Toward Digitally Integrated Inter-Organizational Control Systems: An Exploration of Barriers - A Qualitative Interview Study

Abstract

Title: Toward Digitally Integrated Inter-Organizational Control Systems: An Exploration of Barriers. A Qualitative Interview Study Background and Problematization: As digital transformation reshapes how firms operate and collaborate, new forms of inter-organizational control are emerging, enabled by shared digital platforms, real-time data, and integrated workflows. Although digitally integrated inter-organizational control systems (IOCS) offer considerable potential for improving collaboration and efficiency, their widespread implementation remains limited. Much of the existing literature has concentrated on internal aspects of digital transformation, with relatively less attention given to the specific challenges that emerge when control mechanisms must span firm boundaries. This study responds to that need by examining the persistent barriers organizations encounter as they attempt to develop digitally integrated control systems within inter-organizational contexts. Purpose: The purpose of this thesis is to explore and explain the common barriers that hinder firms from progressing toward more advanced digitally integrated inter-organizational control systems. The study aims to extend classical control theory by applying a digital transformation lens, while also offering practical guidance to firms engaged in cross-boundary digitalization efforts. Research Question: What barriers hinder the progression towards digitally integrated inter-organizational control systems? Methodology: We adopt a qualitative, inductive research design, grounded in the Gioia methodology. Fifteen semi-structured interviews were conducted with decision-makers from nine different firms engaged in inter-organizational collaborations. Conclusion: This study identifies a set of persistent and interacting barriers that prevent firms from realizing the potential of digitally integrated IOCS. At the intra-organizational level, outdated systems and fragmented capabilities lock organizations into rigid control environments that are difficult to adapt or connect externally. At the inter-organizational level, uneven digital maturity and power imbalances force compromises that dilute the value of integration. Externally, regulatory demands and institutional pressures add uncertainty and slow momentum. These barriers do not act in isolation, they reinforce one another, creating a systemic resistance to change. Our findings suggest that progress toward digital IOCS depends less on technology itself and more on an organization’s ability to align internal practices, partner relationships, and institutional expectations in a coordinated and flexible way.