A Conceptual Framework for the Design of Organizational Control Mechanisms

Abstract

The problem of organization is the problem of obtaining cooperation among a collection of individuals or units who share only partially congruent objectives. When a team of individuals collectively produces a single output, there develops the problem of how to distribute the rewards emanating from that output in such a manner that each team member is equitably rewarded. If equitable rewards are not forthcoming, members will, in future cooperative ventures, adjust their efforts in such a manner that all will be somewhat worse off (cf. Simon [Simon, H. A. 1964. On the concept of organizational goal. Admin. Sci. Quart. 9 (1, June) 1-22.], Marschak [Marschak, Thomas A. 1965. Economic theories of organization. J. G. March, ed. Handbook of Organizations. Rand McNally, Chicago, Ill., 423-450.], Alchian and Demsetz [Alchian, Armen A., Harold Demsetz. 1972. Production, information costs, and economic organization. Amer. Econom. Rev. 62 777-795.). It is the objective of this paper to describe three fundamentally different mechanisms through which organizations can seek to cope with this problem of evaluation and control. The three will be referred to as markets, bureaucracies, and clans. In a fundamental sense, markets deal with the control problem through their ability to precisely measure and reward individual contributions; bureaucracies rely instead upon a mixture of close evaluation with a socialized acceptance of common objectives; and clans rely upon a relatively complete socialization process which effectively eliminates goal incongruence between individuals. This paper explores the organizational manifestations of these three approaches to the problem of control. The paper begins with an example from a parts distribution division of a major company which serves to give some flesh to what might otherwise be overly-abstract arguments. Through the example, each of the three mechanisms is explicated briefly and discussed in terms of two prerequisite conditions, one social and the other informational. The more concrete organization design features of the three forms are considered, along with some consideration of the unique costs accompanying each form.organizational design, control, organizational goals

An Empirical Investigation of the Antecedents of Sales Force Control Systems

“…Ouchi's organizational approach (Ouchi 1979) states that goal conflicts between agents and principals can also be overcome by socialization. The measurement of either behavior, outcome, or both may be impossible (see Eisenhardt 1985).…”

“…Specific to this ap proach is, that Ouchi recommends to use behavior control Systems if the transformation process between salespeople's inputs and the outcome of the selling process is known (Ouchi 1979). …”

Control in Virtual Learning Communities: An Investigation from the Views of Trust and Effectiveness Uncertainty

“…[2]. This primitive typology was further modified by adding clan control to represent the social aspect of control [3]. According to Pavlou [4], who proposed five institutional structures: monitoring, accreditation, legal bonds, feedback, and cooperative norms to regulate behavior and build trust, instances of those modes of control applicable to VLC include: accreditation (output control), feedback (behavior control), and cooperative norms (clan control).…”

“…With a focus on VLC, this study attempts to draw on control theory [2], [3] and institution-based trust theory [4] to answer the following questions: (1) what is the role of control in VLC? and (2) what are the relationships between control, trust, effectiveness uncertainty, and learner behavior in VLC?…”

Estudo de organização em rede na metrologia em química

“…É valioso saber como os mecanismos de coordenação social e de controle podem desenvolver relações interorganizacionais, tanto por tratarem dos aspectos peculiares como alguns que possam ter sido negligenciados. Considera-se aqui todo o tipo de coordenação social e de controle de relacionamentos estáveis e profundos baseados em normas de grupos, reputação e controle de pares, de acordo com Ouchi (1979Ouchi ( , 1980);…”