Goals and Governance, Complements or Substitutes? Both!: A study of performance in government organizations ; Proceedings of the 27th Australian and New Zealand Academy of Management Conference
We investigate organizational performance by considering the influence of goals and governance, both directly and interactively. Specifically, we theorize a linear relationship regarding goal importance and a curvilinear relationship regarding the degree of formalization of operational-level governance. We test our model on 348 Information Technology professionals in a large American government organization. We find support for our hypotheses and we find that goals and governance are substitutes in the condition of low to moderate governance, and are complements in the condition of moderate to high governance. While our theory is constrained to goals with high group-efficacy, our provocative findings contribute to both scholarly literature and managerial practice. Managers should select governance systems based on the characteristics of the organization's goals.