IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v70y2017icp202-213.html
   My bibliography  Save this article

Effect of transformational-leadership style and management control system on managerial performance

Author

Listed:
  • Nguyen, Thi Thu
  • Mia, Lokman
  • Winata, Lanita
  • Chong, Vincent K.

Abstract

Our study adds perspective on research into choices in the design of management control systems by examining: (1) how transformational-leadership style influences the choice of the design of a comprehensive performance-measurement system (PMS) and reward system; (2) how subordinate managers' reliance on broad-scope accounting (BSA) information facilitates their managerial decision-making processes and managerial performance. Our results suggest that transformational-leadership style has a significant positive and direct effect on managerial performance. We find that it has a significant positive and direct effect on the use of BSA information and comprehensive PMS, but has no significant effect on reward systems. We also find that transformational-leadership style has a partial indirect effect on managerial performance via three mediators, namely, comprehensive PMS, reward systems, and BSA information. Our findings shed light on how such mediators intervene in the relationship between transformational-leadership style and managerial performance.

Suggested Citation

  • Nguyen, Thi Thu & Mia, Lokman & Winata, Lanita & Chong, Vincent K., 2017. "Effect of transformational-leadership style and management control system on managerial performance," Journal of Business Research, Elsevier, vol. 70(C), pages 202-213.
    • Handle: RePEc:eee:jbrese:v:70:y:2017:i:c:p:202-213
    DOI: 10.1016/j.jbusres.2016.08.018
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296316305057
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2016.08.018?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Axel K-D. Schulz & Anne Wu & Chee W. Chow, 2010. "Environmental Uncertainty, Comprehensive Performance Measurement Systems, Performance-Based Compensation, and Organizational Performance," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 17(1), pages 17-39.
    2. Birasnav, M., 2014. "Knowledge management and organizational performance in the service industry: The role of transformational leadership beyond the effects of transactional leadership," Journal of Business Research, Elsevier, vol. 67(8), pages 1622-1629.
    3. van Veen-Dirks, Paula, 2010. "Different uses of performance measures: The evaluation versus reward of production managers," Accounting, Organizations and Society, Elsevier, vol. 35(2), pages 141-164, February.
    4. Otley, Dt, 1978. "Budget Use And Managerial Performance," Journal of Accounting Research, Wiley Blackwell, vol. 16(1), pages 122-149.
    5. Chow, Chee W. & Shields, Michael D. & Wu, Anne, 1999. "The importance of national culture in the design of and preference for management controls for multi-national operations," Accounting, Organizations and Society, Elsevier, vol. 24(5-6), pages 441-461, July.
    6. Hall, Matthew, 2008. "The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance," Accounting, Organizations and Society, Elsevier, vol. 33(2-3), pages 141-163.
    7. Gumusluoglu, Lale & Ilsev, Arzu, 2009. "Transformational leadership, creativity, and organizational innovation," Journal of Business Research, Elsevier, vol. 62(4), pages 461-473, April.
    8. Chee W. Chow & F. Johnny Deng & Susana Yuen, 2006. "The adequacy of information for managerial decision-making in China's business enterprises: an exploratory study," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 3(3), pages 287-303.
    9. O'Connor, Neale G. & Deng, Johnny & Luo, Yadong, 2006. "Political constraints, organization design and performance measurement in China's state-owned enterprises," Accounting, Organizations and Society, Elsevier, vol. 31(2), pages 157-177, February.
    10. Chong, Vincent K., 1996. "Management accounting systems, task uncertainty and managerial performance: A research note," Accounting, Organizations and Society, Elsevier, vol. 21(5), pages 415-421, July.
    11. Min‐Tsung Cheng, 2012. "The joint effect of budgetary participation and broad‐scope management accounting systems on management performance," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 20(3), pages 184-197, September.
    12. Tiessen, P. & Waterhouse, J. H., 1983. "Towards a descriptive theory of management accounting," Accounting, Organizations and Society, Elsevier, vol. 8(2-3), pages 251-267, May.
    13. Ensley, Michael D. & Pearce, Craig L. & Hmieleski, Keith M., 2006. "The moderating effect of environmental dynamism on the relationship between entrepreneur leadership behavior and new venture performance," Journal of Business Venturing, Elsevier, vol. 21(2), pages 243-263, March.
    14. O'Connor, Neale G. & Chow, Chee W. & Wu, Anne, 2004. "The adoption of "Western" management accounting/controls in China's state-owned enterprises during economic transition," Accounting, Organizations and Society, Elsevier, vol. 29(3-4), pages 349-375.
    15. Sally K. Widener & Margaret B. Shackell & Elizabeth A. Demers, 2008. "The Juxtaposition of Social Surveillance Controls with Traditional Organizational Design Components," Contemporary Accounting Research, John Wiley & Sons, vol. 25(2), pages 605-638, June.
    16. Margaret A. Abernethy & Jan Bouwens, 2005. "Determinants of accounting innovation implementation," Abacus, Accounting Foundation, University of Sydney, vol. 41(3), pages 217-240, October.
    17. Ittner, Christopher D. & Larcker, David F. & Randall, Taylor, 2003. "Performance implications of strategic performance measurement in financial services firms," Accounting, Organizations and Society, Elsevier, vol. 28(7-8), pages 715-741.
    18. 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.
    19. Lee Cronbach, 1951. "Coefficient alpha and the internal structure of tests," Psychometrika, Springer;The Psychometric Society, vol. 16(3), pages 297-334, September.
    20. Menguc, Bulent & Auh, Seigyoung & Shih, Eric, 2007. "Transformational leadership and market orientation: Implications for the implementation of competitive strategies and business unit performance," Journal of Business Research, Elsevier, vol. 60(4), pages 314-321, April.
    21. Anne M. Farrell & Kathryn Kadous & Kristy L. Towry, 2008. "Contracting on Contemporaneous versus Forward†Looking Measures: An Experimental Investigation," Contemporary Accounting Research, John Wiley & Sons, vol. 25(3), pages 773-802, September.
    22. Anderson, Shannon W. & Lanen, William N., 1999. "Economic transition, strategy and the evolution of management accounting practices: the case of India," Accounting, Organizations and Society, Elsevier, vol. 24(5-6), pages 379-412, July.
    23. Scott, Thomas W. & Tiessen, P., 1999. "Performance measurement and managerial teams," Accounting, Organizations and Society, Elsevier, vol. 24(3), pages 263-285, April.
    24. Chenhall, R. H. & Langfield-Smith, K., 1998. "The relationship between strategic priorities, management techniques and management accounting: an empirical investigation using a systems approach," Accounting, Organizations and Society, Elsevier, vol. 23(3), pages 243-264, April.
    25. Sprinkle, Geoffrey B., 2003. "Perspectives on experimental research in managerial accounting," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 287-318.
    26. Vandenbosch, Betty, 1999. "An empirical analysis of the association between the use of executive support systems and perceived organizational competitiveness," Accounting, Organizations and Society, Elsevier, vol. 24(1), pages 77-92, January.
    27. John Hulland, 1999. "Use of partial least squares (PLS) in strategic management research: a review of four recent studies," Strategic Management Journal, Wiley Blackwell, vol. 20(2), pages 195-204, February.
    28. Narayanan, V. G. & Davila, Antonio, 1998. "Using delegation and control systems to mitigate the trade-off between the performance-evaluation and belief-revision uses of accounting signals," Journal of Accounting and Economics, Elsevier, vol. 25(3), pages 255-282, June.
    29. Leslie G. Eldenburg & Ranjani Krishnan, 2008. "The Influence of Ownership on Accounting Information Expenditures," Contemporary Accounting Research, John Wiley & Sons, vol. 25(3), pages 739-772, September.
    30. Mia, Lokman & Chenhall, Robert H., 1994. "The usefulness of management accounting systems, functional differentiation and managerial effectiveness," Accounting, Organizations and Society, Elsevier, vol. 19(1), pages 1-13, January.
    31. Kunz, Alexis H. & Pfaff, Dieter, 2002. "Agency theory, performance evaluation, and the hypothetical construct of intrinsic motivation," Accounting, Organizations and Society, Elsevier, vol. 27(3), pages 275-295, April.
    32. Lau, Chong M. & Martin-Sardesai, Ann V., 2012. "The role of organisational concern for workplace fairness in the choice of a performance measurement system," The British Accounting Review, Elsevier, vol. 44(3), pages 157-172.
    33. Banker, Rajiv D. & Lee, Seok-Young & Potter, Gordon, 1996. "A field study of the impact of a performance-based incentive plan," Journal of Accounting and Economics, Elsevier, vol. 21(2), pages 195-226, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maleen Z. Gong & Nava Subramaniam, 2020. "Principal leadership style and school performance: mediating roles of risk management culture and management control systems use in Australian schools," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2427-2466, September.
    2. Elsa Pedroso & Carlos F. Gomes, 2024. "Discerning interrelationships among management accounting systems, organizational variables, and managerial performance," SN Business & Economics, Springer, vol. 4(9), pages 1-27, September.
    3. Liem Tan Vo & Nhi Van Vo & Toan Ngoc Pham & Nguyen Ngoc Hien, 2023. "The Impact of Historical Performance and Managerial Risk-taking Propensity on the Behavior of Choosing Prospector Strategy and Using Strategic Management Accounting Information in Viet Nam Manufacture," SAGE Open, , vol. 13(4), pages 21582440231, December.
    4. Chen, Jian-Xun & Sharma, Piyush & Zhan, Wu & Liu, Li, 2019. "Demystifying the impact of CEO transformational leadership on firm performance: Interactive roles of exploratory innovation and environmental uncertainty," Journal of Business Research, Elsevier, vol. 96(C), pages 85-96.
    5. Dittes, Sven & Richter, Shahper & Richter, Alexander & Smolnik, Stefan, 2019. "Toward the workplace of the future: How organizations can facilitate digital work," Business Horizons, Elsevier, vol. 62(5), pages 649-661.
    6. Rudi Rusli & Yuswar Zainul Basri & Willy Arafah, 2020. "Role of CEO Leadership towards the Performance of Indonesian SOEs," International Review of Management and Marketing, Econjournals, vol. 10(2), pages 96-106.
    7. Jensen, Maika & Potočnik, Kristina & Chaudhry, Sara, 2020. "A mixed-methods study of CEO transformational leadership and firm performance," European Management Journal, Elsevier, vol. 38(6), pages 836-845.
    8. Paolo Popoli, 2021. "Designing Management Control Systems: Systemic vs Sectoral Approach," International Journal of Business and Management, Canadian Center of Science and Education, vol. 14(6), pages 130-130, July.
    9. Lei Hui & Sengphet Phouvong & Le Ba Phong, 2018. "Transformational Leadership Facilitates Innovation Capability: The Mediating Roles of Interpersonal Trust," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 9(3), pages 1-9, May.
    10. Petrus Maasalo & Henri Teittinen, 2023. "A conceptual framework for exploring management control style within psychological empowerment," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 11(1), pages 1-18, May.
    11. Thi Cam Tu Luong & Ann Jorissen & Ine Paeleman, 2019. "Performance Measurement for Sustainability: Does Firm Ownership Matter," Sustainability, MDPI, vol. 11(16), pages 1-35, August.
    12. Than Thanh Son & Le Ba Phong & Bùi Thị Thu Loan, 2020. "Transformational Leadership and Knowledge Sharing: Determinants of Firm’s Operational and Financial Performance," SAGE Open, , vol. 10(2), pages 21582440209, May.
    13. Haroon ur Rashid Khan & Murad Ali & Hossein G. T. Olya & Muhamamd Zulqarnain & Zubair Rashid Khan, 2018. "Transformational leadership, corporate social responsibility, organizational innovation, and organizational performance: Symmetrical and asymmetrical analytical approaches," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(6), pages 1270-1283, November.
    14. Ibrahim Bader Alharbi & Rossilah Jamil & Nik Hasnaa Nik Mahmood & Awaluddin Mohamed Shaharoun, 2023. "Transformational Leadership’s Impact on Organizational Innovation: The Mediating Role of Management Control System," Global Business Review, International Management Institute, vol. 24(6), pages 1418-1433, December.
    15. Chido Samantha Madhanga & Steven Kayambazinthu Msosa & Tatenda Chikukwa, 2022. "Assessing various leadership styles used at a multinational company specialising in marine services in Sub-Saharan Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(2), pages 136-143, March.
    16. Ahmed Mohamed Alkindi & John Chandler, 2018. "The Impacts of Leadership Styles and Organisational Cultures on Public Innovations in the Emirates," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(7), pages 1-1, June.
    17. Rilla Gantino, 2020. "Leadership Style, Intellectual Capital and Corporate Social Responsibility on Performance, a Comparison Model of Listed Companies in Indonesia," GATR Journals afr192, Global Academy of Training and Research (GATR) Enterprise.
    18. Pedroso, Elsa & Gomes, Carlos F., 2024. "Disentangling the effects of top management on management accounting systems utilization," International Journal of Accounting Information Systems, Elsevier, vol. 53(C).
    19. Sven Dittes & Stefan Smolnik, 2019. "Towards a digital work environment: the influence of collaboration and networking on employee performance within an enterprise social media platform," Journal of Business Economics, Springer, vol. 89(8), pages 1215-1243, December.
    20. Sarra Berraies & Belgacem Bchini, 2019. "Effect Of Leadership Styles On Financial Performance: Mediating Roles Of Exploitative And Exploratory Innovations Case Of Knowledge-Intensive Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-33, April.
    21. Shahper Richter & Alexander Richter, 2020. "Digital Nomads," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 62(1), pages 77-81, February.
    22. Tahar, Afrizal & Abdillah, Muhammad Akhid & Institute of Research, Asian, 2021. "The Influence of Leadership Style on Managerial Performance of Village Governments with Motivation as Mediation," OSF Preprints xeqf7, Center for Open Science.
    23. Cheffi, Walid & Kaleem Zahir-ul-Hassan, Muhammad & Omer Farooq, Muhammad & Baqrain, Abdelrahman & Mohamed Habib Mansour, Mourad, 2023. "Ethical leadership, management control systems and circular economy in SMEs in an emerging economy, the UAE," Journal of Business Research, Elsevier, vol. 156(C).
    24. Zarinah Abdul Rasit & Che Ruhana Isa Mohamed Isa & Nadiah Abdul Hamid & Siti Nurhazwani Kamarudin, 2023. "Cognitive Motivational Perspectives of Performance Measurement System and Organisational Commitment: Role Ambiguity as a Mediator," Accounting and Finance Research, Sciedu Press, vol. 12(2), pages 1-64, May.
    25. Jacobo Gomez-Conde & Ernesto Lopez-Valeiras & Fabricia Silva Rosa & Rogério João Lunkes, 2023. "The effect of management control systems in managing the unknown: Does the market appreciate the breadth of vision?," Review of Managerial Science, Springer, vol. 17(8), pages 2769-2795, November.

    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. Cadez, Simon & Guilding, Chris, 2008. "An exploratory investigation of an integrated contingency model of strategic management accounting," Accounting, Organizations and Society, Elsevier, vol. 33(7-8), pages 836-863.
    2. 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.
    3. Thi Cam Tu Luong & Ann Jorissen & Ine Paeleman, 2019. "Performance Measurement for Sustainability: Does Firm Ownership Matter," Sustainability, MDPI, vol. 11(16), pages 1-35, August.
    4. Hall, Matthew, 2008. "The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance," Accounting, Organizations and Society, Elsevier, vol. 33(2-3), pages 141-163.
    5. Luft, Joan & Shields, Michael D., 2003. "Mapping management accounting: graphics and guidelines for theory-consistent empirical research," Accounting, Organizations and Society, Elsevier, vol. 28(2-3), pages 169-249.
    6. Ittner, Christopher D. & Larcker, David F., 2001. "Assessing empirical research in managerial accounting: a value-based management perspective," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 349-410, December.
    7. Nitzl, Christian, 2016. "The use of partial least squares structural equation modelling (PLS-SEM) in management accounting research: Directions for future theory development," Journal of Accounting Literature, Elsevier, vol. 37(C), pages 19-35.
    8. Chapman, Christopher S. & Kihn, Lili-Anne, 2009. "Information system integration, enabling control and performance," Accounting, Organizations and Society, Elsevier, vol. 34(2), pages 151-169, February.
    9. Paolo Perego & Frank Hartmann, 2009. "Aligning Performance Measurement Systems With Strategy: The Case of Environmental Strategy," Abacus, Accounting Foundation, University of Sydney, vol. 45(4), pages 397-428, December.
    10. Abdel-Maksoud, Ahmed & Cheffi, Walid & Ghoudi, Kilani, 2016. "The mediating effect of shop-floor involvement on relations between advanced management accounting practices and operational non-financial performance indicators," The British Accounting Review, Elsevier, vol. 48(2), pages 169-184.
    11. Hall, Matthew, 2011. "Do comprehensive performance measurement systems help or hinder managers' mental model development?," LSE Research Online Documents on Economics 36703, London School of Economics and Political Science, LSE Library.
    12. Iryna Alves & Sofia M. Lourenço, 2022. "The use of non-financial performance measures for managerial compensation: evidence from SMEs," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 33(2), pages 151-187, June.
    13. Manthei, Kathrin & Sliwka, Dirk & Vogelsang, Timo, 2021. "Information Provision, Incentives, and Attention: A Field Experiment on Facilitating and Influencing Managers' Decisions," IZA Discussion Papers 14199, Institute of Labor Economics (IZA).
    14. Van der Stede, Wim A. & Young, S. Mark & Chen, Clara Xiaoling, 2005. "Assessing the quality of evidence in empirical management accounting research: The case of survey studies," Accounting, Organizations and Society, Elsevier, vol. 30(7-8), pages 655-684.
    15. Jinhwan Kim & Hyeob Kim & HyukJun Kwon, 2020. "The Impact of Employees’ Perceptions of Strategic Alignment on Sustainability: An Empirical Investigation of Korean Firms," Sustainability, MDPI, vol. 12(10), pages 1-23, May.
    16. O’Connor, Neale G. & Vera-Muñoz, Sandra C. & Chan, Francis, 2011. "Competitive forces and the importance of management control systems in emerging-economy firms: The moderating effect of international market orientation," Accounting, Organizations and Society, Elsevier, vol. 36(4), pages 246-266.
    17. Henri, Jean-Francois, 2006. "Organizational culture and performance measurement systems," Accounting, Organizations and Society, Elsevier, vol. 31(1), pages 77-103, January.
    18. Christoph Feichter & Isabella Grabner, 2020. "Empirische Forschung zu Management Control – Ein Überblick und neue Trends [Empirical Management Control Reserach—An Overview and Future Directions]," Schmalenbach Journal of Business Research, Springer, vol. 72(2), pages 149-181, June.
    19. LIN, Zhijun & YU, Zengbiao & ZHANG, Liqun, 2014. "Performance outcomes of balanced scorecard application in hospital administration in China," China Economic Review, Elsevier, vol. 30(C), pages 1-15.
    20. Gomez-Conde, Jacobo & Lopez-Valeiras, Ernesto & Ripoll-Feliú, Vicente M. & Gonzalez-Sanchez, María Beatriz, 2013. "El efecto mediador y moderador de la internacionalización en la relación entre los sistemas de control de gestión y el compromiso con la innovación," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 16(1), pages 53-65.

    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:eee:jbrese:v:70:y:2017:i:c:p:202-213. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    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.