Effectiveness Of Control Mechanism Research Articles

Effects of control mechanisms on supply chain resilience and sustainability performance

Supply chain resilience (SCRES) plays an important role in dealing with disruptions in a highly turbulent business environment and has received a fair amount of attention from industry and academia. This study explores the relationships among control mechanisms (process, social, and outcome control), SCRES (proactive and reactive resilience), and sustainability performance (economic, environmental, and social performance). Structural equation modeling is used to analyze data collected from 322 Chinese manufacturing firms. This study finds that process control and social control have a positive impact on the two dimensions of SCRES, while outcome control has no significant impact on SCRES. Proactive and reactive resilience both have a significant positive impact on the three dimensions of sustainability performance. The results deepen the understanding of the enablers and performance of SCRES. They also provide managerial insights into how to use control mechanisms to build SCRES capability for sustainable development. JEL Classification: M1

An Integrated Assessment and Factor Analysis of Water Related Environmental Risk to Cities in the Yangtze River Economic Belt

With rapid development of the economy and urbanization, water-related environmental risk in urban areas has increased and hindered social-economic development and ecological protection. The assessment of water-related environmental risk is of vital importance to the sustainable development of the Yangtze River Economic Belt (YREB). This study constructed a comprehensive assessment index system for water-related environmental risks from three perspectives: the hazards posed by risk sources, the effectiveness of the control mechanisms, and the vulnerability of the risk receptors. Employing the entropy method, the water-related environmental risks of cities in the YREB from 2000 to 2015 were comprehensively evaluated, and the obstacle degree model was used to analyze the associated influencing factors of the water-related environmental risk. The results showed that the overall level of water-related environmental risk of the YREB presented a significant spatial gradient characterized by “downstream risk > midstream risk > upstream risk”. The areas with higher risks were mainly distributed in the Yangtze River Delta in the downstream area, and Wuhan and Changsha in the midstream area, where their risk receptors were highly vulnerable, and efforts should be made to improve the resilience of these areas. In terms of temporal change, the average value of the comprehensive water-related environmental risk of the YREB dropped from 0.493 in 2005 to 0.392 in 2015, with a reduction rate ranging from about 16.55 to 25.76%. The number of cities with medium-high to high risk had gradually decreased, and the number of cities with medium, medium-low, and low risk continued to increase. The water-related environmental risk of the YREB as a whole is in the transition stage from high risk level to medium and low risk level. Specifically, the hazards posed by risk sources had increased continually, and especially increased significantly in the midstream of the YREB; the effectiveness of risk control mechanisms had increased throughout the region, with downstream cities mainly having a high level of effectiveness; the areas with high vulnerability of the risk receptors were mainly concentrated in the Yangtze River Delta and showed an upward trend. Overall, the main source of water-related environmental risks and differences among the upstream, midstream and downstream cities had shifted from the hazards posed by risk sources to the effectiveness of risk control mechanisms and the vulnerability of the risk receptor. The main factors affecting the water-related environmental risk in the order of average obstacle degree were per capita GDP (34.43%), the number of beds per thousand people (18.70%) and the industrial structure height (15.55%). Therefore, promoting the adjustment of industrial structure, improving economic efficiency, developing the regional social economy, and improving and perfecting the construction of environmental protection infrastructure are effective ways to realize the mitigation and resolution of water-related environmental risks.

Social control or bureaucratic control? -The effects of the control mechanisms on the subsidiary performance

This study empirically examined how social control and bureaucratic control would affect the short-term performance of a subsidiary and how these two control mechanisms would interact with each other. Analyzing 907 Taiwanese FDI cases in China from 2011 to 2012 by ordinal logit regression and OLS regression, this study found that social control delivered an inverted sigmoid effect on the subsidiary performance, whereas bureaucratic control yielded an inverted U-shape effect. Furthermore, these two control mechanisms were positioned substitutively in affecting the subsidiary performance. Broadly speaking, this research contributes to the international management literature by providing empirical evidence regarding the effects of different control mechanisms on the short-term performance of a subsidiary. More narrowly, the findings suggest that multinational corporation (MNC) practitioners should strike and maintain an optimal balance between social control and bureaucratic control when governing their subsidiaries.

Carbon emissions and the cost of debt in the eurozone: The role of public policies, climate‐related disclosure and corporate governance

AbstractOver time, investors have become increasingly aware of the risks associated with a transition to a low‐carbon economy. This study investigates the association between carbon emissions and the cost of debt financing for a sample of firms from the eurozone in the period 2010–2018. The results provide evidence that the risk premium required by lenders increases with carbon emissions. However, although the most polluting sectors were already charged before the Paris Agreement, and not further penalised in the subsequent period, our results indicate that the less polluting sectors started being charged a higher spread for their emissions only in the period after the Agreement. The Paris Agreement appears to be a turning point around which lenders have become aware of the strong commitment taken by policymakers in fighting climate change. Our findings also suggest that increased levels of disclosure on climate‐related issues can mitigate corporate carbon risk. On the other hand, the results are not compelling when we consider the effect of control mechanisms, such as external verification for emissions, board oversight of carbon risk and the presence of emission reduction targets, on the cost of debt. Taken as a whole, the results demonstrate the effectiveness of public policies in driving lenders' allocation decisions as well as the role of climate‐related disclosure in mitigating the corporate cost of capital. As such, our findings have important implications for both policymaking in environmental regulation and managerial strategies.

A Study on the Effect of Control Mechanism, Client-Vendor Relationship and Intrinsic Motivation of Client on the IT Project Performance

A Study on the Effect of Control Mechanism, Client-Vendor Relationship and Intrinsic Motivation of Client on the IT Project Performance

통제 메커니즘, 수주사-발주사 관계도 및 발주사의 내적 동기가 IT 프로젝트 성과에 미치는 영향에 대한 연구

본 연구는 공공 영역의 IT프로젝트 성과에 영향을 미치는 선행 요인들로 수주사에 대한 통제 메커니즘과 발주사의 내적 동기 및 발주사-수주사간 관계도를 고려한다. IT 프로젝트의 성과는 정성적 성과와 정량적 성과로 분리하여 살펴보며, 이를 위해서 조달청 나라장터 시스템에서 3년간 (2013년~2015) 발생한 공공 IT프로젝트에 대한 자료를 수집하였다. 이 자료를 근거로 각 IT프로젝트의 발주 담당자를 대상으로 설문조사를 실시하였다. 분석결과는 다음과 같다. 첫째, 통제 메커니즘 중 결과통제 메커니즘은 IT프로젝트의 정성 및 정량적 성과에 영향을 미치는 반면, 과정통제 메커니즘은 정성적 성과에만 유의함을 보였다. 둘째, 발주사-수주사 간 관계도는 IT프로젝트의 정량적 성과에 영향을 미쳤다. 셋째, 발주사의 내적 동기가 강할수록 과정통제 메커니즘을 선택하였다. 종합하자면, 강한 내적 동기를 가진 발주사일수록 과정통제 메커니즘을 IT프로젝트 관리에 적용하겠지만, 이는 프로젝트를 기간과 예산 범위 내 완료하는 정량적 성과에는 도움이 되지 못할 수도 있는 것이다. 또한 현재의 나라장터 공개경쟁입찰의 경우 발주사-수주사간 관계성을 고려하는 요인은 배제된 실정이지만, 공공정보화 사업의 성과향상을 위해 관계 학습과 관계 이점의 중요성도 고민해 볼 필요가 있음을 제시한다.

Boundary Spanners or Routines? The Effect of Control Mechanism on MNC’s Subsidiary Performance

This study empirically examines how social control and bureaucratic control may affect the subsidiary performance and how these two controls may interact with each other. Analyzing by ordinal logit regression Taiwanese 907 FDI cases in China from 2011 to 2012, this study finds that the social control via expatriation delivers an inverted sigmoid effect on the subsidiary performance whereas the bureaucratic control via structure- embedded routines delivers an inverted U-shape effect. Besides, the social and the bureaucratic controls are in a conflicting position in which one will offset the positive effect on the subsidiary performance from the other. These findings provide empirical evidences to the international management theory regarding the effect of control mechanism on the subsidiary performance. Besides, these findings suggest practitioners to maintain the optimal balance between social control and bureaucratic control while adopting them to govern subsidiaries.

Tweaking the entrepreneurial orientation\u2013performance relationship in family firms: the effect of control mechanisms and family-related goals

Management literature is currently giving growing conceptual and empirical attention to the peculiarity and relevance of entrepreneurial attitudes in family firms, with divergent outcomes. Aiming at concretizing the effects of these attitudes, denoted by the entrepreneurial orientation construct, on family business performance and considering that family dynamics come into play in this relationship, we particularly investigate the impact of control mechanisms and family-related goals. Findings are based on a sample of 180 family firms and show that Proactiveness and Autonomy are particularly relevant to financial performance. Agency-problems avoiding control mechanisms moderate the effect of Innovativeness and Autonomy, while socioemotional wealth (SEW) goals moderate the effect of Risk-Taking, respectively. The usage of these mechanisms and managing SEW goals provide opportunities for a more efficient exploitation of entrepreneurial attitudes.

Corporate controls, geographic dispersion, and their effect on corporate financial performance in related diversified corporations

PurposeDrawing on the literature on corporate diversification, the purpose of this paper is to shed light onto the influence of geographic dispersion on the effectiveness of control mechanisms in related diversified corporations. This research contends that control mechanisms implemented by corporations and the extent of geographic diversification play a role in the synergies expected from related diversification being realized.Design/methodology/approachThis study uses OLS regression to analyze data collected through surveys from managers of 193 Iranian corporations and their 2,704 subsidiaries to examine the relationship between relatedness, corporate performance, geographic dispersion, and emphasis of strategic controls.FindingsThe author finds that a triple interaction effect between corporate strategy (diversification approach), controls mechanisms, and the extent of geographic diversification influences the overall performance of corporations. Findings of this research suggest that the positive effects of strategic controls in related diversified corporations are most when there is less geographic dispersion and will attenuate as corporations become more geographically disperse.Research limitations/implicationsThe findings of this research, have contributed to the extant literature in several ways. First, the findings further establish the superiority of related diversification to unrelated diversification in achieving economic performance in corporations. The findings reveal that, ceteris paribus, the more relatedness between activities of subsidiaries in corporations exists, higher performance can be expected at the corporate level. Second, the findings show once more that to achieve the higher performance that results from synergies in related diversified corporations, emphasis of strategic controls play a crucial and important role. Third, the author find that although the emphasis of strategic controls in essential to realizing the potentials in related diversified corporations, greater geographic dispersion attenuates the positive effects expected from stricter enforcement of strategic control mechanisms.Practical implicationsAn important consequence of findings of this research is that managers should be more aware of the implications of selecting the geographic location of the subsidiaries that they either acquire or establish. While the literature focusing on corporate diversification has mainly focused on the differences between related and unrelated diversification, this paper brings a new factor into light. Therefore, the findings of this research provide the author with a better understanding of the factors that define success or failure in achieving financial objectives of corporations.Originality/valueThere has been very little done to investigate the factors that influence effectiveness of strategic controls in related diversified corporation. Much of this shortcoming has resulted due to difficulties in measurement of strategic controls their operationalization in empirical studies. This study has taken a step to that direction and therefore, provides a more coherent and clear picture of the factors that influence the overall performance in corporations.

Effectiveness of control mechanisms in mobile platform ecosystem

Mobile Internet services are offered by complex ecosystems, which are difficult to control. While control theory has been applied to traditional forms of interorganisational software development, it is yet unclear how input, behavioural and output control should be used to manage complex ecosystems. This paper analyses the impact of a portfolio of ecosystem control mechanisms on a set of performance criteria through a survey. We find that ecosystem leaders manage dependencies among partners through a combination of outcome and behavioural control. In contrast, access to complementary resources is achieved through input and behavioural control. The ecosystem leaders also safeguard customer relationships from other partners through a combination of outcome and behavioural controls. The study extends traditional control theory towards the emerging realm of platform-based mobile service development.

Research on the Management Control Systems in Different R&D Activities − A Field Study of a Listed Company1

AbstractManagement control systems (MCS) are fundamental to the progress of research and development (R&D) activities. However, misunderstanding the functions of MCS impedes their scientific design. In view of this, we assess the literature on the key mechanisms of MCS in an R&D context according to the contingency and resource-based theories, and propose a framework which effectively demonstrates these mechanisms. The framework divides the progress of R&D into three stages and analyses the effects of control mechanisms on different R&D activities by distinguishing between their different functions. Finally, we verify the rationality of our framework, with a view to improving current MCS design, using a field study. Our work can help organisations to recognise the role of MCS and provides valuable theoretical and empirical evidence to support their R&D activities.

Conceptual proposals for measuring the impact of international regimes on energy security

The paper proposes two concepts to assess the effect of international regimes on energy security. Existing indicators focus mainly on state-level factors, excluding international influences. International relation scholars on the other hand see a clear connection between international regimes and stable energy relations. International regimes stabilise energy relations by providing frameworks for negotiations, defining, controlling and sanctioning compliance and allowing the actors to engage in package deals. The researcher needs to include these factors in a complete assessment of political energy security risks. As first step, the paper uses the effectiveness of control mechanisms as basis for such consideration. It refers specifically to international arbitration as the most important control mechanism in international energy relations. The simplest measurement option is the share of a county's energy imports covered by a certain regime. The paper applies the Oslo-Potsdam-Solution to account for outcome effectiveness. It applies a variant of the International Regimes Data Base protocol to account for effective regime structures. In a last section, the paper proposes some possible paths for future research.

Control Mechanism and Value of Firm: Empirical Evidence from Indonesia Capital Market

This research discusses about the roles of institutional ownership and leverage as control mechanism over agency conflict and how it affects corporate performance. Agency conflict is a result of expropriation via tunneling on asset utilization. This study uses panel data with a sample of 136 companies in Indonesia between 2001-2012.Simultaneous model testing using Three Stage Least Square estimation technique is also used in this study. Results suggest that institutional ownership and leverage have a non-linear effect on asset utilization. Institutional owner-ship can be used as a control mechanism at higher levels of owner ship.However, when the ownership surpasses certain level, institutional owners will be able to conduct expropriation through tunneling. Low-level leverage will result in expropriation through tunneling by institutional owners. On the other hand, higher level of leverage makes it possible to use leverage as control mechanism.This study also sug-gests that there is a substitutional correlation between the implementation of control mechanism and leverage. This research also proves that the effect of control mechanism on asset utilization will improve corporate performance. This research does not specifically investigate the proportions of institutional ownership and leverage as borderline threshold which shows that the two variables can be used as control mechanism.It also implies that the control mechanism over agency conflict which happens as a result of expropriation through tunneling can be done using institutional ownership and leverage. Institutional ownership and leverage must, in this case, be conducted properly to-wards asset utilization so that it can improve corporate performance.This research provides evidence and solutions for agency conflicts that happen as a result of expropriation through tunneling. This study also contributes to the agency theory testing model by using simultaneous equation and considering non-linear testing method.DOI :https://doi.org/10.21632/irjbs.6.1.45-62Keywords: Institutional Ownership, Leverage, Asset Utilization, Corporate Performance, Tunneling

Ex ante vs. ex post: the trade-off between partisan conflict and visibility in debating EU policy-formulation in national parliaments

This article asks how ex ante and ex post control mechanisms structuring the involvement of national parliaments in European Union (EU) policy-formulation affect the scope of conflict and visibility of parliamentary debates. Based on democratic theory, partisan conflict and high visibility are normatively preferable. The effects of control mechanisms on these two criteria are assessed in a comparative case study of plenary debates in the Danish Folketing and Dutch Tweede Kamer on multiannual EU budgets. This study shows that control mechanisms have direct and indirect effects on the scope of conflict and visibility of debates by linking up to different phases of policy-formulation and media coverage cycles. Danish ex ante mechanisms trigger more partisan, but less visible debates, whereas Dutch ex post mechanisms stimulate highly visible, but intergovernmental debates. The findings thus present a trade-off between partisan conflict on the one hand and visibility on the other hand.

Effects of control mechanisms on positive organizational change

PurposeThis paper aims to describe an application of key concepts in agency theory to organizational development. Specifically, it seeks to highlight that formal control systems, the ways to regulate employees' performance, are associated with an important factor for organizational development – the capacity for improvement.Design/methodology/approachThe paper presents a literature review on organizational development and agency theory, and an empirical examination of the relationships between bureaucratic control systems, task programmability and the organization's capacity for improvement. The hypotheses of interrelationships among different control systems, task programmability and the capacity for improvement were tested with a sample of 237 employees in the service industry.FindingsResults indicate that input control is a significant factor in determining an organization's capacity for improvement, and task programmability moderates the relation between a bureaucratic control and the organization's capacity for improvement.Research limitations/implicationsThe results are based on a cross‐sectional self‐report study. It is advisable to include managers' assessment of subordinates' capacity of improvement in further research.Originality/valueThe effect of formal controls on organizational performance was controversial. This paper reveals the moderating role of task programmability in a control‐performance relationship. In doing so, this paper sheds light on how a manager can enhance his/her subordinates' performance on organizational improvement through different control tactics.

The Influence of the Selling Situation on the Effectiveness of Control: Toward a Holistic Perspective

An important decision facing sales managers is how to coordinate the sales force. Although prior research has studied the linkage between control and salesperson performance, results remain equivocal. Drawing from the literature on control system and fit theory, the authors suggest that individual, environmental, and organizational factors combine to influence the effectiveness of control mechanisms. Three clusters are identified that describe unique, but often encountered, sales situations: (1) sink or swim—transactional, (2) tried and true—relationship building, and (3) account management—fixed but stable. Data from the study support that the effects of output, process, self, and professional controls on salesperson performance vary according to the sales situation clusters.

Managerial Diversion, Regulation and Internal Control Mechanism

The paper examines costs and benefits of managerial diversion along with monitoring costs to control diversion and incentive costs to substiture for diversion. The paper finds that managers will put out more effort when they are allowed to divert firm resources. Managerial diversion may exist in the equilibrium. In particular, when regulation is loose, or monitoring is inefficient, or managerial discretion is high, allowing managerial diversion is a less costly second best choice for shareholders than imposing a diversion-free governance design. Finally, the paper shows that managerial types influence the magnitude of diversion and the effectiveness of control mechanisms. There is no best way of governance mechanisms for all types of managers.

Managing subsidiary knowledge creation: The effect of control mechanisms on subsidiary local embeddedness

Given the importance of local (external) network embeddedness for an MNC subsidiary's ability to create new knowledge, a crucial question is what factors affect this local embeddedness. Despite its obvious relevance, few efforts have been made in the MNC literature to deal with this issue. In this paper, we hypothesize that a subsidiary's local embeddedness is influenced by headquarters' use of different control mechanisms, and that local embeddedness, in turn, is an important antecedent to a subsidiary's level of knowledge creation. The model is tested on a dataset of MNC subsidiaries in Finland and China. The results indicate that MNC headquarters can indeed influence subsidiary local network embeddedness, which in turn enhances subsidiary knowledge creation.