The efect of management control systems in managing the unknown: Does the market appreciate the breadth of vision?
EntityUAM. Departamento de Contabilidad
CitationReview of Managerial Science (2022): 1-27
ISSN1863-6683 (print); 1863-6691 (online)
Funded byOpen Access funding provided thanks to the CRUE-CSIC agreement with Springer Nature.
SubjectsManagement control systems; Management accounting; Broad scope; COVID-19; Crisis management; Signaling theory; Economía
Rights© The Author(s) 2022
Esta obra está bajo una Licencia Creative Commons Atribución 4.0 Internacional.
We examine the extent to which broad-scope management control systems (MCS) mitigate the negative impact of a crisis with extreme uncertainty on investor and shareholder expectations and the potential role of boundary systems in this link. We use the COVID-19 pandemic as research setting to analyse this link and market value as a proxy for expectations. Our hypotheses are tested using a combination of survey and archival data from large organizations listed on the Brazilian Stock Exchange, resulting in a panel of 6257 organization-week observations. Our main results are consistent with the hypotheses. We also conduct a series of sensitivity tests to check the robustness of our main fndings. Our results remain signifcant across specifcations: alternative identifcation strategy, or additional control variables. In an additional analysis, we also examine the role of lenders. Overall, we extend the scarce prior literature on the efectiveness of MCS under crisis management and provide new evidence for signaling theory, thus connecting both streams of literature. The COVID-19 pandemic provides an optimal context for researching this topic because, in contrast to past economic downturns or fnancial crises, it has required organizations across industries to adapt quickly and respond to new demands with unpredictable economic, behavioural, and societal consequences
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Google Scholar:Gómez Conde, Jacobo - Lopez Valeiras, Enesto - Silva Rosa, Fabricia - Lunkes, Rogério João
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