The influence of management control systems and strategy on the performance of microfinance institution using the contingent-based model / Syed Mohamad Sadeq Bolourchian Tabrizi

Besides financial performance, non-financial performance is also an important element for any organisation in achieving specific competitive advantage from its rivals. Microfinance institutions might collapse due to the lack of management’s focus on performance. From a contingency theory perspective, management is the highest elements that influence strategy and performance. The performance can improve when managers apply effective controls and strategic roles. The contribution of contingency theory, resource-based view and transaction cost economy provides the ability to identify strategic capabilities and competencies for the achievement of competitive advantages. Thus, certain types of strategic management and management control systems have become the focus of a majority of the research. Nevertheless, limited studies investigate the influence of management behaviour and strategic capabilities and competencies on institutional performance in the context of contingency theory. In line with capabilities and competencies, this study aims to investigate the influence of behavioural factors namely lever of management control systems and managerial roles on strategic capabilities and competencies namely cost leadership, differentiation, market-linking capabilities and management capabilities and subsequently financial performance and non-financial performance in Malaysian microfinance institutions.