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Management and control9The second column of Table 1.1 identifies the major types of resources with which managers must work: people, money, machines, and information. Management schools also offer courses organized using this classification. These courses are often called human resource manage-ment, accounting and finance, production and operations management, and information sys-tems, respectively. These are sometimes also referred to as the support management functions.26The term management controlappears in the third column of Table 1.1, which separates the man-agement functions along a processinvolving objective setting, strategy formulation, and manage-ment control. Control, then, is the back end of the management process. The way we use the term management control in this text has the same meaning as the terms executionand strategy imple-mentation. In most organizations, focusing on improving MCSs will provide higher payoffs than will focusing on improving strategy. A Fortunestudy showed that 7 out of 10 CEOs who fail do so not because of bad strategy, but because of bad execution.27The above examples reinforce this, too.Many management courses, including business policy, strategic management, and manage-ment control systems, focus on elements of the management process. To focus on the control function of management, we must distinguish it from objective setting and strategy formulation.Objective settingKnowledge of objectivesis a prerequisite for the design of any MCS and, indeed, for any pur-poseful activities. Objectives do not have to be quantified and do not have to be financial, although that is how they are commonly thought of in for-profit organizations. A not-for-profit organization’s primary objective might be to provide shelter for homeless people, for example; but even in these organizations, there have been calls to express the achievement of these objectives in financial or quasi-financial terms, such as social return on invest-ment.28However, many for-profit organizations also have nonfinancial objectives, such as related to sustainability or personnel development and well-being (see Chapter 16). In any organization, however, employees must have a basic understanding of what the organiza-tion is trying to accomplish. Otherwise, no one could claim that any of the employees’ actions are purposive, and no one could ever support a claim that the organization was successful.In most organizations, the objectives are known. That is not to say that all employees always agree unanimously as to how to balance their organizations’ responsibilities to all of their stakeholders, including owners (equity holders), debtholders, employees, suppliers, customers, and the society at large. They rarely do.