Strategy, IT and control @ eBay, 1995-2005: The management control system (MCS) as consumer product

Dan N. Stone, Alexei N. Nikitkov, Timothy C. Miller

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


Purpose: This paper aims to adapt Simons' (1995b) theory of the role of information technology (IT) in shaping and facilitating the levers of control (i.e. the Levers of Control Applied to Information Technology - LOCaIT) as a framework for investigating how eBay's business strategy was realized through its management control system (MCS) in the first 10 years of the online auction market. Design and method: The qualitative method uses data from public record interviews, teaching cases, books, Securities and Exchange Commission filings and other archival sources to longitudinally trace the realization of eBay's strategy through its MCS and IT. Findings: Realizing its strategy through the eBay MCS necessitated a diagnostic control system unlike any previously seen. This system created a close-knit online community and enabled buyers and sellers to monitor one another's performance and trustworthiness. Research limitations and implications: The LOCaIT theory facilitated understanding the core aspects of the realization of eBay's strategy through its MCS and IT. However, LOCaIT largely omits the strong linkages evident among elements of the MCS, the importance and necessity of building a core IT infrastructure to support eBay's strategy and the central role of building consumer trust in the realization of this strategy. Practical and social implications: eBay's MCS is now, perhaps, the world's most widely imitated model for creating online trust and user interactions (e.g. Yelp, TripAdvisor, Amazon). In addition, eBay's MCS was "sold" as a consumer product that was instrumental in facilitating consumer trust in the online auction market. Originality/value: Contributions include: tracing the creation, growth and evolution of, perhaps, the world's largest and most widely imitated MCS, which redefined the boundaries of accounting systems monitoring; and testing the range, usefulness and limitations of Simons' LOCaIT theory as a lens for understanding eBay's use of IT in their MCS.

Original languageEnglish
Pages (from-to)357-379
Number of pages23
JournalQualitative Research in Accounting and Management
Issue number4
StatePublished - Nov 11 2014

Bibliographical note

Publisher Copyright:
© Emerald Group Publishing Limited.


  • Business strategy
  • Ebay
  • Information technology
  • LOCaIT
  • MCS

ASJC Scopus subject areas

  • Business and International Management
  • Accounting


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