Abstract
This paper deals with management control as an important instrument for managing performances in modern organizations. The paper indicates to the circumstances in which classical theory of management control was created, and describes its process of functioning, with the specifics in large organizations. The aim is to point to some open questions and directions of further development of the management control, as well as to at least partially fill the gap that exists in the domestic literature. The conclusion is that the existing management control framework remains still valid. Open questions can be best resolved within the concept that observes this matter as a 'package' of different control systems, not just those that are oriented to accounting-based performance measures.
Highlights
In economics there are few issues that could be said to have universal significance
Despite the controversies and doubts, management control persists as an indispensable tool for managing performances in modern organizations
The reason for this lies in the fact that the management control deals with the issue which is topical for all times: how to ensure that managers and workers perform in the interest of the organization?
Summary
In economics there are few issues that could be said to have universal significance. One of them is: how to ensure that managers and workers do their jobs in the interest of their owners? Both, profit and non-profit organizations, managers and entrepreneurs, private, public and mixed owners etc., are interested for answers to this question. The changes that have taken place in the coming decades have shown that these answers were too narrowly focused, both in terms of selection of key stakeholders (owners of large decentralized corporations), and in terms of control instruments (accounting-oriented). For many of them, accounting-oriented control is neither the only, northe most important type of control This is true for organizations that are looking for new business models, based mainly on innovations, in order to adapt to changed external circumstances. The need for a new framework of management control is obvious Building this framework is slow and there is an evident gap between the theory of management control and managerial behavior. The subject of this paper is the basic elements of the management control process in modern organizations.
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