Lars Östman towards a general theory of financial control

 

 

 

 

 

 

 

 

 

 

 

---

 

 

CONTENTS 

 

BASIC IDEAS ...................................................................................................................................... 1 

Purposes ................................................................................................................................................ 1 

Starting points ....................................................................................................................................... 3 

The theoretical approach ....................................................................................................................... 4 

Describing the design of control systems .............................................................................................. 6 

A PERSPECTIVE ON ECONOMY AND ORGANISATIONS FROM THE POINT OF VIEW OF 

INDIVIDUALS ..................................................................................................................................... 6 

AN ORGANISATIONAL PERSPECTIVE – COMMON AND CONFLICTING INTERESTS ........ 9 

The concepts of “organisation” and “financial entity” .......................................................................... 9 

Horizontal structure and a separate organisation ................................................................................. 10 

Vertical structure and other influencing interests ................................................................................ 11 

Principal relationships between vertical line and horizontal line ........................................................ 12 

Relationships between horizontal events and financial functions ....................................................... 13 

Organisations as financial entities ....................................................................................................... 13 

Changing patterns ................................................................................................................................ 14 

An overview of main trends ........................................................................................................ 14 

The early period ........................................................................................................................... 15 

From the 1930s to the 1960s ....................................................................................................... 16 

From the 1960s to the 1980s ....................................................................................................... 16 

From the 1980s to the year 2000 ................................................................................................. 17 

At the beginning of the 21st century ........................................................................................... 19 

Ongoing processes and transformation ............................................................................................... 19 

Horizontal tensions and forms of mobility .......................................................................................... 21 

HOW FUNCTIONS AND VISIONS ARE RELATED TO RESOURCES – FINANCIAL 

CONTROL SYSTEMS ....................................................................................................................... 22 

Inherent aims of financial control systems for organisations .............................................................. 22 

Financial sources and control .............................................................................................................. 24 

Resource allocation and horizontal alternatives .................................................................................. 25 

Distance and influence of control subjects .......................................................................................... 26 

Needs, demands and potentials ........................................................................................................... 27 

Being attractive and convincing - a necessity for a separate organisation .......................................... 28 

Relationships between resources, functions and prices ....................................................................... 28 

Financial accounting concepts ............................................................................................................. 29 

---

 

 

Dimensioning and orientation of separate organisations ..................................................................... 31 

Internal objects, measures and control processes ................................................................................ 32 

Objects and measures .................................................................................................................. 32 

Connections to external processes ............................................................................................... 33 

Requirements ............................................................................................................................... 33 

Linking ........................................................................................................................................ 34 

Tensions in vertical processes ............................................................................................................. 35 

Organised examiners and supervisory boards ..................................................................................... 36 

Professional story-telling ..................................................................................................................... 37 

A tendency towards instrumentalism .................................................................................................. 38 

SPECIFIC HANDLING PROCESSES AND TIME .......................................................................... 40 

Long-term development of structure and control systems .................................................................. 40 

The surrounding world ........................................................................................................................ 41 

Ex-ante stage, conduct and reporting .................................................................................................. 41 

The topical perspective and the fundamental perspective ................................................................... 42 

Dynamics of the re-orientation of organisations ................................................................................. 43 

Effects of organisational handling ....................................................................................................... 45 

PRESENT FUNCTIONS AND TRANSFORMATION – VIEWS ON FINANCIAL CONTROL 

SYSTEMS ........................................................................................................................................... 46 

Near and future functions .................................................................................................................... 46 

Functions and instruments ................................................................................................................... 47 

Functions and financial control for organisations ............................................................................... 48 

Structure and control systems .............................................................................................................. 49 

Control of organisations ...................................................................................................................... 50 

Affected systems ................................................................................................................................. 52 

Control subjects and objects ........................................................................................................ 52 

National and super-national levels .............................................................................................. 53 

Inter-organisational systems ........................................................................................................ 54 

Interpersonal systems .................................................................................................................. 55 

Resource systems ........................................................................................................................ 55 

Control of controlling organisations .................................................................................................... 56 

Financial control systems – design and use ......................................................................................... 57 

Research .............................................................................................................................................. 59 

REFERENCES .................................................................................................................................... 60

---

 

1