The EO–performance relationship revisited through the lens of the control levers framework

Chaffik Bakkali () and Jonathan Maurice
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Chaffik Bakkali: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier

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Abstract: In this paper, we consider the concept of entrepreneurial orientation (EO) as a potential determinant of performance. Although numerous authors have noted this relationship, the literature indicates that it is complex and very much influenced by external and internal factors. The aim here is therefore to look more closely at one of the potential internal factors: management control systems. To do so, we focus on the model of Simons (1995), which distinguishes four levers of control: interactive control, diagnostic control, belief systems and boundary systems. An in-depth literature review provides theoretical arguments that yield four propositions about the effect of these control levers on the EO‒performance relationship. We suggest that these levers act as moderators, producing differentiated effects. Interactive control and belief systems bring positive energy to firms. This is essential for successful innovation and bold strategic choices, ultimately improving the transformation of EO into performance. Diagnostic control and boundary systems limit individual initiatives to low-risk but also low-value projects, which weakens the ability of firms to take advantage of their EO. The paper's major contribution is our development of the idea that interactive control and belief systems have positive moderating effects on the EO‒performance relationship, whereas diagnostic control and boundary systems have negative moderating effects. These insights broaden our understanding of the organizational processes that drive the transformation of EO into superior performance. They also contribute to the literature on management control systems by providing food for thought on the simultaneous influence of Simons's four control levers.

Keywords: entrepreneurial orientation; management control systems; control levers; performance (search for similar items in EconPapers)
Date: 2019-05-21
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Published in 40e congrès de l'Association francophone de comptabilité, May 2019, Paris, France

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02140091

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