Abstract
This paper considers multiple control systems at the organizational level and argues for a nuanced and multifaceted approach for internal governance. For this undertaking, we look at a little-examined control and auditing instrument, the formalized audit procedures of Roman Catholic orders. These so-called visitations are one important pillar in the monastic governance system to counter aberrations. Utilizing surveys and interviews, we examine 96 Roman Catholic religious communities in Austria, Germany and Switzerland, and connect these visitations procedures with rule violations and sexual abuse cases. We argue that communities unaffected by scandals and rule violations rely strongly on process and clan control to address inefficiency and misconduct; whereas, affected communities focus more on business issues. We caution against the trend of relying predominantly on output-based processes while suggesting a balance between different types of control systems. Furthermore, we enhance the current discourse by considering implementation procedures of control. The religious orders attach great importance to the way control measures are carried out. To steer the behavior of their members, many successful orders even complement controls with personal support and identity strengthening.
Similar content being viewed by others
Notes
We use a broad and classical definition of governance: it is understood as the set of processes, customs, policies, laws, and institutions affecting the way an organization is directed and controlled. The abuse cases represent a massive governance failure in the religious orders.
See the Acknowledgements section for detailed information.
Closely related to the framework of Ouchi (1979) is the levers of control model from Simons (1990, 1995, 2000). This equally comprehensive model shows many intersections and points of contact. For instance, diagnostic control shares many similarities with output control; whereas, belief systems build a bridge to clan control.
A parallel historical study underscores the impressive significance of the little-known visitations in Christianity and supports the impression from the quantitative analysis. The existence over centuries—from late antiquity until today (Peters 2003), and in the religious orders for almost a millennium—of the visitations, plus their dissemination to all religious orders, dioceses and beyond the Catholic Church (Schwaiger 2003), point to an extraordinary, successful governance instrument. The history of their reception illustrates the flexibility and the broad applicability of this religious assessment tool, and reveals an instrument that heavily influenced the paths of the examined organizations. The focus on output-, process- and clan control to monitor economic health and spiritual life, a constituting element from the beginning, proved highly successful.
References
Abernethy, M. A., & Chua, W. F. (1996). A field study of control system “redesign”: The impact of institutional processes on strategic choice. Contemporary Accounting Research, 13(2), 569–606.
Adler, P. S., & Borys, B. (1996). Two types of bureaucracy: Enabling and coercive. Administrative Science Quarterly, 41, 61–89.
Alford, J., & Hughes, O. (2008). Public value pragmatism as the next phase of public management. American Review of Public Administration, 38(2), 130–148.
Alvesson, M., Ashcraft, K. L., & Thomas, R. (2008). Identity matters: Reflections on the construction of identity scholarship in organization studies. Organization, 15(1), 5–28.
Alvesson, M., & Kärreman, D. (2004). Interfaces of control. Technocratic and socio-ideological control in a global management consultancy firm. Accounting, Organizations and Society, 29(3/4), 423.
Ambos, B., & Schlegelmilch, B. B. (2007). Innovation and control in the multinational firm: A comparison of political and contingency approaches. Strategic Management Journal, 28(5), 473–486.
Anthony, R. N., & Govindarajan, V. (2008). Management control systems (12th ed.). Boston, MA: McGraw-Hill.
Bachman, R., Gillespie, N., & Kramer, R. (2011). Call for papers for a special issue on trust in crisis: Organizational and institutional trust, failures and repair. Organization Studies, 32(8), 1139–1141.
Bebchuk, L. A., & Fried, J. M. (2005). Pay without performance: Overview of the issues. Journal of Applied Corporate Finance, 17(4), 8–23.
Benz, M., & Frey, B. S. (2007). Corporate governance: What can we learn from public governance? Academy of Management Review, 32(1), 92–104.
Betz, H. D., Browning, D. S., Janowski, B., & Jüngel, E. (2005). Religion in Geschichte und Gegenwart. Handwörterbuch für Theologie und Religionswissenschaft (4th ed., Vol. 8). Tübingen: Mohr Siebeck Verlag.
Beuroner Benediktinerkongregation. (2003). Die Visitation der Klöster. Internal law‚ Directorium Spirituale, Chapter V. Maria Laach Abbey, Germany.
Brenner, S., & Schwalbach, J. (2009). Legal institutions, board diligence, and top executive pay. Corporate Governance: An International Review, 17(1), 1–12.
Caglio, A., & Ditillo, A. (2008). A review and discussion of management control in inter-firm relationships: Achievements and future directions. Accounting, Organizations and Society, 33(7–8), 865–898.
Cardinal, L. B. (2001). Technological innovation in the pharmaceutical industry: The use of organizational control in managing research and development. Organization Science, 12(1), 19–36.
Cardinal, L. B., Sitkin, S. B., & Long, C. P. (2004). Balancing and rebalancing in the creation and evolution of organizational control. Organization Science, 15(4), 411–431.
Cardinal, L. B., Sitkin, S. B., & Long, C. P. (2010). A configurational theory of control. In S. B. Sitkin, L. B. Cardinal, & K. M. Bijlsma-Frankema (Eds.), Organizational control (pp. 51–79). New York, NY: Cambridge University Press.
Carlsson-Wall, M., Kraus, K., & Lind, J. (2011). The interdependencies of intra- and interorganisational controls and work practices—the case of domestic care of the elderly. Management Accounting Research, 22(4), 313–329.
Chava, S., & Purnanandam, A. (2010). CEOs versus CFOs: Incentives and corporate policies. Journal of Financial Economics, 97(2), 263–278.
Chenhall, R. H. (2003). Management control systems design within its organizational context: Findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2/3), 127–168.
Clarke, D. C. (2011). “Nothing but wind”? The past and future of comparative corporate governance. American Journal of Comparative Law, 59(1), 75–110.
Codex Iuris Canonici. (1983). Canon law of the Catholic Church. 1 October 2011. http://www.intratext.com/IXT/ ENG0017/_INDEX.HTM.
Dart, R. (2004). Being “business-like” in a nonprofit organization: A grounded and inductive typology. Nonprofit and Voluntary Sector Quarterly, 23, 290–310.
De Charms, R. (1968). Personal causation: The internal affective determinants of behavior. New York, NY: Academic Press.
Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125, 627–668.
Deci, E. L., & Ryan, R. M. (1980). The empirical exploration of intrinsic motivational processes. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 13, pp. 39–80). New York, NY: Academic Press.
Dent, J. F. (1990). Strategy, organization and control: Some possibilities for accounting research. Accounting, Organizations and Society, 15(1/2), 3–25.
Die Zeit Online. (2010). Chronologie der Übergriffe. May 18, 2010 http://www.zeit.de/gesellschaft/zeitgeschehen/2010-04/sexueller-missbrauch-chronologie.
Di Pietra, R., McLeay, S., & Ronen, J. (2010). Special issue on governance and accounting regulation. Journal of Management and Governance, 14(4), 273–276.
Ehrmann, T., Rost, K., & Inauen, E. (2013). Location of decision rights in Catholic religious orders. Managerial and Decision Economics, 34(1), 29–39.
Eisenhardt, K. M. (1985). Control—organizational and economic approaches. Management Science, 31(2), 134–149.
Engelbert, P. (2009). Zwischen Regel und Reform: Zur Geschichte des Benediktinerordens. In C. Schütz & P. Rath (Eds.), Der Benediktinerorden. Gott suchen in Gebet und Arbeit. Ostfildern: Matthias Grünewald Verlag.
Fama, E., & Jensen, M. C. (1983). Agency problems and residual claims. Journal of Law and Economics, 26, 327–349.
Feinberg, K. (2011). Compensating company executives under the troubled asset relief program. Corporate Governance: An International Review, 19(5), 492–496.
Ferreira, A., & Otley, D. (2009). The design and use of performance management systems: An extended framework for analysis. Management Accounting Research, 20(4), 263–282.
Fisher, J. G. (1998). Contingency theory, management control systems and firm outcomes: Past results and future directions. Behavioral Research in Accounting, 10, 47–64.
Flamholtz, E. G., Das, T. K., & Tsui, A. S. (1985). Toward an integrative framework of organizational control. Accounting, Organizations and Society, 10(1), 35–50.
Fortado, B. (1994). Informal supervisory social-control strategies. Journal of Management Studies, 31(2), 251–274.
Franciscans. (2007). The special statutes for the canonical visitation and presidency of the provincial chapter 2001. Rome, Italy: Franciscan Order.
Frey, B. S. (1992). Tertium datur: Pricing, regulating and intrinsic motivation. Kyklos, 45, 161–184.
Frey, B. S. (1997). Not just for the money: An economic theory of personal motivation. Cheltenham, Brookfield: Edward Elgar.
Frey, B. S., Homberg, F., & Osterloh, M. (2013). Organizational Control Systems and pay for performance in the Public Service. Organization Studies, 34(7), 949–972.
Frey, B. S., & Jegen, R. (2001). Motivation crowding theory: A survey of empirical evidence. Journal of Economic Surveys, 15(5), 589–611.
Frey, B. S., & Osterloh, M. (Eds.). (2002). Successful management by motivation: Balancing intrinsic and extrinsic incentives. Berlin: Springer.
Frieb, K. (2006). Kirchenvisitation und Kommunikation. Die Akten zu den Visitationen in der Kuroberpfalz unter Ludwig VI (pp. 1576–1583). Munich: Beck.
Frost, J., Osterloh, M., & Weibel, A. (2010). Governing knowledge work: Transactional and transformational solutions. Organizational Dynamics, 39(2), 126–136.
Frost, J., Vogel, R., & Bagban, K. (2012). Towards a combinative approach to management control: How control mechanisms interact in a multi-business firm. Working paper presented at EGOS 2012 Helsinki.
Fryxell, G. E., Dooley, R. S., & Vryza, M. (2002). After the ink dries: The interaction of trust and control in US-based international joint ventures. Journal of Management Studies, 39(6), 865–886.
George, E., & Qian, C. (2010). Organizational identity and control: can the two go together? In S. B. Sitkin, L. B. Cardinal, & K. M. Bijlsma-Frankema (Eds.), Organizational control (pp. 167–190). New York, NY: Cambridge University Press.
Gerdin, J. (2005). Management accounting system design in manufacturing departments: An empirical investigation using a multiple contingencies approach. Accounting, Organizations and Society, 30(2), 99–126.
Grandori, A., & Soda, G. (2006). A relational approach to organization design. Industry & Innovation, 13(2), 151–172.
Grant, G. H. (2003). The evolution of corporate governance and its impact on modern corporate America. Management Decision, 41(3), 923–934.
Grant, R. M. (2011). Reflections on knowledge-based approaches to the organization of production. Journal of Management & Governance, online first 13 December 2011, pp. 1–18.
Hausmann, Y., & Bechtold-Orth, E. (2010). Changing remuneration systems in Europe and the United States—a legal analysis of recent developments in the wake of the financial crisis. European Business Organization Law Review, 11(2), 195–229.
Hein, M. (2005). Visitation. In D. Betz, D. S. Browning, B. Janowski, & E. Jüngel (Eds.), Religion in Geschichte und Gegenwart. Handwörterbuch für Theologie und Religionswissenschaft. Tübingen: Mohr Siebeck Verlag.
Helvetia Sacra. (1986). Die Orden mit Benediktinerregel. Frühe Klöster, die Benediktiner und Benediktinerinnen in der Schweiz, Vol. 3/1/1. Bern, Switzerland: Francke.
Hilb, M. (2011). Redesigning corporate governance: Lessons learnt from the global financial crisis. Journal of Management and Governance, 15(4), 533–538.
Hirnsperger, J. (2001). Visitation II. Kirchenrechtlich. In M. Buchberger, W. Kasper, K. Baumgartner (Eds.), Lexikon für Theologie und Kirche. Freiburg i. Br.: Herder Verlag.
Holmström, B., & Milgrom, P. (1991). Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design. Journal of Law Economics and Organization, 7, 24–52.
Holtz, L. (2001). Geschichte des christlichen Ordenslebens. Düsseldorf: Patmos.
Inauen, E., Rost, K., Frey, B. S., Homberg, F., & Osterloh, M. (2010a). Monastic governance: Forgotten prospects for public institutions. American Review of Public Administration, 40(6), 631–653.
Inauen, E., Rost, K., Osterloh, M., & Frey, B. S. (2010b). Back to the future: A monastic perspective on corporate governance. Management Revue, 21(10), 38–59.
Janis, I. L. (1972). Victims of groupthink. A psychological study of foreign policy decisions and fiascos. Boston: Houghton Mifflin.
Jensen, M. C. (2003). Paying people to lie: The truth about the budgeting process. European Financial Management, 9(3), 379–406.
Jensen, M. C., & Meckling, H. W. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Jensen, M. C., & Murphy, K. J. (1990). Performance, pay and top-management incentives. Journal of Political Economy, 98, 225–264.
Jensen, M. C., Murphy, K. J., & Wruck, E. G. (2004). Remuneration: Where we’ve been, how we got to here, what are the problems, and how to fix them. Negotiation, organizations and markets. Harvard Business School NOM Research Paper No. 04-28, Harvard.
Johnson, S. (2011). The next financial crisis. Corporate Governance: An International Review, 19(5), 489–491.
Johnson, S. A., Ryan, H. E, Jr, & Tyan, I. S. (2009). Managerial incentives and corporate fraud: The sources of incentives matter. Review of Finance, 13(1), 115–145.
Kaufmann, F.-X. (2010). Moralische Lethargie in der Kirche. Frankfurter Allgemeine Zeitung, 96, 8.
Keevers, L., Treleaven, L., Sykes, C., & Darcy, M. (2011). Made to measure: Taming practices with results- based accountability. Organization Studies, 33(1), 97–120.
Kennedy, F. A., & Widener, S. K. (2008). A control framework: Insights from evidence on lean accounting. Management Accounting Research, 19(4), 301–323.
Kieser, A. (1987). From asceticism to administration of wealth. Medieval monasteries and the pitfalls of rationalization. Organization Studies, 8(2), 103–123.
Kirkpatrick, G. (Ed.) (2009). The corporate governance lessons from the financial crisis. Report by OECD steering group on corporate governance, pp. 1–30.
Kirsch, L. (1996). The management of complex tasks in organizations: Controlling the systems development process. Organization Science, 7(1), 1–21.
Kirsch, L. J., Ko, D. G., & Haney, M. H. (2010). Investigating the antecedents of team-based clan control: Adding social capital as a predictor. Organization Science, 21(2), 469–489. Lexisnexis University. Reed Elsevier Inc.
McGrath, P. (2007). Knowledge management in monastic communities of the Medieval Irish Celtic Church. Journal of Management History, 13(2), 211–223.
Magnan, M., & Markarian, G. (2011). Accounting, governance and the crisis: Is risk the missing link? European Accounting Review, 20(2), 215–231.
Malmi, T., & Brown, D. A. (2008). Management control systems as a package-opportunities, challenges and research directions. Management Accounting Research, 19(4), 287–300.
Martinez, J. I., & Jarillo, J. C. (1989). The evolution of research on coordination mechanisms in multinational corporations. Journal of International Business Studies, 20(3), 489–514.
Meier, D. M. (2006). Klösterliche Finanzvisitation. Anforderungen an ein internes Kontrollsystem. In K. Lüdicke, H. Paarhammer, & D. A. Binder (Eds.), Kirche in einer säkularisierten Gesellschaft (pp. 405–420). Innsbruck: Studienverlag.
Merchant, K. A., & Otley, D. T. (2007). A review of the literature on control and accountability. In C. S. Chapman, A. G. Hopwood, & M. D. Shields (Eds.), Handbook of management accounting research (Vol. 2, pp. 785–802). Amsterdam: Elsevier.
Merchant, K. A., & Van der Stede, W. A. (2012). Management control systems: Performance measurement, evaluation and incentives (3rd ed.). New Jersey: Prentice Hall.
Meyer, M. W. (2003). Rethinking performance measurement. Beyond the balanced scorecard. New York, NY: Cambridge University Press.
Meyer, M. W., & Gupta, W. (1994). The performance paradox. Research in Organizational Behavior, 16, 309–369.
Müller, G. (2003). Theologische Realenzyklopädie., 35 Berlin & New York, NY: De Gruyter.
O’Donnell, S. W. (2000). Managing foreign subsidiaries: Agents of headquarters, or an interdependent network? Strategic Management Journal, 21(5), 525–548.
Osterloh, M., & Frey, B. S. (2006). Shareholders should welcome knowledge workers as directors. Journal of Management and Governance, 10(3), 325–345.
Osterloh, M., & Weibel, A. (2006). Investition Vertrauen. Prozesse der Vertrauensentwicklung in Organisationen. Wiesbaden: Gabler.
Osterloh, M., & Weibel, A. (2008). Managing motivation—Verdrängung und Verstärkung der intrinsischen Motivation aus Sicht der psychologischen Ökonomik. Wirtschaftswissenschaftliches Studium (WiSt), 8, 406–411.
Otley, D. T. (1980). The contingency theory of management accounting: Achievement and prognosis. Accounting, Organizations and Society, 5(4), 413–428.
Ouchi, W. G. (1977). The relationship between organizational structure and organizational control. Administrative Science Quarterly, 22, 95–113.
Ouchi, W. G. (1979). A conceptual framework for the design of organizational control mechanisms. Management Science, 25, 833–848.
Ouchi, W. (1980). Markets, bureaucracies, and clans. Administrative Science Quarterly, 25, 129–141.
Perry, J. L., Engbers, T. A., & Jun, S. J. (2009). Back to the future? Performance-related pay, empirical research, and the perils of persistence. Public Administration Review, 69(1), 39–51.
Peters, C. (2003). Visitation I. In Theologische Realenzyklopädie. Berlin, New York: De Gruyter.
Pirson, M., & Turnbull, S. (2011). Toward a more humanistic governance model: Network governance structures. Journal of Business Ethics, 99(1), 101–114.
Premonstratensians. (1997). Konstitutionen des regulierten Chorherrenordens der Prämonstratenser: Visitationsordnung. Premonstratensian Order. Rome.
Rajan, R. (2010). Fault lines: How hidden fractures still threaten the world economy. Princeton: Princeton University Press.
Rodrigue, M., Magnan, B. & Boulianne, E. (2013). Stakeholders’ influence on environmental strategy and performance indicators: A managerial perspective. Management Accounting Research, 24(4), 301–306.
Rost, K., Inauen, E., Osterloh, M., & Frey, B. S. (2010). Corporate Governance: What can stock corporations learn from monasteries? Journal of Management History, 16(1), 90–115.
Rost, K., & Osterloh, M. (2009). Management fashion pay-for-performance. Schmalenbachs Business Review, 61(2), 119–149.
Salesians (1984). Allgemeine Satzungen der Salesianer Don Boscos. Salesian Order. Rome.
Sandelin, M. (2008). Operation of management control practices as a package. A case study on control system variety in a growth firm context. Management Accounting Research, 19(4), 324–343.
Schmelzer, G. (1979). Religiöse Gruppen und sozialwissenschaftliche Typologie. Möglichkeiten der soziologischen Analyse religiöser Orden. Sozialwissenschaftliche Abhandlungen der Görres-Gesellschaft. Berlin: Duncker & Humblot.
Schwaiger, G. (2003). Mönchtum, Orden, Klöster. Von den Anfängen bis zur Gegenwart. Munich: Beck.
Schwaiger, G., & Heim, M. (2008). Orden und Klöster: das christliche Mönchtum in der Geschichte (3rd ed.). Munich: Beck.
Simons, R. (1990). The role of management control systems in creating competitive advantage: New perspectives. Accounting, Organizations and Society, 15(1–2), 127–143.
Simons, R. (1995). Control in an age of empowerment. Harvard Business Review, 73(2), 80–88.
Simons, R. (2000). Performance Measurement & Control Systems for implementing Strategy. Upper Saddle River, NJ: Prentice Hall.
Sitkin, S. B., Cardinal, L. B., & Bijlsma-Frankema, K. M. (Eds.). (2010). Organizational control. New York, NY: Cambridge University Press.
Snider, L. (2009). Accommodating power: the “common sense” of regulators. Social & Legal Studies, 18(2), 179–197.
Spiegel Online. (2011). Sexueller Missbrauch in der katholischen Kirche. Jan. 8, 2011. http://www.spiegel.de/thema/sexueller_missbrauch_in_der_katholischen_kirche.
St. John, C. H., & Harrison, J. S. (1999). Manufacturing-based relatedness, synergy, and coordination. Strategic Management Journal, 20(2), 129–145.
Sun, W., Stewart, J., & Pollard, D. (2011). Corporate governance and the global financial crisis: International perspectives. Cambridge: Cambridge University Press.
Tajfel, H. (1981). Human groups and social categories: Studies in social psychology. CUP Archive.
Thompson, J. D. (1967). Organizations in action. New York, NY: McGraw-Hill.
Turner, K. L., & Makhija, M. V. (2006). The role of organizational controls in managing knowledge. Academy of Management Review, 31(1), 197–217.
Tyler, T. R., & Blader, S. L. (2000). Cooperation in groups: procedural justice, social identity, and behavioral engagement. Philadelphia, US: Psychology Press.
Weaver, G. R. (2006). Virtue in organizations: Moral identity as a foundation for moral agency. Organization Studies, 27(3), 341–368.
Weibel, A. (2007). Voluntary work behaviors, habilitation manuscript. Zurich: University of Zurich.
Wragg, E.C., Haynes, G. S., Wragg, C. M., & Chamberlin, R. P. (2004). Performance pay for teachers: The experiences of heads and teachers. London, UK & New York, NY: Routledge Falmer.
Acknowledgments
We extend special gratitude to the Swiss National Foundation for their financial engagement. We thank the reviewers of JM&G and the participants of the 2012 Euram Conference subtheme on governance of public and nonprofit organizations for their valuable and considered comments. Our work would not have been possible without the commitment of many padres, brothers and employees of the religious orders. A special thanks goes to Prior Guido Muff (Benedictines, Engelberg), P. Thomas Morus Huber (Capuchins, Wil), P. Hans Weibel (Divine Word Missionaries, Steinhausen), P. Toni Kurmann (Jesuits, Zurich), P. Karl Widmer (Redemptorists, Baden) and Irene Hahn, who were involved in developing the survey. Further, we conducted detailed interviews on visitations with P. Franziskus Berzdorf (Benedictines, Maria Laach), P. Fidelis Schorer (Franciscans, Zurich), P. Paul Zahner (Franciscans, Näfels), P. Pierre Emonet (Jesuits, Provincial of Switzerland), P. Dr. Lutger Horstkötter (Premonstratensians, Hamborn), P. Josef Grünner (Salesians, Provincial of Munich), and P. Toni Rogger (Salesians, Beromünster). We gratefully acknowledge all communities that participated in the survey. Likewise, we are very grateful for the support of the umbrella organization of the orders in Switzerland (Konferenz der Vereinigungen der Orden und Säkularinstitute der Schweiz) and, in particular, the dedication of its superior, P. Ephrem Bucher (O.F.M. Cap.).
Author information
Authors and Affiliations
Corresponding author
Appendix
Appendix
See Table 8.
Rights and permissions
About this article
Cite this article
Inauen, E., Osterloh, M., Frey, B.S. et al. How a multiple orientation of control reduces governance failures: a focus on monastic auditing. J Manag Gov 19, 763–796 (2015). https://doi.org/10.1007/s10997-014-9292-y
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10997-014-9292-y