Managers who pursue an innovation to enhance business performance have to develop core management competencies by creating appropriate skills, habits, motives, knowledge and attitude within organization, and need to establish management control system...
Managers who pursue an innovation to enhance business performance have to develop core management competencies by creating appropriate skills, habits, motives, knowledge and attitude within organization, and need to establish management control system to promote management activities more efficient way. Numerous studies investigating effects of management control system from literature of the US / Europe / Korea have been adding positive evidences to hitherto discussion for the effectiveness of organizational capabilities (e.g., human resource management, performance measure system) on business performances, and it is an evidence supporting resource-based theory. There, however, were little attention to diagnose the level of managerial competencies, human resource management, and performance measurement system (PMS) and to test relationship among the variables for Chinese companies which are increasingly influential in the global economy and are also top trading partner with South Korea. This paper, in hence, aims to examine the effect of entrepreneurship of managers of Chinese manufacturing firms on corporate performances and to further investigate role of psychological empowerment, PMS interactive control and PMS justice in the relationship between entrepreneurship of managers and organizational performances. There are four hypotheses in this study. Hypothesis one is to test if entrepreneurship of managers have a positive effect on organizational performances. Hypothesis two and three are to verify respectively if psychological empowerment or PMS (PMS interactive control and PMS justice) can play a mediating role in the relationship between entrepreneurship of managers and organizational performances. Hypothesis four is to exam if PMS interactive control, PMS justice and psychological empowerment can have sequential mediating effects in the relationship between entrepreneurship of managers and corporate performances. Measurement of the variables of this study is as follows. We defined entrepreneurship as a capacity of organization to continuously change and innovate while taking risks in management activities under uncertain circumstances. Psychological empowerment was defined as a motivational state in which employees perceive that they have been empowered for their own tasks. PMS interactive control was defined as a tool that enables communication and discussion to improve alignment with strategic goals within organization, and PMS justice was defined as a level of awareness of employees for how fairly PMS is operating. We divided corporate performances into non-financial (employee and customer focus) and financial performances. All of the variables of this study were measured by considering prior literature. We surveyed for the biggest 500 manufacturing firms announced in 2020 by China enterprise association and China entrepreneurs association. Hypotheses were verified by path analysis with the finally selected 253 sample firms (return rate: 50.6%). The findings of the study are as follows. First, entrepreneurship have a positive effect on financial and non-financial performances. Second, the mediating effect of psychological empowerment is confirmed in the relationship between entrepreneurship of managers and organizational performances. Third, PMS interactive control and PMS justice play a mediating role in the relationship. Fourth, we found a sequential multiple mediating effects of the psychological empowerment, PMS interactive control, and PMS justice in the relationship. This study has following implications. We confirmed that entrepreneurship of manufacturing firms in China can have a positive effect on the improvement of organizational financial and non-financial performances, which means that entrepreneurship of managers in socialist country can be also a critical factor to enhance corporate performances like those firms in capitalist country. And we also suggest that PMS interactive control and PMS justice a...