Paternalism as a long-term strategy of a management control system

Abstract

PurposeThe purpose of this paper is to trace the evolution of paternalism as a long-term component of a management control system (MCS) in a multi-national business enterprise.Design/methodology/approachThe authors used a historical methodology involving the collection and evaluation of both primary and secondary data. Annual reports of Michelin (2009–2021) were also analysed to trace the evolution of the MCS towards corporate social responsibility (CSR).FindingsThis research traces the evolution of Michelin's Paternalistic MCS from “Traditional Paternalism” to “Welfare Paternalism”, “Managerial Paternalism” and “Libertarian Paternalism” thereby leading the way to CSR. The findings indicate that the evolution of the MCS revealed “Managerial Paternalism” as a specific type of paternalism and an important component of the “Personnel and Cultural Controls” (Merchant and Van der Stede, 2018, p. 95) at Michelin.Research limitations/implicationsMany multi-national companies began as family-owned and controlled firms (e.g. Ford, Toyota, Fiat, Renault, Tata) and they often employed paternalistic MCSs during their early development (Newby, 1977; Perrot, 1979; Colli, 2003). Such MCSs have been seen as being anachronistic and are often abandoned as the family-owned enterprise grows into a multi-national company (Casson and Cox, 1993; McKinlay et al., 2010). The research challenges this assertion and demonstrates how aspects of a paternalistic MCS can survive in a multi-national business enterprise.Practical implicationsWith respect to practical implications, this research shows that paternalism can still be a component of an MCS in a multi-national enterprise.Originality/valueUsing a historical approach, this research addresses a gap in the prior literature regarding the variations and persistence of paternalism in companies. In the case of Michelin, the authors investigate the evolution of its paternalistic MCS from a traditional form to an emphasis on CSR.