Lean Management, Competitive Advantage, and Firm Performance: The Role of Management Control Systems (Evidence from Indonesia Manufacturing Firms)

Abstract

The purpose of this paper is to examine the role of management control systems (MCS) to support the implementation of lean management strategy to achieve competitive advantage and improve firm performance. Data collected using a questionnaire survey. A total of 123 managers in manufacturing firms participated in this study. Data were analyzed using structural equation models. The results show that a lean management strategy is positively and significantly related to MCS and competitive advantage; MCS has a positive and significant effect on competitive advantage and firm performance. Furthermore, these results show that MCS serves as a mediating variable to the relationship between lean management and competitive advantage, and firm performance. The results of the study show the role of lean MCS as an integral part of lean management to achieve competitive advantage and improve firm performance. This result is the initial evidence of how MCS mediates the relationship between lean management strategy, competitive advantage, and firm performance.