Locus of control defines whether people place the primary responsibility within themselves or on outside forces. Some people believe that their own actions strongly influence what happens to them. They feel in control of their own fate. These individuals have a high internal locus of control. Other people believe that events in their living occur because of chance, luck, or outside people and events. They feel more like pawns of their fate. These individuals have a high external locus of control. Many top leaders of e-commerce and high-tech organizations possess a high internal locus of control. These managers have to cope with rapid change and uncertainty associated with Internet business. They must believe that they and their employees can counter the negative impact of outsides forces and events.

Research on locus of control shows real differences in behavior across a wide range of settings. People with an internal locus of control are easier to motivate because they believe the rewards are the result of their behavior. They are better better able to handle complex information and problem solving, are more achievement oriented, but are also more independent and therefore more difficult to manage. However, people with an external locus of control are harder to motivate, less involved in their jobs, more likely to blame others when faced with a poor performance evaluation, but more compliant and conforming and, therefore, easier to manage.