Control Process Structure: Combining Process and Structure Approaches to the Control of Software Development

The performance of firms in the software industry depends considerably on the quality of their software development processes. How should such firms manage software development projects so that their development processes are flexible and predictable resulting in products that meet quality goals, which are delivered within budget and are also developed on-time? Managing software development is a challenging task as management controls need to impose discipline and coordinate action to ensure goals are met while simultaneously incorporating autonomy to motivate software developers to be innovative and produce quality work. The management literature suggests two approaches to control: the process approach and the structure approach. The process approach recommends control of activities through specifying methods (behavior control) and through specifying performance criteria (outcome control). In contrast, the structure approach recommends control through centrally devised standards for activities (standardization) and by discriminating choices related to the delegation of authority for decision-making (decentralization). This study synthesizes these two approaches to propose a new theoretical construct -control process structure, to characterize control. Control process structure comprises four modes of control Standardization of Methods, Standardization of Performance Criteria, Decentralization of Methods and Decentralization of Performance Criteria. The exercise of control is viewed as comprising different levels of these four modes of control. We tested the association of the modes of control comprising control process structure with performance in a sample of 56 firms in the software industry in USA. The results suggest that performance is enhanced by establishing uniform performance criteria across projects (standardization of performance criteria) while giving each project team the authority to make decisions with respect to methods (decentralization of methods). However, standardization of methods across all projects and decentralization of performance criteria by delegating the authority to make decisions about performance criteria to project teams were both not significantly related to performance. The concept of control process structure and its relationship to performance has theoretical and practical implications for managing software development. This model of control is also likely to be useful in other knowledge-work intensive settings.