The associations between management control systems, organisational capabilities and performance

Abstract

This study examines the associations between Simons’ (Levers of control: how managers use innovative control systems to drive strategic renewal. Harvard Business Press, Brighton, 1995) positive systems (belief systems and interactive control systems) and two organisational capabilities (organisational resilience and workplace flexibility), and the subsequent impact of these capabilities on organisational performance. Based upon the survey responses received from the managers of 337 Australian organisations, we found that the use of both belief systems and interactive control systems are positively associated with the level of organisational resilience and workplace flexibility, which in turn, exhibit a significant positive effect on organisational performance. In addition, the two organisational capabilities are found to mediate the associations between the positive systems and organisational performance. The findings suggest that organisations should place greater emphasis on the use of positive systems and endeavour to develop and enhance organisational resilience and workplace flexibility to facilitate organisational performance.