Dr Cathy Knowles

In this study, the role of informal control within Management Control Systems (MCS) is explored. In particular, it addresses calls from prior research for the examination of how informal controls operate within Simons’ Lever of Control (SLOC). While this framework was originally designed for the implementation of strategy by senior managers within large corporations, this paper argues that, with modification, the concepts behind it can be applied to smaller organisations. This research explores the interconnections between informal and formal controls within independent UK hospices, with an income of between £5m and £15m. Through five case studies of these hospices, three patterns of control are identified: ethos, responsibility and judgement which are incorporated into a new performance management framework. While the research was undertaken within a voluntary sector context, its conclusions may have wider application across all sectors, particularly for small organisations, where the use of informal control complements formal controls.

Charities are often complex and networked, and face an increasingly demanding environment. Providing stakeholders with timely and adequate information on activities and impact is therefore challenging. Based on case studies of six UK charities, this paper finds that small/medium charities can use Enterprise Performance (EPM) systems to support providing such information, despite some challenges to their use of IT. There is an increasing awareness in charities of the importance of data, though technical aspects of data management are taxing for them. Compared to SMEs, charities share many of the challenges for IT-enhancement, but benefit from additional encouraging factors. EPM thinking, which is the ability to use an integrated and strategic approach to IT-support for EPM, is extant in charities’ Leadership and Business Systems Thinking capabilities. Necessary capabilities related to IT sourcing are much weaker and need external support. The study identified two different approaches to data integration and business process modelling in EPM: the first focuses on standardising performance measures across activities and projects, the second on standardising reporting processes while allowing for diversity of measures. The use of BI is largely unsophisticated, though improving, and may need enhancing to address the increasingly complex internal and external need for information.