Influence of Formal and Informal Controls and Trust on Organizational Commitment
DOI:
https://doi.org/10.17524/repec.v15i1.2698Keywords:
Formal and informal controls, Organizational trust, Organizational commitmentAbstract
Objetive: The implications of formal and informal controls and trust in organizational commitment represent an important gap in the research, due to its possible effects on job performance at work. Thus, this study analyzes the influence of formal controls and information without organizational commitment, mediated by organizational trust.
Method: A survey was conducted with managers of the 150 Best Companies to Work for, identified on the LinkedIn social network and a final sample comprised of 84 participants. The constructions were measured with instruments already validated in the research by Goebel and Weißenberger (2017) and Verburg, Nienaber, Searle, Weibel, Hartog and Rupp (2018). In the analysis of the collected data, a technique for modeling selected equations is applied.
Results: The research results indicate that formal controls and information influence organizational commitment and the mediation of organizational trust has effects on this relationship. These results are in line with a literature that investigates some of these relationships. Thus, the study contributes by proceeding to jointly analyze these constructs with a view to evidencing the effects of organization controls on individuals behavioral aspects
References
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Audi, R., Loughran, T., & McDonald, B. (2016). Trust, but verify: MD&A language and the role of trust in corporate culture. Journal of Business Ethics, 139(3), 551-561. https://doi-org.ez74.periodicos.capes.gov.br/10.1007/s10551-015-2659-4
Baek, Y. M., & Jung, C. S. (2015). Focusing the mediating role of institutional trust: How does interpersonal trust promote organizational commitment? The Social Science Journal, 52(4), 481-489. https://doi.org/10.1016/j.soscij.2014.10.005
Batac, J., & Carassus, D. (2009). Interactions between control and organizational learning in the case of a municipality: A comparative study with Kloot (1997). Management Accounting Research, 20(2), 102-116. https://doi.org/10.1016/j.mar.2008.11.001
Chenhall, R. H. (2003). Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2-3), 127-168. https://doi.org/10.1016/S0361-3682(01)00027-7
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Modern Methods for Business Research, 295(2), 295-336.
Coletti, A. L., Sedatole, K. L., & Towry, K. L. (2005). The effect of control systems on trust and cooperation in collaborative environments. The Accounting Review, 80(2), 477-500. https://doi.org/10.2308/accr.2005.80.2.477
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20-47. https://doi.org/10.5465/amr.1997.9707180258
Dirks, K. T., & Ferrin, D. L. (2001). The role of trust in organizational settings. Organization Science, 12(4), 450-467. https://doi.org/10.1287/orsc.12.4.450.10640
Flamholtz, E. G., Das, T. K., & Tsui, A. S. (1985). Toward an integrative framework of organizational control. Accounting, Organizations and Society, 10(1), 35-50. https://doi.org/10.1016/0361-3682(85)90030-3
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.2307/3151312
Fulmer, C. A., & Gelfand, M. J. (2012). At what level (and in whom) we trust: Trust across multiple organizational levels. Journal of Management, 38(4), 1167-1230. https://doi.org/10.1177/0149206312439327
Gillespie, N., & Dietz, G. (2009). Trust repair after an organization-level failure. Academy of Management Review, 34(1), 127-145. https://doi.org/10.5465/amr.2009.35713319.
Goebel, S., & Weißenberger, B. E. (2017). The relationship between informal controls, ethical work climates, and organizational performance. Journal of Business Ethics, 141(3), 505-528. https://doi.org/10.1007/s10551-015-2700-7
Gualinga, E. S., & Lennartsson, D. (2020). The relationship between personality traits, management control systems, and organizational commitment : A multifirm study. Dissertation master, Uppsala University, Uppsala, Sweden.
Guibert, N., & Dupuy, Y. (1997). La Complémentarité entre contrôle formel et contrôle informel: le cas de la relation client fournisseur. Association Francophone de Comptabilité - Contrôle – Audit, 3(1), 39-52.
Hair Jr., J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2014). A primer on partial least squares structural equation modeling (PLS-SEM). London: Sage Publication.
Hartmann, F., & Slapnicar, S. (2009). How formal performance evaluation affects trust between superior and subordinate managers. Accounting, Organizations and Society, 34(6-7), 722-737. https://doi.org/10.1016/j.aos.2008.11.004
Hernandez, M. (2008). Promoting Stewardship Behavior in Organizations: A Leadership Model. Journal of Business Ethics, 80, 121-128. https://doi.org/10.1007/s10551-007-9440-2
Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: a review of four recent studies. Strategic Management Journal, 20(2), 195-204. https://doi.org/10.1002/(SICI)1097-0266(199902)20:2<195::AID-SMJ13>3.0.CO;2-7
Khodyakov, D. M. (2007). The complexity of trust-control relationships in creative organizations: Insights from a qualitative analysis of a conductorless orchestra. Social Forces, 86(1), 1-22. https://doi.org/10.1353/sof.2007.0100
Langfield-Smith, K. (1997). Management control systems and strategy: a critical review. Accounting, Organizations and Society, 22(2), 207-232. https://doi.org/10.1016/S0361-3682(95)00040-2
Lau, C. M., & Sholihin, M. (2005). Financial and nonfinancial performance measures: How do they affect job satisfaction? The British Accounting Review, 37(4), 389-413. https://doi.org/10.1016/j.bar.2005.06.002
Malhotra, D., & Murnighan, K. J. (2002). The effects of contracts on interpersonal trust. Administrative Science Quarterly, 47(3), 534–559. https://doi.org/10.2307/3094850
Malmi, T., & Brown, D. A. (2008). Management control systems as a package—Opportunities, challenges and research directions. Management Accounting Research, 19(4), 287-300. https://doi.org/10.1016/j.mar.2008.09.003
Morand, D. A. (1995). The role of behavioral formality and informality in the enactment of bureaucratic versus organic organizations. Academy of Management Review, 20(4), 831-872. https://doi.org/10.5465/amr.1995.9512280023
Oliveira, P. N., & Rowe, D. E. O. (2018). Organizational commitment in the public sector: review and research. Revista Pensamento Contemporâneo em Administração, 12(2), 43-54.
Otley, D. T. (1980). The contingency theory of management accounting: achievement and prognosis. Accounting, Organizations and Society, 5(4), 413-428. https://doi.org/10.1016/0361-3682(80)90040-9
Ozmen, Y.S. (2019). How the exchange relationship affects employee commitment: The mediating role of organizational trust. Journal of Management Development, 38(6), 501-516. https://doi-org.ez71.periodicos.capes.gov.br/10.1108/JMD-08-2018-0220
Peng, D.X., & Lai, F. (2012). Using partial least squares in operations management research: A practical guideline of past research. Journal of Operations Management, 30(6), 467-480. https://doi.org/10.1016/j.jom.2012.06.002
Pranitasari, D. (2020). The influence of effective leadership and organizational trust to teacher’s work motivation and organizational commitment. Media Ekonomi dan Manajemen, 35(1), 75-91. http://dx.doi.org/10.24856/mem.v35i1.1257
Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3), 879–891. https://doi.org/10.3758/BRM.40.3.879
Redda, B. M. (2007). Post-privatisation changes in management control, firm activities and performance: the case of Eritrea-based firms. s.n.
Ringle, C. M., Silva, D., & Bido, D. D. S. (2014). Modelagem de equações estruturais com utilização do SmartPLS. Revista Brasileira de Marketing, 13(2), 56-73. https://doi.org/10.5585/remark.v13i2.2717
Schoorman, F. D., Mayer, R. C., & Davis, J. H. (2007). An integrative model of organizational trust: Past, present, and future. Academy of Management Review, 32(2), 344-354. https://doi.org/10.5465/amr.2007.24348410
Searle, R., Den Hartog, D. N., Weibel, A., Gillespie, N., Six, F., Hatzakis, T., & Skinner, D. (2011). Trust in the employer: The role of high-involvement work practices and procedural justice in European organizations. The International Journal of Human Resource Management, 22(5), 1069-1092. https://doi.org/10.1080/09585192.2011.556782
Sholihin, M., & Pike, R. (2010). Organizational commitment in the police service: exploring the effects of performance measures, procedural justice and interpersonal trust. Financial Accountability & Management, 26(4), 392-421. https://doi-org.ez71.periodicos.capes.gov.br/10.1111/j.1468-0408.2010.00507.x
Souza, A. C., Alexandre, N. M. C., & Guirardello, E. B. (2017). Psychometric properties in instruments evaluation of reliability and validity. Epidemiol Serv Saude, 26(3), 649-659. https://doi.org/10.5123/S1679-49742017000300022
Sprinkle, G. B. (2003). Perspectives on experimental research in managerial accounting. Accounting, Organizations and Society, 28(2-3), 287-318. https://doi.org/10.1016/S0361-3682(01)00058-7
Storey, J. (1985). The means of management control. Sociology, 19(2), 193-211. https://doi.org/10.1177/0038038585019002004
Tan, H. H., & Tan, C. S. F. (2000). Toward the differentiation of trust in supervisor and trust in organization. Genetic, Social, and General Psychology Monographs, 126(2), 241.
Tayler, W. B., & Bloomfield, R. J. (2011). Norms, conformity, and controls. Journal of Accounting Research, 49(3), 2011. https://doi.org/10.1111/j.1475-679X.2011.00398.x
Verburg, R. M., Nienaber, A. M., Searle, R. R. H., Weibel, A., Hartog, D. N. D., & Rupp, D. E. (2018). The role of organizational control systems in employees’ organizational trust and performance outcomes. Group & Organization Management, 43(2), 179-206. https://doi.org/10.1177/1059601117725191
Vieira, J. A., Anjos, A. C., & Silva, L. C. O. (2016). Comportamento organizacional: diferenças na produção empírica entre psicologia e administração organizacional. Revista Pensamento Contemporâneo em Administração, 10(3), 152-162.
Weibel, A., Den Hartog, D. N., Gillespie, N., Searle, R., Six, F., & Skinner, D. (2016). How do controls impact employee trust in the employer? Human Resource Management, 55(3), 437-462. https://doi-org.ez74.periodicos.capes.gov.br/10.1002/hrm.21733
Widener, S. K. (2019). Reagrupamento dos pesquisadores para examinar a interação entre controle gerencial e ética. Revista de Contabilidade & Finanças, 30(80), 167-171. https://doi.org/10.1590/1808-057x201990300
Xu, Q., Fernando, G. D., & Tam, K. (2019). Trust and firm performance: A bi-directional study. Advances in Accounting, 47, 100433. https://doi.org/10.1016/j.adiac.2019.100433
Yandra, F. P. (2017). The role of trust as an informal mechanism in the management control system of performance effectiveness. The Indonesian Accounting Review, 7(1) 45-60. http://dx.doi.org/10.14414/tiar.v7i1.1218
Yao, T., Qiu, Q, & Wei, Y. (2019). Retaining hotel employees as internal customers: Effect of organizational commitment on attitudinal and behavioral loyalty of employees. International Journal of Hospitality Management, 76(A), 1-8. https://doi.org/10.1016/j.ijhm.2018.03.018
Zhang, A. Y., Tsui, A. S., Song, L. J., Li, C., & Jia, L. (2008). How do I trust thee? The employee‐organization relationship, supervisory support, and middle manager trust in the organization. Human Resource Management, 47(1), 111-132. https://doi.org/10.1002/hrm.20200
Arraes, V. M., Cabral, A. C. A., Santos, S. M., Silva, M. N. M., & Penha, E. D. S. (2017). Relação entre aspectos de modernidade organizacional e comprometimento organizacional. Revista de Administração FACES Journal, 16(1), 66-85. https://doi.org/10.21714/1984-6975FACES2017V16N1ART3759
Audi, R., Loughran, T., & McDonald, B. (2016). Trust, but verify: MD&A language and the role of trust in corporate culture. Journal of Business Ethics, 139(3), 551-561. https://doi-org.ez74.periodicos.capes.gov.br/10.1007/s10551-015-2659-4
Baek, Y. M., & Jung, C. S. (2015). Focusing the mediating role of institutional trust: How does interpersonal trust promote organizational commitment? The Social Science Journal, 52(4), 481-489. https://doi.org/10.1016/j.soscij.2014.10.005
Batac, J., & Carassus, D. (2009). Interactions between control and organizational learning in the case of a municipality: A comparative study with Kloot (1997). Management Accounting Research, 20(2), 102-116. https://doi.org/10.1016/j.mar.2008.11.001
Chenhall, R. H. (2003). Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2-3), 127-168. https://doi.org/10.1016/S0361-3682(01)00027-7
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Modern Methods for Business Research, 295(2), 295-336.
Coletti, A. L., Sedatole, K. L., & Towry, K. L. (2005). The effect of control systems on trust and cooperation in collaborative environments. The Accounting Review, 80(2), 477-500. https://doi.org/10.2308/accr.2005.80.2.477
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20-47. https://doi.org/10.5465/amr.1997.9707180258
Dirks, K. T., & Ferrin, D. L. (2001). The role of trust in organizational settings. Organization Science, 12(4), 450-467. https://doi.org/10.1287/orsc.12.4.450.10640
Flamholtz, E. G., Das, T. K., & Tsui, A. S. (1985). Toward an integrative framework of organizational control. Accounting, Organizations and Society, 10(1), 35-50. https://doi.org/10.1016/0361-3682(85)90030-3
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.2307/3151312
Fulmer, C. A., & Gelfand, M. J. (2012). At what level (and in whom) we trust: Trust across multiple organizational levels. Journal of Management, 38(4), 1167-1230. https://doi.org/10.1177/0149206312439327
Gillespie, N., & Dietz, G. (2009). Trust repair after an organization-level failure. Academy of Management Review, 34(1), 127-145. https://doi.org/10.5465/amr.2009.35713319.
Goebel, S., & Weißenberger, B. E. (2017). The relationship between informal controls, ethical work climates, and organizational performance. Journal of Business Ethics, 141(3), 505-528. https://doi.org/10.1007/s10551-015-2700-7
Gualinga, E. S., & Lennartsson, D. (2020). The relationship between personality traits, management control systems, and organizational commitment : A multifirm study. Dissertation master, Uppsala University, Uppsala, Sweden.
Guibert, N., & Dupuy, Y. (1997). La Complémentarité entre contrôle formel et contrôle informel: le cas de la relation client fournisseur. Association Francophone de Comptabilité - Contrôle – Audit, 3(1), 39-52.
Hair Jr., J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2014). A primer on partial least squares structural equation modeling (PLS-SEM). London: Sage Publication.
Hartmann, F., & Slapnicar, S. (2009). How formal performance evaluation affects trust between superior and subordinate managers. Accounting, Organizations and Society, 34(6-7), 722-737. https://doi.org/10.1016/j.aos.2008.11.004
Hernandez, M. (2008). Promoting Stewardship Behavior in Organizations: A Leadership Model. Journal of Business Ethics, 80, 121-128. https://doi.org/10.1007/s10551-007-9440-2
Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: a review of four recent studies. Strategic Management Journal, 20(2), 195-204. https://doi.org/10.1002/(SICI)1097-0266(199902)20:2<195::AID-SMJ13>3.0.CO;2-7
Khodyakov, D. M. (2007). The complexity of trust-control relationships in creative organizations: Insights from a qualitative analysis of a conductorless orchestra. Social Forces, 86(1), 1-22. https://doi.org/10.1353/sof.2007.0100
Langfield-Smith, K. (1997). Management control systems and strategy: a critical review. Accounting, Organizations and Society, 22(2), 207-232. https://doi.org/10.1016/S0361-3682(95)00040-2
Lau, C. M., & Sholihin, M. (2005). Financial and nonfinancial performance measures: How do they affect job satisfaction? The British Accounting Review, 37(4), 389-413. https://doi.org/10.1016/j.bar.2005.06.002
Malhotra, D., & Murnighan, K. J. (2002). The effects of contracts on interpersonal trust. Administrative Science Quarterly, 47(3), 534–559. https://doi.org/10.2307/3094850
Malmi, T., & Brown, D. A. (2008). Management control systems as a package—Opportunities, challenges and research directions. Management Accounting Research, 19(4), 287-300. https://doi.org/10.1016/j.mar.2008.09.003
Morand, D. A. (1995). The role of behavioral formality and informality in the enactment of bureaucratic versus organic organizations. Academy of Management Review, 20(4), 831-872. https://doi.org/10.5465/amr.1995.9512280023
Oliveira, P. N., & Rowe, D. E. O. (2018). Organizational commitment in the public sector: review and research. Revista Pensamento Contemporâneo em Administração, 12(2), 43-54.
Otley, D. T. (1980). The contingency theory of management accounting: achievement and prognosis. Accounting, Organizations and Society, 5(4), 413-428. https://doi.org/10.1016/0361-3682(80)90040-9
Ozmen, Y.S. (2019). How the exchange relationship affects employee commitment: The mediating role of organizational trust. Journal of Management Development, 38(6), 501-516. https://doi-org.ez71.periodicos.capes.gov.br/10.1108/JMD-08-2018-0220
Peng, D.X., & Lai, F. (2012). Using partial least squares in operations management research: A practical guideline of past research. Journal of Operations Management, 30(6), 467-480. https://doi.org/10.1016/j.jom.2012.06.002
Pranitasari, D. (2020). The influence of effective leadership and organizational trust to teacher’s work motivation and organizational commitment. Media Ekonomi dan Manajemen, 35(1), 75-91. http://dx.doi.org/10.24856/mem.v35i1.1257
Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3), 879–891. https://doi.org/10.3758/BRM.40.3.879
Redda, B. M. (2007). Post-privatisation changes in management control, firm activities and performance: the case of Eritrea-based firms. s.n.
Ringle, C. M., Silva, D., & Bido, D. D. S. (2014). Modelagem de equações estruturais com utilização do SmartPLS. Revista Brasileira de Marketing, 13(2), 56-73. https://doi.org/10.5585/remark.v13i2.2717
Schoorman, F. D., Mayer, R. C., & Davis, J. H. (2007). An integrative model of organizational trust: Past, present, and future. Academy of Management Review, 32(2), 344-354. https://doi.org/10.5465/amr.2007.24348410
Searle, R., Den Hartog, D. N., Weibel, A., Gillespie, N., Six, F., Hatzakis, T., & Skinner, D. (2011). Trust in the employer: The role of high-involvement work practices and procedural justice in European organizations. The International Journal of Human Resource Management, 22(5), 1069-1092. https://doi.org/10.1080/09585192.2011.556782
Sholihin, M., & Pike, R. (2010). Organizational commitment in the police service: exploring the effects of performance measures, procedural justice and interpersonal trust. Financial Accountability & Management, 26(4), 392-421. https://doi-org.ez71.periodicos.capes.gov.br/10.1111/j.1468-0408.2010.00507.x
Souza, A. C., Alexandre, N. M. C., & Guirardello, E. B. (2017). Psychometric properties in instruments evaluation of reliability and validity. Epidemiol Serv Saude, 26(3), 649-659. https://doi.org/10.5123/S1679-49742017000300022
Sprinkle, G. B. (2003). Perspectives on experimental research in managerial accounting. Accounting, Organizations and Society, 28(2-3), 287-318. https://doi.org/10.1016/S0361-3682(01)00058-7
Storey, J. (1985). The means of management control. Sociology, 19(2), 193-211. https://doi.org/10.1177/0038038585019002004
Tan, H. H., & Tan, C. S. F. (2000). Toward the differentiation of trust in supervisor and trust in organization. Genetic, Social, and General Psychology Monographs, 126(2), 241.
Tayler, W. B., & Bloomfield, R. J. (2011). Norms, conformity, and controls. Journal of Accounting Research, 49(3), 2011. https://doi.org/10.1111/j.1475-679X.2011.00398.x
Verburg, R. M., Nienaber, A. M., Searle, R. R. H., Weibel, A., Hartog, D. N. D., & Rupp, D. E. (2018). The role of organizational control systems in employees’ organizational trust and performance outcomes. Group & Organization Management, 43(2), 179-206. https://doi.org/10.1177/1059601117725191
Vieira, J. A., Anjos, A. C., & Silva, L. C. O. (2016). Comportamento organizacional: diferenças na produção empírica entre psicologia e administração organizacional. Revista Pensamento Contemporâneo em Administração, 10(3), 152-162.
Weibel, A., Den Hartog, D. N., Gillespie, N., Searle, R., Six, F., & Skinner, D. (2016). How do controls impact employee trust in the employer? Human Resource Management, 55(3), 437-462. https://doi-org.ez74.periodicos.capes.gov.br/10.1002/hrm.21733
Widener, S. K. (2019). Reagrupamento dos pesquisadores para examinar a interação entre controle gerencial e ética. Revista de Contabilidade & Finanças, 30(80), 167-171. https://doi.org/10.1590/1808-057x201990300
Xu, Q., Fernando, G. D., & Tam, K. (2019). Trust and firm performance: A bi-directional study. Advances in Accounting, 47, 100433. https://doi.org/10.1016/j.adiac.2019.100433
Yandra, F. P. (2017). The role of trust as an informal mechanism in the management control system of performance effectiveness. The Indonesian Accounting Review, 7(1) 45-60. http://dx.doi.org/10.14414/tiar.v7i1.1218
Yao, T., Qiu, Q, & Wei, Y. (2019). Retaining hotel employees as internal customers: Effect of organizational commitment on attitudinal and behavioral loyalty of employees. International Journal of Hospitality Management, 76(A), 1-8. https://doi.org/10.1016/j.ijhm.2018.03.018
Zhang, A. Y., Tsui, A. S., Song, L. J., Li, C., & Jia, L. (2008). How do I trust thee? The employee‐organization relationship, supervisory support, and middle manager trust in the organization. Human Resource Management, 47(1), 111-132. https://doi.org/10.1002/hrm.20200
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2021-03-31
How to Cite
Boff, M. L., Rakowski Savariz, C., & Maria Beuren, I. (2021). Influence of Formal and Informal Controls and Trust on Organizational Commitment. Journal of Education and Research in Accounting (REPeC), 15(1). https://doi.org/10.17524/repec.v15i1.2698
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