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Effective Management Control deals with a critical but relatively neglected and misunderstood aspect of organizational effectiveness: the process of controlling the behavior of people in organizations. The issue of organizational control and the design of an optimal control system is essential for the long term effectiveness of an organization: too little control can lead to confusion and chaos; conversely, too great a degree of control can result in the erosion of innovation and entrepreneurship.
This monograph presents a conceptual framework for approaching these issues, and examines the role accounting can play in a successful control system. The author works towards an understanding of the nature, role, elements and functioning of organizational control and control systems in organizations. The book posits and discusses the features of a core control system and its component parts, including: planning, measurement and feedback, evaluation and reward sub-systems. It also discusses the ways in which a core control system operates within a larger organizational structure and culture. The theory is illustrated through its application to a particular case study.

Inhaltsverzeichnis

Frontmatter

1. The Nature and Role of Organizational Control

Abstract
All organizations (businesses, universities, governments, hospitals) are concerned with channeling human efforts toward attainment of organizational objectives. Regardless of their formal purposes, organizations are composed of people with their own personal interests. Even if these individuals and groups wish to help attain organizational goals, the organization of which they are a part must coordinate their efforts and direct them toward specific goals. Thus organizations must influence or control the behavior of people, if they are to fulfill their plans and achieve their goals.
Eric G. Flamholtz

2. Organizational Control Systems: A Framework

Abstract
Organizational control systems (or, for brevity, “Control Systems”) are not visible to the naked eyes of observers in an organization. Yet they are not metaphysical; they are real and permeate an organization.
Eric G. Flamholtz

3. The Role of Planning in Control

Abstract
In its broadest sense, “planning” is the process of deciding about the objectives of an organization and the ways to attain those objectives. It involves analyzing an organization’s environment, assessing potential opportunities, formulating general objectives and specific goals, as well as developing action plans to attain them.
Eric G. Flamholtz

4. The Role of Measurement and Feedback in Control

Abstract
This chapter examines the role of “measurement” and “feedback” in organizational control.28 We shall develop a framework for viewing the measurement and feedback as components of a core control system from the perspective of attempts to influence human behavior, rather than to merely represent things in numerical terms. The framework is termed the “Psycho-Technical Systems” (or PTS) model of measurement.29
Eric G. Flamholtz

5. The Role of Evaluation in Organizational Control

Abstract
The “evaluation and reward subsystem” refers to the component systems of the overall core control systems (shown in Figure 2–2) which deals with the process of assessing human performance and rewarding it. The evaluation system concerns the assessment of the quality of performance and provides the basis for administration of rewards. Thus these two systems individually and in combination play a crucial role in the overall process of organizational control.52 Although the merging of the evaluation and reward processes of an organization creates a system per se, we shall first examine each of these two processes as independent systems.
Eric G. Flamholtz

6. The Role of Reward Systems in Control

Abstract
This chapter examines the nature of organizational reward systems and their role in the core control system. The chapter focuses upon four basic questions:
1.
What are reward systems?
 
2.
What are their function in the organizational control process?
 
3.
What are the major types of reward systems?
 
4.
What are some issues to be resolved in the design of reward systems?
 
Eric G. Flamholtz

7. The Role of Organizational Structure and Culture in Control

Abstract
The model of an organizational control system presented in Chapter 2 (Figure 2–1) included three parts: 1) the core control system59, 2) organizational structure60, and 3) organizational culture61. The components of the core control system have been examined in Chapters 3–6. This chapter deals with the role or organizational structure and culture in control. It also suggests the relationship between structure and culture and the core control systems.
Eric G. Flamholtz

8. The Role of Accounting Systems in Organizational Control

Abstract
Accounting is a system designed to measure, aggregate, and transmit financial data for a variety of managerial purposes. In most organizations, the accounting system is an integral part of the overall core control system because of its measurement capability and the need for measures to facilitate control.
Eric G. Flamholtz

9. The Design and Evaluation of Effective Control Systems

Abstract
Previous chapters have been concerned with the nature and role of organizational control, the effects of control on behavior, the elements of an overall control system, and the accounting-control system as a component of the overall organizational control system. This final chapter deals with some aspects of the design and evaluation of control systems in organizations. Specifically, it focuses upon the criteria which can be used to guide the development on evaluation of an existing control system. It also examines die adverse or dysfunctional effects of control systems that have not been effectively designed. Finally, we shall examine selected examples of control systems in order to illustrate their strengths and weaknesses. In brief, the overall objective of the chapter is to provide a framework that can be useful in the design and evaluation of control systems in order to enhance their effectiveness.
Eric G. Flamholtz

Backmatter

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