Leader attention, management control systems and innovation performance amongst Malaysian medium-sized manufacturing firms

• Main Author: Albayati, Mohammed Sami Noori
• Format: Thesis
• Language: English; English; English
• Published: 2019
• Subjects: HD28-70 Management. Industrial Management
• Online Access: https://etd.uum.edu.my/9410/1/depositpermission_s93686.pdf; https://etd.uum.edu.my/9410/2/s93686_01.pdf; https://etd.uum.edu.my/9410/3/s93686_references.docx; https://etd.uum.edu.my/9410/

Innovation is a very important topic for the sustainability of companies and nations. This thesis examines how leader attention to information influences innovation performance with the help of management control systems (MCS) in Malaysian medium-sized manufacturers’ context. In particular, it investigates which and how MCS mediate leader attention to improving innovation performance. Leader’s attention comprises information search selection and search intensity of senior managers of medium-sized manufacturers. MCS are viewed as practices to convey information and help senior managers to maintain or alter the pattern of innovationrelated activities. MCS are operationalized based on Simons’ levers of control (LOC)- beliefs, boundary, diagnostic, and interactive controls. The resource-based view (RBV), the attention-based theory of search, and LOC framework are integrated to measure the constructs and explain these relationships. Data were collected through structured questionnaires sent to 654 manufacturers. Ordinary least square (OLS) regression path analysis was used to analyze the data from 156 returned surveys. The result shows that both leader attention dimensions have direct effects on innovation performance. Search selection has a direct effect on all LOC except boundary systems. However, search intensity does not have a direct effect on boundary and diagnostic systems. Beliefs and interactive systems mediate leader attention (both dimensions) in enhancing innovation performance. These findings imply that not all control mechanisms restrict innovation activities. If used selectively, control levers can help senior managers optimize information search to enhance innovation performance. Overall, the findings may be applicable to firms to recognize the important role of MCS in reporting relevant information to manage their information search activities. This issue is more pertinent among medium-sized manufacturers as they relatively have less elaborate control systems and lack proper use of information provided by the MCS. The policymakers can incorporate the findings in training materials for senior managers.