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This study examines management control systems (MCS) in two major companies in the brewing industry, and how these systems adapted in response to significant changes in their operating environments. During the period of the study, the brewing industry in question shifted from an oligopoly in which co-operative behaviour occurred to one in which more market-based competitive action is evident. These changes took place in the context of considerable deregulation of the entire economy and the dismantling of trade barriers with a major neighbouring trading partner. In addition, there were significant changes in societal and political attitudes towards alcohol products.
The study involves a comparative analysis of the two companies over the period 1986 to 1990. The use of a broader framework for conceptualizing the relationship between contingent variables and MCS, coupled with the use of multiple methods of data collection including field studies, provided richer insights into the relationships between several contingent variables and MCS, how changes in MCS actually occur in response to changes in contingent variables and the relative effectiveness of these responses. This focus upon the processes by which MCS change is a departure from previous studies which have largely relied on data collected through structured questionnaires when analysing the relationships between MCS and contingent variables.
Our results support the contingency fit notion, in particular, the importance of matching structure to changes in the external environment. Further, changes in structure occurred largely in anticipation of these external environmental changes.