Management Control: Concept, Methods and Practices conceptualises management control concepts, methods and practices used by C-level executives and controllers in managing financial and strategic performance. The authors show how financial and strategic performance control processes can be integrated in order to create and improve internal strategic alignment.
Alongside traditional controls, such as managing cost centres, profit centres, investment centres, budgeting and variance reporting, the use of advanced costing systems, such as activity-based costing and time-driven activity-based costing, and the balanced scorecard in planning and executing improvements of financial and strategic performance is discussed. The authors illustrate how controllers can run a control process in which intended strategies, performance measures, performance targets, actions and budgets are all aligned with each other across all organisational levels (vertical alignment) and between business units and functions (horizontal alignment), and in which financial performance is controlled in relation to strategic performance.
The authors promote a holistic approach and highlight the role of human motivation in the design of management control systems. Using insights from the psychology literature on motivation in the workplace, this book argues that management control systems should not only align goals and interests of internal organisational actors but also enhance their autonomous motivation and well-being in order to achieve sustainable performance. More specifically, the authors draw on self-determination theory to explain managerial behaviour in response to the use of control systems. Through the use of numerous examples from European companies, this book provides the reader with a range of familiar issues and a wide variety of ideas and methods to use in response.
The book provides materials that can be used in business and management control courses at undergraduate and graduate level, as well as for use in the workplace, benefiting managers, consultants, financial analysts, controllers, information systems designers and executive leaders of organizations.
Chapter 1. Management control: definitions and concepts (p. 15)