Leveraging data analytics diagnostically and interactively for effective management control

Purpose Digitalization drives organizational change. The use of data analytics (DA), a key digital technology, aims to enhance management control (MC) effectiveness by enabling the analysis and processing of large quantities of data with sophisticated tools. However, the positive effects of DA may not be due to the mere use of this technology but rather the way it is used. This paper aims to explain how data analytics capabilities, the different modes of using DA and the importance of the MC function explain MC effectiveness as an organizational outcome. Design/methodology/approach A research model is tested using structural equation modeling and a sample of 222 European firms. Findings Stronger DA capabilities support both the diagnostic and interactive DA use, but only interactive DA use is positively associated with MC effectiveness. These effects are not contingent on the importance of cybernetic or planning controls. This suggests that MC effectiveness gains are attributable to the interactive use of DA: the benefits stem from embedding analytics in ongoing managerial dialogue, thereby supporting learning, sensemaking and the reconfiguration of accounting and organizational routines. Originality/value This study challenges the often implicit assumption that the more DA, the better, and provides a more nuanced view on the different uses of DA and their effects. The authors show that DA contributes to change not through mere tool adoption but through the interactive enactment of analytics.