Management control system in solid waste management network in Malaysia

Abstract

Privatisation of solid waste management (SWM) in Malaysia occurred in year 2011. After privatisation, SWM is being managed by multiple entities, from both the public and private sectors. Due to the involvement of many entities with diverse interests, the management control system (MCS) is crucial to align these interests. Therefore, this study examines the role of MCS in creating a stable SWM network. In particular, the study is designed to understand how the MCS is translated to create a stable SWM network. Drawing on the Actor Network Theory (ANT), the study discusses the use of Key Performance Indicators (KPIs) as the main control mechanism in the privatisation of SWM. Using an interpretive case study approach, the study uses a data triangulation approach comprising three sources: interviews, documents review and observations. The participants were selected based on their involvement in the tasks of SWM from three different entities, Department A, Corporation X and Champion. The study reveals that KPIs play an important role as the network control based on the monetary performance indicator. KPIs are linked to the performance of the concession company. The study also finds that most of the activities in the intra-organisational relationships are influenced by inter-organisational relationships. Result and action controls used by the concession company are all based on KPIs and concession agreement (CA), which are the main inscriptions in inter-organisational relationships. This study contributes to the body of knowledge by revealing that KPIs which are part of the CA, can align the interests of all actors in a privatised SWM network. The study also shows that CA is the main reference that shapes the implementation process of privatised SWM. Theoretically, the study shows the relative power of the ANT to explain that the main inscriptions, which are KPIs and CA, are used to create stability of the network. For the practitioners, the study demonstrates how the same KPIs can be used in both inter-organisational and intra-organisational relationships, and can also be used in both the public and private sectors.