Complementarity of Management Control Mechanisms in a Lean Organization: The Effect of Consensus
PDF

Supplementary Files

Complementarity of Management Control Mechanisms in a lean organization: The effect of Consensus on Lean Thinking Strategy (Evidence from Indonesian manufacturing companies)
PDF

Keywords

Complementarity effect
Lean management control mechanisms
Company performance
Consensus on lean thinking strategy

How to Cite

Tupamahu, K. H. (2022). Complementarity of Management Control Mechanisms in a Lean Organization: The Effect of Consensus. Journal of Economics, Business, and Accountancy Ventura, 25(1), 107-122. https://doi.org/10.14414/jebav.v25i1.3046
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Abstract

This study aims to examine the complementarity effect of lean management control mechanisms (lean performance measurement, employee empowerment, visual control, standard operating procedures, and peer pressures) on company performance (operations and financial performance). Besides, this study also tests whether the consensus on lean thinking has affected the relationship between the lean management control mechanisms and the company’s performance. The data is collected by survey with 159 managers from manufacturing companies. The data is then analyzed using the AMOS-SEM and shows that lean management control mechanisms work complementary to increase operation and financial performance in lean manufacturing companies. Furthermore, consensus on lean thinking strategies acts as a moderating variable and positively affects the relationship between lean management control mechanisms and financial performance. This study recommends that lean companies should implement control mechanisms that align with lean thinking. These control mechanisms should be used together to complement each other to maximize the performance benefits that can be derived from lean thinking implementation. In addition, to strengthen the benefits derived from the use of lean control mechanisms, companies need to pay attention to the consensus in implementing lean thinking strategies.

References

Agyabeng-Mensah, Y., Ahenkorah, E., Afum, E., & Owusu, D. (2020). The influence of lean management and environmental practices on relative competitive quality advantage and performance. Journal of Manufacturing Technology Management, 31(7), 1351-1372

AteÅŸ, N. Y., Tarakci, M., Porck, J. P., van Knippenberg, D., & Groenen, P. J. (2020). The dark side of visionary leadership in strategy implementation: Strategic alignment, strategic consensus, and commitment. Journal of Management, 46(5), 637-665.

Bagozzi, R. P., & Yi, Y. (2012). Specification, Evaluation, and Interpretation of Structural Equation Model. Journal of the Academy of Marketing Science, 40, 8-34.

Barron, J. M., & Gjerde, K. P. (1997). Peer Pressure in an Agency Relationship. Journal of Labor Economics, 15(2), 234-254.

Bedford, D. S. (2015). Management Control Systems Across Different Modes of Innovation: Implication for Firm Perfomance. Management Accounting Research, 28, 12-30.