Using Information Technology to Enforce Management Controls in New Product Development Processes: Fishing for Innovative New Products

Abstract

Appropriate use of management controls can assist and constrain individuals depending on the circumstances. Information technology has the potential to contribute significantly to the operation and application of management controls if the management control structures have been designed to leverage the capabilities of information technology. This is the case for new product development where many individuals from a mixed hierarchical level are involved. Through a case study, this thesis looks at how senior management changed in their decision-making behaviours and how employees changed their behaviours towards task-completion after the implementation of information technology. Initially, senior management had not anticipated that the use of information technology would expose them to scrutiny by their superior, peers and subordinates. However, this scrutiny steered them to become more circumspect as a result of peer pressure. Moreover, global transparency was further enhanced as information technology helped communicate the same relevant local knowledge across the firm. This was possible because internal transparency was strong, and the management control structures were designed anew to leverage the capabilities of information technology. Management controls evolve and change in form and intensity over time, particularly under the influence of changing market conditions. To understand how management controls change dynamically, a more dynamic set of management controls is proposed. “Redirecting control” plays the role of persuading individuals to turn away from old practices and adopt new ways to perform and complete tasks. “Reinforcing control” plays the role of encouraging individuals to continue to stay on the new path following redirection with increased commitment. Both redirecting and reinforcing controls can play positive and negative roles for individuals. Interchanging between these two control approaches allows senior management to persuade their subordinates to behave according to the needs and plans of the firm in successive stages of change. Management controls are perceived as positive when individuals experience support for what they perceive to be their work identities; if not, they are perceived as negative. Addressing how controls are presented to individuals may help improve their perceptions and attainment of the work identities they understand and aspire to.