Weak Signals in Management Control Systems

Abstract

The study reports a survey of 58 large and middle-sized Finnish companies, and uses partial least squares modeling to examine the effects of two contingency factors; perceived environmental uncertainty and strategy on the use of weak-signal-based foresight approach in organizations. In more detail it is explored if weak-signal-based foresight approach is a part of management control systems (MCS) of organizations. Furthermore it is explored if the integration of weak signals to MCS increases product innovation and improves performance in the organizations. The results indicate that the companies detect weak signals and that detection and utilization of weak signals is in a way or another a part of MCS. Also the positive relationship between prospector-strategy and detection of weak signals seems to be significant. Direct significant relationship between MCS that includes weak-signal-aspects and product innovation or performance was not found. However, a significant positive relationship between weak-signal-based foresight and product innovation was discovered. Also weak-signal-based foresight approach seems to improve performance via increased product innovation.