The impact of ethical work climate on control system in enhancing the performance of higher education institutions

Purpose This study aims to investigate the interplay between ethical work climate (EWC) and management control systems (MCS), particularly within Indonesian private higher education institutions (HEIs). It aims to examine the impact of EWC on MCS, comprising both enabling and coercive control mechanisms, which exert an influence on the performance of HEIs. Design/methodology/approach An online questionnaire was distributed via social media platforms (Facebook and WhatsApp) and through university coordinators across Sumatra, Java, Kalimantan and Sulawesi islands. Using purposive sampling, eligibility required a minimum tenure of three years. Informed consent was obtained before participation. Four hundred and 43 valid responses were collected, predominantly from male lecturers residing in Sumatra and Java. Structural equation modeling analysis using Smart PLS was used to test hypotheses. Findings The findings indicate that EWC exerts a positive and significant influence on MCS, encompassing both enabling and coercive controls and the performance of HEIs. The findings also suggest that MCS function as partial mediators in the indirect relationship between EWC and the performance of HEIs. Research limitations/implications This study offers theoretical contributions by advancing the understanding of the dynamics between EWC and MCS, particularly in the context of HEIs’ effectiveness. Practical implications The study provides actionable implications for stakeholders to develop robust ethical and controlling frameworks that can improve HEIs’ governance and performance outcomes. Originality/value This study integrates EWC with dual control mechanisms, enabling and coercive, within Indonesian private HEIs, revealing their coexistence and mediating role in performance. It advances organizational and contingency theories by offering rare empirical insights from the HEI context with practical implications for ethical governance for HEI administrators and policymakers.