Perceived importance of management controls: Empirical analysis

Abstract

This study examines what type of management controls (MCs) are regarded as the most important ones. It also examines whether contextual variables have a statistically significant relationship with the importance of the MCs. In addition, the thesis tests if MCs that are the perceived as the most important ones associate with financial efficiency. A further interest is to test whether these MCs produce combinations that associate with financial efficiency. The purpose is to study whether a certain control combination produces statistically significant results.

The study is quantitative in nature and applies covariance and regression analyses to explore the research questions. The data comes from an international survey which is based on Malmi and systems as a package. The actual research project was carried out between 2009 and 2013. The thesis data sample consist of 694 strategic business units (SBUs) from nine different countries.

The results suggest that the following controls are seen as the most important ones; cultural controls, short-term planning controls and cybernetic controls. Additionally, the results indicate that the SBUs cultural background and an external environment have a significant impact on the evaluation of the management controls importance. The organization culture and value controls have a statistically significant relationship with financial efficiency. Some of the MC combinations produced a statistically significant results as well, but their actual impact was low.