New Paradigms of Management Control for Start-ups: A Conceptual Understanding and Prescription for Future Research

Abstract

Start-ups face unique challenges in managing and controlling their operations, including limited resources, rapid technological changes and uncertainty. Start-ups can choose from a variety of management control systems (MCS) based on their specific objectives, strategy and context. A judicious combination of several instruments of MCS tailored to the particular context might be key to their success. However, start-ups and other small firms may not have resources to implement MCS. In recent years, new paradigms of management control have emerged to address these challenges and support success of start-ups in the long term. This article aims to explore the existing literature on management control in start-ups and to use conceptual model to discuss three new paradigms of management control in start-ups: The lean start-up approach (LSA), the agile start-up approach (ASA) and the design thinking start-up approach (DTA). These paradigms emphasise importance of rapid experimentation, adaptability and user-centred design in management of start-ups. The article concludes by highlighting importance of finding the right approach or combination of approaches for the specific needs and goals of the start-up. Future researchers will benefit from this study by identifying research opportunities related to the implementation and effectiveness of different management control paradigms in start-ups and developing a comprehensive framework for selecting and implementing these paradigms.