Systems Development Ambidexterity: Explaining the Complementary and Substitutive Roles of Formal and Informal Controls

Abstract

Although formal and informal control mechanisms are often simultaneously used to govern systems development projects, considerable disagreement exists about whether the use of one strengthens or diminishes the benefits of the other. In other words, are they complements or substitutes? Competing theoretical perspectives favor both sides of the argument, and neither the information systems (IS) controls literature nor the information technology (IT) outsourcing literature has addressed this issue. This study theoretically develops the idea that these competing perspectives are mutually compatible rather than contradictory because informal and formal control mechanisms can simultaneously be complements and substitutes. Using data from 120 outsourced systems development projects, it is shown that informal control mechanisms strengthen the influence of formal behavior control mechanisms on systems development ambidexterity (complementary effects) but weaken the influence of formal outcome control mechanisms (s...