Exercising Management Control Through the Use of Decision Technology: A Case Study from New Product Development

Abstract

When competition is tough and resources are scarce, management may seek ways to systematise their decision-making process so as to better control their operations and resource allocations. Yet little is known about how decision technology is used in practice during the new product development process as a means to exercise, administer and accomplish managerial control. This research investigates how an organisation used a decision technology to exercise management control in order to manage the work activities of their employees in a group decision-making setting. It assesses the impact decision technologies have at the firm level focusing on the transformation of the decision process, the individuals involved and the decision outcomes to the firm. Data was collected through a case study which included passive observations in board meetings and functional team meetings as well as interviews and document analysis on those generated from the decision technology. The decision technology was found not only to have changed the way management exercised management control vertically across different hierarchal levels but also horizontally over their fellow peers. Interestingly, even though the chief executive officer had relinquished his immediate control of the decision process, he was nevertheless able to exercise management control from a distance in a subtle manner through the use of the decision technology. Moreover, the decision technology gave management the confidence to make the necessary decisions and consider innovative and challenging projects which they previously avoided due to fear of project failure. The increase in innovative performance is believed to have resulted from management becoming more accountable for the decision process rather than on the final project outcome, regardless of new product launch success or failure. This change was due to individuals’ willingness to believe and abide to the decision process that disciplined and enforced them through the decision technology. Thus, decision technology can be seen as an enabler of management control that delivers increased innovation performance and provides action control as well as hierarchal and lateral controls.