No. 71: Working from home and management controls

Abstract

The Covid-19 pandemic and the corresponding shift towards working from home (WFH) amplifies control problems within organizations and poses severe challenges for management control. We examine how the physically distant working environment caused by the shift towards WFH influences the design of action controls. Based on a survey among employees in a large international corporation, we find that under WFH conditions the organization more intensively uses standardization and planning participation and grants broader autonomy to employees. We also identify interrelations between pairs of action controls that are moderated by WFH. Finally, we examine the effect of WFH on employee outcomes. Our findings suggest that WFH has increased the time employees spend in meetings as well as employee job focus and decreased the remaining working hours per day. We also find that effectively adjusted action controls can offset negative effects of WFH. Overall, our study adds to the literature by exploring the dynamic nature of management control systems.

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management, ESMT Berlin, Goethe University Frankfurt and Carl von Ossietzky University Oldenburg who share the same research agenda.