Management control in circular economy. Exploring and theorizing the adaptation of management control to circular business models

Summary, in English

A growing body of literature argues that an organization's management control needs to adapt as an organization changes business model or strategy for the management control to be consistent with the organization's objectives and strategies. Nevertheless, scepticism has been raised about the role of management controls in promoting sustainability or the circular economy within organizations. Based on the management control framework of Malmi and Brown (2008), this paper explores empirically how organizations work with the circular economy and how management control has adapted to the business model. The results show that the circular economy can be practiced in different ways and that the adaptation and application of the circular economy affects the whole management control package. The paper identifies the importance of cultural control and long-range planning for communicating circular values and spreading a culture based on circular principles. However, regardless of what circular strategies are used, circular work tends to steer attention to the early phases of the product life cycle. For management controls this means that action plans, cost accounting, and investment appraisals must reflect a higher level of detail and a longer time horizon. The paper highlights how this is associated with challenges for traditional management controls.

• Author: Nikki Svensson; Elin K. Funck
• Publishing year: 2019-10-01
• Language: English
• Pages: 390-398
• Publication/Series: Journal of Cleaner Production
• Volume: 233
• Links: http://dx.doi.org/10.1016/j.jclepro.2019.06.089
• Document type: Journal article
• Publisher: Elsevier
• Topic: Business Administration
• Keywords: Circular economy; Circular strategy; Management control
• Status: Published
• ISBN/ISSN/Other: ISSN: 0959-6526