In this paper a theory of management control based on Transaction Cost Economics
discusses. This theory specifies the composition of various archetypal control structures,
and links these to their respective habitat. These are: (1) arms length control;
(2) machine control; (3) exploratory control; and (4) boundary control. The gist
of the argument is that activities predictably differ in the control problems to
which they give rise, whereas control archetypes differ in their problem-solving
ability, and that alignments between the two can be explained by delineating the
efficiency properties of the match. This approach has some interesting qualities.
Its relatively simple theme seems to speak to a wide empirical domain, and can be
used to make sense of a large set of different control practices. Furthermore, it
offers a practicable way to address control structure effectiveness. Finally, the
approach is empirically testable.