Study on the Impact of Internal Control on Organizational Resilience: Evidence from Chinese Listed Companies

Mule Tai; Yang Liu; Quanzhong Xu

doi:10.6981/FEM.202511_6(11).0010

Authors

Mule Tai
Yang Liu
Quanzhong Xu

DOI:

https://doi.org/10.6981/FEM.202511_6(11).0010

Keywords:

Organizational Resilience; Internal Control; Financial Constraints; Management Efficiency; Innovation Output.

Abstract

Enhancing organizational resilience is crucial for enterprises to navigate environmental uncertainties in the VUCA era. As a core governance mechanism, the question of whether and how internal control can enhance organizational resilience remains a significant theoretical and practical issue. This study examines the impact of internal control on organizational resilience using panel data from Chinese manufacturing listed companies on the Shanghai and Shenzhen A-share markets from 2011 to 2023 and investigates the process mechanisms through which internal control influences organizational resilience. The findings reveal that internal controls exert a significant positive effect on organizational resilience. Mechanistic analysis suggests that internal controls enhance organizational resilience through three key pathways: alleviating financial constraints, improving management efficiency, and increasing innovation output. Heterogeneity tests further show that the positive effect of internal controls on organizational resilience is more pronounced in firms with higher digital transformation levels, those located in eastern regions, and larger-scale enterprises. This study not only enriches the theoretical understanding of internal control and expands research on the antecedents of organizational resilience, but also offers practical guidance for enterprises to enhance organizational resilience and strengthen risk response capabilities.

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