Four Levers of the Control Model, to be Designed in Relation to Each Other
In his framework on the interplay between control and management systems, Robert Simons differentiates four levers of control in a management model, which need to be closely aligned with each other considering their interrelationships for business success:
- Corporate Culture
- Business Area Focus
- Corporate Organization
- The use of Key Performance Indicators (KPIs) as a quantitative measure. But how do these levers steer a company, and how are they interconnected?
Within the corporate culture, the vision, and thus the question of what a company aims to achieve, plays a central role. By communicating goals transparently, motivation and connection among employees can be enhanced, and potential new customers and investors can be convinced. This is accompanied by focusing the business area on a clearly defined field of activity, including the demarcation of what the company does not do. This ensures that available resources are used as efficiently as possible. Building on this, the organization of a company should be designed in such a way that the assigned roles and responsibilities best support the business model and allow a frictionless, efficient flow of core processes. Whether the organization is primarily oriented towards the market and customer side, the product, or functions depends on the needs for individuality and speed on one hand, and scalability and size advantages on the other. From fundamental business concepts and business model-specific KPIs, a performance measurement model can finally be developed, with the help of which the performance of a company can be objectively quantified and controlled.
