Business Intelligence Use as Levers of Control and Enabling or Coercive Control

Abstract

Background and problem: The business environment is becoming increasingly complex, requiring firms to be more adaptive. Firms need to be able to operate their business while innovating and being responsive to their surrounding. At the same time, the amount of generated data is increasing exponentially, making it increasingly difficult to analyse. Designed to facilitate information retrieval and analysis, Business Intelligence (BI) systems provide capabilities which could support the organization’s management control system. Research aim: The research aim of this thesis is to increase the understanding of how BI is or can be used for the management control. Research questions: To achieve the research aim, the guiding research questions to this study are: What BI tools are used or can be used for management control, and what information sources (internal or external) do they use? To study this, BI was divided into three categories of use: self-service BI, data analytics and business performance management. Second, what different levers of control do these BI tools support and how? This was studied using Simons’s (1995) levers of control framework. Third, how are or can BI tools be designed - in an enabling or coercive manner? This question sought to answer how the design of BI impacts its management control use, or vice versa, and was operationalized through Adler & Borys’s (1996) concept of enabling and coercive control. Research Design: The research questions were studied using a comparative design and semi-structured interviews. Three case organizations and two BI consultants were interviewed. This way, in-depth information on how organizations use BI from the case organizations was complemented with general knowledge on how it can be used from the BI consultants. Discussion and conclusion: The findings suggest a gap between management control use and BI capabilities. Currently, BI tools are mainly used for reporting and business performance management. Alongside this, there is also a development where organizations are investigating the possibilities of using data analytics and more advanced analysis. Further, the findings suggest that external data is not yet being integrated in the BI tools. Additionally, the findings corroborate the notion of BI as an integrated management control system. Through the different BI tools, support was found for all levers of control. However, balance between the levers did not occur per se, requiring managers to balance the use of all four levers. Finally, the different BI tools could be designed in either a coercive or enabling manner, contingent upon the tightness of control desired. This also varied depending on the organizational level where BI was used.