The Impact of Management Control Systems - Strategy Interaction on Performance Management: A Case Study

Peljhan, Darja; Tekavčič, Metka

doi:10.2478/v10051-008-0019-1

Cited by 10 publications

(14 citation statements)

References 37 publications

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“…In a case study by Peljhan and Tekavćić (2008), it was confirmed that a combination of performance-driven behaviour and regular use of management control systems lead to improved results. Jubilee insurance believes that a careful blend of control systems and strategy have the capability of improving performance as suggested by Peljhan and Tekavćić (2008). One notable philosophy of the company is that failure can be costly if not checked and avoided.…”

Section: Performance Challenges and Policy Implications In The Kenyanmentioning

confidence: 89%

Untitled

2019

IJEFR

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The article sought to review the contemporary challenges and their policy interventions in the Kenyan insurance industry in terms of the external and internal challenges affecting the insurance business and which require leadership and managerial actions. The researcher reviewed the contemporary challenges and the performance of insurance companies in Kenya by looking at the external business environmental challenges and how they affect the management of Insurance companies. Secondly, the study considered how Kenyan insurance companies adapt and adjust their internal practices and processes to satisfy the changing customer expectations. The article goes further to review the critical policy issues which are required to address: changing consumer dynamics, enforce strict compliance with the stringent regulations, constant product innovations, and greater need for communication, technological disruptions, on-demand marketplace, and compensation. Using peer-reviewed literature and the published integrated annual reports of Jubilee Insurance Company Ltd; the study discussed and highlighted the policy interventions in relation to the demands of business and customers. Using Jubilee Insurance as a model insurance company in a case study, the researcher found that by combining performance driven behaviour and regular use of management control systems, Insurance Companies were able to post improved results. The Choice of Jubilee was driven by its size and stability among the Kenyan insurance companies. Jubilee has adopted an integrated reporting system which enabled the researcher to obtain the empirical information required from a secondary source. The researcher reviewed the data from the company"s integrated annual reports for the ten years from 2007 to 2017. The study looked at the control systems, including informal and formal controls and subjected these controls to a more comprehensive analysis to establish the impact of management control systems and strategy on the insurance company performance. The study suggested further empirical research to find the linkage between the policy interventions to various challenges and the performance of the insurance companies in Kenya.

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Section: Performance Challenges and Policy Implications In The Kenyanmentioning

confidence: 89%

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2019

IJEFR

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“…Some studies have, however, found greater extent of use. Peljhan and Tekavcic (2008) on a scale of 1 to 7 found a mean of 4.618 whilst Widener (2007) with a similar scale reported a mean value of 4.74. Casebased research summarily provide support for use of belief control systems in Indexed African Journals Online: www.ajol.info enhancing a positive effect on a managers' values to lead to increasing focus on a firms strategic direction, (McCartney& Rouse, 2004;Marginson, 2002).…”

Section: Extent Of Practice Of Belief Control Systemsmentioning

confidence: 97%

“…In contrast, Khan (1999) in a retrospective longitudinal study reported that belief control systems only appeared after the first seven years of a firm's existence, suggesting absence of the same at formative stages of the company. Prior studies which have found belief control systems to be critical in orgnizations seeking to maintain coherence in complex and uncertain environments (Peljhan & Tekavcic, 2008;Bartlett & Ghoshal 1993;Simons 1995b). In such situations, belief control systems have been used to overcome inertia Bruining et al, 2004).…”

Section: Extent Of Practice Of Belief Control Systemsmentioning

confidence: 99%

“…Clearly, the study of the direct relationship between use of strategic control systems and organizational performance, in yielding inconclusive outcomes, has not advanced strategic control theory (Tucker and Thorne, 2010;Bisbe and Otley, 2004;Henri, 2006). Some evidence, however, exists supporting an indirect connection between management control system and organizational performance, (Mundy,2009;Peljhan and Tekavcic, 2008;Kober, et al, 2007;Widener, 2007;Henri, 2006;and, Bisbe and Otley, 2004).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Belief Control Practices and Organizational Performances: A Survey of Sugar Industry in Kenya

Ojera¹,

Ogutu²,

Siringi³

et al. 2011

Afr. Res. Rev.

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“…Business strategies (cost leadership, differentiation strategy) can be significantly attained by incorporating all levels of control in an MCS [83]. Furthermore, the MCS is a facilitating system in the implementation of business strategies, that is employed to support workers involved in the management process to accomplish organizational goals [84].…”

Section: Mcs As a Package (Mcsp)mentioning

confidence: 99%

The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia

et al. 2019

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The aim of the current study was to ascertain the influence of a management control systems (MCS) package on a firm's sustainability with the help of mediating variables such as differentiation and cost leadership strategy in Malaysian small and medium enterprises (SMEs). Data were collected from managers working in Malaysian SMEs. A total of 384 questionnaires was finally used for analysis using SmartPLS 3.8.2. Area cluster sampling was used for data collection, and seven out of sixteen clusters were selected randomly. These included Selangor, Johor, Kuala Lumpur, Sabah, Penang, Sarawak, and Perak because these seven states cover 73.9% of total SMEs. Structural equation modeling (SEM) was used to test the hypotheses. Confirmatory factor analysis (CFA) was also used to examine the reliability and validity, and structural model assessment was used to test the relationship between variables. Findings revealed that an MCS package had a positive influence on a firm's sustainability, cost leadership, and differentiation strategy. Moreover, cost leadership and differentiation strategy have a significant and positive influence on a firm's sustainability. In addition, cost leadership strategies and differentiation strategies significantly mediate between the MCS package and a firm's sustainability. This research assesses the influence of the MCS package through cost leadership and differentiation strategy on a firm's sustainability of Malaysian SMEs. It helps top management to focus on the MCS package and business strategies in attaining a firm's long-term sustainability. Finally, research recommendations discuss that the present study helps future researchers and academicians.

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The Impact of Management Control Systems - Strategy Interaction on Performance Management: A Case Study

Cited by 10 publications

References 37 publications

Untitled

Untitled

Belief Control Practices and Organizational Performances: A Survey of Sugar Industry in Kenya

The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia

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