Linking uses of management control systems with strategy-performance relationship
Australian and New Zealand Academy of Management
Faculty of Business
School of Business and Law
In this study, the moderating effects created by diagnostic use and interactive use of management control systems (MCS) on strategy-performance relationship are examined. The results of the survey-based research support the postulate that these two uses moderate the relationship between business strategy and performance. However, it is found that the moderating effect created by the diagnostic use of MCS is more significant when the cost leadership strategy is used for performance. No evidence is found in favor of Porter’s proposition on mutual exclusiveness of business strategies for better performance. Consequently, the results of this study have important implications for both management practice and the academic literature.