Structure of Planning and Control Artifacts and their Accuracy in Brazilian Family Businesses
| Autor | Fábio Frezatti/Daniel Magalhães Mucci/Diógenes de Souza Bido |
https://bar.anpad.org.br
BAR − Brazilian Administration Review
Vol. 19, No. 3, Art. 2, e210080, 2022
https://doi.org/10.1590/1807-7692bar2022210080
Research Article
Structure of Planning and Control Artifacts and their
Accuracy in Brazilian Family Businesses
Fábio Frezatti1
Daniel Magalhães Mucci1
Diógenes de Souza Bido2
1 Universidade de São Paulo, São Paulo, SP, Brazil
2 Universidade Presbiteriana Mackenzie, São Paulo, SP, Brazil
Received September 01, 2021. This paper was with the authors for three revisions. Accepted June 04, 2022.
First published online July 26, 2022.
Editor-in-chief: Ivan Lapuente Garrido (Universidade do Vale do Rio dos Sinos, Brazil).
Associate Editor: Carlos Eduardo Lavarda (Universidade Federal de Santa Catarina, Brazil).
Reviewers: Ilse Maria Beuren (Universidade Federal de Santa Catarina, Florianópolis, SC, Brazil) and one
anonymous reviewer.
Editorial assistants: Kler Godoy and Simone Rafael (ANPAD, Maringá, Brazil).
F. Frezatti, D. M. Mucci, D. de S. Bido 2
ABSTRACT
Objective: the accuracy of planning and control artifacts is fundamental for bringing assertiveness
to the organizational management process. The utility of the artifacts is questioned when the
desired accuracy is missing. This research aims to identify the relationship between the artifact
structure, the market assumptions, and the accuracy of the performance variables with a view to
adapting the artifact profile to the desired impact over performance accuracy. Methods: this is a
quantitative study based on convenience sampling and the data analysis methods used were
structural equation modeling and necessary condition analysis. Results: within a sufficiency logic,
the results support adherence between the planning and control artifacts, but not their
relationship with performance accuracy. However, when analyzing the necessity logic, the artifacts
become a necessary condition for a high level of performance accuracy. Conclusions: we show
that the planning and control structure is consistent for achieving accuracy, but defining the
desired level of deviation tolerance is a fundamental condition for the efficiency level of the
management process. The more demanding the organization is in terms of deviation tolerance,
the greater the need for artifacts.
Keywords: forecast; rolling forecast; accuracy; planning and control; artifacts
JEL Code: M41
Structure of planning and control artifacts and their accuracy in Brazilian fa mily businesses 3
INTRODUCTION
The logic of the management and control chain is discussed from the theoretical viewpoint in
papers in the area of management control (Malmi & Brown, 2008; Merchant & Van der Stede,
2007) and covers the existence of various artifacts such as strategic planning, budget, forecast,
budgetary control, and performance indicators. However, there is little empirical evidence
regarding the relationship between the artifacts within the logic of interdependence and
specifically of complementarity (e.g., Grabner & Moers, 2013).
These mechanisms are normally treated as planning and cybernetic controls (that is, comparisons
between predictions and results are provided), consisting of two of the five groups of control
artifacts discussed by Malmi and Brown (2008) based on the management control systems (MCS)
terminology. MCS consists of a collection or set of controls and control systems used by
organizations interdependently (Bedford, 2020; Grabner & Moers, 2013; Malmi & Brown, 2008;
Merchant & Otley, 2020). Chenhall and Moers (2015) discuss the difference between packages
and the management control system per se, with the need to understand the set (Kapiyangoda &
Gooneratne, 2021). Assertive information for managers on what they should do in the future to
maximize their contributions in order to meet the organizational objectives is essential for the
organization and the accuracy conveyed feeds future assertiveness through the credibility of the
process.
Planning forms part of the results control logic by deciding directions in advance and the cycle
ends and renews when the calculated results stimulate and encourage the managers to develop
their talents and improve future performance (Degenhart, Lunardi, & Zonatto, 2019; Merchant
& Van der Stede, 2007). As a set, the various elements contribute to executives increasing their
ability to achieve results through the following factors: (1) knowledge of the expected results,
which provides both the guidance on what is expected of someone and the opportunity for
commitment as they understand whether it is possible or not to achieve the goal; (2) the ability
to influence results, through knowing the performance profile expected of them and being able
to develop strategies and tactics for that; and (3) the ability to effectively control the results, since
they know the goals and plan how to achieve them (Merchant & Van der Stede, 2007).
This vision concerns the ex-ante control (Flamholtz, Das, & Angeles, 1985), an active option of
this study’s approach. The establishment of performance goals can favor different perspectives,
such as the relationship with the historical results or what was negotiated, the existence of fixed
or flexible targets, and the focus on the parameter of internal or external comparison, enabling
the performance evaluation to occur and recognition to become technically viable (Frow,
Marginson, & Ogden, 2010; Henttu-Aho, 2018; Merchant & Van der Stede, 2007).
In particular, planning and cybernetic controls provide various benefits for organizations, such
as advance decisions, the coordination of activities, identification and advance delegation of
responsibilities, motivation to achieve goals, and conditions for measuring and evaluating area
and manager performance (Hansen & Van der Stede, 2004; Sivabalan, Booth, Malmi, & Brown,
2009). Within that perspective, one of the managers’ expectations is for the planning and control
process to enable the organization to be assertive in the establishment and achievement of goals,
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