The effect of management control system with four lever's of control model and remuneration on employees’ performance: A study at Brawijaya University

Authors

  • Asri Indika Sari
  • Unti Ludigdo Universitas Brawijaya
  • Ali Djamhuri Universitas Brawijaya

DOI:

https://doi.org/10.21776/ijabs.2023.31.2.693

Keywords:

Beliefs System, Boundary Systems, Employees’ Performance, Interactive Control System, Diagnostic Control System, Management Control System, Remuneration

Abstract

Purpose—This study applies contingency theory to examine the effect of the management control system (MCS) and remuneration scheme on Brawijaya University's employees' performance. The MCS in this study is understood following the Four Levers of Control (LOC), which includes belief systems, boundary systems, diagnostic control systems, and interactive control systems.

Design/methodology/approach—For this analysis, the data collection method employed in this study was cluster random sampling of all employees except structural officials of Brawijaya University (UB). 355 respondents from Headquarters and 7 Faculties participated in this study. The data were collected, and the technique analysis used was SEM—PLS programs.

Findings—Based on the analysis and discussion, the results of this study showed that employees’ performance was positively impacted by the boundary system, diagnostic control system, and remuneration. Employees’ performance could be improved by implementing an effective boundary system and diagnostic control system and providing fair and adequate remuneration. Employees’ performance was unaffected by the belief or interactive control systems.

Practical implications—This study's Empirical evidence also showed that beliefs systems and interactive control systems do not affect the performance of UB employees.

Originality/value — A management Control System with the LOC model (Simons, 1995) is implemented in private organizations. The researchers want to adopt the LOC model (Simons, 1995) in public organizations at Brawijaya University. This research is able to provide benefits for related officials in Universitas Brawijaya to implement a Management Control System with the LOC model as a means of controlling employee performance. Employees can be motivated to improve their performance with the management control system and the LOC model.

Paper type — Case study

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Published

2023-10-04

How to Cite

Indika Sari, A. ., Ludigdo, U., & Djamhuri, A. (2023). The effect of management control system with four lever’s of control model and remuneration on employees’ performance: A study at Brawijaya University. The International Journal of Accounting and Business Society, 31(2), 117–130. https://doi.org/10.21776/ijabs.2023.31.2.693

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Vol. 31 No. 2 (2023): The International Journal of Accounting and Business Society

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