The Management of Complex Tasks in

Organizations: Controlling the Systems

Development Process
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Laurie J. Kirsch
Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, Pennsylvania 15260

T his manuscript provides needed clarification o1 a number of key constructs in the area of
managerial control, a much discussed but inadequately studied phenomenon within the organi- zation
sci‹ nces. Further, the carefully designed field study provides clear evidence of the importance
of both b‹ havioral and self c‹›ntrol in the management of complex organizatic›nal tasks.

Robert Zmud

Abstract
Control theory attempts to explain how one person or group
in an organization can ensure that antither person or group
works toward and attains a set or organiz‹itii Anal goals. Prior
empirical work investigai ing control theory has shown that
characteristics of the task and of the organizational environ-
ment predict the use or various types of ct introl. However,
this paper argues that w hen control theory is applied to a
complex, nonroutine task such as the management of infor-
mation systems development, the theory of control is incom-
plete. In particular, it prt poses that knowletlge of the task is
a key determinant of typi of control.
t-tour modes ot contrc›l (behavior, outcome, clan, and self)
arc identified from the ‹ organizational literature; each high-
lights different aspects ‹›i control in organizations. Building
on prior empirical work, this paper integrales the dil‘ferent
the‹iretical perspectives a nd predicts the circumstances under
w'hich each type of ctintrol will be implemented. Survey
rcsp‹inses from 96 partic ipants of 32 systems development
efft›rts suggest that the c tent to which behaviors arc moni- torccl
interacts with the prtaject sponsor’s ieveI of systems
development knowledge io determine the amount of behav-
ior contra I; that t›utcomc control is rt functi‹›n of the extent
tc› which behaviors are m ›nitored and outcorries are measur-
able; and that self-conti ol is dependent on the extent to
which outcomes are mea* urable and the levy l ‹it the project
spc›nsor’s kntiwledge ab‹›ut systems development activities.
No relationship between clan control and t he independent
vari:ibles was found.
(Monagrment I“ontrol. €."ontrol Theory; .Software Development)
Introduction
Control in organizations has long been a topic of
interest for researchers and practitioners alike, who
generally recognize that control mechanisms are
needed t‹a help ensure organizations achieve their goals.
While control can be viewed from various perspectives,
it iS viewed here in a hehauiorul sense, that is, as
attempts to ensure that individuals working on organi-
zational projects act according to an agreed-up‹in strat-
egy t‹i achieve desired objectives (Jaworsk i 1988,
Merchant I 9h8). This definition implies that when a
controller exercises control over a controllee, she iS
taking some action in order to regulate or adjust the
hehaoior ref the controllee. The purpose of this study is
to empirically test a model that predicts the circum-
stances under which various modes of control will be
exercised in the context of information systems devel-
opment (ISI3) Jaroject management. ISD is the process
of identi in k * tl siness objectives for a computerized
information system; designing, building, and testing the
system; and implementing and maintaining it. ISD pro-
ject management involves planning, organizing re-
sources, :ind measuring progress against plans with an
overall gr›al oi achieving a set of project objectives
(Page-.fones 1985).
Controlling complex organizational tasks is an elu-
sive prcoci:ss. one that is not well understood (Flamholtz
et al. 198a, Merchant 1958, Snell 1992). Because the
management of ISD is nonroutine and diNicult (Slevin
and Pinto 1957, Stuckenbruck 1988), it provides a

1047-7039/ 96/0701 00tll / $i11.25

C“c›p›'right /*0 1996 lnstitu ie for Opt ati‹ins Research
and the Management Sciences O net AN I Z.UTI O s Si ir TCE /Vol. 7, No. 1, January —February 1996 1

Copyright O 2001 All Rights Reserved

 LAURIE J. KIRSCH Management of Complex Tasks in Organizations
classic example of the issues associated with structuring
control mechanisms for complex tasks. Much of this
complexity stems from the communication and coordi-
nation problems inherent in tasks that span organiza-
tional departments. These problems are manifested in
several ways. First, each stakeholder involved in ISD
has a set of goals, which may include a quality end-
product, timeliness of implementation, client satisfac-
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tion, and reasonable project costs (Page-Jones 1985,
Frame 1987, Pinto and Slevin 1988). However, the
specific goals may not be clearly articulated; they may
be in conflict, resulting in trade-offs among them
(Wilemon and Baker 1988, Swanson and Beath 1990,
Banker and Kemerer 1992); and they may shift over
the course of the project (Frame 1987, Slevin and Pinto
1987). Thus, part of the dynamics of project manage-
ment involves managing multiple goals and multiple
stakeholders. Second, communication between users
and information systems (IS) developers can be quite
problematic. Users may find it difficult to translate
imprecise business needs into precise system specifica-
tions (Naumann et al. 1950), and need a prototype to
help articulate requirements (Zmud 1980, Alavi 1984).
IS developers may have trouble fully understanding
client needs and explaining information technology ca-
pabilities and ISD procedures (Naumann et al. 1980,
Frame 1987, Newman and Noble 1990). The lack of
unambiguous requirements and clarity in IS-client
communications contributes to the complexity of pro-
ject management. Finally, there are factors associated
with the project itself that increase coordination and
communication tasks. For example, team members of-
ten work on separate ISD tasks (e.g., analysts identify
requirements and programmers write code), especially
for large development efforts (Zmud 1980, Ahituv,
et al. 1984). Further, there may be multiple people
working on one task. Since these individuals bring
different knowledge and perspective to the task (Curtis
et al. 1985), the project leader must find a way to
Figure 1 Organizational Literature Concept of Control
Source: Ouchi 1979, p. 843.
Knowledge of the Transformation Process
Behavior or
Output
Measurement
Ability to
Behavior
Measurement
2 O RG AN1 ZATI O N c“l EN € u/Vol. 7, No. 1, January— February
integrate the separate knowledge bases and indepen-
dently created products into a coherent whole (Walz
et al. 1993).
This paper proceeds as follows. In the next section, a
theoretical mode1 of control is developed and hypothe-
ses are generated. The research methodology is de-
scribed in the following section. Next, the data analysis
strategy and results are presented, followed by a dis-
cussion of the findings. Finally, limitations are noted
and conclusions are drawn.
Development of a Theoretical Model
and Hypotheses
There are two broad categories of control discussed in
the literature: formal and informal (Jaworski 1958,
Ouchi 1979). Formal control is viewed by organiza-
tional researchers as a performance evaluation strat-
egy, where either behaviors or outcomes are measured,
evaluated, and rewarded (Eisenhardt 1955). This sug-
gests that there are two types of formal control: behav-
ior-based and outcome-based. This view of control stems
from the work of Thompson (1967) and Ouchi (1979).
In Ouchi’s conceptualization, the choice of a control
strategy depends on “knowledge of the transformation
process” and “ability to measure outputs.” His model,
shown in Figure 1, suggests that if knowledge of the
transformation process is perfect, that is, if organiza-
tions know the precise behaviors and processes that
will transform inputs into outputs, they can use behav-
ioral control, evaluating the activities of the controllee
and basing rewards on whether he followed the correct
behaviors. If it is possible to measure the organization’s
desired result, outcome control can be used: outcomes
are evaluated and rewards are based on whether the
controllee produced the desired output, regardless of
the process or behaviors followed.
Like organizational theorists, agency theorists
(Jensen and Meckling 1976, Mitnick 1982, Arrow
1985) note that behavior-oriented contracts reward
agents (controllees) on the basis of their behaviors, and
out- come-oriented contracts reward agents according
to the consequences of their behaviors. Agency theory
recognizes that outcomes are a function of the agent’s
effort level as well as uncertainties in the task environ-
ment. Moreover, where Ouchi proposes that behavior-
based control can be used only when knowledge of the
Output
transformation process is perfect, agency theory argues
that behavioral contracts can be structured when
knowledge is imperfect i/ principles (controllers) invest
Rituai and Ceremony, in information systems in order to observe or monitor
’Clan" Control
the actions of agents. Thus, agency theory adds to
1996
 LAURIE 1. KIRSCH Miinagement oJ’ €’omplex Tasks in Org‹inization.s
Ouchi’s conceptualization by positing that the choice of’
a control strategy is also dependent on “behavior ob-
scrvability”: the extent to which the controller has
ac:cess to informati‹›n systems that reveal the con-
trollee’s actions. These information systems, among
‹other mechanisms, include boards of directors, ac-
counting systems, personal observation, and evaluative
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meetings.
Informal controls differ from formal controls in
that they are base‹l on social or people strategies
I F.isenhardt 1985, la vorski 1988). One type of informal
control is known as lan control (Ouchi 1979): the use
‹ii selection processes and social mech‹inisms to control
the behavior of individuals. Ouchi (1950) describes a
clan as any group ‹ ›f individuals wh‹› have common
goals and who are clependent on one another; exam-
ples may include a profession or a labor union. To
implement clan conti of, the organizational group culti-
vates common value s, philosophy, and approaches to
problem sr›lving within the clan. Careful selection of
members and socialization help propiigate these com-
ion values and beli‹:ls, resulting in individuals with a
strong sense of iden tity with and commitment to the
group. Rituals and 'eremonies serve to identify and
reinforce acceptable behaviors among members of the
chin, and individuals are rewarded for acting in accor-
‹tance with the group’s values. Ouchi ( 1979) p‹isits that
chin control will be implemented when knowledge of
the transformation process is imperfect and outcomes
are difficult to measure (see Figure 1 ); in fact, he
‹irgues that the pro) her behaviors are often unknown
and desired outcome s evolve over the course ‹if time.
t3uchi provides the following example. In a research
lal›, it is difficult to know the precise behaviors that, if
followed, will lead to scientific breakth roughs; it is also
hard to identify desired outcomes in a way that enables
the measurement of ,cientists’ r›utputs in a meaningful
‹›r timely way. As an alternative to l›ehavior or out-
come control, clan control can be implemented by
rarefully selecting inilividuals with appropriate profes-
sional training, socializing them to the goals and values
‹›f the clan, and rev arding them for participating in clan-
approved rituals, such as attending conferences and
publishing article s.
A second type of informal control is self-regulation
c›r .self-control: that is, the study c›f how and when
individuals in organizations control their own actions.
T“his concept is consistent with the definition of self-
miinagement (Manz c t al. 1957, Erez and Kanfer 1953):
an individual sets his own goals, m‹initors his own
work. and rewards i ›r sanctions himself accordingly.
Whereas clan control is a function of being s‹icialized
O eG AN I ZAT U3 I S C I ENCE / Vol. 7, No. 1, January—February 199fi
into a group, self-control stems from individual objec-
tives and standards (Jaworski 1988). The difference is
subtle. With self-control, an individual monitors his
behavior .ind rewards car sanctions himself accordingly.
With clan control, monitoring, rewarding and sanction-
ing .me a functit›n of the group. Consider the following
example ui' self-control. An IS programmer, because he
believes that extensive documentation is critical, sets a
personal goal of documenting the computer code he is
writing; he monitors how well he is progressing over
time; a nd intrinsically rewards himself for completing
the jol›, cnfirefy in‹lependent of formal organizational
control mechanisms or clan norms. Tasks involving a
great dcal of autonomy, creativity, or intellectual activ-
ity are goo‹l candidates for self-control since it is
difficult f‹ir controllers to identify appropriate behav-
ir›rs (hlanz and Sims 1980, Greenberger and Strasser
198a). Self-managed individuals are intrinsically moti-
vated I o ‹ichieve their objectives (Manz ct al. 1987),
dci’ine ihcir own goals and processes appropriate for
the task, ‹ind need feedback to inform them about their
perf‹›rmance (Kerr and Slocum 1981, Ashford and
Cummings 1983). Controllers can encourage self-regu-
lation lay ‹illc wing individuals to select tasks and ways
of w ork ing, hissing ofgitflizational rewards, in part, on
how well individuals manage their own work
(Von C linow 1983. l98'i). The characteristics of behav-
ior. ‹but corrie, clan, and self control are summarized in
"Table I .
Development of a Research Model
Research on control has been dominated by conceptual
work rather than empirical work (Flamholtz et al. 1985,
Merchant 1988), and there is a lack of agreement on
the me‹ining r›f key constructs and their relationships
to e.ich other (Merchant and Simons 1986, Merchant
1988). One relationship that has often been con-
t’ounded in the literature is the relationship between
monitoring alul the exer‹’ise oJ’ control (i.e., the regula-
tion of contrt›llee behaviors): monitoring is sometimes
viewed as part of control (e.g., Simons 1987, Snell
1992) and other times viewed as an antecedent to the
exer‹:ist of control (e.g., Koontz and Bradspies 1972).
Unlike much prior work, Eisenhardt (1985) is clear
abt›ut this rel‹itionship, noting that monitoring serves
as an inlormiition system and makes behaviors observ-
able. whereas evaluation and reward constitute the way
in which actions are regulated. This perspective implies
that the process oJ obtaining information on a con-
trolled’!› behaviors is nt›t the same as acting on that
inftirm‹tti‹›n in order to change the person’s behavior,
that is, it does not assume that the controller necessar-
3
 LAURIE J. KIRSCH Management of Complex Tasks in Organization.s
Table 1 Characteristics of Four Modes of Control
BEHAVIOR
Behaviors that transform inputs to outputs are known
Controller monitors and evaluates controllee’s behaviors
Expllclt link exists between extrinsic rewards and followlng
behaviors
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OUTCOME
Desired task outcomes are known and measurable
Controller evaluates whether outcomes were met.
Explicit link exists between extrinsic rewards and producing
out- comes
CLAN
Task-related behaviors and outcomes are not prespecified
Goals are determined by clan and evolve during the task perlod
Clan identifies and reinforces acceptable behaviors
Rewards are based on acting in accordance with clan’s values
and attitudes
Shared experiences, values, and beliefs among the clan
mem-
bers
Members exhibit strong commitment to the clan
SELF
Controllee sets own task goals and procedures
Controllee is intrinsically motivated
Controllee engages in self monitoring and self evaluation
Rewards are based partly on controllee's ability to self manage
ily understands the processes and behaviors the con-
trollee is following.
Eisenhardt’s insight comes from integrating Ouchi’s
theory of control with agency theory into one model
that predicts the choice of control strategy. From Ouchi,
she notes that “outcome measurability” and “knowl-
edge of the transformation process” are predictors of
control strategy; from agency theory, she includes “be-
havior observability” and “uncertainty” as predictors.
Eisenhardt tested this integrated model in the retail
sales compensation context. In conducting the empiri-
cal study, she equated Ouchi’s notion of “knowledge
of the transformation process” with “task program-
mability,” which is defined as the degree to which ap-
propriate behaviors can be specified in advance. It is
important to note that by equating “knowledge of the
transformation process” with “task programmability,”
this dimension is considered a characteristic of the task’,
in other words, it is a function of whether documented
behaviors exist. Eisenhardt operationalized control
strategy in terms of monetary compensation, arguing
that salaries or hourly rates are a form of behavior
4 O R G ANI ZATI O N S oI ENC E / Vol. 7, No. 1, January—February 1996
control, while pay plans that include commission con-
stitute outcome control. The results from a survey of 54
retail stores suggest that when tasks are programmable,
or behaviors are measurable (observable), behavior
control is implemented; when the cost of outcome
measurement is low, or outcome uncertainty is low,
outcome control is used.
Govinctarajan and Fisher (1990) extended this line of
research into the strategy literature, further refining
Eisenhardt’s and Ouchi’s models. In particular, they
modified Ouchi’s original model to include the behav-
ior observability construct from agency theory, and
they retained the notion of task programmability from
Eisenhardt’s work. Govindarajan and Fisher’s model
suggests that behavior observability, outcome measura-
bility, and task programmability are antecedents of
type of control strategy.
Applying this line of research, and in particular the
“task programmability” construct, to ISD project man-
agement presents certain difficulties. First, the project
leader’s job encompasses a variety of human, financial,
and technical ctimponents (Slevin and Pinto 1957).
While it may be possible to specify a set of activities or
behaviors for ISD project leaders to follow, there is
still much uncertainty about a project’s outcomes that
results from those behaviors, especially for the non-
technical components of the job. Because the link
between following a prescribed set of behaviors and
generating known outcomes is tenuous, “task pro-
grammability” does not appear to be a particularly
useful construct for studying the control of ISD project
management.
Second, it is important to recognize that the con-
troller’s capabilities to observe the behaviors that con-
trollees engage in does not necessarily mean that they
will be able to evaluate, reward, or sanction the con-
trollees based on what they observe. Since ISD efforts
are interdepartmental, both user and IS management have
reason to control the project teams; however, their
levels of understanding about the systems development
process can vary greatly, and there is no guarantee that
the large amount of managerial and technical informa-
tion produced during the ISD process is meaningful to
them. It can only be useful to those controllers who
truly understand the meaning and implications of the
data. Thus, the degree to which controllers can observe
behaviors and make sense of them can differ dramati-
cally. This implies that “knowledge of the transformation
process” is not simply a matter of articulating a set of
behaviors, but it is a function of how well the controller
understands the task.
Coovrioht 2001 All Riohts Reserved
 To extend this line of research into l he ISD manage-
ment c‹›ntcxt, then, t he task programmability construct
is replaced with “cr›utroller’s k nowle‹ige of the trans-
formation prr›cess,” which retcrs to the controller’s
knowledgC ilbout lSI J. This suggests that type of con-
t r‹›l is dependent ‹›i behavior observability, outcome
measurability, hand t he controller’s knowledge of the
i i.tnsformation proce ss. The research m‹›del, shown in
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I igui c 2, is a retincincnt ‹a1 Govindar: jan and Fisher’s
( I “J9ti) model. It is ink portant to note that the depiction
‹›t ‹i certain mocle c›f ct›ntrol in cach cell is nr›t meant
It i imply that mocJes of control ‹occur independently.
ltathcr. the intent i• tr› predict the rcl‹itive extent to
w hich the various m‹odes of control arc present. While
t he model :ippears t‹ be descriptive, C ovindarajan and
I is he r ( l9'i0) point ‹but that il is normative ‹is well,
implying I h‹it fr›r el lective pcrli›rmance, an organiza-
i it›n should use the I ‹arm of control specified” (p. 261)
in cach cell. The rai ionale for the hvpr›theses gener-
‹ited from Figure 2 i explained next.
Co nsider first cells 1 and 3. Agencv theory suggests
th‹tt when 1 ehavior ‹ observability is high, behavior
con- trol will he used: t lie more contrt›llcrs monitor the
Figure 2 Research Model
Predictions in cells 1, 4, 5, 7, and 8 differ from
Govindarajan and Fisher's (19901 model, where the
respective t›redictions are Outcome or Behavior;
Clan; Behavior Behavior; and Clan
Controller's Knowledge of the Transformation Process
Behavior Ou‹ come
observability
measurability
w B v ha yGOF
observability
Cell 4 Cell 7
High behavior
Behavior Clan
observability
IAWOUtOOm
Cell 4
Self
‹ bservab›Iiry
b3 R€k S Id \ 11 O^' S C’I ENt‘i /Vol. 7, Nc›. 1, Jan iiary—February 1996
Copyright O 2001 All Rights
efforts ‹if the project leader, the more likely they will
implement behavior-based control. Further, Ouchi’s
theory suggests that as knowledge of the transforma-
tion pr‹:›ccss increases, the use of behavior control will
increase; the argument made here is that it is the
‹ on f/ olli•r’s knowledge of the transformation process
that is important: the more knowledgeable the con-
trollers are ‹ibout ISD, the more likely they will im-
plerrient behavior-based control. This ‹argument is
consists:nt with Snell’s ( 1992) finding that, among other
things, the use of behavior control is dependent on
“hat ing complete cause-effect knowledge”(p. 317), and
suggests that behavior control will be implemented in
cells 1 antl 3.
t“untrol theories also suggest that the controllers in
the situations described by cells 1 and 5 have two
options. l3eciiuse outcome measurability is high, one
opti‹›n is to implement outcome-based control. While
this approach is feasible, agency theory suggests that it
place:s risk ‹›n a risk-‹iverse controllee. In the ISD
c‹intext, thcrc would also seem t‹i be a bias against the
use •f ‹outcome contra 1: with outcome control, errors
may not he detected until the system is completed;
howeve r, the costs of correcting the errors are much
greater at this point than during the early phases of
ISU (Pressm:in 1992, Walz et al. 1993). According to
agency thcorv, a second option in cells 1 and 5 is to
purchase inf‹›rmation about the controllee’s behavior
and structure a behavioral contract. This makes sense
i{ the i-ontroller understands the transformation pro-
cess we11 enough to recognize which behaviors are
appropriate (cell 1). For example, to ensure that the
users’ require ments are met, the controller can monitor
the ‹:oritr‹i1lee in a number of ways, including partici-
pating i n walk-throughs to review project progress, and
nt›ting the way in which the project leader incorporates
a devel‹ipment method‹ilogy to structure the ISD task.
lf t he t ‹introller is knowledgeable about ISD, she can
observe these types of activities, evaluate whether they
are .ipJ›ropriate, and reward or sanction the project
leader accor‹1ingly. However, if the controller is not
knt›wle‹âgc able, it is unlikely that she can make sense
o1 and ev‹iluiite what she observes; thus, it is unlikely
she will clepcnd on behavior control mechanisms to
regulate the behavior ot the project leader. Thus, when
behavior ribservability is high, that is, when information
about the ISD task is available, the controller will
implement behavior control only if she is knowledge-
able about the systems develc›pment process (cells 1
anti 3). Thus. Figure 2 suggests that behavior observ-
ability antl controller’s knowledge of the tr‹insforma-
5
 LAURIE 3. KIRSCH Management of Complex Tasks in Organizations
tion process interact to determine the level of behavior
control:
HYPOTHESIs 1. Behavior observability and controller’s
knowledge of the transformation process haue a positive
interaCtiue effect on the leuel of’ behauior control.
Since the controller in cell 5 is not knowledgeable
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about ISD, behavior control is not an option. Control
theories argue that when outcomes are measurable,
controllers can use outcome-based control, regardless
of their knowledge of the transformation process. For
example, a controller does not have to understand the
intricacies of ISD to know whether the system was
implemented on time. Thus, in cell 5, the controller is
more likely to use her ability to measure outcomes and
structure an outcome-based contract, passing on some
risk to the project leader. Further, consistent with
control theory predictions and previous empirical work
(e.g., Snell 1992), the controllers in cells 2 and 6 will
most likely use outcome control because outcomes are
measurable. Based on these arguments, Figure 2 sug-
gests that outcome control will be used in those cells
where outcomes are highly measurable, except where
both behaviors are highly observable and controllers
are very knowledgeable, in which case behavior control
will be used and unnecessary risk will not be passed to
controllees (i.e., in cells 2, 5, and 6, but not in cell 1):
HYPOTHESIS 2. Behavior observability and controller’s
knowledge of the transformation process haue a negative
interactive effect on the leuel of outcome Control.
Next consider cell 7. Outcome control is no longer
an option since outcomes are not measurable. While
behaviors are observable, they are not very meaningful;
thus, behavior control is not an option. However, be-
cause behavior observability is high, it suggests that the
controller has invested in information systems such as
reports, meetings, and personal observation to follow
the progress of the project. Given that behavior and
outcome controls are not possible, this high level of
behavior observability provides the controller with an
opportunity to implement clan control: she can use her
time with the controllee to explain group values, norms,
and problem-solving approaches. For example, when a
user works with the project leader to identify system
requirements, to lay out screen and report formats, and
when she attends project meetings, she can sensitize
the project leader to the goals of the user community
and build a sense of trust between the user and IS.
This is consistent with Beath’s (1987) argument that
successful social contracting is exercised through a
6
CoDvriaht O 2001 All Riohts
heavy reliance on controller—controllee interaction that
leads to a sense of trust and commitment between the
parties. Thus, Figure 2 predicts that the use of clan
control increases as behavior observability increases, as
outcome measurability decreases, and as controller’s
knowledge decreases. The model suggests that these
three independent variables are not only related to
clan control, but interact to determine the level of clan
control:
HYPOTHESis 3. Behavior observability, outcome
mea- surability, and controller’s knowledge of the
transforma- tion proces.s haue an interactive effect on
the leuel of clan control. In particular, high levels of
behavior obseruahil- ity, low levels of outcome
measurability, and low leuel.s of controller's knowledge
of the transformation process lead to increased use of
clan control.
Finally, consider cells 4 and S. Prior work predicts
the use of clan controls; however, it seems more likely
that the controller will induce the project leader to use
self-control. Since behaviors are not observable and
outcomes are not measurable, behavior and outcome
controls are ruled out. Further, the low level of behav-
ior observability suggests the controller is not closely
supervising or interacting with the controllee, resulting
in less opportunity for clan-type conditions to evolve. It
also suggests that the controllee has much more discre-
tion or freedom in choosing and managing his work
(Alavi et al. 1986, Manz and Angle 1986), implying the
presence of self-control. The absence of observable
outcomes means that a set of precise project goals has
not been articulated. This, in turn, suggests that the
controllee may self-set goals, again implying the pres-
ence of self-control. Thus, in cells 4 and 8, the con-
troller is likely to rely on the controllee’s ability to
manage his own work. Specifically, the model in Figure
2 predicts that self-control is a function of behavior
observability and outcome measurability. The model
also implies that outcome measurability and behavior
observability have an interactive effect on self-control,
suggesting, for example, that low behavior observability
results in an increase in self-control only when out-
come measurability is low:
HYPOTHESIS 4. Behavior obseroubility and outcome
measurability haue a negative tnteractiue effect on the
level of self-control.
Methodology'
Research Design
While there are a number of stakeholders involved in
ISD, in this research, two key relationships are the
O RG AN1ZATI O N S Cl KN Cu/ Vol. 7, No. 1, January—February 199f›
 LAURIE J. KIRSCH Mr inugemrnt ‹aJ L ompl‹'x tasks in £J ryanizanon s

target of study. the relationship between the systems
development manage r and the project leader, and be-
tween the user contact and the project leader. The user
cc›ntact is the key lia isr›n person in the client area, who
,resists in arious phases of the development process.
for example, require ments specification, testing, and
implementation. The development m anager and user
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participants. Each participant was contacted by the
rcse arc’her, who conducted (on average) a 15-minute
teleyiht›nc interview. The purpose of the phone inter-
view w‹is primarily to obtain the person’s commitment
to the research. since the questionnaires were quite
long: 12 pages for the controllee, and 9 for the con-
troller. At the same time, relevant background infor-

cc›ntact exercise cram rol over the project leade r, who is

mation w as collected. After the interview, the notes
the tocal point ot’ the ISD cffo rt thFtn 8h managing the were transcribed and the appropriate questic›nnaire
diiy-i o-da›' process ‹ nd making decisions anal choices was m‹iilcd. Ol the l tJ5 people interviewe‹1, 101 re-
thdt are ultimately iiicc›rporated into the system. In this turned the questionnaire, for a response rate of 96Wo.
reseiirch, then, the IS manage r and user contact arc Ht›wever, because of missing data, three projects were
i hc• c’ontrollers, and i he prt›jCct leader is the
eventually di oppcd frum the analysis, resulting in 96
c‹introllee. usable responses, for a response rate of 91 %.
these relatic›nships (clevclopinent ir ‹in ^8e •- project The participating firms are all large, representing
leader, and user com tact—prc›jcct leafier) were chosen
vari‹›u›. industries, with annual revenues ranging from
because the cuntrtill‹'rs have trec|uerit and direct inter-
$1fi8 million to $49 billion, averaging a little over $9
action with the proj‹ ct leader rluring systems develop-
billion. The systems were developed by IS departments
irenl, and have mu:h to lose if their contr‹›l efforts
within these organizations; the number of IS employ-
tail; thus, both IS ni,tnagers and user contacts play key
ees ranged from I l to 5,0()(), with an average of 572.
.‘tales in c‹int rolling the man agemcn t c›f ISD tasks.
Twenty-seven of the 3ñ systems were designed to run
L urther, given thal “control lc r’s knowledge of the
on niainirames; the remainder were developed for
transformati‹in prcic‹ ss” is a key consl ruct, it was criti-
mid range and person‹il computers. Development ap-
‹Tal t‹i sample frtim a ptipulatic›n that e xhihits variabilitv
proiichcs incl uded the systems development life cycle,
.«'ross this construe . It seemed like ly that most IS
information engineering, prototyping, and in-house de-
development managt rs would he quit c knowledgeable
velopers nietlic›dologies. The size of the projects varied,
ahout ISD, whereas there would be n iuch more vari a-
both in terms of the number of person days to com-
tion acr‹ass user cc›ni acts. While IS m‹inagers and user
plete I he project (range: 42 to 45,000 person days;
cc›nt:icts may have v.irit›us reasons to exercise control.
average: 7,938), and the elapsed time needed to de-
1 he IS literature sugi;csts they have fuur g‹ als for ISD
velop i he system (range: three months to seven years;
pi’ojccts. ln particul: ir. cc›ntrollers want the ISD pro-
average: two years). At the time of data collection, 11
‹:c ss to result in systt me: that meet users’ require ments,
projects were in the linal stagcs of‘ implementation.
that arc delivered or time’, that adhere to lS .stundar‹ls:
Fourteen of the projects were completed in the six
.iricl whose development costs do not exceecl huñgets
month!› prior tt› data collection; six projects, in the
i Hallam and Scrivcii 1976, I’om t')87, Kumar and
previous 1 2 months: and one was completed lS months
13 orn-Andersen 199t1, Banker ‹ind Kemerer 1992).
prior to dicta Collection. While IS months was a longer
T‹› study the relat onships describeLl in thc research
time li ame than the tit her projects, the detrtils of this
hypotheses, question naires were desi,¿ncd to measure
particular project wcre very s‹ilient to the piirticipants
l›chavior observability, outcome measurability, con-
because it w‹is one t›f the last major efforts undertaken
ir‹allcr’s knowledge ‹›i‘ lSD. anal mode of control (with
before mt›st application work was outsourced. Further,
respect to the means with which IS managers and user
facts given by all three participants during the tele-
ccint:icts exercise en ntrol over ISD project Ie‹iders to
phone interviews were in complete agreement, so the
crisui’e the: delivery ot system s thal meet the four
decision was made to keep this project in the sample.
pi oject goals). The clue stionnaires were pretested with
Project teams varied in size from three tto approxi-
lS project leaders, sy stems development managers. and
mately 1(1(1 ‹ind included programmers, analysts, and
user contacts associn ed with four ISD projects at three
othe r technical personnel, according to the needs of
i Jl'gtlnizatiOflS.
the pr‹›ject. Fhe user c‹intacts varied in terms ef orga-
After the pretest, firms fr‹im the Midwest and South
nizational p‹isition and experience with IS projects.
were contacted and asked tra participate in this re-
Ninctecn r›f the 35 occupicd positions in which a major
search; 17 agreed. E.ich firm identifieil one to i ive ISD
responsibility is to act as a liaison between end-users
pi’ojects, as well as t he IS project 1eac)er, his manager,
and IS departments. "I“wenty of the 35 user contacts
arid user contact a›sr›ciated with cach project. This
were involved in relatively few (zero to five) informa-
resul ted in a total ‹ ›t 35 projects anal 105 individual

(3ftG.\ N IZA 1’I O N S I I k Nt 1 / ¥'ol. 7, N u. 1, Jan uary—February 1996

 LAURIE J. KIRSCH Management of Complex rasks fn Orgonizntions
tion systems development efforts prior to the current
effort.
Instruments
New scales were developed to measure behavior ob-
servability, outcome measurability, and controller’s
knowledge of the transformation process. In addition,
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a measure of how important the project goal is to the
controller (i.e., meeting user requirements; delivering
the system on-time; keeping costs within budget; ad-
hering to standards) was also developed. This construct
was added after analyzing the pre-test data, since those
preliminary results suggested that if the project goal
was unimportant to the controller, then she did not
exert control at all.
Determining how to measure mode of control (be-
havior, outcome, clan, and self) was especially trouble-
some since much of the prior research measures it in a
somewhat simplistic approach, often conceptualizing
control as a unidimensional construct and measuring it
with a single question. (See, for example, Ouchi
(1978) and Govindarajan and Fisher (1990).) In a
manner similar to Snell (1992), the approach taken
here was to recognize the multidimensional nature of
control, con- structing composite measures. In
particular, for each mode of control, key conditions
were identified, the existence of which would strongly
suggest that a partic- ular approach was being used by
the controller to regulate controllee behaviors. First,
since formal con- trols are written and management-
initiated (Jaworski 1988), the measures of formal
behavior and outcome controls include an indication of
the extent to which behaviors and outcomes are known
and prespecified by someone other than the controllee,
as well as an as- sessment of the degree to which
organizational rewards are based on following
prescribed behaviors or produc- ing desired outcomes
(i.e., the link between rewards and following behaviors
or producing outcomes). Sec- ond, when clan control
is operating, organizational goals are typically
unknown at the start of a project, but instead evolve
over time (Ouchi 1979). Further, the clan exhibits
shared values that are cooperative in nature (Birnberg
and Snodgrass 1988). Given the simi- lar value set and
the desire to work together, an individual’s high level
of commitment to the group is an indication that clan
controls are operating. Thus, the measure of clan
control combines measures for goal instability and
commitment to the clan. Third, when self-controls are
operating, the individual sets his own goals (Manz et
al. 1987), which may or may not be formally
documented. This notion of self-set goals con- trasts
sharply with the approaches taken when formal
8
Copvri0ht O 2001 All Rights
or clan controls are operating: with formal control,
goals are typically set by a supervisor or management;
with clan control, goals evolve in concert with the clan’s
value set. Additional constructs from the sclf-control
conceptual literature include: controllee self-monitor-
ing; controllee self-evaluation, intrinsic motivatic n of
controllee; and degree to which the controller rewards
the controllee for exhibiting self-management. Thus,
measures for each of these four aspects, along with a
measure of the extent to which the controllee is the
source of the project goal, are combined ter indicate
how strongly self-control is operating.
Recall that what is of interest is the strength of
behavior, outcome, clan, and self-controls put in place
by each of the two controllers to ensure that the
project leader delivers a system that meets the four
project goals. Because the focus of the research is on
multiple controller—controllee relationships and multi-
ple-project goals, the design of the questionnaires is
complex. In particular, each construct is measured
multiple times by modifying the question for each goal
and/or for each controller, as appropriate. To reduce
threats from common source variance, the dependent
variables were measured on the project leader (control-
lee) questionnaire, while the independent variables and
goal importance were measured on the controller (IS
manager and user contact) questionnaire. Where possi-
ble, existing instruments were used; however, all items
were modified to fit the ISD context. Specific items
and their source are in the Appendix.
Instrument Validation
Internal Consistency. Internal consistency was mea-
sured by computing Cronbach’s alpha fer each scale.
The conventional cut-off for acceptable reliability is
0.70 (Nunnally 1978). In Table 2, each scale is listed,
along with the number of items measuring the con-
struct, the sample size of the dataset used to compute
reliability, and the reliability. In addition, descriptive
statistics are included. Each item was measured on a
scale of one to seven.
Because self-monitoring (both feedback from the
task and feedback from agents) and self-evaluation
have reliabilities less than 0.70, these scales were
dropped. Conceptually, dropping these scales does not
mean that the essence of the self-control measure has
been lost, as there was some overlap in the constructs
being measured. In particular, if a person is highly
intrinsically motivated (a scale that was retained), he is
rewarding or sanctioning himself. In order to reward or
sanction himself, that person has to monitor and evalu-
O RGAN i ZATI O N S ci r xc u /Vol. 7, No.1, January—February 199a›
 LAURIE 3. KIRSCH M.anagement oJ L"omple:s Fas'ks tn £lryanizations

Table 2 Scales and Reliabilities

S‹:ale # items a h, mean std dev range

PI especifieo Behaviors 3 136 CI73 3 73 1 59 1 00—6 67

L ink fJetween Behaviors ñ. Rewards 2 260 3 53 1 E1 1 00—7 00
Prespecited Outcomes 3 133 4 27 0 96 2 00—7 00
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Link Between Outcomes . \ Rewards 264 4 38 1 72 1 00—7 00

Commitment to the Clan 9 08 4 99 1 11 2 56—7 00
Goal Instability 2 136 4 42 1 93 1 00-7 00
LJ ntrollee as Source of I .cal 2 136 3 54 1 99 1 00—7 00
S °lt Monitoring (Feedbac frcm Task) 2 136 4 98 1 56 1 00—7 00
Self Monitoring (Feedba‹: from Agenls/ 2 136 4 32 1 68 1 00—7 00
S‹*lf E valuation (Kncwlefl‹ e ot ResrJlts) 2 1.31 5 00 1 55 1 00—7 00
lntrinr›ic Motivatir›n 4 132 5 79 1 01 3 25—7 00
Reward for S°-If Manager› ,ent 1 n/a 4 17 1 91 1 00—7 00
Behavior Ob'›ervability 4 2?7 3 92 1 50 1 00—6 75
Outc‹ame Measurability 249 5 54 1 49 1 00—7 00
LJ.3ntroTIer’s Knowledge 268 4 45 2 06 1 00—7 00

’ ! he sample size depenr›s on how the variable was measured (e g once per pro ect, once per controller, once per goal) For some variables,
tne \›oss/D/e sample sizt is 35 projects x 4 goals x 2 controllers or 260 F‹›r ethers, it is 35 pro ents x 4 goals - 140, or 35 pro ects x 2
controllers 70 Actual s imole sizes differ slightly due t‹› trussing aata

il t his work as the ar i e t progresses. Thus, dropping

the self-monitoring and self-evaluation scales, which the m‹:asures of the dependent variables are formed by
averaging the scores for each of the scales of the
exhibit poor psychometric properties. should not have
composite measures. In particular, behavior control is
an adverse effect on how well self-c‹›ntrol is measured.
me‹isured by averaging the scores for pre-specified
behavi‹›rs and the link between rewards and following
C‹›nt›erge.nt arts f9is‹:riminant Validity. Multitrait-
bchavitirs; outcome control, by averaging the scores
multimethod matrix es (Campbell and Fiske l9ñ9,
for pre-spccil’ied outcomes and the link between
Bagozzi l9btl) were used to assess convergent and
rewards and pr‹iducing outcomes; clan control, by
discriminant validitics, where the multiple itcms used
averaging the scores i'or gt›al instability and
tc› measure each construct correspond to Campbell
commitment to the clan; and self control, by averaging
and Fiskc’s notion of multiple methods. lty examining
the scores for controllee as s‹ource ‹if the project goal,
the c‹irrclations o1’ an ilem measuring oiie construct
intrinsic motivation of the controllee, and reward for
both with other items measuring the same
self-management. For each project, then, there are
construct (‘ within-c‹anstruct” ‹'‹irrelations) and with
eight measures of each type of control: ‹one measure
items mea- siriig different c‹instructs (“cross-
per controller per project goal. Similarly. the
construct” cor- relations). the matt ices provide
independent variables are measured eight times per
some evidence f’or
project.
c‹inve•8C nt and disci iminant validities. lividence of the
ft›rmer comes lr‹illi the “sufficiently large” within-
c‹instruct correlations ranging from 0.29 to (I.8f›, all
significant at 0.tJ0l. The relatively few number of in- Analysis
stances where cross c‹instruct correlations are greater One way to approach the analysis is to regress each
than within-construe t correlatit›ns (25 of 83(1 compar- type oi’ control on goal importance, behavior observ-
isons) provides evid‹ rice of discriminant validity. ability, outc‹ime measurability, and controller’s knowl-
Overall, the results suggest that the instruments re- edge of the transformation process. However, because
tained are reliable ind valid. Based on this analysis. multiple data points are drawn from each project, the
responses may not be independent and the regression

bJ aG.\N1ZATI ON Sc’i eN‹ i / Vol. 7, No. 1, I anuary —February

1996 9
CoDvriaht O 2001 All Riohts Reserved
 LAURIE 3. KIRSCH Management of Complex Tasks in Organizations
error terms may be correlated, violating an assumption
underlying regression analysis. In particular, for this
data, some of an individual’s responses with respect to
the four goals within a single project are highly corre-
lated, while others are not. The ranges of correlations
are: behavior observability: 0.12-0.65; outcome mea-
surability: — 0.01—0.34; controller’s knowledge of the
transformation process: 0.68—0.88; behavior control:
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0.50-0.83; outcome control: — 0.08-0.41; clan control:
0.12—0.63; and self-control: 0.66-0.84.
An alternate approach would be to conduct the
analysis at the project level by averaging the scores for
each construct (i.e., for each project, there would be
one score for behavior observability, one score for
behavior control, etc.). This approach is problematic
for two reasons. First, since organizations have multi-
ple goals for ISD projects, it is conceivable that they
implement different control strategies to ensure that
the different outcomes are met. The results of the
pretest provide some support for this position. For
example, at one organization, the project leader and IS
manager explained that the requirements and time-
frame were both prespecified and documented in a
Project Notebook. The IS manager implemented out-
come control to ensure the implementation date was
met by tying part of the project leader’s performance
review and subsequent raise to meeting that date;
further, he implemented behavior control to ensure the
required functionality was built into the system by
meeting regularly with the project leader to monitor
the behaviors and processes she was following, to as-
sess the appropriateness of her efforts, and to redirect
her work, as necessary. There is also some support for
examining control at the project goal level in the litera-
ture. For example, Banker and Kemerer t1992) suggest
that organizations use four different performance
metrics for software development projects: budget,
schedule, effectiveness (e.g., user satisfaction), and
maintainability (e.g., standards). They examined two
organizations and found formal control mechanisms in
place for budget and schedule, no mechanisms for
maintainability, and few mechanisms available for mea-
suring and controlling project effectiveness. Similarly,
Jones (1991) notes that there are wide variations in the
use of software metrics by various industries, pointing
out that some firms measure system quality, user satis-
faction, budget, and schedule, while some firms do not.
The implication of both Jones (1991) and Banker and
Kemerer (1992) is that organizations at times measure
and track some project goals. This, in turn, suggests
that formal control mechanisms are put in place to
ensure that a subset of project goals is met, and it
10
allows for the possibility that other mechanisms may be
implemented to control for other project goals. Note
that the argument here is not that project responsibtlities
are split along different potential goals, only that con-
trollers may implement different control strategte.s for
the different project goals.
The second reason for not analyzing the data at the
project level is that low power exists with a sample size
of 32. When power is low, the phenomenon may actu-
ally exist, but may not be detected because of a weak
statistical test (Baroudi and Orlikowski 1989). Follow-
ing Cohen’s (1988) approach for determining sample
size suggests that a sample of 35 is sufficient to detect
a phenomenon displaying a large effect; however,
Baroudi and Orlikowski (1989) argue that it is unrealis-
tic for MIS researchers to expect large effect sizes,
suggesting that a sample of 32 would lead to inconclu-
sive results.
To conduct the analyses, a third approach was se-
lected. The problem of nonindependent responses is
often due to the omission of key independent variables
from the statistical model (Neter et al. 1985, Berry and
Feldman 1985). In order to capture the variance due to
nonspecified project variables (e.g., size of the
project), a dummy variable is included for each
project. Using the dummy variables forces a within-
project analysis. In effect, the analysis is done by
estimating the regression coefficients for the eight data
points within each pro- ject, and then “averaging”
those estimates across the sample. In contrast, a
project-independent analysis would estimate the
regression coefficients by examin- ing all 256 data
points. Thus, if the individual re- sponses within a
project are highly correlated, there is less chance of
finding significant results with the dummy variable
approach. For example, if the responses to the
controller’s knowledge items are identical within each
project, but different across projects, then a project-
independent analysis might find this variable signifi-
cant, but a within-project analysis would not, because
there is no variation within each project. To represent
the 32 projects, 31 dummy variables were added to the
regression equations. Where missing values were
found, means were substituted in order to avoid
computa- tional problems with the dummy variable
approach. The sample size for each regression is 256
(32 projects x 2 controllers X 4 goals).
Besides the three independent variables, goal impor-
tance was also entered into the regression equations as
a control variable. The measure of goal importance is
at the ordinal level. While the inclusion of rank order
data in regression analyses is not universally accepted,
a number of researchers assert that it is acceptable as
O RG ANI ZATI O N S CIEsCu/Vol. 7, No. 1, January—February 1996
Copyright O 2001 All Rights Reserved