A critical study of the interrelationship of management control systems and workplace friendships in SMEs : a Greek case study

Abstract

Management Control (MC) and Management Control Systems (MCS) have been examined mostly in large organisations. This study attempts to understand more about them in the SME context. Additionally, the lens is turned to workplace friendships when looking at the human factor from a critical perspective. The SME environment allows for more human interactions, providing the participants with more chances for strong organisational culture, high trust, and the development of friendships, which can also occur between manager-owner and employee. The interest of this study is to identify if these friendships are influenced by MC and MCS, or if they influence the nature of MC and MCS in SMEs. An additional step is taken to identify ways forward in which workplaces can use friendships in their environments to be emancipated from oppressive accounting practices by shaping accounting practices with an aim to realise their emancipatory potential. This research project was based on two case studies, in Agriculture and Clothing. The researcher observed the two organisations for approximately 100 hours, and interviewed 19 of their organisational participants, between 12-45 minutes. The findings show that the SME context provides grounds for workplace friendships to develop and through them the shape of MC and MCS from formal and impersonal to informal and engaging, to even providing chances for a collective management and participation ignoring the structures of the status quo. Where MCS seem to have an impact on workplace friendships is when management, in the name of rational decision-making, chooses to detach itself and force formal controls. Then, not only the employees and the management are distant from each other, but internal trust building also becomes difficult. The theoretical contribution of this research lies in understanding the importance of critical research in SMEs and their fruitful context, as well as reimagining SMEs and their internal structures from a critical standpoint, by understanding their pressures in the capitalist world.