RISK MANAGEMENT WITH MANAGEMENT CONTROL SYSTEMS: A PRAGMATIC CONSTRUCTIVIST PERSPECTIVE

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Abstract

This paper addresses the issue that calculative practices build on socially constructed facts that have both subjective and objective components. Using risk management as an example, we take a pragmatic-constructivist stance to explore how such a tool might be integrated in actor-based Management Control Systems. We propose a conceptual framework and a research agenda that accounts for actorship (L. Nørreklit, 2013) beyond numerical facts.
This paper is conceptual and draws on secondary literature. Our framework highlights the non-linear, iterative nature of integrating calculative practices that specifically require complex reflection concerning the [1] validation if possibilities are factual (combining subjective and numerical data), [2] the elimination of illusions and sur-realities through constructive conflict/dialectical management, and [3] the co-construction of organization-wide topoi (causality and pertinent accounting practices). Our research furthers practice research on calculative practices through the development of a prescriptive rather than descriptive framework. It also offers propositions that future case study researchers can use.

Keywords: Management Control Systems, Risk Management, Pragmatic Constructivism, Calculative Practice, Practice Theory

How to cite this paper: Lueg, R., Knapik, M. (2016). Risk management with management control systems: a pragmatic constructivist perspective. Corporate Ownership & Control, 13(3), 72-81. https://doi.org/10.22495/cocv13i3p6