The Interactive Effects of Perceived Environmental Uncertainty and Control System Type on Managers’ Willingness to Recommend Strategic Change

33 Pages Posted: 17 Aug 2016

See all articles by Margaret H. Christ

Margaret H. Christ

University of Georgia - Terry College of Business

Anna Cianci

Wake Forest University

Stuart Napshin

Kennesaw State Unirversity

Date Written: August 15, 2016

Abstract

To remain competitive today, flatter organizations must rely more on middle management in order to adapt in response to demands in the dynamic environments in which they operate. Yet oftentimes organizations do not change even in the face of evolving markets. Using an experiment, we examine how the type of control system used by organizations can shifting middle manager perception of environmental stability as well as influencing their willingness to recommend organizational change.

Consistent with our expectations, we find a positive association between middle managers’ perceived environmental uncertainty and their willingness to recommend organizational strategic change. This relationship is moderated by control system type, especially for those middle managers whose perceived environmental uncertainty is low. In particular, we find that relative to interactive control systems, diagnostic control systems are more effective in directing manager attention toward environmental uncertainties and increasing the willingness of those managers to recommend a strategic change. Our results are an initial step in understanding the relationships between environmental uncertainty and control systems and thus can help senior managers design and implement control systems for flatter organizations in dynamic environments where middle managers are critical to initiating adaptive strategic change.

Keywords: control systems, diagnostic system, interactive system, perceived environmental uncertainty, strategic change

Suggested Citation

Christ, Margaret H. and Cianci, Anna and Napshin, Stuart, The Interactive Effects of Perceived Environmental Uncertainty and Control System Type on Managers’ Willingness to Recommend Strategic Change (August 15, 2016). AAA 2017 Management Accounting Section (MAS) Meeting. Available at SSRN: https://ssrn.com/abstract=2824135 or http://dx.doi.org/10.2139/ssrn.2824135

Margaret H. Christ (Contact Author)

University of Georgia - Terry College of Business ( email )

Athens, GA 30602-6254
United States
706-542-3602 (Phone)

Anna Cianci

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

Stuart Napshin

Kennesaw State Unirversity ( email )

1000 Chastain Rd
Kennesaw, GA 30144
United States

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