Lars Östman towards a general theory of financial control

 

 

The surrounding world 

 

Basically, the needs of many functions remain rather unaltered in society. New functions are 

added. Other needs and wishes decline. Some functions can be fulfilled in new ways. Thus, 

patterns of varying importance are changing. In part, demands are profoundly conditioned by 

what is being offered. Large and small innovations are introduced in terms of both output 

and production technology; productivity tends to increase in many fields. In particular, 

technological breakthroughs may have considerable effects in many respects. 

Each organisation needs to satisfy current functions and faces the challenge of 

developing: to utilize observable tendencies and, very exceptionally, to be a leading actor for 

general developments in society. To an essential degree, external processes of importance 

change in a rather tacit way. User contexts are transformed so that the output of a certain 

organisation gradually gets a different role, for example when technological or social 

changes take place. General increases in customer focus may restructure demands, and, 

consequently, all the required competences are no longer at the disposal of a certain 

organisation. The prerequisites of resource provision can change continuously or 

instantaneously, for example when wages, inflationary power or currency values reach new 

levels. An organisation may be affected by an increase in vertical pressures from above for 

other organisations with whom they are interacting. 

Activities of a certain organisation are conditioned by vertical and horizontal processes 

for other organisations both distant and near, and also by how these processes change. 

Requirements at the vertical top in various countries tend to level out. Wage formation and 

market competition cover extensive geographical areas. Pay-driven organisations have the 

option of selecting business areas and geographical areas. The effects on function-driven 

organisations are different. There is a real long-term challenge for all vertical actors that are 

concerned about certain aspects of a horizontal process in a certain geographical area. In 

particular, this is a vital problem for tax-financed and unavoidable needs, where costs of 

each achievement tend to rise automatically over time.