Prior studies on the relationship between decentralization of decision rights and variable compensation have largely focused on higher managerial levels and typically find a complementarity association. We extend this literature by examining this relationship at the production level, where managers oversee multidimensional tasks and where performance outcomes are often hard to contract upon. This makes the standard complementarity prediction less apparent and suggests a substitutive relationship instead. Using survey data from production managers in industrial firms, we find that the incentive intensity of variable compensation and decentralization of decision rights act as substitutes: production departments with greater decision rights have a lower level of variable compensation for their managers. Consistent with the role of performance contracting conditions, this negative association weakens with higher levels of performance contractibility—i.e., in more stable operational environments and when evaluation relies on more high-quality measures. Overall, the findings highlight that the incentive–decentralization relationship may differ systematically between production settings and higher managerial levels.
This study investigates how the intensity of use of the levers of control (LoC) facilitates contextual ambidexterity (alignment and adaptability) and supply chain ambidexterity (exploitation and exploration) in Australian manufacturing supply chains. Survey data from 113 manufacturing firms are analyzed using partial least squares-structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA). The results indicate that the intensity of use of the LoC helps to create both contextual ambidexterity and supply chain ambidexterity, which, in turn, lead to superior firm performance. The relationship between the intensity of use of the LoC and firm performance is mediated by contextual ambidexterity and supply chain ambidexterity. While contextual ambidexterity and supply chain ambidexterity are the main drivers of superior firm performance, there are different combinations of emphasis on the intensity of use of the LoC. We provide theoretical insights into and practical implications for the use of management control systems to create contextual and supply chain ambidexterity and improve firm performance.
The application of blockchain technology in accounting information systems provides significant benefits for improving data integrity, transparency, and the productivity of the accounting profession. Therefore, this study examines the factors that influence accountants’ intentions to adopt blockchain technology in financial accounting systems. The proposed determinants consist of core UTAUT constructs (performance expectancy, effort expectancy, and social influence) along with external variables including knowledge, job relevance, accounting information quality, trust, and compatibility. Using a purposive sampling technique, data were collected from 137 accountants in Indonesia and analyzed using SEM-PLS with SmartPLS 3.0. The findings indicate that accountants’ intentions to use blockchain technology are significantly influenced by performance expectancy, compatibility, trust, and accounting information quality. These results suggest that Indonesian accountants place strong emphasis on expected performance improvements and the reliability of information produced when considering the adoption of blockchain technology.
Management control systems (MCS) are designed to support organizational goals and enhance performance; however, evidence increasingly points to their unintended and dysfunctional outcomes, collectively termed control problems. Despite growing attention, limited research systematically investigates how specific MCS types are associated with particular dysfunctional behaviors. To bridge this gap, we conducted a systematic literature review of 95 studies published in management, accounting and organizational behavior journals to examine how different MCS—result controls, action controls, personnel controls, and cultural controls—relate to distinct manifestations of control problems. Our findings reveal recurring patterns linking MCS types to dysfunctions such as gaming, data manipulation, ethical erosion, motivational crowding-out, and symbolic compliance. Furthermore, we identify recurring structural drivers associated with these problems, including excessive rigidity, contextual misfit, limited participation, and symbolic or inconsistent use of controls. Based on these insights, we develop an integrative conceptual framework that synthesizes plausible pathways through which control problems emerge, while highlighting the moderating role of contextual factors such as task uncertainty, professional norms, ethical leadership, external pressures, and organizational structure.
Research on digitalization in the domain of management control (MC) and on organizational design represents disconnected streams. However, both have been shown to affect the information basis and effectiveness of MC. This paper contributes to knowledge by considering the interplay between the two aspects. Building on organizational information-processing theory (OIPT), we examine how digitalization in the control function alters information quality and the locus of information, how these changes affect MC effectiveness, and how standardization in the control function and (de)centralization mediate these relationships. The research model is tested using a sample of business units (BUs) of 246 European firms. We find that digitalization improves information quality, and the latter enhances MC effectiveness. A higher standardization mediates this relationship. Centralization of decision-making corresponds to a more central locus of information, but the central locus of information is neither increased by the digitalization in the control function nor does it influence MC effectiveness. At the same time, a more central locus of information undermines perceived information quality in the BUs. Based on these findings, we conclude that digitalization in the control function enhances information quality, resulting in greater MC effectiveness when supported by appropriate organizational design changes. Of particular importance is standardization, through which digitalization primarily realizes its positive influence on MC effectiveness.
Forecasting plays a pivotal role in effective operational management, providing critical insights for decision-makers. This paper endeavors to discern the comparative performance of human and algorithmic forecasting, especially within crises, to test the resilience and adaptability of these methodologies. Using data from a Swiss automotive distributor, the researchers show that algorithmic forecasts generally outperform human forecasts, particularly during crisis periods, while differences are less pronounced in stable environments. Importantly, the analysis reveals that crises primarily affect the directional bias of forecasts rather than their absolute accuracy. For both human and algorithmic forecasts, crisis periods are associated with systematic overforecasting, while overall forecast accuracy remains relatively stable across crisis and non-crisis situations. This study contributes valuable insights into how different forecasting methods respond to diverse crisis contexts, enhancing decision-making knowledge and organizational resilience in times of uncertainty. Furthermore, by delineating the conditions under which algorithmic forecasts provide the greatest advantages, this paper aims to reduce decision-makers’ skepticism toward algorithmic approaches and support their effective integration into managerial practice.
This study examines whether the influence of boardroom gender heterogeneity on corporate performance differs between family and non-family companies. We also investigate the role of CEO duality in this relationship. To this aim, we utilize a sample of Greek companies during the 2008–2020 period. Our results indicate that a U-shaped curve describes the relation between boardroom gender diversity and the performance of family companies. Also, the U-curve flattens when the CEO holds the chairman position. However, when splitting the sample into two subperiods (during and after the long-lasting socioeconomic crisis in Greece), the results persist only during the period of socioeconomic crisis. Regarding companies not controlled by families, the findings show that boardroom gender diversity does not affect their performance. This finding remains consistent regardless of the socioeconomic conditions. Overall, our findings are valid across different measures of boardroom gender heterogeneity and alternative econometric methodologies. Our conclusions enrich the corporate governance literature and family business research and have practical implications for policymakers in Greece.
Operational risks are risks that may lead to operational losses through operational disruptions, caused by employee errors, failures, or breakdowns of internal processes and external events, or inadequate procedures to identify, prevent, or manage operational risks. Operational risks were once treated as a residual category in risk management. That time is over, as a rising tide of operational risks emerges from recent global developments, including geopolitical instability, energy insecurity, digital interdependence, and regulatory uncertainty. We conceptualise two forms of change to operational risks: (1) amplified core operational risks, risks that have always existed but whose scale, speed, and mechanisms are being transformed and (2) structurally novel operational risks, introducing organisations to entirely new sets of operational risks enabled only by new systemic and technological conditions. The two categories differ not only in their nature but in the control logic they require: preventive and detective approaches for amplified core risks, and resilience and recovery for structurally novel ones. The five papers in this Special Issue address amplified core operational risks and together demonstrate that operational risk management cannot be reduced to a single tool, technique, or organisational function. We close with a forward-looking research agenda on structurally novel operational risks.
This article reviews empirical research on the impact of verbal rewards on workplace performance and proposes a research agenda for future studies. A theoretical model is developed and examined through a systematic literature review encompassing 22 empirical studies on the relationships between verbal rewards, motivation, direction, and performance in organizational settings. The findings from the review are consistent with the theoretical model in several respects: verbal rewards have a positive effect on performance in most of the studies; the attributes of verbal rewards influence their associations with performance; direction mediates the relationship between verbal rewards and performance; and work complexity moderates the relationship between controlling verbal rewards and autonomous motivation. However, the findings are inconsistent with the model’s assumption that the relationship between verbal rewards and controlled motivation weakens in high-complexity work contexts, and overall, the theoretical model requires further testing in additional empirical studies. The article concludes with theoretical implications, implications for management control systems, practical implications, and a research agenda for future studies.
Product risk represents a major operational risk, with significant consequences for a company. This study investigates whether corporate innovation culture affects product risk, measured by product controversies and recalls. Using data from US-listed companies between 2001 and 2018, we find that a stronger innovation culture is positively associated with increased product controversies and recalls. This effect is more pronounced in firms with innovation-oriented competitive strategies. However, management control and governance factors, including ISO9000 quality management system, vertical integration within the supply chain, and institutional investor ownership, can effectively mitigate these risks. Further, on average, the two opposite moderating effects offset each other. Overall, this study underscores the potential adverse effect of innovation culture on product risk and highlights the role of internal and external control measures in managing these operational challenges.
This study examines the relationship between employee engagement in planning and control processes and operational performance within nonprofit organisations. Contributing to the debate on adopting business-like practices, our research investigates the mediating role of employee enablement. Drawing on the enabling controls framework, we sought to uncover the emergent patterns in the experiences of 171 employees from prominent Italian grant-making foundations. The goal was to shed light on the connections between engagement in practices like budgeting, ex-post impact evaluation, and long-term planning and perceptions of autonomy, competence, and dedication as key measures of employee enablement. Our analysis reveals a pattern in which active involvement in planning and control processes is strongly linked to a greater employee enablement, which is then associated with perceived improvements in operational performance. Interestingly, our evidence indicates that an overemphasis on goal commitment could undermine this positive perception.
Research on Public Private Partnerships (PPPs) has largely overlooked the management of risks at the operational phase of such partnerships. This study investigates how management control system (MCS) mechanisms, namely Simons’ (1995) four levers of control (LOC), belief, boundary, diagnostic, and interactive controls coupled with social capital influences relational and performance risks. Based on in-depth interviews of managers and other key stakeholders in a large infrastructure PPP in Sri Lanka, we examine how bonding capital weaken with relational stresses and partnership trust breakdowns while bridging capital is dependent on clear articulation of performance expectations and boundaries. Our findings reveal that the effectiveness of control levers on developing social capital depends on institutional logics alignment between the public and private actors, the distribution of decision-making power, and the presence of a legitimate intermediary. This study contributes to social capital and MCS literature by exploring how LOC shape and repair social capital in hybrid governance settings.
Drawing upon Self-Determination Theory and the findings from an empirical study of researchers at a Swedish university, this paper focuses on the relationship between results control and amotivation. Specifically, it identifies and theorizes six characteristics of results control systems that tend to frustrate two basic psychological needs of individuals, namely their needs to feel autonomous and competent. Moreover, it shows how it is the frustration of these very needs that leads to amotivation. In doing so, the findings contribute to existing management control research not only through identifying important characteristics of a control system that can lead to need frustration, but also through theorizing when and why such characteristics can lead to amotivation.
This paper investigates whether and how the use of business intelligence analytics (BI A) systems influences the way management accountants (MAs) support the decision-making processes of operational managers within organisations. Drawing on a cross-sectional field study of five Italian companies and using the concepts of technological properties, affordances and constraints, findings show that MAs’ degree of involvement in decision-making processes depends on how MAs and operational managers leverage BI A properties to perform tasks during the production, transmission and reception of information. Although BI A systems have reduced MAs’ traditional tasks and responsibilities during the informational flow, by leveraging specific BI A properties, MAs can recognise themselves as orchestrators of information flows because they establish the entire information framework available to managers for decision making. In intra-functional decision making, MAs’ orchestration is largely invisible within the BI A infrastructure because operational managers gain greater autonomy in managing information. However, this autonomy is enabled by the tailored information perimeter previously configured by MAs, making their diminished presence more apparent than real. Conversely, in inter-functional decision making, MAs’ orchestration becomes overt as operational managers actively seek their involvement. Moreover, MAs leverage their enterprise-wide access to BI A information and business knowledge to safeguard local decisions that reflect their broader organisational implications.
This study examines the associations between two organisational-level human resource-related factors, top management support and employee empowerment, and the use of big data analytics (BDA) in performance management. In addition, we examine the association between the use of BDA in performance management and the effectiveness of performance measurement systems (PMSs). Data were collected using an online survey questionnaire completed by 273 middle-level managers in Australian business organisations across various industries. The results reveal that both top management support and employee empowerment are positively associated with the use of BDA in performance management, and in turn, the use of BDA in performance management is positively associated with both dimensions of PMS effectiveness, i.e. performance-related outcomes and staff-related outcomes. The study contributes to the limited empirical evidence on the antecedents and outcomes of BDA utilisation in management accounting, specifically in the context of performance management. The findings highlight the importance of using BDA in performance management and the antecedent roles of top management support and employee empowerment in facilitating its greater use.
Cost stickiness has become a prominent research focus in management accounting. This study investigates cost stickiness from the perspective of peer effects. Using data from Chinese A-share listed companies from 2004 to 2024, I find that cost stickiness exhibits peer effect, with the cost stickiness of peer firms positively correlated with that of the focal firm. Mechanism analysis identifies the effectiveness of information transmission and market competition as key factors driving the peer effect of cost stickiness. Further examination indicates that the peer effect is driven by firms with sticky cost behavior, while firms exhibiting anti-stickiness do not demonstrate peer effects. Moreover, managerial power suppresses the peer effect of cost stickiness, while it is more pronounced under high economic policy uncertainty. This research not only contributes to the understanding of the external determinants of cost stickiness but also provides novel evidence regarding the economic consequences of peer effects.
This research presents a meta-analysis of 55 empirical studies published from 2008 to 2025 examining the association between several corporate governance mechanisms and financial distress. Our basic meta-regression findings reveal that governance mechanisms such as board meetings, board quality, remuneration committee effectiveness, demographic and executive diversity, executive compensation, and ownership structure are significant determinants of financial distress. Further, our results indicate that the influence of corporate governance mechanisms on financial distress varies across geographical regions. Substantial heterogeneity in effect sizes across studies is also observed to be driven by differences in sources of data, measures of financial distress, estimation techniques, and journal indexing and ranking.
Drawing on the institutional work perspective, we examine participatory budgeting (PB) implementation at Bayswater City Council, Western Australia, focusing on how institutional practices recalibrated the process following an initial failure. We show that the initial failure stemmed from insufficient discursive, material, and relational work, leading to low community engagement and trust deficits. Subsequent recalibration included reframing PB narratives, introducing accessible tools, fostering stakeholder relationships, and enabling alignment of community viewpoints with the council’s strategic goals. This study contributes insights into how intentional institutional practices transform participatory governance systems, offering valuable lessons for implementing inclusive and effective PB processes.
Drawing on impression management theory, this study investigates the feedback effect of corporate voluntary disclosure of corporate social responsibility (CSR) information on internal control quality. We argue that although voluntary CSR disclosure is often perceived as a strategic tool for shaping a favorable external image, such impression management strategies may have unintended internal consequences—specifically, they may undermine the effectiveness of internal governance and weaken internal control systems. This adverse effect is more pronounced in contexts characterized by heightened greenwashing risk, elevated audit fees, and state ownership. The findings offer valuable insights for emerging market investors concerned with corporate CSR practices and for other stakeholders seeking to better understand voluntary disclosure behavior within the unique institutional environment of China.
