Antecedents of IT-Enabled Organizational Control Mechanisms

Abstract

Organizational control is one of the fundamental management functions. Literature on control design suggests two underlying antecedents for designing organizational controls: "knowledge of the transformation process" and "ability to measure output". We conducted an exploratory case study, drawing on archival data and interviews to test organizational control theory (OCT), taking into account the role of Information Technology (IT) in control design. We operationalized OCT as characterized by literature and classified 525 organizational controls. We found OCT correctly predicted the control type based on the antecedent conditions in approximately two out of three cases. We found the other third being influenced by automation, centralization, and mass data analysis. We argue that IT allows management to implement behavior controls in situations, where processes and procedures are unknown and therefore "knowledge of the transformation process" is low. As contribution for theory, we reveal exploring capabilities of organizational control in addition to exploiting activities. As contribution for practice, we introduce new antecedents for designing organizational controls. This research is in line with others to test control theory, but it is the first to explain the catalyzing functions of IT on organizational control design within a case study.