Control: Organizational and Economic Approaches

Article Abstract:

Organizational design often focuses on structural alternatives such as matrix, decentralization, and divisionalization. However, control variables (e.g. reward structures, task characteristics, and information systems) offer a more flexible approach. The purpose of this paper is to explore these control variables for organizational design. This is accomplished by integration and testing of two perspectives, organization theory and economics, notably agency theory. The resulting hypotheses link task characteristics, information systems, and business uncertainty to behavior vs. outcome based control strategy. These hypothesized linkages are examined empirically in a field study of the compensation practices for retail salespeople in 54 stores. The findings are that task programmability is strongly related to the choice of compensation package. The amount of behavioral measurement, the cost of measuring outcomes, and the uncertainty of the business also affect compensation. The findings have management implications for the design of compensation and reward packages, performance evaluation systems, and control systems, in general. Such systems should explicitly consider the task, the information system in place to measure performance, and the riskiness of the business. More programmed tasks require behavior based controls while less programmed tasks require more elaborate information systems or outcome based controls. (Reprinted by Permission of Publisher.)

Management science, Wages and salaries, Employee benefits, Design, Salary, Personnel, Organizations, Incentives, Theory

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Sense-Making of Accounting Data As a Technique of Organizational Diagnosis

Article Abstract:

Planning is a process of inquiry. Inquiry can be enhanced if different views-of-the-world are used to inform each other. In an exploratory field study, a sense-making exercise was used in the initial, goal definition stage of planning. Its use is antithetical because sense-making denies that management action is based on preconceived goals or objectives. Instead, sense-making assumes management action is a continuous, equivocal stream of experience that can only be understood (or made sense of) when it is viewed in retrospect. Accounting reports were prepared to describe a fictitious, but plausible future scenario for an organization. A number of alternative future directions that the organization could have followed-different kinds of organization it could have become-were used as a basis for creating the accounting reports. The management group then imagined themselves even further out into the future, looking back over the accounting data. They tried to understand what they had done during this period, why they had done it, and how they felt about having done it. The impact of this exercise on the managers' cognitive and emotional experience and their commitment to use the method in other decisions suggest that sense-making can enhance the group process of inquiry during the initial stages of planning. (Reprinted by Permission of Publisher.)

Management, Business planning, Product introduction, Strategic Planning, New Technique

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Malaysian integrated population program performance: its relation to organizational and integration factors

Article Abstract:

The family planning project instituted in Malaysia and known as the integrated population program is analyzed and its efficiency in meeting project objectives is assessed. The evaluation procedures employed also identify organizational factors and integration factors affecting the program's success. The Malaysian population control program is found to be more effective than its categorical counterparts, and integrative linkage variables are found to be the most important factors affecting program success. The research suggests that family planning programs should be integrated with total health services networks.

Models, Analysis, Demographic aspects, Malaysia, Associations, institutions, etc., Associations, Birth control

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