Management Control Systems in the Internet-enabled Business Models : A Case-study on control dynamics: unravelling the interplay within an open-source business model and its ecosystem

This study builds on two concepts: management control (MC) and Internet-enabled business model (IEBM).MC is a wide set of formal or informal mechanisms that the management has implemented for aligning people’s behaviour towards the set organisational goals and answering to control needs that arise from the business environment. In this study, the focus is on a business model context-driven set of controls. Unlike in the discussion of MC as a system is typical, I use the word system to describe such management control that is implemented by the company management for aligning employees’ behaviour towards the strategic targets. In the IEBM, the Internet is crucial infrastructure and enabler for existence. The choice of technology made by company management divides IEBMs into utilisers of paid and free technology. Value creation and capture can only realise by acting as part of an ecosystem of the same technology users. Technology, the ecosystem, value creation mechanisms, and innovation are the central attributes that describe IEBMs. Those significantly affect the design of MCS as well. However, whilst the MCS literature has concentrated on strategic features of innovation and development, the IEBM level of decisions and the MCS package designed because of them, has not yet been explored much in the MCS literature. The case company of this interpretive study is a free technology software developer for system coders globally. This study contributes to our existing knowledge by showing that the MCS package design is two-fold: MCS for the behavioural control within the organisation, and MCS for the external actors in the ecosystem. Further, the MCS package for the organisation is designed around three main control questions: ensuring value creation and capture, diminishing risks, and enabling of innovation. In addition, the package has another layer, where IEBM control systems aim in the direction of external actors, the ecosystem. That layer builds on a strong organisational culture, some very labelling activity, an anchor/core practice, and also on such social, technical, economic, and institutional minimal structures, which provide governance but allow considerable independence at the same. Those structures govern the ecosystem and the IEBM reciprocally.Tässä tutkimuksessa tarkastelen yrityksen ohjausjärjestelmiä (management control, MC) Internet-pohjaisen liiketoimintamallin (Internet-enabled business model, IEBM) johtamisessa. Ohjausjärjestelmät ovat virallisia tai epävirallisia käytänteitä, jotka yritysjohto on käyttöönottanut. Niiden tarkoituksena on edistää määriteltyjen tavoitteiden saavuttamista ohjaamalla ja yhtenäistämällä työntekijöiden käyttäytymistä organisaatiossa. Tässä tutkimuksessa käsittelen ohjausjärjestelmiä ensisijaisesti Internet-liiketoimintamallin näkökulmasta. Käytän sanaa järjestelmä (system) kuvaamaan sellaista ohjausta, joka on yrityksen johdon toteuttamaa, ohjaa työntekijöiden käyttäytymistä, ja joka ohjaa kohti organisaation strategisia tavoitteita. Internet-pohjaisella liiketoimintamallilla tarkoitan liiketoimintamallia, jossa Internet on elinehto. Yritysjohto voi valita maksullisen tai maksuttoman teknologian käytön liiketoimintamalliinsa. Teknologia on avainasemassa, ja arvonluonti onnistuu vain toimimalla osana samaa teknologiaa käyttävien toimijoiden ekosysteemiä. Teknologia ja sen mukanaan tuoma ekosysteemi, arvonluonnin mekanismit, sekä innovatiivisten tuotteiden ja palveluiden kehittäminen ovat IEBM’ien keskeisimpiä piirteitä. Nämä vaikuttavat oleellisesti ohjausjärjestelmien kokonaispakettiin (MCS package), mutta tätä yhteyttä ei ole MC-kirjallisuudessa juurikaan tutkittu. Tämän tulkitsevan tutkimuksen tapausyritys käyttää maksutonta teknologiaa kehittäessään ohjelmistotuotteita maailman järjestelmäkoodareille. Tutkimus osoittaa, että ohjausjärjestelmien paketissa on kahden tasoisia järjestelmiä, käyttäytymistä organisaation sisällä ohjaavia sekä ekosysteemin ohjausta tavoittelevia. Organisaation sisäistä käyttäytymistä ohjaavat järjestelmät keskittyvät kolmeen ohjaustarpeeseen: arvonluontiin, riskien pienentämiseen ja innovaatioiden mahdollistamiseen. Ekosysteemin toimijoihin, eli yrityksen rajojen ulkopuolelle, suuntautuva ohjaus rakentuu vahvalle organisaatiokulttuurille. Lisäksi ankkuri-/ydinkäytäntö liittää organisaation koko toiminnan tiiviisti ympäristöönsä. Sosiaaliset, tekniset, taloudelliset ja institutionaaliset minimaaliset rakenteet, jotka toisaalta ohjaavat, mutta samalla sallivat laajan itsenäisen toiminnan, luovat vastavuoroisen ohjausjärjestelmän liiketoimintamallin ja ekosysteemin välille

The internal and external governance of cooperatives: the effective membership and consistency of value

Cooperatives are characterised by mutual-benefit coordination mechanisms aimed at the fulfilment of members' participation rights and welfare, consistently with the normative principles of democratic involvement, independence and care for the community. This ideal situation may find, in practice, obstacles within the internal characteristics of the cooperative as well as in the nature of relationship with other actors in the socio-economic environment. Building on evidence from the literature, the paper systematises and highlights some of the potential problems in the governance of cooperative firms concerning the accomplishment of cooperative mutualistic aims by way of means that do not hamper other stakeholders in the socio-economic environment. In exploring the internal conditions that may affect cooperative performance, we focus in particular on the role of rules and incentives towards such aims. In synergy, when analysing the external conditions that may affect cooperative performance, the paper addresses possible sources of external control, such as those related to the nature of the business relationships between the cooperative and its production network. In taking into account both internal and external conditions, we consider an extended notion of governance, whereby those who impact on strategic decision-making are not to be searched only within the internal governance bodies, typically the board of directors or managers, but also outside the cooperative, as in the extended network of production relationships in which the organisation is embedded

SME Performance, Innovation and Networking Evidence on Complementarities for a Local Economic System

The paper addresses the relevancy of networking activities and R&D as main drivers of productivity performance and ouput innovation, for small and medium enterprises (SME) playing in a local economic system. Given the intangible nature of many techno organisational innovation and networking strategies, original recent survey data for manufacturing and services are exploited. The aim is to provide new evidence on the complementarity relationships concerning different networking activities and R&D in a local SME oriented system in Northern Italy. We first introduce a methodological framework to empirically test complementarity among R&D and networking, in a discrete setting. Secondly, we consequently present empirical evidence on productivity drivers and on complementarity between R&D and networking strategies, with respect to firm productivity and process/product output innovation. R&D is a main driver of innovation and productivity, even without networking. This may signify, in association with the evidence on complementarity, that firm expenditures on R&D are a primary driver for performance. The complementarity with networking is a consequential step. Networking by itself cannot thus play a role in stimulating productivity and innovation. It can be a complementary factor in situations where cooperation and networking are needed to achieve economies of scale and/or to merge and integrate diverse skills, technologies and competencies. This is compatible with a framework where networking is the public good part of an impure public good wherein R&D plays the part of the private-led driving force towards structural break from the business as usual scenario. Managers and policy makers should be aware that in order to exploit asset complementarity, possibly transformed into competitive advantages, both R&D and networking are to be sustained and favoured. our evidence suggests that R&D may be a single main driver of performance. Since R&D expenditures are associated with firm size, a policy sustain is to be directed towards firm enlargement. After a certain threshold firms have the force to increase expenditures. The size effect is nevertheless non monotonous. Then, but not least important, for the majority of firms still remaining under a critical size threshold, policy incentives should be directed to R&D in connection with networking, through which a virtuous circle may arise. It is worth noting that it is not networking as such the main engine. Networking elements are crucially linked to innovation dynamics; it is nevertheless innovation that explains and drives networking, and not the often claimed mere existence of local spillovers or of a civic associative culture in the territory. Such public good factors exist but are likely to evolve with and be sustained by firm innovative dynamics.Firm Competitiveness, Innovation, R&D, Networking, Complementarity, Local Economic System

The e-revolution and post-compulsory education: using e-business models to deliver quality education

The best practices of e-business are revolutionising not just technology itself but the whole process through which services are provided; and from which important lessons can be learnt by post-compulsory educational institutions. This book aims to move debates about ICT and higher education beyond a simple focus on e-learning by considering the provision of post-compulsory education as a whole. It considers what we mean by e-business, why e-business approaches are relevant to universities and colleges and the key issues this raises for post-secondary education

For Love and Money: Governance and Social Enterprise

For Love and Money – Governance and Social Enterprise is the result of research commissioned by the Governance Hub, in partnership with the Social Enterprise Coalition, and conducted by third sector specialists from the Open University. It aims to: Identify any characteristics of governance practices specific or distinctive to social enterprises. Identify and examine the governance support needs of social enterprises, the specific sources of governance support they currently access and the limitations and gaps in this provision. Explore how Governance Hub strategies, services and resources, and those of its successor, might be communicated, adapted, or extended to meet the needs of social enterprises

Enterprise risk management in the airline industry - risk management structures and practices

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University London.This thesis expands on the literature in the under-researched field of airline risk management by exploring organisational structures and practices of airline risk management systems and their technical and institutional drivers. In particular, it focuses on the phenomenon of Enterprise Risk Management (ERM) and its alignment to the requirements of airline business contexts. The theoretical framework informing this study combines structural contingency theory with two strands of institutional theory, namely old institutional economics and new institutional sociology. In this thesis, the phenomenon of risk management is investigated in situ as an organisational practice through a two-stage empirical study. Firstly, an exploratory field study was undertaken in a panel of ten international airlines. Secondly, the field study was complemented with findings from two explanatory case studies. This study explains how in developing risk management systems airlines balance the sometimes conflicting technical and institutional demands of their respective task and institutional environments. The adoption and implementation of ERM in airlines are found to be driven primarily by coercive and normative pressures, and expectations of improved organisational effectiveness and efficiency. This study additionally improves general understanding of the nature of ERM and its coupling and fluidity in the organisational settings of airlines. It lends evidence for systematic variations in roles, uses, and organisational design choices of ERM systems. It shows the interdependent nature of airlines’ ERM systems and other management systems. The study also demonstrates that the adoption of ERM in airlines drives development of new institutions, rules, and routines for comprehensive management of risks. Consistent with the tenets of contingency theory, this study conveys lack of a universally appropriate design of an airline ERM system. The main contribution of this thesis is to assess airline risk management systems, identify core drivers of effective risk management practice, and provide a framework with the aim of guiding airlines in the development of enterprise-wide risk management approaches aligned with the requirements of their institutional and technical contexts. Furthermore, this research overcomes the limitations of previous, mostly quantitative studies of ERM coupling and dynamics in organisations, as it explores and explains the structures, practices, and rationales of airline risk management systems within wider organisational contexts through the use of qualitative methodologies

The Learning Organisation and National Systems of Competence Building and Innovation

This paper is based on a hypothesis that we have entered a specific phase of economic development, which we refer to as the 'learning economy', where knowledge and learning have become more important than in any earlier historical period. In this new context the learning capability of firms located in the domestic economy becomes a major concern for national governments and, at the same time, the national infrastructure supporting knowledge creation, diffusion and use becomes a concern for management and employees. To get the two to match and support each other becomes a prerequisite for economic success for firms as well as for the national economy. One of the main objectives of this paper is to demonstrate that societal institutions, which may exist at the national or regional levels, shape the types of organisational learning predominating at the level of the firm. The paper develops the concept of a 'national system of competence building and innovation' by linking national specificities in the formation of skills and labour market dynamics to the micro-level processes of knowledge creation and learning within and between firms. It uses the examples of Japan, Denmark and the high-technology clusters in the US and UK to illustrate the logic of institutionalised variation in patterns of learning and innovation. The paper argues that tacit knowledge, which is difficult to create and transfer in the absence of social interaction and labour mobility, constitutes a most important source of learning and sustainable competitive advantage. Learning builds on trust and social capital. Institutions that are able to imbue these elements into firms and markets encourage interactive learning and are more likely to produce strong innovative capabilities.learning organisations; learning economy; knowledge creation; national innovation systems; institutions; tacit knowledge, competence building