Lars Östman towards a general theory of financial control

Horizontal tensions and forms of mobility 

 

Horizontal processes contain many of the factors that are ultimately significant for 

everybody in his/her unique life as a social being, consumer and worker. Additionally, 

purely financial transactions take place in such processes. Many pivotal horizontal processes 

are in a state of high tensions and vertical processes set conditions. At least latently and in 

the course of time, interests stand in opposition to each other: financiers´ opportunities to use 

resources in alternative ways, room for action for a continuous organisation, the output and 

prices offered to users, and working conditions, including remuneration. Relationships 

between external processes and internal processes are important; variations in direction and 

strength are many. They may vary over time. Shifts in surroundings, without any particular 

immediate connection to an individual organisation, may nevertheless form a crucial 

strategic impulse.  

All horizontal processes have some similarities but each one also has its own profile, 

especially those that essentially intervene in some person´s urgent functions. Organisational 

behaviour is important in this context. In the horizontal line, organisations act forwards and 

backwards. Forwards, they make offers and provide output to users and buyers. Mostly, they 

want output to be appreciated and, especially in the case of pay-driven organisations, to 

appear as competitive, that is, particular and difficult to substitute for a certain group of 

buyers and users. Communicative elements are user-oriented and perhaps personal, at least 

on the surface, while uniformity, standardisation and efficiency are essential for 

accomplished services as well as physical products as such. Backwards, organisations try to 

substitute, that is, look for opportunities to replace one resource with another and to reduce 

input and costs. In the horizontal line, information systems for interaction between 

organisations and external parties, especially customers, have changed radically. Control 

systems gradually develop to capture external events, views and tendencies and to influence 

the surrounding actors. 

At the same time, each individual wants to preserve and improve capabilities from his/her 

point of view and to have liberty of choice. Ambitions and hopes for consumption vary with 

fundamental conditions. Many people have alternatives and can make choices for major and 

minor functions. For a majority of people in Western countries, ambitions extend much 

further than to primary functions. Experiential functions have had more weight in relation to 

---

 

22 

 

material functions. Buyers with purchasing power can take advantage of offers when new 

products are launched and are, in general, attracted by opportunities to substitute.  For 

various reasons, in some parts of the world and at some stages in life, individual influence on 

most pivotal functions is only marginal. 

As workers, most people are themselves candidates for being removed and perhaps 

substituted. Spatial boundaries tend to widen step by step. Professional practices of 

restructuring have changed accordingly. The fact that human beings are possible substitutes 

from a collective point of view means a decisive dependence on the surrounding entities. 

These circumstances shape conditions for each individual. In principle, the pace of the long- 

and short-term systems movements may be related to possible effects on the unique, finite 

lives of individuals, who have their existential prerequisites and need for mobility and 

influence on their own personal matters.   

Central executives play a key role in vertical control processes, or at least they have a 

possibility to gain this role. Such managers may bridge the gap between the perspectives that 

financial principals represent and activity-oriented perspectives within an organisation. 

Upwards, a manager needs trust from vertical principals to whom the manager has a 

distance. S/he, and accountants, have responsibility for the preparation of reports that 

comply with external standards. Downwards, s/he can arrange a control process on his/her 

conditions. S/he will observe operative activities at a distance that is considerable in large 

organisations. 

Principals at the top, in the private sector as well as in the public sphere, have a special 

mobility because they have alternative uses of money. Financiers are in a position to direct 

requirements placed on the activity, explicitly or implicitly, in combination with financial 

frameworks that are more or less clear. Each activity that needs money from the outside must 

be sufficiently attractive in these respects and for the users of output. Functions and visions 

of an organisation with a continuous activity are confronted with a need for financial 

resources for alternative use. Divergence between the two perspectives is intrinsically 

unavoidable. Decoupling between activities and the financial function can only be temporary 

– although it may be difficult to predict acute points of time.