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Does consistency in management control systems design choices influence firm performance? An empirical analysis

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  • Maleen Z. Gong
  • Aldónio Ferreira

Abstract

This study examines the impact on firm performance of theoretically consistent relationships between three management control systems (MCS) design choices - delegation, performance measurement, and incentive compensation. Based upon the 'three-legged stool' model and agency theory, the hypothesis is that theoretically consistent MCS design choices are associated with enhanced firm performance. Using survey data from large Australian firms, the findings support the hypothesis, suggesting that an appropriate MCS design is a determinant of firm performance. The study contributes to the literature by moving beyond a focus on the antecedents of the three key MCS design choices to the consequence of alignment of those choices.

Suggested Citation

  • Maleen Z. Gong & Aldónio Ferreira, 2014. "Does consistency in management control systems design choices influence firm performance? An empirical analysis," Accounting and Business Research, Taylor & Francis Journals, vol. 44(5), pages 497-522, October.
    • Handle: RePEc:taf:acctbr:v:44:y:2014:i:5:p:497-522
    DOI: 10.1080/00014788.2014.901164
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    Cited by:

    1. Maleen Z. Gong & Nava Subramaniam, 2020. "Principal leadership style and school performance: mediating roles of risk management culture and management control systems use in Australian schools," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2427-2466, September.
    2. Ricardo Malagueño & Ernesto Lopez-Valeiras & Jacobo Gomez-Conde, 2018. "Balanced scorecard in SMEs: effects on innovation and financial performance," Small Business Economics, Springer, vol. 51(1), pages 221-244, June.
    3. Laurent Spang, 2024. "The evolution of the management control package (MCP) of a Caisse primaire d’assurance maladie (CPAM) over an extended period: Toward strategic alignment [L’évolution du package de systèmes de cont," Post-Print hal-04720336, HAL.
    4. Bénet, Nathalie & Deville, Aude & Raïes, Karine & Valette-Florence, Pierre, 2022. "Turning non-financial performance measurements into financial performance: The usefulness of front-office staff incentive systems in hotels," Journal of Business Research, Elsevier, vol. 142(C), pages 317-327.
    5. Wilkin, Carla & Ferreira, Aldónio & Rotaru, Kristian & Gaerlan, Luigi Red, 2020. "Big data prioritization in SCM decision-making: Its role and performance implications," International Journal of Accounting Information Systems, Elsevier, vol. 38(C).
    6. Maria Segovia-Villarreal & Raquel Florez-Lopez & Juan Manuel Ramon-Jeronimo, 2019. "Berry Supply Chain Management: An Empirical Approach," Sustainability, MDPI, vol. 11(10), pages 1-36, May.
    7. Iryna Alves & Sofia M. Lourenço, 2022. "The use of non-financial performance measures for managerial compensation: evidence from SMEs," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 33(2), pages 151-187, June.

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