An Empirical Analysis of the Levers of Control Framework

47 Pages Posted: 31 Jul 2005

Date Written: November 2005


The purpose of this paper is to use the levers of control framework to explore the antecedents of control systems - various facets of strategy that drive the use of controls, and to explore the costs and benefits of the control system - costs in terms of consumption of a constrained resource (i.e., management attention) and benefits (i.e., learning). Using data from a survey of 122 Chief Financial Officers, this study tests a structural equation model that relates strategic risk and uncertainty to control systems, which in turn are hypothesized to affect learning and attention, and ultimately firm performance. The study finds that strategic risk and uncertainty are associated with both the role of the performance measurement system regarding whether it functions as a diagnostic or interactive control, and the importance of the belief and boundary systems. Managerial attention is facilitated by diagnostic controls and belief systems, while the interactive use of the performance measurement system consumes management attention. The efficient use of management attention and organizational learning is associated with higher levels of firm performance. Implications along with ideas for future research are discussed.

Keywords: levers of control, performance measurement system, diagnostic controls, interactive controls, belief system, boundary system, performance

Suggested Citation

Widener, Sally K., An Empirical Analysis of the Levers of Control Framework (November 2005). AAA Management Accounting Section 2006 Meeting Paper, Available at SSRN: or

Sally K. Widener (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States

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