IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v63y2023i2p2273-2294.html
   My bibliography  Save this article

Revenue growth in not‐for‐profit organisations: The effects of interactive and diagnostic controls and organisational culture

Author

Listed:
  • Lu Jiao
  • Graeme Harrison
  • Jinhua Chen

Abstract

Using survey and archival data for 180 not‐for‐profit aged care organisations, we find that interactive use of performance measurement systems positively affects the organisations’ revenue growth, while the diagnostic use negatively affects revenue growth. We also find that organisational culture, specifically attention to detail, innovation and respect for people, moderates these effects. Our findings have implications for the literature in terms of understanding the combinatorial effects of formal management control and culture on organisational performance. The findings also have practical implications for designing performance measurement systems and developing organisational cultures, to create an internal environment effective in enabling revenue growth.

Suggested Citation

  • Lu Jiao & Graeme Harrison & Jinhua Chen, 2023. "Revenue growth in not‐for‐profit organisations: The effects of interactive and diagnostic controls and organisational culture," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2273-2294, June.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:2:p:2273-2294
    DOI: 10.1111/acfi.12960
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.12960
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.12960?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Eva Lövstål & Anne-Marie Jontoft, 2017. "Tensions at the intersection of management control and innovation: a literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(1), pages 41-79, February.
    2. Jermias, Johnny, 2008. "The relative influence of competitive intensity and business strategy on the relationship between financial leverage and performance," The British Accounting Review, Elsevier, vol. 40(1), pages 71-86.
    3. Pilonato, Silvia & Monfardini, Patrizio, 2020. "Performance measurement systems in higher education: How levers of control reveal the ambiguities of reforms," The British Accounting Review, Elsevier, vol. 52(3).
    4. Weerawardena, Jay & Mort, Gillian Sullivan, 2006. "Investigating social entrepreneurship: A multidimensional model," Journal of World Business, Elsevier, vol. 41(1), pages 21-35, February.
    5. Chenhall, R. H. & Morris, D., 1995. "Organic decision and communication processes and management accounting systems in entrepreneurial and conservative business organizations," Omega, Elsevier, vol. 23(5), pages 485-497, October.
    6. Kraus, Kalle & Kennergren, Cecilia & von Unge, Amelie, 2017. "The interplay between ideological control and formal management control systems – A case study of a non-governmental organisation," Accounting, Organizations and Society, Elsevier, vol. 63(C), pages 42-59.
    7. Berry, A.J. & Coad, A.F. & Harris, E.P. & Otley, D.T. & Stringer, C., 2009. "Emerging themes in management control: A review of recent literature," The British Accounting Review, Elsevier, vol. 41(1), pages 2-20.
    8. Jenny Green & Bronwen Dalton, 2016. "Out of the Shadows: Using Value Pluralism to Make Explicit Economic Values in Not-for-Profit Business Strategies," Journal of Business Ethics, Springer, vol. 139(2), pages 299-312, December.
    9. Chenhall, Robert H. & Hall, Matthew & Smith, David, 2017. "The expressive role of performance measurement systems: a field study of a mental health development project," LSE Research Online Documents on Economics 46364, London School of Economics and Political Science, LSE Library.
    10. Erik Strauß & Christina Zecher, 2013. "Management control systems: a review," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 23(4), pages 233-268, February.
    11. Dunk, Alan S., 2011. "Product innovation, budgetary control, and the financial performance of firms," The British Accounting Review, Elsevier, vol. 43(2), pages 102-111.
    12. Bisbe, Josep & Otley, David, 2004. "The effects of the interactive use of management control systems on product innovation," Accounting, Organizations and Society, Elsevier, vol. 29(8), pages 709-737, November.
    13. Adler, Paul S. & Chen, Clara Xiaoling, 2011. "Combining creativity and control: Understanding individual motivation in large-scale collaborative creativity," Accounting, Organizations and Society, Elsevier, vol. 36(2), pages 63-85, February.
    14. Sarah Kaine & Jenny Green, 2013. "Outing the Silent Partner: Espousing the Economic Values that Operate in Not-For-Profit Organizations," Journal of Business Ethics, Springer, vol. 118(1), pages 215-225, November.
    15. Grafton, Jennifer & Lillis, Anne M. & Widener, Sally K., 2010. "The role of performance measurement and evaluation in building organizational capabilities and performance," Accounting, Organizations and Society, Elsevier, vol. 35(7), pages 689-706, October.
    16. Widener, Sally K., 2007. "An empirical analysis of the levers of control framework," Accounting, Organizations and Society, Elsevier, vol. 32(7-8), pages 757-788.
    17. Chenhall, Robert H. & Hall, Matthew & Smith, David, 2010. "Social capital and management control systems: a study of a non-government organization," LSE Research Online Documents on Economics 32980, London School of Economics and Political Science, LSE Library.
    18. Weerawardena, Jay & McDonald, Robert E. & Mort, Gillian Sullivan, 2010. "Sustainability of nonprofit organizations: An empirical investigation," Journal of World Business, Elsevier, vol. 45(4), pages 346-356, October.
    19. Bedford, David S. & Malmi, Teemu & Sandelin, Mikko, 2016. "Management control effectiveness and strategy: An empirical analysis of packages and systems," Accounting, Organizations and Society, Elsevier, vol. 51(C), pages 12-28.
    20. Faruk Bhuiyan & Kevin Baird & Rahat Munir, 2020. "The association between organisational culture, CSR practices and organisational performance in an emerging economy," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 28(6), pages 977-1011, April.
    21. Thomas Ahrens, 2018. "Management Controls that Anchor other Organizational Practices," Contemporary Accounting Research, John Wiley & Sons, vol. 35(1), pages 58-86, March.
    22. Diane-Laure Arjaliès & Julia Mundy, 2013. "The use of management control systems to manage CSR strategy: A levers of control perspective," Post-Print hal-00980329, HAL.
    23. Josep Bisbe & Ricardo Malagueno, 2009. "The Choice of Interactive Control Systems under Different Innovation Management Modes," European Accounting Review, Taylor & Francis Journals, vol. 18(2), pages 371-405.
    24. Carl Deschamps, 2019. "Stages of management control in a large public organization: from top to frontline managers," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(2), pages 153-184, July.
    25. Chenhall, Robert H. & Hall, Matthew & Smith, David, 2013. "Performance measurement, modes of evaluation and the development of compromising accounts," LSE Research Online Documents on Economics 51294, London School of Economics and Political Science, LSE Library.
    26. Chenhall, Robert H. & Hall, Matthew & Smith, David, 2010. "Social capital and management control systems: A study of a non-government organization," Accounting, Organizations and Society, Elsevier, vol. 35(8), pages 737-756, November.
    27. Henderson, Elisa & Lambert, Vicky, 2018. "Negotiating for survival: Balancing mission and money," The British Accounting Review, Elsevier, vol. 50(2), pages 185-198.
    28. Hyndman, Noel & McKillop, Donal, 2018. "Public services and charities: Accounting, accountability and governance at a time of change," The British Accounting Review, Elsevier, vol. 50(2), pages 143-148.
    29. Billie Jo Zirger & Modesto A. Maidique, 1990. "A Model of New Product Development: An Empirical Test," Management Science, INFORMS, vol. 36(7), pages 867-883, July.
    30. Michel Lebas & Jane Weigenstein, 1986. "Management Control: The Roles Of Rules, Markets And Culture[1]," Journal of Management Studies, Wiley Blackwell, vol. 23(3), pages 259-272, May.
    31. Mundy, Julia, 2010. "Creating dynamic tensions through a balanced use of management control systems," Accounting, Organizations and Society, Elsevier, vol. 35(5), pages 499-523, July.
    32. Erkki K. Laitinen & Aapo Länsiluoto & Soila Salonen, 2016. "Interactive budgeting, product innovation, and firm performance: empirical evidence from Finnish firms," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 27(4), pages 293-322, November.
    33. Chenhall, Robert H. & Hall, Matthew & Smith, David, 2017. "The expressive role of performance measurement systems: A field study of a mental health development project," Accounting, Organizations and Society, Elsevier, vol. 63(C), pages 60-75.
    34. Müller-Stewens, Benedikt & Widener, Sally K. & Möller, Klaus & Steinmann, Jan-Christoph, 2020. "The role of diagnostic and interactive control uses in innovation," Accounting, Organizations and Society, Elsevier, vol. 80(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Graeme Harrison & Lu Jiao & Jinhua Chen, 2022. "Performance measurement systems and client performance in fee‐generating not‐for‐profit human service organisations," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 931-957, March.
    2. Habib Mahama & Zhichao (Alex) Wang, 2023. "Impact of the interactive and diagnostic uses of performance measurement systems on procedural fairness perception, cooperation and performance in supply alliances," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3253-3296, September.
    3. Ewelina Zarzycka & Justyna Dobroszek & Lauri Lepistö & Sinikka Moilanen, 2019. "Coexistence of innovation and standardization: evidence from the lean environment of business process outsourcing," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(3), pages 251-286, October.
    4. Bisbe, Josep & Kruis, Anne-Marie & Madini, Paola, 2019. "Coercive, enabling, diagnostic, and interactive control: Untangling the threads of their connections," Journal of Accounting Literature, Elsevier, vol. 43(C), pages 124-144.
    5. Sebastian Goebel & Barbara E. Weißenberger, 2017. "Effects of management control mechanisms: towards a more comprehensive analysis," Journal of Business Economics, Springer, vol. 87(2), pages 185-219, February.
    6. Boomsma, Roel & O'Dwyer, Brendan, 2019. "Constituting the governable NGO: The correlation between conduct and counter-conduct in the evolution of funder-NGO accountability relations," Accounting, Organizations and Society, Elsevier, vol. 72(C), pages 1-20.
    7. Chenhall, Robert H. & Moers, Frank, 2015. "The role of innovation in the evolution of management accounting and its integration into management control," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 1-13.
    8. Hall, Matthew & O'Dwyer, Brendan, 2017. "Accounting, non-governmental organizations and civil society: The importance of nonprofit organizations to understanding accounting, organizations and society," Accounting, Organizations and Society, Elsevier, vol. 63(C), pages 1-5.
    9. Baxter, Jane & Carlsson-Wall, Martin & Chua, Wai Fong & Kraus, Kalle, 2019. "Accounting and passionate interests: The case of a Swedish football club," Accounting, Organizations and Society, Elsevier, vol. 74(C), pages 21-40.
    10. Christian Kleine & Barbara Weißenberger, 2014. "Leadership impact on organizational commitment: the mediating role of management control systems choice," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 24(3), pages 241-266, January.
    11. Masquefa, Bertrand & Gallhofer, Sonja & Haslam, Jim, 2017. "Developing appreciation of micro-organizational processes of accounting change and indicating pathways to more ‘Enabling Accounting’ in a micro-organizational domain of research and development," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 44(C), pages 59-82.
    12. Eva Lövstål & Anne-Marie Jontoft, 2017. "Tensions at the intersection of management control and innovation: a literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(1), pages 41-79, February.
    13. Chen, Clara Xiaoling & Lill, Jeremy B. & Lucianetti, Lorenzo, 2023. "Performance measurement system diversity and product innovation: Evidence from longitudinal survey data," Accounting, Organizations and Society, Elsevier, vol. 111(C).
    14. Christina Boedker & Kar Ming Chong, 2022. "The mediating role of accounting controls between supervisors' empowering leadership style and subordinates' creativity and goal productivity," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4587-4614, December.
    15. Bellora-Bienengräber, Lucia & Derfuss, Klaus & Endrikat, Jan, 2023. "Taking stock of research on the levers of control with meta-analytic methods: Stylized facts and boundary conditions," Accounting, Organizations and Society, Elsevier, vol. 106(C).
    16. Clerkin, Brendan & Quinn, Martin & Connolly, Ciaran, 2024. "Decoupled accounting in a non-profit context: An explanation for stable management accounting?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 99(C).
    17. Andrea Fried, 2017. "Terminological distinctions of ‘control’: a review of the implications for management control research in the context of innovation," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(1), pages 5-40, February.
    18. Emer Curtis & Breda Sweeney, 2017. "Managing different types of innovation: mutually reinforcing management control systems and the generation of dynamic tension," Accounting and Business Research, Taylor & Francis Journals, vol. 47(3), pages 313-343, April.
    19. Lill, Philipp A. & Wald, Andreas, 2021. "The agility-control-nexus: A levers of control approach on the consequences of agility in innovation projects," Technovation, Elsevier, vol. 107(C).
    20. Müller-Stewens, Benedikt & Widener, Sally K. & Möller, Klaus & Steinmann, Jan-Christoph, 2020. "The role of diagnostic and interactive control uses in innovation," Accounting, Organizations and Society, Elsevier, vol. 80(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:63:y:2023:i:2:p:2273-2294. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.