Formal and Informal Control as Complement or Substitute? The Role of the Task Environment

Markus Kreutzer (), Laura B. Cardinal (), Jorge Walter () and Christoph Lechner ()
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Markus Kreutzer: Department of Management and Economics, EBS University, 65375 Oestrich-Winkel, Germany
Laura B. Cardinal: Darla Moore School of Business, University of South Carolina, Columbia, South Carolina 29208
Jorge Walter: Department of Strategic Management and Public Policy, School of Business, The George Washington University, Washington, DC 20052
Christoph Lechner: Institute of Management, University of St. Gallen, 9000 St. Gallen, Switzerland

Strategy Science, 2016, vol. 1, issue 4, 235-255

Abstract: The traditional view of control in organizations largely implies an “either-or” substitution logic, as opposed to the complementarity logic implied in the more recent view of control. This study examines whether formal and informal controls complement or substitute each other in their influence on performance outcomes, and whether such an interaction differs for more or less exploratory tasks. Our findings from an analysis of 184 strategic initiative teams in a cross-industry multicountry sample of firms support the complementary view. More specifically, we find support for our hypotheses that the combined use of formal and informal control has a positive impact on the performance of initiative teams, and that this complementary effect is more pronounced when the degree of exploration is lower. Accordingly, our study contributes to the organizational control literature both theoretically—by providing an explicit theoretical rationale for the complementary view—and empirically—by virtue of providing an empirical test of the interactive effects of formal and informal control.

Keywords: control theory; informal organizational control; complementarity; strategic initiative teams; degree of exploration (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:1:y:2016:i:4:p:235-255

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