Simon's four levels of control
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The first one of the four blocks is '''Beliefs Systems''', and it is associated to the '''core values''' of a company. Such core values are usually stated by the mission and the vision of an enterprise, and set the purpose and the direction in which the objectives should be pointed. Simons himself defines the '''beliefs''' as "the explicit set of organizational definitions that senior managers communicate formally and reinforce systematically to provide basic values, purpose and direction for the organization." (Simons 1995) In other words: they create '''positive forces''' that inspire. | The first one of the four blocks is '''Beliefs Systems''', and it is associated to the '''core values''' of a company. Such core values are usually stated by the mission and the vision of an enterprise, and set the purpose and the direction in which the objectives should be pointed. Simons himself defines the '''beliefs''' as "the explicit set of organizational definitions that senior managers communicate formally and reinforce systematically to provide basic values, purpose and direction for the organization." (Simons 1995) In other words: they create '''positive forces''' that inspire. | ||
Revision as of 17:45, 22 September 2017
Contents |
Abstract
The Levers of Control Framework is firstly introduced as a Managemment Control Systems tool in Simons' "Levers of Control: How managers use innovative control systems to drive strategic renewal" (1995). The LOC framework is constituted by four blocks: Belief systems and Interactive Control systems creating positive forces, and Boundary Control Systems and Diagnostic Control Systems creating negative forces. It must be noted that positive/negative forces are not considered as good/bad forces but as different types of forces that must be balanced to achieve proper business strategy. The concept of balance is central or dynamic tension to the proper use of the tool as the later publications took effort on demonstrating (Anne- Marie Kruisa, 2015). Despite the fact that his theory about opposing forces, the number of citations (over 3000 in Google Scholar) gives Simons' LOC framework a consolidated position within Management Control Systems literature. This article intends to give a theoretical basic description of the LOC framework presenting the different blocks of the framework and then to clarify the concept of what Simons understands as balance between innovation and creativity coming from the enablement of the employees, and the the control and set of boundaries that have to be implemented by managers, based on litterature.
The Levels Of Control Framework
As previously mentionned, the LOC is an analytic tool serving to assess the different functions of Management Conctrol Systems (MCS) within a company or a team. MCS has two main functions: 1) controlling to linked with predictability, efficiency and formalitty, and 2)enabling linked with innovation, spontaneity and transparency. Simon distinguishes two different blocks for each one of MCS' functions.
(IMAGE:SIMONS LOC FRAMEWORK) Simons Levers Of Control Framework
The first one of the four blocks is Beliefs Systems, and it is associated to the core values of a company. Such core values are usually stated by the mission and the vision of an enterprise, and set the purpose and the direction in which the objectives should be pointed. Simons himself defines the beliefs as "the explicit set of organizational definitions that senior managers communicate formally and reinforce systematically to provide basic values, purpose and direction for the organization." (Simons 1995) In other words: they create positive forces that inspire.
On the other hand, Boundary Systems embody the limitations and constraints within which lower-level employees creativity is to be contained. Boundary Systems can be associated with codes of conduct, risks to be avoided or operational guidelines. Simons describes them as "formally stated rules, limits and proscriptions tied to defined sanctions and credible threat of punishment… to allow individual creativity within defined limits of freedom." (Simons 1995) Therefore, Boundary Systems create negative forces that constraint individuals' imagination.
Another one of the blocks of the LOC framework is Diagnostic Control Systems they are used to monitor specific critical indicators in relation to performance and objectives therefore using them to compare performance to expectations. They allow managers to follow-up operations remotely, while focusing on predicting uncertainties and strategy modifications. According to Simons they are "the formal information systems that managers use to monitor organizational outcomes and correct deviations from preset standards of performance." Consequently, they are seen as negative forces.Examples of these control systems could be budgets, KPI scorecards, project monitoring systms, etc...
The fourth block of the LOC framework is Interactive control Systems. They allow the flow of innovative ideas to flow bottom-up from lower ranks motivating them to think creatively creating positive forces. According to Simons they are the "formal information systems managers use to involve themselves regularly and personally in the decision activities of subordinates." (Simons 1995) Also, Simons argues that these control systems should generate data that should be regularly discussed to generate learning and stimulation (Simons 1999). Therefore, and in opposition with Diagnostic Control Systems, Interactive Control Systems require much higher managerial implication.
The concept of Balance or Dynamic Tensions
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