Use Of Management Control Systems Research Articles

The effect of differentiation strategy on the organisational performance of companies in the agri-food industry: The mediating role of interactive use of management control system

The aim of this paper is to explore the effect of differentiation strategy on the organizational performance of Moroccan industrial companies by analyzing the role of the interactive use of management control systems as a mediator. To achieve this goal, a questionnaire survey was conducted with 180 industrial companies to collect data, which were analyzed using Partial Least Squares Structural Equation Modeling (PLS SEM) version 4. The results of the study demonstrate a significant relationship between differentiation strategy and organizational performance. Furthermore, the study provides evidence that supports the idea that the interactive use of management control systems plays a mediating role in the relationship between differentiation strategy and performance. These findings underscore the importance for managers to enhance their efforts in making the interactive use of management control systems a key value-generating element.

From distrust to trust: Balancing between forcing and fostering management control systems in a hostile cross-border post-acquisition integration

Extant research contends that in a context characterised by distrust, partners do not engage in developing trust in each other, and the use of management control systems creates tensions and increases distrust. This begs the questions of whether and how trust can be promoted and management control exercised in such a context. Thus, this paper examines the interplay between management control systems and (dis)trust in a hostile post-acquisition integration of two global companies. In doing so, this paper provides a detailed analysis of the role of management control systems as well as the underlying motives and the consequences of their use in various integration processes at different organisation levels. Applying the labour–management negotiation strategy theory, this study distinguishes between two modes of implementing management control. First, in the forcing mode, management control systems are used to coerce and monitor employees and instil top-down organisational values in them to promote controllability. Second, in the fostering mode, management control systems are exercised to promote mutual benefits, learning and shared values to support cooperation. The results show that the combined use of forcing and fostering management control systems supports the development of trust in the post-acquisition context characterised by distrust. Forcing control promotes trust by providing stability, creating accountability for cooperative achievements and supporting conflict resolution, whereas fostering control develops trust by facilitating goal sharing, mutual learning and value integration. This study advances the knowledge of management control systems and the relation between (dis)trust and control in the post-acquisition integration context by demonstrating why and how managers balance between forcing and fostering controls and how these control modes, separately and in combination, interact with (dis)trust.

Designing a Sustainability Assessment Framework for Peruvian Manufacturing Small and Medium Enterprises Applying the Stakeholder Theory Approach

Among the main obstacles affecting the competitiveness of Peruvian Small and Medium Enterprises (SMEs) are poor strategic planning and incipient use of management control systems that support the integration of sustainable practices for the growth of the organization. Not considering sustainability in the strategy and management control systems of Peruvian SMEs can jeopardize their stability and growth, as they are part of the supply chain of large companies that look for suppliers that comply with sustainability standards. Since manufacturing SMEs play a vital role in the economies and social welfare of countries, providing them with appropriate management tools to evaluate the sustainable performance of their activities is urgent to assure their survival. Thus, the aim of this study is to design a holistic sustainability assessment framework that enables Peruvian manufacturing SMEs to evaluate the full integration of sustainability into their business strategy and the creation of value for each stakeholder. Based on the gaps found in the literature review, a conceptual assessment framework was designed, then a multiple-case study was conducted in three Peruvian manufacturing SMEs in the plastic sector, and the data obtained were used to deploy the proposed conceptual assessment framework.

The Use of Management Control System in Corporate Social Responsibility (CSR) Strategy Implementation and CSR Activities on Sustainability Reporting

Objective: This study aims to investigate the impact of the relationship between CSR activities and the strategies employed to ensure their proper management in line with company objectives. Global surveys consistently rank the mining, gas and other sectors at the bottom of all sectors in terms of social and environmental performance. Therefore, companies in these sectors have no choice but to change their approach through a comprehensive understanding of their business impacts.
 
 Methodology: The method used in this study is purposive sampling, where the sample criteria include companies featured in sustainability reports, as well as companies that have incurred environmental costs in the form of environmental development program costs.
 
 Result and Conclusion: The study found that the strength of a company's management control system (MCS) plays a significant role in moderating the relationship between CSR activities and sustainable reporting. When the t-value is greater than 2.055 and the significance level (sig) is less than 0.05, the MCS variable acts as a moderator, indicating that a strong control system reinforces the relationship between CSR activities and sustainable reporting. Conversely, when the MCS is weak, the relationship between CSR strategy and sustainability reporting is also weakened.

Performance implications of exploratory and exploitative innovation: the role of management control systems

Drawing on prominent theories of innovation, this study investigates the inter-relationships between the use of management control systems (MCS), exploratory innovation, exploitative innovation, and firm performance in Vietnam, an emerging market. The research hypotheses were empirically tested using a partial least squares-structural equation model. Data were collected by survey questionnaires from a sample of 238 top-level and middle-level managers in Vietnamese firms. The results confirm that the diagnostic use of MCS has a significant positive effect on exploitative innovation and the interactive use of MCS has a significant positive effect on both exploratory innovation and exploitative innovation. The results also reveal that exploitative innovation and exploratory innovation partially mediate the relationship between the interactive use of MCS and firm performance. Understanding these relationships can assist Vietnamese firms to invest appropriately in MCS that is able to promote innovation actions, thereby achieving outstanding performance.

COVID-19 uncertainty, pandemic management strategy, management control and public health performance

PurposeAlthough the use of management control systems (MCS) in crisis management has received extensive attention, limited knowledge exists regarding the benefits of the broad scope, timeliness, integration and aggregation dimensions. This study aims at examining the performance implications of the context-structure combinations of pandemic management strategy (PMS), MCS use and pandemic-induced uncertainty of public health institutions (PHIs) in Ghana.Design/methodology/approachData were collected using online survey questionnaire where 246 public health managers qualified for the study. Data were analyzed using covariance-based structural equations modeling (version 23).FindingsPMS was found to have a significant and positive impact on three (broad scope, timeliness and aggregation) of the four dimensions. The integrated dimension was statistically insignificant. In addition, the three dimensions had a significant impact on top managers’ satisfaction with MCS use, which in turn impact on cost containment and quality of care. Finally, COVID-19 uncertainty moderated the relationship between MCS use and operational performance.Practical implicationsThe three dimensions of broad scope, timeliness and aggregation are critical for PHIs when it comes to crisis management. Moreover, the presence of pandemics strengthens the relationship between top manager use of MCS and performance in health care. More sophisticated MCS information is required when managing pandemic-related crisis by PHIs.Originality/valueThis study presents a theoretical framework that integrates PMS, MCS use and performance of public health care from a contingency perspective. It extends the benefits of contingency theory to include the three dimensions of MCS with respect to crisis management.

Does environmental uncertainty drive the use of management control systems and innovation?

PurposeThis paper analyzes the effects of environmental uncertainty on the use of Management Control Systems (MCS) and product and process innovation.Design/methodology/approachThe hypotheses were tested with data from a survey carried out with 140 managers of innovative Brazilian firms using structural equation modeling.FindingsThe analyzes show significant negative effects of environmental uncertainty on MCS use and non-significant ones on product and process innovation, which suggests that when environmental uncertainty increases, the MCS use decreases. In contrast, significant positive effects of MCS use on product and process innovation were found, despite environmental uncertainty permeating innovation. However, no mediating effect of the MCS use on the relationship between environmental uncertainty and innovation was observed.Research limitations/implicationsThis study presents implications to the management literature grounded on the Contingency Theory by pointing out negative effects of environmental uncertainty on MCS use and product and process innovation. This encourages research on other contingency factors that might be predictors of MCS use and innovation.Practical implicationsThe findings provide evidence that the analyzed organizational practices (MCS use and innovation) are conceived and implemented to disregard external stimuli, which may bring dysfunctional consequences that need to be monitored.Originality/valueThe study contributes by revealing that environmental uncertainty inhibits the MCS use and does not favor innovation. It was expected that MCS that produce information about the external environment would be valued and would have effects on the strategic planning in these firms.

Analysis of contingency factors and management control systems associated with sustainable management practices

Purpose: The objective of this study was to analyze how contingency factors and the use of management control systems are associated with sustainable management practices in organizations.
 Methodology: A field study (survey) was carried out through questionnaires and semi- structured interviews with managers linked to management control systems in two creative companies in the telecommunications sector. The sample has a non-probabilistic character and the data treated using the content analysis technique of Bardin (2011).
 Results: The findings shows that technology, organizational culture, suppliers and customers are contingency factors associated with sustainable management practices by the study organization. The research results indicate that the use of an interactive management control system is an essential tool. for the establishment of communication among managers and employees at operational levels of organizations, supporting the implementation of environmental management initiatives. Diagnostic control has been used to monitor goals and implement environmental management practices with a positive impact on organizational performance through indicators of cost reduction, profitability, customer satisfaction and increased sales.
 Contributions of the study: The study provided dissemination in the literature of studies on management controls from the perspective of the Contingency Theory, above all, contributing to organizations to create environmental awareness allied to the improvement of their performance with management control practices. In addition to it, the research is relevant for organizations to develop actions to reorganize their processes and meet society's pressures for sustainable practices, increasing competitiveness and improving organizational performance.

IMPACT OF USE OF MANAGEMENT CONTROL SYSTEM ON STRATEGY IMPLEMENTATION OF HIGHER EDUCATION INSTITUTIONS IN GUJARAT

Use of Strategy is inevitable for success of any organisation and for the effective implementation of the strategy, it is important to have an effective management control system. Increasing number of Higher Education Institutes has given an objective to carry out the present research work on the strategies implemented by the Higher Education Institutions and as far as like other organizations, strategies implementation of the Higher Education Institutions is concerned, it is affected by the Use of Management Control Systems. The present study has been carried out with a view to study impact of Use of Management Control System on Strategy Implementation of the Higher Education Institutions in Gujarat. For the accomplishment of the objective the primary data with the help of the questionnaire has been collected from the Heads of the Higher Education Institutions. It is hypothesised for the study that there is significant impact of Use of Management Control System on the Strategy Implementation of the Higher education institutions in the state of the Gujarat. The study found that Use of Management Control System in Higher Education Institutions in state of Gujarat led to positive impact on strategy implementation focus. It was found that the use of better management control system in Higher Education Institutions led to not only better implementation of strategy but also decentralization of strategies to university executive members with a view to facilitate customization of services which resulted into high level of customization in the design and delivery of programs.

The relationship between management control systems and innovativeness in start-ups: evidence for product, business model, and ambidextrous innovation

PurposeThis paper aims to analyze the relationship between the use of management control systems (MCSs) and innovativeness in start-ups pursuing product innovation (PI), business model innovation (BMI) or ambidextrous innovation (both PI and BMI ).Design/methodology/approachThis paper reports on survey data collected at 143 European start-ups using a structured questionnaire sent to a member of the top management team at each firm.FindingsThe authors find that the control levers and their interdependencies associated with increased innovativeness significantly differ between the different forms of innovation.Practical implicationsThe study provides important guidance for entrepreneurs so that they can effectively support their innovation agenda with the MCSs tailored to their needs.Originality/valueThis research contributes to a growing literature that shows the positive role of MCSs in innovative and entrepreneurial processes. It adds to the understanding of the multifaceted nature of innovation and the crucial importance of BMI and ambidextrous innovation for the success of start-ups.

Promoting gender equality through the use of management control systems: a case study in Japan

PurposeThis study examines how formal and cultural management control systems (MCSs) are used to support the promotion of gender equality through a case study of a Japanese bank.Design/methodology/approachA case study was adopted to investigate the use of formal and cultural MCSs in promoting gender equality. Primary data were gathered through semi-structured interviews with managers experienced in promoting gender equality. Then, the data were analysed by reading the interview answers repeatedly and coding interviewees' comments to generate themes.FindingsThe findings indicate that both formal and cultural MCSs can be critical aspects in promoting gender equality. The use of cultural MCS fostered norms and cultures over time that enhances the process of formal MCS to achieve gender equality. Formal MCS was also designed and utilised under the constructed norms and cultures to promote gender equality. Furthermore, the use of formal MCS contributes to shaping norms and cultures that encourage gender equality by controlling and discussing the process of promoting gender equality.Originality/valueThis study clarifies how formal and cultural MCSs can be used to promote gender equality, which is an unresolved issue in Japanese companies. Mechanisms for companies in male-dominated societies are also provided to promote gender equality in terms of MCSs.

Evaluasi Sistem Pengendalian Manajemen Terhadap Kualitas Kinerja Jasa Service (Studi Kasus Pada Auto2000 Cabang Rancaekek)

Health in the corporate body is one aspect that can maintain the sustainability of the company. Including the use of management control system, where control is also one of the operational functions of the company so that expenditures and revenues in accordance with what is targeted. The role of control system is also very important in improving the quality of employee performance and customer satisfaction. The object in this study is PT Astra International, Tbk Auto2000 Rancaekek. This research aims to describe the function of existing management control system can improve the quality of employee work and customer satisfaction. The data source in this study consists of primary data and secondary data collected using interview and observation methods. The collected data is then analyzed descriptively. The results of the study explained that the control system process has been running well, proven by the existence of a very solid and influential work culture, delegation of WWO (Workshop Work Order) well, MTD (Mechanical Task Divider) allocates and organizes mechanical tasks evenly (Heijunka), The head of the workshop gives performance appreciation to employees who reach the target and implement the program in accordance with the previous plan. 
 Keywords: Management Control System, Employee Performance, Corporate Culture

Management control systems effect on the micro-level processes of product innovation

PurposeUsing institutional theory, this study aims to understand how the management control systems (MCSs) designed by top managers influence the micro-level process practices of organization members during product innovation.Design/methodology/approachThis paper reports on a case study carried out at NZMed to examine the design and use of MCSs and their product innovation practices. Simons’ levers of control was used to understand the ways in which MCSs were designed and used in a product innovation setting.FindingsThe findings indicate that the everyday micro-level processes of organization members encoded MCS when their espoused values aligned with those of top managers. However, when the perspectives within the organization differed, variations to the micro-level processes of organization members emerged. The authors show how this resulted in an increase in innovation capabilities necessary to meet organizational goals.Practical implicationsThe misalignment between espoused values and enacted values had a positive effect as it helped the organization maintain their innovation culture, and build long-term trusting relationships with suppliers which enabled the achievement of organizational goals.Originality/valueBy focusing on the relationship between MCS and the micro-level processes of organization members in product innovation, the paper shows how the lack of alignment between the espoused values of top management and the enacted values of project managers explained the variations between the MCS used by top managers and the practices of project teams at our case study company.

Management control systems. A non-family stakeholder perspective on the critical success factors influencing continuous stakeholder support during businesses succession

PurposeAlthough the use of management control systems (MCS) is known to support organizational strategic success, the role played by MCS to monitor stakeholder satisfaction, thus minimizing stakeholder relationship severance, during uncertain events such as business succession remains underexplored. Thus, the authors investigate why succession creates uncertainty and how can stakeholders' concerns assist in contingently adapt the family businesses (FB) MCS to assist decision-making during succession.Design/methodology/approachThe authors use a qualitative approach and a multiple-case study design. The authors conducted 30 in-depth interviews within 6 Australian FB SMEs. Interviewees included owners, successors, senior managers, customers and suppliers.FindingsThe authors' findings suggest that owners' perceptions, that intergenerational succession causes minimal stakeholder disruption, results in MCS not adapting to monitor the uncertain event. Other stakeholders, on the contrary, highlight the need for MCSs to evolve and adapt during the process to assist owners monitor stakeholder-derived success factors to secure the long-term sustainability of the FB.Originality/valueThe novelty of this research is based on the inclusion of non-family stakeholders, such as customers and suppliers, as part of the sample. This approach allowed for stronger conclusions and a broader overview of the succession issue.

Effect of product and process innovation in interactive management control system on financial performance of SME in Thailand

Simons a framework of levers controls revealed that effective use and control of the management system (MCS) can significantly contribute to increased financial performance as well as operational performance. However, the main objective and aim of this research study are to evaluate the financial performance of SME firms in Thailand through the role of the effective use of management control systems. This research paper also examines the direct relationship between MCS and the financial performance of the sector. The research model of this study also investigates the mediating role of product and process innovation in improving the relationship between the financial performance of the sector and MCS. To find the impact of MCS on the firm performance this study collects most of the data from selected employees and managers of different SME firms of Thailand with the help of the survey questionnaire. The results that are calculated with the help of structural equation modeling indicate that MCS significantly influence the financial performance of the firm and also made a significant contribution in enhancing the operational performance of the sector. Furthermore, the findings of this study also demonstrate that product innovation improves the relationship between MCS and financial performance.

Transformational leadership and management control systems in human service not‐for‐profit organizations

AbstractThis study examines the effect of transformational leadership style on the use of management control systems, specifically Simons’ (1995) levers of control, in human service not‐for‐profit organizations. Unlike prior studies in which transformational leadership style has been treated as an aggregate construct, we decompose the construct and examine its effect at the dimensional level. Using matched survey and archival data for 271 organizations in Australia, we find two dimensions of transformational leadership, articulating a vision and facilitating acceptance of group goals, to be dominant in their influence on the use of the levers of control. This finding is consistent with the context of human service not‐for‐profit organizations that are heavily dependent on communication, cooperation, and collaboration across multidisciplinary teams for effective service delivery.

Strategic behavior and use of management control systems in agro-industrial cooperatives

Purpose – This study aims to identify the combinations of MCS used in different strategic behaviors adopted by agro-industrial cooperatives.  Theoretical framework – Miles and Snow's strategic behavior model and Simons' management control systems model (1995).  Design/methodology/approach – A survey was carried out with 100 managers of agribusiness cooperatives in the dairy sector in the southern region of Brazil. Fuzzy set qualitative comparative analysis (fsQCA) was applied to the data collected  Findings – The results partially confirmed the propositions established in the study. Different combinations of belief systems, limits, diagnostic control and interactive control were observed depending on the cooperative's strategic, defender or prospective behaviors. Therefore, the control of the cooperative's strategy is achieved by combining the SCG, since its power lies in the joint use and its complementarity.  Research Practical & Social implications – The combined use of rigid and flexible controls allows agro-industrial cooperatives to simultaneously target the efficiency of operations and the pursuit of innovation.  Originality/value – By demonstrating that not all SCGs individually are relevant to different strategic behaviors, with evidence of equifinality in SCG combinations, the study denotes originality and contribution.  Keywords – Strategic behavior. Management control systems. Levers of control

The Role of Family Management and Management Control Systems in Promoting Technological Innovation in Family SMEs

This paper seeks to resolve the controversy regarding the relationship between family management and technological innovation outcomes. In contrast to prior studies, we focus on small and medium enterprises (SMEs) and go beyond the traditional input-output statistical analysis, by introducing the mediating effect of the use of management control systems (MCS). We also further examine heterogeneity among family firms, studying whether a greater family management influences, directly or indirectly, on technological innovation outcomes. Our results from a data consists of 199 Spanish family-owned small and medium enterprises (FSMEs) were not able to indicate a significant direct influence of the level of family management on technological innovation outcome but supported the notion that the utilization of MCS mediated the above relationship.

Mediating Effect of Management Control Systems in The Interaction Between Ambidexterity and Organizational Learning in Brazilian NPO

This paper investigates the mediating effect of management control systems in the interaction between ambidexterity and organizational learning in Brazilian non-profit organizations. Organizational learning is addressed in the literature as an antecedent of ambidexterity, whereas the use of management control systems finds dichotomous evidence in the literature as to its effect concerning those previous constructs. This descriptive research with a quantitative approach was carried out through a survey. The research sample comprised 227 valid responses collected from the presidents of the organizations. This work reveals the positive relationship between organizational learning and ambidexterity, as well as observing that the use of management control systems tends to inhibit innovation through a mediating effect. The approach of these constructs in nonprofit environments contributes to the need for sustainability of these organizations. Findings highlight the innovative panorama of these organizations between exploitation and exploration strategies and the achievement of ambidextrous skills, also pointing out the use of management control systems, as well as the evidence of organizational learning.

Reporting di Sostenibilità e Controllo Manageriale: L'esperienza di Edison S.p.A.

Reporting di Sostenibilita e Controllo Manageriale:L’esperienza di Edison S.p.A [Sustainability Disclosure and Management Control: the Experience of Edison] The purpose of this study is to investigate the role of management control systems. Particularly, this research aims at examining how management control systems sup-port (1) the implementation of sustainability strategies within the organization and (2) the non-financial reporting process. This qualitative research focuses on the case study of Edison S.p.A. Data include sustainability reports, sustainability plans, and non-financial reports that the organi-zation published during the last three years. Moreover, the authors interview the or-ganization's sustainability managers, management accountants, and controllers to grasp certain peculiarities related to the use of management control systems, and to deepen this control systems’ role in the sustainability disclosure process. Relying on Merchant and Riccaboni's (2001) theoretical framework, this study finds that management control systems play a key role, summarized as follows: support in the decision-making process, definition of objectives and related sustainability tar-gets, monitoring activities, guidance in identifying corrective actions, and measures for an effective improvement of non-financial performance. From a practical perspective, the findings of this study provide interesting insights related to the definition and implementation of organizational solutions for economic and financial equilibrium; moreover, the findings of this study also provide interest-ing insights in terms of sustainability performance.