Management Control System and Performance of Cooperative Societies in Northern Province of Sri Lanka

Abstract

Cooperative societies in Sri Lanka have a long and rich history from British rule. The main purpose of a cooperative society is to meet the common needs of the people in societies around the world. In Northern Province, cooperative societies failed to record a remarkable performance during the past years. Therefore, the study attempts to analyze the relationship between the management controls system and the performance of cooperative societies in the Northern province of Sri Lanka. For the study purpose, 319 questionnaires were received and analyzed. The finding of the study revealed that the logistic regression model was statistically significant. The model explained 31.7.0% (Nagelkerke R2) of the variance in performance and correctly classified 93.1% of cases. From the study results, researchers recommend the following: sharing the vision, mission, and objectives of Cooperatives among their staff will lead to higher performance of cooperatives. Cooperatives should increase face-to-face meetings with employees, which will lead to better performance of cooperatives. Diagnostic control has a negative significant relationship with performance. It shows that employees do not like to work under the traditional management control system. Therefore, the valuation standards and incentives scheme of employees should be modified.