Effect of product and process innovation in interactive management control system on financial performance of SME in Thailand

Abstract

Simons a framework of levers controls revealed that effective use and control of the management system (MCS) can significantly contribute to increased financial performance as well as operational performance. However, the main objective and aim of this research study are to evaluate the financial performance of SME firms in Thailand through the role of the effective use of management control systems. This research paper also examines the direct relationship between MCS and the financial performance of the sector. The research model of this study also investigates the mediating role of product and process innovation in improving the relationship between the financial performance of the sector and MCS. To find the impact of MCS on the firm performance this study collects most of the data from selected employees and managers of different SME firms of Thailand with the help of the survey questionnaire. The results that are calculated with the help of structural equation modeling indicate that MCS significantly influence the financial performance of the firm and also made a significant contribution in enhancing the operational performance of the sector. Furthermore, the findings of this study also demonstrate that product innovation improves the relationship between MCS and financial performance.