Effects of informal controls and psychological empowerment on job satisfaction

Abstract

The aim of this article was to investigate the effects of informal controls on psychological empowerment and job satisfaction. Despite previous studies having analyzed the role of certain management control systems in individual results, such as psychological empowerment and job satisfaction, the evidence on informal controls within this context is inconclusive. Credit union systems play a considerable role in economic growth, regional development, and employability. We therefore explore the perception of directors and managers of business units of one of the biggest cooperative systems regarding the informal controls used. Considering that job satisfaction has a series of implications for organizations (for example in employee loyalty and job performance), it is important to understand its determinants. The literature points to the growing concern among contemporary organizations about informal controls. Various studies focus on understanding the role of these controls and their respective effects on organizational and individual behaviors. From the individual perspective, there is a need to analyze the indirect effects of management controls on individual aspects by means of psychological variables. Thus, this study provides new evidence on informal controls in organizations by exploring the intervening role of psychological empowerment and the (beneficial) effects on job satisfaction. In addition, the study provides a methodological contribution to the national research on management control by adding an analysis based on mixed methods. A survey was applied to directors and managers of business units of one of the biggest credit union systems in Brazil. The data were analyzed using a mixed methods approach: partial least squares structural equation modeling and fuzzy-set qualitative comparative analysis. Informal controls are directly and indirectly associated (via empowerment) with job satisfaction. Moreover, the findings indicate more than one solution for high job satisfaction.

Performance measurement systems, environmental satisfaction, and green work engagement,

“…Previous studies on interdependence of controls explore performance results (Henri, 2006;Kreutzer et al, 2016;Ylinen & Gullkvist, 2014), innovation (Henri & Wouters, 2020;Müller-Stewens et al, 2020), management control effectiveness (Bedford et al, 2016), and environmental performance (Heggen & Sridharan, 2021). They also contribute by using fsQCA to explore combinations of equally effective management controls for achieving a particular outcome (Bedford et al, 2016;Cruz et al, 2022;Frare et al, forthcoming), in this case regarding the diagnostic and interactive uses of PMS (Einhorn et al, 2021). Thus, the study implies a growing debate on the combination of controls, in particular in the search for employees' green behaviors.…”

“…A single entity survey was conducted in a private company that operates in the Brazilian electric power generation sector. The use of this method derives from the relevance of research that explores a particular organizational context in depth, enabling an understanding of the phenomena and beliefs reflected on the various areas and on the organization as a whole (Almeida et al, 2021;Cruz et al, 2022;Frare & Beuren, 2020;Mucci et al, 2016). The company considered in the study is multinational and has operated in Brazil for at least 20 years.…”

“…The use of fsQCA enables us to explore possible combinations between management controls that are equally effective for a particular objective, proving to be a valid supplement for regression-based techniques (Bedford et al, 2016;Bedford, 2020;Cruz et al, 2022;Frare et al, forthcoming). For example, while regressionbased techniques enable it to be highlighted whether the combination (interaction effect) between the diagnostic use and interactive use of controls is significantly associated with a particular outcome (e.g.…”

“…For the variables (constructs) composed of more than one item, the average is calculated (Crespo et al, 2019;Kaya et al, 2020). Next, the anchors at points 7, 4, and 1 are used, respectively, to calibrate the variables (Cruz et al, 2022;Galeazzo & Furlan, 2018;Wang et al, 2021). The other variables considered (age, gender, and time in the company) are calibrated according to their binary nature (Ragin, 2008).…”

“…This answers the recent call from Bedford (2020) to explain the interdependence and combination of management controls under new circumstances. In addition, it aggregates evidence regarding fsQCA use to find combinations of equally effective management controls for certain outputs (Bedford et al, 2016;Cruz et al, 2022;Einhorn et al, 2021;Frare et al, forthcoming). Finally, it contributes by exploring antecedents of environmental satisfaction and green work engagement (Aboramadan, forthcoming;Bhutto et al, 2021;Çop et al, 2021), especially regarding how management can use management controls to achieve these aims.…”