Management Control Systems

Organizational control is defined as any mechanism or process that managers use to align attention, attitudes, behavior, and outcomes of organizational [Page 461]members with an organization’s goals. The concept of organizational control describes both formal control (such as structures, procedures, and rules) and informal control (such as norms, practices) mechanisms, as well as the systems of control mechanisms used in predictable configurations. From their earliest writings, organizational scholars have emphasized the relationship between control application and goal attainment and have depicted organizational control as one of the four primary functions (i.e., controlling, coordinating, organizing, and planning) of management. Most conceptualizations of organizational control rest on theories of cybernetic systems where inputs are transformed through processes into outputs. In implementing these systems, managers plan, measure, reward, and provide feedback on achieved performance. Control systems evaluate inputs, processes, and outputs to assess the attainment of specific production standards. If standards are satisfied, work proceeds unabated. If not, managers alter the inputs, processes, or outputs employed by the system until desired standards are achieved. The information processing theory of organizations was synthesized into the core idea that control is based upon the programmability of tasks and the measurability of outcomes. Contemporary organizational research presents two primary streams of control research. One influential body of work examines individual elements of control. A second prominent body of work investigates ideal types of control arrangements. Together, these two streams provide the foundation for control research; each is briefly summarized in this entry.