ORGANIZATIONAL CONTROL AND PERFORMANCE: AN EMPIRICAL STUDY OF FINANCIAL INSTITUTIONS

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Lilis Sulistyani, Imam Ghozali, Jaka Isgiyarta

DOI:10.22495/cocv14i3art6

Abstract

The aim of this research was to examine the effect of diagnostic control system and interactive control system on organizational performance with organizational capability as intervening variable. Resource-based view theory was used for underlying the association between the variables. The respondents were 84 Financial Institutions in Indonesia. The data were analyzed using Structural Equation Model with Warp PLS 3.0. The results show that the diagnostic control system has positive significant effect on organizational capability but no significant effect on organizational performance. Interactive control system is proven to have positive significant effect on organizational capability and organizational performance. Organizational capability is proven not to mediate the association between diagnostic control system and organizational performance, but it mediates partially the association between interactive control system and organizational performance partially.

Keywords: Diagnostic Control System, Interactive Control System, Organizational Capability, Organizational Performance, Financial Institutions, Indonesia

Date received: 01 December 2016

Date accepted: 15 February 2017

How to cite this paper: Sulistyani, L., Ghozali, I., & Isgiyarta, J. (2017). Organizational control and performance: An empirical study of financial institutions. Corporate Ownership & Control, 14(3), 51-63. http://doi.org/10.22495/cocv14i3art6