Management Control Systems as a Catalyst of Strategic Agility and Organizational Performance The continual evolution of Management Control Systems as a Package (MCSP) today encompasses accounting, finance, human resources, market-based data, management control and information systems, and the entire culture of an organization, yet defies a precise typology (Merchant, Van der Stede, 2006) (Malmi, Brown, 2008) or a consistent global definition (Cruz, Scapens, Major, 2011)
Management Control Systems as a Catalyst of Strategic Agility and Organizational Performance The continual evolution of Management Control Systems as a Package (MCSP) today encompasses accounting, finance, human resources, market-based data, management control and information systems, and the entire culture of an organization, yet defies a precise typology (Merchant, Van der Stede, 2006) (Malmi, Brown, 2008) or a consistent global definition (Cruz, Scapens, Major, 2011)
Within the last decade both have also begun to adopt Balanced Scorecards (BSC) in an effort to illustrate how analytics are being used to successfully manage businesses (Lawson, Stratton, Hatch, 2006). Both MCSPs are also specifically developed to with the goal of bringing greater agility and performance to organizations through completely different operating philosophies and approaches (Otley, 1999)
Literature regarding risk management as a function of the levers of control was also sought. One of the most interesting phenomenon noticed regarding changes in management control systems in Simons' framework is the fact that companies unused to dealing with uncertainty are more likely to change managerial practices and controls in a drastic manner in response to shifts in conditions when compared to companies that operate in an environment of greater uncertainty to begin with (Asel 2009, pp
A focus on accounting issues does not provide an accurate view of the company or its environment. Perhaps one of the most essential elements of Simons' levers of control framework in the case at hand is the proper implementation of what he identifies as interactive control systems (Simons 1995)
Through properly functioning interaction control systems, accurate and up-to-date analysis of the company, its operations, and its external environment and internal situation can be maintained in a way that accounting alone does not allow for. Despite the success that Simons' framework of the four levers of control has had in the business world as well as in academia, there are also those that caution against a complete devotion to this method of exerting managerial control (Tuomela 2005)
This does not negate the essential claims made by Simons nor the construction of his levers of control, but instead suggests that cause and effect relationships must come from a solid initial analysis before the development and implementation of a new framework can take place effectively within an organization (Tuomela 2005). A broader empirical analysis of the levers of control framework reveals that the differences in the efficacy and appropriateness of this approach depend on whether or not the system of control and measurement is engaged with primarily as a diagnostic device, or more as an interactive system (Widener 2005)
"Service control systems might need to change throughout the life cycle to fit in with changes in the competitive environment, business mission and generic strategy. Failure to account for the stages of the life cycle in budgetary policies has been found to result in inefficiencies of resource allocation" (Auzai 201056)