Management control system, corporate social responsibility, and firm performance

Agus Ismaya Hasanudin, Yuliansyah Yuliansyah, Jamaliah Said, Christin Susilowati and Muafi Muafi ()
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Agus Ismaya Hasanudin: Sultan Ageng Tirtayasa University, Indonesia
Yuliansyah Yuliansyah: Lampung University, Indonesia
Jamaliah Said: Universiti Teknologi MARA, Malaysia
Christin Susilowati: University of Brawijaya, Indonesia
Muafi Muafi: Islamic University of Indonesia, Indonesia

Entrepreneurship and Sustainability Issues, 2019, vol. 6, issue 3, 1354-1368

Abstract: The aim of this study is to examine, through corporate reputation and double-loop learning, how Management Control System (MCS) in the form of a diagnostic and interactive system positively and significantly affects corporate social responsibility (CSR) and the firm performance (FP). This study uses a sample of 163 respondents who are middle to top level managers of manufacturing companies in Banten Province. We test hypotheses by using structural equation modelling, especially SmartPLS. We find that the effect of MCS on CSR does not directly affect the corporate firm performance, and that reputation and Double-Loop Learning (DLL) do mediate better firm performance. The study implies that MCS can help the company to support the process of CSR application more effectively when it matches performance to the expectation of stakeholders. In addition, manufacturers must maintain their reputation and increase their double-loop learning to seize opportunities as a result of their socially responsible activity, and to achieve optimal corporate firm performance.

Keywords: Management control system (MCS); Corporate Social Responsibility (CSR); reputation (Rep); Double-Loop Learning (DLL); Firm Performance (FP) (search for similar items in EconPapers)
JEL-codes: M10 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:6:y:2019:i:3:p:1354-1368

DOI: 10.9770/jesi.2019.6.3(21)

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