CH4 LIT Flashcards
9 ways (local conditions) to explain observable indices
Cybernetic Control
Explanation: Cybernetic control is informed by open systems theory and rational decision-making. It involves designing control systems that align organizational and individual goals. This is achieved by setting goals and measuring progress towards those goals. Feedback in the form of rewards or punishments is provided to employees based on their performance.
Example: In a sales department, cybernetic control can be implemented by setting monthly sales targets for each employee and providing rewards such as bonuses or recognition for achieving or exceeding those targets.
Cybernetic control can be divided into output control and behavioural control.
Directly measuring desired results supports output control. Output control encourages measuring variables such as the number of units produced. However, the relationship between output measures and performance can sometimes be highly ambiguous. When output control cannot be measured only with great difficulty, managers use behavioural measures.
Measuring behaviours instead of outcomes supports behavioural control. For example, the work of nurses can be measured by their demeanour with patients. Behavioural control works best when behavioural indicators are known to relate to desired outcomes. Therefore, measuring behaviour can function as a substitute for measuring output.
Organizations apply cybernetic control at multiple levels…
Organizations apply cybernetic control at multiple levels, including individual, group, and organizational levels. At the individual level, employees are assessed based on their performance relative to goals.
At the group level, statistical reports and quality control data are used to evaluate performance.
At the organizational level, measures such as profit and loss and returns on investments assess the overall performance of divisions or the entire organization.
Example: In a retail company, individual sales associates may be evaluated based on their individual sales performance, while groups or departments may be assessed based on their collective sales volume or customer satisfaction ratings.
Agency theory
Agency theory examines the relationship between principals (e.g., shareholders, owners) and agents (e.g., managers) within an organization. It recognizes the potential conflict of interest between the two parties and suggests that control systems should be designed to ensure agents act in the best interests of principals. Contracts specifying goals and performance monitoring, along with rewards and punishments, are primary control mechanisms.
Transaction cost theory
Transaction cost theory (TCT) focuses on the costs associated with conducting economic transactions. It recognizes that organizations face transaction costs such as communication and legal fees when exchanging goods and services. TCT suggests that organizations choose governance structures, such as markets, bureaucracies, or clan control, based on the minimization of transaction costs.
Example: A company may choose to outsource certain functions to external suppliers to minimize transaction costs. By doing so, they avoid the costs of maintaining in-house capabilities and can benefit from specialized expertise and economies of scale.
Types of control
Concept: Coercive Control
Explanation: Coercive control involves using the threat of force or punishment to align behavior with organizational objectives. It relies on the exercise of authority and hierarchical power to enforce compliance.
Example: In a military organization, coercive control is evident in the chain of command, where soldiers are expected to follow orders without question, and disobedience can result in disciplinary action or legal consequences.
Concept: Remunerative Control
Explanation: Remunerative control involves using financial rewards, such as wages and salaries, to align behavior with organizational objectives. It relies on the power of monetary incentives to motivate employees and drive performance.
Example: In a sales organization, remunerative control can be observed through commission-based compensation structures. Sales representatives earn a percentage of the sales revenue they generate, providing a direct link between their performance and financial rewards.
Concept: Normative Control
Explanation: Normative control relies on the power of cultural values and assumptions to influence how members perceive, think, and feel. It shapes individuals’ behavior and guides their decision-making based on shared beliefs and social norms.
Example: A nonprofit organization dedicated to environmental conservation may have normative control by fostering a culture that values sustainability and encourages employees to make environmentally responsible choices in their work and personal lives.
Managerilism
Owners and Managers have the right to control their workers
Hegemony
Critical theorists argue that individuals accept oppression and exploitation when dominant systems of power and ideology become normalized in their lives. They highlight the concept of hegemony, which occurs when existing systems of wealth and power are aligned with and supported by the values and practices of cultural institutions. Hegemonic practices subtly shape individuals’ thinking and communication, favoring the interests of the elite.
Example: In a society where income inequality is prevalent, individuals may unknowingly adopt beliefs and behaviors that support the existing economic system, reinforcing the dominance of the wealthy and perpetuating social inequalities.
Three faces of power
Technocratic Ideology vs Communicative Rationality
Modern society is dominated by institutions that prioritize technical efficiency in achieving goals. Technocratic ideology, rooted in instrumental rationality, pervades various aspects of modern life. It emphasizes efficiency and often overshadows alternative theories, such as communicative rationality, which emphasizes practices like open debate and consensus.
Example: In a government agency, the focus on technocratic ideology might lead to decision-making based solely on cost-effectiveness and measurable outcomes, overlooking the broader social and ethical considerations that communicative rationality would take into account.
