Efficiency creep and shadow innovation: enacting ambidextrous IT Governance in the public sector

ABSTRACT The current push towards increased innovation within the public sector calls for new approaches to IT Governance. However, recent findings highlight the aim to avoid trade-offs between innovation and efficiency through organisational ambidexterity. This paper reports a case study of ambidextrous IT Governance in two large government agencies. According to the findings, ambidextrous IT Governance is enacted through two separate but interrelated mechanisms that emerge simultaneously. In terms of exploitation, the “efficiency creep” mechanism creates a bias for efficiency – rather than innovation-oriented investments. In terms of exploration, the “shadow innovation” mechanism involves unsanctioned innovation activities. These two mechanisms interplay, in the enactment of ambidextrous IT Governance. The contribution of this study lies in theorising about how ambidextrous IT Governance is enacted in public sector organisations, and how efficiency creep and shadow innovation influence each other. This contribution aids future research and practice on public sector innovation and IT Governance.

[1]  G. Stigler.  Production and Distribution in the Short Run , 1939, Journal of Political Economy.

[2]  Moaman Al-Busaidy,et al.  Digitally-enabled service transformation in the public sector: The lure of institutional pressure and strategic response towards change , 2016, Gov. Inf. Q..

[3]  Susan Meyers Chandler,et al.  Exploration, Exploitation, and Public Sector Innovation: An Organizational Learning Perspective for the Public Sector , 2015 .

[4]  R. Anthony,et al.  Planning and Control Systems: A Framework for Analysis , 1965 .

[5]  Stephen P. Osborne,et al.  The New Public Governance? 1 , 2006 .

[6]  Thomas Hess,et al.  How Chief Digital Officers Promote the Digital Transformation of their Companies , 2020, MIS Q. Executive.

[7]  Albert Jacob Meijer,et al.  E-governance innovation: Barriers and strategies , 2015, Gov. Inf. Q..

[8]  Mary J. Benner,et al.  Exploitation, Exploration, and Process Management: The Productivity Dilemma Revisited , 2003 .

[9]  Adler,et al.  Flexibility versus efficiency? A case study of model changeovers in the Toyota production system , 1999 .

[10]  Sebastian Raisch,et al.  Managing Persistent Tensions on the Frontline: A Configurational Perspective on Ambidexterity , 2018 .

[11]  Henry Mintzberg,et al.  Strategy Formation in an Adhocracy. , 1985 .

[12]  Qing Cao,et al.  Unpacking Organizational Ambidexterity: Dimensions, Contingencies, and Synergistic Effects , 2009, Organ. Sci..

[13]  John Paul MacDuffie,et al.  The Road to Root Cause: Shop-Floor Problem-Solving at Three Auto Assembly Plants , 1997 .

[14]  David S. Preston,et al.  Antecedents and Effects of CIO Supply-Side and Demand-Side Leadership: A Staged Maturity Model , 2010, J. Manag. Inf. Syst..

[15]  Jacob Torfing,et al.  New Public Governance , 2020, Public Governance Paradigms.

[16]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[17]  Denise M. English,et al.  Levers of Control , 1996 .

[18]  Sven Modell.  In defence of triangulation: A critical realist approach to mixed methods research in management accounting , 2009 .

[19]  Tomasz Janowski,et al.  Digital government evolution: From transformation to contextualization , 2015, Gov. Inf. Q..

[20]  M. Lutchen.  Managing IT as a Business: A Survival Guide for CEOs , 2003 .

[21]  Frank Bannister,et al.  The curse of the benchmark: an assessment of the validity and value of e-government comparisons , 2007 .

[22]  J. Birkinshaw,et al.  Building Ambidexterity Into an Organization , 2004 .

[23]  Kevin C. Desouza,et al.  An Examination of Effective IT Governance in the Public Sector Using the Legal View of Agency Theory , 2016, J. Manag. Inf. Syst..

[24]  M. Tushman,et al.  Organizational Transformation as Punctuated Equilibrium: An Empirical Test , 1994 .

[25]  Sue Newell,et al.  Growing on Steroids: Rapidly Scaling the User Base of Digital Ventures Through Digital Innovation , 2017, MIS Q..

[26]  Severin V. Grabski,et al.  A Review of ERP Research: A Future Agenda for Accounting Information Systems , 2011, J. Inf. Syst..

[27]  Jing Zhao,et al.  The influence of inter-firm IT governance strategies on relational performance: The moderation effect of information technology ambidexterity , 2017, Int. J. Inf. Manag..

[28]  Sunil Mithas,et al.  How Information Technology Strategy and Investments Influence Firm Performance: Conjecture and Empirical Evidence , 2016, MIS Q..

[29]  Nicholas H. Roberts,et al.  Using Information Systems to Sense Opportunities for Innovation: Integrating Postadoptive Use Behaviors with the Dynamic Managerial Capability Perspective , 2016, J. Manag. Inf. Syst..

[30]  David Otley,et al.  The contingency theory of management accounting and control: 1980–2014 , 2016 .

[31]  Alexander Benlian,et al.  Options for Transforming the IT Function Using Bimodal IT , 2017, MIS Q. Executive.

[32]  J. Youtie,et al.  Building an innovation hub: A case study of the transformation of university roles in regional technological and economic development , 2008 .

[33]  Sebastian Raisch,et al.  Growing New Corporate Businesses: From Initiation to Graduation , 2016, Organ. Sci..

[34]  Ben R. Rich,et al.  Skunk works: A personal memoir of my years at Lockheed , 1995 .

[35]  Daniele Archibugi,et al.  Blade Runner Economics: Will Innovation Lead the Economic Recovery? , 2015 .

[36]  W. Alec Cram,et al.  Information Systems Control: A Review and Framework for Emerging Information Systems Processes , 2016, J. Assoc. Inf. Syst..

[37]  R. Merton,et al.  The functions of the professional association. , 1958, The American journal of nursing.

[38]  S. Tarba,et al.  Organizational Ambidexterity and Performance: A Meta-Analysis , 2013 .

[39]  Wolfgang Drechsler,et al.  Agile local governments: Experimentation before implementation , 2017, Gov. Inf. Q..

[40]  Ryan Peterson,et al.  Crafting Information Technology Governance , 2004, Inf. Syst. Manag..

[41]  Kalle Lyytinen,et al.  Digital product innovation within four classes of innovation networks , 2016, Inf. Syst. J..

[42]  Vallabh Sambamurthy,et al.  Efficiency or Innovation: How do Industry Environments Moderate the , 2022 .

[43]  Rana Tassabehji,et al.  Emergent digital era governance: Enacting the role of the 'institutional entrepreneur' in transformational change , 2016, Gov. Inf. Q..

[44]  Anneke Zuiderwijk,et al.  Open innovation in the public sector: A research agenda , 2017, Gov. Inf. Q..

[45]  Tero Päivärinta,et al.  Suomi.fi - Towards Government 3.0 with a National Service Platform , 2018, EGOV.

[46]  Charlotte van Ooijen,et al.  A data-driven public sector , 2019, OECD Working Papers on Public Governance.

[47]  Zeki Simsek,et al.  A Typology for Aligning Organizational Ambidexterity's Conceptualizations, Antecedents, and Outcomes , 2009 .

[48]  Peter Gwynne,et al.  Skunk Works, 1990s-Style , 1997 .

[49]  Xia Zhao,et al.  Managerial Incentives and IT Strategic Posture , 2017, Inf. Syst. Res..

[50]  Robert Wayne Gregory,et al.  IT Consumerization and the Transformation of IT Governance , 2018, MIS Q..

[51]  Johan Magnusson,et al.  Ambidextrous IT Governance in the Public Sector: A Revelatory Case Study of the Swedish Tax Authorities , 2017 .

[52]  Steven De Haes,et al.  Enterprise Governance of Information Technology , 2019, Management for Professionals.

[53]  Yiwei Gong,et al.  Agile government: Systematic literature review and future research , 2018, Gov. Inf. Q..

[54]  Bendik Bygstad,et al.  Why I act differently: studying patterns of legitimation among CIOs through motive talk , 2013, Inf. Technol. People.

[55]  Tone Alm Andreassen,et al.  MANAGING INSTITUTIONAL COMPLEXITY IN PUBLIC SECTOR REFORM: HYBRIDIZATION IN FRONT‐LINE SERVICE ORGANIZATIONS , 2015 .

[56]  J. V. Maanen,et al.  The Fact of Fiction in Organizational Ethnography. , 1979 .

[57]  Marjolein van Offenbeek,et al.  Stakeholders’ enactment of competing logics in IT governance: polarization, compromise or synthesis? , 2018, Eur. J. Inf. Syst..

[58]  Dovev Lavie,et al.  Ambidexterity Under Scrutiny: Exploration and Exploitation Via Internal Organization, Alliances, and Acquisitions , 2014 .

[59]  Jan Muntermann,et al.  Paradoxes and the Nature of Ambidexterity in IT Transformation Programs , 2015, Inf. Syst. Res..

[60]  Adam D. Thierer.  Permissionless Innovation and Public Policy: A 10-Point Blueprint , 2016 .

[61]  Johan Magnusson,et al.  Enterprise System Platforms: Transforming the Agenda , 2015 .

[62]  Markku V. J. Maula,et al.  Exploration, exploitation, and financial performance: analysis of S&P 500 corporations , 2009 .

[63]  Sten Olof Hansen,et al.  Innovation, a winning solution? , 1997 .

[64]  Guy Paré,et al.  Toward a New Theory of the Contribution of the IT Function in Organizations , 2012, MIS Q..

[65]  Ulrich Remus,et al.  Control Configuration and Control Enactment in Information Systems Projects: Review and Expanded Theoretical Framework , 2016, MIS Q..

[66]  Marina Apaydin,et al.  A Multi-Dimensional Framework of Organizational Innovation: A Systematic Review of the Literature , 2010 .

[67]  L. Diamond.  IT Governance : How Top Performers Manage IT Decision Rights for Superior Results , 2005 .

[68]  Luu Trong Tuan.  Reform in public organizations: the roles of ambidextrous leadership and moderating mechanisms , 2017 .

[69]  Daniel A. Levinthal,et al.  Temporarily Divide to Conquer: Centralized, Decentralized, and Reintegrated Organizational Approaches to Exploration and Adaptation , 2003, Organ. Sci..

[70]  Loizos Heracleous,et al.  Ambidexterity as Historically Embedded Process: Evidence From NASA, 1958 to 2016 , 2018, The Journal of Applied Behavioral Science.

[71]  William R. King,et al.  Assessing the impact of proactive versus reactive modes of strategic information systems planning , 2000 .

[72]  Scott L. Summers,et al.  The Impact of Shadow IT Systems on Perceived Information Credibility and Managerial Decision Making , 2017 .

[73]  Paul A. Pavlou,et al.  CIO Reporting Structure, Strategic Positioning, and Firm Performance , 2011, MIS Q..

[74]  Marijn Janssen,et al.  Adaptive governance: Towards a stable, accountable and responsive government , 2016, Gov. Inf. Q..

[75]  Bendik Bygstad,et al.  The Generative Mechanisms of Digital Infrastructure Evolution , 2013, MIS Q..

[76]  Victor Bekkers,et al.  Innovation in the Public Sector , 2011 .

[77]  Carol J. McNair,et al.  Cost management and value creation: the missing link , 2001 .

[78]  Steven De Haes,et al.  Enterprise Governance of Information Technology: Achieving Strategic Alignment and Value , 2009 .

[79]  Kalle Lyytinen,et al.  Digital Innovation Management: Reinventing Innovation Management Research in a Digital World , 2017, MIS Q..

[80]  M. Tushman,et al.  Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change , 1996 .

[81]  Ines Mergel,et al.  Agile innovation management in government: A research agenda , 2016, Gov. Inf. Q..

[82]  C. Gibson,et al.  THE ANTECEDENTS , CONSEQUENCES , AND MEDIATING ROLE OF ORGANIZATIONAL AMBIDEXTERITY , 2004 .

[83]  Elin Smith,et al.  Organizational Ambidexterity at the Local Government Level: The effects of managerial focus , 2015 .

[84]  Jannis Kallinikos,et al.  Governing Through Technology: Information Artefacts and Social Practice , 2010 .

[85]  Davood Askarany,et al.  Why ABC is Not Widely Implemented? , 2009 .

[86]  Lars Mathiassen,et al.  Embracing Digital Innovation in Incumbent Firms: How Volvo Cars Managed Competing Concerns , 2017, MIS Q..

[87]  M. Tushman,et al.  Organizational Ambidexterity: Past, Present and Future , 2013 .

[88]  Joseph A. Schumpeter,et al.  The Explanation of the Business Cycle , 1927 .

[89]  Aviv Shoham,et al.  Innovation in the public sector , 2021, Innovation in the Public Sector.

[90]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[91]  Rajiv Kohli,et al.  Investing in Information Systems: On the Behavioral and Institutional Search Mechanisms Underpinning Hospitals' IS Investment Decisions , 2015, MIS Q..

[92]  Julian Birkinshaw,et al.  How Do Firms Adapt to Discontinuous Change? Bridging the Dynamic Capabilities and Ambidexterity Perspectives , 2016 .

[93]  J. Birkinshaw,et al.  Organizational Ambidexterity: Antecedents, Outcomes, and Moderators , 2008 .

[94]  Sebastian Raisch,et al.  Dynamic Balancing of Exploration and Exploitation: The Contingent Benefits of Ambidexterity , 2018, Organ. Sci..