Organizational improvisation and the reduced usefulness of performance measurement BI functionalities

Publisher:
Elsevier
Publication Type:
Journal Article
Citation:
International Journal of Accounting Information Systems, 2018, 29 pp. 1 - 15
Issue Date:
2018-06-01
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Firms are increasingly turning to business intelligence (BI) systems to support their management control activities, while management accounting researchers are increasingly focused on studying beneficial roles of such systems. The extant research focuses on how performance-enhancing effects of BI systems occur via enhanced managerial learning and knowledge creation. The research has however failed to consider how managerial learning and knowledge creation processes can be shaped by fundamental organizational contingencies. This paper ventures into this unexplored space to consider how organizational improvisation may moderate beneficial roles played by BI. We derive the concept of ‘semi-structuring heuristics’ and apply it to theorize that the impact of BI functionalities on performance measurement capabilities is negatively moderated by organizational improvisation. Our hypotheses include two BI constructs (BI-planning functionality and BI-reporting functionality) and two organizational improvisation competences (strategic momentum and organizational flexibility). We test our hypotheses with partial least squares procedures using survey data from 324 top-level managers. We find that BI-planning functionality has a positive effect on performance measurement capabilities that is negatively moderated by both organizational improvisation competences. The only significant effect of BI-reporting functionality is as a positive moderator of the effect of BI-planning functionality. Organizational improvisation competences are quite common and entail managers using only ‘minimal forms’ of performance measurement information. By implication, if the term BI ‘functionality’ connotes usefulness and fitness-for-purpose, then this term appears a misnomer in contexts reliant on organizational improvisation.
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