Influence of values on interpersonal relationships in the design of control mechanisms: an illustration using cooperative bank failures

Abstract

This article examines the role of values and interpersonal influences in shaping management control systems in cooperative banks. Drawing on the perspective of management control package (Malmi & Brown, 2008) and the coupling/decoupling approach (Orton & Weick, 1990; Demartini & Otley, 2020), we propose the concept of “under-influence couplings”, referring to situations where informal interactions reconfigure the links between control elements. Using an abductive approach, we analyse four cases of cooperative bank failures in order to identify recurring mechanisms. The results show that values can weaken the overall coherence of the control package. We formulate two propositions: (P1) Values conveyed through interpersonal relationships penetrate the elements of control and replace the values displayed by the organisation; (P2) When interpersonal interactions take precedence over formal interactions within the package, the coherence of the package decreases. The article contributes to the literature by proposing to view values as a design parameter and positioning interpersonal relationships as a vector for package reconfigurations. From a managerial perspective, we advocate for greater alignment between stated values and practised values. Ultimately, the sustainable performance of cooperative banks requires a control package in which values act as a lever for control design without replacing it.