The research objectives for « the setting up of management control systems by consultancy firms in

small and medium-sized enterprises » could include :

1. To examine the current practices and approaches used by consultancy firms in setting up
management control systems in small and medium-sized enterprises (SMEs).

2. To identify the key factors that influence the decision-making process of SMEs in engaging
consultancy firms for setting up management control systems.

3. To assess the effectiveness and impact of management control systems implemented by

consultancy firms in improving the performance and competitiveness of SMEs.

4. To explore the challenges and barriers faced by consultancy firms in setting up management
control systems in SMEs and identify potential strategies to overcome them.

5. To investigate the role of consultancy firms in providing guidance and support to SMEs in the
implementation and maintenance of management control systems.

6. To analyze the cost-benefit analysis of engaging consultancy firms for setting up management
control systems in SMEs.

7. To propose recommendations and best practices for consultancy firms and SMEs in the successful
implementation of management control systems.

8. To contribute to the existing literature on management control systems in SMEs by providing

insights into the role of consultancy firms in this process.

9. To provide practical implications for consultancy firms, SMEs, and policymakers in enhancing the
effectiveness and efficiency of management control systems in SMEs.

10. To fill the research gap in understanding the specific challenges and opportunities associated with
the setting up of management control systems by consultancy firms in the context of SMEs.

The problem statement for a research on « the setting up of management control systems by
consultancy firms in small and medium-sized enterprises » could be :

Small and medium-sized enterprises (SMEs) play a crucial role in driving economic growth and
development. However, many SMEs face challenges in effectively managing their operations and
achieving sustainable growth. One potential solution is the engagement of consultancy firms to set up
management control systems that can help SMEs improve their decision-making processes, enhance
operational efficiency, and achieve their strategic objectives.

Despite the potential benefits, there is limited research on the specific practices and approaches used
by consultancy firms in setting up management control systems in SMEs. This research gap hinders
the understanding of the effectiveness and impact of such systems on SME performance and
competitiveness. Additionally, the challenges and barriers faced by consultancy firms in this process,
as well as the role they play in providing guidance and support to SMEs, remain largely unexplored.
Therefore, this research aims to address these gaps by examining the current practices and
approaches used by consultancy firms in setting up management control systems in SMEs. It will also
identify the key factors that influence the decision-making process of SMEs in engaging consultancy
firms for this purpose. Furthermore, the research will assess the effectiveness and impact of
management control systems implemented by consultancy firms in improving SME performance and
competitiveness.

By exploring the challenges and barriers faced by consultancy firms in setting up management control
systems in SMEs, this research will provide insights into potential strategies to overcome them.
Additionally, it will analyze the cost-benefit analysis of engaging consultancy firms for setting up
management control systems in SMEs. The findings of this research will contribute to the existing
literature on management control systems in SMEs and provide practical implications for consultancy
firms, SMEs, and policymakers in enhancing the effectiveness and efficiency of these systems in SMEs.

Certainly ! Here are five definitions of management control from reputable sources :

1. « Management control refers to the process by which managers influence other members of
the organization to implement the organization’s strategies. » (Anthony, R. N., &
Govindarajan, V. (2007). Management Control Systems. McGraw-Hill Education.)

2. « Management control is the process by which managers ensure that resources are obtained
and used effectively and efficiently in the accomplishment of the organization’s objectives. »
(Merchant, K. A., & Van der Stede, W. A. (2017). Management Control Systems : Performance
Measurement, Evaluation and Incentives. Pearson.)

3. « Management control involves the use of formal systems to influence the behavior of
organizational members and to ensure that organizational goals are achieved. » (Simons, R.
(1995). Levers of Control : How Managers Use Innovative Control Systems to Drive Strategic
Renewal. Harvard Business Press.)

4. « Management control is the process by which managers ensure that organizational activities
are aligned with the organization’s goals and objectives. » (Otley, D. (1999). Performance
management : A framework for management control systems research. Management
Accounting Research, 10(4), 363-382.)

5. « Management control is the process of implementing strategies, policies, and procedures to

ensure that organizational objectives are achieved. » (Chenhall, R. H. (2003). Management
control systems design within its organizational context : Findings from contingency-based
research and directions for the future. Accounting, Organizations and Society, 28(2-3), 127-
168.)
Please note that these definitions are provided for reference purposes and should be properly cited if
used in your research.

Certainly ! Here are some main concepts that could be highlighted in a conceptual literature review
for your research on the setting up of management control systems by consultancy firms in small and
medium-sized enterprises :

1. Management Control Systems (MCS) : Provide an overview of what MCS are and their
importance in organizations. Discuss different types of MCS, such as budgeting, performance
measurement, and incentive systems.

2. Small and Medium-sized Enterprises (SMEs) : Define SMEs and highlight their unique
characteristics, such as limited resources, decentralized decision-making, and entrepreneurial
orientation. Discuss the challenges faced by SMEs in implementing effective management
control systems.

3. Consultancy Firms : Explain the role of consultancy firms in assisting organizations, including
SMEs, in setting up management control systems. Discuss the benefits and limitations of
using consultancy firms for MCS implementation.

4. Factors Influencing MCS in SMEs : Identify and discuss the factors that influence the design
and implementation of management control systems in SMEs. These factors may include
organizational culture, owner-manager characteristics, industry characteristics, and external
pressures.

5. Best Practices for MCS in SMEs : Explore the best practices and frameworks for designing and
implementing management control systems in SMEs. Discuss how these practices can be
adapted and applied by consultancy firms to meet the specific needs and challenges of SMEs.

6. Case Studies and Empirical Research : Review relevant case studies and empirical research
that have examined the setting up of management control systems by consultancy firms in
SMEs. Highlight key findings, methodologies used, and any gaps or limitations in the existing
literature.
 7. Theoretical Frameworks : Discuss relevant theoretical frameworks that can be applied to
understand the setting up of management control systems in SMEs, such as agency theory,
contingency theory, or resource-based view.

8. Implications and Recommendations : Summarize the implications of the literature review for
consultancy firms, SMEs, and researchers. Provide recommendations for consultancy firms
and SMEs on how to effectively set up management control systems.

Remember to critically analyze and synthesize the literature, identify any gaps or inconsistencies, and
provide a clear rationale for your research objectives and hypotheses.

Certainly ! Here are some main challenges faced by consultancy firms in setting up management
control systems in small and medium-sized enterprises (SMEs) :

1. Limited Resources : SMEs often have limited financial and human resources, which can pose
challenges for consultancy firms in terms of budget constraints and the availability of skilled
personnel to implement and maintain management control systems.

2. Lack of Awareness and Understanding : Many SMEs may not fully understand the benefits
and importance of management control systems, or they may have limited knowledge about
different types of control systems. This can make it challenging for consultancy firms to
convince SMEs of the need for such systems and to educate them about their potential
benefits.

3. Resistance to Change : SMEs, particularly those with long-established practices and cultures,
may be resistant to change and reluctant to adopt new management control systems.
Consultancy firms may face challenges in overcoming this resistance and gaining buy-in from
key stakeholders.

4. Complexity and Customization : SMEs often have unique characteristics and specific needs
that require customized management control systems. Consultancy firms may face challenges
in designing and implementing systems that are tailored to the specific context and
requirements of each SME.

5. Lack of Data and Information Systems : SMEs may have limited data collection and
information systems in place, making it difficult for consultancy firms to gather the necessary
data for designing and implementing management control systems. This can also hinder the
monitoring and evaluation of the systems’ effectiveness.
 6. Owner-Manager Dominance : In many SMEs, the owner-manager plays a central role in
decision-making and may resist relinquishing control to external consultants. Consultancy
firms may face challenges in navigating power dynamics and establishing trust with owner-
managers.

7. Time Constraints : SMEs often operate in fast-paced environments with limited time for
strategic planning and implementation. Consultancy firms may face challenges in completing
the setup of management control systems within tight timelines and ensuring that the
systems are effectively integrated into the SME’s operations.

8. External Pressures and Regulatory Compliance : SMEs may face external pressures, such as
regulatory requirements or demands from stakeholders, which can impact the design and
implementation of management control systems. Consultancy firms may need to navigate
these external pressures and ensure compliance while designing effective control systems.

It is important to note that these challenges may vary depending on the specific industry, size, and
context of the SME. Consultancy firms should be prepared to address these challenges through
effective communication, customization, and collaboration with SMEs.

Certainly ! Here is a general methodology or procedure that consultancy firms may follow when
setting up management control systems in small and medium-sized enterprises (SMEs) :

1. Initial Assessment : The consultancy firm starts by conducting an initial assessment of the
SME’s current management control practices, systems, and processes. This involves gathering
information about the organization’s goals, objectives, structure, operations, and existing
control mechanisms.

2. Gap Analysis : Based on the initial assessment, the consultancy firm identifies the gaps and
areas for improvement in the SME’s management control systems. This involves comparing
the current practices with best practices and industry standards.

3. Design and Customization : The consultancy firm designs a customized management control
system that aligns with the specific needs and characteristics of the SME. This includes
determining the appropriate control mechanisms, performance indicators, reporting
structures, and decision-making processes.
 4. Implementation Planning : The consultancy firm develops an implementation plan that
outlines the steps, timeline, and resources required to set up the management control
system. This plan takes into account the SME’s constraints, such as budget, resources, and
time availability.

5. System Implementation : The consultancy firm works closely with the SME to implement the
management control system. This involves training and educating employees on the new
system, setting up data collection and reporting mechanisms, and integrating the system into
the organization’s operations.

6. Monitoring and Evaluation : The consultancy firm helps the SME establish monitoring and
evaluation processes to assess the effectiveness of the management control system. This
includes defining key performance indicators, establishing reporting mechanisms, and
conducting regular reviews to identify areas for improvement.

7. Continuous Improvement : The consultancy firm supports the SME in continuously improving
and refining the management control system. This involves analyzing performance data,
identifying areas of underperformance or inefficiency, and making necessary adjustments to
enhance the system’s effectiveness.

8. Knowledge Transfer : Throughout the process, the consultancy firm ensures knowledge
transfer to the SME’s employees, enabling them to understand and maintain the
management control system independently. This may involve training sessions, workshops,
and documentation of processes and procedures.

It is important to note that the specific methodology and procedures may vary depending on the
consultancy firm’s approach, the industry, and the unique needs of the SME. The above steps provide
a general framework that can be adapted and customized as needed.

Consultancy firms can implement several strategies to improve the effectiveness of the management
control systems they implement in small and medium-sized enterprises (SMEs). Here are some key
approaches :

1. Customization : Consultancy firms should ensure that the management control systems are
tailored to the specific needs and characteristics of each SME. This involves understanding
the organization’s goals, objectives, industry, and culture, and designing control mechanisms
that align with these factors.
2. Stakeholder Involvement : It is crucial to involve key stakeholders, such as top management,
department heads, and employees, in the design and implementation of the management
control systems. This ensures that the systems are aligned with the organization’s strategic
direction and that there is buy-in and commitment from all levels of the organization.

3. Clear Communication : Consultancy firms should emphasize clear and effective

communication throughout the implementation process. This includes communicating the
purpose, benefits, and expectations of the management control systems to all stakeholders.
Regular communication and feedback mechanisms should also be established to address any
concerns or issues that arise.

4. Training and Education : Providing comprehensive training and education to employees is

essential for the successful implementation of management control systems. Consultancy
firms should conduct training sessions to ensure that employees understand the purpose,
processes, and benefits of the systems. This helps to build their skills and confidence in using
the systems effectively.

5. Performance Measurement and Reporting : Consultancy firms should assist SMEs in

establishing robust performance measurement and reporting mechanisms. This involves
defining key performance indicators (KPIs) that align with the organization’s goals and
objectives, setting up data collection processes, and developing clear and concise reporting
formats. Regular monitoring and reporting of performance data enable timely decision-
making and facilitate continuous improvement.

6. Continuous Improvement : Consultancy firms should emphasize the importance of

continuous improvement in the management control systems. This involves regularly
reviewing and evaluating the effectiveness of the systems, identifying areas for improvement,
and making necessary adjustments. Consultancy firms can provide guidance and support in
analyzing performance data, conducting root cause analysis, and implementing improvement
initiatives.

7. Knowledge Transfer : Consultancy firms should ensure knowledge transfer to the SME’s
employees, enabling them to understand and maintain the management control systems
independently. This can be achieved through training sessions, workshops, and
documentation of processes and procedures. Building internal capabilities and empowering
employees to take ownership of the systems enhances their effectiveness and sustainability.
By implementing these strategies, consultancy firms can enhance the effectiveness of the
management control systems they implement in SMEs, leading to improved performance, decision-
making, and overall organizational success.

When conducting a theoretical literature review on the setting up of management control systems by
consultancy firms in small and medium-sized enterprises (SMEs), several theories and concepts can
be highlighted. Here are some key theories that can be relevant to your research :

1. Agency Theory : This theory focuses on the relationship between principals

(owners/shareholders) and agents (managers) and the potential conflicts of interest that
arise. In the context of consultancy firms setting up management control systems in SMEs,
agency theory can be used to analyze how the systems help align the interests of the owners
and managers, reduce information asymmetry, and mitigate agency problems.

2. Contingency Theory : This theory suggests that the design and effectiveness of management
control systems should be contingent upon the specific characteristics and needs of the
organization. In the context of consultancy firms and SMEs, contingency theory can be used
to examine how the control systems are customized to fit the unique characteristics of each
SME, such as its size, industry, strategy, and culture.

3. Resource Dependence Theory : This theory emphasizes the interdependence between

organizations and their external environment. In the context of consultancy firms and SMEs,
resource dependence theory can be used to analyze how the control systems help SMEs
manage their dependencies on external resources, such as expertise, knowledge, and
networks, provided by the consultancy firms.

4. Institutional Theory : This theory focuses on how organizations conform to institutional

pressures and norms. In the context of consultancy firms and SMEs, institutional theory can
be used to examine how the control systems are influenced by external institutional factors,
such as industry standards, regulations, and professional norms, and how they help SMEs
gain legitimacy and conform to these institutional pressures.

5. Transaction Cost Economics : This theory emphasizes the costs associated with transactions
between organizations. In the context of consultancy firms and SMEs, transaction cost
economics can be used to analyze how the control systems help reduce transaction costs,
such as information asymmetry, opportunism, and monitoring costs, by providing a
framework for effective coordination and control.

6. Social Exchange Theory : This theory focuses on the social relationships and exchanges
between individuals and organizations. In the context of consultancy firms and SMEs, social
 exchange theory can be used to examine how the control systems facilitate trust,
cooperation, and reciprocity between the consultancy firms and SMEs, leading to mutually
beneficial outcomes.

These theories provide a theoretical foundation for understanding the dynamics and mechanisms
involved in the setting up of management control systems by consultancy firms in SMEs. By
incorporating these theories into your literature review, you can analyze and interpret the existing
research and identify research gaps for your own study.