Value creation logics and the choice of management control systems

Most, if not all, management control tools were formulated for firms employing an industrial value creation logic (i.e., Ford, McDonald’s, and Wal-Mart). We argue that given the growth, both in number and importance, of firms employing a knowledge value creation logic (i.e., Accenture, Goldman Sachs, and Clifford Chance) and firms employing a network logic (i.e., Verizon, eBay, and Expedia) that these control tools should be revisited in light of this potentially critical contingency. This paper outlines the key characteristics of knowledge intensive firms and network service firms and then examines how these contingencies impact Simons’ (1995) Levers of Control and Kaplan and Norton’s (1996) Balanced Scorecard. We find that whilst each lever/perspective is still relevant for each value creation logic, the relative importance and thus intensity of use should vary between logics.