Management control systems

A review of contemporary theoretical contributions to management control theory shows that overall goals and strategy, linked to performance measurement and target-setting, with further linking to rewards and incentives, permeates much of the management control literature. Two case studies are described and, together with the Handelsbanken case in the previous chapter, their implications for theory are discussed. In these cases, senior managers consciously chose not to set operational targets and there are no incentives based on short-term operational performance. To some extent the strategic concerns of senior managers are “decoupled” from the operating concerns of middle managers. It is concluded that, for some companies, theory over-emphasises the importance of linking organisational vision and goals through strategy and planning to the setting of targets, performance evaluation and incentives.