Integrating management control system and enterprise risk management: Exploring the impact on firm performance in Indonesia fintech companies

Abstract

The study examines the integration of Management Control Systems (MCS)
and Enterprise Risk Management (ERM) and its effect on firm performance
in Indonesian FinTech companies. The study focuses on the importance
of a comprehensive risk management approach that integrates MCS’s
diagnostic and interactive control systems with the five components of
ERM: organizational environment, risk awareness, strategic integration,
risk assessment, and reporting. Data were collected through a survey of
Indonesian FinTech firms using a quantitative research methodology. The
study shows that combining MCS and ERM improves risk management and
positively impacts organizational performance. This study makes a significant
contribution to both theoretical understanding and practical application by
presenting a comprehensive framework that combines management control
systems (MCS) and enterprise risk management (ERM). The insights provided
are particularly valuable for FinTech companies aiming to enhance their risk
management practices and overall performance.