ISSN 2189-9592

Vol. 4, No.1, November 2019Japan Federation of Management Related
Academies

Vice President
Fangqi Xu (Japan Creativity Society, Kindai University)
Editor-in-Chief
Yukio Takagaki (Japan Academy of Management, Surugadai University)
Editorial Board
Shintaro Abe (Japan Academy of Consumer Education, Josai International University)
Takabumi Hayashi (Japan Scholarly Association for Asian Management, Tokyo Fuji University)
Toshio Goto (Japan Academy of Business Administration, Japan University of Economics)
Hisamitsu Ihara (Japan Society for Applied Management, Tokyo Fuji University)
Jun Oeki (Lanchester Society, Tokyo University of Science)David T. Methé（Japan Creativity Society, Kwansei Gakuin University）

Masayasu Takahashi (Japan Academy of Business Administration, Meiji University)
Kim Hua Tan (SFHEA :Senior Fellow of Higher Education Academy, University of Nottingham)
Hideo Ueki (Knowledge Management Society of Japan, Tsukuba Gakuin University)
Masamichi Yoshioka (Global Academic Community, Tokyo University of Science)
Advisory Board
Kazuo Hiramatsu (Japan Accounting Association, Kwansei Gakuin University)
Nobutaka Kazama (Association for the Study of Industrial Management (Japan), Meiji
University)
Takayuki Nonoyama (Japan Association for Management Systems, Aichi Sangyo University)
Takao Nuki (Association for the Study of Industrial Management (Japan), Musashi University)
Koji Okubayashi (Japan Society of Human Resource Management, Osaka International
University)
Yoshihiro Tokuga (Japan Accounting Association, Kyoto University)
Akira Uchino (Japan Society of Business Mathematics, Senshu University)

ISSN 2189-9592

Vol.4, No.1, November 2019Japan Federation of Management Related
Academies

Vol.4, No.1, November 2019©2019 Japan Federation of Management Related Academies
All rights reserved. This journal may not be translated or copied in whole or in part without the written
permission except for brief excerpts in connection with reviews or scholarly analysis. Use in connection
with any form of information storage and retrieval, electronic adaptation, computer software, or by similaror dissimilar methodology new known or hereafter developed is forbidden.
The original English language edition published by JFMRA.

Journal of Japanese Management Vol.4, No.1, November 2019ISSN 2189-9592

Contents

An Empirical Analysis of Cultural Intelligence, Narcissism, ・・・・・・・・・・・・・・p.1
and Export Firm Performance in Japan
Hiroto Soga

The role of collaboration in developing agricultural competitiveness and welfare・・・・・p.15
Masatoshi Kosugi and Keikichi Kato

Recommended paper by Japan Cost Accounting Association
The impact of quality of performance measures on the performance・・・・・・・・・・・・p.30
of public sector organisations: Quantitative analysis based on questionnaire survey
Takehiro Metoki

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

An Empirical Analysis of Cultural Intelligence, Narcissism, andExport Firm Performance in Japan
Hiroto Soga
Kushiro Public University of Economics
Japan Management Diagnosis Association
E-mail: soga@kpu.kushiro-pu.ac.jp
Abstract
Metacognitive cultural intelligence (CQ) monitors and objectively controls cognitive
processes, and may affect the narcissism of Japanese export managers. This study conducted anempirical analysis, using data collected from small- and medium-sized enterprises in Japan, toexamine the hitherto unexplored relationship between CQ, narcissism, and export firm
performance. The findings suggest that narcissism moderates the relationship between
metacognitive CQ and performance prediction. In addition, motivational CQ—moderated bymetacognitive CQ, cognitive CQ, and narcissism—affects export firm performance andperformance prediction.
Keywords:
Cultural Intelligence, Narcissism, Firm Performance, Japan(1) Introduction

focuses on an individual’s cognitive skills,

Globalization has increased the number

motivation, and cultural adaptation behavior.

of foreign tourists and workers, which affects

Earley and Ang (2003) identified CQ as aboth export firms that conduct cross-bordermultifactor

business and those that mainly conduct

metacognition, cognition, motivational, andbusiness domestically. In this situation, firms

behavioral factors. Empirical findings havemust be mindful of cultural differences.

indicated a relationship between the facets ofManagers need to develop the skills and

CQ and psychological factors: Big five (Ang etcapabilities necessary to understand andal., 2006) and self-efficacy (Hu et al., 2018;

adapt to other cultures.

Rehg et al., 2012).

concept

that

includesThe concept of cultural intelligence (CQ),

This study proposes that CQ is related to

introduced by Earley (2002), can be used to

the narcissism of Japanese export managers,

recognize

cultural

who determine the course of business.

understanding. CQ “refers to a person’s

Narcissism mainly refers to our feelings aboutcapability to adapt effectively to new cultural

ourselves, including self-esteem and self-theimportanceofcontexts” (Earley and Ang, 2003, p.59). CQ
1

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

admiration 1 . Managers with high levels ofmanagement did not focus on CQ, thoughnarcissism often disrupt teamwork andstudies have examined the relationship

impair the overall performance of the export

between CEO

firm (Judge et al., 2009; Resick et al., 2009).

performance

Metacognitive CQ, which monitors and2007; Wales et al., 2013). The present study

controls the cognitive process, can be used toproposes a new perspective of CQ to deepen

restrain one’s level of narcissism, thereby

ourimproving export performance.

between CQ and narcissism in a business

Previous research on CQ (Bücker et al.,narcissism(Chatterjee

understanding

of

and
and

the

business
Hambrick,

relationshipmanagement context.

2014; Elenkov and Manev, 2009; Magnusson

This paper first presents a theoreticalet al., 2013) and narcissism (Chatterjee andbackground of CQ and narcissism to develop

Hambrick, 2007; Wales et al., 2013) has

the hypotheses. Second, it presents thefocused on managers and other senior

methodmanagement members. However, no study

hypotheses, and the results. Finally, it

has examined the relationship between thediscusses the implications of the findings.

ofanalysis

used

to

test

the

CQ and the narcissism of export managers, or
how

this

relationshipperformance.
empirical

This

study

analysistoaffects

exportconducts
examine(2) Theoretical background and hypotheses

an

1. CQ

this

CQ is a multidimensional concept that

relationship and its effects.

includes metacognition, cognition, motivation,

This study applies the trait theory ofand behavior. According to Ang and Dyne

leadership (Geiser, 1967; Judge et al., 2002;(2008), who defined the four facets of CQ,

Kirkpatrickwhich

metacognitive CQ refers to “the individual’s

considers the behavior of the leader of anlevel of conscious cultural awareness duringorganization, to two personality traits ofcross-cultural interactions” (p.5); cognitive

export managers: CQ and narcissism.

CQ reflects “knowledge of norms, practices,andLocke,

1991),

This study makes several contributions

and conventions in different cultures that has

to research on international business andbeen acquired from educational and personal

narcissism,

toexperiences” (p.5); motivational CQ reflects

management. First, this study uses empirical“the capability to direct attention and energy

analysis to further investigate the effect of CQ

toward learning about and functioning inon export performance. Previous studies on

situations

CQ focused on the relationship between

differences” (p.6); and behavioral CQ reflects

individual traits and CQ (Ward and Fischer,“the capability to exhibit appropriate verbal

2008; Huff et al., 2014; Hu et al., 2018).

and nonverbal actions when interacting with

Previous studies on narcissism in businesspeoplewhicharerelevant

In this study, narcissism does not mean apathological condition.
1

2

characterizedfromdifferentbyculturalcultures”(p.6).

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Empirical studies of CQ and business havemanagement. Bücker et al. (2014) analyzed

indicated that the four facets of CQ arethepositively

effectiveness and job satisfaction in a sample

associatedwithshort-term

effectofCQ

oncommunication

business travel, the need to control a situation,ofChinesemanagers

workingandmultinational

enterprises.

The

international

non-work

experiencesinresults(Tarique and Takeuchi, 2008; Tay et al., 2008).

indicated that CQ enhances communication

Thomas et al. (2015) developed anothereffectiveness and job satisfaction. In addition,

conceptual model of CQ that included three

Magnusson et al. (2013) used data from US

facets: knowledge, metacognition, and skills.

exporting firms to examine the influence ofThese facets respectively correspond to

CQ on marketing mix adaptation and export

cognitive

andperformance. Their study revealed thatbehavioral CQ, as defined by Ang and Dyne

metacognitive CQ moderates the relationship(2008). However, Thomas et al.’s model does

between marketing mix adaptation and

not include a facet that corresponds Ang andexport performance, and motivational CQ

Dyne’s (2008) motivational CQ because,moderates“motivation and intelligence may have aenvironmental differences and marketing

limited recursive relationship” (Thomas et al.,mix adaptation. Based on these studies, CQ

2015, p.1100). The facets of CQ as outlined by

has a positive effect on business management

Thomas et al. (2015) may have reliability

and firm performance.

CQ,

metacognitive

CQ,

the

relationshipbetweenissues. The authors operationalized the three
facets based on very few questions: 2

2. Narcissism

questions on knowledge, 5 questions on skills,
and3

questionson

Narcissism originates from the Greek

metacognition.

myth of Narcissus, a beautiful young man

Consequently, the model’s reliability index of

who fell in love with his reflection in water.

Cronbach's α is low, which is problematic

Sigmund Freud (1914-1957) used narcissism(Soga, 2019).

as a term to describe a personality disorder,

Therefore, this study adopts the CQ

based on this myth. In the social sciences,model introduced by Earley and Ang (2003)

narcissism is used to refer to our feelings

because it has been used in many previous

about ourselves, including self-esteem andstudies. Earley and Ang (2003) used 20

self-admiration.

questions to identify the facets of CQ: 4

Narcissism

has

both

positive

andquestions on metacognitive CQ, 6 questions

negative effects. Lubit (2002) suggested thaton cognitive CQ, 5 questions on motivational

narcissism could be healthy (positive) or

CQ, and 5 questions on behavioral CQ (Ang etdestructive (negative). Healthy narcissism

al., 2007). Thus, they did not have a reliability

reflects reality and results in self-confidence.

problem.

Destructive narcissism causes grandiose

Prior studies have shown the effects ofthinking

andthedevaluation

andthe four CQ facets, as defined in the Earley

exploitation of others. In addition, destructive

andnarcissism involves “the need to be admired,Ang(2003)

model,

onbusiness3

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

self-glorification, taking credit for the work of

CQ. Flavell (1979), who introduced theothers,andconcept of metacognition, defined the term as

devaluing behavior, envy, lack of empathy,

reflecting on one’s own thinking. Nelson andand lack of insight” (Lubit, 2002, p.132).

Narens (1990) explained metacognition byrepressive

control,

criticalPrevious studies have developed scales tosplitting the cognitive process into two levels:

measure narcissism. Raskin and Terry (1988)

object-level and meta-level. The meta-level

conducted an empirical analysis of items in

cognitive

the Narcissistic Personality Inventory (NPI)

knowledge to monitor and control the object-and identified 7 components of narcissism:

level cognitive process. This results in an

authority, exhibitionism, superiority, vanity,

objective

exploitative, entitlement, and self-sufficiency.

cognitive process. Metacognition can be used

In addition, Resick et al. (2009) used 8

to avoid narcissistic qualities, such as

characteristics—arrogant, assertive, boastful,overconfidence, overestimation, and higher

conceited, egotistical, self-centered, show-off,

self-esteem. The following hypotheses areandproposed:temperamental—tomeasuretheprocessuses

experience

understanding

of

one’s

and

own

narcissism of CEOs.
Using

these

measures,

Hypothesis 1a: Metacognitive CQ is positively
associated with cognitive CQ.

empirical

research has elucidated how narcissism
affectsbusinessmanagement.

Namely,narcissism detracts from the use of contingent

Hypothesis 1b: Metacognitive CQ is positively

reward leadership because a narcissistic

associated with narcissism.

person has little concern for others (Resick etal., 2009). Further, the narcissism of a leader

Narcissism affects motivation. According

affects firm performance. Chatterjee andto Foster and Trimm (2008), narcissism has aHambrick (2007) examined the relationshipweak impact on the motivation to avoid

between the narcissistic tendencies of CEOs

negative outcomes but a strong impact on theand firm performance; the results of theirmotivation to attain desirable outcomes. An

empirical analysis revealed that when a firm’s

empirical analysis by Brunell et al. (2014),

CEO had narcissistic tendencies, the firm’s

however,

performance was either higher or lower thanmotivation,

the average. Wales et al. (2013) also analyzed

between narcissism and motivation. This is

this

the

likely because narcissists do not typicallynarcissism of CEOs affects the variance ofpractice selfless acts such as volunteering. In

firm performance, and that entrepreneurial

other words, narcissists are motivated byorientation has a moderating effect on thisoutcomes related to success and reputation,

relationship.

and volunteering does not provide thoserelationship,

revealing

that

which

focusedidentified

noonvolunteer
relationshipoutcomes. This study examined motivational
3. Hypotheses

CQ in the context of jobs that yield desirable

Metacognitive CQ is related to cognitive

outcomes.
4

The

following

hypothesisisJournal of Japanese Management Vo.4, No.1, November 2019

proposed:

ISSN 2189-9592

associated with the accuracy of export
performance prediction.

Hypothesis 2: Narcissism is
associated with motivational CQ.

positively
Motivation is one of the important factors
inExpertise enhances the motivation toorganization

classified

behavior.

motivation

as

Grant

(2008)

intrinsic

anddevelop skills and accumulate knowledge.

prosocial to analyze the relationship between

Individuals with expertise have the desire to

motivation and job performance. The results

utilize their skills. Tsuji and Yoshikane (2010)

suggested that motivation does not affectinvestigatedperformance;therelationshipbetweenhowever,theinteraction

expertise and work motivation among library

between intrinsic and prosocial motivation

employees in Japan. The results indicatedhas a significant effect on job performance. Inthat employees with a librarian license had

addition, Barrick et al. (2002) classified

higher motivation than those without it.

motivation

Similarly,

had

accomplishment, and status striving tofamiliarity with different cultures had a highanalyze the moderating effect of motivation

motivation to communicate with individuals

on the relationship between personality andfromjob performance. Their findings suggested

exportdifferent

managers

who

cultures.

Therefore,

Hypothesis 3 is proposed:

that

into

communication

communication

striving,

striving,

accomplishment, and status striving had aHypothesis 3: Cognitive CQ is positively
associated with motivational CQ.

significant effect on job performance. Thus,
motivational

CQ

enhances

exportperformance. If export managers’ motivation
Narcissism of the company leader isleads to good performance, their prediction of

associated with firm performance. According

performance will also improve. Therefore, theto previous studies, narcissism results infollowing hypotheses are proposed:

extreme (higher or lower than average) firm
performance(Chatterjee

andHypothesis 5a: Motivational CQ is positively

Hambrick,

2007; Wales et al., 2013). Narcissists also tend
tooverestimate

theirassociated with performance.

performance,

Campbell, 2008; Farwell and Wohlwend-

Hypothesis 5b: Motivational CQ is positively
associated with the accuracy of export

Lloyd, 1998; Gabriel et al., 1994). Therefore,

performance prediction.

intelligence, and attractiveness (Buffardi andthe following hypotheses are proposed:(3) Analysis

Hypothesis 4a: Narcissism is positively

1. Method

associated with export performance.

To test these hypotheses, partial leastsquares structural equation modeling (PLS-

Hypothesis 4b: Narcissism is negatively

SEM), using SmartPLS 3.2.7, was employed.
5Journal of Japanese Management Vo.4, No.1, November 2019

This technique is used to conduct factor

ISSN 2189-9592

strongly disagree, 7 = strongly agree).

analysis, path analysis, and regressions

Furthermore, export sale information(Charoensukmongkol, 2016). PLS-SEM can

was obtained to measure export performance.

be applied when the sample size is small,We

compared with covariance-based structural

performanceequation modeling (CB-SEM), which has thedifference between the firm leader’s forecast

same objective as PLS-SEM (Rigdon et al.,and actual export sales; for example, if the2017).

forecasted sales were 10% higher than thecalculatedtheaccuracy

prediction

of

based

exportontheactual export sales, the respondent wrote 2. Samples

10% in the questionnaire.

Data were collected from February toMissing values were replaced with

April 2018. Information on 2,342 Japanese

average values.

small- and medium-sized enterprises (SMEs)
was extracted from the databases of TSR(4) Results

Kigyo Joho File and Kaigai Sinshutsu Kigyo

1. Measurement of model evaluation

Soran 2 .

Questionnaires were mailed to theenterprise

theused to evaluate the model and confirm theinternational business of these SMEs; 67

reliability and validity of all latent variables.

usable questionnaires were returned. The

The test of common method variance wasleadershaveconducted; single respondents were asked

international experience. The average timequestions about the three CQ facets andthese leaders engaged in export was 25.8

narcissism. Harman’s single factor test andyears. In addition; the average time they were

exploratory factor analysis of the three CQ

engaged in business in a foreign country was

facets and narcissism revealed five factors

18.7 years.

with an eigenvalue greater than 1.0. The

inleaderstheresponsible

usablefor

Before the PLS estimation, tests were

samplecontribution rate of the first factor was
3. Measures

40.246%. Thus, the common method variance

CQ items in this study were adopted fromis not confirmed in this study.

the 20-item CQ scale (CQS) (Ang et al., 2007):

Second, three measures of constructmetacognitive CQ = 4 items; cognitive CQ = 6

reliability were conducted: Cronbach’s αitems; motivational CQ = 5 items; andcoefficient, RhoA coefficient, and composite

behavioral CQ = 5 items. In addition,

reliability coefficient. The minimum value ofconfidence was measured according to thethese coefficients was greater than .70, which

definition of superiority index in the Japaneseis a widely recommended value (see Table 1).

NPI (Konishi et al., 2006). These items were

Therefore, the model of this study meets themeasured on a 7-point Likert scale (1 =criterion of reliability.

Questionnaires were filtered based on capitaland number of employees. However, they were
not filter for type of industry specialization.
2

6

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Third, the test of convergent and

The results also confirmed a positive anddiscriminant validity was conducted. The

significant relationship between narcissism

averagewasand motivational CQ (f2 = 0.068, β = 0.223, p

measured, and the square root of the AVE was< .05), and cognitive CQ and motivational CQ

compared with the correlation coefficient. The(f2 = 0.343, β = 0.502, p < .001). Thus, H2 andminimum value of the AVE was greater

H3 are supported. The result indicated athan .50, which is the cut-off point suggested

positive, but not significant relationshipby Fornell and Larcker (1981) (see Table 1).

between narcissism and performance (f2 =The square root ranged from 0.749 to 0.881

0.027, β = 0.175, p > .10). However, narcissism(see Table 2). Each of these values was higher

had a significantly negative effect on export

than the correlations between them and theperformance prediction (f2 = 0.043, β = -0.21, pother latent variables. These results showed< .01). H4a is not supported, but H4b isthat the model of this study has a high levelsupported. Motivational CQ had a significant

of validity.

negative effect on performance (f2 = 0.075, β =variance

extracted(AVE)

Fourth, the outer loading was checked to-0.293, p < .05), so H5a is not supported. On

test the effects of the variables on thethe other hand, motivational CQ had aconstruct. All outer loadings were greater

significant

than .50, which is the criteria suggested by

performance prediction (f2 = 0.083, β = 0.306,

Hair et al. (2017).

p < .05), which supported H5b.

These results showed the reliability andpositive

effectonexportR2 and Q2 were used to measure thevalidity of the construct of this study.

predictive accuracy and relevance of the study.
R2 explains the level of the endogenous

2. Results of empirical analysis

variable compared to the exogenous variable.

The variance inflation factor (VIF) was
measured

to

test

the

presence

Q2 shows the prediction level of the model.

of

The R2 values of cognitive CQ, motivational

multicollinearity. The maximum value of the

CQ, and narcissism were greater than 0.25,

VIF in the inner model was 1.230. As thebutvalue was less than 5, the suggested criteria

performance prediction were less than 0.25.

by Hair et al. (2017), the problem ofThis suggests a weak predictive accuracy ofmulticollinearity is not confirmed.

cognitive

The bootstrap method was used to

those

of

CQ,

narcissism. The

performance

motivational
Q2

CQ,

exportandvalues of cognitive CQ,

estimate the path coefficient and test the

motivational

hypotheses (see Table 3). The result of thegreater than 0.12, but those of performance

PLS analysis confirmed a positive andand export performance prediction were 0.056

significant

betweenand 0.041 respectively. This study had a Q2

metacognitive CQ and cognitive CQ (f2 = 0.315,

value greater than 0, which indicates thatβ = 0.489, p < .001), and metacognitive CQ
and narcissism (f2 = 0.284, β = 0.470, p < .001).

this model has a high predictive relevance.

relationshipConsequently, H1a and H1b are supported.
7

CQ,

and

and

narcissism

wereJournal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Table 1 Cronbach’s α, RhoA, composite reliability, and average variance extracted
METACQ:

metacognitive

CQ;

COGCQ:METACQ COGCQ MOTICQ

cognitive

C

NAR

PER

PER_PRE

Cronbach's α

.740

.942

.918

.891

1.000

1.000

RhoA

.738

.944

.935

.916

1.000

1.000

Composite reliability

.835

.954

.939

.914

1.000

1.000

Average variance extracted

.561

.776

.756

.577

1.000

1.000

Q; MOTICQ: motivational CQ; NAR: narcissism; PER: performance; PER_PRE: performance
prediction

Table 2 Correlation and square root of AVEs
METACQ COGCQ MOTICQ

NAR

PER

METACQ

.881

COGCQ

.489

.749

MOTICQ

.322

.595

.870

NAR

.470

.418

.433

.759

PER

.046

-.026

-.217

.048

1.000

PER_PRE

.036

.071

.211

-.088

-.041

PER_PRE

1.000

METACQ: metacognitive CQ; COGCQ: cognitive CQ; MOTICQ: motivational CQ;
NAR: narcissism; PER: performance; PER_PRE: performance prediction

Table 3 PLS-SEM path coefficient
Path

Hypothesis

2

Coefficientf

H1a

metacognitive CQ →cognitive CQ

0.489**

0.315

H1b

metacognitive CQ →narcissism

0.470**

0.284

H2

narcissism→

motivational CQ

0.223*

0.068

H3

cognitive CQ→

motivational CQ

0.502**

0.343

H4a

narcissism→

performance

0.175

0.027

H4b

narcissism→ performance prediction－ 0.221 †

0.043

H5a

motivational CQ→－ 0.293*

0.075

H5b

motivational CQ→ performance prediction

0.306*

0.083

performance†p < 0.1, *p < .05, **p < .01
8

Journal of Japanese Management Vo.4, No.1, November 2019(5) Discussion

ISSN 2189-9592

because motivational CQ is relevant to

The results of this study show that the

narcissists’ ability to achieve job success andmetacognitive CQ of export managers affects

reputation.

This

is an

importantnewtheir cognitive CQ. This supports the findings

implication for the relationship between

of Flavell (1979), and Nelson and Narens

narcissism and motivation.

(1990), which suggested that metacognition

The analysis conducted in the present

monitors and controls cognitive process.

study shows that cognitive CQ has a positive

Metacognitive CQ encourages leaders toeffect on motivational CQ. This implies thatobtain more knowledge

different

motivational CQ should be included as a facet

cultures when their knowledge is lacking. The

of CQ. Although Thomas et al. (2015)

metacognitive CQ of export managers has asuggested that the facet of motivation should

significant positive effect on their narcissism.

be excluded from CQ measures, the results ofThis is attributed to the level of self-esteem

the present study, which highlighted theamong Japanese people. Previous studies

relationshiphave indicated that Japanese people havecognitive CQ, suggest that it is better tolowerinclude motivation as a facet.

self-esteem

aboutcompared

to

other

nationalities (Feather and McKee, 1993;

betweenmotivationaland

The results of this study further indicate

Kobayashi and Brown, 2003; Schmitt andthat

Allik, 2005; Yamaguchi et al., 2007). Japanese

performance

prediction,

people tend to underestimate themselves. In

performance.

Previous

the Japanese context, metacognitive CQ doessuggested that the narcissism of a leader

reduce the level of self-esteem in general, but

results in extreme performance (Chatterjee

itexportand Hambrick, 2007; Wales et al., 2013), but

managers to the appropriate level, which isthose studies did not consider the relationshipneither too high nor too low.

between narcissism and export performance,

improves

theself-esteemofnarcissism

significantly
butaffects

notactualstudieshave

The narcissism of export managers

which has not been confirmed. The narcissism

enhances motivational CQ. Brunell et al.

of export managers provides both positive and(2014) analyzed the relationship between

negative aspects to their export performance.

narcissism and the motivation to volunteer.

The present study shows that narcissism has

They did not confirm whether narcissism

a negative effect on performance prediction.

significantly enhanced motivation. In the

Narcissism

context of their analysis, narcissists did notoverestimate the firm’s future performance. It

have positive feelings towards volunteering,is critical that researchers who explore thebecause volunteering does not provide therole of narcissism in business management

honor and fame that narcissists wish to attain.

investigate the prediction of firm performance

However, the results of the present study,in addition to actual performance.

causesexportmanagerstowhich investigated the effect of motivational

This analysis shows that, in export firms,

CQ, elucidated a significant relationshipmotivational CQ negatively affects actual

between narcissism and motivation. This isexport performance and positively affects the9Journal of Japanese Management Vo.4, No.1, November 2019prediction of export performance. Thesea variable.

results imply that motivation and behavior—includingabilityandskill—are

ISSN 2189-9592

Although

this

study

clarified

the

not

relationship between narcissism, CQ, andsynchronized. Porter and Lawler (1968)

export performance, it did not address theargued that ability moderates motivation

behavior(effort) and performance. Baum and Lockeorganizations. Behavior is an important(2004) elucidated that entrepreneurial skills,

element for performance analysis because itin addition to motivation, impact performance.

reflects the psychological traits of managers.

However, since the present study only focused

Futureon psychological factors, it could not clarify

should include behavior as a variable to

the relationship between motivation andclarify the relationship between managers’

behavior.

psychological traits and firm performance.

ofexportbusinessmanagers

management

andresearch

The results showed that while narcissism,(6) Conclusion

which is enhanced by metacognitive CQ,This study showed that psychologicalfactors—narcissism

andcultural

intelligence—affectexportperformance.

negatively affects the prediction of firm
performance, motivational CQ, which isindirectly

andpositively

influencedbyNarcissism and motivational CQ also affectmetacognitive CQ, positively affects thethe prediction of firm performance. These

prediction of firm performance. In otherresults suggest that export managers shouldwords, metacognitive CQ indirectly affects

consider their psychological traits whenfirm performance prediction both negatively

predicting firm performance to ensure thatand positively. There is partial evidence of thethe prediction is accurate.

effects of metacognitive CQ. Future empirical

Although the present study’s empiricalresearch

isnecessary

toanalyze

analysis provides some significant results,

metacognition according to the following

this study has some limitations. First, as theclassification:

study focused on only Japanese SMEs,

metacognitive monitoring, and metacognitive

managers of large-sized enterprises in othercontrol.

metacognitive

knowledge,

countries must be investigated in futureThis study measured narcissism using

research. This study only focused on export

only the notion of superiority index based theperformance. Although export is at an earlyJapanese version of the NPI. Future research

stage in the traditional internationalization

should consider other factors to clarify themodel, many recent firms place it in a later

effect of narcissism in detail.

stage since they have foreign subsidiaries

This study does not focus on industry(Root, 1982). Unlike exporting firms, thesedifference. Cultural intelligence is needed infirms face problems managing international

industries where the product adapts to thehumanhost country. Future studies should control

resourceandcross-cultural

understandings in their international teams.

for industry differences.

Therefore, future research should add this asThis study clarifies the relationship10

Journal of Japanese Management Vo.4, No.1, November 2019

betweenCQ

andnarcissism,

Intelligence: Theory, Measurement, andApplications, Routledge, pp.3-15.

therebycontributing to the literature on leadership.
This

analysisdemonstrates

ISSN 2189-9592

that

Barrick, M. R., Stewart, G. L., and Piotrowski,

metacognitive CQ enhances the narcissism ofM.

Japanese export managers. Narcissism has a

Performance: Test of the Mediating Effects

significant

ofnegative

effectonexportperformance prediction. This study elucidates(2002)“Personality

Motivation

and

Among

Sales

Journal of
Psychology, vol.87, no.1, pp.1-9.

AppliedRepresentatives,”

the relationship between CQ and narcissism,

Jobwhich contributes to the literature on

Baum, J. R. and Locke, E. A. (2004) “Thenarcissism in management performance.

Relationship of Entrepreneurial traits,

Further research is necessary to understand

Skills, and Motivation to Subsequent

CQ, and other psychological factors, in

Venture Growth,” Journal of Applied

Psychology, vol.89, no.4, pp.587-598.
Brunell, A. B., Tumblin, L., and Buelow, M.

business management.
Acknowledgement(2014) “Narcissism and the Motivation toThis research was partially supported byEngageinCurrent

Volunteerism,”

Psychology, vol.33, no.3, pp.365-376.
Bücker J. J. L. E., Furrer, O. Poutsma, E., andthe Japanese Society for the Promotion of
Science, Grant-in-Aid for Research Activity
Start-up, 2017-2018 (JP17H06981).

Buyens, D. (2014) “The Impact of CulturalIntelligence

on

References

Effectiveness,Job

Ang, S., Dyne, L. V., and Koh, C. (2006)

Anxiety

Chinese

Host

Country“Personality Correlates of the Four-Factor

Managers

WorkingforForeign

Model of Cultural Intelligence,” Group &Multinationals,”

Organization Management, vol.31, no.1,
pp.100-123.

Journal of Human Management, vol.25,
no.14, pp.2068-2087.

Ang, S., Dyne, L. V., Koh, C., Ng, K. Y.,

Buffardi, L. E. and Campbell, W. K. (2008)

forCommunication
Satisfaction

The

International

Templer, K. J., Tay, C., and Chandrasekar,“Narcissism

andN. A. (2007) “Cultural Intelligence: Its

Websites,”

Measurement and Effects on Cultural

Psychology

Personality
andBulletin, vol.34,

Judgment and Decision Making, Cultural

pp.1303-1314.

Adaptation

and

Task

performance,”

Charoensukmongkol

Management and Organization Review,
vol.3, no.3, pp.335-371.
Ang,

S.

and

Dyne

“Conceptualization

L.
of

V.

SocialP.

and

Networking(2016)

Socialno.10,“CulturalIntelligence and Export performance ofSmall(2008)

andThailand:

CulturalMediumEnterprises

inMediating

Roles

of

Organizational

Capabilities,”and Nomological Network,” in Ang, S. andInternational Small Business Journal,
vol.34, no.1, pp.105-122.

Dyne, L. V. (eds.), Handbook of Cultural

Chatterjee A. and Hambrick, D. C. (2007) “It’sIntelligence: Definition, Distinctiveness,

11

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

All About Me: Narcissistic Chief Executive

Fornell, C. and Larcker, D. F. (1981)

Officers and Their Effects on Company“Evaluating Structural Equation Models

Strategy

with

and

Performance,”

Administrative Science Quarterly, vol.52,

Measurement

Earley, P. C. (2002) “Redefining interactions
CulturesMovingand

ForwardOrganizations:with

CulturalandEarley, P. C. and Ang, S. (2003) Cultural

AcrossPress.

Cultures,

StanfordofApproach-Avoidance

Motivation,”

Personality and Social Psychology Bulletin,vol.34, no.7, pp.1004-1017.

Behavior, vol.24, pp.271-299.
Individual

JournalError,”

andBeing Eager and Uninhibited: Narcissism

Intelligence,” Research in Organizational

Intelligence:

Variables

Marketing Research, vol.18, no.1, pp.39-50.
Foster, J. D. and Trimm IV, R. F. (2008) “On

no.3, pp.351-386.
AcrossUnobservable

Gabriel, M. T., Critelli, J. W., and Ee, J. S.

Interactions(1994) “Narcissistic Illusions in Self-

University

evaluationsofIntelligence

andAttractiveness,” Journal of Personality,

Elenkov, D. S. and Manev, I. M. (2009) “SeniorExpatriate

Leadership’s

Effects

vol.62, no.1, pp.143-155.

on

Geiser J. G. (1967) “A Trait Approach to theInnovation and the Role of Cultural

Study of Leadership in Small Groups,”

Intelligence,” Journal of World Business,

Journal of Communication, vol.17, no.4,

vol.44, no.4, pp.357-369.

pp.316-323.

Farwell, L. and Wohlwend-Lloyd, R. (1998)“Narcissistic

Processes:

Grant

Optimistic

A.

M.

(2008)“Does

Motivational Fuel the Prosocial Fire?

Expectations, Favorable Self-evaluations,

Motivationaland Self-enhancing Attributions,” Journal

Persistence,

Performance,of Personality, vol.66, no.1, pp.65-83.

Productivity,”

JournalSelf-Esteem and Attitudes Toward theAchieverfor

Australian

SynergyinofPredicting
andAppliedPsychology, vol.93, no.1, pp.48-58.
Hair, J. F. Jr., Hult, G. T. M., Ringle C., andFeather, N. T. and McKee, I. R. (1993) “Global
High

Intrinsic

Sarstedt, M. (2017) A Primer on Partial

andJapanese Students,” Social Psychology

Least

Squares

Structural

Equation

Quarterly, vol.56, no.1, pp.65-76.
Flavell, J. H. (1979) “Metacognition andModeling (PLS-SEM) (2nd ed.), SAGE
Publications.

Cognitive Monitoring: A New Area of

Hu, S., Liu, H., and Gu, J. (2018) “What Role

Cognitive-Developmental

American Psychologist,
pp.906-911.

Inquiry,”
vol.34,

Does Self-efficacy Play in Developing

no.10,

Cultural Intelligence from Social Media
Usage?,” Electronic Commerce Research

introduction,” in Strachey J. (Ed. And

and Applications, vol.28, pp.172-180.
Huff, K. C., Song, P., and Gresch, E. B. (2014)

Trans.), Complete psychological works of“Cultural Intelligence, Personality, andSigmund Freud (Standard ed. and trans.),

Cross-Cultural Adjustment: A Study ofvol.14, Hogarth Press.

Expatriates

Freud, S. (1914/1957) “On narcissism: An

12inJapan,”

International

Journal of Japanese Management Vo.4, No.1, November 2019

Journal of Intercultural Relations, vol.38,
pp.151-157.

andJudge, T. A., Bono, J. E., Ilies, R., and173.

Psychology of
Learning and Motivation, vol.26, pp.125-

Gerhardt, M. W. (2002) “Personality andLeadership:A

Qualitative

ISSN 2189-9592

New

Findings,”

Porter, L. W. and Lawler, E. E. (1968)

Managerial Attitudes and Performance,
Homewood.

andQuantitative Review,” Journal of Applied

Psychology, vol.87, no.4, pp.765-780.
Judge, T. A., Piccolo, R. F., and Kosalka, T.

Raskin, R. and Terry, H. (1988) “A principalcomponents analysis of the Narcissistic(2009) “The Bright and Dark Sides of

Personality

Leader Traits: A Review and Theoreticalevidence of its construct validity,” Journal

Extension of the Leader Traits Paradigm,”

of Personality and Social Psychology,
vol.54, no.5, pp.890-902.

The Leadership Quarterly, vol.20, no.6,
pp.855-875.

Inventory

andfurtherRehg, M.T., Gundlach, M. J., and Grigorian,

Kirkpatrick, S. A. and Locke, E. (1991)

R. A. (2012) “Examining the influence of“Leadership: Do Traits Matter?,” Academy

cross ‐ cultural training on culturalof Management Executive, vol.5, no.2,

intelligence

pp.48-60.
Kobayashi, C. and Brown, J. D. (2003) “Self-

Cross Cultural Management, vol. 19, no. 2,
pp.215-232.

Esteem and Self-Enhancement in Japan

Resick, C. J., Whitman, D. S., Weingarden, S.

and America,” Journal of Cross-CulturalT., and Hiller, N. J. (2009) “The Bright-Side

Psychology, vol.34, no.5, pp.567-580.
Konishi, M., Okawa, M., and Hashimoto, T.

and the Dark-side of CEO Personality:(2006)“Development

Personality

Inventoryof

Examining

Narcissistic(NPI-35),”

R.

(2002)“The

specificCoreself-efficacy,”

Self-Evaluations,

Narcissism, Transformational Leadership,

The

and

Japanese Journal of Personality, vol.14,
no.2, pp.214-226.
Lubit,

andStrategic

Journal of

Influence,”

Applied Psychology, vol.94, no.6, pp.13651381.

Long-Term

Rigdon, E. E., Sarstedt, M., and Ringle, C. M.

Organizational Impact of Destructively(2017) “On Comparing Results from CB-

Academy ofvol.16, no.1,

SEM and PLS-SEM: Five Perspectives andNarcissistic

Managers,”

Management

Executive,

Five Recommendations,” Marketing ZFP,

pp.127-138.

vol.39, no.3, pp.4-16.
Root, F. R. (1982) Foreign Market Entry

Magnusson, P., Westjohn, S. A., Semenov, A.

Strategies,
Association.

V., Randrianasolo, A. A., and Zdravkovic, S.
(2013) “The Role of Cultural Intelligence inMarketing

Adaptation

andExportSchmitt,

Performance,” Journal of InternationalD.

AmericanP.

“SimultaneousMarketing, vol.21, no.4, pp.44-61.
Nelson, T. O. and Narens, L. (1990)

Rosenberg

andManagement

Allik,J.

Administration

Self-Esteem

Scale(2005)
of

the

in

53

Nations: Exploring the Universal and“Metamemory: A Theoretical Framework

Culture-Specific Features of Global Self13

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Esteem,” Journal of Personality and Social“Cultural Intelligence: A theory-based,

Psychology, vol.89, no.4, pp.623-642.

short

Cultural Intelligence with Short Form
Applicability

Journalof

CulturalTsuji, K. and Yoshikane, F. (2010) “Effect ofIntelligence in Japan and the RelationshipJapanese Shisho Librarian Certification:

between

Knowledge

Culturalofmeasure,”International Business Studies, vol.46, no.9,
pp.1099-1118.

Soga, H. (2019) “Empirical Analysis of
Measure:form

Intelligence

Library,
Information and Media Studies, vol.8, no.1,

andPersonality,” Social Sciences: Memoirs ofKushiro Public University of Economics,
pp.135-149.
Tarique,

I.

and

R.

Motivation,”

pp.1-12.
Wales, W. J., Patel P. C., and Lumpkin, G. T.

(2008)(2013) “In Pursuit of Greatness: CEO“Developing Cultural Intelligence: The

Narcissism, Entrepreneurial Orientation,

Roles

Nonworkand Firm Performance Variance,” Journal

experiences,” in Ang, S. and Dyne, L. V.

of Management Studies, vol.50, no.6,(eds.), Handbook of Cultural Intelligence:

pp.1041-1069.

of

Takeuchi,andInternational

Theory, Measurement, and Applications,

Ward, C. and Fischer, R. (2008) “Personality,

Routledge, pp.56-70.

Cultural Intelligence, and Cross-CulturalTay, C., Westman, M., and Chia, A. (2008)“AntecedentsofHypothesis,” in Ang, S. and Dyne, L. V.

Cultural Intelligence Among Short-Term(eds.), Handbook of Cultural Intelligence:

Business Travelers,” in Ang, S. and Dyne,

Theory, Measurement, and Applications,
Routledge, pp.159-173.

L.

V.

(eds.),

andConsequences

Adaptation: A Test of the Mediation

Handbookof

CulturalIntelligence: Theory, Measurement, andApplications, Routledge, pp.126-144.

Yamaguchi, S., Greenwald, A. G., Banaji, M.

Thomas, D. V., Liao, Y., Aycan, Z., Cerdin, J.,

Kobayashi, C., Gai, H., and Krendl, A.

Pekerti, A. A., Ravlin, E. C., Stahl, G. K.,(2007) “Apparent Universality of Positive

Lazarova, M. B., Fock, H., Arli, D., Moeller,

ImplicitR., Murakami, F., Chen, D., Shiomura, K.,

Psychological
Science, vol.18, no.6, pp.498-50

M., Okimoto, T. Z., and Vijver, F. (2015)

Self-Esteem,”(Received: July 31, 2019)(Accepted: October 30, 2019)14

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

The role of collaboration in developing agriculturalcompetitiveness and welfare
Masatoshi Kosugi
Faculty of Humanities and Social Sciences, Hirosaki University
Japan Accounting Association
E-mail: kosugi@hirosaki-u.ac.jp
Keikichi Kato
Faculty of Humanities and Social Sciences, Hirosaki University
Japan Accounting Association
E-mail: katok@hirosaki-u.ac.jp
Abstract
Given its high cost, producing and supplying organically grown and naturally cultivatedcrops is considered a challenge in Japan. The vegetables that Yamanobu-Shouten Co., Ltd.
sells through its food retailing business Supermarket Yamanobu and its affiliated restaurants
are produced by an affiliated agricultural production corporation, Midori-no-Sato. As a resultof collaboration between agriculture and welfare (CAW), Midori-no-Sato has successfully
achieved low costs while adopting a natural farming method.
The CAW process began by matching the goals of the agricultural corporation, which
required farm laborers, with those of a welfare organization looking to rehabilitate mentallydisabled people. During the process of setting up the CAW, the two sides built a smooth
relationship and launched the partnership under a community concept. With this, theagricultural corporation could manage its mentally disabled workers. Therefore, the CAW has
increased the value of the community's internal resources, enabling it to increase productionand expand sales channels. We also analyzed the concept of management control system as
proposed by Merchant and Van der Stede (2012). Furthermore, this study showed that thesuccess factors of social collaboration, as pointed out in previous studies, are included in CAW.
Keywords
Collaboration, Management Control System, Cost Reduction, Agriculture, Welfare(1) Introduction
Since the announcement that Tokyo
will host the 2020 Olympic Games, there
has been increasing attention in Japan onorganic farming practices and agribusinesses related to this approach, tocater to the specific needs of players, whoare expected to arrive in large numbers as
a result of the Games attention in Japanhas
focusedonfarming
without
agriculturalchemicals,
andonagribusinesses related to this approach.
The health consciousness of local
consumers has also been growing,
increasing the demand for agricultural
products grown using only organic

pesticides. However, farming withoutchemical fertilizers places a heavy burden
on agricultural workers, since work that
previously relied on chemical spraying
using farm equipment is generally carriedout manually.
Organically cultivated products areoften labeled as “organic” in retail stores
and are considered to have been producedwith a farming method that does not use
chemicals; for example, only organic
fertilizer is used to cultivate organic
produce (Table 1). However, “naturally
cultivated farming” does not have anationallyaccepteddefinitionorestablishedstandards
likeorganic

15

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

cultivation does. Generally, natural
cultivation is considered a generic term for
agricultural crop cultivation methods thatuse no pesticides or fertilizers. A
characteristic of both organic cultivationand natural cultivation is that the use of
agricultural chemicals and fertilizer is low,
thus increasing work complexity. In Japan,
the aging of the population in general andthe shortage of successors in agriculture
pose serious issues. This social backgroundfurther aggravates the complexities oforganic and natural cultivations.
This additional effort, in turn, affects
selling prices, and organic and natural
cultivation results in more expensive
products. According to the Ministry ofAgriculture, Forestry and Fisheries (2018),
the prices of organic products are around
1.5 times as high as the same product
grown
using
ordinary
agricultural
methods1. As for the difference in sales, nofigure is available based on a large-scale
survey in Japan, but the sales of organic
products is generally higher than those of
products grown using other methods.
Organic cultivation and natural cultivation
rely on manual farming for spraying
pesticides and fertilizers. Therefore, it is
impossible to secure manpower for these
agricultural methods unless the sales priceincreases. A system called collaboration
between agriculture and welfare (CAW)
can resolve this issue.
In this study, we focus on CAW, whichuses the community concept to bring
together agricultural corporations andwelfare organizations, as an approach thatcan potentially overcome this situation.
Our case company has succeeded in setting
up an agricultural production corporationthat sells organically grown and naturally
cultivated products to its affiliatedsupermarket business, which in turn sells
these products to customers at low prices.
We will examine the collaboration between
this company's agricultural production
corporation and welfare organizations
based on the community concept and thedeterminants of its success. In addition,
this collaboration is also affected by certain
issues that are peculiar to Japanese society.
It is necessary to consider these issues thiswithin the theoretical framework of social
collaboration.

1 Ministry of Agriculture, Forestry and Fisheries

purpose of solving social issues.” Therefore, in thispaper, the notation "Social Collaboration" isunified.
3
Waddock (1991), Hartman and Stafford (1997),
Austin (2000), Googins and Rochlin (2000),
Wohlstetter et al. (2005)(2) Previous research
In recent years, companies have started
prioritizing their social responsibility.
Companiesuse
theirmanagement
resources to tackle various social issues
throughbusinesstypes
orsocialcontributions. According to Tanimoto et al.
(2013), to tackle social issues, companies
sometimes cooperate with other companies
and organizations in various sectors, suchas NPOs and governments, instead of
acting as a single unit.
One of these business types is called“social collaboration 2 ,” wherein multiple
organizations work together to addresssocial issues3. According to Seitanidi (2008),
social collaboration involves the selectionof partner organizations and mobilizationof resources. In the “formation stage” ofcollaboration,abusinessplan
is(2018), p.3.
2
In previous studies, there are expressions such as“Social Partnership” in addition to “Social
Collaboration.” All of these are common in termsof “cooperation by multiple organizations for the16

Journal of Japanese Management Vo.4, No.1, November 2019

formulated and the business is promoted tofacilitate smooth collaboration withpartner organizations. The “execution
stage” consists of several stages forbuilding a simple relationship. Regarding
the success factors of social collaboration,
the literature has proposed the following
points 4.
•

•

•

•

In the formation of collaboration, it isimportant to select partners who sharethe mission of resolving social issues
and to secure the resources necessary
for the realization of the business, inaddition to matching with the
management resources of the company.
In the planning stage—which is theformation stage of collaboration—organizations must achieve both“objective proximity” and “means
necessity” for smooth collaboration.
“Objective proximity” means the
purpose of the project is important foreach participating entity. “Means
necessity” implies that cooperation
among organizations is a means
necessary for business execution.
Given that organizations differ in scaleand culture, it is necessary to build a

ISSN 2189-9592

trusting relationship through close
communication among members at theexecution stage of collaboration.
In the execution stage, it is also
necessary to prevent the problem of thepartnerorganization
not
fully
contributing to the business. Therefore,
rules must be formulated for managing
collaborative relationships and abusiness
reportingmechanism
established to clarify accountability
from each other.

In light of the above, research on
management strategies is important tolead social collaboration to success.
However, previous research has rarely
examined the development process ofcollaborative relationships 5 ; rather, thefocus was on either the formation stage or
the execution stage as the success factor ofsocial collaboration6. Thus, it is clear that
there is a need to investigate the successfactors of both the formation and execution
stages of collaboration, in general, and to
examineeach
stage
throughacomprehensive and detailed case study, inparticular. To fill this gap, this study sets
the following two research questions.

4

5 Seitanidi (2008), Yokoyama (2017), Hartman andSeitanidi (2008), Reinand Stott (2009), Berger etal. (2010), Yokoyama (2017), Hartman and
Dhanda (2018)

Dhanda (2018).
6 Okura (2017), Hartman and Dhanda (2018).

17

Journal of Japanese Management Vo.4, No.1, November 2019a) What should companies do in theformation stage of social collaboration?
b) In the execution stage, how canorganizations with different scales andcultures establish a smooth collaborative
relationship?

ISSN 2189-9592

connected
tohis/her
community.
Additionally, the company actively donates
to local educational organizations7.
The company's brand that has fulfilled
its philosophy is "Gonbei-no-Sato," whichprimarily procures from its directly
managed farm and major supplier, Midorino-Sato. The farm cultivates agricultural
crops, mainly using organic cultivation andnatural cultivation farming methods andsells or supplies food to group restaurants.
All products are composed of agricultural
crops of organic and natural cultivation. It
is necessary to clear the private brand’s
own examination criteria. Additionally, thebrand’s staff has "Junior Vegetable & Fruit
Meister" qualifications 8 and provides
information to customers at the time ofcustomer service. Initially, this private
brand was purchasing and selling
agricultural crops by sourcing high quality
crops that met the expectations of external
suppliers and vendors. However, they now
have their own farms. Most major
agricultural crops are supplied from theirown farm, “Midori-no-sato.”
Their own brand, “Gonbei-no-Sato,”
produces organic vegetables throughnatural cultivation, and, as shown in
Figure 3, sales have grown significantly in(3) Overview of our Case Company
Yamanobu-Shouten Co., Ltd. operates
seven supermarkets in the Aichi
Prefecture, an agricultural production
corporation“Midori-no-Sato,”four
restaurant groups, high-end food shops,
and mobile dealers (Figure 1). Establishedin 1955, its head office is located in Toyota
City, Aichi Prefecture. The company’s goal
is to achieve organizational managementthat contributes to the local community. Its
company philosophy is “freshness andsafety of products.”
Yamanobu-Shouten has succeeded inrealizing CAW with the help of Midori-noSato and in branding and selling products
at its supermarkets—its main business.
The company has the following features.
It focuses on its regional contribution,
which is influenced by the founder'sphilosophy. The founder continued to work
after
retirement,interacting
withcustomers on the sales floor to stay

7 Donation activity as a part of regional(Source: author, based on survey results)
8 It is the private accreditation given by the Japan

contribution: Donation totaling 786,600 yen to
local parent-teacher association groups (The 28th
result; from November 21, 2018 to May 20, 2019)

Vegetable Sommelier Association.

18

Journal of Japanese Management Vo.4, No.1, November 2019

recent years. The reason is that the pricesof the organic and natural products of thebrand are lower than the prices of generalproducts. Their price is generally set at
1.2–1.3 times the price of general products,
which is much lower than the country’s
average price difference of 1.5 times (seeSection 1). This is because the company
does not have operate in large metropolitan
areas such as Tokyo and Osaka; therefore,
organic crops can be sold only at prices
lower than their average price in Japan.
The company farm "Midori-no-Sato"
has successfully realized such a sales price.
“Midori-no-sato” produces naturally growncrops to be provided to "Gonbei-no-Sato,"
the main brand of the group. It wasestablished in 2008, with five employees,
including Mr. Shingo Nonaka, the farm
director. Their major crops are rice andstrawberries and other crops areblueberries and vegetables. The biggest
feature is that they cultivate all the crops
by natural cultivation. As mentioned above,natural cultivation is extremely difficult tocommercialize due to labor requirements
and soaring prices of sales. However, theysucceeded in commercialization. They
achieved the world's first successfulcommercialization of naturally cultivatedstrawberries without using agricultural

ISSN 2189-9592

chemicals and fertilizer.
This is the reason behind the strong
feelings and commitment to naturally
cultivated foods held by the founder. The
founder believes that agricultural workers,
including those involved in natural
cultivation, can create high quality
agricultural crops; but if there is no place
to sell them, there will be problems,
including failure. By having places such as
supermarkets and restaurants that
consume the products in the businessgroup, there are places to sell theagricultural crop products, making it
possible to for them to flow within thecompany (Figure 2).
The company believes that realizationof this flow has created marketing
channels for agricultural workers so thatthey can concentrate on agricultural
production. Yamanobu-Shouten Co., Ltd.
has been able to sell these products at a low
price. These lower selling prices are
attractive to customers and sales of theirown brand Gonbei-no-Sato have risen over
the years (Figure 3).
This rise in sales is the reason behindthe strong feelings and commitment
toward naturally cultivated foods held by
Shouten Co., Ltd. He made it possible for
entities using agricultural products, such

19

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

as directly operated farms, dealers, andrestaurants, to be part of the group.
Mr.Toru
Yamanaka,
Chairmanof
Yamanobu- Yamanaka believes that
agricultural workers, including those
involved in natural cultivation, can createhigh-quality agricultural crops. However,if there is no place to sell them, then there
will be problems, including farm failure.
Setting up outlets, such as supermarkets
and restaurants, which consume theproducts in the business group, allows
sales of agricultural crop products,
facilitating the flow of profits within thecompany. The company believes that therealization of this flow has createdmarketing channels for agricultural
workers, ensuring their focus onagricultural production. This is one of the
management policies of YamanobuShouten Co., Ltd.; it is unlike the policy ofsetting high prices, which was witnessedfor products cultivated using traditional,
natural farming methods.
To
ensuresuccessoftheaforementioned level of crop yield. Sincechemicals are not used in natural
cultivation, securing the method, it isnecessary to realize a certain appropriate
harvest quantity through this method
becomes very difficult. However, they have
solvedthis
problemthroughthedevelopment of CAW. This was madepossible as "Midori-no-Sato" collaborated
with welfare organizations outside thegroup. In summary, "Midori-no-Sato" hassucceeded in providing farm products to its
own supermarket at a low price throughnatural cultivation, which tends to be more
expensive than general farming methods.
Therefore, we decided to conduct a casestudy on the group.

9 In our research project, we have been conducting

this paper is a case study, we kept the description
concise to avoid confusions on research topics.
10 Ohtani (2017), pp. 55-56.

(4) Research Method
Relevant actors (i.e., founders andcompanies) adopt the strategy shown in
Figure 4. CAW is effective in realizing thisstrategy. Therefore, to clarify how CAW
functions in the field, we conducted aninterview-based qualitative study byimplementing the following procedure(Figure 5).
Based on the findings, we assume that
CAW’s management strategy is based on
the Management Control System (MCS)
framework of Merchant and Van der Stede(2012). However, in a previous study on
MCS, Simons' framework was found to bemainstream9. Based on previous research,
we consider the difference between these
two frameworks as follows10:•

surveys of previous research and recording
theoretical progress in another research. Please also
refer to the discussion about the framework. Since

20

Merchant: Emphasis is placed on how
to control the behaviors of people in
all levels of the organization based on
individual objects

Journal of Japanese Management Vo.4, No.1, November 2019•

Simons: Emphasis is placed on how
top managers select and use MCS tomaintain or change organizational
behavior

ISSN 2189-9592

ongoing. Definitions and other guidelines
have generally not yet been establishedwith CAW, but it broadly refers to thecollaboration between agricultural groups
and welfare organizations. Mr. Shingo
Nonaka of Midori-no-Sato regards it as thecreation of a community by combining
agriculture and welfare.
According to Mr. Nonaka, in the five
years the corporation has been established,it has been believed that mass productionof naturally cultivated crops is necessary
for management stability. However, as
previously noted, the natural cultivation
agriculture method creates a very heavy
burden because it does not use pesticides or
fertilizers. The company faced thesituation where expansion of agriculturalland area was essential, but there was notenough manpower. At this time, they
accidentally launched CAW through achance acquaintance with the staff of awelfare corporation company.
Initially, Mr. Nonaka offered farmwork to mildly disabled people and paid
them an hourly wage (Figure 6). This
corresponds to the formation stage of social
collaboration. While working with them,
Mr. Nonaka witnessed the power of people
with disabilities, who performed similarly
to healthy people, and realized that hecould help them. Mr. Nonaka began
working with more people with disabilities.
In addition, he began working with

We adopted Merchant's framework
because of its focus on individual objects.
Mr. Nonaka (“Midori-no-Sato”) views thedisabled persons of welfare corporations as
individual workers. He also emphasizes
how we can work with them "happily" (i.e.,they are interested in improving theirperformance).
(5) Initiatives of Midori-no-Sato: On-sitemanagement through CAW
Within Gonbei-no-Sato, one of the
main
product
categories
comprises
naturally cultivated agricultural crops
from a direct-managed farm called Midorino-Sato. To manage this cultivation,
Midori-no-Sato utilizes the collaboration
between agricultural groups and welfareorganizations that form the CAW. In thiscontext, it must be noted that Midori-noSato communities are primarily composedof patients who have mental illnesses.
Midori-no-Sato,theagricultural
production corporation, has been pursuinga mechanism for selling its products
through the CAW over the past six years.
This mechanism is based on the natural
cultivation farming law that they havebeen working on for 11 years, which is still21

Journal of Japanese Management Vo.4, No.1, November 2019severely disabled people. For him, a labor
force to undertake the difficult natural
cultivation was a necessary resource.
While securing such a workforce, it waspossible to provide an agriculturalexperience to persons with mental
disabilities. Mr. Nonaka worked at theJapan International Cooperation Agency
before becoming a farmer and wishes tocontribute to resolving social issues. For
him, the advantage of collaboration with awelfare organization was that he would
have a partner who shared the mission ofsolving social issues while securing theresources necessary to realize his business.
As shown in Figure 6, the two parties canestablish a win-win relationship and help
each other fulfil their purpose, indicatingthat they experience “objective proximity.”
Moreover, the collaboration itself was a“means necessity” for both parties to
conduct business. In particular, welfareorganizations were essential to provide a
workplace experience to help rehabilitate
mentally disabled people. Thus, this casesecured the success factors of the formation
stage of social collaboration.
Mr. Nonaka then came up with theidea to compensate workers with crops
instead of money. When farmers sell crops
to provide money for people withdisabilities, the amounts that can be paid
become small because it costs more to selland develop sales channels. However, if

ISSN 2189-9592

you decide to sell agricultural crops using
people with disabilities, the costs can be
reduced. Of course, since the farmers
provide the crops, money is not taken fromthewelfareorganizationasanintermediate margin. As a result, disabled
people receive more money if sales go well.
This is the reason for establishing a“community.”
Mr. Nonaka realized that this systemincreased the motivation of disabled people
from welfare organizations. This seems tobe the case, because the results of theprocess of individuals cultivating their own
crops and selling them jointly with farmers
can be visibly observed.
Next, Mr. Nonaka's task was to raisemoney for people with disabilities.
Specifically, he sold nonstandard productsthat could not otherwise be sold as crops
and processed items. By further adding
value and increasing sales prices, the priceof labor for people with disabilities wasraised. Furthermore, since 2017, he hascreated a "harvesting team," with arelatively mildly disabled person in charge.
He sold agricultural crops to the group at
lower wholesale prices and delegatedharvesting and selling. This is an effort tohavewelfareassociations
handleagricultural crops in connection withwelfare organizations. By doing this, Mr.
Nonaka made mass production possible. As
a result, the CAW of the community

22

Journal of Japanese Management Vo.4, No.1, November 2019enabled mass production of naturally
cultivated crops, expansion of distribution
channels, and stabilization of selling prices.
His approach is not to move money, but totake advantage of people's coming,
increase production, and return that
production as agricultural products. It canalso be said that Midori-no-Sato created amanagement control system (MCS) that isvery different from the usual MCS.

ISSN 2189-9592

2.1 Action Controls14
Action controls are attempts tomanage actions by confining employee
actions to those that are beneficial to theorganization, or by determining the actions
that are known not to be beneficial. In mostcases, action controls are used to prevent
undesirable behavior.
3.1 Personnel Controls15
Personnel controls are intended toincrease employees' appropriate selfesteem and self-satisfaction by making
suitable personnel assignments, offering
education and training, job design, andresource provision, consequently managing
their behavior.

(6) Case analysis using the MCS
framework
In this section, we consider the CAW’s
management using the MCS framework of
Merchant and Van der Stede (2012). In
recent years, there have been active
discussions about MCSs. Previous research
has shown that they provide organizations
with sustainability and effectively fulfill
the role of supporting corporate social
responsibility (CSR) 11 . By properly
creating an MCS, employees takeappropriate actions and increase theprobability that the organization willachieve its goal12. Merchant and Van derStede (2012) list the following four types of
MCSs.

4.1 Cultural Controls16
Cultural controls are attempts tomanage the behavior of employees throughan organizational code of conduct, mutual
monitoring by employees, and influencing
each other. The organization's code of
conduct is an organizational culture.
Specifically, it is built on the traditions,norms, beliefs, values, ideologies, opinions,and actions shared by the organization.
According to Merchant and Van der Stede(2012), personnel controls and culturalcontrols are becoming more important as"soft controls."
Merchant and Van der Stede’s (2012)
categories are used to analyze Mr.
Nonaka's approach.

1.1 Results Controls13
Results controls provide employeeswith the desired degree of accomplishment
as a goal. These controls are used by those
who intend to manage behavior byproviding external compensation (such as
cash or stock) for goal accomplishment, orby satisfying internal rewards (such as atarget crime rate inside police). By giving
employees high autonomy, results controls
are indirect controls that do not focus onactions and decisions. In other words, you
may not be able to control the actions taken
to achieve the goal.
Results controls is supplemented or
replaced by the following three controls.

1.2 Analysis using the concept of Results
Controls
Midori-no-Sato has a "target," butrecognizes that the target is not a work
norm. They try to enjoy thinking about how
everything has gone so far rather thanfocusing on the aspect of completing worknorms. They appreciate that they could
evolve by more than just achieving theirgoals. They also often do not present

11 Ito (2009), Sumita (2015), Nagano (2015),

14 Ibid. (2012), pp.81, 85
15 Ibid. (2012), p.81.

Shinoda and Maruta (2017)12 Merchant and Van der Stede (2012), p. 5

16 Ibid. (2012), p.81

13 Ibid. (2012), pp.35, 40, 81.

23

Journal of Japanese Management Vo.4, No.1, November 2019

"targets" to people with disabilities.
Instead, they encourage them to try doing
the first job for the time being, and thenencourage them in the form of "I hope you
can do better tomorrow."
Mr. Nonaka and other officials areincluded in the workforce as appropriate,especially when the work of the disabled isunlikely to be completed, such as pot
clogging work or strawberry harvest
packing. Sometimes, they all work together
until they finish. In these circumstances,
there are cases where each goal isdetermined by the individual without
getting permission. As people withdisabilities become more willing to be able
to do more than their nature and in theirpast, they sometimes create quotas in theirhearts with the goal of exceeding past
performance. This way, as much as
possible, the spontaneity of people withdisabilities is encouraged.
As mentioned earlier, remuneration
may not only be in the form of money, butalso internal crops, such as actual farm
products and work and sales achievementsby everyone. Therefore, regarding results
controls, those that lead to an internalsense of accomplishment are considered to
be functioning effectively.
The aforementioned scenario led tothe division of labor and to the emergenceof the community concept. The thorough

ISSN 2189-9592

division of labor led to the clarification ofroles and the development of mutualcommunityaid(Figure7).
Thiscorresponds to the execution stage of social
collaboration. In this effort, welfareorganizations created a shift from anattitude of working alone to an attitude of“working collaboratively” (to the ablebodied farmers developed a respect toward
the self-motivation of disabled people).
This changed the consciousness of disabled
people (voluntary target setting). In
addition to the given goals, they started to
set voluntary working norms like "I want
to be able to do better than I what I did in
the past" (Staffs are not concerned nor
involved at all.)
2.2 Analysis using the concept of Action
Controls
There are rules for agricultural workat Midori-no-Sato; for example, "Do notwalk on the ridge" and "Do not harvest
strawberries that are not mature yet.” Infact, there are a lot of finer details,
depending on the work being done, that are
taught while working. Therefore, they do
not hold separate training or study groups.
If problem behavior, such as throwing
things to people, occurs, they do not ignore
it. Such instances provide teaching
opportunities, such as saying that "their
behavior is wrong" and nurturing values.

24

Journal of Japanese Management Vo.4, No.1, November 2019

Prioritizing actions and teaching rules asappropriate are used as action controls,
rather than behavior management andprevention policies.
The above approach shows that thefocus is on taking corrective actions
irrespective of particular roles andresponsibilities. Furthermore, from theviewpoint of persons with disabilities, it isunderstood that measures for examining
work performance are provided at the worksite (farm or workplace). This approach
reduced their sense of burden andresponsibility. In other words, they execute
farm work with little ease. These efforts
contribute to the formation of a workableenvironment for persons with disabilities.
It is also obvious that these ideas are
influenced by collaboration and thecommunity concept.

ISSN 2189-9592

realization of the “right place for the right
person” agenda: resolving the question ofwhich work is suitable for which person
leads to close communication with eachmember. This is one of the success factorsof the execution stage of social
collaboration.
Furthermore, as a side effect, thechange in consciousness of workers withdisabilities became clear. Disabled persons,
who used to come to welfare facilities oncea week, now come to welfare facilities everyday. Additionally, they are actively
engaged in farm work. This enhances theperformance of disabled farmers and helps
them achieve organizational objectives.
4.2 Analysis using the concept of Cultural
Controls
Midori-no-Sato is trying to ensurethat people with disabilities do "notperform meaningless work." Mr. Nonaka
said that by having disabled people do only
meaningful work, they can reflect andthink that "I was able to spend the day
contributing to the organization andsociety." They are focusing on making theirworkers are aware of their contribution
through their work. Their sense ofaccomplishment is thought to function as
the driving force of action.
Agricultural corporations’ staff havechanged not only how they work, but also
improved efficiencies within their facilities
for disabled working people. This improved
the quality of employees (strengthening
internal resources). Transitioning from aworkplace that overly focused on
improving work efficiency to a workplacethat accommodates failure and facilitatedamicable relationships enhanced the social
contribution of staff and instilled in them asense of pride.
This community concept not only
increased their productivity, but also
improved internal human resources. It
must be noted that realizing anenvironment that enhances the work
environment for mentally disabled persons
enabled the disabled to lead and contributeto the profit of the community. Through

3.2 Analysis using the concept of Personnel
Controls
As much as possible, Midori-no-Satokeeps the same person in charge of the
agricultural work, trying not to change
workers; this is very characteristic. At the
CAW site, they arrange people considering
the different talents and disadvantages of
disabled people and other workers.
However, Midori-no-Sato has not been able
to secure workers that already possess
talent at the desired level. Therefore, theyprioritize allowing individuals to adapt towork. Once they are accustomed to work,
they then focus on improving work skills.
To accomplish this, Midori-no-Sato also
requests
thecooperative
welfareorganization to consistently use the same
personnel.
As a result of personnel fixation,
professional abilities of persons withdisabilities improved, thereby improving
product quality. People with mental
disabilities who had difficulty consistently
attending the facility have improved on
self-esteem and are actively working.
Enhancing expertise contributes toward
improving the quality of agricultural crops
and the efficiency of agricultural work.
This initiative also results in the25

Journal of Japanese Management Vo.4, No.1, November 2019

this process, each staff gained pride and asense of social awareness within theirorganization.
We also wish to note that thiscommunity concept is based on the divisionof labor. This division of labor isestablished by mutually acknowledging
the expertise of co-workers in eachbusiness and business process. The
division of labor not only improves
productivity, but also strengthens mutual
trust. Enhancing mutual trust accelerates
communication between members. This iscited as a success factor of the execution
stage of social collaboration.
In addition, due to the increase inproductivity, stable crops can be secured.
Therefore, it became possible to develop
sales channels, other than their own
brands. This led to the expansion of thewelfare organizations’ existing sales
channels. As a result, CAW enabled asimultaneous increase in production
volume and expansion of sales channels as
a company.
In Japan, due to changes in the
agricultural environment, local rural
farmers are especially required to devote
time to agricultural work, making it
difficult to foster management skills andcollaboration outside the organization. Oneof the reasons for this is the weakening of
the regional network. Therefore, it isnecessary to create a local community thatis the core of regional value creation. CAW
is a management system based on thecommunity concept; it also connects people
with disabilities to communities andutilizes the skills of people with disabilities.
Therefore, there is a possibility that it willstrongly influence the future developmentof the region and the Japanese society. In
that sense, this research is a subject ofagriculture and cooperation, which has notbeen studied in previous research. It is not
limited to the introduction of valuable
practical case examples in the field of
management accounting and providing
verification materials as materials for
examination and criticism. It highlights
new development to further improve the

ISSN 2189-9592

future of Japanese society, most especiallyin the discussion of regional contribution
and regional creation through farmers,social welfare, and local communities.
(7) Conclusion
A characteristic of CAW is that an
agricultural organization and a welfareorganization are working in a community
platform. They reap mutual benefits
through their collaboration at CAW. This
collaborative advantage increases thevalue of internal resources within thecommunity, considering the organizations’activities
fromthecommunity’s
perspective.
Additionally,
theseorganizations can increase production andexpand sales channels, which would
inevitably increase the power of appeal tocustomers and increase sales. Next, wefinally answer the research questions
posed in Section 2 based on our overall
analysis.
a) What should companies do in theformation stage of social collaboration?
The CAW process at YamanobuShouten began with matching the goals ofMidori-no-Sato, the group’s agricultural
corporation that required labor for working
on the farm, and those of a welfareorganization looking to rehabilitate
mentally disabled people. In other words,
at the earlier stages of CAW, laborers
worked in exchange for crops. Gradually,
farmers recognized the value that disabled
people contributed to the workforce and thecommunityandthus
createdanenvironment to accommodate them. As aresult, expertise has increased thoroughthe division of labor and maximum
employment of the community’s skillset.
By tapping individual ingenuity, theysucceeded in increasing yield through thecommunity concept. Additionally, suchmanagement policies attracted humanresources that conformed to the founder’sfocus on local contribution and food safety.
This approach facilitated an environmentthat accepted people with disabilities. In
this case, the choice of the partner

26

Journal of Japanese Management Vo.4, No.1, November 2019organization during the formation of social
collaboration was accidental. In addition,
because of the nature of rehabilitation forpeople with mental disabilities, it is notpossible to actively utilize external
resources for the purpose. Therefore,
internal resources must be strengthened at
the formation stage. It is necessary toconsider what is important for thecollaborator and to make it happen. When
CAW was functioning in our case study,
the following features were noted:• Fostering specialized skills throughcomplete division of labor• Increasing the quality of shipping
crops by improving skill andexpertise• Thinking of how to make work easier• Changing consciousness of workers
with disabilities

ISSN 2189-9592

leaders is easy. Considering these, it isnecessary to conduct research on futurebusiness expansion of companies.
Acknowledgment
A part of this paper was supported by
MEXT/JSPS KAKENHI Grant Number
19K13846.
References
Austin, J.E (2000) The Collaboration
Challenge, Jossey-Bass.
Barney, J. (1991) “Firm Resources andSustained Competitive Advantage”,
Journal of Management, 17, 99-120.
Berger, I.E., P.H. Cunningham and M.E.
Drumwright (2010) “The integrative
benefits of social alliances: Balancing,building and bridging”, in Smith, N.G.,
C.B. Bhattacharya, D. Vogel and D.I.
Levine (eds.), Global challenges in
responsible
business,
Cambridge
University Press.
Das, T.K. and B. Teng (2002) “The
Dynamic of Alliance Conditions in the
Alliance Developmental Process” ，Journal of Management Studies, 39(5),725-748.
Googins, B.K. and S.A. Rochlin (2000)“Creating the Partnership Society:
Understanding the Rhetoric andRealityof
Cross-Sectoral
Partnerships”, Business and Society
Review, 105(1), 127-144.
Hartman, C.L. and E.R. Stafford (1997)“Green Alliances: Building New
Business with Environmental Groups”,
Long Range Planning, 30(2), 184-196.
Hartman, L.P. and K.K. Dhanda (2018)“Cross-Sector
Partnerships:
An
Examination of Success Factors”,
Business and Society Review, 123(1),181-214.
Ito, Y. (2009) Intanjiburuzu to shite no
CSR (CSR as intangibles: thesignificanceandpossibilityofvisualizing the effects of CSR-related
activities on business), The Waseda
Commercial Review (418・419), 305337.

b) In the execution stage, how canorganizations with different scales andcultures establish a smooth collaborative
relationship?
By constructing an environment
taking into account the aforementioned
values, CAW improves the value ofinternal resources of the community andenablesincreased
production
andexpansion of sales channels of corporates.
This is important to build smoothcollaboration in the execution stage. The
involved parties will strengthen their unity
as a community as they expand theirbusiness. This promotes communication
among community members, which leads
to mutual recognition, trust, and further
strengthening of internal resources. In
other words, CAW contains all the successfactors of social collaboration.
However, as noted before, one of thesuccess factors of the execution stage ofcollaboration was clarifying the rules andresponsibilities of the members ofcollaborative relationships. In this case,there was no such approach. In addition to
the fact that both are indispensable as acommunity in CAW, it is thought that thereason is that the organization is now
small and communication among top

27

Journal of Japanese Management Vo.4, No.1, November 2019

Merchant, K.A. and W.A. Van der Stede.
(2012) Management Control Systems:
Performance Measurement, Evolution
and Incentives, 3rd ed., Prentice Hall.
Ministry of Agriculture, Forestry and
Fisheries (2018) Yuuki Nougyou no
Suishin ni tuite (Promotion of Organic
Agriculture),(URL:http://www.maff.go.jp/j/seisan/kankyo/yuuki/convention/h26/pdf/d01.
pdf) (Accessed on July 31, 2019).
Nagano, S. (2015) Management control andcorporate social responsibility (inJapanese), Kaikei(Accounting), 188(4),470-482.
Ohkura, K. (2014) Syakaiteki Kyoudou ni
kansuru Kenkyuu no Doukou (Thetrendofresearchinsocialcollaboration), Jinbunsyakai-Ronsou(Studies in the humanities and Social
sciences), (31), 27-49.
Ohkura, K. (2017) Syakaiteki Kyoudou ni
okeru Kyoudou-Manager ni tsuite no
Kenkyuu no Doukou (Trends in the
research on the alliance manager ofsocialcollaboration),
Jinbunsyakaikagaku-Ronsou (Studies
in the humanities and social sciences),(2), 85-100.
Ohtani,H.
(2017)
Manejimento
Kontorouru Sisutemu no Bunseki
Fureemuwaaku to shite Levers ofControl wo Saiyou surukoto no Igi to
Kadai - Simons no syosetsu wotyuusinnnni (The Significance andIssue of Adopting Levers of Control as
an Analytical Framew ork ofManagement Control Systems : Focus
on Simons' Studies), Management andEconomics (Keiei-to-Keizai), 96(4), 4380.
Porter, M.E.(1985) Competitive advantage:
Creating and sustaining superior
performance, Free Press.Shinoda, A.
and O. Maruta. (2017) CSR Katsudou
ni yoru Manejimento Kontorouru
Sisutemu no Kasseika – Fuji Mgegane
no Jireikenkyuu (Revitalization ofmanagement control system by CSR
activities: a case study of Fuji glass),
Accounting (Kigyou-Kaikei), 69(2),ISSN 2189-9592

262-269.
Rein, Melanie and L. Stott (2009) ''Working
together: Critical perspectives on six
cross-sector partnerships in Southern
Africa", Journal of Business Ethics, 90,
79-89
Seitanidi,
M.M.,(2008)“Adaptive
responsibility: nonlinear interactions
in cross sector social partnerships”,
Emergence:
Complexity&
Organization, 10(3), 51-64.
Simons, R. (1995) Levers of Control: How
Managers Use Innovative Control
Systems to Drive Strategic Renewal,
Harvard Business School Press.
Stalk, G., Evans, P. and L. Shulman (1992)“Competing on capabilities: the newrules of corporate strategy,” Harvard
Business Review, 70(2), 57-69.
Sumita, K. (2015) Puro Soccer Curabu ni
okeru
Manejimento
Contorouru
Sisutemu no Jirei Kenkyuu (Casestudy of management control systems
in professional football clubs), Society
Report of Kyushu Association of
Economic Sciences, 53, 79-85.
Tanimoto, K., Omuro, N., Ohira, S., Doi, M.,
and K. Komura (2013) Social
Innovation no Fukyuu to Sousyutsu(Creation and Diffusion of Social
Innovation), NTT Publishing.
The Act on Promotion of Organic
Agriculture (Act No. 112 of 2006,
Japan)
Tobita, T. (2015) Tyuusyoukigyou ni okeru
Manejimento Kontorouru Sisutemu no
RIyou ni kansuru Jissyoubunseki –Kigyoukibo to Riyoujyoukyou no
Kankeisei wo tyuushinnni (Anempirical analysis on the use ofmanagement control systems inSMEs), Fukuoka University Review ofCommercial Sciences, 59(4), 445-469.
Yokoyama, K. (2017) Kigyou to NPO no
Soshiki-kan Kankei
ni okeru
Kyoudou-Kachi-Souzou to Jiko-Riekino Kankeisei: Kyoudou-Kaihatsu-Jirei
no
HikakuBunseki(Inter-Organizational Relationships
between Businesses and Nonprofits
for Their Collaborative Value Creation

28

Journal of Japanese Management Vo.4, No.1, November 2019and Linked Interest: A Comparative
Case Study on a Joint Development),
50(3), 16-29.
Waddock, S.A.(1991)“A Typology of Social
Partnership
Organizations”,
Administration and Society, 22(4),480-515.

ISSN 2189-9592

Wohlstetter, P., J. Smith and C.L. Malloy(2005) “Strategic Alliances in Action:
Toward a Theory of Evolution”, The
Policy Studies Journal, 33(3), 419-442.

(Received: July 31, 2019)(Accepted: November 3, 2019)29

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

The impact of quality of performance measures on theperformance of public sector organisations: Quantitative analysis
based on questionnaire survey
Takehiro Metoki
Faculty of Economics, Musashi University
Japan Cost Accounting Association
E-mail: t-metoki@cc.musashi.ac.jp
Abstract
Although the introduction of PMS has progressed in many organisations, it has notnecessarily been effectively utilised. Since the introduction and use of PMS has become a global
trend, it has been reported that perfunctory introduced PMS has a negative impact onorganisational performance. The issue of the quality of performance measures, which is shownto have a significant impact on the effectiveness of PMS in public sector organisations, has notbeen fully discussed. Low-quality performance measures can lead to incorrect decisions andactions and can undermine the credibility of PMS. Furthermore, if PMS constructed with a large
amount of tax is not used properly, then it will lead to tax waste. Therefore, it is necessary tomaintain and improve the quality of performance measures when designing and using PMS in
public sector organisations. Previous studies pointed out that the quality of performancemeasures have a significant impact on organizational performance, the relationship between
the two has not been clarified quantitatively. This study presents empirical evidence that thequality of performance measures (validity, legitimacy, and functionality of performancemeasures) increase positive outcomes of performance management systems use in public sector
organisation and suppress negative outcomes of performance management systems such as lossof usefulness and side effect. Data for analysis was collected by mailing questionnaire survey; it
was conducted in FY2016 in 791 Japanese cities (designated cities, core cities, special cities, andother cities) Japan. The number of valid responses was 327 (valid response rate 41.3%).
Keywords
Performance management systems, Quality of performance measures, Validity of performancemeasures, Legitimacy of performance measures, Functionality of performance measures

30

Journal of Japanese Management Vo.4, No.1, November 2019(1) Introduction

ISSN 2189-9592

the organisation (van Helden and Reichard,

The use of performance management2013).

These

studiesareincreasingly

systems (PMS) has become a global trend inclarifying the relationship between PMS

public sector organisations (Pollitt 2006). The

designuse of PMS not only creates incentives toperformance in public sector organisations.

alignHowever,organisational

objectives

with

and
the

use

and

issue oforganisational
the quality of

individual goals but also provides valuable

performance measures, which is shown to

feedback

have a significant impact on the effectiveness

on

the

progressof listed goals (Cavalluzzo and Ittner, 2004;of PMS in public sector organisations, has not

Heinrich,

Schack,been fully discussed (van Dooren et al., 2015).

1996). Owing to these benefits, PMS, also

Low-quality performance measures can leadcalled public sector evaluation ”gyousei-

to incorrect decisions and actions and canhyouka”, has been introduced by many public

undermine

sector organisations in Japan since the late

PMS. Furthermore, if PMS constructed with1990s (Matsuo, 2009; Metoki, 2012).

a large amount of tax is not used properly,

1999;

Kravchukandthecredibilityof

Although the introduction of PMS hasthen it will lead to tax waste. Therefore, it isprogressed in many organisations, it has notnecessary to maintain and improve thenecessarily been effectively utilised. Since thequality of performance measures whenintroduction and use of PMS has become adesigning and using PMS in public sector

global trend, it has been reported thatorganisations.

perfunctory introduced PMS has a negative

In this regard,

Bouckaert(1993)

impact on organisational performance (Bevan

recognises the three aspects of validity,and Hood, 2006; de Bruijn, 2002; Newberry

legitimacy, and functionality as the quality ofand Pallot, 2004).

inperformance measures important for PMS in

public sector organisations not only impacts

public sector organisations. In the case of

positively, but also has the risk of negative

validity, performance measures are measured

consequences; if it is not designed and used

as objective measures without being distorted

appropriately, then it may lead to erroneousby external influences, and legitimacy means

decision-making and actions. (Cuganesan etthat all organizational members support theal., 2014; van Dooren et al., 2015). This leads

design and use of performance measures.

to the question of what considerations should

Finally,

be taken when designing and using PMS.

measured performance measure is realistic

Furthermore,

PMS

functionality

means

that

the

In this regard, research has shown thatand suitable for managerial use. In line withthe effect of PMS on the relationship between

Bouckaert (1993), this research considers the

PMS design and use and results in public

quality of performance measures to be

sector organisations differs depending on how

composed of 1) validity, 2) legitimacy, and 3)

tomanagement

functionality. According to Bouckaert (1993),

information (Metoki and Senoo, 2012) andthe quality of performance measures affects

various contingency factors inside and outside

the

use

of

performance31

performanceofpublicsectorJournal of Japanese Management Vo.4, No.1, November 2019organisations.

Despitetheirimpacts,

It

ISSN 2189-9592

revealed

that

contractibility

which

research only presents the concepts thatmeasured by the three concepts of clarity ofmake up the quality of performance measures,

goals, measurability, and the degree to which

and there is no quantitative analysis of the

managers

impact on the performance of public sectortransformation

organisations. Therefore, in this study, therelationship between the incentive-oriented

relationshipof

use of the performance measurement system

performance measures and the performanceand performance. However, it has beenof public sector organisations is analysed

pointedquantitatively based on the results of aorganisations does

questionnaire survey conducted in 791 cities

positive results; as stated earlier, it canin Japan.

produce negative results if not properly

betweenthequality

know

out

and

process

control

themoderates

thethat PMS innotpublicalwayssectorproduce

The rest of this paper is structured as

designed and used (Cuganesan et al. 2014;

follows. Section 2 summarises related studies

van Helden and Reichard 2013). In thisand presents the analysis framework of thisregard, Bouckaert (1993) pointed out that the

study. Section 3 employs variables, anduse of PMS will facilitate false decision-

Section 4 discusses the results of the analysis.

making and behaviour if the quality of

Finally, Section 5 presents the contributions

performance measures is not maintained atand limitations of this study and draws

an appropriate level. Similarly, Melnyk et al.

conclusions.

(2014) found that performance measures andtarget are not modified according to the(2)Previous

researchandanalysissituation in which the organisation is placed;frameworkin other words, in certain cases, organisations

1. Positive and negative consequences ofcontinue to use these measures without

using PMS

proper modification. (Melnyk et al. 2014).

Metoki and Senoo (2012), using 264

Therefore, it is necessary to clarify theobservations based on a questionnaire survey

relationshipon Japanese government oraganisations,performance measures in the PMS of publicrevealed that the results achieved by using

sectorPMS

performance.

differperformance

dependingonmanagement

the

use

of

betweenorganisations

the
and

qualityoforganisational

information(financial outcomes/improved responses to

2. Building an analysis framework

residents’ needs/psychological empowerment

In this study, we will focus on theof those in charge of public sector reforms).

concepts

Additionally, Speklé and Verbeeten (2014)

functionality, and conduct an exploratory

studied the relationship between PMSs usage

analysis of the relationship between theand organisational performance using 101

quality of performance measures and theobservations

questionnaires

performance of public sector organisations.

targeting Dutch public sector oraganisations.

However, neither Bouckaert (1993) nor van

based

on

32

of

validity,

legitimacy,

andJournal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Dooren et al. (2015), who indicate thethat measured performance measures areimportance of the quality of performancesuitable for use. Therefore, if the performancemeasures in public sector oraganisations,

measures becomes unrealistic because ofprovides a measure of the quality ofchanging situation, it will be necessary to stop

performance measures. Therefore, we willusing

address this gap in this study. First, validity

measures.

is the first concept that

constitutes

the

or

redesigning

Conversely,

therecentperformancestudieshavequality of performance measures. Bouckaert

pointed out that the effect of PMS in public(1993) considers validity as a performance

sector organisations may not be necessarily

measurethat

objectively,

positive, but also negative (Cuganesan et al.,without

being

external

2014; van Helden and Reichard, 2013).

is

the

Therefore, when analysing the relationshipconsistency of measurement, and hence its

between the quality of performance measuresdesign must ensure that the measurement’s

andresults do not vary due to the influence oforganisations, we consider both positive andexternal factors, other than the quality ofnegative outcomes.

ismeasured
distorted

influences. Additionally,byvalidity

theperformanceofpublicsectorstaff behaviour. Therefore, it is important

Based on the aforementioned studies, athat performance measures are designed andmultiple regression analysis is conductedmeasuredensure thatwith validity, legitimacy, and functionality as

measurement results are not distorted byindependent variables and the performance of

external influences. The second concept thatthe public sector organisation as dependent

constitutes

performancevariables. In the analysis, environmental

measures is legitimacy. As per Bouckaert

uncertainty, operational complexity, and the(1993), legitimacy supports the design andnumber of employees are taken as control

use of performance measures by all members

variables in consideration of the varyingof the organisation. Additionally, it isenvironments

reported that legitimacy is ensured by theorganisations and the diverse businessparticipation

thecontents of the responding organisations. The

organisation in the design and use ofanalysis framework of this study is shown inperformance

Figure 1.

appropriately to

the

of

quality

theofmembers

measures.

This

of

prevents

surrounding

publicsectorunauthorized manipulation and gaming of
performance measures. Therefore, legitimacy(3) Employment of data and variables

is expected to increase by the participation of

1. Dataorganisational members in designing, using,andmodifying

performance

Data for analysis was collected bymeasures.

mailingquestionnaire

survey;itwas

The third concept that constitutes the quality

conducted in FY2016 in 791 Japanese citiesofmeasures is(designated cities, core cities, special cities,

considersand other cities). Prior to sending theperformance

functionality. Bouckaert(1993)

functionality to be a realistic measurement soquestionnaire, we asked two practitioners,
33

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Independent variables

Dependent variables

Quality of performance measures‣Validity of performance measures‣Legitimacy of performance measures‣Functionality of performance measures

Performance of the public sector organisation
・Positive outcomes
・Negative outcomes

Figure1 The analysis framework

who supervised the related work in the publicoraganisations

sector organisation, and two management

1. Additionally, respondents comprised staff

accounting

at a section manager level or higher in the

researcherswithspecialized

are

shown

in

Table

knowledge in performance management to

responding

check the validity of the wording and question

test was performed on the data collected fromitems. The questionnaire was received by the327 public sector organisations used in the

supervisor of the management department ofanalysis. The results confirmed that the data

the public sector organisation, and theofquestionnaire was sent with a request letter

generally

anddistribution

reply envelope. In

consideration ofthedepartment. A goodness-of-fit

publicsectorcompatibleorganisation

was

with

the

=

7.770, df =

(χ 2

group

incentives for answering the questionnaire, it

3, p = .051). Additionally, we conducted a test

was clarified that a report on the analysisof the difference between the size of the target

results will be sent to the applicant. In orderorganisation and the non-target organisation

to improve the collection rate, a reminder was(public

sent before the collection deadline. The final

employees), but no significant difference wasnumberfound between the two. The results did notofresponding

was 339 (recovery

oraganisations

rate 42.9 %). In

the

of

organisations

inadequate

response

and

that
were

responses

was 327 (valid

rate 41.3%). Details

of

the

of

gave
judged

2. Variable manipulation
2.1 Validity of performance measures

response

Bouckaert (1993) regards the validity

respondingof performance measures as being measured

Table 1 Response distribution
Group classification

numberdata.

inappropriate for analysis. The number ofvalidorganization:

show any significant non-response bias in theanalysis, we used data, excluding the
responses

sectorNumber of sent

Number of valid response (rate)

designated cities

20

14

70.0%

core cities

48

20

41.7%

special cities

36

8

22.2%

other cities

687

285

41.5%

total

791

327

41.3%

34

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

as an objective measure without being

accurately reflect the results of the staff’s

distorted by external influences. In otheractions, or that the staff's work is good. The

words, there is a need to use objective

questionnaire asked whether it is directly

performance measures to produce verifiablereflected in the performance measures or

results and ensure that they are not changed

whether these measures are objective; theby external influences. Therefore, we referred

responses were sought from 5 points, from ‘1

to

(not

Moers

(2006),

which

analysed

the

at

all)

to

5

(exactly)’.

In

the

relationship between performance measures’variabilisation, these average values arecharacteristics and performance (Table 2).

scored (α = .695). Although Cronbach's α isSpecifically, we determined whether theslightly below the general level of .70, it isresults of the performance measures are set

close to .70. Hence, we believe that there is noso that they cannot be affected externally andmajor problem in validity.

whethertheperformancemeasures

Table 2 Validity of performance measures
Range

Mean

S. D.

1–5

3.03

.816

1–5

2.86

.784

1–5

2.98

.746

1–5

3.50

.743

The results of performance measures are appropriately designed
VALID_1 to ensure that they are not affected by external influences, otherthan those emerging from staff’s actions.
VALID_2
VALID_3

Performance measures accurately represent whether the staff
exhibited superior performance.
If staff exhibited superior performance, it was directly reflectedin performance measures

VALID_4 Performance measures are objective and verifiable

2.2 Legitimacy of performance measures
Bouckaertthesystem usage. Based on Bourne et al. (2002),

legitimacy to be that the design and use ofthis study discusses the participation of

performance measures are supported by allorganizational members in the design and use

members of the oraganisationso that theof management systems; moreover, the study

performance measures can be designed andsets and amends performance measures,

used to prevent unauthorized manipulationcollects data, and conducts analysis to achieve

and gaming. Legitimacy is ensured by thenumerical targets for performance measures.

participation of organizational members inFive questions are set regarding the degree ofthe design and use of the PMS. Therefore,

participation of non-managerial staff in

Abernethy

also

processes such as the evaluation of theempirically clarified that the degree ofachievement status of the performance

employee participation in the management

measures (Table 3). The above questions were

information system design has a positive

responded on the basis of 5 points, from ‘1 (notimpactparticipate at all) to 5 (Actively participating)’.

on

and

the

(1993)

considers

performance of the management information

Bouwenssatisfaction(2005)

levelsand35

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Table 3 Legitimacy of performance measures
Range

Mean

S. D.

LEGIT_1 Setting of performance measures

1–5

3.72

.801

LEGIT_2 Selecting the data for setting of performance measures

1–5

3.63

.829

LEGIT_3 Amending performance measures

1–5

3.60

.822

LEGIT_4 Actions to achieve performance targets

1–5

3.88

.713

LEGIT_5 Analysis to achieve numerical targets for performance measures

1–5

3.65

.821

While constructing the variables, thesefailing which they can have a negative impact

average values were scored (α = .905).

on organisational performance (Melnyk et al.,2014). Therefore, we set four questions to

2.3 Functionality of performance measures
Bouckaert (1993) sees functionalityaflexibly in response to environmental changes

realistic measurement so that measured(Table 4). These responses were given on theperformanceforbasis of 5 points, from ‘1 (not at all) to 5

use. Therefore, when there is a difference(exactly)’. When constructing the variables,

between the initial performance measurethese average values were scored (α = .713)1.

measuresareasdetermine whether the target can be changed

suitablesetting and the actual situation, it isimportant to adjust the settings in accordance

2.4

with the actual situation; it is also importantorganisations

to determine whether the monitoring cancontributetowardfacilitating

Performanceofpublicsector

The use of PMS brings various benefits

thisto an organisation. Non-financial as well as

adjustment. The measures and targets infinancialpublic sector organisations are often inflexible,

performance assessment, as shown in many

which may not be conducive to adjustments

quantitative studies (e.g. Davis and Albright,

made

and

2004; Ittner and Larcker, 2001). However,environment. Smith (1995) refers to this type

public sector organisations cannot measureof

performance

performance using financial results such as

evaluation. de Brujin (2002) also argues thatsales and profit measures. Therefore, many

once performance measures are set, thepublic sector studies have relied on the items

continuous reproduction of existing services isof van de Ven and Ferry (1980), which areencouraged and the demand for change can beconsidered suitable for measuring public

ignored. If there is a change in the external or

sector performance, and determined theinternal environments of organisations, thenaccuracy of productivity and operations.

the measures must be modified appropriately,

Measurements were made using the following

In order to change the functionality of
performance measures, we used fourquestions. However, when the question item
‘Change of target during the period is notallowed (reversal scale)’ was included,
Cronbach's α was .596, which made the scaleless reliable. Therefore, variablisation was
performed, which excluded this item.

according

risk

to

the

as ossification ofsituation1

36

results

have

been

used

for

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Table 4 Functionality of performance measures
Range

Mean

S. D.

1–5

2.88

1.175

1–5

3.15

.982

1–5

3.14

1.010

FNCT_1 Targets are updated regularly according to certain criteria
When setting targets, adjustments are made throughout the year
FNCT_2 for situations that could not have been foreseen when setting
targets unforeseen events.
Ongoing monitoring was conducted within the organization to
FNCT_3 assess whether targets are realistic or whether they should bechanged.

seven items: productivity, accuracy of work,

efficiency, and improvement of residents’

an increase in the number of innovative newsatisfaction (α = .826). The second factor was

projects, satisfaction from and reputation ofnamed ‘Behavioural performance’ 2 because

the work, the achievement of targets, work

items related to the impact on staff behaviour,

efficiency,

staff

such as cost awareness and motivation,

motivation towards work. In this study, we

showed a high factor loading (α = .806). The

added six items, such as budget adjustment

third factor was termed ‘Loss of usefulness’and cost awareness, which were measured bybecause items related to the loss of usefulness

major PMS studies such as Hall (2008).

of PMS—such as the fact that performance

Additionally, it has been pointed out thatmeasuresare

PMS yields both positive and negative

indicateorganisational

outcomes. Therefore, we also measured theresidents and parliament—indicated a highseven negative outcomes emerging from use

factor loads (α = .707). The fourth factor wasof PMS, as described by Cuganesan et al.

named ‘Side effects’ because items restricting(2014). We conducted an exploratory factor

communication within the oraganisation,

analysis (using the main factor method andsuch as the inhibition of organisational

promax rotation) on the performance of public

flexibility

sector organisations, based on these 20

oraganisation, showed a high factor loading (αquestions. We identified the elements that= .704). Additionally, in the variabilisation ofcontribute to the performance of public sector

each item, the average value of the question

organisations. As a result, as shown in Table

items that showed a factor load of .35 or more

5, it became clear that the performance ofwas scored.

and

improvementin

underutilised

and

and

poorlyperformance

wrinkleswithintothepublic sector organisations is composed offour factors. The first factor was named ‘Task

2.5 Control variable

performance’ because it comprised the result

In order to control the analysis results,of work activities, such as work quality,

the number of employees was set as a control

Items that make up the second factor
include items that may not be directly linked
to behavioural performance, such as an‘increase in the number of innovative new

project. However, these items are also
considered to be indirectly generated bybehavioural changes, and hence the second
factor is named ‘behavioural performance’.

237

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Table 5 Factor analysis on the performance of public sector organisations

EFT_2 Quality or accuracy of work
Improvement in the achievement
EFT_5 of business and departmental
targets
Improvement in operational
EFT_4
efficiency
Increase in business volume
EFT_1 (production volume) and service
provision
Improvementin
informationcollection and recording methods
EFT_12formeasuring
outputandoutcomes
Increase in the satisfaction and
EFT_6
reputation of residents and users
Coordination of Budgets and plan
EFT_8
with other departments
Information exchange with staff in
EFT_13other departments
Reduction in the time incurred for
EFT_11 making decision associated withtargets, policies, and work schedule
Improvement in cost reduction
EFT_9
awareness
Improvement staff motivation
EFT_7
towards work
Increase in the number of
EFT_3
innovative new business projects
Performance measures and related
EFT_15
information are underutilised
Performance measures are not tied
EFT_16to organisational targets
Performance measures tend to be
EFT_14 poor measures of performance toresidents and parliament.
Performance measures are not
EFT_18 designed to reflect business results
or workload
Measurement and evaluation of
performance measures has led to
EFT_17 the creation of traps and excessivecompetition
withintheorganisation
Measurement and evaluation of
performance measures has led to
EFT_19
reduced organisational flexibility
and disrupted change
Eigenvalue
Factor correlation

Range

Mean

1–5

3.41

Factor1
Factor2
Factor3 Factor4
Task
Behavioural Loss of
Side
S.D.
performanceperformance usefulness effects(α= .826） (α= .806） (α= .707） (α= .704）
0.683
0.861
-0.1490.036-0.008

1–5

3.65

0.694

0.755

-0.005-0.008

0.008

1–5

3.47

0.749

0.611

0.203

0.105

0.017

1–5

3.18

0.685

0.537

0.063

0.063

-0.034

1–5

3.23

0.732

0.421

0.222

-0.039-0.015

1–5

3.21

0.751

0.398

0.174

-0.116

0.065

1–5

3.25

0.831

-0.116

0.805

0.028

-0.067

1–5

3.17

0.778

-0.0330.679-0.021

0.068

1–5

3.01

0.750

0.004

0.574

-0.053-0.040

1–5

3.38

0.764

0.160

0.570

0.014

0.015

1–5

3.18

0.713

0.213

0.432

-0.147

0.011

1–5

2.88

0.727

0.228

0.428

0.085

-0.011

1–5

2.91

0.891

0.082

-0.0480.816-0.070

1–5

2.69

0.889

-0.027-0.0160.753-0.025

1–5

2.45

0.887

-0.275

0.165

0.485

0.117

1–5

2.80

0.862

0.154

-0.050

0.400

0.127

1–5

1.99

0.698

-0.0040.039-0.021

0.789

1–5

2.29

0.752

-0.010-0.082

0.089

0.662

6.068
―
0.670
-0.562-0.240

1.858

1.260

1.008

Factor1
Factor2
Factor3
Factor4―-0.545-0.111

―
0.427

―

38

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

variable; this is because items such asloading in the item indicating whether

environmental

uncertainty,

business procedures and processes werecomplexity,

organisation

expectedandtoaffectthebusiness
scale

are

clarified by manuals and regulations. The

performancesecondfactorwas

named‘Measurable

management of public sector organisations.

outcome’ (α = .714) because it showed a highRegarding environmental uncertainties andfactor loading on the items related to theoperational complexity, we referred to Speklé

measurable outcome of the department (lower

and Verbeeten (2014) and Oura and Matsuo

part of Table 6). Additionally, in the(2017)

conduct

variabilisation of each item, the average value

exploratory factor analysis (main factorof the question items that showed a factor

method and promax rotation)3. Additionally,load of .35 or more was scored. Finally, inwhen conducting factor analysis, items fororder to control the scale of the organization,

which the ceiling effect was confirmed andthe value obtained by logarithm conversion of

items that showed only factor loadings

the number of employees is used in the

below .35 for all factors were deleted. As aanalysis.

result,

to

the

set

questionsfirstfactoranddenoting

theuncertainty of the work environment had a(4) Analysis resultshigh factor loading in the item indicating
uncertainties

relatedtothe

Based on the above variables, wefutureconducted a multiple regression analysis;

predictability of work, and therefore thisvalidity, legitimacy, and functionality offactor was termed ‘Task predictability’ (αperformance= .666). The second factor was named

independent variables, and the performance‘Business design difficulty’ (α = .776) becauseof public sector organisations was taken as ait showed a high factor loading in the items

dependent

indicating difficulty in predicting needs anduncertainty, operational complexity, andeffects related to business design (upper partscale (number of employees) were set asof Table 6). Although Cronbach's α ofcontrol variables. The correlation coefficient‘business predictability’, which is the first

between variables (Table 6) and the results offactor, is below the general standard of .70,

multiple regression analysis (Table 7) are as

there is no major problem in validity because

follows. As a result of the analysis, it became

it is close to .70. It was judged. The first factor

clear that any variable that makes up theof business complexity is ‘Business process

quality of performance measures affects theclarity’ (α = .790) because it had a high factor

performance of public sector organisations.

Speklé and Verbeeten (2014) do not perform
factor analysis for each question item on both
uncertainty of work environment and work
complexity, but they are variabilised by thesimple average method. However, as a resultof performing the same operation in thisstudy, the value of Cronbach's α became low,

and hence factor analysis was performed forenhancing the accuracy of the analysis.
4 The variance of inflation of the input
independent variable was confirmed, but the
maximum value was 1.325, and hence it isconcludedthattheproblemofmulticollinearity does not exist.

339

measuresvariables

4

were

.

taken

as

Environmental

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

First, it improves operational results such as

performance measures: B = .217, β = .228, t =thevalidity

legitimacyfunctionality

of
of
of

performancemeasures,4.504; legitimacy of performance measures: B

performancemeasures,= .203, β = .262, t = 5.405; and performance

performancemeasures,measures functionality: B = .150, β = .242; tproductivity, and work efficiency (validity of=4.857).

Table 6 Factor analysis on the control variables
Uncertainty of the task environment

There is a high possibility thatENVDYN_1 unpredictable events will occur in daily
operations
It is difficult to predict when a new project
ENVDYN_2
will start
It is difficult to estimate the required
ENVDYN_4
budget for the following year accurately
Achievement of targets depends heavily
ENVDYN_3
on the external environment
When designing a business, it is difficult
ENVDYN_6
to predict needs
When designing a business, it is difficult
ENVDYN_7
to predict the effect
Eigenvalue
Factor correlation

Business complexity
There is an appropriate and efficient
ENVHOST_2
process for conducting business
There is a standard procedure that should
ENVHOST_1be referenced for addressing differences inbusiness execution
Procedures for conducting business are
ENVHOST_4
clearly shared among various departments
Procedures for conducting business are
ENVHOST_3stipulated through laws, regulations, andrules, among others
Quantitatively understand what the
ENVHOST_6
department should achieve
A single quantitative measure can grasp
ENVHOST_5
the results of each businessCurrent performance measures accurately
ENVHOST_7represent what the department should
achieve
Eigenvalue
Factor correlation

Factor2
Business
designdifficulty(α=.776)

Range

Mean

S.D.

Factor1Task
predictability(α=.666)

1–5

3.11

0.888

0.767

-0.130

1–5

3.11

0.965

0.702

-0.001

1–5

2.76

0.945

0.410

0.238

1–5

3.28

0.779

0.382

0.108

1–5

2.72

0.739

-0.058

0.797

1–5

2.84

0.804

0.069

0.794

2.376
―
0.311

1.343

Factor1
Factor2―

Factor1
Factor2
Business
Measurable
process clarity
outcome(α=.790)(α=.714)

Range

Mean

S.D.

1–5

3.02

.930

.794

.010

1–5

2.93

1.067

.757

-.019

1–5

3.26

.902

.673

.071

1–5

3.21

.982

.534

-.001

1–5

2.88

.937

-.060

.977

1–5

2.53

.956

.027

.656

1–5

3.23

.781

.189

.362

3.104
1.281
Factor1―
Factor2.447―
ENVDYN_1 to ENVDYN_7 asked about uncertainties in the work environment and measured them on a five-point
scale (‘“1 not at all’” – ‘“5 exactly’”). ENVDYN_5 was removed for factor analysis because both factors showed factor
loadings less than .35. ENVHOST_1 to ENVHOST_10 asked about the complexity of the business and measured it
on a 5-point scale (‘“1 not at all’” – ‘“5 exactly’”). Since ENVHOST_9 confirmed the ceiling effect, ENVHOST_8 and
ENVHOST_10 showed factor loadings less than .35 for both factors, and hence were excluded from the factor analysis.

40Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

Table 7 Correlation coefficient between variables
Variables(1)TSK_PERF

1

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(2)BEH_PERF.661** 1(3)RER_NPERF-.446** -.446** 1(4)SIDE_ NPERF-.218* -.157** .393** 1(5)VALID.419** .408** -.342** -.125* 1(6)LEGIT.419*** .342** -.289** -.282** .263** 1(7)FNCT

.415*.377** -.397** -.075.304** .284*

1(8)PREDICT

-.084

-.029

.112*

.023

-.165** -.081-.112* 1(9)DIFFICULT-.126* -.144** .118*.127*-.166** -.118* -.120* .292** 1(10)CLARITY.179** .257** -.216** -.035.283** .155** .293** -.282** -.191** 1(11)MEASURABLE.350** .309** -.250** -.069

.333*

(11)

.199** .244** -.237** -.177** .400** 1

1）Pearson's correlation coefficient
2）TSK_PERF: Task Performance，BEH_PERF: Behavioural performance ，RER_NPERF: Loss of usefulness,
SIDE_ NPERF: Side effects，VALID: Validity of performance measures，LEGIT: Legitimacy of performancemeasures，FNCT: Functionality of performance measures，PREDICT: Task predictability，DIFFICULT: Businessdesign difficulty，CLARITY: Business process clarity，MEASURABLE: Measurable outcome3）**p<0.01, *p<0.05 (two-sided)

Table 8 The results of multiple regression analysis
Behavioural

Task PerformanceΒ

t-valueβperformanceΒβ3.007*** .729

Loss of usefulness

t-valueΒ2.110**

5.299

βt-value

Side effectsΒ

β12.476*** 3.328

t-valueConstant term

.960

7.253***

VALID

.217

.228

4.504*** .243

.246

4.617*** -.209-.178-3.235*** -.045

-.040

-.658

LEGIT

.203

.262

5.405*** .159

.193

3.792*** -.123-.130-2.464** -.239-.257-4.444***

FNCT

.150

.242

4.857***

.127

.201

3.822***

-.197

-.260

-4.809*** .015

.020

.340

PREDICT

.032

.038

.775

.088

.103

2.009** .016

.015

.289

-.036

-.037

-.626

DIFFICULT

-.016

-.021

-.432

-.041

-.053

-1.055

.017

.018

.347

.095

.105

1.835*

CLARITY

-.045

-.065

-1.253

.049

.069

1.259

-.019

-.022

-.393

.031

.038

.605

.096

.129

2.343**

-.088

-.098

-1.738*

-.013

-.015

-.238

.016

.024

.494

-.103

-.130

-2.607* -.063-.081-1.476

MEASURABLE

.143

.195

3.749***

Number of staff

.030

.047

1.010

R2

.368

.306

.261

.097

Adj. R2

.352

.288

.241

.074

F-value

22.500***16.881***

13.531***4.154***

1）Estimation based on ordinary least squares (OLS) method2）B: Non-standard regression coefficient ，β: Standard regression coefficient ，R2: Coefficient of determination ，Adj. R2:
Modified coefficient of determination3）*** p < 0.01, ** p < 0.05, * p < 0.1（two-sided）

Additionally,animprovementin

β = .193, t = 3.792; and performance measurespositive outcomes was observed, such asof functionality: B = .127, β = .201; t = 3.822).

improvement of staff motivation and the

As pointed out by Bouckaert (1993) andactive exchange of information with other

van Dooren et al. (2015), it is important tolegitimacy of performance measures: B = .159,

improve the quality of performance measureswhen designing and using PMS in public
41

Journal of Japanese Management Vo.4, No.1, November 2019ISSN 2189-9592

sector organisations. This suggests that-.178, t = -3.235; legitimacy of performance

improving the validity, legitimacy, andmeasures: B =-. 123, β = -.130, t = -2.464;

functionality of measures improves theand functionality of performance measures: B

performance of public sector organisations. In=-. 197, β = -.260; t = -4.809). Additionally,

other

and

legitimacy of performance measures, that is,using PMS for public sector organisations,staff participation in setting and using

the performance measures are designed in a

performance measures is also supressed sidemanner that they are not distorted byeffectsexternal influences. It is essential to build acompetition

mechanism that will allow managers andflexibility of organisation (B = -.239, β =non-managerial staff to participate in the-.257; t =design and use of performance measures; thisal. (2014) mentions the possibility that themechanism

will

contributetowardsuse of PMS in public sector organisations not

improving

task

and

behavioural

only produces positive outcomes but also

performance. Groen et al. (2017) clarified thatnegative outcomes, it has not been revealed

the involvement of operational employees inthat how to suppress these negative outcomesthewords, when

designdesigningandof PMS use, such
in

the

body

-4.444). Althoughasexcessive

andreducedCuganesan etimplementationofof PMS. In this respect, an improvement inmeasures improves thejob

the quality of performance measures, such as

performance of employees. It can be said thatvalidity, legitimacy, and functionality of

thisperformance measures may suppress theperformanceisconsistent

withprevious

studies. Additionally, the measurability ofnegative outcomes.

outcomes affects the relationship between

In public sector oraganisations, once

each variable related to the quality of

performance measures are set, they are often

performancenot reviewed for reasons such as year-on-

measures

and

task

and

behavioural performance. In other words, it isyear comparisonssuggested that it is necessary to giveother organisations. Ensuring comparability

sufficient consideration to the quality ofis,performance measures when the business or

accountability of the government. But leaving

project allows the quantitative measurement

improvements of quality of performanceof the results of each department or

measures can also lead to poor performance of

project. These variables related to the quality

public sector organisations. Therefore, it isof performance measures not only increase

necessary

positive outcomes but also show the potential

performance measures periodically to sustain

to suppress negative outcomes. In otherthe quality of the performance measures.

ofcourse,toandcomparisons

importantverify

and

in

with

fulfilling

reviewthewords, the validity, legitimacy, functionalityof performance measures suppresses negative(5) Contribution of this research and future

outcomesissuesofperformance

management

systems such as loss of usefulness (validity of

Although previous studies pointed out

209, β =that the quality of performance measures has

performancemeasures:

B

=-.

42

Journal of Japanese Management Vo.4, No.1, November 2019asignificant

impacton

ISSN 2189-9592

organizationalquestion items by relying on the literature on

performance (van Dooren et al., 2015), thenegative outcomes of PMS use, such as therelationship between the two has not been

study by Cuganesan et al. (2014). There is aclarified quantitatively. In this regard, thispossibility that the negative outcomes may

study presents empirical evidence that the

not be fully understood. The points comprise

validity, legitimacy, and functionality of

the limitations of this research, which must

performancebe evaluated in future research.

measuresincreasepositiveoutcomes. This is the first contribution of thisstudy.

Additionally,

althoughnegative

Acknowledgements

outcomes from the use of PMS have beenThis paper’ original version (Metoki, 2018)

pointed out (Cuganesan et al., 2014), thewon the Best Paper Award at the Japan Costmeans to suppress them have not been

Accounting Association (JCAA) and waspresented. This study addresses this gap by

publisheddemonstrating that negative outcomes can berecommendation of the president. The author

suppressed by improving the quality ofwould like to thank the president of JCAA,

performance measures, that is, the validity,

and two anonymous reviewers of Journal of

legitimacy, and functionality of performance

Japanese Management.

in

this

journalwiththemeasures. However, while making the abovementioned contributions, it must be pointed

References

out that this research has its limitations. This

Abernethy, Margaret A. and Jan Bouwens.

study analyses the quality of performance(2005).

measures by focusing on the

Innovation Implementation. Abacus, 41

validity,

legitimacy, and functionality of performance

DeterminantsofAccounting(3) , pp.217-240.

measures presented by Bouckaert (1993).

Bevan, Gwyn and Christopher Hood. (2006).

Additionally, it attempts to grasp the quality

What's Measured is What Matters:of the performance measures by considering

Targets and Gaming in the English

the validity of the construct, as much as

Public Health Care System. Public

possible,

Administration, 84 (3), pp.517-538.

relyingonprevious

research.

However, since the concept of quality of

Bouckaert, Geert. (1993). Measurement andMeaningful

elements, this study does not capture allmeasures’

Productivity and Management Review,
17, pp.31-43.

measurement,

Bourne, Mike. John J. Mills, Mark Wilcox,

importance, measurement cost, sensitivity,

Andy Neely, and Ken Platts. (2002).

and noise discussed in Kawai (2016) are

Designing, Implementing and Updating

considered to be factors related to the quality

Performanceof performance measures in public sector
organisations. Additionally, when measuring

International Journal of Operations andProduction Management, 20 (7), pp.754-

negative outcomes, the study formulated

771.

aspects.

For

characteristics

example,
such

as

the

43

Management.

Publicperformance measures is composed of various

Measurement

Systems.

Journal of Japanese Management Vo.4, No.1, November 2019

deBruijn,Hans.

(2002).

Management Accounting Research, 36,
pp.51-66.

Performance

Measurement in the Public Sector:
Strategies to Cope with the Risks of
Performance

ISSN 2189-9592

Hall,

Measurement.

Matthew.

(2008).

The

Comprehensive

Effectof

Performance

International Journal of Public Sector
Management, 15 (7), pp.578-594.

Measurement Systems on Role Clarity,

Cavalluzzo, Ken S. and Christopher D. Ittner.

Managerial Performance. Accounting,(2004).

Implementing

Measurement

PsychologicalandOrganizations and Society, 33 (2/3),

Performance

Innovations:

Empowerment

Evidence

pp.141-163.

Accounting,Heinrich, Carolyn J. (1999). Do Government

Organizations and Society, 29 (2), pp.243267.

Bureaucrats Make Effective Use of

Cuganesan, Suresh. James Guthrie andJournal of Public Administration
Research and Theory ,9 (3), pp.363-393.

fromGovernment.

Performance Management Information?

Vedran Vranic. (2014). The Riskiness of
PublicSectorPerformancevan Helden, G. Jan and Christoph Reichard.

Measurement: A Review and Research(2013). A Metareview of Public Sector

Agenda. Financial Accountability and

Performance

Management, 30 (3), pp.279-302.

Tékhne-Review of Applied Management

Management

Research.

Investigation of the Effect of Balanced

Studies, 11, pp.10-20.
Ittner, Christopher. D. and David F. Larcker.

Scorecard Implementation on Financial(2001). Assessing Empirical Research in

Performance. Management Accounting

Management Accounting: A Value-based

Research, 15 (2), pp.135-153.
van Dooren, Wouter. Geert Bouckaert andPerspective. Journal of Accounting and

Performance
Public Sector.

Kawai, Takaharu. (2016). Gyouseki Sokutei

London and New York: Routledge and(Performance Measuring Objects and Its

Taylor and Francis Group.

Properties). Journal of Cost Accounting

Davis, Stan and Tom Albright. (2004). An

John

Halligan.

Management

Economics, 32, pp.349-410.

(2015).

in theno Sokutei Taishou to Shihyou Tokuseiin Japan, 40(2), pp.87-99.
Kravchuk, Robert and Ronald Schack. (1996).

Grafton, Jennifer. Anne M. Lillis and Sally K.
Widener. (2010). The Role of Performance
Measurement

andEvaluationin

Designing

Effective

Building Organizational Capabilities andMeasurement

Performance. Accounting, Organizations

Government Performance and Results

and Society, 35(7), pp.689-706.

Act 1993. Public Administration Review,

Groen, Bianca. A. C. Marc. J. F. Wouters andSystems

Performance
under

the

56 (4), pp.348-358.

Celeste P. M. Wilderom. (2017). Employee

Matsuo, Takami. (2009). Jichitai no Gyouseki
Kanri

Job Performance: A Survey Study Basedmanagementongovernment). Chuokeizai-sha, Inc. Japan.

Self-determination

Theory.
44

Shisutemu(Performance

Participation, Performance Metrics andsystemsinlocal

Journal of Japanese Management Vo.4, No.1, November 2019

Departments. Management Accounting

Melnyk, Steven. A., Umit Bititci, Ken Platts,

Research, 15, pp.247-266.

Jutta Tobias, and Bjørn Andersen. (2014).
Is

Performance

Management

Measurement

Fit

for

the

and

Oura, Keisuke and Takami Matsuo. (2017).

Future?

ChihouManagement Accounting Research, 25(2), pp.173-186.

Management

Information

Effectiveness

in

and

Japanese

Its
Local

Government). Journal of Cost Accounting

in Japan, 41(1), pp.103-115.
Pollitt, Christopher. (2006). Performance
Management in Practice: A Comparative

performance management systems in

Study of Executive Agencies. Journal of

local government). The Journal of Cost

Public Administration Research andAccounting Research, 42(9), pp.97-109.
Metoki, Takehiro. (2012). Gyouseki Kanri

Theory,16 (1), pp.25-44.
Smith, Peter. (1995). On the Unintended

Shisutemu to shite no Gyousei Hyouka (AConsequences of Publishing Performance

Survey of Performance Management in

Data in the Public Sector. International

The
Journal of Musashi University, 60 (2),Journal of Public Administration,18 (2/3),
pp.277-310.

Local

qualityniokeruonJapanesemeasures

DanntaiYuukousei (The Use of Performance

Takehiro.

performance

Koukyou

Gyouseki Kanrij Youhou no Riyou to(2018). Gyouseki
Shihyou no Shitsu ga Gyousei Soshiki
no Pafoumansu ni ataeru Eikyou:
Sitsumonhyou Cyousa ni Motozuku
Teiryou Bunseki (The effects ofMetoki,ISSN 2189-9592

Government).

pp.45-72.

Speklé, Roland F. and Frank H. M. Verbeeten.

Metoki, Takehiro and Takeyoshi Senoo.

(2014).

The

Use

of

Performance(2012). Examining Managerial Uses of

Measurement Systems in the Public

Accounting

andSector:Measurement

Information

Performanceinin Japan, 36 (2), pp.115-129.
Moers, Frank. (2006). Performance Measure

Performance.

Van de Ven, Andrew. H. and Diane L. Ferry.
(1980).

The
Accounting Review, 81 (4), pp.897-924.
andonManagement Accounting Research, 25(2), pp.131-146.

Local

Government. Journal of Cost Accounting

Properties

Effects

MeasuringandAssessingOrganizations. Wiley, New York.

Delegation.

Newberry, Susan and June Pallot. (2004).
Freedom or Coercion? NPM Incentives in
New

ZealandCentralGovernment(Received: July 31, 2019)(Accepted: November 1, 2019)45

Publisher: JFMRA
November 2019