A Normative Theory of Organizational Control: Main and Interaction Effects of control Modes on Performance

The dominant model of organisation control was developed by Ouchi and his colleagues. It predicts the choice among control modes as a function of the task context. It has two limitations. One is that it predicts the choice of control modes but not the effect of those choices on performance. The other is that it restricts that choice to a single control mode for a specific context and does not consider the choice of a combination or portfolio of control modes, which the same literature frequently describes as practice. Here, contributing to control theory, these two limitations are addressed through the development of a more complete and complex normative model which includes interactions among modes and their effect on performance. This model has important implications for both the theory and practice of outsourcing, IT project methodology and IT-based organisational transformation.