The Concept of Management Control

Despite the lack of a commonly accepted framework or typology of organizational controls, most authors interpret control in terms of the influence exerted on the subordinates to seek their compliance with organizational goals (Simons, 1995). ‘Management control is the back end of the management process’ (Merchant, Van der Stede, & Zheng, 2003). The number of definitions of management control per se is legion, however, they ‘all relate to the process of organizing resources and directing activities for the purpose of achieving organizational objectives’ (see Table 2.1) (Horvath, 1986; Merchant et al., 2003; Peemoeller & Keller, 1998). Merchant and Simons (1986) observed an absence of a unifying view on control in diverse areas of management and practice. Consistent with cybernetics theory (Weiner, 1954), from which the term ‘control’ was initially adopted, modern organization theorists tend to agree that control is a purposely designed and implemented process by which the organization achieves its goals (Yan & Yadong, 2001). ‘The terms management accounting (MA), management accounting systems (MAS), management control systems (MCS), and organizational controls are sometimes used interchangeably. In general, MA refers to a collection of practices such as budgeting or product costing, while MAS refers to the systematic use of MA to achieve some goal’ (Chenhall, 2003). The MCS is generally interpreted broader encompassing MAS and also other controls such as personal or clan controls.