Controllability principle
The controllability principle seeks to evaluate managers on results they can meaningfully influence over the relevant period. Separate their decisions from centrally imposed allocations, external shocks and inherited assets, while recognising shared influence and interdependent causes. Different measures may be needed for managerial performance and the economic performance of the division. Perfect separation is rarely possible, so reports should explain context rather than mechanically delete every external effect.
Worked example
A plant manager controls material usage but purchasing negotiates price centrally. Report both, explain quality interactions and assess the manager’s own influence rather than attributing all material cost differences to them.
Common mistake
A result can be uncontrollable in the short term but influenceable over a longer horizon. Do not turn controllability into an excuse to ignore risks.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | APM | Direct | September 2026–June 2027 |
| ACCA | MA | Direct | September 2026–June 2027 |
| ACCA | PM | Direct | September 2026–June 2027 |
| ACCA | SBL | Supporting | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |