ARTIKEL 1

Management control in the 21 st century

1. Introduction Robert Anthony wrote in the foreword to the ninth edition of Management control System (Anthony and Govindarajan, 1998) The management control framework that student learned decades ago is still generally valid today. Lifelong learning is important, but it consists of fitting detailed improvements into the overall framework, which is a lot easier than learning a new framework from scratch. Admittedly, a new framework will be developed some day; we developed ours in the 1950s. Faculty must be aware of this possibility, and adopt it if it comes, but until then they need not worry that the framework they now teach will shortly be irrelevant. This special issue on management control is motivated by the recurring concerns expresses by academics, managers, stakeholders and corporate regulators that the wxisting framework of management control may, in fact, be irrelevant, that the control needs of the current environment are significantly different from those developed in an earlier period and that improvements are urgently required. The concerns are not new and are increasing in frecuency and cogency. Over a decade ago Jack Welsh, who was at the time Chairman and CEO of General Electric, claimed: The old organization was built on control, but the world has changed. The world is moving at such a pace that control has become a limitation. It slows you down. Youve got to balance freedom with some control, but youve got to have more freedom that you ever dreamed of. From an academic and a different geographic perspective to Welsh, Otley et al. observed that despite the quite radical changes that have occurred in the UK environtment over the last 15 years the general issue has not been well explored in the control ( as distinct from the economic ) literature. The changes in the control environtment in the period 1980 1995 accelerated throughout the 1990s, propelled by deregulation, globalization, the emergence of powerful developing economies like China, india and brazil and the diffusion of new technologies, especially digitization of information, electronic surveillance and the internet. Together these change drivers are transforming the competitive landscape. In addition, a series of high profile corporate collapses and scandals have expose weaknesses in both external regulation and internal controls that have led to actions, like the Cadbury and turnbull reports in the UK and the 2002 Sarbanes-Oxley Act in the US, to strengthen regulatory supervision, corporate governance and accountability. Companies must now not only pay more attention to the demands of shareholders but also address the concerns of all other legitimate constituencies with which they interact.

Trust has always been important in employment, inter-firm, customer and shareholder relation but there is significant evidence to suggest that one effect of growing knowledge intensity in the global economy may be a trend toward greater reliance on trust; managers must build and maintain the trust of a broad set of stakeholders through openness, transparency, and accountability. The balance between the technical and behavioural, the hard and soft dimensions of control suggests a pressing need for reappraisal.