The organizational control structure

ma1 Control Structure Henry Tosi ,University ofFlorida

This paper introduces a special topic section of jke papers on organization contrul. Organizational control is conceived of in a broad sense to include such factors as leadership, formalization, reward systems and the like. In this paper, it is proposed that the control structure varies by type of organization, and that the control structure has d@erential effects on (I) predictability and (2) organization effectiveness.

The papers that follow are, for the most part, from a symposium entitled “Subtle Forms of Organization Control. ” 1 The purpose of that symposium was to consider elements that lead to predictable behavior patterns in work organization beyond those most frequently discussed in the management IIiterature , i .e . , leadership, formalization, job descriptions, and so foirth. The papers in this collection all focus on control in organizations. They address some different facets of the question, “HOW is the behavior of individuals and groups influenced so as to ensure that members act in ways to minimize problems and maximize their compliance witInorganization norms, policies and goals?” At one conceptual extreme, control is a very narrow term, applying to only one phase of he management process. ” In this view, quite common in the management literature, control is regarded as the process of ensuring that activities (or events) conform to plans or objectives. Such a concept requires (I) the presence of a standard against which performance can be measured, (2) a monitor which may be mechanical QKhuman, and (3) corrective action when deviation from the standard is presently, or anticipated to be, excessive. At the other conceptual extreme, control is seen as more broad. It includes all that managers do to insure compliance. In fact, in this broad sense, control is merely another synonym for the term managemeW. Personnel selection, supervision, the development of organization objectives, and the design of organization structure are some, surely not all, approaches and devices to ensure compliance. They are some components of the control structure. _I___ Address correspondence to Henry L, Tosi, Management Center, ZI9C Business Building, University of Fhwida, Gainesville, FL 32611. 1 National Meetj,.qg of the Academy of Management, Detroit, Michigan, 1980. Research II,27 l-279 ( 1983) @ Elsevier Science Publishing Co., Inc. 1983

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The control structure is the set of factors, and the relationship between them, which elicit predictable performance from individuals and groups in organizations 131. The effect of the control structure is predictable member pelformarrce. That is to say, relatively stable interaction patterns among members, whether or not these patterns are maximally goal criented, emerge and persist because of the nature of the reinforcements of the control structure. The Control Structure

Thecontrol structure, by definition, is composed of the following factors

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refers to both the number and the restrictiveness of procedures and policies. Organizations develop formalistic tendencies early in their existence .and it is unquestionable that these affect behavior patterns. High formalization Increases predictability. Technology may affect behavior in two ways. First it may be a determinant of the upper and the lower limit of performance. It is impossible to produce more than the capacity of the machine with which a person works. Second, technalogy may affect interpersonal relationships between a person with peers, supervisors, and subordinates. A highly automated work proces:; for instance, reduces the need for personal supervision, substituting machine control for human control. Sociizlization is the learning process by which the institution (a society or an organization) inculcates its members with values, beliefs, and norms. Socialization affects how individuals learn how to adapt, or cope with organizations. Of particular importance am the nature of organizational commitment and the responses to authority which emerge from socialization. Organizational socialization, the learning of norms after one joins an organization, also affects individual behavior in an organization. Selection processes may, when they a~ systematic, restrict the range of behavioral and attitudinal variance in an organization. Procedures which systematically include or exclude a particular class of individuals will have obvious effects on behavior patterns. For example, a firm may systematically choose persons with very high ability and not those with moderate or lolwskills. Another effect of selection may be due the regular choice or exclusion of persons with particular attitudes, or points of view. Reward systems may affect behavior patterns. Pay, promot.ion, and/ or recognition, systematically given or withheld will be a deter-

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minant of behavior patterns. Understanding the bases for allocation of reward and sanctions is fundamental to understanding predictability of behavior. 6. Work relationships among peets and with s&ordinates are often reflected in both productivity and compliance norms. The nature of these relationships and the strength of group pressures for iompliante can be strong forces in shaping behavior. L 2. Leadership, finally, as interpersonal influence of a higher level organizational official, affects behavior patterns. This occurs to the extent that a person complies with such influence attempts. l

There are some interesting questions which may be raised about the control structure. 1. What are the processes by which the elements of the control structure affect behavior? Are the processes different for the various elements of the control structure? 2. How much variance in behavior patterns is accounted for by each factor? By all these factors combined? 3. Do these factors have a simple additive or interactive effects on behavior patterns? 4. Axe there circumstances (and what are they) in which different patterns of these factors would result in a similar level of predictability? The Management of the Control Structure The relationships between the control structure and predictability of behavior is shown in Fig. 1. When the control structure is tight (or high), then the behavior patterns are highly predictable. Conversely a low control structure would be associated with less accurate predictions about behavior patterns in an organization. Does this mean that a management can simply increase control as it wishes to improve predictability and, potentially, improve organization effectiveness? I will deal with the control structure and effectiveness in a more complete section which follows. Here I[ will explain the susceptibility of the control structure to managerial manipulation. Some elements of the control structure may be directly affected by managerial decisions. For example it is possible to increase or decrease the level of formalization, to change selection criteria, alter the technology, and to modify the reward system. Not so susceptible to direct influence are socialization, work relationships, and leadership. These result more directly from the operation of

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PREDICTABILITY OF BEHAVIOR

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TIGHT

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STRUCTURE

FIGURE 1: The control structure and predictability of behavior in organizations.

human interaction processes which are generally beyond managerial control. Such a distinction between those elements of the control structure which are manipulable and those which are not leads to the conclusion that managers may not increase the tightness of the structure beyond the limits of the factors which they can directly influence. To be sure, socialization, work relationships, and leadership, may have very significant control effects, but they are not manipulable in quite the same sense as the others. This, of course, argues that in some cases the control structure can be more easily managed than in others. To put it another way, the control stt~cture may be tightened by managers when work is highly controlled by technology, in cases where there is a relatively large pool of job applicants with requisite abilities, and where the reward system can be designed so that there is close link between rewards given and the behavior which is desired by management. For example, I would argue that the conml structure can be more easily tightened or loosened in bureaucratic organizations with machine-paced, low skill level work than in nonbureaucratic organizations in which professionally trained persons work.

The control structure has a positive and, likely, a linear relationship with predictability. It does not necessarily follcw that same positive linear

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HIGH

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LOW

LOW

HIGH

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FIGURE 2: The control structure and organization effectiveness.

relationship exists between the control structure and organizational effectiveness. The reason for this is that organization effectiveness; a!ydpredictability of behavior are net necessarily reiated to each other Iw &e same waj. Under very low levels of control, for insLance, behavior may be unpredictable and performance may be low. However, under very high levels of control, individual and group actions and motivation snight be restricted by the control system. Thus under high levels of control, behavior patterns may be quite predictable but these may not yield high performance. Such a case is illustrated in Figure 2. The Control Stmsture

and Type of Organization

Casual observation would lead to the conclusion that the control structures of different types of organizations may vary in two ways. First, the different elements of the control structure may account for different amounts of variance in predictability of behavior. Consider, for example, the different role and effects of selection on member control. When the organization’s work requirements are heavily human-skill dominated, the emphasis on, and the effects of, selection may be very different from when the work is technology dominated. till dominated work, the person’s ability to perform the task must take precedence over other criteria such as attitudes and

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Fig. 3: The control structure, predictability and effectiveness in mechanistic and organic organizatb 3.

organizational commitment si-1 J, we assume here, the pool of potential workers may be relatively small. In this case we expect that the organization will hire “technical experts” who are trained and socialized elsewhere. To the extent that such members bring v,alues, attitudes, and beliefs which are not generally compatible with prevailing organization philosophy and pratice, it may be necessary to adjust, organizationally, to accomodate those persons. The selection element of the control structure will act to minimize performance problems but will not have a damping effect on managing other human problems. In the case of technology-dominated work, especially where the work has hcome routinized, selection may have a very different effect. Under such conditions, performance dependability is built into the technology. The operator needs to use limited personal skills. Thus, if we assume that a larger work pool is availab!,e from which an organization can draw, then it is possible to select not only persons with requisite skills but also with vahtes, attitudes, and beliefs which present minimal control problems. Those who deviate too sharply can be terminated and easily replaced. The selection element in the control structure can minimize both performance and attitudinal problems. The second way that the control structure will vary by type of organization is LI the amount of control possible. In some cases, the range of possibIe control may be quite high while in other instances it may be quite low. Figute 3 illustrates this case, showing how the control structure might be different between mechanistic and organic organizations and how the control structure may be related to predictability and to effectiveness in each case.

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According to Bums and Stalker [l] the mechanistic organization is characterized by many rules and policies, adherence to the chain of

command, and other properties of the classic bureaucracy. The organic organization is less rigid. work assignments are more general and the hierarchical imperative is not great. In Figure 3, the control structures of the organic and mechanistic organizations are shown in the hr -iTontal axis. Note that the upper level of the control structure of t! !:. organic organization can overlap with the lower ranges of the mechanistic organization’s control structure. The representation of effectiveness and predictability are hypothetically drawn here. It is possible though that the behavior patterns of members of these two different classes of organization are equally predictable within the effective range of the effective control structures for the type of organization. That is, even though there is less actual control of behavior in the organic organization than in the mechanistic organization, at high levels of control in both types there exist relatively well-fixed behavior patterns. Such a case may also exist with respect to effectiveness. This hypothetical case suggests that effectiveness is highest for both types of organizations at the midranges of control.

Summary The construction of control structure that is proposed in this paper raises a wide range of important theoretical and pragmatic issues, far beyond the scope of this paper and those that follow. However, the papers in this collection address some, certaintly not all, of the specific issues which have been suggested above. They focus on both direct and indirect causes and effects of control structure elements. In the first paper, for example, Inzerelli and Rosen consider how culture is related to organizational control. In a cross-cultural analysis of managers, they demonstrate why and how Anglo-Saxon managers are different from Japanese managers. Japanese managers “take” responsibility, English managers are “held” accountable. Japanese managers expect commitment, English expect “to control.” Such differences in orientation to work stem from basic societal beliefs that permeate the culture, beliefs which are embedded in family, religious, and educational institutions. Moth and Huff consider how the language itself may be a mechanism of control. They discuss, specifically, how language and subordination are related. Moth and !-Iuff show by analysis and by example the manner in which a higher level official makes clear to those at lower levels “who is boss. ” Of particular interest is their discussion of the use of scata-

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logical and demeaning language in the superior/subordtiate relationship. Workers, managers,and professionals in organizations are the subject of the next three papers. Jermier discusses t!: effects of the work process on those who must do the work. He argues that those who decide how work is to be done may, through the act of “de-skilling” work, increase the dependence of workers on organizations. This ensures a more manageable work force, minimizing control problems. Of course, such an issue has profountd implications which must be resolved through social processes. Dispersion or centralization of control over the means of production is an issue at the core of any political and economic philosophy. There is little question, though, that how that issue is resolved in society will have a ima@reffect on the control structure of organizations. Blair and Kaserman illustrate how the organizational control structure may be a more powerful determinant of an individual’s behavior than legal requirements They attack an old issue, the separation of management control from ownership control. According to law, the manager is the representative of the owners and should act in the owner’s interest. Yet, as Blair and Kaserman note, in many instances managers are shielded from sanctions when they act in ways that do not represent owner interest. Their example is the behavior of managers which is subject to antitrust sanctions. Managers who violate the law are not generally penalized for violations. When they are, the penalties are small. The firm (read investors) pays the penalty and can, in fact, pass the costs to the consumer. The final paper by Van Glinow outlines a framework for consideration ofcontrol issues in which professionals are involved. Professionals who have developed high levels of personal skill through education and training are often brought into organizations which do not present them with a suitable work climate. The professionals may have a strong p=ference for autonomy of both work assignments and how to perform professional tasks. Such a preference for autonomy may pose few problems when the organization is designed in such a fashion as to facilitate f&&m. It is clearly a problem in more restrictive settings. Van Glinow discusses this problem, suggesting that control issues related to professionals are a function of individual preferences and organizational circumstances. These papers present a broad construction of control. They alert the reader to the fact that there are cultural circumstances and persona1 processes which serve to influence other’s behavior in predictable ways. These gened and often indirect forces exert tremendous effects on members of organizations, and they are often unnoticed. Hopefully, the

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papers in this special edition will spur 0the.Eto propose ways to integrate such notions into theories of organizations andltheories of behavior in organizations. References Lon-

1.

Bums, T., and Stalker, G. M., The Managemtwt of Innovation. Tavistock, don, 1961.

2.

Tosi, Henry, Toward a Paradigm Shift in the Study of Leadership, in Leadership: Beyond Establishment View 3. G. Hunt, U. Sekaldll. ~IKI L. Schreishiem, eds., Southern Illinois University Press, Carbontlale, IL, 1~5 I

3.

Tosi, Henry, and Carroll, Stephen, Managejnent. Wiley, New York, 1982.