IMPACT ON ORGANIZATION

Impact on Organization



Impact on Organization

Functional And Dysfunctional Control Systems

Control systems often produce dysfunctional (not performing as expected) behavior.The different types of dysfunctional behavior that have been documented include the bureaucratic, the strategic, feeding invalid information, and resistance.

Bureaucratic behavior occurs when employees behave in ways that are detrimental to the organizational goals they are supposed to promote. The main responsibility of a public department / agency is to serve the public. Keeping statistical records of the number of interviews conducted, and the number of forms filled - measurable activities supposedly conducive to this goal - often results in dysfunctionalbehavior as employees lost sight of their primary function which is to serve the public! This is most certainly the case when rewards are given for carrying out these secondary tasks.(Allard,2002)

Another type of bureaucratic activity consists of rigidly sticking to the rulebook - at the cost of public goodwill. This is especially true of larger organizations…Control systems also cause employees to indulge in strategic behavior; or behavior carried out solely to look good as far as the control systems are concerned. Such type of behavior may or may not be detrimental to the organization.(Fligstein,1996)

Feeding invalid data about what can be done make both planning and budgeting difficult to carry out. Individuals may distort data about what production levels are possible, and employees may ask for much larger budgetary estimates. (Creese, 1999) This sort ofbehavior happens all the time, because it gives employees (as well as managers) the flexibility that they need. Employees may want to cover up past errors or poor performance. But it is important to understand that invalid data is sometimes fed into the system because the data asked for is simply not available! Employees (and managers) may prefer to use guess estimates instead of failing to provide the data.(Robbins,2002)

Control systems often meet resistance from the very people whose activities they are supposed to streamline. This may be due to a variety of reasons:

Control systems may automate and standardize expertise (skills acquired over many years), which some people find threatening.

Information can become a source of power; and the people managing the information can become all too powerful.

Control systems measure individual performances objectively, showing some people in an unfavorable light.

Control systems can reduce the amount of autonomy employees have, by specifying how the job needs to be done.

Criteria For Developing And Evaluating Control Systems

Developing a comprehensive performance measurement system has frustrated many managers (Fligstein,1996). The traditional performance measures enterprises have used may not fit well with the new business environment and current competitive realities. A broad range of enterprises are deeply engaged in redefining how to evaluate their business performance. New qualitative measurements are need to perform this business evaluation. Drucker put the ever-increasing measurement dilemma this way: (Fligstein,1996)

"Quantification has been the rage in business and economics these past 50 years. Accountants have proliferated as fast as lawyers. Yet we do not have the measurements we need. Neither our concepts nor our tools are adequate for the control of operations, ...