Management control system effectiveness

Abstract

Purpose – This study aims to examine the association between the use of three types of controls (input, behaviour and output) with the level of employee organisational commitment (EOC) across organisational life cycle (OLC) stages. Design/methodology/approach – Data were collected by a survey questionnaire from a random sample of 343 general managers in Australian manufacturing business units. Findings – The level of EOC was found to be highest in growth and revival stage units, suggesting that EOC relates to the level of innovation. The analysis revealed that the types of controls were significantly associated with the level of EOC. In particular, a significant positive association was found between input controls and the level of EOC in both the birth and revival stages. Originality/value – This study contributes to both the management control system (MCS) literature and practice. First, because only a limited number of studies have examined the effect of MCSs on the level of EOC, and there is no published study to date which has examined the association between the types of controls with the level of EOC from an OLC perspective, this study fills a gap in the literature by examining these associations. Secondly, the findings have important implications for Australian manufacturing organisations. Specifically, by providing an insight into the association between the types of controls with the level of EOC across OLC stages, the results suggest that managers of organisations in the birth and revival stage need to place greater emphasis on input controls so as to enhance the level of EOC.

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

“…The analysis revealed that the types of controls were significantly associated with the level of (EOC). In particular, a significant positive association was found between input controls and the level of (EOC) in both the birth and revival stages (SU et al, 2015).…”

Management Control Systems and Employee Organisational Commitment in the Malaysian Public Sector

“…Blom (2019) indicated that when the public sector implemented the required rules and regulations, employees considered those rules and regulations burdensome and unproductive. Su et al (2015) also agreed that close supervision and monitoring resulted in employees with lesser organisational commitment. A negative relationship between the implementation of behaviour controls and the degree of employee organisational commitment is anticipated as suggested in the following hypothesis: H2: The extent to which behaviour controls are used is negatively related to the level of employee organisational commitment in the public sector…”

“…Numerous studies by Jaramillo et al (2005), Karsh et al (2005), and Su et al (2015), had highlighted Cook and Wall's 9-item scale as an effective tool for measuring employee organisational commitment. The nine items focused on three main elements: organisational identification, organisational involvement and organisational loyalty with items number three, four and seven stated negatively, as an opposite scoring was expected.…”

“…A study by Hanaysha (2016) found that employee organisational commitment is affected by staff training. Moreover, employees consider different kinds of input control consisting of training and skills development activities as a positive sign that their respective employing organisations are concerned about their job development and welfare (Su et al, 2015). Studies have shown that development programmes enhance the staff's abilities (Dymock et al, 2012) and boost workers' emotional attachment to the employing organisation (Newman et al, 2011).…”

“…Numerous studies (Lee & Yang, 2011;Su et al, 2015) have highlighted the effect of management control systems on company performance, but very few studies have focused on investigating the effectiveness of management control systems on employee behavioural outcomes, and, in particular, on employee organisational commitment (Su et al, 2015). However, it should be noted that previous studies had determined that employee organisational commitment is significant to organisations because of its ability to enhance staff work performance (Sahoo & Das, 2011).…”