Management Controls, Expectations, Common Knowledge and Culture

Shyam Sunder

Yale School of Management Working Papers from Yale School of Management

Abstract: Control in organizations can be defined as expectational equilibrium, or correspondence between how the members of an organization behave and how others expect them to behave. Using a contract model of organizations as the base, we use human expectations, common knowledge, and culture to propose a theory of control. Changes in factor and product market conditions tend to disrupt control in organizations. Strategic management consists of continual monitoring and anticipation of market conditions, and redesign, negotiation, and implementation of contracts to restore and maintain the expectational equilibrium.

Keywords: Management Control; Expectations; Common Knowledge; Culture; Organization (search for similar items in EconPapers)
JEL-codes: D84 L20 M14 M40 (search for similar items in EconPapers)
Date: 2003-02-18
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Citations: View citations in EconPapers (3)

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