Lever of control was first introduced by Robert Simons in 1995 (MBA Brief, 2013). It is a formal information-based routine or procedure that is used by management to maintain or alter patterns in organizational behaviour (MBA Brief, 2013). It is used to achieve a balance relationship for the control mechanisms in an organisation in order to realise the business strategy implemented in the firm (Iwaarden, Wiele, Williams, & Dale, 2006). In other words, the scales could not be skewed to either control mechanism, or else it will faced difficulties in realising its strategy. In this framework, there are 4 ways of exercising control and promoting innovation, which are belief system, boundary systems, diagnostic control system and interactive control system (MBA Brief, 2013). It can be further classified into two, which are (1) to inspire and direct the search of new opportunities (beliefs systems and interactive control system) and (2) to restrict individual freedom (boundary systems and diagnostic control systems) (Iwaarden, Wiele, Williams, & Dale, 2006). The lever of control being illustrated as follows:
Figure 1 Simons Lever of Control System (Iwaarden, Wiele, Williams, & Dale, 2006)
Simons (1995) defined belief system as an explicit set of organisational definitions that senior managers communicate formally and reinforce systematically to provide basic values, purpose, and direction for the organisation (Gleed, 2012). It is related to the fundamental values of the organisation, including mission statements and vision statements (GT webMarque, 2008) which are used to inspire and direct the search for new opportunities (Van der Wiele & Van Iwaarden, 2010). In other words, it espouses the values and direction that senior management want their subordinates to adopt (Iwaarden, Wiele, Williams, & Dale, 2006). As example, the company is establishing their business strategy in order to achieve the company missions. The company missions are act as the guideline or the direction for the company to follows in establishing their business strategy. Hence, a formal beliefs system which allows the organisation to control the commitment towards the firm’s vision and core values (12 Manage) is created and communicated through documents such as credos, mission and vision statement and the statement of purpose (Iwaarden, Wiele, Williams, & Dale, 2006). By making sure all individual in the organisation has a clear understanding of the organisation’s purpose and what is their role or contribution towards actualised the purpose, the beliefs systems enable the managers to transform the abilities of individual in the organisation into unified organisational output (UK Essays .com, 2010).
Boundary system can be addressed as control the risks that can be avoided by the organisation and the control define limits of authority and set standards of ethical behaviour (Gleed, 2012). It is being used to set the limit on...