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).
What 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
- 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.
- 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.
- 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.
- 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
Forum discussions about the Levers of Control. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.
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Risks That Internal Controls Help to Avoid
Internal controls are important in every organization, as they support organizations in achieving the objectives that have been set.
Internal controls are also an important component of Enterpris...
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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
- Providing facilities causing intri...
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Corporate Phishing Emails by your Own CEO or CFO
EMAIL PHISHING
Phishing emails constitute a serious threat to the financial stability of a firm. Traditionally, a phishing email involves an unknown sender that requests a recipient to access a w...
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Systems that can Support Levers of Control
We can use managerial accounting tools like activity based costing and target costing to support Simon's Levers of Control.
Specifically they can act as 3. Diagnostic Control and 4. Interactive C...
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The best, top-rated topics about the Levers of Control. Here you will find the most valuable ideas and practical suggestions.
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Advanced insights about the Levers of Control. Here you will find professional advices by experts.
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Internal Corporate Governance Management Control, Internal Control A more recent term for internal control or management control is internal corporate governance....
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Levers of Control Categorization Understanding Simon's Contribution to Management Science Of the 4 Levers of Simons,
1. The Boundary Systems and Diagnostic Control Systems are more operational and process-orie...
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Additional Questions to Manage the Tension Between (Value) Creation and Control Management Control Some more additional questions to use the levers of control to assure success from Simons’ point of view are:
- Have yo...
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Various sources of information regarding the Levers of Control. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.
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Managing Risks Through Internal Controls Internal Controls, Risk Management Interesting presentation about internal controls in organizations. The presentation includes he following sections:
1. ...
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Controlling as a Management Function Controlling, Management Control Presentation about controlling as a management activity includes the following sections:
1. Why Management Controlling?...
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