Levers of Control (Simons)

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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).

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

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

Forum 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. Start a new topic about Levers of Control Share your knowledge here (or ask a question)   🔥 NEW Consequences of AI for Management Control What is the meaning of Artificial Intelligence for management control… Does it represent a new, 5th system or lever for control? Or will AI in the long run be a threat for managers, replacin... 10   6 comments 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... 4   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... 4   Management Control and Organizational Learning Can someone help me on the interactions between management control and organizational learning? Do you know of any empirical studies.... 3   1 comments 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... 2   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... 0

Expert Tips Advanced insights about the Levers of Control. Here you will find professional advices by experts. Internal Corporate Governance Management Control, Internal Control A more recent term for internal control or management control is internal corporate governance.... 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... 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...

Information Sources 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. Managing Risks Through Internal Controls Internal Controls, Risk Management Interesting presentation about internal controls in organizations. The presentation includes he following sections: 1. ... 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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