Harnessing the synergy of control mechanisms: enhancing management control system effectiveness through Simons’ Levers of Control framework

Purpose: This study aims to investigate the interplay between different components of management control systems (MCS) and their collective impact on organizational effectiveness, using Simons’ (1995) Levers of Control (LOC) framework. Specifically, the study examines how the emphasis on belief, boundary and diagnostic controls influences the use of interactive controls and how these dynamics contribute to the overall effectiveness of the MCS. Design/methodology/approach: An empirical research design was employed to test the proposed hypotheses, involving data collection from a sample of organizations across various industries. Structural equation modeling (SEM) was utilized to analyze the relationships between the different control mechanisms and their impact on MCS effectiveness. Findings: The findings reveal that greater emphasis on boundary and diagnostic controls is positively associated with increased use of interactive controls. In turn, the emphasis on interactive controls is significantly linked to the overall effectiveness of the MCS. Additionally, while the direct positive relationship between belief controls and MCS effectiveness is supported, the mediating role of interactive controls in this relationship is not confirmed. Similarly, the direct influence of boundary and diagnostic controls on MCS effectiveness is not supported; however, their impact is mediated through interactive controls. Practical implications: The insights gained have practical implications for managers, suggesting that a balanced emphasis on boundary, diagnostic and interactive controls can lead to more effective MCS, thereby supporting strategic objectives and improving organizational performance. Originality/value: This study contributes to the literature by providing a more holistic understanding of the interdependencies within the LOC framework and their role in enhancing organizational control systems.