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The Role of Management Control System in Mitigating Corruption: The Levers of Control Perspective

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  • Noor Hasniza Haron
  • Norhayati Alias
  • Tuan Zainun Tuan Mat
  • Mazurina Mohd Ali
  • Noraini Johan

Abstract

A Management Control System (MCS) is a comprehensive mechanism organizations can use to ensure that their strategies and plans are effectively implemented to achieve their objectives. This concept paper explores the application of Management Control Systems (MCS), specifically concerning levers of control (LOC), for behavioral control. Based on the comprehensive literature review, it is expected that LOC will be able to provide a pathway to mitigate corruption not only from the perspective of fraud diamond theory but also from the perspective of agency theory. Agency theory highlights the inherent conflict of interest between agents, who have more information about their actions and intentions, and principals, who rely on agents to act in their best interest. This information asymmetry creates opportunities for agents to engage in corrupt practices, such as embezzlement, bribery, or fraud, including unethical behavior that may undermine organizational goals and trust. Effective control mechanisms are essential to mitigate these risks and ensure alignment between agents' actions and principals' objectives. Furthermore, organizations can apply the principles of fraud diamond theory when creating an effective control framework to deter corruption.

Suggested Citation

  • Noor Hasniza Haron & Norhayati Alias & Tuan Zainun Tuan Mat & Mazurina Mohd Ali & Noraini Johan, 2024. "The Role of Management Control System in Mitigating Corruption: The Levers of Control Perspective," Information Management and Business Review, AMH International, vol. 16(3), pages 166-173.
    • Handle: RePEc:rnd:arimbr:v:16:y:2024:i:3:p:166-173
    DOI: 10.22610/imbr.v16i3(I).3962
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    2. Patricia Martyn & Breda Sweeney & Emer Curtis, 2016. "Strategy and control: 25 years of empirical use of Simons’ Levers of Control framework," Journal of Accounting & Organizational Change, Emerald Group Publishing Limited, vol. 12(3), pages 281-324, September.
    3. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
    4. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
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