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

    Authors

    M. Z. Elbashir; P. A. Collier;S. G. Sutton

    Comments

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    Abbreviated Journal Title

    Account. Rev.

    Keywords

    business intelligence; management control systems; knowledge creation; absorptive capacity; management accounting systems; business analytics; corporate performance management; enterprise systems; enterprise; resource planning systems; PERFORMANCE-MEASUREMENT SYSTEMS; RESOURCE PLANNING SYSTEMS; INFORMATION-TECHNOLOGY; TOP MANAGEMENT; KNOWLEDGE CREATION; ACCOUNTING; SYSTEMS; E-COMMERCE; ASSIMILATION; FIRM; PERSPECTIVE; Business, Finance

    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.

    Journal Title

    Accounting Review

    Volume

    86

    Issue/Number

    1

    Publication Date

    1-1-2011

    Document Type

    Article

    Language

    English

    First Page

    155

    Last Page

    184

    WOS Identifier

    WOS:000286138300006

    ISSN

    0001-4826

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