Levers of control, management innovation and organisational performance

Kevin Baird (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)
Sophia Su (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)
Rahat Munir (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)

Pacific Accounting Review

ISSN: 0114-0582

Publication date: 5 August 2019

Abstract

Purpose

This study aims to reinforce the important role of management control systems (MCSs) in managing change through adopting a unique approach to the conceptualisation of Simons’ (1995) levers of control, specifically focussing on the enabling (beliefs and interactive) and constraining (boundary and diagnostic) levers of control and empirically examining their association with management innovation and organisational performance.

Design/methodology/approach

A mail survey questionnaire was used to collect data, with the Dillman (2007) tailored design method used in regards to the development of questions, and the personalisation and distribution procedures. A total of 645 questionnaires were distributed to either the Financial Controller or Chief Financial Officer of manufacturing business units identified in the OneSource database.

Findings

The findings reveal that the use of enabling controls was directly associated with organisational performance and with three management innovation dimensions (new structures, processes and practices) with new structures positively associated with organisational performance. It was also found that the use of constraining controls was indirectly, through the extent of adoption of new management techniques, associated with organisational performance.

Practical implications

The findings have important implications for managers in respect to how they use controls to enhance innovation and organisational performance.

Originality/value

The findings highlight the importance of the use of MCS, specifically both enabling and constraining controls, in facilitating change (management innovation) and performance. Hence, the findings provide empirical evidence in support of Simons’ (1995, 2000) theoretical assertion that the levers coexist to provide benefits to organisations.

Keywords

Citation

Baird, K., Su, S. and Munir, R. (2019), "Levers of control, management innovation and organisational performance", Pacific Accounting Review, Vol. 31 No. 3, pp. 358-375. https://doi.org/10.1108/PAR-03-2018-0027

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Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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