A system and method for controlling a work machine system having a work machine and work tool. Operational characteristics of both the work machine and work tool are configured by a machine controller based upon the type of work tool attached to the work machine, the operating environment of the work machine, and the location of work site personnel or other observers relative to the machine or work tool. The operational characteristics of both the work machine and work tool may then be automatically altered during operation of the work machine system to limit or expand functions of the work machine system in response to changes in the operational environment or movement of personnel or observers relative to the work machine system.