Peter Drucker in his 1973 Management treatise made it clear that the word 'controls' is not the plural of 'control'. "For the manager controls are purely a means to an end; the end is control. Controls deal with facts, the events of the past. Control deals with expectations, that is with the future. Controls are analytical, concerned with what was and is, Control is normative and concerned with what ought to be" (Page 494)
"There are three major characteristics of controls in business enterprise, 1) Controls can be neither objective nor neutral; 2) Controls need to focus on results: and 3) Controls are needed for measurable and non-measurable events............................. A balance between the measurable and the non-measurable is therefore a central and constant problem of management and a true decision area. Measurements which do not spell out the assumptions with respect to the nonmeasurable statements that are being made - at least as to parameters or as restraints misdirect therefore. They actually misinform. Yet the more we can quantify the truly measurable areas, the greater the temptation to put all-out emphasis on those- the greater therefore, the danger that what looks like better controls will actually mean less control if not a business out of control altogether." (Extracted from pages 496 - 498)
"Specification for controls - To give the manager control, controls must satisfy seven specifications, 1, they must be economical, 2, they must be meaningful, 3, they must be appropriate, 4, they must be congruent, 5, they must be timely, 6, they must be simple and 7, they must be operational. CONTROLS FOLLOW STRATEGY". (There then follows dialogue on the reason for the attributes of the specification.)
Some of the dialogue on, "Controls must be operational. They must be focused on action. Action rather than information is their purpose." (It may be only to study and analysis - it maybe saying, 'what goes on we do not understand; but something goes on that needs to be understood'.) "This then means that controls - whether reports, studies, or figures - must always reach the person who is capable of taking corrective actions."
"The ultimate control of organisations..........................................In designing controls for an organisation one has to understand and analyse the actual control of the business, its people decisions. (....the invisible, qualitative control of any human organization, its systems of rewards and punishments, of values and taboos)".
Drucker has a complete chapter on this topic - Number 39 pages 494 - 505
PS. The Balance Scorecard would be in number 3 of the specification for controls "Controls have to be appropriate to the character and nature of the phenomena being measured....... Because controls have such an impact it is not only important that we select the right ones. To enable controls to give right vision and become the ground for effective actions, the measurement must also be appropriate. That is, it must present the events measured in structurally true from. Formal validity is not enough."
------------------------------
Clifford Moggs CMA
Consultant
Reading
United Kingdom
------------------------------
Original Message:
Sent: 01-20-2015 12:59 PM
From: Jenna Uszenski
Subject: See how a Chinese company uses the balanced scorecard
See how a Chinese company uses the balanced scorecard: http://bit.ly/1yrHDHC