Management Control of the Process of Evolution: Fact or Fiction?

Abstract

This paper presents the results of a research-project to integrate the Management Control Framework, based upon the COSO report Internal Control - Integrated Framework [1992], and the theory of Evolution Management. The research question is to explore whether this Management Control Framework is of use in the process of evolution.Today effective management control systems are no guarantee for success tomorrow. Even winning the “Baldridge Award” for quality management is no guarantee for survival. From an evolutionary point of view, the principles of natural growth and self-organisation, show that organisations evolve through different stages such as no growth, new growth, high growth and declining growth. Not (high) growth, as is often assumed, but survival is the pivotal criterium. Our paper presents the results of an opinion survey among 131 high-level managers in 109 organisations across 7 countries in Europe. The survey was conducted to identify the organisational states and directions which have naturally evolved and to explore the perceptions, if not, misconceptions of management. The contributing corporations include profit and non-profit organizations in a wide variety of industries. The research results are remarkable. Not only is the unreversable proces of evolution confirmed. The survey also shows how managers’ perception of organisational success and effective management control systems are biased by the stage of high growth. Declining growth, no growth and to a certain extent, new growth tend to be seen as failure.The paper concludes with an innovative view on how to use these findings in the design of an effective management control-system which better supports companies in the different stages of growth.