Impact of Management Control Systems on Capabilities and Performance

This report investigates the impact of Management Control Systems (MCS) on organizational performance and capabilities under perceived environmental uncertainty (PEU). It explores the positive relationship between MCS and organizational performance, considering factors like strategic decision-making and environmental dynamics. The study, conducted for a Master of Business Administration program at Liverpool University, examines the effects of MCS in uncertain situations, highlighting the influence of PEU on the relationship between MCS and organizational capabilities and performance. The research utilizes both primary and secondary data collection methods, including interviews, to analyze the impact of MCS on management decisions, organizational capabilities, and performance, and to address the research question: "What is the impact of MCS upon organizational performance?" The study aims to identify how PEU influences the relationship between MCS and organizational outcomes, providing insights into how management teams perceive uncertain business environments and make decisions accordingly.

UNDERSTANDING THE IMPACT OF MANAGEMENT CONTROL
SYSTEMS OVER CAPABILITIES AND ORGANIZATIONAL
PERFORMANCE UNDER THE INFLUENCE OF PERCEIVED
ENVIRONMENTAL UNCERTAINTY

Acknowledgments
I would like to express my greatest gratitude to my project Supervisor Dr ………. who
inspired and motivated me during the process of this dissertation, and I am deeply indebted to
my principal supervisor.
In this research study, I would like thankful to my all the teaching staff who supported my
efforts throughout the Master of Business Administration at Liverpool university. Finally, I
would like to thank all administrative professionals who ensured that I obtained all the
information needed to create the research study presented…………..

Abstract
This research study investigates the existence of a positive relationship between the
use of various control systems and the performance and capabilities of organizations. The
decision to go for the Management Control Systems (MCS) as a way of fostering the
prevailing strategic management of the firm or any other form of milestone is based on the
capacity of the organization’s accounting and innovation portfolio (Talab, Flayyih &
Hussein, 2018). Moreover, the application and use of management control systems in
uncertain organizational situations is believed to have some significant influence on
capabilities, performance, and management decisions of a firm. Therefore, a scrutiny of the
working of MCS during uncertain situations and periods is important in affirming the kind of
effects that the organization is most likely to realize on both its capabilities and performance
outlooks. The study execution will involve literature on the subject from previous studies in
the description and analysis of the variables (Simons, 1995). The outcomes bolster the
perspective on control frameworks as devices adding to the usage of proposed
methodologies, yet additionally as apparatuses animating the rise of new techniques. Future
examination could additionally research the arbitrator impact of ecological vulnerability and
hierarchical culture on these connections. In addition, more examination is required to see
how unique strain is strengthened and overseen on an everyday premise by supervisors at
various echelons

CHAPTER 1: INTRODUCTION
1.1 Background Information
The roles of Management Control Systems (MCS) on organizational capacity
and performance cannot be underestimated (Talab et al., 2018; Shrader et al., 1984).
Research has, however, confirmed the existence of a positive relationship between the use of
various control systems and the performance and capabilities of organizations. This is
because these management and control systems influence the strategic decisions of a firm
especially regarding uncertain situations and events in their external environment (Gnjidić,
2014). Therefore, various strategies and frameworks for management and control systems are
preferred based on their availability and suitability.
A perceived environmental uncertainty (PEU) forms the foundation for the actions carried out
by a management team (Jahanshahi and Brem, 2019). Therefore, as determined by the
dynamics in the industry, the level of technological adaptation, and use on the firm, such
teams are able to strategize operations. In light of this understanding, this research main aim
is to examine the impact of MCS upon organizational performance by considering perceived
environment. Thus, there is a positive relationship between MCS and PEU because when the
condition are constantly changing within a business, as a result management of a company
influence over factors which are outside the company's control. For instance, sudden collapse
of economy at any time. This motivation follows the idea argued by Grant (1996) that
accounting-based frameworks were responsible for the development of effective information
and control systems such MCS for organizations to help them in ascertaining the very best of
systems to put in place for effective strategic performance in respective industries.
The primary point of inquisition is the assessment of the significance of the
MCS followed by an investigation on impacts of the same on the capabilities and
performance of organization. Nevertheless, the latter is based on the various interactive

processes embodied by MCS and organizational performance within PEU parameters. As
such, Allameh and Khalilakbar (2018) support this school of thought through research on the
existence of a positive relationship between entrepreneurial orientation and learning
orientation in small and medium-sized enterprises (SMEs). The relevance is especially in
situations whereby the management embraces high level technological and innovative
initiatives.
Some factors form the foundation of the dynamics in the business environment
and often include the invention of new technologies, globalization and increasing rates of
competitions. On a wide perspective, these factors have significantly influenced the
application of MCS in organizations and the impacts of the same. For instance, changes in
technology ensure that better and well-suited systems and structures have been developed for
the purposes of facilitating data collection and analytical procedures (Nuhu, Baird &
Appuhami, 2019). Additionally, the increased rate of globalization has increased the
complexity of the external environment in which many business entities operate. Such
complexities come about as a result of new and improved products, technologies, and
competition.
A culmination of these factors jeopardizes the application of the MCS by
organizations thus impacting capacities and performance levels. While MCS systems are
trusted with promoting positive impacts among businesses, their application during uncertain
situations remains a mystery. Gaps in literature on the subject lead to the belief that although
MCS may be important in impacting various organizational elements, their influence in
uncertain environmental situation remains unclear.
A scrutiny of MCS during uncertain situations and periods is important in affirming
the kind of effects most likely realized on both an organization’s capabilities and
performance outlooks. However, past studies also fail to adequately separate among the three

kinds of uncertainty included in PEU: state, response, and effect uncertainty. Despite
compounding with the fact that MCS have huge impacts on organizational capacities and
performance, findings from prior studies have determined that the capacity for MCS to
impact such organizational milestones is not always guaranteed (Porter, 2008).
The present research will uses both primary and secondary data collection methods
in which models are consider in order to attain the define aim and also conduct the research
in systematic manner. The failure in articulating the true value of MCS in dealing with
unprecedented business situations fosters the hypothetical significance of the environmental
uncertainty development. Combined with the fairly perplexing condition of the observational
written studies, the need to reconsider the idea of this significant relationship is presented.
The motivation for conducting this study is such that it will assist scholar to determine
the relationship between MCS with organizational performance. Also, in recent trend
companies are use MCS that help to increase profitability which further assist to make
decision. Thus, implement this tool will help to overcome the problem of PEU because these
system helps to communicate the objectives and goals of a business entity. The title of the
dissertation is, “Understanding the impact of management control systems over capabilities
and organizational performance under the influence of perceived environmental uncertainty”.
The general objective is to look at the effects of applying Management Control Systems to
boost organizational performance and capabilities during periods of uncertain environmental
happenings. The relevance of this research question is based on the fact that various previous
resources have tried unsuccessfully to investigate the impacts of MCS on both organizational
capabilities and performance.
However, little has been done to ascertain how these unfold and take place when the
firm in question is experiencing some threats and uncertainty from its external environment.
In this regard, the value and relevance of a firm’s external organization are questioned since

they tend to create the required conditions for success or threats to the organization. As such,
the research question seeks to underpin how management teams perceive the relationships
between uncertain business environments and how such influence the relationship between
MCS and the performance and capabilities of the firm. This is because management teams
are endowed with the roles of decision making in the organization upon which relevant
control and information systems may be chosen or preferred.
The aim of the study is to examine the impact of management control system upon
organizational performance by considering the influence of perceived environmental. The
research question is “What is the impact of MCS upon organizational performance?”
Therefore, the research question seeks to investigate how perceived environmental
uncertainty (PEU) influences the relationship between management control systems (MCS)
and organizational capabilities and performance. Due to the broad nature of the research
question and the restrictive conditions for performing this study, the research process was
driven by three associated propositions narrow down the line of questioning to ease the
procedure. These propositions are detailed as follows: -
P.1 To identify the effect of PEU upon management organizational decision and
strategic approaches.
P.2 To examine the positive relationship between management control system and
organizational capabilities.
P.3 To ascertain the relationship between MCS and organizational performance that
effect from PEU.
By study on this, scholar ascertain the relationship between the variables and this in
turn assist the corporate to make decision accordingly. Also, investigation examine the
impact of MCS upon organizational capabilities so that all the companies make changes in

their strategies. The validity of this claim is based on the fact that any research should be
narrowed down in such a way that it should be able to capture the key components of the
investigation in question for the purposes of understanding the relationship between the
variables under investigation. In this regard, this dissertation will capture the relationship
between independent variable, perceived environmental uncertainty (PEU) and the three
dependent variables of organizational capabilities, performance, and management decisions.
A qualitative investigation of these variables in the context of various business set ups will
help the researcher in narrowing down on the subject matter.
Researcher conduct both primary and secondary research and also with the help of
using chi-square test, scholar analyse the relationship between variable and this in turn assist
to meet the define aim. Further, under primary research, interview tool is used in which
experience and perception of corporate is shared that helps to conduct the research in more
precise manner. Further, by attaining the research objectives, scholar improve the knowledge
with regards to management control system and PEU, also may use the same in their future
career options.
The structure will basically consist of an abstract, the introduction in which scholar
provides a background related to topic. then comes literature review, in which investigator
uses all the secondary sources that assist to meet the define aim. Third chapter is
methodology, in which investigator determine the methods which are used under this
research i.e. primary and secondary. Next is data analysis in which all the collected data are
analyzed by using thematic data analysis. Last chapter is conclusion and recommendations, in
which the entire study is summarized that helps to determine the results.
CHAPTER 2: LITERATURE REVIEW

The current section of the study provides a summary of previous research on a topic
in which relevant secondary sources are used that assist to meet the define aim. Literature
review enumerate, describe and evaluate previous study and support the same in present
study (Anderson, 2006).
The perceived environmental uncertainty (PEU) is all about lack o information about
a world around a firm as perceived by decision makers. Therefore, this lack of information is
due to decision related items i.e. difficult to understand and sudden changing in trend. Lee
(2013) detailed that remotely arranged particular abilities at the specialty unit level (statistical
surveying and item improvement) were basic for firms stood up to with high degrees of PEU.
Conversely, creation (an inside arranged action) was basic for firms contending in
circumstances with low PEU. Hitt, Ireland, and Palia (1982) found that PEU influenced the
gathering of corporate-level utilitarian exercises seen as basic to firm execution.
Notwithstanding, they discovered both remotely and inside arranged capacities to be basic for
firms confronted with high PEU, while the best impacts were found for firms with medium
PEU (Gnjidić, 2014).
Proof subsequently proposes that PEU may impact which gathering of unmistakable
capabilities is identified with execution at both the corporate and specialty unit levels. Be that
as it may, the specific determination of these groupings, especially at the corporate level,
stays indistinct. Proof presented by Gnjidić (2014) recommends that administrative activity
depends on a supervisor's view of natural vulnerability. Along these lines, activities intended
to create particular abilities are probably going to differ as indicated by PEU.
Exploration proposes that unmistakable abilities may likewise change with a company's
predominant innovation. For instance, Kim and Shin (2013) detailed that innovative work
exercises were basic for firms that utilized the creation framework dictating the production of
units by supply, while creation exercises were the most significant for firms utilizing a huge

cluster and-large scale manufacturing framework, and showcasing exercises were basic for
those with a ceaseless procedure creation framework. Others such as Thompson (2003) and
Perrow, (2000) propose that utilizing increasingly complex innovations regularly requires the
creation capacity to be a competence.
The concept of Management Control Systems (MCS) denotes the arrangement of
methods and procedures that executives and other high ranking members use so as to help
guarantee the accomplishment of their objectives and the objectives of their companies (Otley
and Berry, 1994), and it envelops formal control frameworks just as casual individual and
social controls. Formal MCS comprise of intentionally planned, data based and express
arrangements of structures, schedules, systems and procedures (Merchant & Van der Stede,
2007; Simons, 1995) that assist administrators with guaranteeing that their organizations
techniques and plans are done or, if conditions warrant, that they are changed (Bisbe &Otley,
2004)
2.1 PEU and Organizational Capabilities
The aim of this study is to primarily look at the relationship between the Management
Control Systems (MCS), over capabilities and performance of an organization in situations of
perceived environmental uncertainty (PEU). On this regard, the dissertation seeks to examine
the dynamic role of organizational capabilities based on the flexibility of strategies, and the
empowerment of employees in it. Therefore, the Management Control Systems (MCS) are
vital in formulation of sustainable competitiveness strategies that enhance better performance
results over capabilities on an organization. According to Govindarajan (1988), MCS have
internal systems and structures such as strategies, and favorable environment that are
incorporated together to set high performance of an organization.

As such, good implementation of an organization’s strategy leads to realization of better
results (Simons, 2000). In addition, the organizational capabilities of any organization should
be unique from other companies to prevent competitors from imitating them for their own
gain (Kelchner 2017). In this regard, Kelchner retaliates the importance of organizations to
apply the best of control systems to ensure that they maintain their competitive advantage
over their competitors irrespective of the kind of industry in which they operate. In researches
that have been conducted previously, Management Control Systems have greater impact over
capabilities (Henri, 2006a; Koufteros et al. 2014). Nevertheless, there is not much evidence in
place that supports the effects MCS can have on organizational capabilities. Therefore, Slater
and Narver posit that management teams that embrace these management control systems are
more likely to perform better than their counterparts who knowingly or unknowingly fail to
embrace them. However, though there is little information written about the direct
relationship between the MCS over capabilities and organizational performance, this study
seeks to add some information in relation to these findings. This is the case regarding issues
of future uncertainty and related events which may pose some huge dangers on the
application and implementation of various MCS systems and their overall capacity to trigger
the intended solutions and outcomes.
To contextualize how MCS can be used in different perspectives to foster better results, a
Tentative control framework was used to incorporate uncertainty variable that would enable
a clear understanding of the importance of this research. As per the model, company's HR
should develop a best package to their employees such that reward system, training and
development session etc. Through this model, it is easily to analyze how the control system
are used by companies throughout several days. This differs to earlier researches done by

(Henri, 2006a; Koufteros et al. 2014). In this regard, these researchers found that although
MCS were integral in influencing organizational operations, the actual influence could not be
upheld. Further, results derived from this study indicate that there is a positive and significant
relationship that directly affects MCS use over capabilities that determine the performance of
an organization. In this regard, the high performance of a company regardless of its size is
significantly affected by the entrepreneurial orientation rather than learning orientation.
(Slater & Narver 1995). Despite these observations, the place of perceived environmental
uncertainty (PEU) and its overall impacts on management decisions and consequently the
uptake of MCS cannot be verified. Ultimately, MCS provide rich information that is used by
managers of any company in planning, making decisions, monitoring, and evaluating the
company’s undertakings that may change employee behavior (Merchant & Otley, 2007). On
the same breath, managers are mandated with the responsibility of determining and
identifying better practices that may improve future controls of competitive advantage by
allowing better usage of their Management Control Systems (Widener 2007).
Elements that affect the growth of MCS structure as applied to a tech startup (Lundell &
Forzelius, 2017)

Findings in this literature suggests that all stages of strategic processes of a company are
facilitated by the Management Control Systems (Mintzberg 1978; Mintzberg & Waters
1985), this is by providing all the important information required to challenge the validity of
contents used in a strategy (Ittner et al. 2003). Apparently, this research challenges the
previous study and points out that MCS are important resources in an organization and
therefore creates a competitive advantage in relation to how they are used (Lengnick-Hall &
Wolff 1999). Therefore, it is imperative to acknowledge how these resources are incorporated
in an organization to realize a sustainable basis of competitive advantage because as a result,
they have an indirect or direct effect on performance. As such, the applicability of MCS as far
as the organizational decisions on performance and capabilities remains a mystery since there
is little research that has been conducted on the same.
The institutional distance has a negative effect on foreign subsidiary performance and
it is so because of distance increases the difficulties of doing business in international
countries. As a result, cost due to larger uncertainty of an environment increases and also, due
to diverging ways of communication, the information asymmetry increases (Henri 2006a).
Moreover, there is a wide difference in the cultural beliefs and that is why, there it creates an
negative effect on foreign subsidiary. Though management team of the companies uses range
of ways that assist to cope up with many challenges so that this institutional distance may
decreases (Simons 1995; Henri 2006a; among others).
On investigating the importance of traits identified with use as opposed to structure and on
attention to the particular ramifications of various styles of utilization of formal MCS,
Simons’ lever of control framework gives bits of knowledge that help comprehend the
referenced evident irregularities (Simons, 1995). More unequivocally, the structure adds to

clarifying the conflicting discoveries with respect to the course and importance of the impacts
of formal MCS on effective development as announced in earlier writing. The terms of the
structure dictates that those investigations that denote that proper MCS such as criticism and
estimation frameworks, upset development are inclined toward the degree that they center
solely on analytic employments of formal MCS, and disregard the ramifications of intuitive
employments of formal MCS. Despite what might be expected, those research endeavors that
have discovered that conventional MCS serve as facilitators of fruitful advancement are those
that are progressively far reaching to the degree that they catch the nearness of intelligent
employments of MCS just as the dynamic strain among indicative and intuitive employments
of formal MCS
By and large, Simons’ structure stresses the significance of the intuitive utilization of MCS in
encouraging effective advancement, including fruitful item development. In any case, it
doesn't give an away from of the connections among the factors in question (Simons, 1995).
Specifically, the structure doesn't give an all-around characterized separation between two
kinds of potential impacts which are thoughtfully particular and ought to be systematically
recognized. From one perspective, the intelligent utilization of MCS may encourage item
development (which thus may in the long run increment execution); then again, the intuitive
utilization of MCS may upgrade the effect of any degree of item advancement upon
execution. Simons (1995) doesn't make an unequivocal differentiation between these two
impacts, alluding to them rather unclearly in his argumentation.

Simon’s Lever of Control Framework (Simon, 1995)
So as to look at the ramifications of the two unique impacts inserted in Simons structure, this
paper presents two models in which various kinds of connections between item advancement,
intelligent utilization of MCS and execution are made express (Simons, 1995). As showed
underneath, these two models segregate Simons’ rather undefined references to impacts
which are in truth characteristically unmistakable and compose them in two model structures
which are similarly legitimate from hypothesis (Simons, 1995). A first model plans to test the
magnitude of immediate and aberrant impacts of the intuitive utilization of MCS individually
on item advancement and execution. A subsequent model intends to test the proximity of
directing impacts by which the intelligent utilization of MCS impacts the effect of item
development on execution.
2.2 PEU and Organizational Performance
The appropriate application and use of various management controls and systems is a
pathway to exemplary organizational performance. To ensure that a company can achieve
high levels of performance (Danneels 2002; Hurley & Hult 1998), it must have hard to
imitate and valuable capabilities that would position it in a competitive advantage (Widener

2007). These imitations and capabilities are anchored on the kind of management and control
systems that the organization is applying in its day to day running initiatives. The legitimacy
of the diagnostic systems used in MCS to have formality on routines (Simons 2000) have an
intention to guide on an employee behavior, communication in the organization on various
levels and implementation of decisions made by the managerial team. Therefore, with
appropriate employee behaviors then it will be possible for the firm to realize its production
milestones since all the employees will be able to meet their personal targets in a timely
manner. On the other hand, effective communication channels and networks created by these
systems are important in ensuring that organizational goals, vision, missions, and objectives
are effectively communicated to all stakeholders for optimal support and execution.
However, the fact that employee behaviors and organizational communication blueprints may
be compromised by possible threats and uncertainties then their implications on MCS cannot
be overlooked. In the same note, routines that guide behavior in an organization have
originality from historical experiences of organizational learning (Levitt & March 1988).
Improvement of competitive advantage in an organization, is facilitated by the LO. Thus,
improvement of information processing grows at a faster rate than the competitors do (Baker
& Sinkorganizational leula 1999). However, it is of great importance to have information
systems being up to date (Simons 1987). High Performance and improvement of an
organization is articulated to continued and frequent up to date control systems to strengthen
organizational learning (Simons 1987). In his argument he points out that MCS have a
significance effect positively on staff understanding about learning capability (Yuan et al.
2008). Organizations that have MCS in their management upholds a holistic perception in all
the processes of strategy implementation, occasioning to organizational learning (Slater &
Narver 1995; Speckbacher et al. 2003) facilitated by the four processes of organizational
processes (Slater & Narver, 1995).

Entrepreneurial orientation on the other hand specifically captures the aspects of an
organization’s strategies (Covin & Slevin 1989; Covin & Lumpkin 2011). Therefore, EO
encompasses the decisions made in an organization, processes and practices that ensure the
success and management of a new company being ventured into the market for the first time
(Lumpkin & Dess 1996). It is considered as a permanent attitude of an organization (Covin &
Slevin 1991) that is entitled in seeking and establishing new opportunities for its growth
(Zahra & Garvis 2000).
A research that was previously conducted by Koufteros et al. (2014) suggests that
Henri (2006a) used a narrow approach in defining diagnostic use of MCS only for monitoring
use, and that is why he found a negative relationship between the organizational learning and
MCS diagnostic controls. On the other hand, these diagnostic variables are influence by how
the company uses its information structures when put together with its strategic resources.
Resources such as knowledge-based systems are directly used to realize and exploit new
opportunities which can have a positive impact on competitiveness advantage over other
companies and entrepreneurship (Barney 1991, Chenhall & Morris, 1995). This is because
the prevailing diagnostics and findings help management teams in crafting the best ways to
counter some of their most lethal operational and administrate challenges and bottlenecks. To
overcome such challenges, then organizational managers should have a consensus regarding
the kind of controls and systems to use for the purposes of spearheading the realization of the
firm goals and objectives. Hrebiniak and Snow, (1982) found that there is a positive
relationship between the agreement of management team and the economic performance of
an organization. The positive relationship is based on the fact that management agreement is
essential as far as the control of the various organizational variables is concerned and for this
reason it may foster either strengths or weaknesses. In this case, the realization of

organizational strength is based on the fact that the management is in agreement regarding the
very best of management control system to use and how well it can impacts its performance
by the way of realizing optimality in resource and variable application.
2.3 PEU and Strategic Management Decisions
The interrelationship exhibited in the usage of the two diagnostic MCS exemplifies the
positive sign of the results as documented by some researchers (Mundy, 2010). Therefore,
these results from this finding supposedly brings about the assumption that the negative
impact posed by a control system used in such a way could be affected if we have the notion
that it had a single use. Apparently, these systems work concurrently and have the support of
each other in fostering the performance of an organization (Simons, 1995). Organizations
consider MCS as resources that have value addition and foster better performance because of
their solid connection between them. In this regard, MCS supports the designing and
implementation of an organization’s strategies that defines its growth and competitiveness
among the rival firms. Therefore, managers have the sole responsibility of matching the most
desirable control systems to the appropriate strategy. As such, to determine better
performance on a firm depends on the efficacy of the implementation of these strategies
Florez et al (2012).
Capabilities on an organization are advantageous in the marketplace. With the creation of
new capabilities and the improvement of the already in place such as knowledge, innovation
designs, and licenses on products, upholds the advantage of higher performance over its
rivals. (Bisbe & Otley, 2004; Chenhall, 2003). Organizational capabilities also act as a link
that bids resources and their distribution together. They are the organizational processes and

procedures to adopt, gain, and are reconfigured to either have a matching effect or create
market change (Grant 1996; Eisenhardt & Jeffrey 2000). As such, companies are mandated to
be keen in identifying, developing, safeguarding, and ensuring proper usage of these
resources and capabilities that have the surety of higher achievement and sustainability of
competitive advantage (Santos et al. 2005). In the study done by Henri, (2006) affirm that
better application of MCS fosters market orientation capabilities, entrepreneurship,
organizational learning, and innovation. While Mundy (2010) and Simons (1995) confirm
that indeed the use and application of management control systems has positive influence on
organizational performance, the big question remains whether the same applies when the
underlying management teams are dealing with threats and other forms of uncertainties that
the organization is prone to. On the same note, Jusoh (1984) found that perceived
environmental uncertainty (PEU) had significant negative effects on the financial and internal
operations of the firm based on the prevailing conditions. In this regard, the management
teams find it hard to execute some of the firm’s financial obligations and for this reason they
hold back or forgo such projects due to the fear that the prevailing uncertainties may lead the
firm to losses. In this regard, Jusoh found that the use of analyzer strategy in fostering
customer measures by the management was the best action to undertake in response to
uncertainty in the external business environment. In another research, Koberg, and Ungson,
(1987) found that the perceived environmental uncertainty had some significant effects on the
performance and structure of an organization. In this case, the two researchers found that the
correlation between business environment and the structure of an organization could not be
defined under the umbrella of organic structure and thus the actual effects of uncertainties
cannot be verified. Al-Mawali and Lam (2016) found that the relationship between customer
accounting initiatives of the organization and its performance had a moderate relationship
owing to the effects of the perceived environmental uncertainties. The moderating effects in

question are as a result of the fact that the prevailing threats and uncertainties in the
environment in which the firm is operating. This observation was similar to the one made by
Litsschert and Tan (1994) where they found that perceived environmental uncertainty (PEU)
had significant effects on the strategic management decisions of firms. In this regard, they
found that perceived environmental uncertainty (PEU) made organizational leaders to be very
careful in their decisions thus they tend to work in favor of defensive as opposed to proactive
strategies. As such, organizations faced by such situations were more likely to engage in
strategies that seem to reduce the risks that the organization is operating in by adopting vital
defensive strategies. These strategies tend to reduce the reliance of the firm on management
control systems in favor of more defensive initiatives that may seem to maintain production
levels while improving its capabilities. Ultimately, the application and use of defensive
strategies during perceived environmental uncertainty (PEU) was bound to foster the
realization of positive results based on the effectiveness of the management decisions that are
put in place. With reduced risks and threats then the prevailing control measures adopted by
the organization are bound to bring more positive results to the firm in the short run.
Therefore, the use of both diagnostic and interactive management control systems is taunted
as some of the most appropriate actions that organizations can utilize in dealing with the
uncertain situations (Marginson, 2002; Mundy, 2010). In this case, diagnostic management
control systems are preferred in times of uncertainties as a way of ensuring that the
organization is well set to deal with the impeding dangers. These initiatives are undertaken
with line to the underlying organizational strategy and the metrics used in initiating the same.
MCS is therefore responsible for the monitoring of the organization’s performance as
exemplified by its Key Performance Indicators (KPIs) and other forms of metrics that can be
used in comparing the performance of the firm in respect to the anticipated targets and
milestones (Maginson 2002). On the other hand, organizations may utilize interactive

management control systems to ensure that all the prevailing concerned are communicated
between the management and their subjects for the purposes of creating the required
consensus for efficiency in organizational performance (Mundy, 2010). In another research it
was found that most organizations preferred the use and application of non-interactive
management control systems to salvage the firm especially during uncertain times (Ezzamel,
1990). In this regard, such firms can package themselves in a better way through the use of
appropriate management control systems to stimulate and boost the firm’s capabilities and
performance in the respective industry. However, other researches have confirmed that some
organizations have been successful in the use of interactive systems to facilitate their
capabilities and performance during periods of perceived environmental uncertainty (PEU)
(Andrews, 2008). Furthermore, a research conducted by Costantini and Zanin (2017) found
that there existed a positive relationship between perceived environmental uncertainty (PEU)
and Strategic Management accounting (SMA). In this case, they found that the management
teams headed by various Chief Financial Officers made strategic adjustment on the pricing of
products as a way of dealing with uncertain events in their business external environment.
This means that environmental uncertainties prompted organizations to change their pricing
strategies for the purposes of bolstering the capabilities of the firm (Costantini and Zanin,
2017). In the same research, it was found that organizations went for a balanced scorecard
and other SMA strategies to curb the threats posed by perceived environmental uncertainty
(PEU). With a positive relationship between these variables then there is no doubt that in
most cases, perceived environmental uncertainty (PEU) served to increase the capabilities of
organizations both in the short-run and in the long-run (Fisher, 1996; Andesto, 2016). Cathy
Fisher (1996) found that there existed some significant relationships between internals and
externals of the firm’s Locus of Control (LOC) scale and the perceived environmental
uncertainty (PEU). In this regard, she found that the relationship was positive for internals

and negative for externals since in the former, the personality of the leaders and the
prevailing factors of the environment have some huge impacts on them.

CHAPTER 3: METHODOLOGY
3.0 Introduction
Methodology is a vital process as far as a research process is concerned. The validity
of this claim is based on the fact that methodology creates a pathway through which the
relationship between variables in a research process can be ascertained and confirmed. The
fact that methodology is a process means that there is need for a researcher to very careful
with the kind of techniques and procedures that he or she is bound to incorporate and use in
his analysis process for efficient findings and resolutions. Therefore, an authentic research
methodology should indicate all the processes, procedures and techniques through which data
will be collected, organized and analyzed so as to find out the relationship between both the
independent and dependent variables in the study in question (Jonker and Pennink, 2010).
This section outlines the ways through which the required qualitative data will be collected
and measured and the sources for the same.
3.1 Data Sources, Stages and Variable Measurement
Data sources are critical resources in research processes since they underpin the
quality of the data collected and consequently the kind of inferences that can be made once
the analysis process has been conducted. The present study will make good use of qualitative
data for the purposes of ascertaining the relationship between the prevailing independent and
dependent variables. In this regard, the use of qualitative data is important in capturing the
opinions and thoughts of various managers and Chief Financial Officers (CFOs) of various
organizations regarding the kind of changes and adjustments that they have at one time or
another, made in their organizations in a bid to respond to the various forms of environmental
uncertainties that impact their performance and capabilities. This process was informed by

rigorous research regarding the organizations to go for and whether they used MCS in their
day-to-day running of their firms.
Due to the current pandemic, meeting with these individuals would prove difficult as the
international measures for prevention of the spread detail limited contact. However, similar
efforts may see the research consider conducting virtual interviews with various managers
and CFOs as an appropriate methodology for this research process. The appropriateness of
considering virtual interviews for this investigation is based on the restricted social gatherings
due to the devastating effects of the novel Corona Virus (Covid-19). In this regard, the
restriction in social gatherings and the need for first-hand information and information from
these organizational leaders also makes virtual interview the most appropriate approach.
However, this difficulty also limits the ethical approval dynamic that is required to ensure
optimality in the data collection method as well as in adhering to the time requirements for
this research.
Essentially, the first stage would have involved acquisition of ethical approval as it is
critically ensuring that the research is conducted within the parameters of scholarly integrity.
However, the pandemic limits the time dynamic associated with the research ethics
committee who receive declaration of any conflict. Therefore, the inability to complete this
first step impedes every step thereafter including sampling out the number of organizational
managers and CFOs, and the conduction of the interviews through the Zoom and Skype
platforms to capture all their opinions and thoughts concerning their use of various MCS
programs.
Additionally, the interviews would have captured the manner through which they would have
reacted to uncertainties in their business environment and how their actions would have

impacted their capabilities and performance outputs. Considering the objectives for this
study, the aim may not get a lot of literature affirmation without the statement of the
appropriate variables. The measurement of the independent and dependent variables is,
therefore, crucial in the establishment of the relationship. For this research study, the
independent variables include the PEU, organizational performance and the strategy approach
adopted by the organization.
In order to adequately capture each of these dynamics, the research study will utilize
previously published literature to determine the interconnected nature of the concepts.
Primarily, the survey or interview dynamic for the research study has been affected by the
unpredictable nature of the Covid-19 pandemic. Therefore, previously published literature is
the most viable avenue to achieve the comparable aspects used in the analysis. As a result, the
diversity of the literature chosen will offer the much-needed range of knowledge denoted in
the propositions.
To better understand the knowledge and perspective held by various administrative powers
within organizations, this study will employ an approach that investigates the perceived
environmental uncertainty (PEU) influences in the relationship between management control
systems (MCS) and organizational capabilities and performance. This general approach
emphasizes on the application MCS with regards to the relationship to PEU. Therefore, the
approach explores the links between the strategic understanding of the concepts, related
information, and the knowledge of the organizational capabilities and associated
performance.
Reheul and Jorissen (2007) provide an in-depth look into the role of performance on the
choice of MCS especially when applied to small businesses. Similarly, the study conducted

by Latan et al. (2018) investigate the PEU and the general concept of performance especially
with regard to commitment by administrative entities within organizations. The piece of
literature also takes the perspective on strategic approach in the form of the methodology
taken up by the administrative entities studied within. Lastly, the study will utilize the
literature by Agyemang and Broadbent (2015) in relation to MCS as developed by
institutions of higher learning to perform research management tasks.
In relation to the PEU, these pieces of literature may incorporate values such as endeavors by
competitors, market preferences, power exercised by the suppliers, technologies determining
production, external policies and procedures, globalization, the overall economic setting, and
relationships with other sectors. Operationalization of the organizational performance
variable will follow the average gross ROA between two consecutive years as determined by
the records within the literature by Reheul and Jorissen (2007). However, this variable will
need determination following adjustment of the performance index, a comparison of the
individual organizations against the industry average.
The approach for the variable on organizational performance will essentially be supported by
a comparative dynamic relating two sides of a scale. One side of the scale will incorporate
approaches that are non-detrimental to the long-term functioning of the organization. These
includes the release of familiar items, low-cost production endeavors, lack of product
innovation for extended periods, lack of portfolio enhancement for extended periods,
response to competition, and remaining as trend followers. The other side of the scale adopts
a more revolutionary approach, encompassing approaches such as research and development,
advances in technology and innovative ideas, novelty in product ideas, regular release of
novel products, regular enhancement of the portfolio, being trend setters, and instigating

industrial change to evoke responses. The dynamic of strategy approach will however form
the basis of the second part of the interviews that embody the virtual interviews.
Predictably, the dependent variables are ones defining the framework and utilization
of MCS. These ideals will be represented by the range of measurement as related to
performance, the dependence on these performance indicators, and the inclination of MCS
use as detailed largely by Latan et al. (2018). Following the adjustment of the independent
variables, these dependent variables will adequately capture data useful in the connection of
the proposition of various parameters in understanding the relationship seen in literature
conceptualized by Agyemang and Broadbent (2015).
Regarding the range of measurement for performance, the definition of the scope will
be founded on weighing MCS goals including fiscal goals, customer related objectives, goals
related to organizational business processes, and goals involving learning and innovative
practices. The criteria will also determine the variable defining the dependence on the
performance indicators although the variable aims to capture a comparative degree for each
element pitted against the rest of the elements.
Finally, variable denoting the inclination of MCS use attempts to look into the use on
a diagnostic capacity or an interactive capacity. In regard to the former, the responses will be
aimed at investigating the use to monitor various elements hence the inclusion of aspects such
as following advancement towards objectives, audit key measures, observe results and
contrast results with projections. Interactive use of MCS will involve focus related elements
such as giving a typical perspective on the organization, building up a typical culture in the
association, to empower regular conversation in meetings with individuals on various
hierarchical levels, and to empower persistent experimentation and discussion on outcomes,
expectations and activity plans.

3.2 Research Set-up and Data Collection
Data collection is the method of gathering and collecting the information from the
relevant sources in order to reach the final results. In the same way, for the present study, to
test hypothesis, there are two methods has been selected which in turn leads to meet the
results. Such that primary data collection approach in which scholar uses interview method.
As mentioned earlier, the current pandemic prevents effective face-to-face meetings with
these individuals due to the international measures for prevention of the spread that detail
limited contact. Despite the internet providing a relatively adequate solution to the
predicament in the form of virtual interviews, the proposed research approach would have
required the interviewer to perform interview with open ended questions, hence influencing
the process. Additionally, due to the nature of the profession of the participants; managers
and CFOs, it is an unpredictable methodology for this research process due to their duties.
Another type is secondary data collection method which are also used by the scholar
for the present research paper. Under this, scholar select the relevant article and books which
are used under literature review section so that effective research has conducted. Following
the first stage that involves an assessment of the literature chosen for this study, the research
process will be aimed at gathering as much data as possible to aid in the analytic approach to
ascertaining the propositions. Therefore, the approach will endeavor to acquire data on the
independent variables, taking on the scale approach taken by the various perspectives for
PEU, organizational performance, and comparative scale method for the strategy approach.
Therefore, by using both primary and secondary data collection methods, investigator
generate the best results and this in turn leads to meet the define aim. Also, with the help of
these approaches, scholar analyze the relationship between variable and examine whether
there is any impact of MCS upon organizational capabilities or not. Apart from this, to
analyze the data, thematic data analysis strategy is used in which, scholar interpret the

findings in more presentable manner. This in turn also leads to generate the best outcomes
and clearly analyze the results according to aim and objectives. Researcher chooses this
method of data analysis because it will assist to examine the views of different respondents
and this in turn leads to meet the results in better manner.
In order to operating the variables, scholar uses chi-square test which in turn assist to
analyze the relationship between dependent and independent variables. This is performed
under SPSS software that assist to analyze whether the variable are dependent upon other or
not.
3.3 Rationale
The research is focused on collecting qualitative data with an element of
interactive data collection. The interactive aspect of the data collection is necessitated
by the lack of sufficient corporate data during the research period. While the
inadequacy of the corporate data is due to the existence of a limited number of existing
corporate clients, the incorporation of the interactive perspective of the data collection
offers relative compensation. The lack of utilization of quantitative data from private
patients is as a result of the data protection policies. Therefore, the quantitative data
collection methods are considered irrelevant bearing in mind that the paper is based on
understanding the impact that management control systems have on performance.
In the same light, quantitative data is not relevant due to a few more reasons. Firstly,
quantitative data tends obtain a foundation for a truth and establishes this foundation
under principles that suggest such a truth exists (Cassell, Cunliffe et al. 2018). This
specific research is focused on collecting experiences and perceptions of corporates
rather than proving the correct nature of a situation. Secondly, as mentioned earlier,

the lack of internal data is a hindrance to the progression of the analysis process,
deeming qualitative data an irrelevant approach.
There are typically multiple forms of qualitative research methods to collect data, some of
which were applied to this research study. The only form of qualitative data used in this
research will be literature analysis; the primary objective behind the use of this method will
be to gain an understanding of the complex phenomena under examination. The phenomena
that included various forms of uncertainties including the environmental require the
achievement of in-depth understanding in order to adequately address the research topic
(Johnson, Buehring et al. 2007).
3.4 Validity and Reliability
Validity in qualitative analysis means that “appropriateness” of the tools, processes,
and data. Whether or not the analysis question is valid for the specified outcome, the
selection of methodology is suitable for respondent the analysis question, the look is valid for
the methodology, the sampling and knowledge analysis is suitable, and eventually the results
and conclusions are valid for the sample and context. In assessing validity of qualitative
analysis, the challenge will begin from the metaphysics and philosophy of the difficulty being
studied. For instance, the construct of “individual” is seen in a varied light as being between
humanistic and organizational entities thanks to differing managerial and human resource
perspectives: wherever managers believe “individual” may be a product of awareness and
interaction with the organization, personnel experts assume the “individual” exists within the
same space as the organizational entity. Despite the difference in perspective, the varied
avenues taken by qualitative analysis ought to result in the variable validity.

In quantitative analysis, consistency is defined as the actual ability to reproduce the
processes and also the outcome. In this qualitative analysis, there are numerous paradigms,
such definition of consistency that present a level of is difficulty due to the contradictory
action. Therefore, the core of consistency for qualitative analysis lies with the fact that it is
unchanging despite the difference in material used. A margin of outcome fluctuation is
acceptable in qualitative analysis as long as the procedure and epistemic provision
systematically give rise to knowledge that is relatively similar. However, the conditions to the
fluctuations might take into consideration issues in the atmosphere inside these similar
dimensions. Leung (2015) projected five avenues for the improvement of the consistency of
method and outcomes: Refutational analysis, constant information comparison, all-inclusive
utilization of the information, together with the information of the divergent case.
Le Comple and Goetz (1982) allude to investigation discoveries which hold that what
the researcher sees and reports as a component of the power held inside the gathering of
participants, the status concurred to them, and the conduct expected of them. The power held
by the researcher can be that of an untouchable or that of a member of the group. However,
each of these settings can keep the analyst from getting certain data and unless oblivious,
invalid understanding of the information may occur. However, analyst is among the
participants, there is a risk of accepting the mentalities and practices of those under
examination hence losing the capacity to take a gander at what's going on and may create
predisposition towards the perspective of the lot.
Analyst predisposition may likewise be presented by the inclination specialists to
watch subjects and decipher discoveries in the light of their own qualities, the propensity to
specifically watch and record certain information to the detriment of other information. The

physical presence of the analyst often impacts the circumstance in addition to other qualities
presented forming further premise denying the use of surveys or interviews. For instance,
subjects may react distinctively researchers of different genders and an unexpected result may
occur when the researcher possesses a similar bias.
For the appropriate measure of validity, the selection of approach should change detection of
findings within the acceptable context. This need to also follow the relation to cultural and
contextual variables. Concerning sampling, procedures and approaches should be acceptable
for the analysis intricacies and be differentiated between adaptive, methodical, or determined
sampling. Therefore, the adaptive sampling is shaped by the continuing method of
information assortment and approach, the methodological sampling does not require a
working theory, and the determined sampling typically encompasses a sure structure.

CHAPTER 4: DATA ANALYSIS
The objective of this study is to evaluate the perceived environmental uncertainty (PEU)
influences the relationship between management control systems (MCS) and organizational
capabilities and performance utilizing the following variables; the answers with respect to the
survey detailing the performance framework and MCS, and the data on the company's
publicly available records. The study incorporates the fulfillment measure recorded in the
responses to permit correlations of the outcomes to other measures utilizing the dependent
variable. The measures obtained from the records give more straightforward impacts of the
related PEU measures.
The theoretical model mentioned during this study reflects two primary aspects that need to
be well thought-out once selecting an applied analytic tool. Agyemang and Broadbent (2015)
presented that the first aspect is the awareness of several and interconnected relationships
between the variables. The subsequent aspect is the existence of latent variables that cannot
be determined definitively. Due to the lack of mediating variables, the most viable analysis
model to follow would be the Ordinary Least Squares (OLS) model. This model method
utilizes estimators to reduce the summation of the difference obtained between projected
parameters and the perceived ones.
Information collected from the literature will be analyzed considering variable non-normality
of the information and also the presence of a product term; a view that denotes the use of
most chance estimates (Bentler & Chou, 1987). Additionally, composite indices and a OLS
regression approach will be used to represent latent construct (Bagozzi & Heatherton, 1994).
As Landis, Beal, & Tesluk (2000) recommend, indicators will be used per latent construct

apart from PMS use. As a result of the anticipation and assumptions, utilizing chi-square
insights will determine the contrasts based on the size, area and industry of respondents and
non-respondents.

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
From the above, it has been concluded from literature review that if company uses
strong management control system then it creates a positive impact upon organizational
performance. On the other side, due to PEU, management team do not make decision which
leads a business towards opposite direction. To present the study, scholar uses analytical
approach in literature review section in which scholar break the aim in different elements
which in turn assist to solve the problem. For that, this research study was able to understand
the relation to MCS to organizational performance. Despite the application of the concepts as
developed by institutions of higher learning to perform research management tasks, the
literature adequately discusses the basics. On the other hand, the look into PEU by Latan et
al. (2018) and the general concept of performance sheds light into the commitment by
administrative entities within organizations. In the long run, the literature denotes the
relationship of PEU and organizational capabilities in the presence and absence of MCS.
Further, the piece of literature also connects the perspective on strategic approach to
the form of the methodology taken up by the administrative entities studied within. Finally,
Reheul and Jorissen (2007) provide an in-depth look into the role of performance on the
choice of MCS especially when applied to small businesses. Moreover, secondary research
also supported the study and concluded that PEU and organizational performance are directly
related to each other. It is so because if there is any fluctuation in economy of country,
management team do not take action accordingly then they cannot take an action accordingly
and as a result, company's performance got affected.
Apart from this, through research methodology section, it has been concluded that
qualitative research methods assist researcher to collect the data and conduct the research in
more precise manner. Also, with the help of authentic research methods i.e. chi- square
method investigator examine the direct relationship between PEU and MCS. Moreover, with

relevant sources, scholar examine that there is a direct relationship between variables and by
using effective management control system, company's performance is increases and this
assist to take a business towards success direction.
Overall, the three studies denote that the relationship between PEU, MCS,
organizational performance and capabilities are dependent on the individual connections. For
instance, the presence or absence of MCS in an organization directly influences performance
and capability possessed by an organization.
Recommendations
 It is recommended to the company should develop best training session for their
employees which in turn assist to improve the performance as well as profitability.
Also, if company have talented personnel, then it will assist to attain the set goals of a
firm.
 Moreover, by implementing reward and compensation controls will assist to improve
the performance of employees. This in turn assist to improve the culture and
environment which directly impact upon organizational performance.
 It is also suggested to the firm that organization should also conduct internal and
external audit at quarter basis which in turn assist to determine the environment
uncertainty. This in turn leads to examine the factor and then take suitable action
which leads to improve the environment as well as organizational performance.

References
Agyemang, G., & Broadbent, J. (2015). Management control systems and research
management in universities. Accounting, Auditing & Accountability Journal.
Allameh, S.M. and Khalilakbar, R., 2018. Exploring the antecedents of innovation
performance: the roles of entrepreneurial orientation, learning orientation and
organisational learning. International Journal of Business Excellence, 14(4), pp.470-
485.
Al-Mawali, H. and Lam, T.D., 2016. Customer Accounting and Environmental Uncertainty:
Sequential Explanatory Study. International Review of Management and Marketing,
6(3).
Anderson, M.H., 2006. How can we know what we think until we see what we said?: A
citation and citation context analysis of Karl Weick’s The Social Psychology of
Organizing. Organization Studies, 27(11), pp.1675-1692.
Andesto, R., 2016. The influence of perceived environmental uncertainty and business
strategy on management accounting system (survey on the Indonesia advertising
companies). European Journal of Accounting, Auditing and Finance Research, pp.27-
36.
Andrews, R., 2008. Perceived environmental uncertainty in public organizations: An
empirical exploration. Public Performance & Management Review, 32(1), pp.25-50.
Bagozzi, R.P. and Heatherton, T.F., 1994. A general approach to representing multifaceted
personality constructs: Application to state self‐esteem. Structural Equation
Modeling: A Multidisciplinary Journal, 1(1), pp.35-67.

Barney, J., 1991. Firm resources and sustained competitive advantage. Journal of
management, 17(1), pp.99-120.
Bentler, P.M. and Chou, C.P., 1987. Practical issues in structural modeling. Sociological
methods & research, 16(1), pp.78-117.
Bisbe, J. and Otley, D., 2004. The effects of the interactive use of management control
systems on product innovation. Accounting, organizations and society, 29(8), pp.709-
737.
Chenhall, R.H. and Morris, D.E.I.G.A.N., 1995. Organic decision and communication
processes and management accounting systems in entrepreneurial and conservative
business organizations. Omega, 23(5), pp.485-497.
Costantini, A. and Zanin, F., 2017. The effect of perceived environmental uncertainty on the
use and perceived usefulness of strategic management accounting: Some empirical
evidence. Managing Global Transitions, 15(4), pp.379-398.
Danneels, E., 2002. The dynamics of product innovation and firm competences. Strategic
management journal, 23(12), pp.1095-1121.
Fisher, C., 1996. The impact of perceived environmental uncertainty and individual
differences on management information requirements: A research note. Accounting,
Organizations and Society, 21(4), pp.361-369.
Gnjidić, V., 2014. Researching the dynamics of Miles and Snow's strategic
typology. Management-Journal of Contemporary Management Issues, 19(1), pp.93-
117

Govindarajan, V., 1988. A contingency approach to strategy implementation at the business-
unit level: integrating administrative mechanisms with strategy. Academy of
management Journal, 31(4), pp.828-853.
Grant, R.M., 1996. Toward a knowledge‐based theory of the firm. Strategic management
journal, 17(S2), pp.109-122.
Henri, J.F., 2006. Organizational culture and performance measurement systems. Accounting,
organizations and society, 31(1), pp.77-103.
Hitt, M. A., Ireland, R. D.. & Mia, K. A. Industrial firms’ grand strategy and functional
importance: Moderating effects of technology and uncertainty. Academy of
Management Journal, 1982,
Hrebiniak, L.G. and Snow, C.C., 1982. Top-management agreement and organizational
performance. Human Relations, 35(12), pp.1139-1157.
Hult, G.T.M. and Ketchen Jr, D.J., 2001. Does market orientation matter?: A test of the
relationship between positional advantage and performance. Strategic management
journal, 22(9), pp.899-906.
Hurley, R.F. and Hult, G.T.M., 1998. Innovation, market orientation, and organizational
learning: an integration and empirical examination. Journal of marketing, 62(3),
pp.42-54.
Ittner, C.D., Larcker, D.F. and Randall, T., 2003. Performance implications of strategic
performance measurement in financial services firms. Accounting, organizations and
society, 28(7-8), pp.715-741.

Jonker, J. and Pennink, B., 2010. The essence of research methodology: A concise guide for
master and PhD students in management science. Springer Science & Business
Media.
Jahanshahi, A.A. and Brem, A., 2019. Entrepreneurs in post-sanctions Iran: Innovation or
imitation under conditions of perceived environmental uncertainty?. Asia Pacific
Journal of Management, pp.1-21.
Jusoh, R., 2010. The influence of perceived environmental uncertainty, firm size, and strategy
on multiple performance measures usage. African Journal of Business Management,
4(10), p.1972.
Justin Tan, J. and Litsschert, R.J., 1994. Environment‐strategy relationship and its
performance implications: An empirical study of the Chinese electronics industry.
Strategic management journal, 15(1), pp.1-20.
Kim, D.H. and Shin, G.C., 2013. An Empirical Study on the Relationships among Marketing
Environment, Capacity and Strategy on the Marketing Performance of
SMEs. Academy of customer satisfaction management, 15(1), pp.53-84.
Koberg, C.S. and Ungson, G.R., 1987. The effects of environmental uncertainty and
dependence on organizational structure and performance: A comparative study.
Journal of Management, 13(4), pp.725-737.
Koufteros, X., Verghese, A.J. and Lucianetti, L., 2014. The effect of performance
measurement systems on firm performance: A cross-sectional and a longitudinal
study. Journal of operations Management, 32(6), pp.313-336.

Landis, R.S., Beal, D.J. and Tesluk, P.E., 2000. A comparison of approaches to forming
composite measures in structural equation models. Organizational Research
Methods, 3(2), pp.186-207.
Latan, H., Jabbour, C. J. C., de Sousa Jabbour, A. B. L., Wamba, S. F., & Shahbaz, M.
(2018). Effects of environmental strategy, environmental uncertainty and top
management's commitment on corporate environmental performance: The role of
environmental management accounting. Journal of Cleaner Production, 180, 297-
306.
Le Comple, M.D. & Goetz, J.P. 1982. Problems of reliability and validity in ethnographic
research. R eview o f Educational Research 52 (no 1): 31-60.
Lee, C.L. and Yang, H.J., 2011. Organization structure, competition and performance
measurement systems and their joint effects on performance. Management accounting
research, 22(2), pp.84-104.
Lee, S.B., 2013. A Study on the Effect of Characteristics of CEO and Competency in Venture
Companies on the Organizational effectiveness: Including the Mediating Effect of
Corporate Strategy. Hoseo University, Doctor’s thesis.
Leininger, M. 1991. Culture care, diversity and universality: A theory o f nursing. New York:
N.LJ'f.
Lengnick‐Hall, C.A. and Wolff, J.A., 1999. Similarities and contradictions in the core logic
of three strategy research streams. Strategic Management Journal, 20(12), pp.1109-
1132.
Leung, L., 2015. Validity, reliability, and generalizability in qualitative research. Journal of
family medicine and primary care, 4(3), p.324.

Levitt, B. and March, J.G., 1988. Organizational learning. Annual review of sociology, 14(1),
pp.319-338.
Lewis, M.W., 2000. Exploring paradox: Toward a more comprehensive guide. Academy of
Management review, 25(4), pp.760-776.
Lundell, T., & Forzelius, M. (2017). Developing a Framework for Management Control
Systems in Start-ups: How Management Control Systems can be used in fast-growing
technology start-ups to support controlled growth.
Merchant, K.A. and Otley, D.T., 2007. A review of the literature on control and
accountability. Handbook of Management Accounting Research,(Ed.) C. S. Chapman,
AG Hopwood, and MD Shields, 785-804.
Merchant, K.A. and Van der Stede, W.A., 2007. Management control systems: performance
measurement, evaluation and incentives. Pearson Education.
Mintzberg, H. and Waters, J.A., 1985. Of strategies, deliberate and emergent. Strategic
management journal, 6(3), pp.257-272.
Mintzberg, H., 1973. Strategy-making in three modes. California management review, 16(2),
pp.44-53.
Mueller, R.O., 1996. Confirmatory factor analysis. In Basic principles of structural equation
modeling (pp. 62-128). Springer, New York, NY.
Mundy, J., 2010. Creating dynamic tensions through a balanced use of management control
systems. Accounting, Organizations and society, 35(5), pp.499-523.
Narver, J.C. and Slater, S.F., 1990. The effect of a market orientation on business
profitability. Journal of marketing, 54(4), pp.20-35.

Nuhu, N.A., Baird, K. and Appuhami, R., 2019. The impact of management control systems
on organisational change and performance in the public sector. Journal of Accounting
& Organizational Change.
Otley, D.T. and Berry, A.J., 1994. Case study research in management accounting and
control. Management accounting research, 5(1), pp.45-65.
Perrow, C., 2000. An organizational analysis of organizational theory. Contemporary
Sociology, 29(3), pp.469-476.
Porter, M.E., 2008. Competitive strategy: Techniques for analyzing industries and
competitors. Simon and Schuster.
Reheul, A., & Jorissen, A. (2007, September). The role of performance on the choice of MCS
in SMEs: the integration of resource dependence theory in the conventional
contingency-based framework. In Proceedings of the 4th Conference on Performance
Measurement and Management Control–Measuring and Rewarding Performance (pp.
26-28).
Shrader, C.B., Taylor, L. and Dalton, D.R., 1984. Strategic planning and organizational
performance: A critical appraisal. Journal of Management, 10(2), pp.149-171.
Simons, R.L., 1995. Levers of control: how managers use innovative control systems to drive
strategic renewal (Hardcover). Boston: Harvard Business School Press Books.
Talab, H.R., Flayyih, H.H. and Hussein, N.A., 2018. THE IMPACT OF MANAGEMENT
CONTROL SYSTEMS (MCS) ON ORGANIZATIONS PERFORMANCE A
LITERATURE REVIEW. Journal of Economics and Administrative Sciences,
24(105), pp.1-1.

Thompson, J.D., 2003. Organizations in action: Social science bases of administrative
theory. Transaction publishers.
Wang, C.L., 2008. Entrepreneurial orientation, learning orientation, and firm performance.
Entrepreneurship theory and practice, 32(4), pp.635-657.
Widener, S.K., 2007. An empirical analysis of the levers of control framework. Accounting,
organizations and society, 32(7-8), pp.757-788.
APPENDICES