J of Product Innov Manag - 2021 - Khanagha - Mitigating The Dark Side of Agile Teams Peer Pressure Leaders Control and

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Received: 29 May 2020 Accepted: 15 June 2021
DOI: 10.1111/jpim.12589
ORIGINAL ARTICLE
Mitigating the dark side of agile teams: Peer pressure, leaders’

control, and the innovative output of agile teams
Saeed Khanagha1 | Henk W. Volberda2 | Andreas Alexiou3 | Maria Carmela Annosi4
1
School of Business and Economics, Vrije
Universiteit Amsterdam, Amsterdam, The Abstract
Netherlands Increasingly, organizations have been employing self-managing teams to circum-
2
Amsterdam Business School, University vent bureaucratic controls and stimulate innovation. However, this goal is not easily
of Amsterdam, Amsterdam, The
Netherlands
achieved; in many situations, informal controls replace formal controls. This study
3
Tilburg School of Economics and develops a multi-level perspective of control. We explicitly analyze control mecha-
Management, Tilburg University, Tilburg, nisms at different levels of the organization and how they affect innovative team out-
The Netherlands
put. We theorize and empirically investigate a potential downside of horizontal social
4
School of Social Sciences, Wageningen
control mechanisms at the team level (i.e., peer pressure) affecting self-managing
University, Wageningen, The Netherlands
teams’ innovative outcomes. We also discuss managerial control mechanisms at the
Correspondence organizational level (i.e., interactive and diagnostic management control systems)
Saeed Khanagha, School of Business
and Economics, Vrije Universiteit
that may help to mitigate such negative effects. We theorize how they may influence
Amsterdam, De Boelelaan 1105, 1081 the innovative output of self-managing teams, both directly and interactively. We
HV Amsterdam, The Netherlands. chose a multi-level, multi-source setting for our study and ran three parallel surveys
Email: s.khanagha@vu.nl
with employees in a Fortune 500 firm where 248 team members, 126 internal team
Special Issue Guest Editors: Matthias leaders, and 97 organizational leaders enabled us to create a unique database of 97
Weiss, Markus Baer, and Martin Hoegl self-managing software development teams. Our findings confirm that peer pressure
is common among established agile teams and that it negatively influences the inno-
vative output of the agile teams. Moreover, our findings show that the magnitude of
the effect of peer pressure is contingent on control mechanisms at higher levels within
the organization. This enables us to provide new theoretical insights regarding the
paradoxical effect of managerial control systems when it comes to flat organizations
and autonomous teams. Additionally, we provide practical guidelines for managers
who increasingly adopt agile practices but at the same time face issues with regard to
innovation.
KEYWORDS
agile teams, diagnostic control, interactive control, managerial control systems, peer pressure
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original
work is properly cited.
© 2021 The Authors. Journal of Product Innovation Management published by Wiley Periodicals LLC on behalf of Product Development & Management Association
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334 wileyonlinelibrary.com/journal/jpim
J Prod Innov Manag. 2022;39:334–350.
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KHANAGHA ET AL.
335
1 | IN T RO D U C T IO N
Practitioner Points
Today's organizations need to innovate (e.g., Doran & Ryan,
• People working in self-managing teams, despite
2016; Volberda et al., 2021) to survive increasingly dynamic
being empowered by autonomy, can often be con-
environments, and teams often become the locus of innova-
strained by accumulated peer pressure, leading to
tion (e.g., Weiss et al., 2018). However, innovation does not
reduced team innovativeness.
come easily. Implementing creative ideas can be difficult
• Team managers can help improve overall team
(Baer, 2012), and many innovation projects remain incom-
performance when team members are subject to
plete (Todt et al., 2018, 2019). To stimulate innovative out-
peer pressure through two key interventions: tar-
put, large firms increasingly reorganize themselves around
get optimization & frequent interaction.
self-managing work teams, such as agile teams (Cooper &
• A focus on optimizing targets and outcomes is
Sommer, 2016; Grass et al., 2020). A self-managing team is a
beneficial when peer pressure is high and has a
“group of individuals with diverse skills and knowledge with
potentially detrimental effect when peer pressure
the collective autonomy and responsibility to plan, manage,
is low.
and execute tasks interdependently to attain a common goal”
• Frequent interaction and guidance on behalf of the
(Magpili & Pazos, 2018, p. 4). By combining elements of an
manager also demonstrates an overall positive ef-
organic structure (Burns & Stalker, 1961; Slater et al., 2014;
fect, but the effect is strongest when peer pressure
Volberda, 1996) with new and more indirect forms of control
is low.
(Heydebrand, 1989; Sewell, 1998), organizations aim to ac-
quire more flexibility, creativity, and speed to overcome the
inertia associated with bureaucratic control.
However, despite the increasing popularity of self- overlooked multi-level implications of providing autonomy
managing teams, they do not always deliver on promises to for teams. Several studies on internal regulations have explic-
enhance teams’ innovative output; previous research shows itly called for multi-level conceptualization and analysis of
that self-managing teams do not always achieve high levels of interactions between organizational controls and team-level
innovativeness (Cardinal, 2001). This variation in the success social dynamics (Long & Sitkin, 2018; Stewart et al., 2012).
of self-managing teams achieving innovative outcomes is Such cross-level effects are particularly relevant when ex-
likely explained by the organizational context in which such ceeding a routine-based performance outcome, focusing on
teams are embedded (Ahmadi et al., 2017; Ahmadi et al., prior research on organizational controls (e.g., Kreutzer et al.,
2021; Baer & Frese, 2003), and important contributing fac- 2015) and investigating the overlooked question (Siciliano,
tors include the roles of leaders and line managers (Khanagha 2016) of how various control mechanisms affect creativity
et al., 2017; Kreutzer et al., 2015). Control systems, i.e., and innovativeness.
mechanisms to ensure alignment between employees’ capa- With this in mind, we build on the seminal work by
bilities, actions, and performance with organizational goals Simons (1994) to identify key managerial control systems
and aspirations (Sitkin et al., 2010), are particularly import- (interactive and diagnostic) and group level social controls
ant in this regard. They are associated with various manage- (peer pressure), and we explore how these factors influence
rial challenges, including those related to innovation (Coelho the innovative outcome of agile teams. This article aims to
et al., 2020; Turner & Makhija, 2006). When combining so- deepen our understanding regarding different manifestations
cial control exercised by team peers, understanding the effect of organizational control and how they interact with and af-
of managerial control becomes more complex. Multi-level fect the innovative performance of self- managing teams.
interactions between team-level dynamics and the wider or- First, by developing a multi-level perspective on the con-
ganizational context are likely to influence teams’ general trol of self-managing teams, we extend research on the im-
and innovative performances (cf. Jansen et al., 2016; Magpili plications of organizational controls (Cardinal et al., 2017;
& Pazos, 2018). Specifically, this study sets out to reveal the Long & Sitkin, 2018); we investigate how different types of
paradoxical relationship between high team autonomy and team and organizational behavior can affect team innova-
managerial controls. While self-managing teams may facil- tion. Specifically, we propose that internal peer pressure, a
itate innovation, they can also bear unwanted side-effects, potential consequence for self-managing teams, relates to a
such as high peer pressure, which can hurt the team's bal- team's overall ability to innovate. This relationship depends
ance and performance. Simultaneously, although managerial on the leader's control behavior, particularly on the diagnos-
control practices can stifle innovation in the same context, tic and interactive controls implemented. By evaluating how
they can also counter the negative effects of high peer pres- the organizational-level control level influences the team-
sure by limiting destructive behaviors and regulating extrin- level internal regulation process, this article attempts to shed
sic and intrinsic motivation. Previous research has largely light on the tensions between external forces enacted through
MITIGATING THE DARK SIDE OF AGILE TEAMS: PEER PRESSURE, LEADERS’ CONTROL, AND THE
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336 INNOVATIVE OUTPUT OF AGILE TEAMS
existing managerial control systems and internal forces ex- norms for their activities. Initial norms, representing “cor-
erted horizontally, i.e., by peers within self-managing teams. rect” behavior, are the basis and formal instrument to exer-
In this way, we aim to advance the idea that different control cise control (Jermier et al., 1991), leading to peer pressure
systems need to be considered in combination (e.g., Loughry developing within the team.
& Tosi, 2008; Stewart et al., 2012). Second, we add to liter- Peer pressure can be understood as a team-level phenom-
ature seeking to identify strategies for avoiding issues inhib- enon, defined as a system of control exerted and perpetuated
iting innovation within teams (e.g., Todt et al., 2018). We do by workers, which involves micro-techniques of discipline
this by conceptualizing the management layer as moderating for regulating and normalizing collective team action and
the effects of social influence within the self-managing team. the actions of individual employees. Peer pressure emerges
This moderation ensures that the team's activities align with as a dimension of team culture (Akgün et al., 2010; Owens
the organization's goals and strategy; we examine how mana- & Hekman, 2016). Team members’ shared norms and val-
gerial control may affect the teams’ innovative output, an area ues legitimize attempts to influence teammates’ behavior
that has not yet been widely studied (Büschgens et al., 2013). through verbal disapproval such as direct demands, open con-
We distinguish two types of controls, namely diagnostic and frontation, or guilt-inducing comments (Druskat & Kayes,
interactive controls (Simons, 1994). Diagnostic controls are 2000). While individual team members apply pressure, they
traditional management control system used to monitor and act based on collective norms and the behalf of their team
optimize targets and outcomes. Interactive controls, on the (De Jong et al., 2014). The emergence of peer pressure is,
other hand, can be considered a more active form of control therefore, a dynamic, interactive process. More specifically,
that is based on stimulating managers to communicate with following the definition of emergence by Kozlowski and
the employees and to support them. We also consider inno- Klein (2000), we consider peer pressure to be a bottom-up
vative output as a performance outcome, thereby extending phenomenon, whereby individual characteristics and dy-
prior research (e.g., Kreutzer et al., 2015) primarily focused namic social interaction yield a higher-level group property.
on how general performance outcomes are affected by man- When employees work together to generate their own social
agerial controls. rules, this can give rise to a feeling of collective empowerment
We develop five hypotheses and test the research model (e.g., Barker, 1993; Sinclair, 1992). This refers to a belief that,
(Figure 1) with multi-level and multi-source data collected to reach specific ends, an individual can influence other peo-
from 97 self- managed, agile research and development ple or events in an organization or a group (Greenberger &
(R&D) teams and the various management layers in a large Strasser, 1986; Kanter, 1977). However, in this kind of par-
multinational corporation (MNC), a leader in the telecom- ticipative environment, individual autonomy, which allows the
munications industry. Like many information and communi- employee to decide when and how to perform a task (Hackman
cation technology organizations, the firm decided to move & Oldham, 1976), is likely to be overridden by pressures to
to agile software product development. While peer pressure conform to other team members’ expectations. Here autonomy
emerges from interactions between team members, it is mea- becomes collective rather than individual (Herman, 1982), and
sured directly at the group level. To visually capture the pro- the locus of control moves from the organizational manage-
cess of emergence, we have included an additional level in ment to team members, who cooperate by creating social rules
Figure 1. and norms. These rules and norms then drive their behaviors,
constituting the basis for meaning and sanctioning modes of
social conduct (Barker, 1993).
2 | T H E O RY D E V E LOP ME N T Through a process of internalization, which occurs when
employees feel a sense of identity within the organizational
2.1 | Self-managing teams and peer pressure value system, peer pressure becomes part of the “standard
operating procedure.” Classification usually legitimizes unin-
Peer pressure can be a consequence of flatter management terrupted individual domination inside the team (Greenblatt,
structures and increased worker autonomy (Tompkins & 1986; Hacking, 1986). Classifying individuals as poor or
Cheney, 1985). Although self-managing teams might experi- good workers is relevant for determining which employees
ence less bureaucratic control, they are not free from control make active contributions, as expected by others, and sanc-
because peer pressure can often develop. This kind of social tioning employees who do not (Foucault, 1980). Team mem-
pressure directs employees’ behavior toward accomplishing bers are evaluated against a norm or average, so rankings are
organizational objectives without relying on the bureaucratic constantly generated. Continuous surveillance, which nor-
hierarchy. Team members develop mechanisms “in concert” malizes behavior, is likely to help employees develop self-
to control their activities (Tompkins & Cheney, 1985). By control and establish an organizational conscience (Merton,
cooperating on common team tasks, team members establish 1968; Presthus, 1962; Whyte, 1956).
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KHANAGHA ET AL.
337
2.2 | Team innovation cognitive, motivational, entrepreneurship, leadership, net-

works, culture, and strategy).
Organizations are increasingly reliant on teams developing This study defines team innovation as the generation and im-
innovative solutions. Entrepreneurial teams, new venture plementation of novel and useful outcomes (Nijstad & De Dreu,
teams, R&D teams, new product development (NPD) teams, 2002). We acknowledge that team creativity is a core element
and science teams are some common terms used for describ- of team innovation; however, we emphasize generating creative
ing what are, essentially, innovation teams (ITs). While these ideas and putting them into action (Hülsheger et al., 2009).
teams operate in different environments, experience contex- Early emphasis is placed on exploration and divergent thinking,
tual differences in risk level and uncertainty, and their re- whereas in the second stage, the emphasis shifts to exploitation
sponsibilities may vary, they all share the common goals of and convergent thinking. We also ground our approach on the
developing and implementing new products, processes, or assumption that, due to synergies from synthesizing different
solutions (Thayer et al., 2018). insights and perspectives, and the mutual stimulation of cre-
Due to its seemingly contradictory demands, team inno- ative insights, team-based work is fundamental for innovation
vation is a complex, paradoxical process. ITs explore cre- (van Knippenberg, 2017; West & Farr, 1990).
ative ideas and exploit existing knowledge so that creative
solutions can be feasibly and usefully implemented (Bledow
et al., 2009; March, 1991). Consequently, team innovation is 2.3 | Peer pressure and innovative
a multistage phenomenon consisting of idea generation and team output
idea implementation, yet innovation moves dynamically and
non-linear, not neatly between these stages (Bledow et al., While a certain degree of peer control within a team may
2009; Cheng & Van de Ven, 1996). Due to the strong element stimulate alertness and learning among team members, agile
of creative problem solving involved with the innovation pro- teams tend to have an average or above level of peer pres-
cess, autonomy, a prerequisite for idea generation, has been sure. In other words, in agile teams, it is unlikely to observe
a key characteristic of ITs. Moreover, strong reliance on cre- extreme cases of low peer pressure and the related potential
ativity has resulted in a multi-level view of team innovation, downsides. However, when peer pressure is high, innova-
attributing the apparent complexity to cross-level differences tive team output can be constrained in several ways. First,
in creativity requirements and complex interactions among pressure to act in a particular way can stifle an individual's
the phenomena operating at a given level of analysis (e.g., intrinsic motivation. Previous studies compared people with
Anderson et al., 2014; Mumford & Hunter, 2005). As a re- intrinsic motivation with those whose actions tend to be con-
sult, different levels of antecedents have been proposed at trolled externally. They found that individuals with intrin-
the individual, job, group, and organizational levels of anal- sic motivation engage more with tasks, show more interest
ysis, governed by a wealth of theoretical approaches (e.g., in what they are doing, and are more confident; thus, they
Unit Level Managerial Control Systems
Diagnostic Interactive
Control Control
H2 & H3
Team Level H4 & H5 Team Innovative

Peer Pressure
Output
H1
Emotions,
Individual Level Cognition
F I G U R E 1 Research model and hypotheses

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perform better and show greater persistence and creativity as interactive control. Managers using this form of control
(e.g., Deci & Ryan, 1991). Such individuals are more likely “personally and regularly involve themselves in the decisions
to take risks and remain focused on tasks for longer, and they of subordinates” (Simons, 1991, p. 49). Interactive control
also develop ideas or solutions for problems. However, in- systems are used when team managers and/or external stake-
dividuals who feel pressured to think and behave in certain holders regularly stimulate dialogue and interaction with
ways and whose behavior is monitored closely might have team members; this is done to influence the team members’
less intrinsic motivation. They may become less focused on decisions and the impact of their work and ensure they are
team activities (Deci et al., 1989; Deci & Ryan, 1987). focusing on set objectives.
Second, peer pressure implies that team members adhere
to collective norms and rules, with violations resulting in var-
ious forms of sanctioning by the team. Consequently, for in- 2.4.1 | Diagnostic control and innovative
dividuals within teams, a sense of introjection arises because team output
they are driven by external regulation (Deci & Ryan, 1985).
Under such circumstances, individuals are not operating in By imposing deadlines and providing feedback loops, di-
response to explicit directives but are instead following the agnostic controls can act as “non-synergistic extrinsic mo-
expectations of others. As a result, innovative outcomes will tivators” (Amabile, 1993), meaning that they can never be
be discouraged, as they often require divergent thinking and positively associated with intrinsic motivation. Without any
behavior and intrinsic or extrinsic stimuli. Thus, we argue diagnosis, team members may lose focus and alignment with
that peer pressure within a team will be significantly related organizational goals. However, expert organizations often
to the team's innovative output. routinize such controls, and when exercised too frequently or
strictly by managers, the controls may prove detrimental to an
Hypothesis 1 Team peer pressure will be negatively related individual's sense of self-determination. The feeling of being
to the innovative output of the team. directed by powerful management does not build a sense of
competence or a deep engagement with one's work. A work
environment that emphasizes extrinsic motivators without
2.4 | Leaders’ control and their influence on supporting intrinsic motivation will, over time, undermine
innovative team output any initial intrinsic motivation (Amabile, 1993). DCS are
tied to existing lines of authority and responsibility, and
Peer pressure, in the form of scrutiny from other peer group they undermine individual commitment to cross-functional
members, acts as a form of horizontal surveillance; it is dif- processes (Abernethy & Brownell, 1999). To achieve the
ferent from the vertical control achieved by monitoring the highest level of creative and productive work, individuals
work performance of individuals and teams, enacted through performing complex tasks require a combination of intrinsic
the control systems and behavior of organizational leaders. motivation and synergistic extrinsic motivation (Amabile,
The controls used by leaders are “formalized procedures and 1993). Diagnostic control can foster single-loop learning, but
systems that use information to maintain or alter patterns in not the higher-level (double-loop) learning required to en-
organizational activities” (Simons, 1987, p. 358). Examples courage innovative behavior (De Haas & Kleingeld, 1999).
include planning systems, reporting systems, and monitoring Also, the use of diagnostic control typically involves limited
procedures that rely on information use. Through reconciling information flow and structured communication channels,
organizational tensions between innovation and efficiency while innovation relies on a free flow of information and
(Henri, 2006), leaders may use control to overcome organi- open channels of communication (Kohli & Jaworski, 1990).
zational inertia and bring about both evolutionary and revo- Additionally, Van Den Bosch et al., (1999) suggest that dis-
lutionary changes in the firm (Simons, 1994). cussion initiated by using diagnostic control will, at best, lead
We focus on two distinct types of managerial control. to corrective action. Hence, we hypothesize that:
First, one control system, closely related to management-
by-exception, is diagnostic control systems (DCS) (Simons, Hypothesis 2 Managerial diagnostic control is negatively
1991). These systems involve team goals formulated accord- related to innovative team output.
ing to a given organizational vision and strategy and related
feedback loops. The feedback loops control any deviation
from the team's proximal and distal goals, based on the 2.4.2 | Interactive control and innovative
continuous collection of team performance data, and allow team output
different tolerance levels for discrepancies. Second, manag-
ers may adopt a more participative approach, such as inter- According to Simons (1995), interactive control systems are
vening in daily organizational decisions; this is referred to used in contexts with constantly changing information that
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KHANAGHA ET AL.
339
managers identify strategically important, requiring consist- such as destructive behavior and sanctioning against creative
ent attention to subordinates and being involved in their deci- individuals. Therefore, we argue that while autonomy gener-
sions. Interactive forms of control mean that data are better ally facilitates innovation, it can also bear high peer pressure.
interpreted in face-to-face meetings between team members At the same time, while it has been shown to stifle innovation,
and managers, as this allows continuous debate and formula- managerial control can equalize cases of high peer pressure,
tion of action plans. Interactive control systems are a tight dampening its negative effect.
form of control that provides a more open, informal, and A manager frequently meeting and speaking with individ-
subjective exchange of information (Chenhall, 2005). In a uals, i.e., a participative approach, may help to create both
context involving rapid, iterative developments, lacking ap- the intrinsic and extrinsic motivations required for innovative
propriate information can cause difficulties in developing behavior. Managers may provide an outsider view not neces-
plans for products or services and create issues when making sarily aligned with the team's shared norms and values. This
evaluations for changing demands. This suggests that inter- may lead to ideas being encouraged or may help resolve ten-
active management control systems are needed to facilitate sions and problems standing in the way of innovation, for ex-
learning and adaptation and make decisions based on adjust- ample, reserving time for individual development and teams
able criteria dependent on changing conditions (Chenhall, accessing required expertise and resources. Thus, we expect
2005). Interactive control provides intellectual stimuli, which both interactive and diagnostic approaches to help mitigate
will be beneficial in generating new knowledge and under- the negative effects of peer pressure on team innovative out-
standing of relevant cause-and-effect relationships (Henri, put. Hence we hypothesize:
2006). By stimulating dialogue and debate and expediting
information exchange, interactive control systems enable Hypothesis 4 Managerial diagnostic control weakens the
knowledge dissemination, communication and distribution negative effect of team peer pressure on innovative
of information, and the development of strategic initiatives team output.
(e.g., De Haas & Kleingeld, 1999; Simons, 1995). In this Hypothesis 5 Managerial interactive control weakens the
way, managers can help teams deal with conflicts arising negative effect of team peer pressure on innovative
between innovation and efficiency, hence supporting them team output.
to focus on creative activities beyond regular responsibilities
(Bass & Avolio, 1994). Thus, we hypothesize that:
3 | M ETHODS
Hypothesis 3 Managerial Interactive control is positively
related to innovative team output. 3.1 | Research setting
3.1.1 | Agile software development and scrum

2.5 | Cross-level interactions between control
mechanisms and innovative team output Agile software development departs from traditional, plan-
based approaches to software engineering to emphasize lean
Information and feedback from managers make it easier for processes and dynamic adaptation rather than detailed front-
teams to set targets or goals, allowing them to determine how end plans and heavy documentation (Nerur & Balijepally,
to make up performance deficits and adjust certain behaviors. 2007). It is typically used in settings where it is pivotally im-
When external feedback is received, it may provide a different portant to detect, identify, and respond to emerging user re-
and unexpected perspective, leading to comparisons between quirements (Schwaber & Beedle, 2002) with minimal formal
the team's collective perception and a manager's external view processes (Cockburn, 2006).
(Berg, 1985). When managers behave in ways supportive of a Agile principles, first discussed in the “Agile Manifesto”
team's goals and actions, they reinforce the team's perceptions (Fowler & Highsmith, 2001), aim to create business value by
of the desired behavior in the organization. While diagnostic delivering working software to users at regular short inter-
control may directly damage creative work, we expect it to vals. These principles have, in turn, spawned several prac-
dampen the negative effect of peer pressure on innovation. tices built around two premises: (a) self-organizing teams
In innovative teams, this effect reveals the paradoxical rela- whose members are collocated and work at a sustainable
tionship between high autonomy and managerial control. By pace, allowing for creativity and productivity; and (b) the
diverting the focus toward regular activities and efficiency- active participation of customers (or their surrogates) in the
oriented tasks, diagnostic control itself might break the crea- development process, facilitating feedback and reflection to
tive flow of a well-functioning innovation team. However, ensure better results (Dingsøyr et al., 2012).
when peer pressure is high, managerial diagnostics may help “Scrum” is one of the most common agile methods.
a team recognize and resolve some detrimental consequences, It emerged from the “NPD game,” a holistic approach to
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product development. Self-managing teams implement inno- were often present to monitor the team's activities at those
vative products in “sprints,” i.e., short periods of two to four meetings. To reduce potential common method bias, we gath-
weeks, each starting with a planning session and ending with ered data from three different sources. Team members re-
a review. Scrum consists of six principles: (a) self-managing ported on team peer pressure, the team's internal leaders, the
teams with high autonomy, (b) very challenging goals, (c) team size and age, and their organizational managers reported
subtle control, (d) overlapping development phases, (e) mul- on diagnostic and interactive controls and innovative team
tifunctional learning, (f) organizational transfer of learning output. All respondents were repeatedly encouraged to par-
(Takeuchi & Nonaka, 1986). In every team, the product ticipate; we reminded them that a high response rate would
owner (PO), i.e., a functional unit manager, determines the increase the reliability of results, which would help their or-
items that need development, which then get listed in the ganization. Of the 1441 questionnaires sent out to team mem-
product backlog. The backlog always reflects the current bers across 226 teams, we received 726 responses relating to
knowledge of necessary tasks. During each sprint planning 140 teams (50% response rate). After cleaning the data and
phase, team members select the top priority items from the assessing inter-rater reliability, retaining only teams where
product backlog and include them in the next sprint. Daily at least two members responded, we obtained a final sample
meetings coordinate the team's work. On the other hand, the for the analysis made up of 248 team members, 126 teams,
Scrum master, the equivalent of a project manager, is respon- and 126 internal team coordinators (Scrum masters). Finally,
sible for multiple things, perhaps most importantly, enacting we conducted a third survey among unit-level team managers
the Scrum values and practices and resolving any issues pre- one month later; we sent several reminders to these individu-
venting the team from working effectively. als until we received 97 complete responses. We used this
time lag to avoid potential issues arising from a concurrent
measurement of independent and dependent variables.
3.2 | Participants and procedures
We collected survey data from 97 R&D teams in a telecom- 3.3 | Measures

munications MNC, including their internal team managers
and their higher-level managers in 34 organizational units, The surveys were in English, the common language used in
located in 11 different countries, including Canada (5), China the company. Some of the items in our survey came from
(16), Croatia (12), Hungry (5), India (2), Ireland (13), Italy previous research. In some cases, we adapted them slightly
(1), Madrid (11), Poland (6), Sweden (25), and the United to the team context. We used seminal and recent work to de-
States (1). Data to develop reliable scales came from 44 velop and validate scales for team-level interactive and diag-
exploratory interviews held over three months in the same nostic controls. The surveys were tested in a pilot study on 23
MNC. To introduce the study and secure the involvement team members and managers across different sites; we asked
of employees and respective managers, one of the authors them to complete the survey and comment on any ambiguity
contacted the top manager in each of the units involved. The in the questions. We held individual follow-up interviews to
types and sizes of teams and the levels of task complexity collect feedback and suggestions for improving the question-
were very similar in all the organizational units. Most teams naire, which we used to revise some items.
in the study were developing new products to implement new
software functionalities. Some of them (9%) were working on
software maintenance, undertaking vast activities, including 3.3.1 | Team peer pressure
optimization, error correction, deletion of discarded features,
and enhancement of existing features. Both types of teams We used three items from Wright and Barker's (2000) scale
had similar responsibilities and issues concerning innova- to measure peer pressure. This scale represents the first psy-
tion and agile initiatives. The average team size was seven chological measure used to validate the manifest dynamics
members (size ranged from five to nine), and the average of peer pressure, as reported by Barker (1993). The selected
agile team had been formed for an approximate average of items are meant to capture the degree of responsibility, con-
1.5 years. Our study defined a team as a group of people who: trol, or discretion provided by the management system es-
(a) worked together permanently, (b) reported directly to the tablished within a team due to team norms. Specifically, we
same supervisor and group of stakeholders, (c) were coor- asked team members to respond to the following items: (a)
dinated by the same internal team coordinator (Scrum mas- “My team makes sure that everyone in the team pulls his/
ter), (d) recognized themselves as belonging to a team with a her weight,” (b) “Within my team, we need the agreement of
unique identifier (i.e., the team's name). Without exception, everyone in the team to decide how to use my working time,”
team members interacted at least once a day during stand-up and (c) “Within my team, we usually check with other team
meetings and/or while completing tasks. Team coordinators members before doing something that might affect them.”
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We assessed team peer pressure and all the team member test the validity of our measurements, we added one ques-
survey variables on a seven-point Likert scale, ranging from tion from each leadership control scale to the Scrum masters’
1 for “strongly disagree” to 7 for “strongly agree.” survey. The correlation between the two measures was high
(r = 0.64 for Diagnostic Control and r = 0.58 for Interactive
Control, p < 0.001), providing additional assurance regard-
3.3.2 | Interactive and diagnostic controls ing the credibility of our measurement.
We used a systematic approach for scale development,

following the steps recommended by seminal references 3.3.3 | Team innovative output
(Rossiter, 2002). Based on Simons’s (1991, 1994) original
work and transcripts of interviews with team members and Higher-level managers assessed the innovative output of
others in the organization, we started by determining a theo- their teams using a scale ranging from “very low” (1) to
retical basis for scale items. We subsequently explored other “very high” (7), using items closely related to those used
sources of information, including organizational documen- in the company's internal appraisal system. To ensure the
tation on the way teams worked, and then created a tenta- validity and reliability of our measurement, we used sev-
tive list of survey items. This resulted in 10 items (5 for each eral measures before, during, and after our survey. Before
moderator variable). We conducted in-depth interviews with launching, to increase the face validity of our survey, we in-
three leaders to check any ambiguity in the item formula- teracted extensively with the company to avoid defensive-
tion and to suggest improvements to the questions. Of the ness or withdrawal by the respondents (Johnson & Saboe,
10 items, 2 were dropped (1 per variable) due to perceived 2011). We avoided abstract or fully qualitative assessments
ambiguity. We conducted an exploratory factor analysis to and rather had managers evaluate innovation performance
verify these measures’ reliability and internal consistency, based on tangible, unbiased, and standardized elements (re-
and a two-factor structure for the 8 items was confirmed (ex- flecting internal appraisal systems). The items rated in this
plaining 78.24% of the variance). The factor loadings ranged way were: patents or the number of ideas generated for new
from 0.788 to 0.923, which is above the acceptable threshold. features or new system improvements; new ideas generated
Higher-level managers were asked to answer the following for improving the team's way of working; new ideas gener-
four items using a Likert-type scale (from 1 = “strongly disa- ated for minor improvements to existing products; use of new
gree” to 7 = “strongly agree”). The items used to measure the practices, new tools, or ways of working; the implementation
interactive control were: of radical/major new product ideas. Ensuring correspond-
ence between our scales and internal measures enabled us
• “I ensure that learning about our products is an important to capture variation in performance across the teams without
agenda to discuss inside my team or teams” neglecting complex commercial issues, HR problems, tech-
• “I ensure that product innovation is a regular focus of at- nological concerns, or other issues that could influence the
tention for all the team members within my team(s)” teams’ innovation output and are difficult to control due to
• “I participate in all the team's ceremonies and events” the company's confidentiality concerns. During the survey,
• “I continuously challenge and debate team's work progress we interacted with managers through internal communication
data or their action plans.” channels, and we ensured that there was a common under-
standing of the survey questions. After the survey, to further
Diagnostic control was measured using the following assess the reliability of our measurement, we secured access
items: to an idea box and checked the correlation between the inno-
vation performance reported by managers and the number of
• “My team is regularly (several times in a month) asked to ideas submitted by teams. Not all the teams in our study used
provide information about our work progress” an idea box. More importantly, since it was operationalized,
• “I regularly see information about the team's progress in it did not cover all instances of innovation. However, there
the achievement of their competence goals or learning was a strong correlation between two measures (r = 0.61,
objectives” p < 0.001) in the sample that we used (34 teams), providing
• “Competence goals are regularly (at least twice a year) pro- extra assurance about the credibility of our measurement. As
vided to my team.” various measures of innovative output have unique aspects, a
change in a latent variable may not cause simultaneous vari-
The questions about managerial controls were not inher- ation in all measures (Jarvis et al., 2003). Hence, different
ently positive or negative. Thus, there was no strong reason dimensions of innovative output can be considered indices
to believe that managers may try to ascribe unrepresentative produced by observable variables and are, therefore, forma-
behavior to themselves. Nonetheless, to ensure reliability and tively measured.
|
3.3.4 | Control variables that interactive control is positively related to innovative out-
put (β = 2.80), and the relationship is statistically significant,
Previous research shows that team processes and out- supporting hypothesis 3. Diagnostic control is negatively re-
comes can be strongly affected by the group's composition lated to the innovative output of the teams (β = −3.08), and
(Williams & O’Reilly, 1998). Group size and team tenure the relationship is statistically significant. However, because
are central among team composition variables and influence diagnostic control is not significant in Model 3, this interpre-
group processes and outcomes (e.g., Ancona & Caldwell, tation needs further scrutiny. Because the final model is the
1992; Bantel & Jackson, 1989). We used these variables as strongest in terms of χ2 value and the moderation chart sug-
control variables in our regression models. The group size gests opposing forces that may cancel each other without con-
was obtained from the internal team managers and evaluated sidering interaction effects, we conclude that hypothesis 2 is
as the number of team members. We assessed team age as supported. The interaction effects of managerial controls and
the current team's years of experience; this came from the peer pressure are significant: Figures 2 and 3 illustrate these
internal team manager's survey. relationships. In interactive control, the figure shows that an
increased level of peer pressure negates the control's potential
benefits. Conversely, higher levels of diagnostic control seem
3.4 | Aggregation and measurement analysis to be influential when there is greater peer pressure.
The mean inter-rater agreement values for team-level con-

structs in this article, i.e., peer pressure (r = 0.78), exceeded 5 | DISCUSSION
the generally accepted cut-off point of 0.70 for substantial
inter-
rater agreement (range: 0.67– 0.86). To complement Our study focused on a potential dark side of agile teams and
these statistics, we also estimated group-size-corrected and asked how leaders might deal with this. We theorized and
intra-class correlation coefficients (ICCs). This procedure found that increased peer pressure to conform is a potential
yielded acceptable intra-class correlations for the construct innovation inhibitor. We then identified managerial diagnos-
(0.72) and significant F-tests (p < 0.001), confirming the tic and interactive controls as organizational-level factors
appropriateness of aggregating individual-level data to the that could mitigate or exacerbate this inhibitor. Our results
team level. We assessed our multi-item measures’ conver- suggest that peer pressure, focused on delivering and meet-
gent and discriminant validity with confirmatory factor ing deadlines, is linked to lower innovative team output. By
analysis (CFA) on the team-level data. The measurement illustrating how peer pressure is not beneficial for innovative
model included three latent variables constructed by calcu- team output when teams are working on high-intensity R&D
lating the means for their underlying constructs: peer pres- activities, this finding contributes to research on normative
sure, diagnostic control, and interactive control. The CFA mechanisms. The study underlines the importance of peer
yielded a non-significant chi-square and a good fit to the data pressure as a motivational state in self-managing teams. We
(CFI = 0.93; RMSEA = 0.053). Reliability analyses of our also show that managerial diagnostic and interactive controls
multi-item measures yielded satisfactory Cronbach alpha co- moderate the relationship between peer pressure and team
efficients (0.73 ≤ α ≤ 0.95). Together, these results support innovation. Diagnostic controls positively affect innovative
the validity and reliability of our measures. output when peer pressure is high and have a potentially neg-
ative effect when peer pressure is low. Interactive controls
also demonstrate an overall positive effect, but the effect is
4 | R E S U LTS strongest when peer pressure is low. Specifically, this work is
a first attempt at studying the multi-level performance effects
Table 1 shows means, standard deviations, and bivariate cor- of diagnostic and interactive controls and how they interact
relations among the key variables of our study across two with the more commonly studied normative mechanism of
levels. Table 2 illustrates the results of the multi-level regres- peer pressure.
sion model for the outcome variable, i.e., the innovative out- Questions about how various controls can and should be
put of teams. The models indicate a good level of fit and give, applied have attracted significant scholarly attention. Our
more or less, similar results in terms of this study's different study adds to existing research on control dynamics within
focal variables. The team-level construct, i.e., peer pressure, organizations, for example, between managers and subordi-
is statistically significant and negative (β = −2.241), support- nates (e.g., Cardinal et al., 2017; see Long & Sitkin, 2018).
ing hypothesis 1. Our results suggest that, depending on the level of peer pres-
The effects of the two unit-level constructs, i.e., interac- sure within a team, management control can foster innova-
tive control and diagnostic control, are both significant and tive output and is important in the context of self-managing
in the expected directions in Model 4. The model confirms teams. By using interactive control to focus on strategic
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KHANAGHA ET AL.
343
priorities, such as learning and innovation, managers can The study helps better understand the complexity of multiple
help to improve the team's innovative output. These results controls characterizing workers who support firms in achiev-
can be extended to the team level and complement empiri- ing their organizational goals in the post-bureaucratic era. It
cal work undertaken by Abernethy and Brownell (1999) and also empirically tests the model proposed by Simons (1995),
Bisbe and Otley (2004), which indicate the role of control in confirming that control systems are tools used in implement-
the context of innovation. ing strategies, giving rise to the emergence of new strategies.
This study also shows that because team members feel However, the study extends the Simons model by introducing
constrained by the need to meet deadlines, diagnostic control a new unit of analysis: managerial control in teams. In con-
negatively affects a team's capacity for innovation. This is trast to that model, where it was unclear how leaders’ control
in line with theoretical arguments supporting the notion that could be combined with autonomous, social mechanisms,
both complementarity and competition exist between diag- this study shows how leaders may use control to secure and
nostic and interactive controls, giving validity to including extend the positive effects of self-managing teams, helping
both types of control in theoretical and empirical analyses. them become or remain more innovative.
The results indicate that managerial diagnostic and interactive Past research has recognized that multiple controls may
controls both contribute to a team's innovation capabilities. be used concurrently in teams, but the effect on team per-
Our results also clarify the nature of the relationship formance has not been considered (Barker, 1993). Previous
between managerial interventions (through diagnostic and studies investigated the nature of impact without considering
interactive control) and the normative mechanism of peer different controls’ interdependent or joint effects (Henderson
pressure. In innovative team output, diagnostic controls es- & Lee, 1992). Our study demonstrates that controls can com-
sentially help reduce the negative effects of peer pressure; plement each other or interact so that when used in combina-
interactive controls also reduces the negative effects, but to tion, the impact on a team's innovative capabilities is stronger
a lesser extent. Thus, consistent with our expectations, the than when any form is used alone. We do not suggest, as
effect of peer pressure on innovative output attenuates as di- traditional control theory would indicate, that controls can
agnostic control increases. However, the effect is not strong only be used as replacements for one another (Choudhury
enough that a high level of diagnostic control substitutes en- & Sabherwal, 2003). Complementarity and interactions be-
tirely for the effect of increased peer pressure. tween different controls depend on each control's specific na-
With these results, we can extend prior research on the ture and how they influence a predetermined outcome, both
determinants of innovation in self-managing teams in sev- independently and jointly. Our findings on the relationship
eral important ways. The study examined how management between managerial controls, both diagnostic and interactive,
control systems determine innovative output in the context of and peer pressure offer scope to extend the theory on orga-
self-managing teams. Overall, the findings indicate that with nizational control. We provide a more comprehensive theo-
lower peer pressure, interactive managerial control makes a retical understanding of how different controls, formal and
positive contribution to the innovative output of a team; how- informal, combine and interact to influence team capabilities.
ever, diagnostic control does the opposite. When peer pressure Even though earlier current control theory provided insights
is high, both control approaches seem to be useful in helping into the different types of control mechanisms used by orga-
teams to overcome innovation challenges. This study adds to nizations, there is still no clear understanding of the specific
current research on managerial controls by proposing a theo- working processes (Loughry & Tosi, 2008; Stewart et al.,
retical framework that offers insights into the role of controls 2012), interrelationships between the controls, and their im-
in implementing organizational strategies at the team level. pacts on teams. Because it elicits the conditions needed for
T A B L E 1 Means, standard deviations and correlations
n Mean SD (1) (2) (3) (4) (5) (6)

(1) Team age (years) 97 1.5 0.450
(2) Team size (fte) 97 6.932 1.754 0.037
(3) Team structure 97 5.480 0.932 0.083 −0.104
(4) Peer pressure 97 5.016 0.973 0.150 −0.089 0.623*
(5) Team innovative 97 4.343 1.363 0.147 0.103 0.032 −0.018
output
(6) Diagnostic control 34 5.780 1.029 −0.207 0.143 0.161 0.064 −0.008
(7) Interactive control 34 5.710 0.879 0.002 −0.005 0.278 0.163 0.285 0.369*
*Correlations above |0.22| are significant at p < 0.01.
| 344
T A B L E 2 Results of hlm analysis of team innovative outcome
Model 1 Model 2 Model 3 Model 4
Variable Β (SE) t p Β (SE) t p Β (SE) t p Β (SE) t p

Intercept 4.41 (0.13) 32.97 0.00 4.06 (0.98) 4.16 0.00 1.64 (1.31) 1.25 0.21 10.31 (4.32) 2.39 0.02
Team-level (Level 1)
Team Age 0.24 (0.09) 2.70 0.01 0.23 (0.08) 2.81 0.00 0.32 (0.77) 4.12 0.00
Team Size 0.17 (0.17) 1.02 0.31 0.10 (0.17) 0.63 0.52 0.20 (0.15) 0.13 0.90
Team Structure 0.12 (0.14) 0.83 0.41 0.10 (0.13) 0.70 0.49 0.20 (0.13) 1.53 0.13
Peer Pressure (PP) −0.28 (0.15) −1.84 0.06 −0.31 (0.15) −2.11 0.03 −2.24 (0.85) −2.63 0.01
Unit-level (Level 2)
Interactive Control 0.42 (0.17) 2.50 0.01 1.77 (0.63) 2.80 0.00
(IC)
Diagnostic Control 0.09 (0.15) 0.58 0.57 −2.67 (0.87) −3.08 0.00
(DC)
Cross-level interaction effects −0.27 (0.12) −2.20 0.03
PP × IC 0.56 (0.17) 3.26 0.00
PP × DC
χ2 9.74 0.04 17.58 0.01 32.28 0.00
Log likelihood −216.28 −158.22 −150.30 −146.43
INNOVATIVE OUTPUT OF AGILE TEAMS
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4.5
Innovativeness
4
3.5 Low Interactive

Control
3
High Interactive
2.5 Control
2
Low Peer Pressure High Peer Pressure
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F I G U R E 3 Peer pressure by diagnostic control on innovative output
control mechanisms to interact with each other, theorizing output. It confirms the hypothesis put forward by Barker and
about control interactions offers a holistic understanding of Tompkins (1994) that as peer pressure (which Barker referred
the phenomenon (Bendersky, 2003; Chadwick, 2010). to as concertive control) becomes stronger, a team can reach
Our research draws on organizational control theory the point of diminishing returns. When there is a high level
(Cardinal, 2001; Long et al., 2011; Sitkin et al., 2010) to explain of peer pressure, team members have to surrender too much
team- level dynamics and outcomes. Cardinal and Kreutzer of their identity for the team's sake, which has a detrimental
(2013) argue that most work on organizational control focuses effect on motivation. Our focus on informal team-related fac-
on formal control. Research on informal control, such as peer tors, such as peer pressure, provides a more finely-grained
pressure, pays no attention to specific controls that managers understanding of how peer pressure affects a team's inno-
and team members can use to mitigate its effects. Understanding vative abilities. This confirms the usefulness of Wright and
how organizations handle both formal and informal control sys- Barker's (2000) scale in a different setting than Hilgermann
tems requires a deep understanding of the mechanisms avail- (1998), who applied the construct both in a service organi-
able to managers and what implications their use might have for zation and with manufacturing workers. Hilgermann found
team capabilities. Our work explores these issues in some depth a positive relationship between the extent of peer pressure in
by looking at the effects of using diagnostic and interactive con- the team environment and team outcomes, such as job sat-
trols both separately and in combination. Several scholars claim isfaction and effectiveness. This is in line with Henderson
that formal controls are becoming less important due to the in- and Lee's (1992) results, which, although exploratory, show
creasing team-based and knowledge-based work (Hagel et al., that, in the context of design teams, team members’ control
2010; Kirsch & Choudhury, 2010; Kreutzer et al., 2015) that positively affects team performance. The contrast with our
this creates a need to understand better how informal controls observations underlines the need to explore peer pressure
work. Our theorizing on the complementary use of controls mechanisms further to reconcile these different results. In ad-
reveals a set of criteria that managers could potentially use to dition, to increase the generalizability of these findings, the
reduce the negative effects of peer pressure. effect that tasks have on teams’ control behavior should be
Our findings support the notion that team peer pressure is investigated. For example, our case included teams employed
a motivational state that can undermine the team's innovative in highly complex R&D activities requiring a specific level
|
of learning. Previous studies investigated how other forces controls can positively affect team innovation. This study pro-
exerted by peers affect team performance (Stewart et al., vides a better understanding of how people working in self-
2012). However, despite its increasing importance in mod- managing teams, despite being empowered by autonomy, can
ern organizations, few studies have explored the influence of often be constrained by accumulated peer pressure, leading
peer pressure. More research is needed to fully understand to reducing the team's innovative output. For team manag-
the joint influence of peer pressure and other peer forces– ers, this study suggests various interventions to help improve
particularly investigating the combined effect of peer-based overall team performance when team members are subject to
normative mechanisms and rational control mechanisms in peer pressure. In particular, our findings indicate that in teams
the context of self-managing teams. with a high level of peer pressure, managers should ensure
that team members keep a healthy focus on innovation and
avoid excessive focus on routine, short-term-oriented tasks.
5.1 | Limitations and future research
CONFLICT OF INTEREST
While the methodology employed had several strengths, such The authors have no conflicts of interest to disclose.
as its use of multi-level data and multiple sources, it could be
improved by using longitudinal data, which could more clearly ETHICS STATEMENT
determine the direction of causality. Nevertheless, since our The authors have read and agreed to the Committee on
hypotheses were driven by theory and the team members were Publication Ethics (COPE) international standards for
assigned to their team from the organization, we can argue that authors.
these issues do not significantly impact the interpretation of
the results. However, future research should use a longitudinal ORCID
study or experimental design to establish the direction of cau- Saeed Khanagha https://orcid.org/0000-0003-4765-0425
sality. Findings from longitudinal datasets could improve the
internal validity of our results by providing time-lagged data. R E F E R E NC E S
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Product Innovation Capability: Literature Review, Synthesis, and
Illustrative Research Propositions.” Journal of Product Innovation Dr. Saeed Khanagha is associate professor of strat-
Management 31 (3): 552–66.
egy at VU Amsterdam and his research is broadly
Stewart, Greg L., Stephen H. Courtright, and Murray R. Barrick. 2012.
focused on understanding the factors that determine
“Peer-Based Control in Self-Managing Teams: Linking Rational
and Normative Influence with Individual and Group Performance.” success of organization in adoption of emerging digi-
Journal of Applied Psychology 97 (2): 435–47. tal technologies at the individual, team, organization,
Takeuchi, Hirotaka, and Ikujiro Nonaka. 1986. “The New Product and ecosystem levels, using a variety of qualitative
Development Game.” Harvard Business Review 64 (1): 137–46. and quantitative data methods including single case
Thayer, Amanda L., Alexandra Petruzzelli, and Caitlin E. McClurg. study, multiple cases studies, survey, and experimen-
2018. “Addressing the Paradox of the Team Innovation Process: tal design. His ongoing research mostly explores
A Review and Practical Considerations.” American Psychologist
the different dimensions of strategizing for digital
73 (4): 363–75.
Todt, Gisa, Matthias Weiss, and Martin Hoegl. 2018. “Mitigating
technologies, particularly digital platforms and eco-
Negative Side Effects of Innovation Project Terminations: The systems. He has twice received prestigious Marie
Role of Resilience and Social Support.” Journal of Product Curie Horizon 2020 grants. Dr. Khanagha has close
Innovation Management 35 (4): 518–42. collaborations with academic and industrial organi-
Todt, Gisa, Matthias Weiss, and Martin Hoegl. 2019. “Leading Through zations, including Intel, Ericsson, and Atos. His re-
Innovation Project Setbacks: How Authentic Leaders Keep Their search has been published in outlets such as Strategic
Innovators Resilient.” Project Management Journal 50 (4): 409–17. Management Journal, Journal of Management
Tompkins, Philip K., and George Cheney. 1985. “Communication
Studies, and Long Range Planning. He is a member
and Unobtrusive Control in Contemporary Organizations.”
Organizational Communication: Traditional Themes and New
of editorial board of Long Range Planning.
Directions 13: 179–210.
Turner, Karynne L., and Mona V. Makhija. 2006. “The Role of Prof. Henk W. Volberda is professor of strategic
Organizational Controls in Managing Knowledge.” Academy of management & innovation at Amsterdam Business
Management Review 31 (1): 197–217. School of the University of Amsterdam. Moreover,
Van den Bosch, Frans A. J., Henk W. Volberda, and Michiel De he is Director of the Amsterdam Centre for Business
Boer. 1999. “Coevolution of Firm Absorptive Capacity and
Innovation. He has held visiting scholarships at the
Knowledge Environment: Organizational Forms and Combinative
Wharton School of the University of Pennsylvania
Capabilities.” Organization Science 10 (5): 551–68.
van Knippenberg, Daan. 2017. “Team Innovation.” Annual Review and Cass Business School in London. Volberda holds
of Organizational Psychology and Organizational Behavior 4: various advisory positions such as member of the su-
211–33. pervisory board of NXP Semiconductors Netherlands,
Volberda, Henk W. 1996. “Towards The Flexible Form: How To Remain expert member of the World Economic Forum and
Vital in Hypercompetitive Environments.” Organization Science 7 fellow of the European Academy of Management.
(4): 359–87. His research on technological disruption, coevolu-
Volberda, Henk W., Saeed Khanagha, Charles Baden-Fuller, Oli R.
tion, new business models, strategic flexibility, and
Mihalache, and Julian Birkinshaw. 2021. “Strategizing in a Digital
World: Overcoming Cognitive Barriers, Reconfiguring Routines
management innovation has led to an extensive num-
and Introducing New Organizational Forms.” Long Range ber of publications in peer-reviewed journals includ-
Planning, Forthcoming. https://doi.org/10.1016/j.lrp.2021.102110 ing the Academy of Management Journal, Journal
Weiss, Matthias, Stefan Razinskas, Julia Backmann, and Martin Hoegl. of Management, Journal of International Business
2018. “Authentic Leadership and Leaders’ Mental Well-Being: An Studies, Management Science, Organization Science,
Experience Sampling Study.” The Leadership Quarterly 29 (2): and Strategic Management Journal.
309–21.
|
Dr. Andreas Alexiou is assistant professor of dig-

ital strategy at Tilburg School of Economics and How to cite this article: Khanagha, Saeed, Henk
Management (TiSEM) at the University of Tilburg, W. Volberda, Andreas Alexiou, and Maria Carmela
Netherlands. He received his doctorate from the Annosi. 2022. “Mitigating the Dark Side of Agile
Rotterdam School of Management (RSM), Erasmus Teams: Peer Pressure, Leaders’ Control, and the
University, Netherlands. His research centers on Innovative Output of Agile Teams.” Journal of
strategy and technology management, especially on Product Innovation Management 2021;39: 334–350.
digital transformation, adaptation to technological https://doi.org/10.1111/jpim.12589
disruption, and their implications for strategy, inno-
vation and business models. His work is published
in various journals, including Long Range Planning,
Technological Forecasting and Social Change and
Information Technology and People.
Dr. Maria Carmela Annosi is senior assis-

tant professor of innovation management and or-
ganizational behavior at the School of Social
Sciences, Wageningen University and Research,
The Netherlands. She is a member of the Research
Centre in Business Transformation (ReBoot), LUISS
Business School. She is co- founder of DigiMetis
network of WUR research experts on the analysis of
socio-ecological systems in a digitalized era, inside
Wageningen University and Research. She is an aca-
demic external collaborator of McGill Centre for the
Convergence of Health and Economics (MCCHE).
She is a Board Member of the International Food and
Agribusiness Management Association (IFAMA)
and IFAMA Europe.

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Mitigating the dark side of agile teams: Peer pressure, leaders’

Saeed Khanagha1 | Henk W. Volberda2 | Andreas Alexiou3 | Maria Carmela Annosi4

2.2 | Team innovation cognitive, motivational, entrepreneurship, leadership, net-

Unit Level Managerial Control Systems

Team Level H4 & H5 Team Innovative

F I G U R E 1 Research model and hypotheses

3.1.1 | Agile software development and scrum

We collected survey data from 97 R&D teams in a telecom- 3.3 | Measures

We used a systematic approach for scale development,

The mean inter-­rater agreement values for team-­level con-

T A B L E 1 Means, standard deviations and correlations

n Mean SD (1) (2) (3) (4) (5) (6)

T A B L E 2 Results of hlm analysis of team innovative outcome

Model 1 Model 2 Model 3 Model 4

Variable Β (SE) t p Β (SE) t p Β (SE) t p Β (SE) t p

3.5 Low Interactive

F I G U R E 2 Peer pressure by interactive control on innovative output

F I G U R E 3 Peer pressure by diagnostic control on innovative output

Dr. Andreas Alexiou is assistant professor of dig-

Dr. Maria Carmela Annosi is senior assis-

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The mean inter-rater agreement values for team-level con-