The financial manager

Let's apply this notion to a football activity of an organisation consisting of a coach and a football club. The coach will have an overall objective of winning the football league by acquiring a total of 90 points at the end of the league. To achieve this, within the overall objective there will be secondary objectives and limitations. For example, the coach will hope to manage players so as to avoid injuries, to avoid losing matches to other football teams most especially main competitors and to win each match has they come along.

Although this process seems straightforward but without any such objectives, process will be meaningless and there will be no reason for control. As the league proceeds, lets say in the middle of the league, the coach will monitor his present position with the objectives set and consider questions such as have I defeated the main competitors? How have we coped with the number of injuries? Such observations can be made by considering the number of points reached so far (e.g., have we reached half of the total number of points set?). Thus, this provides a way of comparing actual achievement with that of planned achievement which is necessary for control.

Although, Otley and Berry's notion is based on the cybernetic model of control, however the model argued that feedforward (anticipatory) controls are likely to be of more importance than feedback (reactive controls) and further maintained that effective control depends upon the existence of an adequate means of predicting the consequences of alternative control actions (D. Otley et al pg. S34). In relating these arguments to the usefulness of understanding organisational activities, the importance can be seen in the activity of planning, performance measurement and decision making. By placing more emphasis on feed forward control rather than feed back control and the need for a predictive model, it helps provide a basis for organisations to plan ahead rather than rely on the occurrence of an error before corrective action is implemented. In other words, it helps to reduce the differences between planned output and actual output by implementing control actions.

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In the instance of the football activity, suppose the coach notices that four of his players are down with injury, his predictive model, based on his previous experience, indicates that his team might be in a more difficult situation. He further predicts that unless he buys players during the transfer window the objective of winning the league will not be achieved. In haste, he acquires players on loan and predicts and assesses the likely effect. It is obvious that by predicting the consequences of alternative control actions, problems can be anticipated rather than using a reactive model; organisations are able to plan its activities and decide on control actions it should implement.

Furthermore, by identifying their objectives, they are able to measure organisational performance by comparing objectives and outcome. However, the only problem faced by the model can be found on the emphasis on predictive model considering the fact that predictive model of organisational behaviours can be inaccurate or weak as it can sometimes imply. Managers, thus, need to reveal their predictive models as organisational activities constantly changes. After considering the usefulness of Otley and Berry notion to the understanding of organisational activities it should be noted that the approach is based on the growing complexity of organisational activities and a clear consideration of why controls are found in different parts of their work needs to be explored in detail.

In recent years, it has become a necessity for organisations to have controls in different parts of their works as organisations are larger and are developing globally. Other reasons can also be seen as the fact that people may fail to act in an organisations best interest for reasons such as lack of direction, lack of motivation and lack of abilities (Emmanuel C. et al, pg 110). Such reasons has led organisation to implement controls in different parts of their work and which has seen them rely heavily on the mechanism of specialization or differentiation where different sections of the organization, and different people with those sections, deal with only a small part of the total operation (Emmanuel C. et al, pg 5). The reasons mentioned so far are the familiar examples; however, two more reasons are explored in greater detail below (Emmanuel C et al, pg 5).

Firstly, it is the need of efficacy in coordinating accounting information. As it was said earlier, businesses are growing and activities are complex, hence, making the channel of communication longer and the information passed unclear. In order for organisation to act in a consistent way, the flow of importation is important and this can be provided by implementing controls in different parts of their work. For example, a cash flow statement produced in the financial department might be required in the marketing department in order to assess the performance of certain marketing technique used in a particular year.

The financial manager can transmit the cash flow statement formally or informally to the marketing manager in order to compare the cost spent on marketing the product and the profit made on it. Subsequently, the marketing manager can pass information across to the production manager in order to notify him/her of a need to change its production method. From this example, it is clear that the exchange of information is important for organisational goal; however, the speciality of each manager varies allowing them to deal with certain complaints. Organisations need a good structure in order to create a simple channel of information by implementing control mechanisms in different parts of their work.

Secondly, it's the issue of culture. Culture is generally understood to be the way of life of a group of people--the behaviors, beliefs, values, and symbols that they accept, generally without thinking about them, and that are passed along by communication and imitation from one generation to the next (www1). Merchant et al, in his book claimed organisation have a mixture of the four culture described by Handy (1978), with different aspects of each being prominent in different parts of the organization (Emmanuel C et al, pg 93), thus making it necessary for organisations to have controls in different parts of their work.

The four different organisational cultures described by Handy (1978) are role, task, club and existential with each type found in different parts of an organisation (Emmanuel C. et al, pg 93). He gave a basic description of each type and significant examples to distinguish them. He said club culture is found in higher levels of management where speedy decisions based on subjective judgements are required and is typified by reliance upon people and the informal relationships that exist between them (Emmanuel C et al, pg 95). A good example is the executive board in Banks, where they are concerned with the activities of the whole organisation. Based on process classification described by Anthony (1965), it will be classified under the strategic planning where control is more normative.

The second type of culture he described is existential culture which assumes that the organisation exists to help the individual achieve his purposes rather than vice versa and professional partnerships of doctors, accountants or artists are examples given which may operate in this way (Emmanuel C et al, pg 93). Taking into account that this example stresses the need for agreement and is more democratic in nature (Emmanuel C, et al, pg 94), using any of the classification mentioned by Anthony (1965) can be misleading; however, classifying it under social control will be more rational.

Conversely, a contrasting description was given for role and task culture where the former which is found in the administrative functions of Universities was said to be typified by the large bureaucracy in which jobs and responsibilities are precisely defined and the latter concentrates on the solution of new problems and can be found in the research units of universities (Emmanuel C et al, pg 93). Due to the nature of the process, task culture and which is found in the administrative functions of Universities will be classified under management control as its focus is mainly based on coordinating day-to-day tasks while role culture which is found in research units of universities will be classified under operational control as it is concerned with the activity of ensuring that immediate tasks are carried out (David Otley et al, pg S32)

It is imperative to note that each culture has its merits and drawbacks in carrying out various tasks as every part of an organisation have individual objectives. If we consider the statement made by D.T Otley et al that overall objectives are, in some sense, an aggregation of individual objectives (D.T. Otley et al, pg. 233), it will be logical to state that different part of an organisation have different ways of thinking since there objectives differ, thus, each culture will have its own appropriate control.

In conclusion, it can be found from the essay that a definition of control can often be misleading and Lowe (1971) distinguished various types of controls by giving a detailed definition of Management control. From the definition, it was obvious that the management control has become a complex process which led Otley and Berry (1980) to develop the four conditions stated in Tocher's (1970) cybernetic model and apply it to organisational activities.

Out of the four conditions stated, it placed more emphasis on feed forward control than feed back control and the need for a predictive model. However, with the use of the example of a football activity, it was derived that the model is useful in the activity of planning, performance management and decision making by comparing objectives and outcome. The need for further consideration, however, lies on the inaccuracy and weaknesses of the predictive models.

It was further stated that the complexity of organisations, cultural differences and the need for information coordination has made it necessary for them to have controls in different part of their work. Four types of cultures were mentioned as club, task, role and existential with examples and were classified into strategic planning, operational, management and social control respectively.

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