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Disentangling the effects of organizational controls on innovation
Authors:Karynne L Turner  Alberto Monti  Maria Carmela Annosi
Institution:1. Department of Business and Management, LUISS Guido Carli University of Rome, Villa Blanc, Via Nomentana, 216-00162, Rome, Italy;2. Department of Management and Technology and ASK Research Center, Bocconi University, via Guglielmo Roentgen, 1, 20136, Milan, Italy;3. Department of Social Sciences, Wageningen University, Hollandseweg 1, 6706KN, Wageningen, the Netherlands
Abstract:The strategy and innovation literatures argue that organizational competitiveness is contingent upon firms simultaneously pursuing both process and product innovations. A firm’s control system plays a fundamental role in this regard by managing, motivating, and coordinating employees’ behaviors for the development of its innovative capabilities. Research suggests that in order to develop successful innovation, management must use controls that align employees’ interests with those of the organization while simultaneously allowing employee autonomy to encourage creativity. These disparate functions lead to the control–autonomy dilemma. We argue that managers can address this dilemma by recognizing that the effect of controls on innovation outcomes depends, in part, on the controls’ enabling features and the type of commitment they inspire. Our findings show that employee development, which is the focus of input controls, has a direct effect on process innovation-related behaviors while specified goals, the emphasis of output controls, have a direct effect on product innovation-related behaviors. It is only through employees’ perceptions of managerial support that input controls increase product innovation-related behaviors and output controls increase process innovation-related behaviors.
Keywords:Organizational control  Process innovation  Product innovation  Perceived managerial support  SEM
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