The ethical dimension of Management Control Systems: Modelling the levers of control framework for CSR strategies

The main aim of the thesis was to explore the way in which management control systems may be shaped in order to integrate corporate social responsibility issues.
Business ethics and corporate social responsibility are acquiring more and more
relevance, given the greater attention that communities, public opinion, investors and
institutions are directing to these themes. Companies are no longer required to be simply economic solvent or to have the ability to produce an income, but they must also deal, within the limits of their possibilities, with the community in which they are inserted. If once it was enough to be accountable to the shareholders only, nowadays firms have to address many more stakeholders, such as customers, suppliers, employees, public entities and the reference community.
In the light of these new responsibilities that organizations have to take on, there is a need for them to constantly monitor business strategies, also from a social perspective. Management control systems are usually adopted by companies in order to guide the behaviour of the employees towards the accomplishment of organizational goals, ensure that workers’ interests do not diverge from firm’s interests, and monitor the level of achievement of targets, analysing possible deviations from preset goals. Nonetheless, little has been said about the possibility of remodelling these tools so that they can also deal with ethical issues.
In the first chapter I have discussed the importance that ethics and, above all, business ethics have acquired over time. Then, I have introduced corporate social responsibility, highlighting the differences with business ethics and the motivations that should lead companies to deal with it.
Furthermore, the concepts of stakeholder theory and stakeholder management have been presented, given that these themes are strictly related to the ones previously examined. In the second chapter I have examined how corporate social responsibility may become a strategy able to generate a competitive advantage, and the main disclosure tools adopted by companies. Then, I have analysed management control systems. At the beginning I have proposed the classical formulation and then I have reshaped them to fit social responsibility issues. To do this, I have used the Levers of Control framework by Simons (1995).
Furthermore, I have presented a framework to theorize and analyse the degree of integration between business and sustainability strategies and between the management systems used to monitor these strategies. Finally, in the third chapter I have presented a case study. After a brief introduction regarding the motivations that led me to choose a firm operating in the health industry and the story of the firm, I have assayed the way in which the company deals with corporate social responsibility issues. Then, I have examined the management control systems employed by the organization applying the two frameworks presented in chapter 2, in order to draw some empirical considerations on the way in which companies, in practice, integrate
ethics and corporate social responsibility in the management control systems.


Giuseppe Rinaldo, Laurea magistrale in Scienze Economico-aziendali (curriculum Entrepreneurship and Management), Università degli Studi di Palermo