Re-writing management control philosophy

Abstract

This paper explores the enigmatic relationship between management control and technological innovation, offering valuable insights. First, it aims to clarify the fundamental components of traditional management control (TMC), such as the cybernetic philosophy, the diagnostic use of control systems, financial information, the top-down approach, and positivist theory. Additionally, the paper seeks to highlight the paradoxical connection between these elements and the stochastic nature of innovation. Second, by emphasizing the necessity of shifting the paradigm that underpins contemporary management control (CMC), this approach steers the research toward a comprehensive analysis of its key components. These include the interactive use of control systems, the integration of non-financial information, a bottom-up approach, and the positioning of management control tools within the framework of instrumental theory. Such a configuration fosters innovation by promoting interactive communication, creativity, the development of new strategies, and the reduction of uncertainties. Third, the literature identifies two distinct typologies of innovation: incremental and radical. Each requires a unique process, which is further divided into phases, each with its own set of requirements. These requirements necessitate specific levers of control, which not only rethink and rehabilitate the role of traditional management control but also emphasize the importance of both TMC and CMC in supporting the innovation process.