This paper examines how the management accounting control system functions while implementing strategy. We use the lens of institutional theory to understand how strategy and control processes are woven through a prominent international manufacturing organization. We show that the interplay between the formal and indigenous institution (e.g., Havenevik and Hårmar, 1999) steers strategy implementation as well as daily work. We introduce the concept of the indigenous institution as a lens to understand the flow of power and decisions through the company.

We find that both strategy implementation and daily work are directed by the indigenous institution, and maintained through communication of the intentions, or mission, of the formal institutions without significant specification of ways or means by the formal institution. It is, in effect, control through intention, or mission. 

Strategy implementation, which is usually understood to be an autonomous, or separate, activity, is in this case the content of a set of communications that flow through the indigenous institution and are filtered and transformed in such a way that the implemented strategy is not the same as the strategy prescribed by the formal institution. 

In this case, the indigenous institution is revealed to be in a long-term engagement with the issue of where control should be located for specific tasks and it introduced the concept of “position ownership” throughout the site as an unofficial operating strategy, even though the concept has no existence in the formal institution or formal strategy. 

This paper clarifies the boundaries between the formal institution of management documents and structure, and the realm of action, in which the indigenous institution dominates. The concept of the indigenous institutions reifies the underlying interactions of the participants in an understandable and useable way, revealing the durability and reflection jointly realized by participants. Adding this perspective to our way of understanding work gives us a way to understand the capacity of organizations to be both steady and flexible. It also provides a way to understand the difficulty of attempting to control change initiated by formal institutions.