Chapter 1
Evolving Views
- 1965: managers assure that resources are obtained & used effectively and efficiently in the accomplishment of the organization's objectives ("Planning and Control Systems: A Framework for Analysis", R. Anthony, 1965)
- 1992: managers influence other members to implement the organization's strategies ("Management Control Systems, R. Anthony, 1992")
- 2004: formalized, information-based routines, structures and processes used by management to formulate strategies and implement them by influencing employee behavior ("Understanding Competitive Advantage: The Importance of Strategic Congruence and Integrated Control", Nilsson and Rapp, 2004")
Management Control (MC) is comprising a combination of control practices designed and implemented by top managers to increase the probability that lower-level managers and employees will behave in ways consistent with the organization's mission, goals and strategies.
Centralisation vs Decentralisation
What motivates managers to obtain goal congruent behavior?
- Top-down vs Bottom-up
- Formal vs Informal Communication
Top-down
Top managers implement appropriate control practices so that lower-level managers and employees have a clear sense of:
- what decisions to take
- what results to achieve
- where to lead the people
- how to use the resources under their responsability
Bottom-up
- Report on achievements
- Enable lower-mevel managers and employees to acquire the support to develop their skills and organizational resources to execute their responsabilities
Control Practices
Three types of control practices:
- Input: information about the organization's objectives, strategies, and goals
- Throughput: the number of people and resources available to achieve the organization's objectives
- Output: the results achieved by the organization
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