Simon's four levels of control - Revision history

Tkokotas at 09:30, 17 May 2019

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			''*Disclaimer: The articles are created by DTU students. As part of the course, students are introduced to knowledge related to IP rights, plagiarism and copyright infringement. Additionally, the articles are a product of critical engagement of students with the literature review, and their aim is to contribute to the Project Management holistic field of science. If you discover any potential copyright infringement on the site, please inform thereof by sending an email to ophavsret@dtu.dk.''


	''Developed by Javier Gumà''		''Developed by Javier Gumà''

Tkokotas at 13:00, 10 November 2018

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			''Developed by Javier Gumà''


	<div style="text-align: justify;">		<div style="text-align: justify;">
	==Abstract==		==Abstract==
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	<references/>		<references/>

			[[Category:Project Management]][[Category:Actions]][[Category:Complexity]][[Category:Control]][[Category:Tool]]

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	==The Levels Of Control Framework==		==The Levels Of Control Framework==

	As previously mentioned, the LOC is an analytic tool serving to assess the distinct functions of Management Control Systems (MCS) within a company or a team. MCS has two main functions: 1) '''controlling''' linked with predictability, efficiency and formality, and 2) '''enabling''' linked with innovation, spontaneity and transparency. ~~Simon~~ distinguishes two different blocks for each one of MCS' functions.		As previously mentioned, the LOC is an analytic tool serving to assess the distinct functions of Management Control Systems (MCS) within a company or a team. MCS has two main functions: 1) '''controlling''' linked with predictability, efficiency and formality, and 2) '''enabling''' linked with innovation, spontaneity and transparency. Simons distinguishes two different blocks for each one of MCS' functions.

	[[File:LOC.PNG\|thumb\|upright=2.0\|Simons Levers Of Control Framework]]		[[File:LOC.PNG\|thumb\|upright=2.0\|Simons Levers Of Control Framework]]

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	Within this phase, the project documents that will be used are developed defining the deliverables that will have to be made in the following phases, building up the '''Boundary Systems''' and further defining the indicators that will serve for '''Diagnostic Control Systems'''. Therefore despite the balance might still be emphasizing in empowering, it is more likely to progressively move into more negative forces defining the expected performance in time and objective terms. '''Boundary Systems''' have to be properly communicated to employees by the end of this phase since the cost of making changes in the following phases is severely increased.		Within this phase, the project documents that will be used are developed defining the deliverables that will have to be made in the following phases, building up the '''Boundary Systems''' and further defining the indicators that will serve for '''Diagnostic Control Systems'''. Therefore despite the balance might still be emphasizing in empowering, it is more likely to progressively move into more negative forces defining the expected performance in time and objective terms. '''Boundary Systems''' have to be properly communicated to employees by the end of this phase since the cost of making changes in the following phases is severely increased.

	==Dynamic tensions in carrying out the project work==		===Dynamic tensions in carrying out the project work===

	Design and execution are done within these phase, therefore the importance of '''Diagnostic control systems''' is increased to ensure performance and predictable goals. Regarding '''Beliefs''' and '''Boundary Systems''', they should be defined and understood by the time the organization arrives to this phase. Since change costs at this point tend to be elevated '''Interactive Control Systems''' should be used to suggest changes. The amount of importance provided to '''Interactive Control Systems''' at this phase depends on the type of project. It must be noted that ''carrying out the project work'' appears to be the most sensitive phase in terms of finding the right balance between dynamic tensions, due to the existence of a loop formed between planning, executing and monitoring and controlling processes.		Design and execution are done within these phase, therefore the importance of '''Diagnostic control systems''' is increased to ensure performance and predictable goals. Regarding '''Beliefs''' and '''Boundary Systems''', they should be defined and understood by the time the organization arrives to this phase. Since change costs at this point tend to be elevated '''Interactive Control Systems''' should be used to suggest changes. The amount of importance provided to '''Interactive Control Systems''' at this phase depends on the type of project. It must be noted that ''carrying out the project work'' appears to be the most sensitive phase in terms of finding the right balance between dynamic tensions, due to the existence of a loop formed between planning, executing and monitoring and controlling processes.

	==Dynamic tensions in closing the project==		===Dynamic tensions in closing the project===

	Given that the tasks in this phase are related to reporting and delivering, and thus not much innovation or creativity are required, the balance in this case should be inclined into '''Diagnostic Control Systems''' and '''Boundary Systems'''.		Given that the tasks in this phase are related to reporting and delivering, and thus not much innovation or creativity are required, the balance in this case should be inclined into '''Diagnostic Control Systems''' and '''Boundary Systems'''.

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	~~Export Citation~~
	==The Levels Of Control Framework==		==The Levels Of Control Framework==

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	2. '''The Levers of Control Framework: An exploratory analysis of balance''': this article provides an overview of the theory behind Simons' four levers of control. By defining the nature of the four levers and the reviewing the literature on the concept of balance, the article sets the bases to their further intent of making an empirical study of how different organizations found a proper balance scenario.		2. '''The Levers of Control Framework: An exploratory analysis of balance''': this article provides an overview of the theory behind Simons' four levers of control. By defining the nature of the four levers and the reviewing the literature on the concept of balance, the article sets the bases to their further intent of making an empirical study of how different organizations found a proper balance scenario.

	3.''' Management control systems and strategy: a resource-based perspective''': the article presents the use of diagnostic control systems and interactive control systems in a business ~~mangement~~ resource-based context, and argues about different possible combinations of their usage and their effect on dynamic tensions.		3.''' Management control systems and strategy: a resource-based perspective''': the article presents the use of diagnostic control systems and interactive control systems in a business management resource-based context, and argues about different possible combinations of their usage and their effect on dynamic tensions.

	4.'''Unpacking organizational ambidexterity:dimensions, contingencies, and synergistic effects''': studies the concept of ambidexterity in combining exploratory and exploitative activities. The article further concludes about the benefits of managing the trade-offs of both types of actions.		4.'''Unpacking organizational ambidexterity: dimensions, contingencies, and synergistic effects''': studies the concept of ambidexterity in combining exploratory and exploitative activities. The article further concludes about the benefits of managing the trade-offs of both types of actions.

	6.'''A guide to the project management body of knowledge''': constitutes a common base of knowledge on project management theory and experiences. The guide is used in the article to find scenarios, cases and similarities in Project Management with Business Management, in terms of Managing control Systems, that could benefit from the use of the LOC framework.		6.'''A guide to the project management body of knowledge''': constitutes a common base of knowledge on project management theory and experiences. The guide is used in the article to find scenarios, cases and similarities in Project Management with Business Management, in terms of Managing control Systems, that could benefit from the use of the LOC framework.

	7.''' A conceptual development of Simons’ Levers of Control framework.''':reviews the literature on the LOC, and studies the ambiguities and vague definitions ~~witht~~ the intent of shedding some light on it.		7.''' A conceptual development of Simons’ Levers of Control framework.''': reviews the literature on the LOC, and studies the ambiguities and vague definitions with the intent of shedding some light on it.

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Show changes

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	==Abstract==		==Abstract==

	The Levers of Control (hereby LOC) Framework is firstly introduced as a Managemment Control Systems tool in Simons' "Levers of Control: How managers use innovative control systems to drive strategic renewal" (1995). The LOC framework is constituted by four blocks: Belief systems and Interactive Control systems creating positive forces, and Boundary Control Systems and Diagnostic Control Systems creating negative forces. It must be noted that positive/negative forces are not considered as good/bad forces but as different types of forces that must be balanced to achieve proper business strategy. The concept of balance or dynamic tension is central to the proper use of the tool as the later publications took effort on demonstrating (Anne- Marie Kruisa, 2015). Despite the fact that his theory about opposing forces, the number of citations (over 3000 in Google Scholar) gives Simons' LOC framework a consolidated position within Management Control Systems literature. This article intends to give a theoretical basic description of the LOC framework presenting the different blocks of the framework and then to clarify the concept of what Simons understands as '''balance''' between innovation and creativity coming from the enablement of the employees, and the the control and set of boundaries that have to be implemented by managers, based on litterature.Then, since the LOC is traditionally a business management tool, a relation with Control Systems in Project Management is proposed taking into account the tool's limitations.		The Levers of Control (hereby LOC) Framework is firstly introduced as a Managemment Control Systems tool in Simons' "Levers of Control: How managers use innovative control systems to drive strategic renewal" (1995)<ref name="Simons">Simons, R. ''Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal''. Boston: Harvard Business School Press, 1995.</ref>. The LOC framework is constituted by four blocks: Belief systems and Interactive Control systems creating positive forces, and Boundary Control Systems and Diagnostic Control Systems creating negative forces. It must be noted that positive/negative forces are not considered as good/bad forces but as different types of forces that must be balanced to achieve proper business strategy. The concept of balance or dynamic tension is central to the proper use of the tool as the later publications took effort on demonstrating (Anne- Marie Kruisa, 2015). Despite the fact that his theory about opposing forces, the number of citations (over 3000 in Google Scholar) gives Simons' LOC framework a consolidated position within Management Control Systems literature. This article intends to give a theoretical basic description of the LOC framework presenting the different blocks of the framework and then to clarify the concept of what Simons understands as '''balance''' between innovation and creativity coming from the enablement of the employees, and the the control and set of boundaries that have to be implemented by managers, based on litterature.Then, since the LOC is traditionally a business management tool, a relation with Control Systems in Project Management is proposed taking into account the tool's limitations.



			Export Citation
	==The Levels Of Control Framework==		==The Levels Of Control Framework==

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	==Annotated Bibliography==		==Annotated Bibliography==
			1. '''Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal''': is the book in which Simons fully presented his theory about the four levers of control and presents not only the levers themselves but the concept of balance that is required for successful business management.
			2. '''The Levers of Control Framework: An exploratory analysis of balance''': this article provides an overview of the theory behind Simons' four levers of control. By defining the nature of the four levers and the reviewing the literature on the concept of balance, the article sets the bases to their further intent of making an empirical study of how different organizations found a proper balance scenario.
			3.''' Management control systems and strategy: a resource-based perspective''': the article presents the use of diagnostic control systems and interactive control systems in a business mangement resource-based context, and argues about different possible combinations of their usage and their effect on dynamic tensions.
			4.'''Unpacking organizational ambidexterity:dimensions, contingencies, and synergistic effects''': studies the concept of ambidexterity in combining exploratory and exploitative activities. The article further concludes about the benefits of managing the trade-offs of both types of actions.
			6.'''A guide to the project management body of knowledge''': constitutes a common base of knowledge on project management theory and experiences. The guide is used in the article to find scenarios, cases and similarities in Project Management with Business Management, in terms of Managing control Systems, that could benefit from the use of the LOC framework.
			7.''' A conceptual development of Simons’ Levers of Control framework.''':reviews the literature on the LOC, and studies the ambiguities and vague definitions witht the intent of shedding some light on it.


	==References==		==References==

	<references/>		<references/>

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	==Limitations==		==Limitations==

	As previously mentionned, Simons' levers of control despite being an impactful theory in Management Control Systems and Business Management, is also critizised for being ambiguous, ill-defined, or vaguely defined in some of its concepts. Some authors have tried to discuss such ambiguities.<ref name="ambig">Sophie Tessiera, David Otleyb, 2012. ''A conceptual development of Simons’ Levers of Control framework''. Management Accounting Research 23 (2012) 171– 185</ref>. The claim in that regard is that vague of definition of the concepts leads to mixed empirical results that impede the bulding of a unified body of knowledge. A clear example is the definition of the balance, where infinite possibilities exist depending on each case. Despite the fact that some progress has been made, Kruis, Speklé and Widener <ref name="Exploratory balance"></ref> ~~fore~~ example gathered empirical data about 217 managers belonging to different companies, considered as successful, in different environments. Such data helped making a series of case studies that allowed them to propose a series of balance scenarios linked to the companies industries.		As previously mentionned, Simons' levers of control despite being an impactful theory in Management Control Systems and Business Management, is also critizised for being ambiguous, ill-defined, or vaguely defined in some of its concepts. Some authors have tried to discuss such ambiguities.<ref name="ambig">Sophie Tessiera, David Otleyb, 2012. ''A conceptual development of Simons’ Levers of Control framework''. Management Accounting Research 23 (2012) 171– 185</ref>. The claim in that regard is that vague of definition of the concepts leads to mixed empirical results that impede the bulding of a unified body of knowledge. A clear example is the definition of the balance, where infinite possibilities exist depending on each case. Despite the fact that some progress has been made, Kruis, Speklé and Widener <ref name="Exploratory balance"></ref> for example gathered empirical data about 217 managers belonging to different companies, considered as successful, in different environments. Such data helped making a series of case studies that allowed them to propose a series of balance scenarios linked to the companies industries.
	So far no litterature exists on the use of the LOC framework in a Project Management context, but the limitations are evident aswell since different optimal balance scenarios can be seen through the different phases of a single project.		So far no litterature exists on the use of the LOC framework in a Project Management context, but the limitations are evident aswell since different optimal balance scenarios can be seen through the different phases of a single project.

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	==Dynamic Tensions in Project Management and Project Life Cycle==		==Dynamic Tensions in Project Management and Project Life Cycle==
	===The Four levers in Project Management===		===The Four levers in Project Management===
	According to the Project Management Institute, "projects and programs are undertaken to achieve business strategy outcomes, for which many organizations now adopt formal organizational governance.[...] Because the project success may be judged on how well the resultant product or service supports organizational governance, it is important for the project manager to be knowledgeable about corporate/organizational governance policies and procedures pertaining to the subject matter of the product or service..." (PMBOK ~~5th edition)~~ It can be deduced from such statement that the applicability of the LOC framework in a Project Management context seems pertinent. Still, some nuances have to be made since the elements forming the different blocks might differ because of a higher importanceof stakeholders' and sponsors' influence in Project Management in comparison to Business Management.		According to the Project Management Institute, "projects and programs are undertaken to achieve business strategy outcomes, for which many organizations now adopt formal organizational governance.[...] Because the project success may be judged on how well the resultant product or service supports organizational governance, it is important for the project manager to be knowledgeable about corporate/organizational governance policies and procedures pertaining to the subject matter of the product or service..."<ref name="PMBOK"></ref> It can be deduced from such statement that the applicability of the LOC framework in a Project Management context seems pertinent. Still, some nuances have to be made since the elements forming the different blocks might differ because of a higher importanceof stakeholders' and sponsors' influence in Project Management in comparison to Business Management.
	Another notable difference between LOC application in Business Management and Project Management is the fact that the optimal state of balance may shift throughout the Project Life Cycle-because of the high variance of costs and uncertainties along the way-, while it should be more stable in Business Management.		Another notable difference between LOC application in Business Management and Project Management is the fact that the optimal state of balance may shift throughout the Project Life Cycle-because of the high variance of costs and uncertainties along the way-, while it should be more stable in Business Management.
	[[File:Risk&Costvstime.PNG\|thumb\|upright=2.0\|Impact of Variable Based on Project Time]]		[[File:Risk&Costvstime.PNG\|thumb\|upright=2.0\|Impact of Variable Based on Project Time]]
	According to the Project Management Base of Knowledge ~~(5th edition)~~, the Project Life Cycle Phases are:		According to the Project Management Base of Knowledge<ref name="PMBOK"></ref>, the Project Life Cycle Phases are:
	*Starting the project		*Starting the project
	*Organizing and preparing		*Organizing and preparing
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	===Dynamic tensions in starting the project phase===		===Dynamic tensions in starting the project phase===

	The main activities in starting the project being the definition of the project and the authorisation of this one, logic says that balance should be acquired emphasizing in Beliefs Systems and Interactive Control Systems.(PMBOK) During the defintion project managers have to ensure the staff is acknowledging the expected outcomes and the objectives set based on them, through what could be seen as '''Interactice control systems'''. These could be considered as ''Beliefs System'' since they will set he "mission" the projects intends to fullfil. On the other hand, the acceptable risks(i.e. stringency in environmental or safety requirements, budget, etc...) and the code of conduct are to be defined in this phase and could be seen as the '''Boundary systems''' definsing the employees limitations. Since no project work is done, and the phase objectives are mostly the definition of the scope, the objectives and the boundaries in which staff will be free to operate, emphasis should be given to '''Interactive Control Systems''' to ensure that further empowerment leading to creativity will be driven in the intended direction for the project. Still the feasability of the project is to be checked in thise phase and therefore '''Diagnostic Control Systems''' must not be pushed apart.		The main activities in starting the project being the definition of the project and the authorisation of this one, logic says that balance should be acquired emphasizing in Beliefs Systems and Interactive Control Systems.<ref name="PMBOK">''A guide to the project management body of knowledge'',5th edition,2013</ref>. During the defintion project managers have to ensure the staff is acknowledging the expected outcomes and the objectives set based on them, through what could be seen as '''Interactice control systems'''. These could be considered as ''Beliefs System'' since they will set he "mission" the projects intends to fullfil. On the other hand, the acceptable risks(i.e. stringency in environmental or safety requirements, budget, etc...) and the code of conduct are to be defined in this phase and could be seen as the '''Boundary systems''' definsing the employees limitations. Since no project work is done, and the phase objectives are mostly the definition of the scope, the objectives and the boundaries in which staff will be free to operate, emphasis should be given to '''Interactive Control Systems''' to ensure that further empowerment leading to creativity will be driven in the intended direction for the project. Still the feasability of the project is to be checked in thise phase and therefore '''Diagnostic Control Systems''' must not be pushed apart.

	===Dynamic tensions in organizing and preparing===		===Dynamic tensions in organizing and preparing===
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	Within this phase, the project documents that will be used are developed defining the deliverables that will have to be made in the following phases, building up the '''Boundary Systems''' and further defining the indicators that will serve for '''Diagnostic Control Systems'''. Therefore despite the balance might still be emphasizing in empowering, it is more likely to progressively move into more negative forces defining the expected performance in time and objective terms. '''Boundary Systems''' have to be properly comunicated to employees by the end of this phase since the cost of making changes in the following phases is severly increased.		Within this phase, the project documents that will be used are developed defining the deliverables that will have to be made in the following phases, building up the '''Boundary Systems''' and further defining the indicators that will serve for '''Diagnostic Control Systems'''. Therefore despite the balance might still be emphasizing in empowering, it is more likely to progressively move into more negative forces defining the expected performance in time and objective terms. '''Boundary Systems''' have to be properly comunicated to employees by the end of this phase since the cost of making changes in the following phases is severly increased.

	===Dynamic tensions in carrying out the project work===		==Dynamic tensions in carrying out the project work==

	Design and execution are done within these phase, therefore the importance of '''Diagnostic control systems''' is increased to ensure performance and predictable goals. Regarding '''Beliefs''' and '''Boundary Systems''', they should be defined and understood by the time the organization arrives to this phase. Since change costs at this point tend to be elevated '''Interactive Control Systems''' should be used to suggest changes. The amount of importance provided to '''Interactive Control Systems''' at this phase depends on the type of project. It must be noted that ''carrying out the project work'' appears to be the most sensitive phase in terms of finding the right balance between dynamic tensions, due to the existence of a loop formed between planning, executing and monitoring and controlling processes.		Design and execution are done within these phase, therefore the importance of '''Diagnostic control systems''' is increased to ensure performance and predictable goals. Regarding '''Beliefs''' and '''Boundary Systems''', they should be defined and understood by the time the organization arrives to this phase. Since change costs at this point tend to be elevated '''Interactive Control Systems''' should be used to suggest changes. The amount of importance provided to '''Interactive Control Systems''' at this phase depends on the type of project. It must be noted that ''carrying out the project work'' appears to be the most sensitive phase in terms of finding the right balance between dynamic tensions, due to the existence of a loop formed between planning, executing and monitoring and controlling processes.

	===Dynamic tensions in closing the project===		==Dynamic tensions in closing the project==

	Given that the tasks in this phase are related to reporting and delivering, and thus not much innovation or creativity are required, the balance in this case should be inclined into '''Diagnostic Control Systems''' and '''Boundary Systems'''.		Given that the tasks in this phase are related to reporting and delivering, and thus not much innovation or creativity are required, the balance in this case should be inclined into '''Diagnostic Control Systems''' and '''Boundary Systems'''.
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	As previously mentionned, Simons' levers of control despite being an impactful theory in Management Control Systems and Business Management, is also critizised for being ambiguous, ill-defined, or vaguely defined in some of its concepts. Some authors have tried to discuss such ambiguities.<ref name="ambig">Sophie Tessiera, David Otleyb, 2012. ''A conceptual development of Simons’ Levers of Control framework''. Management Accounting Research 23 (2012) 171– 185</ref>. The claim in that regard is that vague of definition of the concepts leads to mixed empirical results that impede the bulding of a unified body of knowledge. A clear example is the definition of the balance, where infinite possibilities exist depending on each case. Despite the fact that some progress has been made, Kruis, Speklé and Widener <ref name="Exploratory balance"></ref> for example gathered empirical data about 217 managers belonging to different companies, considered as successful, in different environments. Such data helped making a series of case studies that allowed them to propose a series of balance scenarios linked to the companies industries.		As previously mentionned, Simons' levers of control despite being an impactful theory in Management Control Systems and Business Management, is also critizised for being ambiguous, ill-defined, or vaguely defined in some of its concepts. Some authors have tried to discuss such ambiguities.<ref name="ambig">Sophie Tessiera, David Otleyb, 2012. ''A conceptual development of Simons’ Levers of Control framework''. Management Accounting Research 23 (2012) 171– 185</ref>. The claim in that regard is that vague of definition of the concepts leads to mixed empirical results that impede the bulding of a unified body of knowledge. A clear example is the definition of the balance, where infinite possibilities exist depending on each case. Despite the fact that some progress has been made, Kruis, Speklé and Widener <ref name="Exploratory balance"></ref> for example gathered empirical data about 217 managers belonging to different companies, considered as successful, in different environments. Such data helped making a series of case studies that allowed them to propose a series of balance scenarios linked to the companies industries.
	So far no litterature exists on the use of the LOC framework in a Project Management context, but the limitations are evident aswell since different optimal balance scenarios can be seen through the different phases of a single project.		So far no litterature exists on the use of the LOC framework in a Project Management context, but the limitations are evident aswell since different optimal balance scenarios can be seen through the different phases of a single project.

			==Conclusion==

			This article has presented a description of Simons' Levers of Control framework based the existing litterature in Business Management. It has been described that the framework is formed of four building blocks two of them creating positive forces that are meant to enable employees, and two of them creating negative forces that are meant to constrain them. It has also been explained the concept that balance between these positive and negative forces leads to successful business management accoring to Simons theory. Once LOC's blocks were defined and the dynamic tensions have been explained, a proposition on how could that theory be applied to project management was made. It was stressed that successful balance situations may evolve and change throughout the project life cycle. Finally a statement was made on the limitations expressed in litterature about the tool and its ambiguities.

	==Annotated Bibliography==		==Annotated Bibliography==