Squeezing or cuddling? The impact of economic crises on management control and stakeholder management

Asel, Johannes and Posch, Arthur and Speckbacher, Gerhard (2011) Squeezing or cuddling? The impact of economic crises on management control and stakeholder management. Review of Managerial Science, 5 (2-3). pp. 213-231. ISSN 1863-6683


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This paper analyzes the effects of economic crises on firms' use of management control mechanisms and on their management of stakeholder relations. Moreover, the association between stakeholder management and management control system use is analyzed. In the wake of the economic crisis of 2008/2009, many firms were faced with severe threats that called for immediate short-term action to ensure firm survival. However, short-term action like massive cost-cutting and cash generation often are blamed for going at the expense of long-term health as key stakeholder relations may be irreversibly harmed. Hence, three interrelated questions are addressed theoretically and empirically: First, we analyze the impact of the recent economic crisis on firms' control strategies. More specifically, we investigate whether a high crisis impact on firms is associated with a shortening of reporting cycles, a more interactive use of control-relevant information, restriction of employee autonomy and a focus on liquidity and cost-cutting. Second, we examine from the viewpoint of stakeholder theory how firms can make use of active stakeholder management for crisis management. Third, we explore whether firms can take short-term measures for ensuring liquidity and cutting costs and at the same time pursue a stakeholder strategy aiming at the long-term survival of the firm. Using survey data from 204 major Austrian corporations, we provide evidence that firms significantly adjusted their control systems as a response to the economic crisis. Our data do not indicate an immanent contradiction between a "short-term finance focus" and the pursuit of a sustainable stakeholder strategy.

Item Type: Article
Additional Information: To see the final version of this paper please visit the publisher's website: the original publication is available at www.springerlink.com. Access to the published version may require a subscription.
Keywords: crisis / management control / stakeholder management / mangement accounting
Classification Codes: JEL M49-Other
Divisions: Departments > Strategy and Innovation > Unternehmensf├╝hrung
Version of the Document: Accepted for Publication
Variance from Published Version: Minor
Depositing User: Dissertation Administrator
Date Deposited: 24 Mar 2011 11:14
Last Modified: 25 Jun 2019 17:42
Related URLs:
URI: https://epub.wu.ac.at/id/eprint/3039


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