Management Control from a Critical Rationalist Perspective: A Discussion on Results Controls

Abstract Karl R. Popper translated the core idea of critical rationalism to a managerial context when advocating the searching for and learning from mistakes as part of professional ethics. This paper builds on the conjecture that adopting a critical rationalist perspective contributes to advancing management control toward empirical foundation, scrutiny, and continuous learning. Based on the work of critical rationalist Hans Albert, three core components of results controls – namely cause-effect relations, provision of incentives, and accountability – are analyzed for potential obstacles for active testing and learning from mistakes. The impediments identified can be condensed into three types: cognitive limitations, self-interested behavior, and structural properties of results controls, including inherent assumptions about managerial behavior and situational conditions. The findings contribute to management control in various respects – from a more practical side toward means for counteracting the obstacles against a critical rational approach; conceptually, findings indicate so far underdeveloped issues in management control, such as learning on incentivization. Moreover, the analysis reveals that the critical rationalist approach may pose particular challenges for management control and organizational members, as it inherently may impose frequent changes and uncertainty.