Heard It through the Grapevine: Conceptualizing Informal Control through the Lens of Social Network Theory

The investigation of management control has been a continuing theme in management accounting research over the past four decades. Although studies in this area collectively constitute a considerable body of knowledge, the vast majority of research attention has been directed to the design or use associated with formal management control systems (MCS). However, although often recognized as fundamentally inherent within organizational control environments, few studies have explicitly investigated informal control, despite its pervasiveness and the effects repeatedly attributed to it in the overall organizational control package. Predicated on the view that this knowledge gap may be largely explainable by the difficulties associated with conceptualizing and, therefore, operationalizing informal control, the purpose of this study is to advance the use of social network theory as a means to provide a deeper understanding about how informal control operates within organizations, and as an aid in developing more fully specified control models. JEL Classifications: M41.