Proposition- â€œEmployeesâ€™ behaviour shape the organizational design and that behaviour control is non-existent in organizationsâ€.
Section 1 - Introduction including definition of key terms
The world is rapidly changing and managers are faced with varying challenges to effectively manage in todayâ€™s highly competitive world (Daft, 2010). The increased technological advances, the demographic and economic changes, the increase in globalization, the demand for high quality and customer satisfaction are leading organizations to look for competitive ways to be more efficient. Organizations are considering outsourcing, part-time workers, and self-directed work teams to be cost effective. ...view middle of the document...
Based on the thoughts of Jaworski (1988) & Ouchi (1979), formal control can be further categorized into behaviour based control and outcome based control. If a manager is perfectly aware of the process of transforming inputs into outputs then behavioural based control can be used and the reward would be based on the accuracy of behaviour displayed. Incase the manager can measure the result, then outcome based control can be used and the reward would depend on the achievement of the desired output.
The agency theorists, Jensen and Meckling (1976), Mitnick (1982), Arrow (1985) also agree that employees are rewarded based on their behaviour (behaviour-oriented contracts) or based on the result of their behaviour (outcome-oriented contracts). However, they also recognized that an employeeâ€™s effort alone doesnâ€™t impact the outcome; there are also certain uncertainties in the environment that would affect the outcome. Hence they bought forth the argument against Ouchiâ€™s conceptualization remarking that even if there is a lack of knowledge of the process, the behaviour can still be rewarded by observing the employees behaviour personally, through a board of directors or by using accounting systems.
Snavely (1990) on the other hand commented that formal controls reflect the amount of authority supervisors have, to control the behaviour of the subordinates through an official formal organizational structure. This hierarchical structure requires the managers to maintain close supervision, allocate responsibilities and develop impersonal procedures to monitor performance.
Ouchi (1980) also describes two informal types of control- clan control and self control. Clan control is used when the outcomes are unpredictable and when knowledge is limited. This is most effective in a group where the sense of commitment and trust are high like in virtual teams. This is propagated by ensuring that the members are selected carefully and by constantly socializing to reinforce acceptable behaviours to achieve organizational goals. While self control is used when an individual measures his own performances against the standards he has set and rewards himself accordingly (Kirsch, 1996).
Informal control mechanisms help to coordinate employee behavior through interpersonal, social and/or cultural influence methods. Here, the behaviour is monitored informally by the peers rather than formally by the superior (Snavely, 1990).
The purpose of this essay is to identify the organization designs, the impact or influence of employee behaviour in designing these structures and the essential behaviour control mechanisms that are used within these organizations.
This essay is structured as follows: Section 2 of this essay will demonstrate arguments in favor of the proposition by stating that employee behaviour does affect the organization design and in that case behaviour control is non existent in organizations. This leads to increased motivation amongst...