Research Article

Dynamic Tensions from Management Control Systems and Performance in a Sub-Saharan African Economy: Mediating Effects of Competitive Strategy

Published in: Africa Journal of Management
Volume 2, issue 4, 2016, pages: 395–421
DOI: 10.1080/23322373.2016.1256178
Author(s): Moses AcquaahDepartment of Management, USA, Ahmed AgyapongDepartment of Marketing and Corporate Strategy, Ghana

Abstract

This study examines how the dynamic tension created as a result of the simultaneous and balanced use of controlling and innovative forces of management control systems indirectly influences firm performance through competitive strategy. Using data from 106 firms from Ghana, over three time periods and the Preacher and Hayes’ (2008) bootstrapping procedure, the findings indicate that dynamic tension has a direct positive effect on the competitive strategic typologies of cost leadership, differentiation, and hybrid strategies. Moreover, dynamic tension positively influences performance indirectly through cost leadership and differentiation strategies, but not the hybrid strategy. We also find that the indirect effect of dynamic tension on firm performance through the pure strategies is greater than that through the hybrid strategy. The findings indicate that the dynamic tension is not only germane in influencing competitive strategy, but also firm performance through competitive strategy.

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