Management control systems in the smart sustainable city: a focus on smart environment.

Abstract

As cities are growing, local governments are challenged to guarantee a good quality of life by taking action on climate mitigation and adaptation. Due to increased awareness among citizens, local governments commit to ambitious sustainability objectives. The concept of a smart sustainable city has emerged as an ideal for cities to aim for. It requires management control systems (MCS) to steer stakeholders’ behavior towards these objectives. The effectiveness of a MCS depends on one another, requiring to study MCS as a package and not in isolation as previous research has done. Especially the knowledge on MCS packages adopted by smart cities is very limited, and therefore, this research filled in this gap focusing on the smart environment dimension. The goal was to explore the MCS packages adopted for smart environment projects and how they integrate the concept of sustainability. After analyzing the existing literature, case studies were performed in two Belgian local governments, Liège and Hasselt. Using semi-structured interviews, different stakeholders were asked to identify the adopted MCS. The conceptual framework by Malmi and Brown (2008) was used as a guiding theory. As a result, the different MCS were identified for both cities, classified into the five groups of control systems. Also, the links between control systems and their role in implementing sustainability were identified. Based on these findings, it is concluded that both cities have adopted strong planning and administrative controls for their smart environment projects. Also, the culture helps to align employee’s behavior. The reward & compensation and cybernetic controls were weak, apart from budgeting. These insights allow a better understanding of the adopted MCS package by smart cities. Future research can use these insights to determine the effectiveness of systems based on the full package, facilitating the transition toward a smart sustainable city.