Int. J. Trade and Global Markets, Vol. 3, No. 1, 2010 5 Copyright © 2010 Inderscience Enterprises Ltd. Strategy and Management Control Systems: How are they interrelated? Metka Tekavčič and Darja Peljhan* Faculty of Economics, University of Ljubljana, Kardeljeva ploščad 17, SI-1000 Ljubljana, Slovenia Fax: +386 1 5892 698 E-mail: metka.tekavcic@ef.uni-lj.si E-mail: darja.peljhan@ef.uni-lj.si *Corresponding author Abstract: The purpose of the paper is to study the role of strategy and its change in the use of Management Control Systems (MCS) in a particular company. In this paper, Miles and Snow’s (1978) definition of strategy is adopted. Our results show that in the defender period the case company focused on traditional basic MCS’ information. Then it made a very distinctive shift from defender to prospector strategy. In these phases MCS changes followed strategy changes. The paper’s major contribution is that it incorporates a wider range of controls, including informal mechanisms, as opposed to the majority of prior studies. Keywords: case study; defender; MCS; management control systems; prospector; strategy. Reference to this paper should be made as follows: Tekavčič, M. and Peljhan, D. (2010) ‘Strategy and Management Control Systems: How are they interrelated?’, Int. J. Trade and Global Markets, Vol. 3, No. 1, pp.5–23. Biographical notes: Metka Tekavčič is a Professor at the Department of Management and Organisation at the Faculty of Economics, University of Ljubljana. She is the Head of the Institute of Management and Organisation. Her research interests are in cost management and performance measurement. She attended many international conferences, where she presented papers in her research area and published several papers in European and US journals. She is a member of editorial boards in several professional journals from her research field. Darja Peljhan is an Assistant Professor at the Department of Management and Organisation at the Faculty of Economics, University of Ljubljana. Her research interests are in management control systems and performance management. She attended many international conferences, where she presented papers in her research area and published several papers in European and US journals. 1 Introduction Accounting scholars have argued that MCS have to be modified in accordance with the strategy of a company (Simons, 1987a). Early studies in contingency research