Management Control under Uncertainty: Thinking about Uncertainty

David Otley

Chapter 6 in Management Control and Uncertainty, 2014, pp 83-96 from Palgrave Macmillan

Abstract: Abstract Much of the discussion of the design and operation of management control systems takes place under the (often implicit) assumption that the future can be known with a high degree of certainty. Even where uncertainty is explicitly recognized, it takes the shape of a benign form of external uncertainty where the future, although not completely predictable, is seen as occurring in a well-specified space. Indeed, such uncertainty tends to be treated as a contingent variable, which may modify the form of well-understood relationships between control variables, but is otherwise quite well contained. However, the real world is subject to much greater uncertainty, with events occurring that are often totally unexpected and which have a major impact and unforeseen consequences. This chapter will therefore explore the nature of uncertainty, how it may be conceptualized and examine some of the consequences for management control systems.

Keywords: Future Event; Track Record; Fund Manager; Management Control System; Recent Financial Crisis (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-39212-1_6

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DOI: 10.1057/9781137392121_6

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