Environmental innovation strategy and organizational performance

enabling and controlling uses of management control systems

Chaminda Wijethilake*, Rahat Munir, Ranjith Appuhami

*Corresponding author for this work

Research output: Contribution to journalArticle

20 Citations (Scopus)

Abstract

This study examines the extent to which enabling and controlling uses of management control systems (MCS) moderate the relationship between environmental innovation strategy and organizational performance. Partial least squares structural equation modeling is used to analyze survey data collected from top managers in 175 manufacturing and services sectors representing multinational and local organizations operating in Sri Lanka. We find that while the enabling use of MCS positively moderates the relationship between environmental innovation strategy and organizational performance, in contrast, the controlling use of MCS negatively moderates the relationship. We compare the results for the manufacturing and services sectors. As predicted, we find a significant positive moderating impact of the enabling use of MCS in both manufacturing and services sectors. However, contrary to our expectations, we find no significant moderating impact for both sectors for the controlling use of MCS. We conclude that environmental innovation strategy per se does not lead to performance improvements; however, the extent to which organizations use enabling and controlling MCS determines the relationship. We provide theoretical insights and practical implications concerning the importance of strategic alignment between managerial controls, environmental innovation strategy, and organizational performance.

Original languageEnglish
Pages (from-to)1139-1160
Number of pages22
JournalJournal of Business Ethics
Volume151
Issue number4
Early online date9 Jul 2016
DOIs
Publication statusPublished - Sep 2018

Keywords

  • Environmental innovation strategy
  • Management control systems
  • Manufacturing and services
  • Organizational performance

Fingerprint Dive into the research topics of 'Environmental innovation strategy and organizational performance: enabling and controlling uses of management control systems'. Together they form a unique fingerprint.

  • Cite this