Levers of Control (Simons)

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Managing the tension between (value) creation and control. Explanation of Levers of Control of Robert Simons. ('95)

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In his book "Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal" (1995), Robert Simons introduced the Levers of Control framework, giving managers in large companies a framework to manage the tension between (value) creation and control (managing and measuring value).


Levers of Control, Robert SimonsWhat are the Levers of Control? Definition

Levers of Control are defined as any:

  • Formal information-based routine or procedure
  • that is used by management
  • to maintain or alter patterns in organizational behavior.

Simons Levers of Control

  1. Belief Systems that an organization must put in place so that it can control commitment to the organization's vision, core values, mission statements, vision statements, credos and statements of purpose.
  2. Boundary Systems which an organization must have so that it can stake out the territory for each participant: codes of conduct, predefined strategic planning methods, asset acquisition regulations, operational guidelines.
  3. Diagnostic Control Systems. These must be put in place by a company so that it can optimize outcomes, and get the work done: output measurement, valuation standards, incentive systems and compensation systems.
  4. Interactive Control Systems. Smart organizations use these for tracking new ideas, for triggering new learning, and for properly positioning the organization for the future: incorporating process data into management interaction, face-to-face meetings with employees, challenging data, assumptions and action plans of subordinates.

Questions related to the levers of Simons

To get a better handle on understanding an organization, Simon recommends the following questions.

  • Have senior managers communicated the core values of the business in a way that people understand and embrace?
  • Have managers in your organization clearly identified the specific actions and behaviors that are not allowed?
  • Are diagnostic control systems adequate at monitoring critical performance variables?
  • Are the control systems interactive? And have they been designed to stimulate learning?
  • Are you paying enough for traditional internal controls?

Book: Robert Simons - Levers of Control -


Levers of Control Forum
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  Interactive Control Systems
Regarding the interactive control systems, controling an organization's employees, we can also add:
- Increasing salary
- Promotion to higher levels
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Best Practices - Levers of Control Premium

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Internal Corporate Governance

A more recent term for internal control or management control is internal corporate governance....
Usage (application): Management Control, Internal Control
 
 
 

Levers of Control Categorization

Of the 4 Levers of Simons,
1. The Boundary Systems and Diagnostic Control Systems are more operational and process-oriented.
2. The Belief S...
Usage (application): Understanding Simon's Contribution to Management Science
 
 
 

Additional Questions to Manage the Tension Between (Value) Creation and Control

Some more additional questions to use the levers of control to assure success from Simons’ point of view are:
- Have you been devoted to making p...
Usage (application): Management Control
 
 

Resources - Levers of Control Premium

Managing Risks Through Internal Controls

Interesting presentation about internal controls in organizations. The presentation includes he following sections:
1. Quick refresh
2. The ...
Usage (application): Internal Controls, Risk Management
 

Controlling as a Management Function

Presentation about controlling as a management activity includes the following sections:
1. Why Management Controlling?
2. A Cybernetic Cont...
Usage (application): Controlling, Management Control
 
 

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Compare with The Levers of Control: Parenting Styles  |  Parenting Advantage  |  Core Competence  |  Levers of Control  |  Growth Phases  |  Distinctive Capabilities  |  Organizational Configurations  |  3C's  |  Acquisition Integration Approaches  |  Organization Chart


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