Revenue growth in not‐for‐profit organisations: The effects of interactive and diagnostic controls and organisational culture

Abstract

Using survey and archival data for 180 not-for-profit aged care organisations, we find that interactive use of performance measurement systems positively affects the organisations' revenue growth, while the diagnostic use negatively affects revenue growth. We also find that organisational culture, specifically attention to detail, innovation and respect for people, moderates these effects.Our findings have implications for the literature in terms of understanding the combinatorial effects of formal management control and culture on organisational performance. The findings also have practical implications for designing performance measurement systems and developing organisational cultures, to create an internal environment effective in enabling revenue growth.

Differences In The Use of Diagnostic Budget and The Use of Interactive Budget: Case Study of SMEs in Palembang City

“…In line with the theory of contingency, the effectiveness of performance companies can be seen in their ability to fulfill the need for system controller management in the company (Jesmin Islam, 2012). This study is contrary to research by (Jiao et al, 2023), which states that neither using a budget in a diagnostic manner nor using a budget in a interactive manner has a significant effect on company performance.…”

“…In line with the contingency theory, the effectiveness of company performance can be seen in the company's performance in meeting the needs of the MCS contained in the company (Jesmin Islam, 2012). This study contrasts with studies by Jiao et al (2023), which states that the diagnostic and interactive uses of budgets have a significant effect on company performance. Different results are shown in Table 10, which shows the results of the independent sample t-test used to test the third hypothesis.…”

“…Diagnostic budgeting can influence company performance by helping achieve organizational goals and taking corrective action when there are budget variations (Kaveski et al, 2021). According to research conducted by Jiao et al (2023), the use of diagnostic budgets is related to company performance, where diagnostic budgets in practice use comparisons of the company's actual work results against previously set goals, which can indicate company performance. Meanwhile, when using interactive budgeting, company performance can be affected because interactive budgeting can encourage managers to actively involve themselves in the entire series of company activities, such as decision-making, active discussions, and communication about the opportunities and threats facing the company (Jiao et al, 2023).…”

“…According to research conducted by Jiao et al (2023), the use of diagnostic budgets is related to company performance, where diagnostic budgets in practice use comparisons of the company's actual work results against previously set goals, which can indicate company performance. Meanwhile, when using interactive budgeting, company performance can be affected because interactive budgeting can encourage managers to actively involve themselves in the entire series of company activities, such as decision-making, active discussions, and communication about the opportunities and threats facing the company (Jiao et al, 2023). Then, interactive budgets can provide managers with the information resources they need to improve innovation performance and create a wellresourced work environment for managers, leading to increased dynamic and innovative capabilities (Zeng et al, 2023).…”

Leadership and managerial challenges to ensure agile management as a method to enable business success: a Delphi study of the Slovenian health organisations

“…As part of the search for solutions that will ensure that the organisation becomes resilient to various risks, management is faced with the complexity of changing decisions, and these are often unclear. It is important for management to accept risks as a challenge and to ensure that the organisation responds to these factors promptly and that organisational changes occur as quickly as possible, which will provide both the recovery of the organisation and its long-term resistance to various risks, thus enabling the final goal this is to ensure sustainable organisational growth (Jiao et al , 2023). It will ensure organisational stability compatible with agility because agility requires strength for most organisations.…”