MANAGEMENT CONTROL OF THE COMPUTER RESOURCE: DECENTRALIZATION, TRANSFER PRICING, AND THE CHALLENGE OF DATA BASE TECHNOLOGY

Prudently applied, management control structure and process enable decentralized decision-makers to allocate resources to computer usage and applications in a manner that benefits both themselves and the total corporation. In the environment of data base technology, however, decentralized resource allocation decisions may effectively determine how technology is to be employed in the corporation, yielding results that may or may not benefit the total corporation.;The research was conducted in two phases. First, hypotheses were obtained by weighing what is known about transfer price theory and practice in the predata base environment against what is known about data base technology. The second phase consisted of observing three companies that had achieved operating data bases in some acceptable form, the aim being (1) to determine whether the hypotheses were supported by the observations, and (2) to obtain additional insights to the research questions.;The findings of this study pertain to structure and the transfer pricing process. As to structure, it was found that the partially decentralized corporation requiring horizontal and vertical information flows is best served by a computer resource organized as a service center (cum steering committee), in which centralized decisions are made concerning applications to be developed, and in which central control is retained over the relevant data and the necessary technical skills. The profit center model, in which applications decisions and control over data and technical skills are decentralized to user/managers, is appropriate for the truly decentralized corporation requiring compartmented information flows.;As to transfer price process, steps are identified that management should be prepared to take to avoid certain dysfunctions in three areas of organizational effort: (1) the development of global data bases, (2) the early encouragement of data base usage, and (3) error-free maintenance of the data bases. In the first two instances, financial subsidization from some appropriate source is indicated. In the last instance, a system of charging users and reimbursing the suppliers of data is indicated.;This dissertation studies that problem. The research questions are: How do management control structure and transfer price processes affect the assimilation of data base technology? What modifications, if any, are appropriate to facilitate its assimilation?...