Management Control
Chapter 1
Management control: an overview
Introduction
T
his first chapter introduces management control, providing an overview of its fundamental objectives, components, concepts and tools. Its aim is to elucidate the general anatomy of this management approach so that the reader will be able to understand the links between the various topics that are dealt with in subsequent chapters of the book.
Management control will be defined progressively. In the first section we will deliberately place ourselves within a simplified context, that of an autonomous entity – a small company, for example. This will allow us to explore the basic elements of the approach. In the second section we will take a look at the more complex context of an “organisation”, made up of several “entities” (operational divisions, functional departments, etc.) and will explore the new dimensions engendered by this broader configuration.
1. The basic elements of the approach
1.1. The control process*
What does management control comprise and what are its aims? In order to grasp this notion, we need to draw on a broad definition of “control”, such as found in the Oxford
English Dictionary: “to determine the behaviour or supervise the running of, to maintain influence or authority over...to regulate...”, “to hold sway over, to dominate, to command. To hold in check or repress one’s passions or emotions; so to control one’s feelings, etc.” Some concrete examples of the use of the word “control” are: to control one’s breathing, air-traffic control, etc. In other words, it encompasses the idea of a deliberate intervention on the part of an agent in order to produce desired effects. Control is the opposite of chance, but is also at odds with an excessive dependence on external factors. It is related to the notions of command and regulation.
Taking one of the above examples of control, to say that a person controls his breathing means both that he has an active role (no
Management control: an overview
Introduction
T
his first chapter introduces management control, providing an overview of its fundamental objectives, components, concepts and tools. Its aim is to elucidate the general anatomy of this management approach so that the reader will be able to understand the links between the various topics that are dealt with in subsequent chapters of the book.
Management control will be defined progressively. In the first section we will deliberately place ourselves within a simplified context, that of an autonomous entity – a small company, for example. This will allow us to explore the basic elements of the approach. In the second section we will take a look at the more complex context of an “organisation”, made up of several “entities” (operational divisions, functional departments, etc.) and will explore the new dimensions engendered by this broader configuration.
1. The basic elements of the approach
1.1. The control process*
What does management control comprise and what are its aims? In order to grasp this notion, we need to draw on a broad definition of “control”, such as found in the Oxford
English Dictionary: “to determine the behaviour or supervise the running of, to maintain influence or authority over...to regulate...”, “to hold sway over, to dominate, to command. To hold in check or repress one’s passions or emotions; so to control one’s feelings, etc.” Some concrete examples of the use of the word “control” are: to control one’s breathing, air-traffic control, etc. In other words, it encompasses the idea of a deliberate intervention on the part of an agent in order to produce desired effects. Control is the opposite of chance, but is also at odds with an excessive dependence on external factors. It is related to the notions of command and regulation.
Taking one of the above examples of control, to say that a person controls his breathing means both that he has an active role (no