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Introduction
Management control systems are used to direct managers’ attention toward the actions that matter for corporate strategies and goal attainment (Burns and Scapens, 2000). As managers’ attention is a scarce resource (March et al., 2000; Ocasio, 1997; Schultz, 1998), organizational problems compete for it. Accordingly, research has shown that organizational rules can effectively direct and govern alignment between corporate aspirations and managers’ attention (Burns and Scapens, 2000; Oliveira and Quinn, 2015; Quinn, 2011, 2014). “Organizational rules” are the accepted principles and guidelines for action that are documented as artifacts to ensure compliance (Quinn, 2011) with the purposes of guaranteeing uniform actions and directing managers’ attention toward “the way things should be done” (Burns and Scapens, 2000, p. 6). Rules become institutionalized over time as the organization continuously moves between rules and routines (Burns and Scapens, 2000). However, the management accounting literature offers different views on how these interactions between rules and routines create change and stability in formal rules. Burns and Scapens (2000) describe routines as inextricably linked to rules, while Quinn (2014) understands rules and routines as two separate concepts. As such, the extant literature calls for more empirical insights into why some rules are accepted or rejected, and for a better understanding of the drivers of change in organizational rule systems (Oliveira and Quinn, 2015; Quinn, 2011, 2014).
This paper enhances our understanding of why and how formal organizational rule systems change in global organizations, such as multinational companies (MNCs). Our motivation in this regard lies in the apparent tension between global and local interests in the development of management control systems. While aspirations on the corporate level usually focus on strengthening the global coordination of entities through the harmonization and standardization of control systems, units on the local level desire flexibility and responsiveness in the control system so that they can better adapt to local contingencies (Busco et al., 2008).
If not properly addressed, this tension between local and global can lead to organizational conflicts and local resistance to the implementation of corporate systems, resulting in a dysfunctional organization (Bourmistrov and Kaarbøe, 2017). However, achieving a balance between top-down controls on the corporate-level and flexible local controls can be difficult (Bhimani and Langfield-Smith, 2007; Frow et al., 2005;...