Skip to main content


Assessing the divide between action planning and performance control in a university setting


Speaker:Dr. Winnie O'Grady, Auckland University, New Zealand
Date: Friday 9 November 2012
Time: 14:00 - 15:30
Location: Laver 320

Further details

The study considers how management control systems (MCS) integrate action planning and performance control functions. Mintzberg (1994) claims these processes are often separated by a “great divide” but need to be integrated to ensure organizational survival. Existing accounting based frameworks of control provide few insights about how this integration is achieved. Kaplan and Norton (2001a, 2001b) propose that the two processes can be linked through a balanced scorecard when feedback about budget outcomes is delivered to the strategic planning process. This research extends our knowledge about the operation and influence of the links between these two systems. A case study of a tertiary education institution is undertaken to investigate the links between strategic planning for e-learning and budget control processes, and explain their influence on the relevant control processes. The control functions and their links are depicted using the viable system model (VSM) and the law of requisite variety (LORV) is used to understand the operation of the links. The analysis revealed that no links existed between strategic planning and budget processes at the department and faculty levels. At the university level, although a link existed between the two processes, strategic planning could not deliver widespread e-learning change because it lacked requisite variety. Consequently, it could help budget holders appreciate the possibilities provided by e-learning or convince them to commit resources to e-learning. The paper concludes that: the divide between strategy and budget processes arises when the linking mechanism, such as the VSM’s three-four homeostat, is missing or inadequate; and the success of strategic adaptation and renewal depends on strategic planning having requisite variety in its interactions with budgetary control.