Software development outsourcing companies employ a variety of control mechanisms to manage the coordination amongst interacting partners. In such scenarios, the employees at the vendor companies are governed not only by the management of their own company, but also by the project managers at the client company. This creates multi-layers of control at the vendor companies. This paper presents a study designed to examine the conflicts in multi-layered control at the vendors of software development outsourcing projects. Grounded in the qualitative interview data, the study identified the importance of extending control theory to include ‘strategic’ dimension, for minimizing the conflicts. The proposed ‘strategic’ control as a higher-level construct, which complements formal and informal controls already in place introducing ‘continual’ and ‘flexible’ as two new and testable controls. Unlike, the dynamism observed in formal and informal controls in projects, the proposed strategic control delivers stable and long-term control.