CONTROL

Introduction

This first chapter introduces management control, providing an overview of its fundamental

objectives, components, concepts and tools. Its aim is to elucidate the general

anatomy of this management approach so that the reader will be able to understand the

links between the various topics that are dealt with in subsequent chapters of the book.

Management control will be defined progressively. In the first section we will deliberately

place ourselves within a simplified context, that of an autonomous entity – a small company,

for example. This will allow us to explore the basic elements of the approach. In the second

section we will take a look at the more complex context of an “organisation”, made up of several

“entities” (operational divisions, functional departments, etc.) and will explore the new

dimensions engendered by this broader configuration.

1. The basic elements of the approach

1.1. The control process*

What does management control comprise and what are its aims? In order to grasp this

notion, we need to draw on a broad definition of “control”, such as found in the Oxford

English Dictionary: “to determine the behaviour or supervise the running of, to maintain

influence or authority over...to regulate...”, “to hold sway over, to dominate, to command. To

hold in check or repress one’s passions or emotions; so to control one’s feelings, etc.” Some

concrete examples of the use of the word “control” are: to control one’s breathing, air-traffic

control, etc. In other words, it encompasses the idea of a deliberate intervention on the part

of an agent in order to produce desired effects. Control is the opposite of chance, but is also

at odds with an excessive dependence on external factors. It is related to the notions of command

and regulation.

Taking one of the above examples of control, to say that a person controls his breathing

means both that he has an active role (no artificial respiration) and also that he tries to

achieve a given effect (calm and steady respiration), while resisting external factors (strong

emotions, a lack of oxygen) and taking action to regulate his rate of breathing (for example

through regular physical training or relaxation exercises).

Chapter 1

Management control: an overview

© 2011 Pearson Education France – Fundamentals of Management Control –

Françoise Giraud, Philippe Zarlowski, Olivier Saulpic, Marie-Anne Lorain, François Fourcade, Jeremy Morales

2 Fundamentals of management control

By analogy, management control is an approach that enables a company to produce desired

results (generally expressed in terms of “performance”) by taking action to achieve those

results and by dealing with the dangers brought on by external difficulties (particularly

those related to the market, competitors and the economic or political context) and the

internal difficulties of the organisation. In other words, management control can be defined

as the process whereby a company sets itself performance objectives and strives to achieve

them as best it can over time. It is a method for managing the performance of the company.

Management control is an approach that is pursued over time: we situate ourselves both

before the action, in the planning phase, and after the action in the monitoring and analysis

of results phase. The approach is therefore progressive, which is why we speak of the control

process.

PLANNING ACTIO

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