IDEAS home Printed from https://ideas.repec.org/a/spr/jglont/v9y2019i1d10.1186_s40497-019-0155-5.html
   My bibliography  Save this article

The mediating role of organizational capabilities between organizational performance and its determinants

Author

Listed:
  • Shafique-ur Rehman

    (Universiti Utara Malaysia)

  • Rapiah Mohamed

    (Universiti Utara Malaysia)

  • Hazeline Ayoup

    (Universiti Utara)

Abstract

The objective of the current research is to determine the influence of management control system (MCS) as a package on organization performance, and organizational capabilities play an important role to explain this relationship. Data were collected from general managers and chief financial officers from the textile industry of Pakistan to empirically test hypotheses of this study. One hundred sixty questionnaires were used in the analysis through partial least square equation modeling technique. The findings elucidated a significant influence of cybernetic, rewards and compensation, and administrative controls on organizational performance. The same findings were found with cultural, cybernetic, rewards and compensation, planning, and administrative controls with organizational capabilities. Despite this, planning controls and cultural controls have no influence on organizational performance. Organizational capabilities mediate the relationship between all five elements of MCS as a package and organizational performance. The findings provide insights to top management of the textile industry to enhance organizational performance by focusing on indicators mentioned in the study. In addition, improvements in organizational capabilities will also enhance organizational performance. The current research is the pioneer study that tests the mediating role of organizational capabilities between MCS as a package and organizational performance with the help of resource orchestration theory and resource-based view theory. Subjects: management accounting, business, performance management

Suggested Citation

  • Shafique-ur Rehman & Rapiah Mohamed & Hazeline Ayoup, 2019. "The mediating role of organizational capabilities between organizational performance and its determinants," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-23, December.
    • Handle: RePEc:spr:jglont:v:9:y:2019:i:1:d:10.1186_s40497-019-0155-5
    DOI: 10.1186/s40497-019-0155-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s40497-019-0155-5
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s40497-019-0155-5?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. 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.
    2. Gregory G. Dess & Richard B. Robinson, 1984. "Measuring organizational performance in the absence of objective measures: The case of the privately‐held firm and conglomerate business unit," Strategic Management Journal, Wiley Blackwell, vol. 5(3), pages 265-273, July.
    3. Bonner, Sarah E. & Sprinkle, Geoffrey B., 2002. "The effects of monetary incentives on effort and task performance: theories, evidence, and a framework for research," Accounting, Organizations and Society, Elsevier, vol. 27(4-5), pages 303-345.
    4. Luftim CANIA, 2014. "The Impact of Strategic Human Resource Management on Organizational Performance," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 17(2), pages 373-383, December.
    5. Walayat Shah & Usman Ali Warraich & Abdul Kabeer Kazi, 2012. "Challenges Faced by Textile Industry of Pakistan: Suggested Solutions," KASBIT Business Journals (KBJ), Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 5, pages 33-39, December.
    6. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7-8), pages 1034-1062.
    7. Sarstedt, Marko & Ringle, Christian M. & Smith, Donna & Reams, Russell & Hair, Joseph F., 2014. "Partial least squares structural equation modeling (PLS-SEM): A useful tool for family business researchers," Journal of Family Business Strategy, Elsevier, vol. 5(1), pages 105-115.
    8. R. T. Lenz, 1981. "‘Determinants’ of organizational performance: An interdisciplinary review," Strategic Management Journal, Wiley Blackwell, vol. 2(2), pages 131-154, April.
    9. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7‐8), pages 1034-1062, September.
    10. Flamholtz, Eric G. & Das, T. K. & Tsui, Anne S., 1985. "Toward an integrative framework of organizational control," Accounting, Organizations and Society, Elsevier, vol. 10(1), pages 35-50, January.
    11. Henri, Jean-Francois, 2006. "Management control systems and strategy: A resource-based perspective," Accounting, Organizations and Society, Elsevier, vol. 31(6), pages 529-558, August.
    12. Flamholtz, Eric G., 1983. "Accounting, budgeting and control systems in their organizational context: Theoretical and empirical perspectives," Accounting, Organizations and Society, Elsevier, vol. 8(2-3), pages 153-169, May.
    13. Chris Akroyd & William Maguire, 2011. "The roles of management control in a product development setting," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 8(3), pages 212-237, August.
    14. Acquaah, Moses, 2013. "Management control systems, business strategy and performance: A comparative analysis of family and non-family businesses in a transition economy in sub-Saharan Africa," Journal of Family Business Strategy, Elsevier, vol. 4(2), pages 131-146.
    15. Margaret A. Abernethy & Wai Fong Chua, 1996. "A Field Study of Control System “Redesign†: The Impact of Institutional Processes on Strategic Choice," Contemporary Accounting Research, John Wiley & Sons, vol. 13(2), pages 569-606, September.
    16. 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.
    17. Alvesson, Mats & Karreman, Dan, 2004. "Interfaces of control. Technocratic and socio-ideological control in a global management consultancy firm," Accounting, Organizations and Society, Elsevier, vol. 29(3-4), pages 423-444.
    18. Henri, Jean-François & Journeault, Marc, 2010. "Eco-control: The influence of management control systems on environmental and economic performance," Accounting, Organizations and Society, Elsevier, vol. 35(1), pages 63-80, January.
    19. David G. Sirmon & Michael A. Hitt, 2003. "Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms," Entrepreneurship Theory and Practice, , vol. 27(4), pages 339-358, October.
    20. Syed Abdul Sattar Shah & Anwar Ali Shah G.Syed & Faiz M.Shaikh, 2014. "Impact of Textile Industry on Pakistan Economy," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 62(3), pages 43-59, March.
    21. Abernethy, Margaret A. & Brownell, Peter, 1999. "The role of budgets in organizations facing strategic change: an exploratory study," Accounting, Organizations and Society, Elsevier, vol. 24(3), pages 189-204, April.
    22. Hoque, Zahirul, 2004. "A contingency model of the association between strategy, environmental uncertainty and performance measurement: impact on organizational performance," International Business Review, Elsevier, vol. 13(4), pages 485-502, August.
    23. Luliya Teeratansirikool & Sununta Siengthai & Yuosre Badir & Chotchai Charoenngam, 2013. "Competitive strategies and firm performance: the mediating role of performance measurement," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 62(2), pages 168-184, January.
    24. Chenhall, Robert H., 2005. "Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: an exploratory study," Accounting, Organizations and Society, Elsevier, vol. 30(5), pages 395-422, July.
    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. Zhenia Tahmasebinia & Aliakbar Jokar & Amir Mohebi & Sogand Fardmehregan & Mehdi Beigi & Foozhan Tahmasebinia, 2022. "A Study on the Impact of Market and Strategic Orientations on Business Performance by Emphasizing the Role of Innovation as a Mediator," Business Management and Strategy, Macrothink Institute, vol. 13(2), pages 67-84, December.
    2. Sunday Stephen AJEMUNIGBOHUN & Ogorchukwu Augustine ISIMOYA & Ayobami Folarin ELEGUNDE, 2020. "Risk Attitude, Insurance Patronage and SMEs Performance: Empirical Evidence from Lagos, Nigeria," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 70-78.
    3. Eltigani Ahmed & James Kilika & Clare Gakenia, 2021. "The conceptualization of dynamic resource orchestration framework as an anchor for organizational resilience," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(7), pages 53-61, October.
    4. Henrique Faverzani Drago & Gilnei Luiz Moura & Luciana Santos Costa Vieira Silva & Claudimar Pereira Veiga & Fabíola Kaczam & Luciana Peixoto Santa Rita & Wesley Vieira Silva, 2023. "Reviewing the relationship between organizational performance, dynamic capabilities and strategic behavior," SN Business & Economics, Springer, vol. 3(1), pages 1-22, January.
    5. Kraus, Sascha & Rehman, Shafique Ur & García, F. Javier Sendra, 2020. "Corporate social responsibility and environmental performance: The mediating role of environmental strategy and green innovation," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    6. Muhammad Haseeb & Marcin Lis & Ilham Haouas & Leonardus WW Mihardjo, 2019. "The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia," Sustainability, MDPI, vol. 11(17), pages 1-20, August.
    7. Patricia Inês Schwantz & Leander Luiz Klein & Eugênio de Oliveira Simonetto, 2023. "The Relationship between Lean Practices and Organizational Performance: An Analysis of Operations Management in a Public Institution," Logistics, MDPI, vol. 7(3), pages 1-14, August.
    8. Marino-Romero, Jorge Alberto & Palos-Sánchez, Pedro R. & Velicia-Martín, Félix, 2024. "Evolution of digital transformation in SMEs management through a bibliometric analysis," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    9. Juan Manuel Ramon-Jeronimo & Raquel Florez-Lopez & Pedro Araujo-Pinzon, 2019. "Resource-Based View and SMEs Performance Exporting through Foreign Intermediaries: The Mediating Effect of Management Controls," Sustainability, MDPI, vol. 11(12), pages 1-26, June.
    10. Shafique Ur Rehman & Anam Bhatti & Naveed Iqbal Chaudhry, 2019. "Mediating effect of innovative culture and organizational learning between leadership styles at third-order and organizational performance in Malaysian SMEs," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-24, December.
    11. Aamir Rashid & Rizwana Rasheed, 2023. "Mediation of Inventory Management in the Relationship Between Knowledge and Firm Performance," SAGE Open, , vol. 13(2), pages 21582440231, April.
    12. Shafique Ur Rehman & Anam Bhatti & Rapiah Mohamed & Hazeline Ayoup, 2019. "The moderating role of trust and commitment between consumer purchase intention and online shopping behavior in the context of Pakistan," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-25, December.
    13. Shafique Ur Rehman & Stefano Bresciani & Dorra Yahiaoui & Elisa Giacosa, 2022. "Environmental sustainability orientation and corporate social responsibility influence on environmental performance of small and medium enterprises: The mediating effect of green capability," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(6), pages 1954-1967, November.
    14. Suherman & Florentinus Pambudi Widiatmaka & Fitri Kensiwi & Didik Dwi Suharso & Sukirno & Pranyoto & Susena Karona Cahya & Kundori & Haniek Listyorini & Sapto Supriyanto & Pranoto & Sukrisno, 2024. "Resilience in tourism-based SMEs driven by initiatives and strategies through share value relational capital viewed from a resource-based theory perspective," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    15. Ibrahim Rashed AlTaweel & Sulieman Ibraheem Al-Hawary, 2021. "The Mediating Role of Innovation Capability on the Relationship between Strategic Agility and Organizational Performance," Sustainability, MDPI, vol. 13(14), pages 1-14, July.
    16. Maria Bano & Dr. Muhammad Nawaz & Touseef Ahmad & Fatima Ejaz, 2023. "The Performance of Small and Medium Sized Enterprises (SMEs) in Punjab: A Moderating Role of Corporate Image," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(3), pages 650-666.

    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. Shafique-ur Rehman & Rapiah Mohamed & Hazeline Ayoup, 2018. "Management Control System (MCS) as a Package Elements Influence on Organizational Performance in the Pakistani context," Pakistan Journal of Humanities and Social Sciences, International Research Alliance for Sustainable Development (iRASD), vol. 6(3), pages :280-297, September.
    2. Henri, Jean-François & Journeault, Marc, 2010. "Eco-control: The influence of management control systems on environmental and economic performance," Accounting, Organizations and Society, Elsevier, vol. 35(1), pages 63-80, January.
    3. Kaveh Asiaei & Ruzita Jusoh & Omid Barani & Arash Asiaei, 2022. "How does green intellectual capital boost performance? The mediating role of environmental performance measurement systems," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1587-1606, May.
    4. Irene Eleonora Lisi, 2018. "Determinants and Performance Effects of Social Performance Measurement Systems," Journal of Business Ethics, Springer, vol. 152(1), pages 225-251, September.
    5. Henri, Jean-Francois, 2006. "Management control systems and strategy: A resource-based perspective," Accounting, Organizations and Society, Elsevier, vol. 31(6), pages 529-558, August.
    6. 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.
    7. Henri, Jean-Francois, 2006. "Organizational culture and performance measurement systems," Accounting, Organizations and Society, Elsevier, vol. 31(1), pages 77-103, January.
    8. Margaret A. Abernethy & Henri C. Dekker & Jennifer Grafton, 2021. "The Influence of Performance Measurement on the Processual Dynamics of Strategic Change," Management Science, INFORMS, vol. 67(1), pages 640-659, January.
    9. 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.
    10. 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).
    11. Abernethy, Margaret A. & Anderson, Shannon W. & Nair, Sujay & Jiang, Yile (Anson), 2021. "Manager ‘growth mindset’ and resource management practices," Accounting, Organizations and Society, Elsevier, vol. 91(C).
    12. Lueg, Rainer & Radlach, Ronny, 2016. "Managing sustainable development with management control systems: A literature review," European Management Journal, Elsevier, vol. 34(2), pages 158-171.
    13. Kaveh Asiaei & Nick Bontis & Omid Barani & Ruzita Jusoh, 2021. "Corporate social responsibility and sustainability performance measurement systems: implications for organizational performance," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(1), pages 85-126, March.
    14. M. Frigotto & Graziano Coller & Paolo Collini, 2013. "The Strategy and Management Control Systems relationship as emerging dynamic process," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(3), pages 631-656, August.
    15. Cooper, Christine, 2015. "Entrepreneurs of the self: The development of management control since 1976," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 14-24.
    16. Amizawati Mohd Amir, 2011. "The indirect effects of PMS design on Malaysian service firms' characteristics and performance," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 19(1), pages 31-49, May.
    17. Franco Visani, 2017. "Applying business analytics for performance measurement and management. The case study of a software company," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2017(2), pages 89-123.
    18. Ingrid Fasshauer, 2011. "Quand les cadres intermédiaires utilisent les outils de contrôle pour influencer la stratégie," Post-Print hal-00650427, HAL.
    19. Fábio Frezatti & Diógenes Souza Bido & Daniel Magalhães Mucci & Franciele Beck & Ana Paula Capuano Cruz, 2023. "The Impact of the Management Control System on the Family Business’ Intention to Maintain the Organization for Future Generations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 1145-1176, June.
    20. 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.

    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:spr:jglont:v:9:y:2019:i:1:d:10.1186_s40497-019-0155-5. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.