Management accounting control systems’ impact on joint venture performance: the positive role of managers’ experience

Abstract

This study explores the impact of management planning and control systems’ use on 50/50 joint venture’s performance operating in the auto industry. It explores the effect of the use of these systems by organizations operating in turbulent environments through an analysis of the impact that managers’ experience has on the intensity and purpose of use of management planning and control systems. The study of this topic emerges as the results of previous exploratory field studies of JVs (Groot and Merchant 2000) and of JVs in the auto industry (Porporato 2013) where it is suggested that management planning and control systems’ do not have a central effect on JV performance. A survey of 35 international JVs with shared ownership (50/50) shows that organizational performance improves when the uncertainty of factors perceived as controllable by managers is reduced; a factor is perceived as controllable when the manager has a high level of past experience with it. Uncertainty as it is defined by Galbraith (1973) is reduced through an intensive use of management planning and control systems, which in turn positively affects organizational performance.