Nondyadic Control Systems and Effort Direction Effectiveness: Evidence from the Public Sector

45 Pages Posted: 17 Aug 2018 Last revised: 19 Oct 2021

See all articles by Roland F. Spekle

Roland F. Spekle

Nyenrode Business University

Frank Verbeeten

University of Amsterdam - Faculty of Economics and Business, Amsterdam Business School

Sally K. Widener

Clemson University

Date Written: September 01, 2021

Abstract

One of the main themes in the current management control literature is the study of systems of control practices. While several studies have examined pairwise (‘dyadic’) complementarities in control practices to investigate whether a control system exists, control systems may also be comprised of more than two control practices (‘nondyadic systems’). We examine whether organizations use a complementary system of three performance measurement uses to mitigate the control problem of effort direction. We illustrate how a nondyadic control system can be modeled and empirically examined using data from 162 organizational units in the public sector. Our findings are consistent with our hypothesis that operational, incentive-oriented, and exploratory uses of performance information are complementary and combine in a single system in a low contractibility setting. We also show that the intensity of use of this nondyadic control system is significantly correlated with effort direction effectiveness in conditions of low contractibility. In contrast, and consistent with our theory, we find that when contractibility is high, the combination of the three uses of performance measures is not correlated with effort direction. Jointly, our results suggest that multiple performance measurement uses combine as a nondyadic system to guide effort direction in a low contractibility setting, yet not in a high contractibility setting.

Keywords: Performance Measurement, Management Control, Contractibility, Systems of Control, Linear Systems, Public Sector

JEL Classification: M40, M41

Suggested Citation

Spekle, Roland F. and Verbeeten, Frank H.M. and Widener, Sally K., Nondyadic Control Systems and Effort Direction Effectiveness: Evidence from the Public Sector (September 01, 2021). Management Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3233511 or http://dx.doi.org/10.2139/ssrn.3233511

Roland F. Spekle (Contact Author)

Nyenrode Business University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC
Netherlands

Frank H.M. Verbeeten

University of Amsterdam - Faculty of Economics and Business, Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018TV
Netherlands
(+31)0205257391 (Phone)

Sally K. Widener

Clemson University ( email )

Clemson, SC 29634
United States

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