Management support systems, interactive management controls, and strategic adaptation

Large, geographically-dispersed corporations that face rapidly changing market conditions often encounter situations that require strategic adaptation. As defined by Ansoff (1979), strategic adaptation represents the adjustment of plans, procedures, and performance targets to new market dynamics. Management control systems have been identified as an important element in strategic adaptation, particularly those control systems that top managers use interactively to focus organizational attention on chosen strategic uncertainties, to encourage discussion and debate about plans and assumptions, and to provide guidance on appropriate action (Simons 1990, 1991). Information technology, in the form of management support systems (MSS) that provide appropriate data and analyses to a management hierarchy, can be considered an integral part of management control systems (Anthony 1988), including control systems that are used for strategic purposes (Lorange et al. 1986). Considerable research has focused on information technology and management decision-making (Keen and Scott Morton 1978), executive support (Rockart and De Long 1988), and information support for control procedures (Anthony et al. 1992). Research has yet to gain an in-depth understanding of the interrelationship between information technology and interactive controls, particularly with regard to how the two influence the organization flexibility needed for strategic adaptation. This study investigates management support systems as a critical enabler of strategic adaptation through interactive management controls. It examines this question by considering how management support systems influence the characteristics of interactive control systems. It then asks what organizational outcomes those control system changes support. This question is increasingly appropriate in the 1990s, where technological change, industry consolidation, and the globalization of markets increase the likelihood that high-level management teams will encounter new forms of competition and accelerating market change. This thesis builds a research framework for considering the interrelationship of management support systems and interactive control system characteristics by examining the literature on control theory, management control, and management information systems. It applies that framework to field data gathered between 1989 and 1991 during a longitudinal study of high-level management teams at a Fortune 100 consumer goods company. The study investigates the contribution of information technology to the surveillance, signalling, timing, and discussion functions of interactive control systems. It then considers the implications of MSS-supported interactive controls for organizational outcomes in the context of strategic adaptation. The study finds that management support systems influence interactive controls by enabling improved information input to control systems, by accelerating the timing of the control process, and by contributing to changes in management discussions. The study's evidence suggests that through these mechanisms, appropriate information technology amplifies the control system attributes needed to support effective strategic adaptation.