Perceived Organizational Paranoia and Financial Decision-Making Process Quality: The Mediating Role of Risk Perception and Moderating Effect of Internal Controls

Nazaripour, Mohammad; Ghaderi Rahaghi, Majid

doi:10.48301/jear.2025.551656.1147

Perceived Organizational Paranoia and Financial Decision-Making Process Quality: The Mediating Role of Risk Perception and Moderating Effect of Internal Controls

Articles in Press

Document Type : Original Article

Authors

Mohammad Nazaripour ¹

Majid Ghaderi Rahaghi ²

¹ Department of Accounting, University of Hazrat-e Masoumeh, Qom, Iran.

² Department of Accounting, Shamsipour Technical and Vocational College, National University of Skill, Tehran, Iran

10.48301/jear.2025.551656.1147

Abstract

This study examines the impact of Managers’ Perceived Organizational Paranoia (MPOP) -defined as an individual-level perceptual climate construct - on the quality of financial decision-making processes reported by managers in Iranian manufacturing firms. Data were collected from 285 financial managers (one per firm) using a descriptive survey design and snowball sampling, yielding a non-representative sample. Structural equation modeling in AMOS, cross-validated with PLS-SEM (SRMR = 0.049), showed that MPOP significantly reduces financial decision-making quality. Perceived risk partially mediates this negative relationship, while internal controls exert a modest but significant moderating effect (β = 0.18, p < 0.001) through latent variable interaction, despite lacking a direct main effect on decision quality. All measures exhibited high reliability (Cronbach’s α > 0.88), and tests confirmed that common method bias was not a concern (common latent factor explained 18.4% of variance; parameter shifts < 5%). Given the single-respondent, non-probability design, MPOP reflects individual perceptions rather than shared organizational cognition, and results are preliminary and not statistically generalizable. Nonetheless, this study provides early empirical evidence of how psychological climate, risk perception, and internal governance mechanisms jointly shape financial decision-making under conditions of uncertainty.

Keywords

Managers’ Perceived Organizational Paranoia (MPOP)

Financial Decision-Making

Perceived Risk

Internal Controls

Iranian Manufacturing Firms

Subjects