The impact of organizational contexts on EDI controls

The growing popularity of electronic data interchange (EDI) in business operations has led to a growing recognition of the need to implement proper control procedures. The requirements for control systems vary according to organizational context. A research model proposes that the organization, technological, and task characteristics as well as partner attributes affect formal, informal, and automated controls, each of which can be categorized as internal and external controls. Data were gathered from 110 companies that had adopted EDI. IS sophistication and task routineness were significantly associated with the use of formal and automated — both internal and external — controls. Decentralization and partner trust affected the use of internal and external informal controls. The results of this study could help EDI managers or auditors decide the necessary mode of controls for a certain organizational context. In addition, this study would be of interest to EDI practitioners in designing control systems.