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The Role of Organizational Absorptive Capacity in Strategic Use of Business Intelligence to Support Integrated Management Control Systems

Year: 2010

Type: article

Abstract: ABSTRACT: This study examines the influence of organizational controls related to knowledge management and resource development on assimilation (i.e., strategic integration and use) of business intelligence (BI) systems. BI systems use analytics and performance management concepts to leverage enterprise system databases and provide core management control system (MCS) capability. Our results indicate that organizational absorptive capacity (i.e., the ability to gather, absorb, and strategically leverage new external information) is critical to establishing appropriate technology infrastructure and to assimilating BI systems for organizational benefit. Further, findings show that while top management plays a significant role in effective deployment of BI systems, their impact is indirect and a function of operational managers’ absorptive capacity. In particular, this indirect effect suggests that leveraging BI systems is driven from the bottom up as opposed to the top down. This differentiates BI from other isolated strategic MCS innovations that have traditionally been viewed as top-management driven.

Source: The Accounting Review

DOI: 10.2308/accr.00000010

Authors: Mohamed Z. Elbashir, Philip A. Collier, Steve G. Sutton

Institutions: Australian National University, The University of Melbourne, University of Central Florida

Language: English

Topic: Big Data and Business Intelligence

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1978573107

FWCI: 25.16

Cites: 101

Cited by: 309

Related to: 10