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Management control system, corporate social responsibility, and firm performance

Author

Listed:
  • Agus Ismaya Hasanudin

    (Sultan Ageng Tirtayasa University, Indonesia)

  • Yuliansyah Yuliansyah

    (Lampung University, Indonesia)

  • Jamaliah Said

    (Universiti Teknologi MARA, Malaysia)

  • Christin Susilowati

    (University of Brawijaya, Indonesia)

  • Muafi

    (Islamic University of Indonesia, Indonesia)

Abstract

The aim of this study is to examine, through corporate reputation and double-loop learning, how Management Control System (MCS) in the form of a diagnostic and interactive system positively and significantly affects corporate social responsibility (CSR) and the firm performance (FP). This study uses a sample of 163 respondents who are middle to top level managers of manufacturing companies in Banten Province. We test hypotheses by using structural equation modelling, especially SmartPLS. We find that the effect of MCS on CSR does not directly affect the corporate firm performance, and that reputation and Double-Loop Learning (DLL) do mediate better firm performance. The study implies that MCS can help the company to support the process of CSR application more effectively when it matches performance to the expectation of stakeholders. In addition, manufacturers must maintain their reputation and increase their double-loop learning to seize opportunities as a result of their socially responsible activity, and to achieve optimal corporate firm performance.

Suggested Citation

  • Agus Ismaya Hasanudin & Yuliansyah Yuliansyah & Jamaliah Said & Christin Susilowati & Muafi, 2019. "Management control system, corporate social responsibility, and firm performance," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(3), pages 1354-1368, March.
    • Handle: RePEc:ssi:jouesi:v:6:y:2019:i:3:p:1354-1368
    DOI: 10.9770/jesi.2019.6.3(21)
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    References listed on IDEAS

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    1. Scott L. Newbert, 2007. "Empirical research on the resource‐based view of the firm: an assessment and suggestions for future research," Strategic Management Journal, Wiley Blackwell, vol. 28(2), pages 121-146, February.
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    Cited by:

    1. Fuzhen Liu & Kee-hung Lai & Wei Cai, 2021. "Responsible Production for Sustainability: Concept Analysis and Bibliometric Review," Sustainability, MDPI, vol. 13(3), pages 1-27, January.
    2. N.A. Prodanova & N.S. Plaskova & V.A. Dikikh & L.V. Sotnikova & L.K. Nikandrova & G.A. Skachko, 2019. "Techniques for Assessing the Investment Attractiveness of a Commercial Organization based on Classical Methods of Strategic Economic Analysis," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 35-46.
    3. Larysa Cherchyk & Mykola Shershun & Nina Khumarova & Taras Mykytyn & Artur Cherchyk, 2019. "Assessment of forest enterprises' performance: integrating economic security and ecological impact," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(4), pages 1784-1797, June.
    4. Tiantian Wang & Kamisah Ismail & Khairul Saidah Abas Azmi, 2022. "The Rise of MCS and EMA in the Sustainable Field: A Systematic Literature Analysis," Sustainability, MDPI, vol. 14(24), pages 1-12, December.
    5. Fernando García & Jairo González-Bueno & Javier Oliver & Nicola Riley, 2019. "Selecting Socially Responsible Portfolios: A Fuzzy Multicriteria Approach," Sustainability, MDPI, vol. 11(9), pages 1-14, April.
    6. Hafizah Abd-Mutalib & Che Zuriana Muhammad Jamil & Rapiah Mohamed & Nor Atikah Shafai & Saidatul Nurul Hidayah Jannatun Naim Nor-Ahmad, 2021. "Firm and Board Characteristics, and E-Waste Disclosure: A Study in the Era of Digitalisation," Sustainability, MDPI, vol. 13(18), pages 1-14, September.

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    More about this item

    Keywords

    Management control system (MCS); Corporate Social Responsibility (CSR); reputation (Rep); Double-Loop Learning (DLL); Firm Performance (FP);
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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