Levers of Control

Question 1

Simons (2000) Levers of control Framework

Answer 1

Diagnostic Controls
Interactive Controls
Boundary Systems
Belief Systems

Question 2

Widener (2007) purpose of the study

Answer 2

Generally accepted that control systems are interdependent, but are they substitutes or compliments?
Assumption is that controls are implemented when benefits exceed the costs, true?
How relevant is strategic uncertainty and strategic risk?
Sheds insight on the role of PMS

Question 3

Belief Systems

Answer 3

organisational definitions that senior management communicate formally
reinforces basic values, purpose and direction
Inspire and motivate employees to search, explore, create
Through mission and values

Question 4

Boundary Systems

Answer 4

restrains employees
acceptable domain of strategic activity 
employees can innovate and achieve within predefined areas
Stop companies growing too quick
Normally through code of conduct

Question 5

Diagnostic Controls

Answer 5

motivate employees to perform and align behaviour with organisational objectives
closely linked to results controls
Also a constrain on behaviour
Backwards looking

Question 6

Interactive Systems

Answer 6

Forward looking
Search for new ways to strategically position themselves
Zara is a good example

Question 7

Positive energy

Answer 7

Belief

Interactive

Question 8

Negative Energy

Answer 8

Diagnostic

Boundary

Question 9

Environmental factors to consider in the design of MCS

Answer 9

Strategic uncertainty

Strategic Risk

Question 10

Strategic uncertainty

Answer 10

emerging threats or opportunities that could invalidate assumptions that the current strategy is reliant upon
Information asymmetry causes uncertainty
Operating / competitive / technological

Question 11

Strategic Risk

Answer 11

unexpected event that limits managers to implement strategy

Operating / asset impairment / competitive

Question 12

Organisational Learning (benefit)

Answer 12

historical experiences embedded in routines

Interactive allows for the facilitation of organisational learning (double loop)

Question 13

Management Attention (cost)

Answer 13

Time and processing capability are constrains on management
belief/boundary/diagnostic - efficient use
interactive - costly

Question 14

(Results of Widener) Interdependencies

Answer 14

Belief emphasis leads to emphasis on all other three
Using interactive with diagnostic
Compliments rather than substitutes
Cant expect humans to follow belief system

Question 15

(Results of Widener) Costs v Benefits

Answer 15

find although their are costs, they have an overall positive affect

Question 16

(Results of Widener) Strategic Uncertainty

Answer 16

Only Competitive and operational associated with the use of all four controls
Operational largest impact on diagnostic and interactive (can be measured)
Competitive largest impact on interactive controls

Question 17

(Results of Widener) Strategic Risks

Answer 17

only operational associated with the use of controls

More emphasis on beleifs