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Strategy, IT and control @ eBay, 1995-2005: The management control system (MCS) as consumer product

Dan N. Stone (Von Allmen School of Accountancy, University of Kentucky, Lexington, Kentucky, USA)
Alexei N. Nikitkov (Faculty of Business, Brock University, St. Catharines, Canada)
Timothy C. Miller (Department of Accountancy, Xavier University, Cincinnati, Ohio, USA)

Qualitative Research in Accounting & Management

ISSN: 1176-6093

Article publication date: 11 November 2014




This paper aims to adapt Simons’ (1995b) theory of the role of information technology (IT) in shaping and facilitating the levers of control (i.e. the Levers of Control Applied to Information Technology – LOCaIT) as a framework for investigating how eBay’s business strategy was realized through its management control system (MCS) in the first 10 years of the online auction market.

Design and method

The qualitative method uses data from public record interviews, teaching cases, books, Securities and Exchange Commission filings and other archival sources to longitudinally trace the realization of eBay’s strategy through its MCS and IT.


Realizing its strategy through the eBay MCS necessitated a diagnostic control system unlike any previously seen. This system created a close-knit online community and enabled buyers and sellers to monitor one another’s performance and trustworthiness.

Research limitations and implications

The LOCaIT theory facilitated understanding the core aspects of the realization of eBay’s strategy through its MCS and IT. However, LOCaIT largely omits the strong linkages evident among elements of the MCS, the importance and necessity of building a core IT infrastructure to support eBay’s strategy and the central role of building consumer trust in the realization of this strategy.

Practical and social implications

eBay’s MCS is now, perhaps, the world’s most widely imitated model for creating online trust and user interactions (e.g. Yelp, TripAdvisor, Amazon). In addition, eBay’s MCS was “sold” as a consumer product that was instrumental in facilitating consumer trust in the online auction market.


Contributions include: tracing the creation, growth and evolution of, perhaps, the world’s largest and most widely imitated MCS, which redefined the boundaries of accounting systems monitoring; and testing the range, usefulness and limitations of Simons’ LOCaIT theory as a lens for understanding eBay’s use of IT in their MCS.



Alexei Nikitkov thanks Brock University for a grant supporting this study. Dan Stone and Tim Miller thank the University of Kentucky, the Gatton College of Business and Economics and the Von Allmen School of Accountancy for grants supporting this research. For valuable comments and suggestions on previous drafts, thanks to workshop participants at the American Accounting Association 2006 annual meeting, the University of Florida, the University of California – Riverside, the University of Montana, and the 2011 Accounting, Organizations, and Society Fraud conference.


N. Stone, D., N. Nikitkov, A. and C. Miller, T. (2014), "Strategy, IT and control @ eBay, 1995-2005: The management control system (MCS) as consumer product", Qualitative Research in Accounting & Management, Vol. 11 No. 4, pp. 357-379.



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Copyright © 2014, Emerald Group Publishing Limited

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