Examining the Effect of the Organization’s Internal Control System on Organizational Effectiveness: A Jordanian Empirical Study

Abstract

This study aims to investigate the impact of the internal control system (Control environment, Communication, Risk management, Control activities and Monitoring) on organizational effectiveness in Jordan. The organizational effectiveness was studied through three approaches namely; organizational ability to achieve its goals (Goal approach), organizational ability to control and maintain the needed resources (Resource Control approach) and the (Multiple Constituency approach) which deals with organizational competitiveness, job satisfaction, customer satisfaction and complaints. To achieve the objectives of the study, a theoretical framework was developed and some hypotheses were proposed. Data were collected using a self-administrated questionnaire from 151 employees occupying different managerial levels in Jordan. The results of the multiple regression test showed a high positive impact of the study variables on organizational effectiveness with (R = 87.9%) and (R square =77.3%). Based on the findings of the research, the researchers suggest a number of relevant recommendations related to improving awareness about the importance of internal control system components, and mechanisms to improve internal procedures and processes for improving the organizations’ effectiveness using different approaches. The implications to both theory and practice are discussed at the end of this paper.