Management control system change in buyouts : a multiple case study on management control system change in private equity performed buyout transactions
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- Master Thesis 
This empirical study investigates how the control package change in private equity performed buyout transactions. The overall research question is: How does the control package change following a buyout transaction performed by a private equity firm? The method applied is the multiple case study design with six buyout cases in the Scandinavian private equity industry. For each case there is conducted one interview with a private equity professional. The study applies the theoretical frame suggested by Malmi and Brown of management control system as a package and is based on prior research on buyouts and changes in the management control system. The study suggests that following a buyout transaction there exist a major opportunity to change and alter the use of the management control systems. There are not necessarily introduced new control tools, but the existing ones are developed to better fit the operating environment and an altered strategy. The use of the systems is in general intensified, and control is centralized. After buyout there appears to be a clear initiative of aligning the interests of the new owners with those of the management and employees, by connecting reward and compensation closer to company performance. The private equity firms appear to have an important role in the development of the management control systems after buyout. In the position as a majority owner the private equity firms take board position and play an active role, directing their investment. In changing the system the role of the private equity firms is foremost seen as an initiator. Nevertheless, when needed the private equity firms also assist in the implementation of changes.