FROM INSTITUTIONAL PRESSURES TO FINANCIAL PERFORMANCE: THE MEDIATING ROLE OF MANAGEMENT CONTROL SYSTEMS IN SUSTAINABLE CONSTRUCTION AND RESILIENT INFRASTRUCTURE IN MOROCCO
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Large construction firms face coercive, normative, and mimetic demands that encourage the formal adoption of management practices. However, adoption that secures legitimacy does not necessarily deliver sustainable economic growth or stronger financial results. This study examines whether management control systems (MCS) mediate the relationship between institutional pressures and perceived financial performance in large construction companies in Morocco, a sector central to resilient infrastructure and sustainable industrialization. Using a quantitatively dominant sequential explanatory mixed-methods design, the quantitative phase analyses 170 valid enterprise-level questionnaire responses from construction firms with annual revenue of at least MAD 100 million through reliability tests, exploratory factor analysis, Pearson correlations, ordinary least squares regression, and bootstrap mediation (5,000 resamples); the qualitative phase draws on two key informant interviews. The results show that institutional pressures are positively associated with MCS (β = 0.52, p < 0.001) and that MCS are positively associated with financial performance (β = 0.44, p < 0.001). In contrast, the direct effect of institutional pressures on financial performance is not significant once MCS and firm-level controls are included (β = 0.09, p = 0.228). The indirect effect through MCS is 0.23, with a 95% bootstrap confidence interval of [0.14, 0.35], and the mediation model explains 28% of the variance in financial performance. The findings suggest indirect-only mediation in which about 72% of the total association between institutional pressures and performance operates through formalized control systems. At the same time, the interviews indicate that internal endorsement, practical relevance, and adaptation to project complexity determine whether formal controls become operationally meaningful.
JEL Classification Codes: M10, M41, L74, O18.
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