The associations between management control systems, market orientation and CSR use

This study contributes to the management control system (MCS) literature by examining the association between MCSs, specifically Simons’ (Levers of control: how managers use innovative control systems to drive strategic renewal, Harvard Business School Press, Boston, 1995) four levers of control (i.e. belief, boundary, diagnostic and interactive) and CSR use, and the mediating role of market orientation on this association in a developing economy, Bangladesh. The study also develops a six-dimensional model of CSR use, utilising the principles of CSR use provided by the OECD. Data was collected using a survey of 201 Bangladeshi firms. The findings indicate that the boundary, diagnostic use and interactive use of levers of control exhibit a direct positive influence on the use of specific dimensions of CSR use. In addition, market orientation mediates the specific positive associations between the interactive use of controls and two different dimensions of CSR use: ‘accountability to external stakeholders’ and ‘environmental, occupational, and public health and safety’. Accordingly, the findings indicate that the influence of MCSs (i.e. the interactive use of control) on the use of CSR occurs both directly and indirectly (through market orientation) and consequently firms need to consider the role of MCSs in enhancing both market orientation and CSR use. Practitioners can use the findings of this study to implement appropriate MCSs and develop their market orientation in a manner which is conducive to CSR use.