Management Control Systems in Early‐Stage Startup Companies

This paper uses a multi‐method, multi‐case field research design to study the evolving portfolio of the management control systems (MCSs) of 78 early‐stage startup companies. We examine 46 individual systems from eight different MCS categories—financial planning, financial evaluation, human resource planning, human resource evaluation, strategic planning, product development, sales/marketing, and partnerships. We report analysis of the following: (1) The speed of adoption of financial planning and financial evaluation systems in relation to six other MCS categories. These systems are considered key MCSs associated with management accounting. We find financial planning to be the most widely adopted MCS category at an early stage, followed by the human resource planning and strategic planning categories. Financial evaluation systems are typically adopted at a later stage. (2) Variables associated with the rate of adoption of MCSs. Our results indicate that number of employees, presence of venture capital, i...

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