The influence of an interactive use of management control on individual performance: mediating roles of psychological empowerment and proactive behavior

Abstract

Purpose Although middle managers play important roles in forming strategies and generating innovation, few studies have explored the influence of management control systems (MCS) on employees’ behaviors or performance at the middle-management level. The purpose of this study is to examine the effect an interactive use of MCS has on individual performance at the unit level. Design/methodology/approach A longitudinal, multisource and multilevel survey was conducted among 373 nurses in 20 units at a Japanese public hospital. Findings The multi-level analyzes indicate that middle managers’ interactive use of MCS has a direct and indirect positive influence on individual performance, through proactive behavior, as well as through psychological empowerment and, subsequently, through proactive behavior. Research limitations/implications As the present study collected data from nurses at a Japanese hospital, it is necessary to conduct research in other countries using different occupations to verify the findings. Practical implications Organizations need to be aware that the interactive use of MCS can be an effective tool for empowering and motivating employees. Originality/value The present study contributes to the literature by clarifying the mechanisms of how the interactive use of MCS influences employees’ psychological and behavioral outcomes at the middle-management level.

Effects of informal controls and psychological empowerment on job satisfaction

“…The hypothesis was supported (β = 0.477; p < 0.001). The result corroborates studies on MCS that support the beneficial role of interactive (Matsuo et al, 2021) and enabling controls (Baird et al, 2018; in psychological empowerment. This result, especially within the scope of informal controls, broadens the understanding of their positive effects on organizational commitment (Goebel & Weißenberger, 2017a), participation (Wohlgemuth et al, 2019), and organizational identification by employees (Monteiro & Lunkes, 2021), by highlighting positive effects on psychological empowerment.…”

“…In turn, highlighted that an enabling perception of MCS leads to psychological empowerment, which induces managers' organizational resilience. Finally, Matsuo et al (2021) found that the interactive use of MCS positively affects employees' psychological empowerment, proactive behavior, and performance.…”

“…In this sense, related studies employ psychological empowerment as a mediating variable. The mediating role of this construct is highlighted in relationships such as between the psychological environment and job satisfaction (Carless, 2004), between the comprehensive performance measurement system (PMS) and management performance (Hall, 2008), between an enabling PMS and both task performance and job satisfaction (Souza & Beuren, 2018), between an enabling perception of the MCS and organizational resilience , and between the interactive use of the MCS and both innovative behavior and performance (Matsuo et al, 2021).…”

“…On one hand, it offers evidence and answers the call of Hall (2016) and Luft and Shields (2003) by analyzing the mediating effect of a psychological variable (psychological empowerment) between management controls (informal control mechanisms) and individual behaviors/results (job satisfaction). It also specifically contributes to the literature on MCS Hall, 2008;Matsuo et al, 2021;Souza & Beuren, 2018) by exploring new relationships in which psychological empowerment acts as a facilitator. Moreover, it provides new evidence on informal controls in organizations (Goebel & Weißenberger, 2017b;Monteiro & Lunkes, 2021;Wohlgemuth et al, 2019), especially in cooperative environments.…”

“…As management controls are used to guide behaviors that are consistent with organizational strategies (Merchant & Van Der Stede, 2007), when managers seek information about opportunities and threats in their environments in order to develop such strategies, the chances of success in that task are increased if they are supported by teams that work proactively in relation to the motivations suggested by MCS (Matsuo et al, 2021). For that reason, this study explores the role of informal controls in psychological empowerment and job satisfaction.…”