From Cost Management to Value creation: The role of AI in Management Control Systems

The integration of Artificial Intelligence (AI) into Management Control Systems (MCS) is reshaping the luxury fashion industry, enabling a shift from traditional cost management to data-driven value creation. Through technologies such as predictive analytics, machine learning, and generative AI, luxury brands enhance decision-making, operational efficiency, and strategic alignment while responding to evolving customer expectations. Combining theoretical analysis with empirical research, the study examines how AI-enabled control systems are perceived by organizational actors within the sector. Findings highlight AI’s potential to improve forecasting, streamline operations, and personalize customer experiences, while also raising challenges related to data governance, ethical considerations, and the preservation of creativity. The results suggest that successful AI integration depends on balancing technological innovation with the human and cultural elements that define luxury brands, ensuring that digital transformation supports, rather than undermines, brand authenticity and long-term value creation.