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The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia

Muhammad Haseeb (), Marcin Lis (), Ilham Haouas () and Leonardus WW Mihardjo ()
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Muhammad Haseeb: Taylor’s Business School, Taylor’s University Lakeside Campus, 1 Jalan Taylors, 47500 Subang Jaya, Selangor, Malaysia
Marcin Lis: Faculty of Applied Science Cieplka 1c, WSB University, 41-300 Dąbrowa Górnicza, Poland
Leonardus WW Mihardjo: Doctor of Research in Management Program, Bina Nusantara University, Jalan Hang Lekir I no. 6, Senayan, 10270 Jakarta, Indonesia

Sustainability, 2019, vol. 11, issue 17, 1-20

Abstract: The aim of the current study was to ascertain the influence of a management control systems (MCS) package on a firm’s sustainability with the help of mediating variables such as differentiation and cost leadership strategy in Malaysian small and medium enterprises (SMEs). Data were collected from managers working in Malaysian SMEs. A total of 384 questionnaires was finally used for analysis using SmartPLS 3.8.2. Area cluster sampling was used for data collection, and seven out of sixteen clusters were selected randomly. These included Selangor, Johor, Kuala Lumpur, Sabah, Penang, Sarawak, and Perak because these seven states cover 73.9% of total SMEs. Structural equation modeling (SEM) was used to test the hypotheses. Confirmatory factor analysis (CFA) was also used to examine the reliability and validity, and structural model assessment was used to test the relationship between variables. Findings revealed that an MCS package had a positive influence on a firm’s sustainability, cost leadership, and differentiation strategy. Moreover, cost leadership and differentiation strategy have a significant and positive influence on a firm’s sustainability. In addition, cost leadership strategies and differentiation strategies significantly mediate between the MCS package and a firm’s sustainability. This research assesses the influence of the MCS package through cost leadership and differentiation strategy on a firm’s sustainability of Malaysian SMEs. It helps top management to focus on the MCS package and business strategies in attaining a firm’s long-term sustainability. Finally, research recommendations discuss that the present study helps future researchers and academicians.

Keywords: MCS package; cost leadership strategy; differentiation strategy; firm sustainability (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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