The effect of management control systems in managing the unknown: Does the market appreciate the breadth of vision?

Abstract We examine the extent to which broad-scope management control systems (MCS) mitigate negative impact of a crisis with extreme uncertainty on investor and shareholder expectations potential role boundary in this link. use COVID-19 pandemic as research setting analyse link market value proxy for expectations. Our hypotheses are tested using combination survey archival data from large organizations listed Brazilian Stock Exchange, resulting panel 6257 organization-week observations. main results consistent hypotheses. also conduct series sensitivity tests check robustness our findings. remain significant across specifications: alternative identification strategy, or additional variables. In an analysis, we lenders. Overall, extend scarce prior literature effectiveness MCS under provide new evidence signaling theory, thus connecting both streams literature. The provides optimal context researching topic because, contrast past economic downturns financial crises, it has required industries adapt quickly respond demands unpredictable economic, behavioural, societal consequences.