the
product office and the chief executive officer.’’ (Director, Collection Office, A-Brand, Deep-
Fashion)
‘‘In the fashion world, where there is a seasonal trend, there are operating calendars.’’ (Director,
Shoes and Bags Collection, P-Brand, Deep-Fashion)
‘‘We receive a briefing, where we are told . . . the number of variants you can introduce. If the
total number of drawings is 100–110, the total pieces will be 130–140 because some clothes
are repeated in different fabrics and can have completely different effects. One dress can be in
embroidered chiffon while another is in unified crêpe.’’ (Assistant Chief Designer, Deep-
Fashion)
(with reference to the dates by which products should be ready) ‘‘I use the conditional
purposefully, and by which the designers have to produce their drawings to have the products
ready for the collection presentation; keeping into consideration that we have to have, after
presenting the collection, four operating weeks to produce the sample, at minimum.’’
(Collections Coordinator, J-Brand, Deep-Fashion)
Multi-Fashion (fine fashion) ‘‘The company develops a budget for each product and for each event.’’ (Controller, Multi-
Fashion)
‘‘When the sales campaign begins, there is a need of developing the standard cost in order to set
the retail price. You fill in the bill of materials and the work cycle card.’’ (Controller, Multi-
Fashion)
‘‘The allocation of indirect cost is done in a very simple fashion.’’ (Controller, Multi-Fashion)
(continued on next page)

TABLE 3 (continued)
‘‘They develop collections on the basis of a merchandising grid indicating the number of lines for
season, the number of materials, the price ranges; however the choice of materials and color is
totally free. The number of articles is defined together with the merchandiser, but the chief
designer will choose which products will be sold. What is defined is the number of lines and
not the number of pieces.’’ (Controller, Multi-Fashion)
Trendy-Fashion (fine fashion) ‘‘The person responsible for pricing, intended here as the monitor, proponent, is however the
controller. Maybe an initial control on what are the objectives that the group has set, in the
sense that controlling is not only monitoring but also planning and pricing.’’ (Controller,
Trendy-Fashion)
‘‘So cost centers, responsibility centers, which are involved in the process of product
development, with a specific position in our internal income statement are considered as
general overheads. So they are not in the cost of goods sold, it’s outside the gross margin. We
see it like a cost that refers directly to the volume of activity of the firm as a whole.’’
(Controller, Trendy-Fashion)
‘‘We have an income statement for the company as a whole and one for each collection.
However you do not allocate the cost of the designers. All the other costs you do.’’ (Controller,
Trendy-Fashion)
‘‘We have always been high in the number of colors cards. Then, there is gradual selection of
colors while the collection is developed. As regards the number of fabrics, we have to comply
with those indicated in the briefing that we receive, both the number and the typology that we
have to have for each category, prices levels that we have to meet.’’ (Creative Director,
Trendy-Fashion)
Luxury-Fashion (fine fashion) ‘‘We do this type of control, we give suggestions, and we start defining the first set of designs
with the public of the collection, that is to say the commercial director, the marketing director,
also members of the board of directors may appear, but not necessarily, and mainly the style
director who recently is becoming a different role from that of the creative director. In these
meetings, we define carefully the ‘fallen,’ they are eliminated and we signal to the designer
that the fallen models need to be replaced with some alternatives.’’ (Product Manager, Luxury-
Fashion)
‘‘I want to make a jacket with the shoulder straps, all built ‘tailor’ with a non-twisted cotton, and
I want to wash it. That means creating a monster, but explaining it is not easy so you have to
look after him (the designer): ‘How would you like it?’ ‘I would like it with this cotton . . . but
I want to have it built.’ ‘But you do not want to wash it, do you?’ ‘Yes, I want to wash it,’ ‘so
let’s not have it built.’ ‘Why?’ ‘Because it’s crap.’ ‘Yes, you are right.’ So, looking after him
all the time.’’ (Product Manager, Luxury-Fashion)
Panel B: Inspirational Controls: Search for Ideas

Best-Fashion (mass market) ‘‘Each collection, 780 items, is organized by theme describing the flavor that they must have.’’
(Technical Director, Best-Fashion)
‘‘The themes could be, I don’t know, rock, glamour, they are names that remind of a period or
that suggest the flavor, and they are interpreted in the colors.’’ (Technical Director, Best-
Fashion)
Deep-Fashion (mass/fine market) ‘‘There is a theme that should guide the collection in its entirety and the creative director
provides images, fabrics, for example, this year, China and for the other brand cowboys, and
the creative director selects some images.’’ (Collections Coordinator, J-Brand, Deep-Fashion)
Trendy-Fashion (fine fashion) ‘‘The design office is provided with a budget to do some research exploration, a budget that has
to be met.’’ (Creative Director, Trendy-Fashion)
‘‘If you get in a company like Trendy-Fashion, a lot of work is already done because there is an
incredible archive.’’ (CEO, Trendy-Fashion)
Luxury-Fashion (fine fashion) ‘‘The designer enters in the world of collection and he organizes a search trip, he goes to the
vintage shops and to the exhibition and starts to define the emotive dimension of a certain
theme, simply the ‘50s, the aggressive silhouettes, or the use of crazy materials, which
becomes the pillar of the collection, more fabric than style in terms of visual impact, and then
also stylistic content.’’ (Marketing Director, Luxury-Fashion)
(continued on next page)

TABLE 3 (continued)
Panel C: Inspirational Controls: Visual Integration of Ideas
Best-Fashion (mass market) ‘‘The fundamental colors are maybe taken from newspapers, magazines as a reference starting
point and then on the basis of that they create, draw.’’ (Technical Director, Best-Fashion)
Deep-Fashion (mass market) ‘‘And then we have the prototypes, made with either similar fabrics to those we selected or in
pieces of the same fabric with different colors to have a general idea of the garment.’’
(Creative Director, M-Brand, Deep-Fashion)
Panel D: Inspirational Controls: Social Integration of Ideas

Even-Fashion (mass market) The interaction with the retail shops is particularly important to understand trends, customers’
preferences.
Organization of social events with personnel, retailers, consumers (e.g., naked parties).
Deep-Fashion (mass market) ‘‘At the end of the collection, you have to be able to transmit something to write a press release.’’
(Creative Director, M-Brand, Deep-Fashion)
Multi-Fashion (fine fashion) ‘‘They define the collection on the basis of period trends.’’ (Controller, Multi-Fashion)
Creative activities are bound to have many changes throughout the process, especially when the product is fashion.
Sometimes designers with the last changes can create interesting products. (Collections Coordinator, J-Brand, Deep-
Fashion)
Inspirational MCS at fine fashion firms are much more the decision of the chief designer, who often makes the theme
evolve based on the designs that are emerging rather than freezing it early on in the process:
You build the collection somehow for stories, but they are not so clearly defined. The creative director selects designs
that are consistent after they have been developed. (Creative Director, M-Brand, Deep-Fashion)
The theme is kind of there. However, you will never hear the chief designer say, ‘‘This year I was inspired by India, or
this year I like the ‘60s.’’ It will never be like, ‘‘We got inspired by Brigitte Bardot.’’ That would kill us. We start from
some images of an artist, who can inspire the idea of volume. This idea is then reinterpreted and used for the clothes.
In the last atelier we have the 3-D, but we got there through a path. (Creative Director, Trendy-Fashion)
The chief designer drives the style search and makes sense of market changes. She has the prestige to impose her views on
style and markets (often the brand may be her name). She is the main actor of the collection choices and the rest of the team
captures her vision.
FIGURE 1
Market Positioning and the Use of Management Control Systems

You have to understand whether the chief designer is a creative person with experience, if he is part of the family, he
has the name of the family, or he is an external person, because the level of influence and the degree of penetration on
the creative part is different. In this case, the creative perspective has a stronger power. (CEO, Trendy-Fashion)
In contrast, mass market companies are more sensitive to efficiency rationale. The ‘‘motto’’ written at the back of the desk
of the technical director of Best-Fashion and visible to everyone illustrates this point:
Creativity is a serious matter only if there is discipline, steadiness, and rules. (Technical Director, Best-Fashion)
For instance, the directional MCS at Best-Fashion shape a narrower creative space for the design team with a few clear
restrictions on creation:
There must be rigor, in other words an analytical approach, very precise rules. (Technical Director, Best-Fashion)
The number of variations (colors, fabrics, accessories, etc.) is clearly defined in advance for the designers, and the
opportunities for them to deviate are small:
We develop a collection brief for the semester, for example the fall-winter collection. The brief includes the plans of
all the activities that must be carried out to be ready for the collection presentation. (Technical Director, Best-Fashion)
Best-Fashion sets clear boundaries from the beginning of the creative process. The number of items, number of colors,
fabrics, number of accessories, and level of outsourcing are clearly defined. Budget, product costs, and technical requirements
are specific and complete, and reviews are detailed.
We have to pursue revenues objectives, keeping complexity under control. (Technical Director, Best-Fashion)
Themes and metaphors are focused. The chief designer chooses the theme early on, and keeps it the same over the entire
process.
Our data indicate that market positioning affects the design of MCS. In particular, fine fashion firms start with a broader
creative space that is narrowed down as the collection advances, and directional systems are progressively negotiated. Mass
market fashion firms use directional systems that define a narrower creative space. Figure 1 summarizes this evidence, and
shows how MCS design varies as market positioning changes.
DISCUSSION AND CONCLUSIONS

MCS play an important role in creative teams. These systems shape the creative space of the teams as well as provide
coherence to the collection being designed. MCS in creative teams can be interpreted as enablers of creativity rather than as
mechanisms to induce effort, motivate through extrinsic incentives, coordinate routine activities, and manage agency
relationships. These aspects are of much less relevance in creative settings. MCS define the creative space and inspire creative
people in ways that are consistent with findings in the creative literature. They are not detrimental to creativity as often argued;
rather they enhance it, clarifying the constraints in the creative act and defining a collective mind through sources of inspiration.
We identify two sets of MCS: directional MCS balance the tension between creative freedom and business needs; and
inspirational MCS balance individual creative freedom and the need to have a consistent theme collection (Busco, Frigo,
Giovannoni, and Maraghini 2012). Directional MCS define the boundaries of the creative space. They specify the degree of
freedom (e.g., number of fabrics, colors, patterns) that can be used to create, as well as the product mix that is expected from the
creative process. To this end, they establish communication channels with downstream functions to negotiate and legitimize the
creative outcomes. Collection briefs, cost cards, operating calendars, gates, and meetings are important tools to delimit this
space (Ford 1996; Chandy et al. 2006), to filter ideas, and to legitimize final decisions (Drazin et al. 1999), confirming the
relevance of MCS in stimulating curiosity and activating dialogues around uncertainties (Hedberg and Jönsson 1978). Their
role reflects the emphasis that creativity literature puts on the need to establish limits for creativity to flourish (Prahalad and
Mashelkar 2010). Directional controls share certain characteristics of boundary systems in that they define limits. However,
they are not directly related to behavioral boundaries (such as codes of conduct) or strategic boundaries; rather they define the
degree of freedom and resources used in the creative acts. Through the freedom and resources available to the creative team,
directional systems buffer the creative team from the business needs. In the fine fashion companies, these limits are constantly
negotiated between the design team and the business side of the firm, whereas in mass market firms they tend to be defined
from the very beginning. Directional MCS change every season, with marketing requiring a different product mix or
manufacturing having different deadlines. Directional MCS also share certain characteristics with diagnostic systems. Some
directional MCS are accounting based and have associated targets (such as expense budgets). However, in contrast to
diagnostic systems, these targets do not have the purpose of monitoring the implementation of a predetermined plan; rather they
specify the resources available for the creative endeavors. In addition, directional MCS share certain characteristics of enabling

systems as described in the enabling-coercive framework (Jørgensen and Messner 2009) and act as enabling extrinsic
motivators.20 They foster internal transparency within creative teams, and global transparency between the creative teams and
other functional groups. Their enactment in high fashion firms shares the idea of flexibility.
The second set of systems is inspirational MCS. They support the creative activities of the team. Inspirational systems
provide new frameworks for the team to create in a new direction and away from past collections. This concept is consistent
with the creative literature’s emphasis on the relevance of external stimulus for creation. The role of inspirational MCS
emphasizes identification across a common theme to enhance aesthetic order and social compatibility where each garment
reinforces the meaning of the collection and converges toward market trends (Adler and Chen 2011). Fine fashion firms provide
their chief designers with more freedom in designing inspirational systems, while mass market firms provide more guidance
regarding where to look for inspiration. Inspirational MCS are close to belief systems in that they speak to people’s intrinsic
motivation and have designers adapt the collection theme as their own. Yet, they are not long-term aspirations that motivate
people because of the company’s mission in business and society. Rather, they are short term, lasting one collection. They are
not intended to align personal goals with the organization’s mission, but rather to turn individual sensemaking processes into a
consistent collective sensemaking. They also differ from belief systems in that they are used to provide a unique perspective to
observe society and learn from it, rather than communicate culture. These systems share with interactive systems their aspect of
stimulating face-to-face dialogue, search, and exchange of ideas. However, these dialogues are local and do not involve
members of the top management team.
MCS in creative environments is a fruitful line of future research as creativity, as reflected in stylistic innovation, becomes
a more important source of competitive advantage beyond technological progress. Rather than toning down MCS as the
relevance of creativity increases, these systems need to be interpreted from a new perspective unrelated to the traditional goal
incongruence agency framework, and be designed with different objectives and features. In addition, more directional MCS
need to be integrated with appropriate inspirational MCS.
Our findings raise several questions for future research. First, the study focuses on the fashion industry; it does not inform
whether its findings are fully relevant in other creative industries. In particular, the control challenge is likely to be more
demanding in settings where innovation requires not only stylistic creativity but also technology advancement; as well as
settings where inspiration has to be balanced against more traditional coordination and goal divergence objectives. Further
investigation can also focus on a wider range of variables that affect MCS choices in creative contexts. Despite these
limitations, this work interprets MCS as tools to enhance creativity and, in doing so, contributes to the debate on creativity and
control.
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APPENDIX A
The Design Process in Fashion Firms
The design process starts with the research phase where designers collect information on market trends and predictions
about how fashion will evolve. Designers use various sources of information. First, they have their own feeling of the market
based on trade shows, what is currently selling, and their own contacts and experience in society. Second, they rely on trend
reports that describe styles, colors, and fabrics popular for the coming seasons. Third, they visit textile manufacturers to procure
samples of fabrics and make an initial selection of fabrics and patterns and match them to the expected products. Textile
manufacturers are at the very beginning of the industry value chain and follow a similar research process ahead of fashion

designers to select fabrics and patterns. This selection is recorded in technical cards. These cards become the documents where
all decisions and choices regarding a specific garment product along its lifecycle are recorded (Bureau of Labor Statistics
2008).21
Once designers have selected fabrics, colors, patterns, and shapes, the design phase starts. In this phase, designers sketch
preliminary designs. Many designers use pencil and ink for their sketches and then translate them into digital blueprints with
computer-aided design (CAD) systems. These systems allow designers to see their designs on virtual models and in different
colors and shapes, thus reducing the time to do refinements and adjustments in the later phases of prototyping and sampling
(Parsons and Campbell 2004).
In the paper pattern drafting phase, the technical aspects of the designs are addressed. The paper pattern is the drawing on
paper of the basic silhouette, indicating all the different parts and features of a garment (for example, in a female shirt, the
neckline or collar, the sleeves, the pockets, the cuts, the lengths, the drape). The paper pattern is then cut and placed on the
fabric that is used in order to decide how to cut it (Bureau of Labor Statistics 2008).
During the prototyping phase, prototypes are built to experiment with various alternatives. These prototypes can use
different materials or include small changes to the design. Then they are tried on human models to see them and decide whether
further adjustments are needed. This process leads to the selection of the designs that will be actually offered as part of the
collection (Bureau of Labor Statistics 2008).
At the sampling phase, the samples of the article using the actual materials are produced and marketed to clothing retailers
through fashion and trade shows. This phase ends with the development of the different sizes of the same design.
This fashion development process, even if described as linear, is iterative in its nature and has an ample field for
experimenting and discovery. Color and fabric specifications, or even the design, can be re-evaluated in light of the new
information generated throughout the various stages in the process. This iterative nature makes the focus on only one stage in
the process limited if its interactions with the other stages are not considered.
21
For instance this technical card at one of the companies in the study (Luxury-Fashion) included the design of the product and the instructions to
reproduce it.

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JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH American Accounting Association

Vol. 29, No. 3 DOI: 10.2308/jmar-51806

Management Control Systems for Creative Teams:

Journal of Management Accounting Research

CREATIVITY AND MANAGEMENT CONTROL SYSTEMS RESEARCH

Journal of Management Accounting Research

Journal of Management Accounting Research

RESEARCH SETTING AND METHODS

Case Study Research Design

Journal of Management Accounting Research

The Cases’ Data Analysis

Journal of Management Accounting Research

Journal of Management Accounting Research

FINDINGS: CONTROLLING CREATIVITY IN FASHION FIRMS

Directional and Inspirational Controls for Creativity

Journal of Management Accounting Research

Journal of Management Accounting Research

Journal of Management Accounting Research

Journal of Management Accounting Research

Contextual Variables and the Design of Management Control Systems

Journal of Management Accounting Research

Panel A: Directional Controls: Output and Behavioral

Journal of Management Accounting Research

Panel B: Inspirational Controls: Search for Ideas

Journal of Management Accounting Research

Panel D: Inspirational Controls: Social Integration of Ideas

Journal of Management Accounting Research

DISCUSSION AND CONCLUSIONS

Journal of Management Accounting Research

Journal of Management Accounting Research

Journal of Management Accounting Research

Journal of Management Accounting Research

Journal of Management Accounting Research

Journal of Management Accounting Research

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