his book intends to present an updated view of management control, T its components, the issues it addresses and the tools involved. Management control is away to guide a company’s performance,carried out by the company’s managers who are seconded by their controllers. This book is therefore not reserved exclusively for management control specia-lists. It speaks to all managers (corporate directors, managers in charge ofbusiness unitsor subsidiaries,operating/service division or branch managers, etc.) who are the key players in the control process. It is also intended for controllers who seek to compare their practices with general principles. It also addresses MBA students, as management control is an important aspect of their future careers. Often management control is considered only through itstools(manage-ment accounting, budgets, scorecards, etc.). This has certain limits: – Attention may be focused on the technical nature of these tools: cal-culating costs; setting transfer prices; put the finishing touches to a budget; choosing a powerful software; etc. Yet, the technical aspect is not a guarantee of relevance or appropriateness for manager needs. – The technical aspect also has its own limitations. Even when based on structured methods, management tools are never fully predetermi-ned. There is no one “recipe”. Building these tools requires guidance and principles. – The market regularly sees new management tools appear, usually jus-tified by changing contexts. How do we distinguish between fads or real innovation? How do these new tools face up to the “traditional” tools:
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are they complementary or a substitute? A more comprehensive analy-sis chart is necessary to evaluate the true reach and limits of the conti-nual novelties. This is why we chose to organise this book around the different functions that management control is supposed to carry out. This helps presenting the tools in a more active manner by clarifying their goals and the prin-ciples that guide their construction. Sometimes this aspect is overlooked when just the operational aspect of the tool is considered. We also take a more differentiated approach since some tools fulfil several functions, which requires to find compromises as regard to operational construction. The function most frequently associated with management control is that of management planning, which is attributable to one of the process’ prin-cipal tools – the budget. But planning is a part of a much larger control pic-ture, orcontrol cycle,with a multitude of objectives and facets. This bigger picture is developed in part 2 of the book. Focusing on planning tools sometimes leads to underestimating the impor-tance ofdefining and measuring performance.Yet, this is a key to the entire control process. This step is fundamental, multi-dimensional, and in the midst of recent changes, as seen in the emergence of performance mea-suring tools like the Balanced Scorecard or EVA. Part 1 of this book is dedicated to this question of defining and measuring performance. Part 3 will develop two important complementary themes. First, companies frequently employ, in addition to their ongoing control systems, temporary tools known as “performance improvement programmes”: cost-cutting, quality improvement, six sigma, etc. Often, little is known about these pro-grammes and their role vis-à-vis management control is unclear. Chapter 7 is devoted to these programmes. In addition, a management control sys-tem requires the support of an efficient and well adapted information sys-tem. These systems have undergone tremendous developments that are worth analysing with the consequences for management systems in mind. We offer a general overview of these developments in Chapter 8. In short, the book is organised in the following manner. Chapter 1 provides an overview of management control and spells out the various issues. Three parts then follow: – Defining and measuring performance (Part 1) – The Control cycle (Part 2) – Questions of organisation (Part 3) This organisation is intended to be pedagogical. It allows us to distinguish, as we emphasised above, the various challenges involved in management control and clarify their goals and principles. These challenges are in fact closely interwoven. Each one is a piece of a puzzle that must be assem-bled together.