The Role of Management Control Systems on Inter-Organisational Efficiency: An Analysis of Export Performance

Abstract

Purpose – Resource-based literature argues that firms’ export performances are influenced by a proper combination of their own resources and capabilities, allowing for sustainable competitive advantages. Because export activities are usually based on relationships between firms and foreign intermediaries, the adequate management of inter-organisational activities should also be analysed as a key determinant of export performance.

Originality – Our research adds to the existing literature by examining the role that management control systems (MCS) play in exploiting firms’ exporting capabilities and resources to optimise export performance.

Methodology – Utilising empirical data from Spanish exporters, an initial analysis of export efficiency was performed based on DEA and segmentation techniques. From efficiency scores, we tested causal relationships between MCS design and use and the optimisation of resources and capabilities when performing export activities.

Findings and practical implications – The main conclusions are that any type of control system was found to have a positive influence in export performance, but only social control establishes a difference in terms of efficiency. The results show that strong social controls increase firms’ efficiencies when managing export channels, allowing firms to achieve outputs superior to competitors with similar resources and capabilities. In addition, an efficiency ‘lifecycle’ was identified for relationships between exporters and intermediaries. A pro-cyclical effect was found among MCS design, use, and export efficiency; intense MCS were established in the first stages of a relationship but were relaxed after a certain level of efficiency was achieved, leading to a reduction of efficiency in the long term that compromised the continuity of relationships.

Citation

Florez, R., Ramon, J.M., Velez, M., Concepcion Alvarez-Dardet, M., Araujo, P. and Sanchez, J.M. (2012), "The Role of Management Control Systems on Inter-Organisational Efficiency: An Analysis of Export Performance", Davila, A., Epstein, M.J. and Manzoni, J.-F. (Ed.) Performance Measurement and Management Control: Global Issues (Studies in Managerial and Financial Accounting, Vol. 25), Emerald Group Publishing Limited, Leeds, pp. 195-222. https://doi.org/10.1108/S1479-3512(2012)0000025011