The Design and Use of Management Control Systems: An Extended Framework for Analysis

54 Pages Posted: 4 Aug 2005

See all articles by Aldónio Ferreira

Aldónio Ferreira

Monash University - Department of Accounting

David Otley

Lancaster University

Multiple version iconThere are 2 versions of this paper

Date Written: October 2005


This paper puts forward the Performance Management and Control (PMC) framework as a research tool for describing the structure and operation of management control systems (MCS). The framework has been inductively generated from the observation of MCS design and use practices in four different organizations, and from our reflections on the strengths and weaknesses of previous frameworks that have been used to examine control systems. It is also based on our understanding of the major issues in the design and use of performance management and control systems acquired from previous experience in conducting such studies.

This paper begins by reporting on the differing ways in which management control systems were designed and used in four different organizations. These organizations were selected to be different in several ways, whilst having control systems that were believed to be effective. The study uses the frameworks proposed by Simons (1995) and Otley (1999) to characterise various aspects of control systems design.

The two frameworks used both proved useful in illuminating different aspects of management control systems design, but each also had weaknesses or blind spots. Building on these frameworks, on the case study material, our wider experience and on our understanding of the literature, we propose an extended framework that both elaborates Otley's five questions into twelve questions, and also integrates it with Simons' framework. In particular, it argues that it is the coherence of the links between the aspects of the system identified by Otley (1999) that are crucial to effective outcomes. It is believed that this extended framework will provide a useful research tool for those wishing to study the design and operation of performance management and control systems.

Keywords: Management control systems, performance management, framework, design and use of management control systems

JEL Classification: M40, M46

Suggested Citation

Ferreira, Aldónio and Otley, David T., The Design and Use of Management Control Systems: An Extended Framework for Analysis (October 2005). AAA 2006 Management Accounting Section (MAS) Meeting, Available at SSRN: or

Aldónio Ferreira (Contact Author)

Monash University - Department of Accounting ( email )

​E1065, Menzies Building, Level 10
​20 Chancellors Walk
Clayton, Victoria 3800
+61 3 9905 24267 (Phone)
3800 (Fax)

David T. Otley

Lancaster University ( email )

The Management School
Lancaster LA1 4YF
United Kingdom
+441 524 593 632 (Phone)
+441 524 652 01 (Fax)

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