A second interesting and unexpected

A second interesting and unexpected finding is the significantly high proportion of Traditional MAS among Lateral units facing reciprocal interdependence. This is contrary to the view in the literature that traditional financially oriented systems
are inappropriate in uncertain environments (Abernethy & Lillis, 1995; Dunk, 1992; Kaplan,1983; Macintosh, 1985; Merchant, 1984). The characteristics of Lateral units may provide an explanation for the contradictory result. Galbraith
(1973) argued that decentralization and the creation of self-contained units are appropriate ways to handle the high information-processing needs caused by task uncertainty. However, decentralization has a price since it creates
a potential for loss of control. Decentralization in large and complex organizations is therefore often associated
with well-developed systems to enable subunit performance evaluation (Bruns & Waterhouse,1975; Chenhall & Morris, 1986; Gordon & Miller,1976; Gul & Chia, 1994; Khandwalla, 1974; Merchant,1981; Waterhouse & Tiessen, 1978). However,critical prerequisites of output control are that the unit
s performance can be isolated and that relevant output measures can be identified.
Referring to Table 1, these prerequisites are met in Lateral units in that responsibility centers are organized
around ‘‘natural economic entities’’,namely products/projects. 7 These self-sustained units can thus be held responsible for more aggregated measures such as profits, which give management an overall measure of the units
performance.
Consequently, it is reasonable to believe that financially oriented MASs, under certain organizational conditions, may also be appropriate for performance evaluation in non routine situations.
Kaplan and Mackey
s (1992) finding that there was a greater tendency for flow shops to use financial information for managerial performance evaluation supports this argument.