Top managers’ formal and informal control practices in product innovation processes

Abstract

Purpose

This study aims to understand the formal and informal practices of top managers as they seek to control product innovation processes and how the style of control used differs during development stages and gates.

Design/methodology/approach

A qualitative in-depth case study was conducted at a multinational corporation (pseudonym: MEC). The authors examined 12 product innovation projects and carried out semi-structured interviews to understand the experiences, perceptions and challenges of the people involved in product development projects with a focus on the interactions between top managers and the project teams.

Findings

The authors found that MEC uses formal control mechanisms such as a stage-gate model and a project management and reporting system to keep track of the progress of innovation projects. In addition, top managers use informal controls through involvement in innovation activities and interaction with the team members during the stages and gates of the development process. To carry out their control practices top managers use four distinct styles of control as follows: participative, facilitative, empowering and authoritative.

Practical implications

Suggestions are provided for managers on how formal and informal management control tools can be used in innovation processes. The authors show how top managers can broaden their range of interventions by involving themselves in product innovation projects in different ways.

Originality/value

This paper shows how the combination of formal and informal controls can generate a more holistic view of management control in innovation. It also adds to previous conceptualizations of control use by suggesting four distinct styles, which top managers can use to involve themselves in product innovation processes.

Citation

Pan Fagerlin, W. and Lövstål, E. (2020), "Top managers’ formal and informal control practices in product innovation processes", Qualitative Research in Accounting & Management, Vol. 17 No. 4, pp. 497-524. https://doi.org/10.1108/QRAM-02-2019-0042