Abstract
It is well known that both management control systems (MCSs) and operations management (OM) are related to firm performance; however, an integrated study that involves MCS and OM within the context of firm performance is still lacking. This research aimed to examine the relationships among the use of MCSs and OM techniques and firm performance in the Brazilian auto parts industry. Simons’ levers of control framework was used to characterise the uses of MCSs, and OM techniques, such as total quality management (TQM) and continuous improvement programmes, were adopted. The results obtained through the structural equation modelling indicated that the diagnostic use of MCSs is positively associated with the goals of cost reduction. In addition, the interactive use of MCSs is positively associated with the objectives of introducing new products, which is consistent with previous research. Additionally, OM techniques are positively related to cost reduction but have no direct relationship with the introduction of new products.
Highlights
In the framework developed by Simons (1995, 2000), the use of management control systems (MCSs) is classified as diagnostic use and interactive use
4.3 DISCUSSION Hypothesis 1 (H1), which proposes the relationship between the diagnostic use of MCSs and the reduction of costs, was supported
Regardless of the level of development of a firm’s MCS or of the specific information system used by managers, such diagnostic use has the traditional function of a feedback system (SIMONS, 2000), such that managers can evaluate the results from their actions in their firm’s operations
Summary
In the framework developed by Simons (1995, 2000), the use of MCSs is classified as diagnostic use and interactive use. Previous studies have reported dissonant results, both in the studies of the use of MCSs (HENRI, 2006a; BISBE; OTLEY, 2004) and in the studies of OM techniques, such as quality programmes (CORREDOR; GOÑI, 2011; CUA; MCKONE; SCHROEDER, 2001; O’REAGAN; SIMS; GHOBADIAN, 2004; REED; LEMAK; MERO, 2000). Such differences suggest the need for new empirical research involving MCSs and OM techniques. The automotive industry chain as a whole is characterised by constant innovations and cost reduction programmes, which constitute a favourable environment for our research
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