An Employee Perspective on Management Control Effectiveness - Measurement and Mechanisms

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School of Business | Doctoral thesis (monograph)
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Date

2024

Department

Laskentatoimen laitos
Department of Accounting

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Mcode

Degree programme

Language

en

Pages

236

Series

Aalto University publication series DOCTORAL THESES, 279/2024

Abstract

Empirical research has mostly shown that management control (MC) practices are linked to positive organizational outcomes. However, it is not fully understood how these MC practices actually contribute to improved organizational performance. Grounded in emerging literature within management accounting and human resources, this dissertation aims to unravel intricate employee-level mechanisms through which MC practices affect individual behaviours and finally organizational performance. Hence, this work addresses research on MC effectiveness by shifting the focus from the traditional manager-centric perspective to the crucial yet often overlooked realm of employee perceptions. Two empirical studies are conducted. The first study systematically develops a novel scale for quantifying employee-perceived result and action control quality (eRCQ and eACQ). The second study explores a process model of MC effectiveness from an employees' perspective. According to this process, employees respond to management practices by forming individual perceptions and developing a certain attitude towards the work or organization which results in different individual outcome variables that finally lead to a certain behavior and performance at the organizational level. Four consecutive mechanisms can be revealed within the relationship of the use of MC and employee behavior: employee perceptions, employee engagement, mental wellbeing, and turnover intention. In conclusion, this dissertation advances our knowledge of effective MC systems by providing a nuanced understanding of how employees responses to controls can be explained. The proposed process model elucidates the sequence from control design to impact, offering useful guidance for organizations that seek to boost performance through engaged and happy employees.

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Supervising professor

Malmi, Teemu, Prof., Aalto University, Department of Accounting, Finland

Thesis advisor

Sinha, Vikash, Asst. Prof., Aalto University, Department of Accounting, Finland

Keywords

management control effectiveness, employee perspective, employee perceptions, employee engagement, mental wellbeing, turnover intention, scale development

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https://urn.fi/URN:ISBN:978-952-64-2201-5

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[diss] Kauppakorkeakoulu / BIZ