Social capital and management control systems: A study of a non-government organization

• Published in: Accounting, organizations and society organizations and society, 2010-11, Vol.35 (8), p.737-756
• Main Authors: Chenhall, Robert H., Hall, Matthew, Smith, David
• Format: Article
• Language: English
• Subjects: Accounting; Alliances; Bonding; Bridging; Control systems; Cultural capital; Economics; Interpersonal relations; Joints; Management; Management controls; Networks; NGOs; Non-governmental organizations; Nongovernmental organizations; Organizational analysis; Organizational behavior; Personal relationships; Social capital; Social networks; Studies; Systems analysis
• ISSN: 0361-3682; 1873-6289
• DOI: 10.1016/j.aos.2010.09.006

► Social capital affects the delivery of outcomes in non-government organizations. ► Social capital involves interpersonal bonding and structural bridging. ► Management control systems have potential effects on bonding and bridging. ► Social capital shows how individuals react to formal and informal controls. In this paper we use the concept of social capital to outline a distinctive approach to understanding the interplay between management control systems and the development of social connections in and between organisations. Social capital provides a comprehensive framework for examining the nature of social connections through its focus on both structural networks (bridging) and interpersonal relationships that predispose individuals towards mutually beneficial collective action (bonding). In doing so, social capital provides a means of considering how individuals react to management control systems in terms of the social ties that exist both within the organization and external to the organization. Using a case study of a non-government organization, we show how social capital is implicated in efforts to attract economic capital and cultural capital. We demonstrate how elements of a management control system can either enhance or inhibit the bonding and bridging dimensions of social capital with potential consequences on both economic and cultural capital. We highlight the mixed and sometimes contradictory effects of management control systems on social capital, and provide a powerful illustration of the role of management control systems in brokering alliances and bridging structural holes.