Outsourced supply chains as a complex adaptive system

Abstract

PurposeFirms in the early stage of their organisational lifecycle (ESFs) are subject to concerns founded on a requirement for strategic flexibility, prompting engagement in inter-organisational relationships such as outsourcing. However, studies of the management control dynamics of these relationships are rare. This paper aims to respond by empirically examining the influence of ESF managers on the ongoing management control of such relationships.Design/methodology/approachA single outsourcing case study is utilised to provide evidence in examining a multi-theoretical framework that adopts a complex adaptive system (CAS) perspective as a qualitative analytical framework, along with the existing accounting theory on control adoption.FindingsFocused on management concerns with tensions between inter-organisational control and strategic flexibility, this paper identifies reasons for the adoption of management controls by an ESF. The inter-organisational system explored in this paper emphasises the importance of adopting a holistic epistemology in understanding changes in control adoption.Research limitations/implicationsThis paper extends current theoretical perspectives on control adoption to consider the inter-organisational control concerns of ESF managers.Practical implicationsThe insights identified in this paper provide a systemic framework to identify potential organisational and environmental influences on control problems, emphasising environmental co-evolution rather than achievement of ideal equilibrium states.Originality/valueThe intended contribution is to extend the management control literature to consider the effect of organisational lifecycle on the adoption of new inter-organisational management controls in the wake of ongoing trade-off between competing inter-organisational requirements.