The Effects of Organizational Learning on Control System Design
Speaker
Abstract
| The organization design literature, drawing on principal-agent theory, provides a comprehensive framework for empirical research into control design. Recent studies identify factors influencing control design choices and have typically assessed elements of the “three-legged stool” (Jensen, 1998), which includes delegation of decision rights, performance measurement and incentives. We follow Roberts (2004) and expand the control choice set to include a fourth interrelated control choice, namely selection processes. We further add to the literature by explicitly incorporating the firm’s strategy as a determinant of these control choices. We include organizational learning as the strategic variable as it is viewed as one, if not the, most critical success factor in creating enduring competitive advantage through innovation and idea creation. The paper contributes to the literature by assessing not only how organizational learning influences the four control choices, but also whether these choices enable a firm to embed organizational learning as a shared value into the firm. Our analysis, based on a cross-section of senior business unit managers, provides broad support for our expectations. |
| Contact information: |
| Paolo Perego |
