286 ACCOUNTING FOR MANAGERS
the flexibility to adapt to the consequences of change as they become apparent.
The ‘management of change’ remains an important managerial skill, but it should
no longer be seen as a discrete event bounded by periods of stability; rather we
are concerned with management in a context of continual change. This requires
continual adaptation, a note which is reflected in the current popular terminology
of ‘continuous improvement’.
A second feature has been a movement towards reducing the size of business
units, certainly in terms of the number of people employed. In part, this has
been driven by technological change, but there has also often been a strategic
choice to encourage units to concentrate on their ‘core’ business and to avoid
being distracted by irrelevant side issues. In turn, this has led to ‘non-core’
activities being outsourced, a process which can be most reliably undertaken in
the context of long-term alliances. Such a trend is emphasized by just-in-time
production and the processes of ‘market testing’ which have been imposed upon
the public sector in the UK. The number of middle managers is being reduced
and the range of responsibilities of those who remain is being increased. The split
between strategic planning, management control and operational control, which
was always tendentious has now become untenable, and a much closer integration
between those functions has developed.
The boundaries of the organization and the boundaries of the control function
are not necessarily co-terminus. Within the organization, ideas of ‘business process
re-engineering’ have reinforced the need to devise control mechanisms that are
horizontal (i.e. which follow the product or service through its production process
until its delivery to the customer) rather than solely vertical (i.e. which follow
the organizational hierarchy within organizational functions). As production
processes are increasingly spread across legal boundaries (and often across national
boundaries) new processes for the control of such embedded operations are needed
(Berry, 1994). That is, control systems need to be devised which coordinate the
total production and delivery process regardless of whether these processes are
contained within a single (vertically integrated) organization or spread across a
considerable number of (quasi-independent) organizations.
Traditional approaches to management control have been valuable in defining
an important topic of study, but they have been predicated on a model of organi-
zational functioning which has become increasingly outdated. This has resulted in
the study of control systems becoming over narrow by remaining focused primar-
ily upon accounting control mechanisms which are vertical rather than horizontal
in their orientation. Contemporary organizations display flexibility, adaptation
and continuous learning, both within and across organizational boundaries, but
such characteristics are not encouraged by traditional systems. There is consider-
able anecdotal evidence to suggest that organizational practices are beginning to
reflect these needs, so a key task for MCSsresearchers is to observe and codify
these developments.
In this type of changing environment the logic of systems theory could be
argued to be of some importance in emphasizing issues such as the importance
of environment and the holism of the organization. Although MCSs theory often
makes references to the concepts of cybernetics, and sometimes to those of general