Clan Control Research Articles

The Role of Organizational Social Capital in the Design of Management Control Systems

ABSTRACT Interest in so-called “soft controls,” such as clan control, and what role they may play in designing management control systems has been growing in recent years. In particular, the conditions under which clan control and formal bureaucratic controls complement or substitute each other are the subject of an ongoing debate. The aim of this paper is to investigate the role of organizational social capital in the design of management control systems and, more specifically, to better understand the functioning of clan control. We argue that adopting a social capital perspective can help explain how clan control works and what positive effects it has on performance: organizational social capital moderates the positive effect of clan control on performance and enables organizations to use clan control and bureaucratic controls complementarily. We provide empirical evidence that supports our hypotheses and is based on survey data from 523 small and medium-sized enterprises in Germany.

The mediating effects of in-role and extra-role behaviors on the relationship between control and software-project performance

Research on project controls has mainly focused either on their direct effect on project outcomes, or on the joint effect of controls and other factors on such outcomes. A few studies have examined the impact of control mechanisms on teamwork processes, usually with the aim of ascertaining why a particular mechanism is needed, or how control affects final outcomes. This study goes further, exploring control mechanisms' influence on teamwork and how this influence, in turn, leads to changes in project performance. Moreover, while many past studies have only examined the extent to which controlees can effectively perform their tasks, this one looks at in-role and extra-role behaviors as process variables; and, instead of treating control as a single undifferentiated phenomenon, it models the integrated effects of formal and informal (clan) control on projects. Analysis of data collected from 220 practitioners shows that both types of formal control mechanisms and clan control had distinctive impacts on both in-role and extra-role behaviors, and that both these behavior types had identifiable impacts on project performance. When formal and clan control mechanisms were applied simultaneously, in-role behavior was reduced and extra-role behavior increased. We conclude with a discussion of our findings' implications for past and future control studies as well as for practitioners.

The combined effects of managerial control, resource commitment, and top management support on the successful delivery of information systems projects

Current research on information systems (IS) projects fails to comprehensively explain how these projects can achieve higher performance. This study examines the underlying conditions that result in IS project performance. We examined the role of managerial control as well as the moderating effects of resource commitment and top management support. Data were collected from 262 respondents working in various IS projects across Pakistan. The results indicate that managerial control plays a key role in the performance of IS projects. The moderating role of resource commitment was established for clan control and outcome control, while it failed to play a moderating role for behavioral control and self-control. In case of top management support, the moderation was established for outcome control and clan control while for other two dimensions of managerial control i.e. self-control and behavioral control, the moderating role was not established.

Managing the Trade-Off between Delegation and Task Interdependence in Creative Teams: The Role of Personnel and Cultural Controls

In this study we analyze the interactive effects of delegation of decision rights (task autonomy) and team task interdependence on creative team performance. Creative teams are characterized by a high requirement for both autonomy and task interdependence, suggesting that ideally creative teamwork should be designed in a way that both are maximized. However, we expect that giving team members higher autonomy will in fact undermine the positive effect of more task interdependence on team creativity and vice versa. Most importantly, while the trade-off between autonomy and team task interdependence is inherent in the nature of creative work, we argue that some creative teams are better able to deal with this trade-off than others, depending on the presence of selection, training and cultural control as mechanisms for supporting successful team self-control. Such clan control enables teams to efficiently self-manage and self-regulate team activities in order to reconcile high task interdependence and high task autonomy (team self-control). We test our hypotheses using survey data collected from 101 teams and 372 individuals in 53 marketing agencies, and find evidence that is consistent with our predictions.

Bridging business model and inter-organizational coordination mechanisms in the Italian wine industry

Purpose The aim of this paper is to interpret the concept of a business model from the pattern of coordination mechanisms used by an Italian wine cooperative to manage its inter-organizational relationships. Design/methodology/approach The business model is taken as the structure and governance of the relationships between the focal firm and its exchange partners. The empirical analysis is based on a qualitative investigation, analyzing material collected at the Farming Cooperative Gran Cru. Findings Several different coordination mechanisms were used to rethink the firm customer value proposition, showing a very complex and dynamic inter-organizational system: process control mechanisms, knowledge suppliers and clan control mechanisms. The combination of mechanisms enables the firm to govern the extreme complexity of external complementarities and interdependence among activities and resources. Practical implications The study is particularly helpful to managers because wine entrepreneurs and managers can influence their networks’ features and strategies, as well as the mechanisms for governance of the relationships and extracting customer value. Originality/value The study seeks to enrich the debate on the strategy/structure fit by shifting the focus from the organizational to inter-organizational level of analysis. The analysis centers on boundary-spanning relationships between one wine firm and its partners and knowledge suppliers. This perspective brings business model analysis and inter-organizational design closer because variables of the business model – such as customer value – can be seen as combinations of inter-organizational coordination mechanisms.

Control Mechanisms and Agile Methodology Use: Data from the Industry

ABSTRACTThis research investigates the relationship between the degree of agile methodology use and four types of control mechanisms that are widely used in the management of a software project and its personnel: outcome control, behavioral control, clan control, and self-control. We conducted two studies: a survey of software professionals and a follow-up interview in six organizations. We found the following: 1) software professionals reported high outcome and clan controls regardless of their levels of agile methodology use; 2) the high agile group reported some use of behavioral and self-controls while the low agile group did not; 3) even though behavioral control was minimum in the low agile group, all professionals we interviewed strongly agreed that using established materials and following existing procedures should be standardized practices in software development. Implications of this research are discussed.

Spiritual leadership at the workplace: Perspectives and theories.

Leadership has always been an area of interest since time immemorial. Nevertheless, scientific theories regarding leadership started to appear only from the beginning of the 20th century. Modern theories of leadership such as strategic leadership theory emerged as early as the 1980s when outdated theories of behavioral contingency were questioned, resulting in the beginning of a shift in focus leading to the emergence of modern theories hypothesizing the importance of vision, motivation and value-based control of clan and culture. Value-driven clan control emphasizes the importance of the role played by employees in a rapidly changing work environment. Therefore, the 21st century marked the rise of the need to establish a culture driven by values, inspiring the workforce to struggle and strongly seek a shared vision. This can be accomplished by an effective and motivating leadership.

Management control systems and student performance in Norwegian primary education: an exploratory case study

The management control literature has devoted limited attention to the design and use of management control systems (MCSs) in schools and by local school authorities (LEAs) and to their role with respect to student performance. This study aimed to narrow this knowledge gap by exploring the design and use of MCSs in schools and by LEAs and the relationships between the design and use of MCSs and student performance. A case study approach was applied, building on interviews with headmasters and other employees in six schools and three LEAs, in addition to plans, reports, student performance measures and other types of public information. The case studies provide insight into the design and use of MCSs on the school and LEA levels and how MCSs might substitute for and complement each other. The findings suggest that learning-focused design and use of MCSs and flexible organization of students and teaching are factors that are positively related to student performance. This study also suggests that clan control based in a learning focus instilled in teachers during their professional education and training, and facilitated by a flexible and transparent school organization, may moderate or substitute for the role of learning-focused MCSs. Finally, it proposes that a learning focus on the LEA level in small and unified LEAs might substitute for a school-level learning focus.

Business Intelligence System Use as Levers of Control and Organizational Capabilities: Effects on Internal and Competitive Benefits

This study investigates the organizational benefits of business intelligence (BI) systems. BI systems are management control systems (MCS) that leverage operational and market data. We draw upon levers of control and capability theory, and distinguish among three aspects of BI systems (intelligence, benchmarking, and integration) and two types of organizational benefits: internal (inward-facing) and competitive (outward-facing). We propose that intelligence use of BI (diagnostic use and an inside-out capability) provides internal benefits, whereas benchmarking use of BI, (interactive use and an outside-in capability) provides competitive benefits. We propose that BI integration with other technologies, a spanning capability, contributes to both internal and competitive benefits. Finally, we investigate the effects of information culture, a clan control, on these aspects of BI. We test our model using structural equation modeling with survey data collected from 175 global organizations, and find our hypotheses to be largely supported. Research and practice implications are discussed.

The effective promotion of informal control in information systems offshoring projects

As firms increasingly engage in interorganizational information systems (IS) projects, including IS offshoring projects, the challenge for client firms of effectively exercising control across organizational boundaries becomes critical. Although the importance of informal controls (clan and self-control) in this context has been recognized, prior research has focused primarily on formal controls. Consequently, our understanding of the use of clan and self-control in interorganizational IS projects is scarce, and partly inconsistent or contradictory. This study focuses the client’s role in promoting informal controls in interorganizational projects involving distant client–vendor relationships as well as the effectiveness of such controls. We use matched-pair survey data from 86 IS offshoring projects involving client and vendor relationship managers. Our results show an interesting pattern: while clan control is considerably more difficult to promote than self-control in client–vendor project relationships, only clan control has a direct positive impact on project performance. Moreover, formal control modes, national cultural values, and project context factors moderate both the promotion and the effectiveness of informal controls. Our study’s main contributions lie in establishing the relevance of the distinction between informal control given and received, and the importance of the client’s role in promoting informal controls.

Effects of control on the performance of information systems projects: The moderating role of complexity risk

Control of projects is a core issue for organizations. Successful projects, such as information systems projects, enable organizations to develop a superior supply network and enhance the capability of operations management. A few studies have investigated the effects of control on project performance; however, complexity risk has not been integrated into the relationship between control and performance. Limited evidence has been provided concerning whether modes of control differ in their effectiveness in the presence of a single risk factor. Based on quantitative data obtained from 128 information systems projects, behavior, outcome, clan, and self-control are empirically determined to be positively associated with the system performance of projects. However, complexity risk generates a mixed moderating effect on the relationship between control and performance. In the presence of a high complexity risk, the effects of behavior and self-control on performance are low, whereas the effectiveness of outcome and clan control increases. This finding implies that complexity risk is a double-edged sword with regard to control. Each control mode exhibits different characteristics and effectiveness under high complexity risk. Therefore, appropriate control modes should be carefully selected, and highly effective control modes, such as outcome and clan control, should be prioritized in managing complex system projects.

Effect of Control on Information Systems Development Performance: A Meta-Analysis

Control modes are critical for promoting information systems development (ISD) performance, however the relationship is elusive. Further, control is typically discussed in terms of the use of portfolios of control comprised of both formal (outcome and behavior) and informal (clan and self) mechanisms. Yet, the extent to which formal and informal controls individually relate to both performance and each other is still not fully established. This research utilizes meta-analysis to examine these relationships. The results indicate that control does enhance performance, although the strength of the relationship varies across types of control and different measures of performance. The results also show a significant relationship between formal and informal control modes, providing support for views of complementarities between modes within portfolios of control. It appears, however, that only clan control is positively associated with formal control. Building on these findings we suggest future directions for the study of control in ISD.

Cross-cultural perceptions of clan control in Korean multinational companies: a conceptual investigation of employees' fairness monitoring based on cultural values

While enjoying success in their home territory in terms of human resource management (HRM) and employee commitment, Korean multinational companies (MNCs) seem to struggle in their overseas subsidiaries to replicate this success in attracting/retaining talent. To explain the HRM challenges seen in many Korean MNCs, we adapt the notion of employees' fairness monitoring in developing a model which illustrates the relationships between clan control in Korean MNCs, employee's perceived fairness and the cultural values of individualism and collectivism. We offer our first set of propositions concerning associations between fairness monitoring and cultural values, before suggesting another set of propositions about relationships between employees' fairness judgement and clan control in Korean MNCs. Figures graphically illustrating of some of our propositions are also presented. Our model proposes that clan control in Korean MNCs may cause perceived low fairness judgement during employees' fairness monitoring in both individualistic and collectivistic cultures. We believe this paper should stimulate further enquiries in international HRM, cross-culture and fairness literatures.

How a multiple orientation of control reduces governance failures: a focus on monastic auditing

This paper considers multiple control systems at the organizational level and argues for a nuanced and multifaceted approach for internal governance. For this undertaking, we look at a little-examined control and auditing instrument, the formalized audit procedures of Roman Catholic orders. These so-called visitations are one important pillar in the monastic governance system to counter aberrations. Utilizing surveys and interviews, we examine 96 Roman Catholic religious communities in Austria, Germany and Switzerland, and connect these visitations procedures with rule violations and sexual abuse cases. We argue that communities unaffected by scandals and rule violations rely strongly on process and clan control to address inefficiency and misconduct; whereas, affected communities focus more on business issues. We caution against the trend of relying predominantly on output-based processes while suggesting a balance between different types of control systems. Furthermore, we enhance the current discourse by considering implementation procedures of control. The religious orders attach great importance to the way control measures are carried out. To steer the behavior of their members, many successful orders even complement controls with personal support and identity strengthening.

The Role of Informal Control for Volunteer Satisfaction and Turnover in Volunteer Work Teams

Informal organizational control's role, while not extensively studied, has been said to be increasingly important - especially in contexts in which formal power, formal incentives and rewards are not prevalent - in volunteer teams. We are interested in how non-governmental organizations (NGOs) can reduce volunteers' turnover by inducing an informal clan control in their organization. We propose that clan control positively influences both volunteer job satisfaction and satisfaction of relatedness of needs, argued to be important indicators of how likely these volunteers will remain engaged in the organization - and that these links are partly mediated by the induced behavior of volunteers in teams, specifically, the lateral monitoring, i.e. the informal peer control that results. We selected volunteers in a children's rights NGO with almost 3,000 volunteers in Germany to empirically test our model. This NGO organizes its volunteer work in 175 regional volunteer groups, each headed by a group leader. Test results of structural equation modeling provide evidence that direct and indirect peer control indeed act as partial mediators of clan control's link to satisfaction and thereby turnover intention in our sample of more than 600 volunteers. While direct peer control partly mediates clan control's link to job satisfaction and satisfaction of relatedness needs, indirect peer control partly mediates clan control's link to satisfaction of relatedness needs. Implications for NGOs building on volunteer work and future research are discussed.

Delivering complex engineering projects: Reexamining organizational control theory

The delivery performance of complex engineering projects, such as infrastructure projects, is poor and shows no sign of significant improvement. Most of these projects have been delivered by a contractor organization for a client—usually a public or statutory agency. To ensure expected outcomes, the client typically employs “control instruments”, such as specifying outputs, directing behaviors, selecting contractors and building relationships, to influence, or control, delivery by the contractors. The dominant literature informing the choice of control instruments is derived from organizational control theory, which primarily focuses on the exercise of control within a single organization and assumes that different types of control function independently. The persistent poor delivery performance of infrastructure projects suggests a need to revisit the recommendations of organizational control theory. While a number of papers have identified the potential of combining control instruments and the need to take into account the influence of operating in a client–contractor context the mechanics and influence of specific interactions remain little understood.A case study of the delivery of the Open Pool Australian Lightwater reactor (OPAL) Nuclear Research Reactor Project in Australia, documents how the various controls employed interacted and jointly impacted on the delivery outcome. The findings start the process of further developing control theory and offer a number of practical suggestions for combining control types for practitioners.There are two main contributions to theory by this study. First, it adds support to the view that the factors influencing the principal's choice of control modes are more complex than depicted by the control theory framework. Second, it enriches the emerging balance of control literature (Cardinal et al. 2004), suggesting that it is not only the number of control modes that determines performance but also the interactions between them. Thus not only is the appropriate choice of control modes based on more than task programmability and outcome measurability, it appears that interactions between control modes also play an important role. In the case studied a combination of input, output and clan control was seen as forming an effective combination. It was also assessed to be important to avoid behavior control due to the interaction effect between behavior control and output control when employing such a grouping.

Antecedents of Management Control Combinations — An Explanation from Resource Dependence Theory

We empirically validate a model primarily based on Resource Dependence Theory. Our model links task characteristics and various subordinate characteristics that represent sources of managerial dependence to the adoption of the four archetypical combinations of formal and informal control proposed by Jaworski, Stathakopoulos, and Krishnan (1993). We find that managerial dependence and task characteristics jointly explain the adoption of control combinations; that, given high degrees of dependence and programmable tasks, managers will rely on a combination of high formal and high informal control; and that the choice between clan and bureaucratic control combinations is largely governed by task characteristics.

Information Systems Development in a Low Methodology Maturity Environment: A Case Study from the Control Perspective

This paper presents an exploratory case study to examine information systems development (ISD) processes in a low methodology maturity environment, and to understand the role of control mechanisms in project success. The case involves the development of a large scale information system, which progressed without a fully-defined “master plan” or much reliance on formal methodologies, but was successfully launched nevertheless despite some delay. Data were analyzed from the lens of control theory. Results show that clan control emerged as a dominant form of informal control in a high complexity and low methodology maturity environment. Moreover, end-to-end user participation through collocation with the developers served as effective outcome control, which appeared to be a critical success factor. The reliance on behavior control was marginal, although the project manager’s effective leadership as a form of self-control also played a role in project success. This work contributes to ISD research in general and the development of a control perspective to user participation in ISD.

How team risk and planning and control risk moderate the effects of clan and self control on the process performance of IT projects

The successful control of information technology (IT) projects has received significant attention in academe and in practice. Previous studies have shown the effectiveness of formal control modes in the performance of IT projects for project managers. However, little is known about the joint effects of risks and the two informal control modes, clan and self control, on the process performance of IT projects from the perspective of user liaisons. Based on data collected from 63 completed IT projects in China, we have found that both clan and self control are important from the perspective of user liaisons and that informal control is effective for the performance of different stakeholders. However, both team and planning and control risks suppress the effectiveness of clan and self control in process performance, indicating that IT project performance is not purely dependent on a single risk or control factor but on the balance between these two streams.

Organizational Culture and Innovation: A Meta‐Analytic Review

The relationship of organizational culture and innovation has been subject to extensive research over the last decades. The multitude of cultural variables under investigation has led to a fragmented concept of culture for innovation, and an inclusion into management theory is still missing. Further, managerial practice requires an underlying structure in order to decide what culture should be implemented in order to foster innovation, and to assess if a specific culture is an effective and efficient coordination instrument. Hence, a framework is needed which allows classification of cultural values without residuals, to draw expedient comparisons with reference to the criteria by which they are grouped, and to assess their relationship with organizational innovation. This meta‐analysis, which comprises 43 studies with a combined sample size of 6341 organizations, reveals that Quinn and Rohrbaugh's Competing Values Framework provides a meaningful structure for the ideational aspects of organizational culture. The Competing Values Framework describes value systems based on two main dimensions. Those two pairs of opposing values are flexibility versus control and internal versus external orientation. The analysis shows that the congruence of different cultures with organizational goals of innovation can be described based on that framework. Control theory is used to explain the relationship of organizational culture and innovation. While culture describes the ideational aspects of organizational values, clan control describes their coordinative effect. Managers may choose different clan control strategies according to the Competing Values Framework. They will most likely follow the strategy that provides a high level of congruence between the goals of management and the goals of their organization's social system. Individuals that have internalized the organizational values apply them as a form of self‐control. Those values will also be applied in groups, such as product development teams. While development teams may be formed and disbanded with certain projects and individuals may leave the company, the organization forms the steady frame of those activities. The cumulative data confirms the hypothesis that managers of innovative organizations most likely implement a developmental culture, which emphasizes an external and a flexibility orientation. Yet also group and rational cultures are to a certain extent consistent with the goals of an innovative organization and may thus be appropriate social control strategies. Hierarchical cultures emphasize control and an internal orientation and are less likely to be found in innovative organizations. A moderator analysis of the culture–innovation relationship revealed that it is not influenced by the differentiation between radical and incremental innovation, and only weak evidence exists for an influence of innovation adoption versus innovation generation. A potential reason is that those organizations that are geared toward innovation will pursue it consequently, without differentiating between different kinds of innovation. Therefore, managers that follow a (radical) innovation strategy should establish a developmental culture in their organization. If innovation rather represents a minor aspect of the firm's long‐term objectives, the efficiency‐oriented rational culture or a group culture may also be the right choice.