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MCS package and entrepreneurial competency influence on business performance: the moderating role of business strategy

MCS package and entrepreneurial competency influence on business performance: the moderating role... This paper draws on resource-based theory (RBV) to examine the impact of the management control system (MCS) package on business performance through the mediating role of entrepreneurial competencies and the interaction role of business strategy in small and medium-sized enterprises (SMEs).Design/methodology/approachA total of 372 questionnaires were used in this research for analysis purposes using partial least square–structural equation modelling. Cluster sampling was used and nine states out of 16 states were selected randomly, including Kelantan, Johor, Sarawak, Selangor, Kedah, Kuala Lumpur, Penang, Perak and Sabah, because the nine states cover 84.4% of the total SMEs.FindingsThe results revealed that only cultural and administrative control has no relationship with business performance. Moreover, in the MCS package, all elements have a significant and positive influence on entrepreneurial competencies. Furthermore, business strategy (cost leadership and differentiation strategy) significantly moderates, while entrepreneurial competencies mediate between, cultural, planning, cybernetic, rewards and compensation, administrative control and business performance.Originality/valueSMEs in Malaysia are contributing 36.6% to gross domestic product. Further, as this sector is important, less attention has been paid to this area of MCS package with business strategies to determine organisational performance. This study fills these gaps, and the recommendations and findings for further research are discussed in detail accordingly. Moreover, the findings of the current research provide guidelines for the management of SMEs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Journal of Management and Business Economics Emerald Publishing

MCS package and entrepreneurial competency influence on business performance: the moderating role of business strategy

MCS package and entrepreneurial competency influence on business performance: the moderating role of business strategy

European Journal of Management and Business Economics , Volume 32 (1): 23 – Feb 28, 2023

Abstract

This paper draws on resource-based theory (RBV) to examine the impact of the management control system (MCS) package on business performance through the mediating role of entrepreneurial competencies and the interaction role of business strategy in small and medium-sized enterprises (SMEs).Design/methodology/approachA total of 372 questionnaires were used in this research for analysis purposes using partial least square–structural equation modelling. Cluster sampling was used and nine states out of 16 states were selected randomly, including Kelantan, Johor, Sarawak, Selangor, Kedah, Kuala Lumpur, Penang, Perak and Sabah, because the nine states cover 84.4% of the total SMEs.FindingsThe results revealed that only cultural and administrative control has no relationship with business performance. Moreover, in the MCS package, all elements have a significant and positive influence on entrepreneurial competencies. Furthermore, business strategy (cost leadership and differentiation strategy) significantly moderates, while entrepreneurial competencies mediate between, cultural, planning, cybernetic, rewards and compensation, administrative control and business performance.Originality/valueSMEs in Malaysia are contributing 36.6% to gross domestic product. Further, as this sector is important, less attention has been paid to this area of MCS package with business strategies to determine organisational performance. This study fills these gaps, and the recommendations and findings for further research are discussed in detail accordingly. Moreover, the findings of the current research provide guidelines for the management of SMEs.

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References (92)

Publisher
Emerald Publishing
Copyright
© Shafique Ur Rehman, Hamzah Elrehail, Kiran Nair, Anam Bhatti and Abdallah Mohammad Taamneh
ISSN
2444-8451
DOI
10.1108/ejmbe-04-2020-0088
Publisher site
See Article on Publisher Site

Abstract

This paper draws on resource-based theory (RBV) to examine the impact of the management control system (MCS) package on business performance through the mediating role of entrepreneurial competencies and the interaction role of business strategy in small and medium-sized enterprises (SMEs).Design/methodology/approachA total of 372 questionnaires were used in this research for analysis purposes using partial least square–structural equation modelling. Cluster sampling was used and nine states out of 16 states were selected randomly, including Kelantan, Johor, Sarawak, Selangor, Kedah, Kuala Lumpur, Penang, Perak and Sabah, because the nine states cover 84.4% of the total SMEs.FindingsThe results revealed that only cultural and administrative control has no relationship with business performance. Moreover, in the MCS package, all elements have a significant and positive influence on entrepreneurial competencies. Furthermore, business strategy (cost leadership and differentiation strategy) significantly moderates, while entrepreneurial competencies mediate between, cultural, planning, cybernetic, rewards and compensation, administrative control and business performance.Originality/valueSMEs in Malaysia are contributing 36.6% to gross domestic product. Further, as this sector is important, less attention has been paid to this area of MCS package with business strategies to determine organisational performance. This study fills these gaps, and the recommendations and findings for further research are discussed in detail accordingly. Moreover, the findings of the current research provide guidelines for the management of SMEs.

Journal

European Journal of Management and Business EconomicsEmerald Publishing

Published: Feb 28, 2023

Keywords: MCS package; Entrepreneurial competency; Cost leadership strategy; Differentiation strategy; Business performance; RBV theory

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