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The Performance Effects of Using Business Intelligence Systems for Exploitation and Exploration Learning
Abstract
Accounting researchers are becoming increasingly interested in the performance effects of business intelligence (BI) systems in their role as management control systems. Extant research focuses on the performance effects of adopting and implementing such systems. However, there is less known about how organizations use the information in BI systems for management control once implemented, and whether the use of this information translates into organizational performance. We utilize the theoretical connection between information systems and organizational learning to explain the performance effects of BI system use through organizational learning. Evidence from recent literature indicates the need for organizations to engage in exploitation and exploration learning in pursuit of organizational ambidexterity. Our study draws on agenda setting and framing theories to provide insights that will enable organizations to strategically use the information in two fundamental BI systems to emphasize either or both modes of learning. Subsequently, we examine whether the two modes of learning translate into performance.
... We consider technological, organizational, and external factors as real drivers for the successful deployment of BI systems. Based on the theoretical foundations of the previous section, we believe that the extent of use of BI systems is the key to unlock BI capabilities [43]. Users must be able to value, absorb, and assimilate new technologies to support the organization's business strategy and value chain activities [3], [15]. ...
... Indeed, BI functionalities can be very limited and may present a risk of completeness and updating if they are based on data from several disparate sources [12]. Having a strong IT infrastructure is the foundation for supporting the flexibility of BI systems [43]. Thus, relying on IIS ensures the quality and richness of data that is a prerequisite for the development of innovative features and broader decision support mechanisms that are assimilated in value creation activities [3], [63]. ...
... BI systems provide managers with the necessary reports to manage their business with the ability to carry out ad hoc analysis and sift through large volumes of disparate data. BI systems must present for each financial measure the degree of achievement of the strategy, provide the necessary explanations for variances between results and what was planned [43]. Moreover, the systems must ensure self-service to enable the user to explore the problematic context, thinking that the explanation for variances between expectations and achievements as well as the solutions lie in the relationships contained in the data structure [43], [63]. ...
... We argue that this integration enhances the ability to collaboratively monitor and support value chain activities and organisational performance. While the capability provided by these systems theoretically deliver MCS benefits to organisations (Elbashir et al., 2011;Peters et al., 2016), there is limited and somewhat conflicting empirical evidence related to whether and how organisations appropriate these benefits (Lee and Widener, 2016;Peters et al., 2016;Arnold, 2018;Rikhardsson and Yigitbasioglu, 2018). ...
... The limited research that focuses on the effects of BI on managerial controls has tended to examine BI systems in isolation from other information systems (Rikhardsson and Yigitbasioglu, 2018). The existing BI research is premised on the assumption that the query, dashboard, and visualisation capability embedded in BI systems, on their own, will enhance organisational learning (Lee and Widener, 2016;Peters et al., 2018), enable performance measurement capability (Peters et al., 2016), and facilitate strategy alignment and performance gains (Reinking et al., 2020a(Reinking et al., , 2020b. While these studies have significantly contributed to the literature on BI-integrated MCS, they have modelled out the complex reality of the organisational information systems context within which BI operates. ...
... Researchers increasingly view business processes as the key drivers of value in organisations (Porter, 1985;Barua et al., 1995;Davern and Kauffman, 2000;Elbashir and Williams, 2007). The essence of assimilating integrated MCS into organisational processes is to seize on identified opportunities that improve the capacity of these processes to deliver such value in an efficient and effective way (Lee and Widener, 2016;Peters et al., 2016). We argue that the assimilation of integrated MCS into business processes confers on managers a set of decisionmaking options and coordination choices for enhancing business process performance (Winter, 2000). ...
The purpose of this study is to examine whether the interactive effects of integrated information systems (IIS) and business intelligence (BI)‐enabled management control system (MCS) lead to the assimilation of integrated management control information into business processes and whether this assimilation enhances organisational performance. Data were gathered through a large survey and included 419 senior and middle managers representing 347 Australian organisations. The respondents were from organisations that use a single international vendor’s BI software designed to provide integrated MCS capability. As hypothesised, the results confirm the positive influence of the interaction between IIS and BI‐enabled MCS on assimilation of integrated management control information at the business process level, the positive relationship between business process level assimilation and business process performance, and finally the positive relationship between business process performance and overall organisational performance. The results also show that the interaction term has a significant indirect relationship with business process improvement and organisational performance.
... ration of hundreds of key performance indicators (Elbashir et al., 2011). The research on business intelligence enabled SPMS largely finds benefits at the organizational performance level (Elbashir et al., 2013;Lee and Widener, 2016;Peters et al., 2016); however, when differences in organizational structure and use of such systems is considered, detrimental effects can emerge (Peters et al., 2018). ...
... The resulting challenge is that the breadth in scope of SPMS utilizing the broad sets of measures provided by these technologies may detract from the focus on strategic objectives; use of a narrower set of measures that translate into specific strategic objectives may better align management's decision making with organizational strategy (Choi et al., 2012(Choi et al., , 2013. Digital dashboards 1 (hereinafter referred to as dashboards) are a technological element of organizations' overall SPMS that can provide greater focus on appropriate KPIs by providing access to a selected subset of measures that are continuously compared against predetermined benchmark or target data to guide a manager's actions and decision-making (Chapman and Kihn, 2009;Lee and Widener, 2016). Dashboards are widely provided as components of BI systems and as software extensions that draw upon the data accumulated within enterprise and business intelligence systems to move specific performance measurement data to specific individuals. ...
... These observations help in understanding how organizations develop dashboards, but the other insight of interest is why organizations develop dashboards. Prior research suggests organizations make dashboards available to managers throughout the organization to disseminate summary level business data and KPIs to important stakeholders, to monitor and compare actual performance to predetermined benchmarks, to plan future goals and strategies, and to influence organizational activities (Pauwels et al., 2009;Elbashir et al., 2011;Lee and Widener, 2016). However, this prior research focuses on an organizational perspective and does not provide insight into the extent that managers choose to use their dashboard to help manage their work life. ...
Strategic performance measurement systems (SPMS) are employed by senior management as a means of translating strategy into performance measures. Recent research suggests that this translation can lead managers to focus on personal performance measures as opposed to overall organizational strategy—a phenomenon referred to as strategy surrogation. Emerging technologies are increasingly used to operationalize SPMS via smart phone/tablet/laptop formats that inherently promote the use of small subsets of performance measures and have the potential to exacerbate strategy surrogation effects. This study explores executive managers' motivations in deploying dashboards and the resulting effect on operational managers' focus on associated performance measures. An exploratory cross-sectional field study is conducted with 27 executive to mid-level managers to establish a theoretical model explaining how and why organizations deploy dashboards and why managers use dashboards to facilitate their activities and decisions. Despite concerns over the propensity of managers to focus on performance measures and lose sight of strategic objectives (i.e. strategy surrogation), the interview data indicate that executive management intentionally designs dashboards to achieve strategy surrogation. The impact of this intentional surrogation appears to arise through operational managers' beliefs that dashboard measures align with organizational strategy and lead to improved managerial and organizational performance. However, this relationship between perceived alignment of performance measures and managerial and organizational performance is mediated by dashboard quality and information quality. These findings have important implications as the effects of SPMS on strategy surrogation are further explored by researchers, and as system designers consider the side effects of emerging technologies on effective strategic performance measurement.
... Management accounting researchers have increasingly focused on the role of business intelligence (BI) in packaging and enhancing management control systems. 1 The emerging literature links BI to positive organizational outcomes via beneficial roles in performance measurement capabilities and interrelated organizational learning processes (Elbashir et al., 2008(Elbashir et al., , 2011(Elbashir et al., , 2013Lee and Widener, 2016;Peters et al., 2016;Prasad and Green, 2015). The overarching emerging perspective is that BI functionality provides information, and to disregard highly detailed multi-dimensional data models from higher functionality BI systems if such systems are implemented. ...
... The overarching emerging perspective is that BI functionality provides information, and to disregard highly detailed multi-dimensional data models from higher functionality BI systems if such systems are implemented. Given that significant resource commitments can be required for implementing, staffing and maintaining the BI integrated infrastructures and specialized applications needed for high quality BI systems (Lee and Widener, 2016;Peters et al., 2016), the results from this study also suggest that BI-planning systems quality should be prioritized over BI-reporting systems quality. This paper has four remaining sections. ...
... We view managerial knowledge for business unit coordination and integration as being an essential product of the learning processes within performance measurement capabilities. This perspective builds upon the prior literature's emphasis on organizational learning as the overarching mechanism by which BI systems enhance managerial control activities (e.g., Elbashir et al., 2008Elbashir et al., , 2011Elbashir et al., , 2013Lee and Widener, 2016;Peters et al., 2016;Prasad and Green, 2015). We argue that highly multi-dimensional data elements from BI systems will only be processed as information by managers when they perceive such highly granular data as potentially useful (Alavi and Leidner, 2001;Huber, 1991;Peters et al., 2016) for structuring business unit coordination and integration. ...
Firms are increasingly turning to business intelligence (BI) systems to support their management control activities, while management accounting researchers are increasingly focused on studying beneficial roles of such systems. The extant research focusses on how performance-enhancing effects of BI systems occur via enhanced managerial learning and knowledge creation. The research has however failed to consider how managerial learning and knowledge creation processes can be shaped by fundamental organizational contingencies. This paper ventures into this unexplored space to consider how organizational improvisation may moderate beneficial roles played by BI. We derive the concept of “semi-structuring heuristics” and apply it to theorize that the impact of BI functionalities on performance measurement capabilities is negatively moderated by organizational improvisation. Our hypotheses include two BI constructs (BI-planning functionality and BI-reporting functionality) and two organizational improvisation competences (strategic momentum and organizational flexibility). We test our hypotheses with partial least squares procedures using survey data from 324 top-level managers. We find that BI-planning functionality has a positive effect on performance measurement capabilities that is negatively moderated by both organizational improvisation competences. The only significant effect of BI-reporting functionality is as a positive moderator of the effect of BI-planning functionality. Organizational improvisation competences are quite common and entail managers using only “minimal forms” of performance measurement information. By implication, if the term BI “functionality” connotes usefulness and fitness-for-purpose, then this term appears a misnomer in contexts reliant on organizational improvisation.
... Proses interaksi memberikan kesempatan bagi manajemen untuk melakukan komunikasi pada kelompok organisasi untuk mendapatkan informasi dan menindaklanjuti kegiatan organisasi. Kemampuan perusahaan yang dinilai melalui inovasi, pembelajaran organisasi, orientasi pasar, dan kewirausahaan diakui sebagai kemampuan utama untuk mencapai keunggulan kompetitif (Holzhack-er, Krishnan, & Mahlendorf, 2015;Karlinsky & Burton, 2016;Lee & Widener, 2016;Basoglu & Hess, 2014;Cheng, Green, & Ko, 2015;Runyan & Swinney, 2008;Capps, Koonce, & Petroni, 2016;Indjejikian & Matĕjka, 2012;Xu & Huang, 2016;Journeault, 2016;Wood, 2016;Schindehutte, Morris, & Kocak, 2008) Banyak peneliti menyatakan bahwa sistem pengukuran kinerja strategis dan pengendalian interaktif berhubungan positif dengan kinerja organisasi (Holzhacker, Krishnan, & Mahlendorf, 2015;Hudayati & Sofiah, 2011). Perusahaan yang menggunakan sistem pengukuran kinerja strategis meningkatkan kinerja keuangan lebih tinggi daripada perusahaan yang tidak menggunakan sistem pengukuran kinerja strategis (Ahyaruddin & Akbar, 2016;Chen, 2015Ahyaruddin & Akbar, 2016Ahn, Hwang, & Kim, 2010;Primarisanti, 2015;Spekl & Verbeeten, 2014;Wijaya & Akbar, 2013). ...
... Kapabilitas menjadi proses strategis yang meliputi pengembangan produk dan stra tegi jangka panjang untuk menciptakan nilai pasar bagi perusahaan. Inovasi, pem belajaran organisasi, orientasi pasar dan kewirausahaan diakui sebagai faktor utama untuk mencapai keunggulan kompetitif (Holzhacker, Krishnan, & Mahlendorf, 2015;Karlinsky & Burton, 2016;Lee & Widener, 2016;Basoglu & Hess, 2014;Cheng, Green, & Ko, 2015;Tajeddini, 2010;Capps, Koonce, & Petroni, 2016;Indjejikian & Matĕjka, 2012;Xu & Huang, 2016;Journeault, 2016;Wood, 2016). Oleh karena itu, keempat sumber daya ini mendukung kemampuan manajemen dalam membuat keputusan strategi dan memberikan informasi dari sumber daya yang dihasilkan untuk menindaklanjuti ke depannya. ...
... Di dalam organisasi orientasi pasar sebagai faktor utama untuk menentukan segmentasi pasar dan menjadi bagian dalam meningkatkan kinerja organisasi (Lee & Widener, 2016). Kewirausa haan diidentifikasikan sebagai proses organisasi yang penting bagi kelangsungan hidup perusahaan yang dilaksanakan oleh individu dan kelompok sebagai bagian peningkatan perusahaan (Cheng, Green, & Ko, 2015;Capps, Koonce, & Petroni, 2016). ...
Determinant of Islamic Banks Performance. This study aims to examine the effect of strategic performance measurement system and interactive control on Islamic banking performance through capability. Data collection was done by mail survey to Islamic Bank in East Java and processed using Partial Least Square.. The study proves that interactive controls and strategic performance measurement systems are able to facilitate the organization. In addition, the capability contributes to improving organizational performance. These results become important so that information resources generated benefit. Nevertheless, the strategic performance measurement system has no effect on performance due to the different characteristics of Islamic banks making improvement in environmental change.
... Organizational learning occurs when the knowledge base of more than one manager is affected by their cognitive processing of information (Huber, 1991). Further, there is evidence that diagnostic and interactive BI uses will improve managers' knowledge bases (Lee and Widener, 2016). ...
... This broad MCS-enabling capability is derived from the hundreds of pre-designed scorecards and key performance indicators available through contemporary BI software (Howard, 2003). Prior research shows that effective assimilation of BI at the business process level can lead to enhanced organizational learning and organizational performance (Elbashir et al., 2008(Elbashir et al., , 2013Lee and Widener, 2016). These benefits arise from top management's support and knowledge of BI (Lee et al., 2014) along with a knowledge culture that promotes operational managers to use the BI and to effectively interact with IT managers to develop the BI infrastructure (Elbashir et al., 2011). ...
... First, BI self-service will broaden information distribution within an organization because, by interacting with a BI application, a business manager will access more information than would otherwise be possible from static reports. Indeed, numerous studies find evidence that information systems use by managers enhances their learning (e.g., Leidner and Elam, 1995;Vandenbosch and Higgins, 1995;Maiga et al., 2013;Lee and Widener, 2016). Second, BI self-service will enable elaboration of more varied interpretations of organizational activity, because a business manager can use his/ her unique knowledge base to develop unique interpretations of the information in the BI application (Thomas et al., 2001;Clark et al., 2007). ...
The purpose of this study is to better understand how the quality of a Business Intelligence (BI) system improves the diagnostic and interactive dimensions of management control systems (MCS), thereby enhancing performance measurement capabilities, which in turn are positively associated with competitive advantage. Integrating theory from performance measurement, organizational learning and the knowledge-based view of the firm, a theoretical model is developed that considers three concepts of BI quality (infrastructure integration, functionality, and self-service) and the roles they play in enhancing diagnostic and interactive performance measurement capabilities. Data collected via survey from 324 CEOs and CFOs provides support for the theorized effects of BI quality on performance measurement capabilities. These capabilities in turn are positively associated with competitive advantage.
... Applying a business intelligence system at the operational level increases company performance (Elbashir et al., 2021). Furthermore, Lee and Widener (2016) claimed that business intelligence uses diagnostic and interactive controls to increase the knowledge base of managers. A study by Bronzo et al. (2013) also indicates a direct effect between business orientation, analytical indicators, and performance, which is considered statistically significant. ...
... This shows that the business intelligence system could enhance the effectiveness of MCS in improving the company's overall performance. Therefore, business intelligence positively relates to firm performance by enhancing organizational learning (Elbashir et al., 2013;Lee & Widener, 2016). ...
This study aimed to examine the relationship between business intelligence and management control systems and how they impact company performance. It used 209 startup companies recorded in the database of the Ministry of Tourism and Creative Economy Republic of Indonesia. The sample consists of startups less than ten years old and experiencing a period of growth. The partial least squares SEM (PLS-SEM) is used to estimate cause-effect relationship models. The finding shows that the management control system positively contributes to the company's performance. The moderation analysis concludes that business intelligence is not able to moderate the relationship between management control systems and company performance. This finding supports the contingency theory, which claims the need to evaluate conditional factors in creating effective management control. Also, the theory emphasizes the alignment between management control and company performance to support performance improvement. This research provides practical implications for startups about the importance of creating a more contextual management control system to improve company performance.
... The exploitation of DTs is also positively related to its digitalization effect on entrepreneurial ecosystems because of these technologies' diffusion, refinement, or reuse (Lee and Widener, 2016). Today's pervasive DTs offer unbounded innovations affecting multiple spheres of influence (Harty, 2005); in turn, their adoption stimulates waves of entrepreneurship in a community's tools, technologies, work practices, and organization structures and strategies (Boland et al., 2007). ...
... Current definitions of DTs in entrepreneurial ecosystems also vary depending on how their diffusion, refinement, and reuse processes are considered, whether separately or dependent on each other (Lee and Widener, 2016). These definitions range from those focusing on digitizing DTs and modeling techniques on entrepreneurial ecosystems (Autio et al., 2018) to reports that focus on the digitalization issues around the digital delivery of technologies (Davies and Harty, 2013). ...
In recent years, countries have adopted policies seeking to promote the development and adoption of innovative digital technologies and grow their entrepreneurial ecosystems. In this paper, we review and analyze the vast literature on how digital technologies foster the birth, development and growth of new ventures and how these firms employ these technologies to shape the evolution of their ecosystems. Our analyses highlight the intimate links among ecosystem development, digital technologies and the active role that new ventures play, depicting a complex evolutionary process. We also discuss the role of pioneering, disruptor and imitator digital new ventures in the growth of their ecosystems. We also discuss the theoretical, policy and managerial applications of our work.
... On the other hand, [4] confirm a correlation between organizational ambidexterity and business intelligence systems that can achieve long-term success and survival to achieve sustainable advantage, while [3], have shown that the business intelligence systems have a moral (ethical) impact on building an learning organization, In order to identify the problem accurately, the mediator of the organizational ambidexterity has been explored in terms of its relationship between business intelligence systems and the learning organization and that within the community of the study of the aforementioned state-run public hospitals, since they are the institutions that are providing treatment (health) services at the lowest costs, thus are supposed to meet the needs and expectations of patients, both at the local and regional level. Consequently, the current study has sought to identify the intermediate role of organizational ambidexterity in the relationship between business intelligence systems and the learning organization in public hospitals in Anbar. ...
... Organizational ambidexterity is closely linked to business intelligence systems, which has led many organizations to change many of their traditional methods and seek new non-traditional skills that highlight their competitiveness, freedom of communication, knowledge sharing within and outside the organization quickly and efficiently, making them a key pillar for building an learning organization. The studies by [2] and [4] prove that relationship and lead us to build the hypothesis of "there is a positive relationship between business intelligence systems and organizational ambidexterity". ...
... and BI risks are mitigated under the IT governance. The IT governance aligned BI with business goals and objectives to ensure that BI operations are continuously supported(Lee & Widener, 2016). ...
... Sutton, & Wakefield, 2016). The support from top management and BI knowledge(Lee & Widener, 2016), together with BI culture, motivate low level or operational managers to use the BI(Elbashir et al., 2008).Strategy alignment occurs when BI is aligned with the business goals. Business strategies, management and business processes should be consistent. ...
... Ambidextrous organizations need to balance longterm exploration and short-term exploitation in order to be successful over time (McCarthy and Gordon, 2011). Lee and Widener (2016) show that a specific business intelligence system is associated with a specific organizational learning mode. We assume this to apply also for BD&A information. ...
... The findings contribute to theory on information systems and organizational theory. In line with Lee and Widener (2016), we find that a management information system should be customized coherently with a specific set of decisions, for which a given organizational learning mode is assumed to be required. In that sense initiatives aiming to adopt data mining and business analytics techniques may be likely to succeed when developed in support of decisions which require exploration learning. ...
The growing attention that Big Data & Analytics (BD&A) are actually raising among academics and practitioners is probably triggered by their almost infinite information potential. On the other side, BD&A hold specific peculiarities (source, structure of data or computational complexity), which may condition the inclination of users to consider them reliable. This paper investigates the factors that may hinder or enable managers' trustworthiness about BD&A when used in support of planning and control, both at strategic and operational level where a different organizational learning is assumed to be required. Using data from a survey, we find that the organizational learning mode significantly conditions the perceived usefulness of BD&A. Additionally, managers' individual characteristics, under some conditions, may hinder their inclination to rely on BD&A. The findings contribute to literature on management accounting systems and on organizational learning and provide as well interesting managerial implications.
... Partanen et al. (2020) revealed that SCA may decrease firm performance but improve network capabilities and strategic information flow. Lee and Widener (2016) explored how organizations leverage information from business intelligence systems for management control, stressing the importance of both exploitation and exploration learning for achieving organizational ambidexterity. Furthermore, research has highlighted the beneficial effects of big data analytics on supply chain agility, adaptability and performance metrics (Wamba et al., 2020a(Wamba et al., , 2020b and factors influencing ambidexterity, such as learning and knowledgesharing partnerships, have been identified (Lin et al., 2013). ...
Purpose
The main purpose of this study is to assess the influence of business analytics (BA) on supply chain ambidexterity (SCA) and market learning (ML) in the context of Iran as a developing country.
Design/methodology/approach
The study population encompasses a range of key positions such as senior managers, supply chain managers, senior IT managers and senior marketing and marketing research managers in Iran. Through a survey, a questionnaire was designed to gather data from these individuals. The data collected from a total of 214 participants underwent rigorous analysis using structural equation modeling.
Findings
Findings revealed BA has a positive influence on SCA and ML. Furthermore, the study found that distinct facets of ML, namely, exploratory and exploitative learning, exerted a positive influence on SCA. Additionally, the investigation uncovered that the mechanisms of exploratory ML and exploitative ML play a partially mediating role in the relationship between BA and SCA.
Research limitations/implications
It is prudent to acknowledge that the study’s sampled entities were exclusively Iranian companies, potentially curtailing the extent of generalizability of our findings.
Originality/value
This research contributes valuable theoretical insights and practical implications to policymakers and top managers of organizations, particularly the surveyed organizations to formulate and implement an appropriate strategy to avail of BA techniques toward enhancing SCA. Also, this study provides significant insights into the determinants of SCA and demonstrates how organizations can leverage data analytics and ML to attain sustained growth and ambidexterity within the supply chain context.
... As a result, once digital technologies are implemented, MAs face the risk of being almost completely cut out from carrying out their traditional tasks and responsibilities. This would eventually lead to a reduction in the size of the management accounting function (Lee and Widener, 2016). ...
Purpose
This paper aims to critically examine the accounting and information systems literature to understand the changes that are occurring in the management accounting profession. The changes the authors are interested in are linked to technology-driven innovations in managerial decision-making and in organizational structures. In addition, the paper highlights research gaps and opportunities for future research.
Design/methodology/approach
The authors adopted a grounded theory literature review method (Wolfswinkel et al. , 2013) to achieve the study’s aims.
Findings
The authors identified four research themes that describe the changes in the management accounting profession due to technology-driven innovations: structured vs unstructured data, human vs algorithm-driven decision-making, delineated vs blurred functional boundaries and hierarchical vs platform-based organizations. The authors also identified tensions mentioned in the literature for each research theme.
Originality/value
Previous studies display a rather narrow focus on the role of digital technologies in accounting work and new competences that management accountants require in the digital era. By contrast, the authors focus on the broader technology-driven shifts in organizational processes and structures, which vastly change how accounting information is collected, processed and analyzed internally to support managerial decision-making. Hence, the paper focuses on how management accountants can adapt and evolve as their organizations transition toward a digital environment.
... De ce fait, un système de contrôle de gestion efficace et innovant de l'entreprise facilite l'évaluation du capital immatériel et accroît ses contributions (Mouritsen & Roslender, 2009;Tayles et al., 2007). Il permet aussi de soutenir efficacement la capacité de connaissance d'une entreprise (Lee & Widener, 2016) et dans recherche d'un avantage concurrentiel (Simons, 1995). L'objectif de cet article est de présenter un modèle conceptuel théorique de la contribution du système de contrôle de gestion à l'évaluation du capital immatériel et de ses composantes dans les entreprises innovantes (Start-up). ...
With the rise of digitalization and artificial intelligence, intangible capital is recognized, through its components, as a primary source of performance within companies. Alongside the recognition of its importance in determining a company's value, we are witnessing the growing role of management control systems in the context of intangible capital (Novas et al., 2017). As a result, an effective and innovative corporate management control system facilitates the valuation of intangible capital and enhances its contributions (Mouritsen & Roslender, 2009; Tayles et al., 2007). It also effectively supports a company's knowledge capacity (Lee & Widener, 2016) and its quest for competitive advantage (Simons, 1995). The aim of this article is to present a theoretical conceptual model of the contribution of the management control system to the evaluation of intangible capital and its components in innovative companies (Start-ups). We have chosen innovative companies as our field of study because of the immateriality that characterizes this type of company and the close relationship between their values and their ability to assess their intangible capital. Accordingly, we have drawn on resource theory (Barney, 1991), dynamic capability theory (Teece et al., 2008) and the strategic approach to intangible capital management (Arrègle, 2006) as theoretical foundations for the literature. Our study presents a theoretical conceptual model that shows the role of the management control system in the evaluation of intangible capital and its components.
... In addition, diagnostic and interactive MP (Managerial Performance) competencies are considered as important tools in supporting the knowledge capabilities of companies effectively (Lee & Widener, 2016) in Peters et al. (2016) and for achieving competitive advantage (Simons, 1994in Peters et al., 2016. Klein (2002) further added that it is not easy to achieve a competitive advantage and there is a relationship between competitive advantage and an organization's performance. ...
The current research was conducted aiming to investigate the simultaneous effect of Intellectual Capital and Heptahelix Managerial Performance on Competitive Advantage. The current research novelty is in the form of measurement of the level of personal performance by combining the Pentahelix and Technology concept as well as the Managerial Performance measurement in the Indonesian Navy (TNI AL), Riau Islands Province, which is called Heptahelix's Managerial Performance. The implication of this research is expected to create superior human resources among the Indonesian Navy in the Riau Islands Province so that they can handle the illegal actions they encounter, since their main tasks and functions is to maintain defense and security in the Marine Territory of the Republic of Indonesia, especially in the Riau Islands Province. This study uses the associative method to see the magnitude of the influence if Intellectual Capital and Heptahelix Managerial Performance are combined together so that later it is hoped that the Navy will excel in competing to maintain the defense and security of the Marine Territory of the Republic of Indonesia, particularly in the Riau Islands Province.
... Some research shows evidence of a relationship between the adoption of ERP and the success of BI&A modules such as activity-based costing (Doran and Walsh, 2004;Jackling and Spraakman, 2006;Spathis and Constantinides, 2004) and balanced scorecard (Edwards, 2001). The main argument here is that BI&A systems have both analytical and interrogative capabilities that enable them to provide the required business intelligence (Lee and Widener, 2016;Peters et al., 2016Peters et al., , 2018Rikhardsson and Yigitbasioglu, 2018). To accomplish this, BI&A requires a comprehensive and diverse set of data. ...
Purpose
The purpose of this study is to investigate the role of business intelligence and analytics (BI&A) in mediating the relationship between enterprise resource planning (ERP) and three sets of management accounting practices (MAPs): budgeting, costing and performance evaluation. It also examines the extent to which the usage of ERP affects the intensity of the application of various MAPs.
Design/methodology/approach
Structural equation modeling (SmartPLS 3) is used to analyze data collected from a cross-sectional survey of 82 firms in the UAE. The results indicate that the constructs are valid and reliable and that the model supports the research hypotheses.
Findings
The findings confirm the positive effect of the extent of using ERP systems, as a construct of modules, on the extent of applying three sets of MAPs. They also show that the extent of the use of BI&A systems partially mediates the relationship between the extent of the use of ERP systems and intensity of applying each of the three sets of MAPs.
Practical implications
The results encourage organizations to adopt BI&A to reap the full benefits of ERP.
Originality/value
In contrast to the extant research that presumes a direct influence of ERP on MAPs, this study investigates if the extent of the use of BI&A mediates the presumed relationship between the extent of the use of ERP and intensity of applying each of the three sets of MAPs.
... In terms of academic literature, not much is known from an emerging economy's perspective about how organizations use information in their BIS for management control and whether this information helps organizations to improve their performance (Lee & Widener 2015). Theoretically, our study contributes here as we have shown that by using proper information, which has been collected from collaborative sources, and by putting systems in place, BIS enhances organizational performance. ...
This paper aims to investigate the role of business intelligence systems in the relationship between organizational learning culture and organizational performance in the healthcare context. A quantitative approach was applied to identify the hypothesized relationships. Data was obtained from a survey of 217 mid- and top-level hospital managers of healthcare organizations in Bangladesh. Structural equation modeling was used to analyze the data. The findings attested to the effectiveness of the mediating role of business intelligence systems in the relationship between organizational learning culture and organizational performance within healthcare organizations. The theoretical & practical implications of the findings are also discussed. The study data was collected from a single country, which made generalization difficult. Further research should be carried out to replicate the present study with different organizational cultural variables and organizational outcomes, such as patient satisfaction.
This study provides a clear direction for hospital managers to invest more resources in an effective learning culture, to be positively mediated by BIS, to eventually enhance their hospitals’ performance. In addition, this study also suggests that hospital managers should focus on building a knowledge-based learning culture to effectively use the information provided by BIS. Despite the prior study on the applications of business intelligence systems and their value to an organization, little is known about the impact of organizational learning culture on business intelligence systems in healthcare organizations. The findings give support to the argument that organizational learning culture plays an important role in business intelligence systems that, in turn, affect business performance.
... Therefore, CAD/CAM technologies are essentially explorative IT in nature, while ERP systems qualify as mainly exploitative IT. In this study, however, we exclude exploitative IT, concentrating instead on explorative IT as these last technologies are the ones that are specifically designed to enable the firm's explorative learning processes (Lee and Widener, 2016) and to provide it with greater agility (Park et al., 2017) in the face of increased competitive pressures. ...
Purpose
As purveyors of knowledge-based and high value-added services to the manufacturing sector, industrial service small- and medium-sized enterprises (SMEs) must develop the information technology (IT) capabilities that, in combination with other non-IT capabilities, enable their capacity for organizational learning (OL) and for explorative learning in particular. In this context, this study aims to identify the different causal configurations that account for the nonlinear complex interplay of IT capabilities for exploration and strategic capabilities for explorative learning as they affect these firms’ competitive performance.
Design/methodology/approach
Survey data obtained from 92 industrial service SMEs were analyzed with a configurational approach, using fuzzy set qualitative comparative analysis (fsQCA).
Findings
As it allows for equifinality, the fsQCA analysis identified two sets of causal configurations that characterize the sampled firms’ explorative learning capability as it relates to competitive performance. In the first set, two configurations were equally associated with high innovation performance, whereas in the second set, four configurations were equally associated with high productivity.
Originality/value
By viewing explorative learning as a dynamic capability that is enabled by the firm’s IT and strategic capabilities, the study contributes to OL theory by providing a more concrete or “operational” grounding, which allows for a greater practical applicability of this theory. By taking both the configurational and capability-based views of the OL-IT-performance causal framework, the authors provide an empirical basis for unraveling, explaining and understanding the complex non-linear relationships embedded within this framework.
... The analytics part utilizes the analytical capability of data-mining tools to harness the power of Big Data existing in most public sector organizations. The analytics facilitate the ERM tenet that everyone is responsible for risk, because they allow data to be partitioned into areas of responsibility; managers can select their responsibility area and drill through the multiple layers of data (Lee & Widener, 2016). Business analytic capability allows managers to make sense of the Big Data they have accumulated and leverage that data for effective ERM. ...
IMPACT
This article addresses an important public sector management issue—what and how organizational capabilities can be mobilized for effective deployment of enterprise risk management (ERM) in public sector organizations. The authors present a framework providing insights to public sector managers for enhancing risk management practices
ABSTRACT
Public sector reforms have led to risk management gaining prominence as a means for effective service delivery and a tool for accountability. The public sector has seen regulatory changes intended to empower managers to engage in appropriate risk management practices. The authors present a framework for effective enterprise-level risk management in public sector organizations. The framework includes three essential enablers of risk management and provides conceptualizations for guiding future empirical research.
... Management accounting and information systems researchers are increasingly focused on the use of business intelligence (BI) to facilitate broad-based packages of management controls and enhance organizational learning and performance (Elbashir et al., 2011;Lee and Widener, 2016;Peters et al., 2016Peters et al., , 2018Rikhardsson and Yigitbasioglub, 2018). At the operational level the BI system becomes particularly important in supporting and executing performance measurement activities. ...
Based on a cross-sectional field study, Reinking et al. (2019) propose a complex theoretical model for understanding the characteristics of dashboards that promote use and lead to individual and organizational performance gains. This study tests the theoretical model using survey data collected from 323 middle and upper level managers with experience using corporate dashboards. The data were analyzed using components based structural equation modeling, and the results provide strong support for the external validity of the Reinking et al. (2019) theoretical model. The results show that two primary constructs, strategy alignment and interactive management control, are important factors impacting the extent of dashboard use, perceived managerial performance, and perceived organizational performance. Prior research has expressed concerns over the tendency of managers to lose sight of strategic objectives (i.e., strategy surrogation) and focus solely on performance measures. However, our results indicate that operational managers perceive that dashboards focused on specifically tailored KPIs lead to both improved managerial and organizational performance. This study contributes to management control and strategy research in two important ways. While prior research has examined strategy in the executive level context through evaluations, changes, or initiative implementations, this study investigates strategy alignment at the operational levels of the organization. Second, the results suggest that intentional strategy surrogation may have beneficial effects at the lower operational levels in an organization.
... In their exploratory study, Bedford and Malmi (2015) provide evidence that diagnostic and interactive uses take part in the same control package for strategy implementation and follow-up. Recently, de Harlez and Malagueño (2016) also analyzed the joint effects of diagnostic and interactive uses on performance based on the contingent effect of personal background, while Lee and Widener (2016) showed the positive relationship via the joint effect of the diagnostic and interactive use of business intelligence systems on organizational learning. Research into MACS for environmental sustainability remains under development (Pondeville et al., 2013;Perego and Hartmann, 2009), so we study both levers related to the implementation (interactive use) and the monitoring (diagnostic use) of environmental innovation practices, extending the call of Arjaliès and Mundy (2013, p. 286): "An enhanced understanding of the role of MCS in managing CSR strategy may be attained by investigating the use, rather than the existence, of specific accounting tools and mechanisms." ...
Purpose
The purpose of this paper is to analyze the effect of management accounting and control systems (MACS) on environmental innovation practices and operational performance. Specifically, this study relies on Simons’ levers of control (LOC) framework to investigate how managers implement environmental innovation practices. This paper hypothesizes that a forward-looking use of MACS (i.e. interactive use) triggers the implementation of environmental innovation practices, resulting in higher operational performance. Furthermore, the authors argue that the monitoring role of MACS (i.e. diagnostic use) combined with environmental training improves the effect of environmental innovation practices on operational performance.
Design/methodology/approach
Hypotheses are examined through a questionnaire survey. The analyses are based on responses in an empirical study from 89 Brazilian hotels.
Findings
Empirical findings from a hierarchical moderated regression analysis support the hypothesized links.
Originality/value
This study contributes to the environmental management and management control literature by providing novel evidence on the roles MACS play in the field of sustainable development. Based on the LOC framework, the authors shed light on the understanding of how managers introduce and monitor environmental innovation practices, as well as also outlining the key effects of environmental training in enabling the novel abilities of managers and employees to better understand environmental data and identify novel potential environmentally friendly solutions in the case of deviations. This paper also adds to Wijethilake et al. (2017), providing new empirical evidence on how firms design, implement and use MACS that capture institutional pressures for sustainability from multiple stakeholders.
... Ambidextrous organizations need to balance longterm exploration and short-term exploitation in order to be successful over time ( McCarthy and Gordon, 2011). Lee and Widener (2016) show that a specific business intelligence system is associated with a specific organizational learning mode. We assume this to apply also for BD&A information. ...
This paper focuses on how the relations between Performance Management and Measurement (PMM) and Strategy are considered by scholars. These relations are crucial in building a comprehensive body of knowledge of a complex and multifaceted phenomenon which attracts scholars pertaining to different management disciplines. The results obtained by adopting quantitative methodologies (descriptive statistics and text-mining analysis) on a sample of articles recently published in the most influential international “business, and management accounting” journals, contribute to extant literature by providing evidence that several connections exist between key-concepts which are usually considered an exclusive heritage of single management disciplines, such as strategy, organization, management control, and so forth. For that reason an integration of competences and methodologies is needed to support further research in the field. We also find evidence suggesting that the organizational perspective should be particularly considered when investigating the relations between strategy, management control systems and PMM.
... According to Simons et al. (2000), a PM system is used as a lever to facilitate the management of strategic resources. In this regard, diagnostic and interactive PM competencies are perceived as an important tool in effectively supporting the knowledge capability of a company (Lee and Widener, 2016) and for the pursuit of competitive advantage (Simons, 1995). ...
Purpose – This paper seeks to empirically explore how the effect of intellectual capital on
organizational performance is indirect and mediated through performance measurement systems.
Design/methodology/approach – Data was collected from a survey of 128 chief financial
officers (CFOs) of Iranian publicly-listed companies. Hypotheses were tested using partial least squares (PLS) regression, a structural modeling technique which is appropriate for highly complex predictive models.
Findings – Results from the structural model indicate that, in general, companies with a higher level of intellectual capital place a premium on the balanced use of performance measurement systems in a diagnostic and interactive style. Furthermore, the results provide some evidence that IC is indirectly associated with organizational performance through the intervening variable of the balanced use of interactive and diagnostic performance measurement systems.
Practical implications – This study sheds light on the issue of how senior management should use performance measurement systems to take full advantage of intellectual assets which could lead to improved organizational performance.
Originality/value – This is the first study of its kind to synthesize a model which examines
intellectual capital, performance measurement systems and organizational performance.
Although the effect of different types of intangible assets on performance has been substantially examined in the literature, less effort has been devoted to understanding the role of performance measurement systems in leveraging an organization’s intellectual capital.
Keywords: intellectual capital, management control, performance measurement systems in Iran
... Other recent research has focused on how BI transforms MCS capability. Lee and Widener (2016) provide evidence as to how BI-driven MCS can be aligned to improve exploitation and exploration learningtwo key elements to developing organisational ambidexterity. Aligning the capabilities in BI systems is critical to developing this strategic capability. ...
In an era where the pace of change continues to escalate, behavioural research provides an ongoing avenue for explaining the likely effects of emergent changes on decision-making by providers, users and assurers of accounting information, and for providing ex ante enlightenment for policy-makers. The purpose of this discussion is to identify contemporary changes affecting the accounting environment, discuss the potential impact to individual and organisational decision-making, and explore how behavioural research can be utilised to examine these changes. Specifically, this discussion focuses on the impact that technological changes have had on financial reporting, external auditing and managerial accounting, with an eye towards the potential for these changes to radically alter the future of accounting and auditing research.
... Simons' perspective that balance is achieved by integrating positive and negative control forces is analogous to a broad stream of organizational research that holds that firms must be ambidextrous in order to be successful. For example, the organizational learning literature holds that firms need to balance both exploitation and exploration styles of learning (Lee and Widener, 2015; March, 1991). Similar notions of ambidexterity are found in the literatures on technological innovation, organizational adaptation, strategic management, and organizational design (Gupta et al., 2006; Raisch and Birkinshaw, 2008; Raisch et al., 2009). ...
The impact of the Levers of Control (LOC) framework on the accounting literature is undeniably large. The framework, however, has also been criticized for being vague and ambiguous. One of the central, but unclear, concepts in the LOC framework is the notion of balance. That is, the framework holds that control systems must be in balance in order to manage competing tensions such as that found between predictable goal achievement on the one hand and innovation on the other. The goal of our study is to examine the concept of balance and to provide empirically informed insights on different balancing arrangements that exist in a cross-section of business units. We develop a survey and administer it in person to a convenience sample of business unit managers. Using responses from 217 managers, cluster analysis reveals a stable solution with four distinct patterns of balance, which we interpret using configurational thinking. We label the clusters strategic vigilance, strategic exploitation, strategic responsiveness, and strategic stability respectively, and examine organizational and contextual factors that validate and help explain the observed patterns of balance. By identifying empirical manifestations of balance, our study sheds light on one of the key concepts in the LOC framework, providing an empirically informed starting point for future theoretical analysis and interpretation.
... Simons' perspective that balance is achieved by integrating positive and negative control forces is analogous to a broad stream of organizational research that holds that firms must be ambidextrous in order to be successful. For example, the organizational learning literature holds that firms need to balance both exploitation and exploration styles of learning (Lee and Widener, 2015; March, 1991). Similar notions of ambidexterity are found in the literatures on technological innovation, organizational adaptation, strategic management, and organizational design (Gupta et al., 2006; Raisch and Birkinshaw, 2008; Raisch et al., 2009). ...
The impact of the Levers of Control (LOC) framework on the accounting literature is undeniably large. The framework, however, has also been criticized for being vague and ambiguous. One of the central, but unclear, concepts in the LOC framework is the notion of balance. That is, the framework holds that control systems must be in balance in order to manage competing tensions such as that found between predictable goal achievement on the one hand and innovation on the other. The goal of our study is to make the concept of balance more explicit by providing empirically informed insights on different balancing arrangements that exist in a cross-section of business units. To empirically examine the concept of balance, we develop a survey and administer it in person to a convenience sample of business unit managers. Using responses from 217 managers, cluster analysis reveals four stable configurations of balance, which we label strategic stability, strategic vigilance, strategic exploitation, and strategic responsiveness. We examine organizational and contextual factors that further validate and help explain the observed patterns of balance. By shedding light on one of the key concepts in the LOC framework, our study helps to explicate a hitherto underspecified theoretical claim in that framework. This explication is a significant step in the further development of the framework, adding to its explanatory expressiveness as well as to its empirical contestability.
This study examines the impact of Business Intelligence (BI) on financial performance, with a specific focus on the mediating role of operational efficiency within Jordanian commercial banks. Utilizing a sample of 260 questionnaire responses collected from banking professionals, the study employs partial least squares structural equation modeling (PLS-SEM) using SmartPLS4 to analyze the hypothesized relationships. The findingsreveal that BI significantly enhances both financial performance and operational efficiency by optimizing financial processes and supporting more effective decision-making. Furthermore, operational efficiency exerts a strong positive influence on financial performance, indicating that improved internal processes directly contribute to better financial outcomes. Mediation analysis confirms that operational efficiency serves as a critical intermediary in the BI and financial performance relationship, suggesting that banks realize the greatest financial value from BI through its ability to streamline operations. The study provides robust empirical evidence highlighting the strategic importance of BI implementation in the banking sector. Based on these insights, it is recommended that banks invest in advanced BI technologies, emphasizing process automation, resource optimization, and cost-reduction strategies to fully leverage the benefits of BI in enhancing operational and financial performanc
Innovative technologies such as business analytics (BA) offer significant opportunities for management control (MC) departments. Despite considerable hype in academia and practice, there are some MC aspects for which BA may also pose a threat to MC departments. This study examines whether there are certain aspects of MC for which BA can create both opportunities and threats for MC departments. Analyzing 64 publications from high-quality MC/accounting journals, four MC aspects and corresponding conditions are identified for which the simultaneous occurrence of opportunities and threats from an MC perspective applies. These MC aspects are: 1: information quality from BA for MC departments, 2: controller roles, 3: collaboration of MC departments with other departments, and 4: MC task performance (comprising decision support and managerial decision-making, performance measurement and management, and reporting). Gaining these insights, this study helps both MC scholars and practitioners to develop a new perspective on the effects of BA on MC, as it rearranges the existing knowledge in the complex area of simultaneous opportunities and threats of BA for MC departments. Furthermore, identifying the conditions that may favor opportunities and threats, it helps MC practitioners to foster those conditions that are related to opportunities, thus helping to realize potential opportunities. In addition, by deriving relevant research questions, it serves as a starting point for future research to gain more insights into the complex area of BA-related opportunities and threats.
Purpose
This study aims to investigate a mediation model in which generative learning positively affects marketing innovation and both organizational control and relationship openness mediate the relationship between learning intent and generative learning of international joint ventures (IJVs) in emerging markets. We also decipher the degree of necessity of these factors for generative learning and of generative learning for marketing innovation.
Design/methodology/approach
A sample of 181 marketing managers of IJVs in Vietnam, an emerging market, was surveyed to collect data. Partial least squares structural equation modeling (PLS-SEM) was employed to test the net effect, and necessary condition analysis (NCA) was used to decipher the degree of necessity.
Findings
The PLS-SEM results demonstrate that the effect of learning intent on generative learning is fully mediated by organizational control and relationship openness, which in turn leads to marketing innovation. The NCA findings reveal that all three factors, namely learning intent, organizational control and relationship openness, serve as necessary conditions for generative learning. However, generative learning does not play the role of a necessary condition for marketing innovation.
Practical implications
The study findings suggest that IJVs in emerging markets should pay attention not only to the net effects of those factors but also to their degrees of necessity for generative learning in order to achieve marketing innovation.
Originality/value
The study contributes to the literature by confirming the mediating roles of organizational control and relationship openness in the relationship between learning intent and generative learning. Furthermore, it is among the first to decipher the degrees of necessity of these factors for generative learning and of generative learning for the marketing innovation of IJVs in emerging markets.
Controls are used to ensure "that resources are obtained and used efficiently and effectively to achieve the organization's objective" (Merchant and Otley, 2007, p. 788). Hybrid workplaces, which include flexible work arrangements like working from home, working outside of regular business hours, having flexible work hours, etc. (Stirpe and Zarraga-Oberty, 2017), are characterized by spatial and/or tem-poral separation. This presents control challenges because controlling requires that employee behaviour be in line with the company's goals (Snell 1992). Strict con-trols signal a compromise on trust (Christ et al., 2008), and loose controls dilute subordinates getting strong and clear directives (Long, 2010). Through a quasi-experiment utilizing the theoretical underpinning of Simon's levers of control (1995, 2000), this study explores the types of controls which enable hybrid firm's competitiveness. According to Widener (2007), the levers both individually and collectively drive firm-level knowledge production and attention direction, and be-cause they interact with one another, their effects are intricately entangled. This entanglement causes tension for organizational actors, who are largely interested in knowing which types of controls are effective in the hybrid firm's context and how these controls relate to each other. The results of the experiment identify that the best possible combination to enable hybrid firm competitiveness is ‘High IC and High DC'. The findings establish a significant role of high IC and high DC, in ensuring hybrid firm competitiveness.
This paper presents the possibility of using statistical modeling to automate the process of dynamic pricing management with revenue control and adaptation to current legislation in this area. In addition, it is proposed the use of integration of Python tools with the ERP and BI systems popularly used in the industry. This integration in order to facilitates decision-making in this area for the business without the end of programming. The proposed solutions support the CEO enterprises make decisions regarding pricing strategies and optimize their revenues.
En una sociedad con organizaciones cada vez más dinámicas en la producción de datos, pero aún no veloces en su procesamiento y aplicación sistemática (a pesar de contar con tecnologías cada vez más complejas en el análisis de los mismos). La capacidad adaptativa de las organizaciones, y la aplicación de las mejores herramientas para interpretación de datos, se constituyen en soportes estratégicos para la ventaja competitiva duradera. En este contexto, los procesos de exploración y acción – eficiente y efectiva – sobre los hallazgos de oportunidades y amenazas, se constituyen en generadores de insumos de información de alta calidad para la toma de decisiones a nivel estratégico en la alta gerencia. Ello sólo se logra bajo la integración de los procesos de Vigilancia – Inteligencia – Prospectiva (VIP), cada uno de los cuales tiene actividades y herramientas de distinto nivel de complejidad. De otro lado, la velocidad, veracidad y pertinencia en el análisis de los datos generados por el proceso VIP, se constituye en factores críticos de éxito para la toma de decisiones correctas. Por otro lado, la capacidad de absorción de nuevos conocimientos (soportado en su velocidad de aprendizaje, la cultura organizacional, las capacidades tecnológicas y flexibilidad de adaptación) se constituyen en el entorno ideal para que el proceso VIP y su aplicación en las organizaciones. A este entorno se le denomina organización ambidiestra (Fillipi y otros, 2012)
Information Systems Management and Innovation
Missing input values weaken the ability of information systems (IS) researchers to make calculations, thereby reducing effective sample sizes and statistical power. Such technical problems with data cascade into scientific limitations resulting in the neglect of social and economic issues. Therefore, extensive missing values in data forces researchers to make crucial decisions, such as whether to impute and if so, what strategy to use. This study presents a single imputation approach that integrates and extends best practices for mitigating the effects of missing values. Using an array of missing value situations, we illustrate the Regression Imputation Optimizing Sample Size and Emulation (RIOSSE) method. The approach involves the derivation of an imputation model for each low-sample variable that leverages information available in large-sample sized inputs within the same data source. RIOSSE derives imputation equations with two competing goals in mind: 1) statistical power and 2) emulation. Direct comparisons demonstrate that RIOSSE is superior to three prominent multiple imputation methods (K-Nearest Neighbor, missForest, and LASSO) in two criteria each for achieving statistical power (parsimoniousness and sample size) and emulation (predictiveness and content validity). Further, 5-fold cross validation validated the head-to-head goal criteria comparisons. The paper contributes 1) a description of the RIOSSE method, 2) new imputation performance metrics and visualizations, 3) comparisons of our proposed method to three prominent multiple imputation methods, and 4) specified imputation models for 30 commonly used inputs to firm performance calculations.
Background: For many years, researches on Business Intelligence (BI) development have been popular in primary industry (trading, telecommunication, and manufacturing). Nevertheless, the academic sector has not been the primary beneficiary. This lack of practices also means there has been limited knowledge relating to the development of BI in the academic sector
Objective: This study presents the development of an Academic Business Intelligence (ABI). Taking an actual ABI development project in a small and medium-sized university in Indonesia context, it specifically sought to understand as to why the university needed an ABI and how it could be developed within the limited resources (funding, IT infrastructure and expertise).
Methods: Following the business intelligence development roadmap, this study was able to develop an ABI as an attempt to provide a smart way for generating valuable information from scattered data interactively. It also successfully deployed the newly developed ABI into the existing IT legacy and then run a series of pilot testing involving the intended users.
Results: The results showed the acceptance rate was high (87.25%) and suggested that the system found to be usable for conducting students' performance assessment and decision making faster. In short, this study contributes to the growing body of BI development literature by providing empirical evidence on how to successfully develop a BI within the unique context of the academic sector.
Conclusion: Considering the findings, this study also draws practical recommendations and highlights a few limitations from which future study could address, especially when developing BI or similar ABI in particular.
In order to shed light on the implications of the business intelligence (BI) for management accounting (MA) and decision making, this study investigates as to how the use of the BI affects the production, transmission, and reception of performance measures (PM).
To investigate the issue at hand, a case study of an Italian company is carried out. The case study method is deemed suitable to explore the complex, penetrating, and unpredictable relationship between BI and PM.
The case analysis shows that the use of the BI can affect the production of PM by leading the organization to frame PM into an indicator setting. Moreover, the BI can affect the transmission by introducing a new, “visual” approach for presenting PM to decision makers, which is also relevant in the reception as a mobilizing factor.
This study contributes to improving the understanding of BI implications for MA and decision making, which is still limited in the accounting academia. Additionally, this research adds to extant knowledge about the relationship between measurement and management; more specifically, it contributes to understanding the “fate” of PM.
Furthermore, the findings illustrated in this chapter can be relevant from a practical point of view: by showing the role that BI solutions can play in producing and transmitting PM, the study shows the potential contribution of the use of the BI in managing and overcoming problems arising in these phases, favoring the use of these measures.
In competitive world, as information technology progresses, organizations are seeking to acquire competitive advantage in global market to survive. One of information technology areas which have been more considered by managers is business intelligence. BI Implementation and using its benefits require the identification of all the factors that prevent of utilizing it desirably. Considering the importance of tourism industry in the countries economy and the impact of BI in organization working in this industry, the study aimed to identify and prioritize BI Barriers in Iran tourism industry.
In this research, Barriers on BI implementation and utilization in Iran tourism industry have been performed using a mixed or combination methodology in both qualitative and quantitative measurement. In the qualitative part the grounded theory method and in qualitative section descriptive survey has been used. According to the results, the eleven obstacles based on its priority are as follow respectively: data barriers, managerial barriers, cultural barriers, lack of awareness and education, barriers related to human force, legal and political obstacles, lack of confidence and trust in knowledge transfer, organizational barriers, lack of systems integrity, obstacles related to funding of BI plans and barriers related to infrastructure. The results can facilitate utilizing and implementing of BI in Iran tourist industry.
In this article, we attempt to distinguish between the properties of moderator and mediator variables at a number of levels. First, we seek to make theorists and researchers aware of the importance of not using the terms moderator and mediator interchangeably by carefully elaborating, both conceptually and strategically, the many ways in which moderators and mediators differ. We then go beyond this largely pedagogical function and delineate the conceptual and strategic implications of making use of such distinctions with regard to a wide range of phenomena, including control and stress, attitudes, and personality traits. We also provide a specific compendium of analytic procedures appropriate for making the most effective use of the moderator and mediator distinction, both separately and in terms of a broader causal system that includes both moderators and mediators. (46 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
The current article provides a guideline for conducting factor analysis, a technique used to estimate the population-level factor structure underlying the given sample data. First, the distinction between exploratory and confirmatory factor analyses (EFA and CFA) is briefly discussed; along with this discussion, the notion of principal component analysis and why it does not provide a valid substitute of factor analysis is noted. Second, a step-by-step walk-through of conducting factor analysis is illustrated; through these walk-through instructions, various decisions that need to be made in factor analysis are discussed and recommendations provided. Specifically, suggestions for how to carry out preliminary procedures, EFA, and CFA are provided with SPSS and LISREL syntax examples. Finally, some critical issues concerning the appropriate (and not-so-appropriate) use of factor analysis are discussed along with the discussion of recommended practices.
Most problem solving in chemistry tends to be algorithmic in nature,
while problems in life tend to be very open ended. This paper offers a
simple classification of problems and seeks to explore the many factors
which may be important in the successful solving of problems. It
considers the place of procedures and algorithms. It analyses the role
of long-term memory, not only in terms of what is known, but how that
knowledge was acquired. It notes the great importance of the limitations
of working memory space and the importance of confidence which comes
from experience. Finally, various psychological factors are discussed.
This paper argues that solving open-ended problems is extremely
important in education and that offering learners experience of this in
a group work context is a helpful way forward.
Exploration and exploitation have emerged as the twin concepts underpinning organizational adaptation research, yet some central issues related to them remain ambiguous. We address four related questions here: What do exploration and exploitation mean? Are they two ends of a continuum or orthogonal to each other? How should organizations achieve balance between exploration and exploitation-via ambidexterity or punctuated equilibrium? Finally, must all organizations strive for a balance, or is specialization in exploitation or exploration sometimes sufficient for long-run success? We summarize the contributions of the work in this special research forum and highlight important directions for future research.
In the American political process, news discourse concerning public policy issues is carefully constructed. This occurs in part because both politicians and interest groups take an increasingly proactive approach to amplify their views of what an issue is about However, news media also play an active role in framing public policy issues. Thus, in this article, news discourse is conceived as a sociocognitive process involving all three players: sources, journalists, and audience members operating in the universe of shared culture and on the basis of socially defined roles. Framing analysis is presented as a constructivist approach to examine news discourse with the primary focus on conceptualizing news texts into empirically operationalizable dimensions—syntactical, script, thematic, and rhetorical structures—so that evidence of the news media's framing of issues in news texts may be gathered. This is considered an initial step toward analyzing the news discourse process as a whole. Finally, an extended empirical example is provided to illustrate the applications of this conceptual framework of news texts.
Given the proliferation of factor analysis applications in the literature, the present article examines the use of factor analysis in current published research across four psychological journals. Notwithstanding ease of analysis due to computers, the appropriate use of factor analysis requires a series of thoughtful researcher judgments. These judgments directly affect results and interpretations. The authors examine across studies (a) the decisions made while conducting exploratory factor analyses (N = 60) and (b) the information reported from the analyses. In doing so, they present a review of the current status of factor analytic practice, including comment on common errors in use and reporting. Recommendations are proffered for future practice as regards analytic decisions and reporting in empirical research.
Organizational ambidexterity, defined as an organization's ability to be aligned and efficient in its management of today's business demands while simultaneously being adaptive to changes in the environment, has gained increasing interest in recent years. In this article, the authors review various literature streams to develop a comprehensive model that covers research into the antecedents, moderators, and outcomes of organizational ambidexterity. They indicate gaps within and across different research domains and point to important avenues for future research.
Self-reports figure prominently in organizational and management research, but there are several problems associated with their use. This article identifies six categories of self-reports and discusses such problems as common method variance, the consistency motif, and social desirability. Statistical and post hoc remedies and some procedural methods for dealing with artifactual bias are presented and evaluated. Recommendations for future research are also offered.
Although interest in organizational learning has grown dramatically in recent years, a general theory of organizational learning has remained elusive. We identify re- newal of the overall enterprise as the underlying phenomenon of interest and organ- izational learning as a principal means to this end. With this perspective we develop a framework for the process of organizational learning, presenting organizational learning as four processes-intuiting, interpreting, integrating, and institutionaliz- ing-linking the individual, group, and organizational levels.
- How should we understand why firms exist? A prevailing view has been that they serve to keep in check the transaction costs arising from the self-interested motivations of individuals. We develop in this article the argument that whal firms do better than markets is the sharing and transfer of the knowledge of individtials and groups within an organization. This knowledge consists of information (e.g., who knows what) and of know-how (e.g., how to organize a research team). What is central to our argument is that knowledge is held by individuals, but is also expressed in regularities by which members cooperate in a social community (i.e.. group, organization, or network). If knowledge is only held at Ihe individual level, then firms could change simply by employee turnover. Because we know that hiring new workers is not equivalent to changing the skills of a firm, an analysis of what firms can do must understand knowledge as embedded in the organizing principles by which people cooperate within organizations. Based on this discussion, a paradox is identified: efforts by a firm to grow by the replication of its technology enhances the potential for imitation. By considering how firms can deter imitation by innovation, we develop a more dynamic view of how firms create new knowledge. We build up this dynamic perspective by suggesting that firms learn new skills by recombining their curreni capabilities. Because new ways of cooperating cannot be easily acquired, growth occurs by building on the social relationships that currently exist in a firm. What a firm has done before tends to predict what it can do in the future. In this sense, the cumulative knowledge of the firm provides options to expand in new but uncertain markets in the future. We discuss at length the example of the make/buy decision and propose several testable hypotheses regarding the boundaries of the firm, without appealing to the notion of opportunism.
This paper focuses on dynamic capabilities and, more generally, the resource‐based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high‐velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well‐known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high‐velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long‐term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high‐velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
A critical element in the evolution of a fundamental body of knowledge in marketing, as well as for improved marketing practice, is the development of better measures of the variables with which marketers work. In this article an approach is outlined by which this goal can be achieved and portions of the approach are illustrated in terms of a job satisfaction measure.
This article examines product innovation as an organizational learning process. It provides a framework allowing managers and scholars to relate product-innovation learning skills to organizational goals. Daryl McKee shows how different types of organizational learning skills are involved in incremental innovation, discontinuous innovation and institutionalization of innovation within the organization. This conceptualization can help scholars and managers diagnose an organization's learning skills and how they relate to new product management; direct the organization toward learning more efficient and effective product innovation; and provide scholars with a structure for future research.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed 'best practice'). This suggests that they are more homogeneous, fungible, equifinal and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of REV, we conclude that traditional REV misidentifies the locus of long-term competitive advantage in dynamic markers, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright (C) 2000 John Wiley & Sons, Ltd.
Prior management accounting research has investigated the effects of framing on decision makers' perceptions of problems and their judgments. Negotiation research suggests that the negotiator's perception of the negotiation situation may affect the negotiation outcome. Additionally, prior research has found that compensation structure is an important variable in explaining transfer pricing outcomes. The current research used an experiment to examine the effect of framing (i.e., positive, or profit made from negotiation, and negative, or profit forgone) on sellers' claimed shares of profit available from a transfer pricing transaction for two levels of compensation structure (i.e., high and low percent of divisional profit). The results show, using managers experienced with transfer pricing, that both negative framing and a larger bonus percentage based on divisional profit significantly enhanced sellers' claimed shares of the profit available from a transfer pricing transaction. However, compared to positive framing, negative framing makes the sellers less flexible. The reduced flexibility suggests that there may be more potential for conflict with negative goal framing than with positive goal framing.
In this paper we present a model of the interplay among learning, managerial intervention, and the allocation of decision rights in the context of a generalized agency problem. Within this context, actors face not only conflicting interests but also diverging cognitive "visions" of the right course of action. We assume that a principal may obtain the implementation of desired organizational policies by means of appropriate design of the allocation of decisions or by means of costly intervention through authority or incentives, and we analyze their consequences for organizational control and learning. We show that the structure of allocation of decision rights is very powerful in terms of control, but when the principal is uncertain about the course of action, organizational structure and managerial intervention complement each other in nontrivial ways and must be carefully tuned. We also show that there is a general advantage in maximizing the partitioning decision rights, because it allows both higher control and higher levels of learning.
This study examines aspects of dual performance measures in the context of organizations disclosing operational performance to the general public through information dashboards. Dual performance measures are measures where performance is a function of two values, one value denoting the percentage of a group to which the measure refers and one value denoting the performance level achieved by that particular percentage. Dual measures must be anchored to either target percentage or target performance level before a decision on over- or under-performance can be made. A 23 2 experiment (n 1/4 222), involving performance assessment of a fictional emergency room, varies anchor and presentation format, and measures the effects on subjective performance of the emergency room, as well as perceived informativeness and attractiveness of the dashboard. The results indicate, first, that choice of anchor matters, in the sense that anchor choice can mask or accentuate relevant information, thereby influencing subjective performance. Second, a pictorial unit chart combined with a performance-level anchor is perceived to be the most informative and most attractive dashboard display. The study contributes to research on the design of information dashboards by developing theory on the effectiveness of reporting dual performance measures.
Information systems' reports typically contain quantitative feedback such as monetary values or the number of units sold or produced. We investigate if providing relative performance information (RPI) feedback and framing the feedback in a positive (good job) or negative (poor job) manner induces performance improvements in a repetitive task. We also investigate if feedback framing interacts with performer level, such that framed feedback has a differential effect for low performers, compared to average and high performers. An experiment was conducted using a 3 × 4 × 2 factorial design, crossing feedback framing (positive, negative, or control), relative performance information (no RPI, rank-ordered RPI, percent RPI in first session, percent RPI in second session), and contract type (fixed or variable), using 289 student participants assuming the role of production workers. Results revealed a significant positive effect of providing relative performance feedback and positively framed feedback. The results also indicate an interaction between worker performance level and feedback framing, such that low-performing workers improved performance in response to positive feedback significantly more than average and high-performing workers. Feedback framing did not have an incremental effect over relative performance feedback. These results have implications for the design of accounting information systems in terms of the type of feedback provided to workers.
This study examines the influence of organizational controls related to knowledge management and resource development on assimilation (i.e., strategic integration and use) of business intelligence (Bl) systems. Bl systems use analytics and performance management concepts to leverage enterprise system databases and provide core management control system (MCS) capability. Our results indicate that organizational absorptive capacity (i.e., the ability to gather, absorb, and strategically leverage new external information) is critical to establishing appropriate technology infrastructure and to assimilating Bl systems for organizational benefit. Further, findings show that while top management plays a significant role in effective deployment of Bl systems, their impact is indirect and a function of operational managers' absorptive capacity. In particular, this indirect effect suggests that leveraging Bl systems is driven from the bottom up as opposed to the top down. This differentiates Bl from other isolated strategic MCS innovations that have traditionally been viewed as top-management driven.
Business intelligence (BI) systems have attracted significant interest from senior executives and consultants for their ability to exploit organizational data and provide operational and strategic benefits through improved management control systems. A large body of literature indicates that organizations have largely failed to use their business intelligence investments effectively to exploit the wealth of data they capture in their ERP systems. As a result, BI has too often failed to support organizations' managerial decision making at both the strategic and operational levels and, thus, failed to enhance business value. Whether and how organizations achieve business benefits from their BI investments remains unclear. This study draws on the strategic alignment and IT assimilation literature to develop a research model that theorizes the importance of BI systems assimilation, and the need for shared knowledge among the strategic and operational levels as the drivers of BI business value. Results from the study confirm the crucial role of BI assimilation in translating organizational resources into capabilities that enhance the business value of BI. The findings also contribute evidence on the importance of shared domain knowledge and the interrelations between senior business, IT executives, and operational-level managers for enhancing BI assimilation.
Building on prior accounting research (Luft and Shields 2001; Dearman and Shields 2005), this study examines the effects of observable decision aid bias on decision aid agreement and task performance accuracy. Using a behavioral experiment, this study manipulates decision aid bias to assess the impact of a change in the level of decision aid bias on the degree to which decision makers' decisions agree with decision aid suggestions (i.e., decision aid agreement) and to which they learn to effectively adjust their decisions (i.e., task performance accuracy). Results indicate that learning subsequent to an observable change in decision aid bias is diminished, consistent with fixation on the previous aid's bias.
JEL Classifications: D8; D83; M4
The business value of investments in Information Systems (IS) has been, and is predicted to remain, one of the major research topics for IS researchers. While the vast majority of research papers on IS business value find empirical evidence in favour of both the operational and strategic relevance of IS, the fundamental question of the causal relationship between IS investments and business value remains partly unexplained. Three research tasks are essential requisites on the path towards addressing this epistemological question: the synthesis of existing knowledge, the identification of a lack of knowledge and the proposition of paths for closing the knowledge gaps. This paper considers each of these tasks. Research findings include that correlations between IS investments and productivity vary widely among companies and that the mismeasurement of IS investment impact may be rooted in delayed effects. Key limitations of current research are based on the ambiguity and fuzziness of IS business value, the neglected disaggregation of IS investments, and the unexplained process of creating internal and competitive value. Addressing the limitations we suggest research paths, such as the identification of synergy opportunities of IS assets, and the explanation of relationships between IS innovation and change in IS capabilities.
Research indicates that successful adoption of information technology to support business strategy can help organizations gain superior financial performance. The recent wave of enterprise-wide resource planning systems adoptions is a significant commitment of resources and may affect almost ail business processes. This study examines the effect of adoption of enterprise systems on a firm's long-term financial performance. A large-scale data identification and collection method compared the fi- nancial data of 247 firms adopting enterprise wide systems with a matched control group of firms cross-sectionally and longitudinally before and after adoption. A number of implementation characteristics were also measured and their effects assessed. The results show that firms adopting enterprise systems exhibit higher differential perfor- mance only after two years of continued use. Furthermore, controlling for implementa- tion characteristics as vendor choice, implementation goal, modules implemented, and implementation time period, helped explain the financial performance effects of enter- prise resource planning system use. These results provide important insights that comple- ment extant research findings and also raise future research issues.
In a previous paper (Kaplan and Norton 2001b), we described the role for strategy maps and Balanced Scorecards to develop performance objectives and measures linked to strategy. With this paper, we show how organizations use their scorecards to align key management processes and systems to the strategy. We also discuss the relation-ship of the Balanced Scorecard (BSC) to other financial and cost measurement initia-tives, such as shareholder value metrics and activity-based costing, and quality pro-grams. We conclude with suggestions about opportunities for additional research on measurement and management systems. THE FIVE PRINCIPLES OF A STRATEGY-FOCUSED ORGANIZATION When asked to describe how the Balanced Scorecard helped them achieve break-through performance, executives of adopting organizations continually referred to two words: alignment and focus (Kaplan and Norton 2001a, Chapter 1). Although each or-ganization achieved strategic alignment and focus in different ways, at different paces and in different sequences, each eventually used a common set of five principles, which we refer to as the Principles of a Strategy-Focused Organization, portrayed in Figure 1. Principle #1: Translate the Strategy to Operational Terms Organizations translate their strategy into the logical architecture of a strategy map and Balanced Scorecard to specify in detail the critical elements for their growth strategies (Kaplan and Norton 2001b). These create a common and understandable point of reference for all organizational units and employees.
There has been an emphasis in recent years on understanding how value is created within the firm. To understand what drives value, managers must have in place performance measurement systems designed to capture information on all aspects of the business, not just the financial results. Many firms are implementing a Balanced Scorecard (BSC) performance measurement system that tracks measures across four hierarchical perspectives: learning and growth, internal business processes, customer, and financial perspectives. Although BSCs should ideally be tailored to each firm's unique strategy, evidence shows that managers tend to rely on generic measures, particularly as measures of the outcome of each perspective. We use cross-sectional data on seven archival measures from 125 firms over a five-year period to proxy for typical outcome measures of the four BSC perspectives. We find that a model that allows each outcome measure to be associated with outcome measures in all higherlevel BSC perspectives captures the value-creation process better than a relatively simple model that allows each measure to be a driver of only the next perspective in the BSC hierarchy. We also find differences in the relations among performance measures when firms implement a performance measurement system that contains both financial and nonfinancial measures versus one that relies solely on financial measures.
The purpose of this case is to enable you to design a performance measurement system using a balanced scorecard. This case is based on factual issues and decisions faced by the real‐world managers and employees of Holloway Consulting Services (HCS) (names and dollar amounts have been changed). HCS is a service firm that provides its customers with managed business solutions, i.e., integrating outsourcing options with systems design and support. Currently, HCS collects several financial and operational performance measures; however, Sharon Holloway, owner of HCS, is concerned that these measures are not adequate for a firm that competes using intangible assets, especially human capital. Therefore, she plans to implement a balanced scorecard in which performance measures are linked to the firm's strategy. This case provides you with the opportunity to develop a balanced scorecard that incorporates both traditional and nontraditional performance measures within the strategic context of a knowledge‐based firm.
Jim March's framework of exploration and exploitation has drawn substantial interest from scholars studying phenomena such as organizational learning, knowledge management, innovation, organizational design, and strategic alliances. This framework has become an essential lens for interpreting various behaviors and outcomes within and across organizations. Despite its straightforwardness, this framework has generated debates concerning the definition of exploration and exploitation, and their measurement, antecedents, and consequences. We critically review the growing literature on exploration and exploitation, discuss various perspectives, raise conceptual and empirical concerns, underscore challenges for further development of this literature, and provide directions for future research.
One of the most enduring questions at the intersection of accounting and information systems is measuring the value of Information Technology (IT). This longevity is unsurprising — measuring the value of IT is difficult at best. Literature on this issue falls into two broad research streams. One stream, which draws largely on mainstream financial accounting and economics, employs independently observable measures, such as capital market reactions, return on assets and changes in market share, to assess the value of IT in an organization. The ready comparability of such measures makes them quite desirable. However, accurately linking them to the underlying IT is problematic as often they do not solely capture the impact of IT in the organization. An alternative stream of research, which draws on the behavioural sciences, uses more subjective, perceptual measures such as assimilation, user satisfaction, perceived net benefit, and perceptions and expectations of quality. These measures are often more closely connected to the underlying IT and are often more diagnostic with respect to how effectively IT is used and value is realized. Nevertheless as subjective measures they are open to all the biases and inconsistencies of human judgment. In this paper we present a framework for understanding the theoretical characteristics of independently observable and perceptual measures. We seek to provide a more integrated perspective on these otherwise disparate approaches to IT value measurement. Through a review of the generally accepted findings on IT value measurement, we establish the need for an integrated view and demonstrate how such an integrated perspective might operate and advance our understanding of IT value measurement.
The balanced scorecard revolutionized conventional thinking about performance metrics. When Kaplan and Norton first introduced the concept, in 1992, companies were busy transforming themselves to compete in the world of information; their ability to exploit intangible assets was becoming more decisive than their ability to manage physical assets. The scorecard allowed companies to track financial results while monitoring progress in building the capabilities needed for growth. The tool was not intended to be a replacement for financial measures but rather a complement - and that's just how most companies treated it. Some companies went a step further, however, and discovered the scorecard's value as the cornerstone of a new strategic management system. In this article from 1996, the authors describe how the balanced scorecard can address a serious deficiency in traditional management systems: the inability to link a company's long-term strategy with its short-term financial goals. The scorecard lets managers introduce four new processes that help companies make that important link, The first process - translating the vision - helps managers build a consensus concerning a company's strategy and express it in terms that can guide action at the local level. The second - communicating and linking - calls for communicating a strategy at all levels of the organization and linking it with unit and individual goals. The third - business planning - enables companies to integrate their business plans with their financial plans. The fourth - feedback and learning - gives companies the capacity for strategic learning, which consists of gathering feedback, testing the hypotheses on which a strategy is based, and making necessary adjustments.
The dominant explanation for the spread of technological innovations emphasizes processes of influence and information flow. Firms which are closely connected to pre-existing users of an innovation learn about it and adopt it early on. Firms at the periphery of communication networks are slower to adopt.
This paper develops an alternative model which emphasizes the role of know-how and organizational learning as potential barriers to adoption of innovations. Firms delay in-house adoption of complex technology until they obtain sufficient technical know-how to implement and operate it successfully.
In response to knowledge barriers, new institutions come into existence which progressively lower those barriers, and make it easier for firms to adopt and use the technology without extensive in-house expertise. Service bureaus, consultants, and simplification of the technology are examples. As knowledge barriers are lowered, diffusion speeds up, and one observes a transition from an early pattern in which the new technology is typically obtained as a service to a later pattern of in-house provision of the technology.
Thus the diffusion of technology is reconceptualized in terms of organizational learning, skill development, and knowledge barriers. The utility of this approach is shown through an empirical study of the diffusion of business computing in the United States, reporting survey and ethnographic data on the spread of business computing, on the learning processes and skills required, and on the changing institutional practices that facilitated diffusion.
Understanding communication processes is the goal of most communication researchers. Rarely are we satisfied merely ascertaining whether messages have an effect on some outcome of focus in a specific context. Instead, we seek to understand how such effects come to be. What kinds of causal sequences does exposure to a message initiate? What are the causal pathways through which a message exerts its effect? And what role does communication play in the transmission of the effects of other variables over time and space? Numerous communication models attempt to describe the mechanism through which messages or other communication-related variables transmit their effects or intervene between two other variables in a causal model. The communication literature is replete with tests of such models. Over the years, methods used to test such process models have grown in sophistication. An example includes the rise of structural equation modeling (SEM), which allows investigators to examine how well a process model that links some focal variable X to some outcome Y through one or more intervening pathways fits the observed data. Yet frequently, the analytical choices communication researchers make when testing intervening variables models are out of step with advances made in the statistical methods literature. My goal here is to update the field on some of these new advances. While at it, I challenge some conventional wisdom and nudge the field toward a more modern way of thinking about the analysis of intervening variable effects.