Chapter 1 Management and Control
Management control is a critical function in organisations. Management control failures can lead to large financial losses, reputation damage and possibly even to organizational failure. Reality shows us (in some examples illustrated on page 3-4) the importance of having good management control systems (MCS). However, adding to much control does not always lead to better control. Some MCS’s in common use often stifle initiative, creativity, and innovation. I.e. in organisations with a lot of bureaucracy a culture with a lack of responsibility can occur and due to the slow, bureaucratic processes people can find ‘creative’ ways to speed up this process.

That good MCS’s are important is widely accepted, but within the field of MCS’s there are different views. An old, narrow view of a MCS is that of a ‘cybernetic’ system involving a single feedback loop. You can compare measuring performance with a thermostat; They measure the temperature, compare those measurements with the desired standard, and, if necessary, take a corrective action (turn on or off). This book, however, takes a broader view. It recognizes that may management controls in common use, such as direct supervision, employee-hiring standards and codes of conduct do not focus on measured performance. The focus instead on encouraging, enabling or, sometimes, forcing employees to act in the organization’s best interest. MCS can rather be proactive (to prevent) than reactive. The primary function of management control is to influence behaviours in desirable ways. The benefit is the increased probability that the organization’s objectives will be achieved.

Management and control.
Management control is the back end of the management process. This can be seen from the various ways in which the broad topic of management is disaggregated.

Management.
All definitions of