Examining the Effect of the Organization’s Internal Control System on Organizational Effectiveness: A Jordanian Empirical Study

Abstract

This study aims to investigate the impact of the internal control system (Control environment, Communication, Risk management, Control activities and Monitoring) on organizational effectiveness in Jordan. The organizational effectiveness was studied through three approaches namely; organizational ability to achieve its goals (Goal approach), organizational ability to control and maintain the needed resources (Resource Control approach) and the (Multiple Constituency approach) which deals with organizational competitiveness, job satisfaction, customer satisfaction and complaints. To achieve the objectives of the study, a theoretical framework was developed and some hypotheses were proposed. Data were collected using a self-administrated questionnaire from 151 employees occupying different managerial levels in Jordan. The results of the multiple regression test showed a high positive impact of the study variables on organizational effectiveness with (R = 87.9%) and (R square =77.3%). Based on the findings of the research, the researchers suggest a number of relevant recommendations related to improving awareness about the importance of internal control system components, and mechanisms to improve internal procedures and processes for improving the organizations' effectiveness using different approaches. The implications to both theory and practice are discussed at the end of this paper.

The Effect of Internal Control and Total Quality Management on Organizational Performance

“…The statistical significance of hypotheses 1 confirms the Advances in Social Science, Education and Humanities Research, volume 377 implementation of internal control improves organizational performance. This research similar with [2]; [6]; [11]; [12] that showed the higher the internal control system applicability, the higher the applicability of organization effectiveness. Internal controls help the financial sector in presenting it's a strong and stable outlook.…”

“…There is a lot of literature that examines the relationship between internal control and organizational performance in various countries as well as industries (for example, [2]; [11]; [12]; [6]. They founded internal control have a significant effect on organizational performance.…”

“…The theoretical framework was determined by reviewing literature; so that model of [2]; [6]; [11]; [12] for internal control and organizational performance. The model of [1]; [8]; [15] for TQM and organizational performance.…”

The Impact of Transformational Leadership on Organizational Performance via the Mediating Role of Corporate Social Responsibility: A Structural Equation Modeling Approach

“…Organizational performance measurement has become an increasingly important matter in order for organizations to survive under the pressure of world class competition (Skrinjar et al, 2008;Al-Syaidh et al, 2015;Mahadeen et al, 2016). Financial performance refers to "a measure of the change of the financial state of an organization, or the financial outcomes that results from management decisions and the execution of those decisions by members of the organization" (Carton, 2004).…”

The Effect of Human Resource Management Practices on Organizational Commitment in Chain Pharmacies in Jordan

“…However, several definitions of organizational commitment have surfaced from various quotas. From the varied definitions, organizational commitment can be coined to mean the link between an individual and an organization, as well as the beliefs in the goals of the organization thus making tremendous efforts to reach the goals of the organization by being a part and parcel of it (Amari, 2012;Mahadeen et a., 2016). Allen and Mayor (1990) conducted a study which has dominated the academic field of organizational commitment.…”