Organizational controls and discretionary program decision making: A field study

Abstract

This paper reports the results of a field study aimed at exploring how one important class of decisions— discretionary program decisions—are controlled in decentralized films. Data were collected from profit centre managers using unstructured interviews and a questionnaire survey. The data show that decisions are affected by many devices that can be called controls, including net income targets, expense targets, headcount constraints, requirements for approvals, and directives given by higher management. They also show that the effects of the controls can vary with certain characteristics of the profit centers' situation (e.g. strategy, recent performance), the management style of the company chairman, and the accounting treatment for the expenditure (i.e. whether capitalized or expensed).