Herding cats - A holistic study of management control in the context of a professional service firm

Sammanfattning: Professional service firms (PSFs) make up an increasingly important part of the global economy.The knowledge-intensive nature of these firms does however contribute to management control challenges. Conducting a single-case study on a law-firm, the contextual challenges' impact on the management control package was examined. It was found that the professionalized staff, in combination with allowed autonomy and an equity-based remuneration system, led to directional issues. More specifically, control on a partner level was hard to achieve regarding tasks outside the role demarked by the profession. It was further found, in contrast to previous literature, that cultural controls were used to disguise more enforcing elements of control rather than to act as a directional tool in itself, which also helped empower the CEO. Finally, the reward system within the firm was found to be dominant, affecting cultural and cybernetic controls. Our thesis is structured around the management control framework of Malmi & Brown (2008) to which three challenges facing PSFs (Nordenflycht, 2010) have been added to better systematize the empirics and analysis.