Management control system package, risk culture and performance of listed Nigerian firms

This study examines the relationship between management control system (MCS) package (planning, cybernetic, administrative, cultural, and reward and compensation control) and Nigerian listed firms‘ performance as well as the moderating effect of risk culture on the relationship. This study focuses on MCS package due to the
limited attention given in prior studies to the interplay of elements of control. In addition, practitioners in developing countries have failed to recognise the influence of risk culture on firm performance. This quantitative study used the cross-sectional method to collect data from 186 listed Nigerian firms via a close-ended questionnaire. The data were analysed using the Partial Least Squares-Structural
Equation Modelling (PLS-SEM) method to test 19 postulated hypotheses. The resource-based view (RBV) theory is adopted as the underlying theory to explain the relationship. The results show that 12 hypotheses are supported. The findings indicate that planning control, cybernetic control and reward and compensation
control have a significant positive relationship with the firm performance. Similarly, the MCS package, which comprises the five elements of control, is found to have a significantly positive relationship with firm performance and risk culture demonstrates a moderating effect on the relationship. The outcome of this study
provides remarkable insights into MCS package and risk culture as they are found to have an influence on firm performance, which is of paramount importance to the success of firms. This study adds to the existing literature by applying the resource-based view theory concern with the MCS package as internal capabilities to enhance
firm performance. This study also highlights the role of risk culture to enhance firm performance. Practically, the findings will benefit regulators and managers in discharging their regulatory and managerial responsibilities. Investors and other interest groups will also benefit from the study in their decisions on firm performance.