Page 207 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Management Control Systems

Notes “Cybernetics” is derived from the Greek work “Kybernatics” which means “Steersman”.
A Steersman is a person who directs or governs a ship and corrects deviations from planned
course as they occur.
Cybernetics has been defined as the “service of communication and control.” The term cybernetics
was coined by Norbert Weiner and it aims at the study of the entire field of control and
communication theory, whether in the machines or the animal and has been extensively used in
control system engineering and in biology.

Did u know? “Cybernetics” as a biological phenomenon, has been defined as “how systems
regulate themselves, reproduce themselves, explore and learn.”
The fundamental concern of cybernetics is with negative feedback and the role of negative
feedback mechanism to explain purposive and adoptive behaviour. This aspect of cybernetics
has relevance for the financial and economic control of business and other organizational ethics.
The particular version of the paradigm developed by Griesinger (1979) (Griesinger, Donald W.
Management Theory - A Cybernetic Perspective, Graduate Management Centre Jan. 86) captures
all the elements of the control process, which may be enumerated as follows:
1. Set goals and performance measures

2. Measure achievement
3. Compare achievement with goals
4. Compute the variances as the result of the proceeding comparison

5. Reporting the variances
6. Determine the cause of the variances
7. Take action to eliminate the variances
8. Follow up to ensure that goals are met
These eight elements of the control process are captured in the cybernetic paradigm. The process
operates as follows:
Each sub-unit or responsibility centre of the organization operates within an environment. The
environment includes the “outside world” (i.e., the external environment) as well as other
organizational units internal to the firm (i.e. the internal environment).

!
Caution Each responsibility centre must be responsive to changes in the external
environment as well as to the goals, strategies, policies, decisions and managerial styles
of its superior responsibility center (i.e., its internal environment).
Each manager of an organizational unit scans the environment either formally or informally, so
as to absorb information or feedback pertaining to its state-of-affairs. The manager comes into
contact with the environment through the sensors i.e., the mechanism used by managers to
collect data, e.g. formal reports as well as informal report that comes to the attention of the
manager through his or her sense of hearing and seeing. The sensors collect data on the changes
occurring in the external environment as well as the internal performance of the responsibility
center.

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