Diagnostic control systems and boundary systems: Pathway or barrier to SMEs’ entrepreneurial success

Chaffik Bakkali, Jonathan Maurice () and Jeffrey G. Covin ()
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Chaffik Bakkali: UM - Université de Montpellier
Jonathan Maurice: TSM - Toulouse School of Management Research - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse, CNRS - Centre National de la Recherche Scientifique
Jeffrey G. Covin: UW - University of Wyoming

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Abstract: This study examines how "negative" management control systems condition the performance implications of entrepreneurial orientation (EO) in SMEs. Building on Simons' levers of control framework, we focus on diagnostic control systems and boundary systems, conceptualized as negative forces, and theorize that the EO–performance relationship is shaped by their configurational rather than isolated use. Using survey data from 276 French SMEs and structural equation modeling, we test a three-way interaction between EO, diagnostic control systems, and boundary systems. Our results confirm a positive EO–performance relationship and show that this effect is preserved when SMEs rely on diagnostic control systems and boundary systems in a balanced way, whether at high or low levels, but largely disappears when one lever is overemphasized at the expense of the other. We thus uncover an entrepreneurship–control trap in which misaligned negative controls prevent SMEs from converting EO into superior performance.

Keywords: entrepreneurial orientation; firm performance; SMEs; Management control; Boundary systems; Diagnostic control systems; Entrepreneurship (search for similar items in EconPapers)
Date: 2026-01-30
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Published in Journal of Small Business Management, 2026, pp.1-44. ⟨10.1080/00472778.2026.2616377⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05601333

DOI: 10.1080/00472778.2026.2616377

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