Traditionally, managers see their role as one of optimising use of their resources. Work is organised on a functional basis; the argument being that this makes it easier to control because one can measure the results achieved and resources used.
Performance goals are cascaded down the organisation. As the goals get nearer to that part of the organisation where the work is actually done, they become imposed numerical goals with associated measures for control. While the thinking is rational, the effect on the organisation is often devastating. Each department sees its purpose as the achievement of short-term goals. Often departments come into conflict and some will strive to meet their own goals regardless of the effect on others or the organisation as a whole.
Management by control encourages people to look inwards at their own structures rather than outwards to the customer. People feel that accomplishment comes from meeting the controls rather than meeting customer needs. Management by control becomes a self-reinforcing phenomenon leading to complacency; people assume that everything is going well if they meet the controls. By the time the organisation realises that it is off course, it’s usually too late.