Abstract:
Purpose – The purpose of this paper is to identify the complementariness and tensions in the use of
management control systems diagnostically and interactively, using a budgetary control example,
drawing empirical evidence from a clustered firm, ‘‘Pattern On’’, which is engaged in the manufacture of
apparels.
Design/methodology/approach – This paper uses the qualitative methodology and case study
approach. Face-to-face in-depth interviews were carried out as the main source of data collection,
supplemented by an analysis of internal documents.
Findings – The field data from this study shows that both diagnostic and interactive controls appear in
the clusters of PatternOn. However, the extent of use, the way they are perceived by employees,
consequences, complementariness and tensions differ among the clusters. It further suggests that
interactive and diagnostic controls have their own positive and negative implications on organisational
activities. Therefore, rather than ruling one type as superior; what is best depends on the particular
organisational circumstances.
Research limitations/implications – This paper is a useful addition to the current body of management
accounting literature, particularly to budgeting and to the levers of the control framework and highlights
the use of a domain theory in a research study.
Practical implications – It provides insights to practitioners regarding the simultaneous use of controls,
diagnostically and interactively, and how any resulting tensions are managed.
Originality/value – Using a budgetary control example, this paper shows how controls are used
diagnostically and interactively while emphasising the complementariness and tensions created by such
levers. This is important as most prior research has explored diagnostic and interactive use in isolation,
while budgetary control, as well as the role of domain theory has not been their focus
