The Distribution of a Management Control System in an Organization

The Distribution of a Management Control System in an Organization

Alfonso Reyes A. (Universidad de los Andes, Colombia)
DOI: 10.4018/978-1-60566-128-5.ch003
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Abstract

This chapter is concerned with methodological issues. In particular, it addresses the question of how is it possible to align the design of management information systems with the structure of an organization. The method proposed is built upon the Cybersin method developed by Stafford Beer (1975) and Raul Espejo (1992). The chapter shows a way to intersect three complementary organizational fields: management information systems, management control systems, and organizational learning when studied from a systemic perspective; in this case from the point of view of management cybernetics (Beer 1959, 1979, 1981, 1985).
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Understanding Control In An Organizational Context

When Norbert Wiener defined cybernetics as the science of control and communication in the animal and the machine (Wiener 1948) he was using the Greek word κυβερνητηζ, or steersman, as his main inspiration. Indeed, he was recalling the ancient practice of steering a ship towards a previously agreed destination regardless of changing conditions of currents and winds. This simple idea of connecting communication (at that time used as a synonymous of information flow) and control by a continuous feedback process opened up a huge space of possibilities to explain physical, biological and social phenomena related to self-regulation (Heims 1991). This is the case, for instance, of a heater in a physical domain, or the homeostatic mechanism to regulate body temperature in mammals (Ashby 1956). In all these cases, however, it is important to notice that control is far from its naïve interpretation as a crude process of coercion, but instead it refers to self-regulation. This is the meaning of control used in this chapter.

Cybernetics has evolved in many branches since its early years (Espejo & Reyes 2000). One of these variations has focused on the study of communication and control processes in organizations; this is the topic of management cybernetics (Beer 1959, 1966, 1979) and is the conceptual underpinning of this chapter.

Given the close relation between information and control in self-regulating systems (as organizations) this chapter addresses the question of how information should be distributed across the structure of an organization in order to allow self-regulation to be effective. In order to achieve this, we would like to show a way of relating three organizational fields: management information systems, management control systems and organizational learning. This is done from a methodological point of view by describing a step-by-step method (although it is not intended to be linear) to build a network of homeostatic mechanisms. But before describing the method, it is important to clarify with more detail the meaning of control used herein.

In an organizational context controlling a system is a process intended to close the gap between the observed outcomes produced by the organization and the expectations previously agreed among relevant stakeholders. It is, therefore, a self-regulating process.

An organization, on the other hand, is understood in this context as a closed network of relationships constituted by the recurrent interplay of roles and resources in a daily basis. In other words, people in organizations play formally defined roles that underpin the working relations they carry out with other organizational members. When these relations allow them to create, regulate and produce the goods and services they want to offer, an organization with a particular identity emerges; a human interaction system (Espejo 1994). This is an operational way to distinguish between a group of people that meets regularly to do something (as fans that used to meet at football matches) and an organization (when those fans constitute a club).

There are different ways to describe what an organization is doing; one way is to make explicit the transformation process by which this organization is producing the goods or services it is offering. Figure 1 shows a simple representation of such description. Notice that this description is suitable not only for an organization as a whole (like an insurance company that transforms information into specific products) but also to any other organizational processes like those carry out by the human resource department of a bank or those constituting the quality system of a company.

Figure 1.

A representation of a system-in-focus as a transformation process

Our concern is to model the self-regulating (or control) process of any organizational system that could be described as a transformation process. From now on we will call an instance of these processes a system-in-focus.

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Associate Editors
Table of Contents
Preface
Mehdi Khosrow-Pour
Chapter 1
Manuel Mora, Ovsei Gelman, Guisseppi Forgionne, Doncho Petkov, Jeimy Cano
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Chapter 2
Steven Alter
The work system method was developed iteratively with the overarching goal of helping business professionals understand IT-reliant systems in... Sample PDF
Could the Work System Method Embrace Systems Concepts More Fully?
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Chapter 3
Alfonso Reyes A.
This chapter is concerned with methodological issues. In particular, it addresses the question of how is it possible to align the design of... Sample PDF
The Distribution of a Management Control System in an Organization
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Chapter 4
Phillip Dobson
This chapter seeks to address the dearth of practical examples of research in the area by proposing that critical realism be adopted as the... Sample PDF
Making the Case for Critical Realism: Examining the Implementation of Automated Performance Management Systems
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Chapter 5
Jo Ann Lane
As organizations strive to expand system capabilities through the development of system-of-systems (SoS) architectures, they want to know “how much... Sample PDF
System-of-Systems Cost Estimation: Analysis of Lead System Integrator Engineering Activities
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Chapter 6
Kosheek Sewchurran, Doncho Petkov
The chapter provides an action research account of formulating and applying a new business process modeling framework to a manufacturing processes... Sample PDF
Mixing Soft Systems Methodology and UML in Business Process Modeling
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Chapter 7
Aidan Duane, Patrick Finnegan
An email system is a critical business tool and an essential part of organisational communication. Many organisations have experienced negative... Sample PDF
Managing E-Mail Systems: An Exploration of Electronic Monitoring and Control in Practice
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Chapter 8
Stephen V. Stephenson, Andrew P. Sage
This chapter provides an overview of perspectives associated with information and knowledge resource management in systems engineering and systems... Sample PDF
Information and Knowledge Perspectives in Systems Engineering and Management for Innovation and Productivity through Enterprise Resource Planning
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Chapter 9
Gunilla Widén-Wulff, Reima Suomi
This chapter works out a method on how information resources in organizations can be turned into a knowledge sharing (KS) information culture, which... Sample PDF
The Knowledge Sharing Model: Stressing the Importance of Social Ties and Capital
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Chapter 10
Jijie Wang
Escalation is a serious management problem, and sunk costs are believed to be a key factor in promoting escalation behavior. While many laboratory... Sample PDF
A Meta-Analysis Comparing the Sunk Cost Effect for IT and Non-IT Projects
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Chapter 11
Georgios N. Angelou
E-learning markets have been expanding very rapidly. As a result, the involved senior managers are increasingly being confronted with the need to... Sample PDF
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Chapter 12
C. Ranganathan
Research on online shopping has taken three broad and divergent approaches viz, human-computer interaction, behavioral, and consumerist approaches... Sample PDF
Examining Online Purchase Intentions in B2C E-Commerce: Testing an Integrated Model
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Chapter 13
Nicholas C. Georgantzas
This chapter combines disruptive innovation strategy (DIS) theory with the system dynamics (SD) modeling method. It presents a simulation model of... Sample PDF
Information Technology Industry Dynamics: Impact of Disruptive Innovation Strategy
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Chapter 14
Shana L. Dardan, Ram L. Kumar, Antonis C. Stylianou
This study develops a diffusion model of customer-related IT (CRIT) based on stock market announcements of investments in those technologies.... Sample PDF
Modeling Customer-Related IT Diffusion
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Chapter 15
Bassam Hasan, Jafar M. Ali
The acceptance and use of information technologies by target users remain a key issue in information systems (IS) research and practice. Building on... Sample PDF
The Impact of Computer Self-Efficacy and System Complexity on Acceptance of Information Technologies
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Chapter 16
James Jiang, Gary Klein, Eric T.G. Wang
The skills held by information system professionals clearly impact the outcome of a project. However, the perceptions of just what skills are... Sample PDF
Determining User Satisfaction from the Gaps in Skill Expectations Between IS Employees and their Managers
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Chapter 17
James Jiang, Gary Klein, Phil Beck, Eric T.G. Wang
To improve the performance of software projects, a number of practices are encouraged that serve to control certain risks in the development... Sample PDF
The Impact of Missing Skills on Learning and Project Performance
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Chapter 18
Leigh Jin, Daniel Robey, Marie-Claude Boudreau
Open source software has rapidly become a popular area of study within the information systems research community. Most of the research conducted so... Sample PDF
Beyond Development: A Research Agenda for Investigating Open Source Software User Communities
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Chapter 19
Milam Aiken, Linwu Gu, Jianfeng Wang
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Electronic Meeting Topic Effects
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Chapter 20
A. Durfee, A. Visa, H. Vanharanta, S. Schneberger, B. Back
Text documents are the most common means for exchanging formal knowledge among people. Text is a rich medium that can contain a vast range of... Sample PDF
Mining Text with the Prototype-Matching Method
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Chapter 21
Francis Kofi Andoh-Baidoo, Elizabeth White Baker, Santa R. Susarapu, George M. Kasper
Using March and Smith’s taxonomy of information systems (IS) research activities and outputs and Newman’s method of pro forma abstracting, this... Sample PDF
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About the Contributors