< Terug naar vorige pagina

Publicatie

Essay on the design of management control practices in Vietnam

Boek - Dissertatie

Ondertitel:an analysis of antecedents and subordinates’ perception
The thesis is inspired by an increase in the need of organizations to have well-designed management control (MC) practices and MC packages that help managers to make decisions, to implement strategies, to guide employee behavior and activities consistent with organizational objectives. Therefore, this thesis analyzes design choices related to management control practices and their consequences with respect to subordinate’s perceptions of those design choices in Vietnamese firms. Based on agency theory and contingency insights, the first paper examines how differences in ownership characteristics between state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs) influence the scope of the performance measurement system (PMSs) in place in the company. With a small sample size of 140 large and medium Vietnamese firms, we analyzed data by using covariance-based Structural Equation Modeling (SEM) (AMOS software). This method is seen as an effective technique for testing theories, developing, validating, and analyzing complex models. We find that organizations with a higher share of government focus their PMSs more on governmental duty indicators. The presence of community indicators and ethical indicators is not influenced by the share of the state or the type of ownership. The designs of their PMSs also focus less on economic value outcome-based indicators, particularly internal business process indicators, customer indicators, and financial indicators. The inclusion of innovation and learning indicators in SOE PMSs is not affected by the presence of state owners in the ownership structure. In the second study, agency theory and stewardship theory lend us the insights to investigate whether ownership differences between SOEs and non-SOEs moderate the relationship between a low-cost strategy and the design of a MC practice package related to cost and efficiency-based PMSs, efficiency-based compensation and rewards, and the tightness of the cost and efficiency-based PMSs. We employ partial least square (PLS)-SEM (SmartPLS software) to analyze data with a sample of 140 observations, in which SOEs and non-SOEs are observed to compete directly with each other in the Vietnamese open market. PLS is used to estimate multiple constructs and to investigate relationships of a set of independent variables and multiple variables at the same. PLS does not require a large sample size and any strict data distribution assumptions. Moreover, PLS’s algorithms are suitable for models with hierarchical order formative constructs. The analysis shows that the association of a low-cost strategy and the efficiency-based compensation and rewards is weaker (or stronger) for firms with a higher share of non-state owners (or with a higher share of state-owner). A firm with a higher level of emphasis on a low-cost strategy, when non-state owner holds a higher level of shares in the firm’s ownership structure, focus its compensation and rewards less on efficient performance. By contrast, a firm placing an emphasis on a low-cost strategy at a higher level which has a higher share of state-owner in its ownership structure tends to use efficient performance at a higher level as a basis for setting up the firm’s compensation and rewards. Usually, MC practices are designed by top managers with a clear intention towards controls’ functions, for instance enabling functions. Nonetheless, the enabling character of controls may be perceived differently by different subordinates due to differences in the subordinates’ characteristics, i.e., differences in beliefs and values and between subordinates from different ages, and in their cultural backgrounds. Based on “time-stable perspective” theory and value-belief theory, the last study delves deeper into whether a subordinate’ age influences his/her perception of the enabling character of the PMSs, and whether this relationship is moderated by the subordinate’s cultural background (i.e., collectivism and individualism). Our analyses are based on a sample of 276 observations collected from a large pharmaceutical company, in which 196 employees come from the South of Vietnam (grown up in a culture characterized by individualism) while 80 employees’ origin is from the North of Vietnam (grown up in a culture characterized by collectivism). Covariance-based SEM is employed to analyze data using AMOS software. The findings reveal a significant relationship between a subordinate’s age and his/her perception of the enabling character of the PMSs. Specifically, older subordinates perceive the PMSs as more enabling (i.e., more reparable, more internally transparent, more globally transparent, and more flexible) in comparison to younger subordinates. Besides, we also observe that the effect of a subordinate’s age on his/ her perception of the repair characteristic of the PMS in the company is stronger for the group characterized by a more collectivistic cultural background than for the group coming from a more individualistic cultural background.
Aantal pagina's: 150
Jaar van publicatie:2021
Trefwoorden:Doctoral thesis
Toegankelijkheid:Open