Lars Östman towards a general theory of financial control

Near and future functions 

 

By their operations, organisations satisfy certain material and experiential functions of 

individuals immediately or almost immediately, some of them very urgent. The need for 

immediate functions is one obvious and vital area of significance. Other such areas include 

what resources are used and how equitably resources and output are spread. Possible future 

functions and dysfunctions are also at stake for organisations and ultimately for human 

beings. 

Horizontally, a certain organisation has two-way relationships over time. To what extent, 

and how, is an organisation able to influence horizontal states and changes externally? What 

horizontal states and changes outside will have a determining effect on the organisation? An 

organisation meets individuals and other organisations backwards and forwards. They all 

have intentions and foresight. The horizontal position of an organisation in relation to these 

individuals and other organisations constitutes operational dependencies and uncertainties. 

The activities of one specific unit may be narrow or wide in a total value chain. This position 

is very important for the possibility of fulfilling functions that will be demanded in the 

future. Horizontal relations include processes in which organisations, individuals and nature 

are involved. Relationships are difficult to grasp. Operating modes and relationships are 

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uncertain in many respects. Nature has no known intentionality and no foresight. States of 

nature concern multiple interrelated areas of significance rather than a single area.

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Thus, actions today concern the conditions and outlook for horizontal activity in the 

future – for a single organisation and for larger systems, including natural resources. 

Structures and incentives are constructed to improve existing functions and their efficiency. 

Novelties are stimulated. But there is also vulnerability – for individuals, single 

organisations, nations, multinational areas and the entire global system. Actors and systems, 

at all these levels, are exposed to variations in horizontal events and have some adaptive 

capacity. Moreover, to varying degrees, each nation, organisation or individual is financially 

dependent in the sense that their financial functions are sensitive to variations in supplying 

financial markets and allocation systems. The possibility of such variations constitutes 

financial uncertainties for them and for larger systems and interacts with horizontal 

uncertainties. Again, at all these levels exposure to various operational, financial and total 

uncertainties and adaptive capacity are key variables.