The complementarity of control formalization and control flexibility: The contingent effects of competitive turbulence

• Published in: Australian journal of management Vol. 47; no. 4; pp. 773 - 792
• Main Authors: Yang, Feifei, Shinkle, George A, Goudsmit, Mirjam
• Format: Journal Article
• Language: English
• Published: London, England SAGE Publications 01-11-2022; Sage Publications Ltd
• Subjects: Data processing; Economic aspects; Evaluation; Formalization (Philosophy); International relations; Management; Organizational behavior; Organizational effectiveness; Turbulence; ISRAEL; AUSTRALIA; UNITED STATES; CHINA; Competitive turbulence; control formalization; control theory; organizational control; control flexibility
• ISSN: 0312-8962; 1327-2020
• DOI: 10.1177/03128962211067648

We examine how the complementarity of control formalization and control flexibility influences organizational performance across contexts of varying competitive turbulence. We build contingency arguments anchored in the efficiency logic of control theory and investigate both the restrictive and facilitative views of control formalization. Our empirical evidence is based on a survey of top executives from 536 organizations across the United States, Australia, China, and Israel. We find that control formalization and control flexibility are complementary in environments of low competitive turbulence. With increasing turbulence, the complementarity diminishes and shifts toward substitutive effects.