Organisations, especially senior management of an organisations, wants to reach the goals set by the organisation. However, individual members have their own personal goals. They might or they might not be in line with the goals of the organisation.
Management control systems purpose is to ensure goal congruence:
In a goal congruent process, the actions people are led to take in accordance with their perceived self-interest are also in the best interest of the organisation.
Perfect congruence will not be possible. An adequate control systems encourages individuals to not act against the best interest of the organisation.
Goal congruence can be influenced by informal and formal factors. Informal factors ought to be taken into account when designing formal factors.
Informal factors are:
The formal control system contains the management control system itself and rules. Rules, in the context of management control systems, is a shorthand for all types of formal instructions. This could be job descriptions, standard operating procedures, instructions, manuals and ethic guidelines. Specific types of rules are:
Source Management Control Systems, 2007, R.N. Anthony & V. Govindarajan.