Influence of Institutional and Contingency Factors on Managerial Dysfunctional Behaviour Outcome of Management Control Systems in Nigerian Companies

No Thumbnail Available
Date
2012-11
Authors
Fagbemi, T.O
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The various findings on the consequences of management control systems (MCS) have been inconsistent and inconclusive; with MCS research generally biased towards the positive consequences of MCS, such as performance, satisfaction, or motivation. Negative behavioural consequences have been, in comparison, less considered empirically. This study provides empirical evidence on the relationship between MCS and managerial dysfunctional behaviour (MDB) in quoted companies in Nigeria. In order to achieve this aim, a model was proposed based on agency, contingency and institutional theories with a view to examining their influence on the MCS-MDB relationship. The model incorporated budget participation (BP), budget emphasis (BE), standard operating procedures (SOP) and Non-financial measures (NFM) as variables representing MCS while gaming and information manipulation were proposed as variables representing negative behavioural consequences of the control systems. The model was tested by means of data collected from a questionnaire survey of three hundred and eleven managers of selected quoted companies on the Nigerian Stock Exchange. The data were analysed using correlation analysis, regression and independent samples t-tests. Findings suggested that BP has a statistically significant influence on the behaviours exhibited by managers (r =0.674, R2 = 0.454, p < 0.05). Similarly, the study noted that there is a difference in the level of dysfunctional behaviour of managers depending on the level of BE (t(309) = -5.885, p < 0.05). However, the study provided no support for significant influence of SOP and NFM on MDB (r = 0.042, p > 0.05; r = 0.079, p > 0.05). Findings from the study revealed that managers operating in relatively uncertain environments and who are under pressure from their external environment were significantly more likely to engage in MDB (R2 = 0.58, F = 9.435, Sig. F = 0.002). Evidences also suggest that business unit strategy and institutional pressure moderate the relationship between MCS and MDB (R2 = 0.57, F = 116.573, Sig. F < 0.05; R2 = 0.57, F = 125.415, Sig. F = 0.000). Designers of MCS are encouraged to give adequate consideration to the choice and combination of MCS to be used within the organisation. Deterrent measures should be taken when managers are found to have engaged in managerial dysfunctional behaviour. This study contributes to literature by providing an analytical framework for studying MCS-MDB relationship in Nigeria.
Description
A Thesis Submitted to the School of Postgraduate Studies, University of Lagos
Keywords
Management control systems , Budget participation , Standard operating procedures (SOP) , Non-financial Theories , Research Subject Categories::SOCIAL SCIENCES::Business and economics::Economics
Citation
Fagbemi, T.O (2012). Influence of Institutional and Contingency Factors on Managerial Dysfunctional Behaviour Outcome of Management Control Systems in Nigerian Companies. A Thesis Submitted to University of Lagos School of Postgraduate Studies Phd Thesis and Dissertation, 236pp.