Introduction: members, thus it is better ableIntroduction: members, thus it is better able


the last few decades, there was increasing interest on the topic of management
control systems (MCS), due to the increased attention of managers and academics
towards performance assessment and organizational control, which reflects the
increased pressure from both internal and external environment that the organizations
are confronted with. For this reason, The need for making an appropriate fit
between company’s situation and its management control systems is an underlying
assumption of many empirical research on contingency-style management control (Pock
and Westlund, 2010: p436).

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control system has been addressed in many different ways and appears in a
variant of shapes by a host of organizational sociologists and theorists. The core
notion of the classical approach to explain and understand management control
systems is that the management has superior knowledge on the operating
processes of the organization and the relationships among its units and members,
thus it is better able to take a wide and comprehensive view of the
organization (Lagerstrom, 2012: p17).

defines management control systems as practical concentration on results, which
are obtained through employee activities. This theory is based on three pillars
each one refers to an aspect of management control: results, people and procedures.
He explained that the management control focuses on results which indicate to
what extent it has succeeded in achieving organizational objectives. Also, it
is related to people because management control system affects the performance
of all the members of the organization and employees are the most important
factor of the success or failure of such organization.

is apparent that performance measurement is closely connected to the second
pillar of the theory of management control system: people. The assessment of
employee performance has been used traditionally for a long time as a tool to
control and adjust their job behavior and maintain organizational control and
financial goals.

performance measurement systems help the organization to identify and measure
its progress toward its objectives. When the organization identifies and
analyzes its objectives, it needs a way to measure its progress towards these
goals. Key performance indicators are tools for measuring performance or
progress towards the operational objectives of an organization or unit.
Measuring performance allows the organization to identify a practical way of
describing what is and is not. KPIs are a “snapshot” overview in the
form of aggregated reports, publications or maps that provide individuals with
the information they need to assess their past actions. KPIs are also the fundamental
presumptions for proper understanding of different processes and activities in
a business organization. These indicators are usually long-term, given that
their definition and definition usually do not change rapidly.

last quarter century has witnessed an increase of both sophistication and
application of measurement systems within organizations. Watts and Connolly
(2012) developed a chronology order for the measurement models during the last
twenty years. They outlined seven models:

The first
model was put by Keegan et al., (1989), which known as “The Performance
Measurement Matrix”. The most salient feature of this model is that it uses the
key metric approach and the “Determine and Decompose” method. This
includes decomposing departments into functional equivalent units and assessing
to what extent these units support the corporation objectives.

The second
model was put by Fitzgerald et al. (1991), which is known as “The Results
and Determinants Framework”. This model classified measures into two basic
types: the measures that relate to results (financial performance,
competitiveness, etc) and the measures that focus on the factors that determine
those results (resource utilization, flexibility, innovation and quality).

The third
model is for Lynch and Cross (1991), which known as the “Strategic Measurement
and Reporting Technique” (SMART) or the Pyramid Model. This model supports the
inclusion of internally and externally focused measures and adds the notion of applying
measures on all levels of the organization so that measures at department and
sub-department level reflect the organizational vision as well as internal and
external objectives.

forth model was put by Kaplan and Norton (1992), which well known as “The
Balanced Scorecard”. This model reflects many of the attributes of other
measurement frameworks but links measurement to the organisation’s vision. It stems
from the fact that there is no performance indicator alone can define all the sophistications
of organizational performance. This model spells the vision of an organization into
objectives and performance measures in four perspectives: financial, customer,
internal business process, and learning and growth.

fifth model was put by Brown, (1996), which is known as “The Input- Process,
Output-Outcome Framework”. This macro process model builds relations among
five levels in an organizational process and the measures that estimates the performance
at these levels. These levels are defined as inputs, processing systems,
outputs, outcomes and goals. The model assumes a linear set of relationships
between these levels, since each factor of them determines the next.

The sixth
model is put by Neely et al. (2000), which known as “The Performance Prism”.
This model consists of five integrated facets which identify areas for
organisations to address: stakeholder satisfaction, strategies, processes,
capabilities and stakeholder contribution. The critical and unique aspect of
the performance prism is the reorganization of the reciprocal relationship
between the stakeholder and the organisation.

last model was put by Bourguignon et al., (2004) and Pezet, (2009). This model
is not limited to the financial indicators, but is developed to take into
account the objectives and mission of each unit of the organization.


control system is a main topic in business administration studies in the last
few decades. It uses a host of tools refers to three aspects of controlling job
in any organisation: people, process, objectives. There are a number of control
systems such as budget, auditing and project control and the accounting system.
Performance assessment is one of the most important methods of achieving
control over the organization.

the people dimension as a management control system brings us ahead to the controlling
tools that relate to performance measurements. There are many performance
measurement models that divide into two main categories: financial and
non-financial performance measurement models.


Pock, Thomas and Westlund, Anders (2010)
The Design and Change of Management Control Systems in Dynamic Environments:
Results from Case Study Research.

Taylor, Dennis and Bobe, Belete J.
(2010) Uses of Management Control and Performance Measurement Systems by Deans
and Heads in Australian Universities: Their Effects on Research, Teaching and
Networking Capabilities. A paper submitted to the First RMIT Accounting
Educators’ Conference, Melbourne, November.

Watts, T. and McNair-Connolly, C. J.
(2012). New performance measurement and management control systems. Journal of
Applied Accounting Research, 13 (3), p(226-241).

Lagerstrom, Mitra (2012) Performance
Measurement Control Systems, Profit oriented corporations versus non-profit
organizations, master thesis, Lunds University.