Chapter 17 Organisational Control and Power

An underlying feature of organisational behaviour is the concept ofcontrol and power. Control systems exist in all spheres of theoperations of the organisation and are a necessary part of theprocess of management. Work organisations are complex systemsof social relationships, status and power, and attention should begiven to the manager–subordinate relationships. The managerneeds to understand the nature of power and control in order toimprove work behaviour and organisational performance.

Learning outcomes

After completing this chapter you should be able to:

■ explain the nature and importance of control in work organisations, andthe essential elements in a management control system;

■ detail different forms of control and characteristics of an effective controlsystem;

■ explain the nature of power and management control, and reviewperspectives of organisational power;

■ assess the nature and impact of financial and accounting systems ofcontrol;

■ explore the concept of empowerment and the manager–subordinaterelationship;

■ examine the process of delegation, and the benefits and art of delegation;

■ recognise the human and social factors that influence people’s patterns ofbehaviour.

ORGANISATIONAL CONTROL ANDPOWER

Critical reflection

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‘The controversial nature of control means that some writers prefer to usealternative terms such as monitoring or evaluating. But whatever term isused, the process of maintaining order is an integral part of the individualand organisational relationship, and a necessary feature of regulating workbehaviour and effective management.’

Do you agree? What term would you favour for this process, and why?

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THE CONTROVERSIAL NATURE OF CONTROL

In the discussion on the role of the manager (Chapter 11) attention was drawn to the motivation of staff and the importance of direction and control over the performance ofother people’s work. By their very nature, control systems are concerned with the regulationof behaviour. This concern for the regulation of behaviour and improvement in performanceraises questions as to the ethical nature of control. (Ethical behaviour in business is discussedin Chapter 18.) Unfortunately ‘control’ often has an emotive connotation and is interpretedin a negative manner to suggest direction or command by the giving of orders. People maybe suspicious of control systems and see them as emphasising punishment, an indication ofauthoritarian management, and a means of exerting pressure and maintaining discipline. Somewriters seem to take this view, and even to suggest that organisational control is exploitationof employees.1

This, however, is clearly too narrow an interpretation. There is far more to control thansimply a means of restricting behaviour or the exercise of authority over others. Control is notonly a function of the formal organisation and a hierarchical structure of authority, it is alsoa feature of organisational behaviour and a function of interpersonal influence.2 Tannenbaum,for example, sees control as an inherent characteristic of the nature of organisations. The process of control is at the centre of the exchange between the benefits that the individualderives from membership of an organisation and the costs of such benefits.

Organization implies control. A social organization is an ordered arrangement of individual humaninteractions. Control processes help circumscribe idiosyncratic behaviors and keep them conformant tothe rational plan of the organization. Organizations require a certain amount of conformity as well asthe integration of diverse activities. It is the function of control to bring about conformance to organ-izational requirements and achievement of the ultimate purposes of the organization.3

Control is, therefore, a general concept that is applied to both individual behaviourand organisational performance. Nevertheless, we should note, for example, the commentsby Drummond who in a critical discussion about mechanistic thinking in organisationsmakes the point: ‘Common sense suggests that control is preferable to anarchy, and morecontrol is preferable to less. While such assumptions are not necessarily wrong, they are notuniversally correct either.’4

Child suggests that although control is an essential process of management, it is strangelyneglected by many writers on organisation. Among possible reasons for this is that

control has a sinister ring to it, associated in people’s minds with power and manipulation. As a result,there may be some reluctance among many business school writers to discuss control, in order to avoidembarrassment for their sponsors in positions of corporate power. The claim that it is a purely technicalprocess, concerning feedback on accounting and operations, also amounts to a desensitizing of the subject.5

Individual behaviour

Most people show an ambivalence towards control. While they may not wish to have themapplied by other people to their own performance they recognise the need for, and useful-ness of, control systems. Under certain conditions, however, people may actually desire con-trol. Lawler gives three reasons why employees might want to be subject to a control system:

■ to give feedback about task performance;■ to provide some degree of structure of tasks, definition of how the tasks are to be carried

out, and how performance will be measured; and■ where reward systems, for example pay, are based on performance.6

Control can stand for reliability, order and stability. Whenever a person inquires ‘I wouldlike to know how well I am doing’, this in effect can be seen as asking for control. Membersof staff want to know what is expected of them and how well they are performing. This placesemphasis on the exchange of information, and feedback and comparison of actual results

Figure 17.1 The nature of management control

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against planned targets. Control is a basis for training needs, for the motivation to achievestandards and for the development of individuals.7

According to Tulgan, ‘control’ (together with timing and customisation) is one of the three factors that should guide rewards and incentives in the workplace of the future. ‘It iscritical to make very clear to individual contributors exactly what performance – whatresults, within what guidelines, parameters and deadlines – the organisation needs, and willtherefore reward.’8

However, as Wilson reminds us, individuals are not just passive objects of control: ‘Theymay accept, deny, react, reshape, rethink, acquiesce, rebel, or conform and create themselveswithin constraints imposed on them.’9 And in a discussion of management processes in thenew century, Lorange notes that the control process will also change dramatically:

Perhaps the name ‘control’ will no longer exist, given the behaviourally dysfunctional overtones thattend to come with it. We shall, however, still use it here as a convenient term of reference, and rememberthat the content behind the phenomenon will be dramatically different.10

Organisational performance

At the organisational level, management need to exercise ‘control’ over the behaviour andactions of staff in order to ensure a satisfactory level of performance. Managerial control systems are a means of checking progress to determine whether the objectives of the organisation are being achieved. According to Zimmermann an organisation without controlis impossible.

Every organization has control systems that co-ordinate the exercise of decision rights that are dispersedamong individuals. Control systems also serve another important function in the organization. Theymeasure how effectively decisions have been translated into results. This second feature of control systemsrelates to the goal achievement of the company. In this perspective, control systems are about influencingthe behavior of individuals in the interest of the corporation. Both functions are closely interlinked.11

Control completes the cycle of managerial activities. It involves the planning and organ-isation of work functions, and guiding and regulating the activities of staff. Control providesa check on the execution of work and on the success or failure of the operations of the organ-isation. The whole purpose of management control is the improvement in performance atboth the individual and organisational level (see Figure 17.1). Lack of adequate supervision


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and control, or of an effective risk-management system, are major features of poor organ-isational performance and can even lead to the collapse of a company.12 A major internationalreport undertaken by Proudfoot Consulting found that poor management in terms of inade-quate planning and control and insufficient day-to-day supervision of work is still the largestsingle reason for lost productivity.13

EXPRESSION OF MANAGERIAL BEHAVIOUR

While the need for some form of control is constant, the extent and manner of control isvariable. The exercise of control is an expression of management systems and styles ofbehaviour. As mentioned in Chapter 11, what is really important is what control is intendedto achieve and the manner in which it is exercised.

One view of control is based on the classical approach and traditional assumptions oforganisation and management. Control is viewed as an essential feature of formal organisa-tion and a hierarchical structure of authority. It may also be recalled that the idea of‘Taylorism’ and scientific management (discussed in Chapter 2) can be seen as representinga form of close management control over workers and the actual process of work and production system. As a consequence of their status and position within the hierarchicalstructure, managers have control over the flow of information that mainly moves down theorganisation through vertical lines of communication.

By contrast, the human relations approach places emphasis on the social organisation,and the importance of groups and informal relationships. Control is seen more as a featureof interpersonal influence and takes place within a network of interaction and communica-tions. Control should not be seen therefore only in the sense that it suggests close and con-stant supervision or as an organisational constraint on freedom of action by the individual.

The contingency approach takes the view that the most appropriate structure and systemof management depend upon the particular situation. The nature of management control isan organisational variable. Recall the discussion on the organisational setting (Chapter 3)and consider likely variations in the extent and nature of management control among arange of diverse organisations.

Environment of consultation and communication

In previous chapters we have discussed the general movement towards flatter organisationstructures and the increasing importance of an integrating rather than a hierarchical or controlling style of management. The message today appears to be that control must neveroutweigh leadership. ‘Control is the hallmark of the Old World while leadership is a measure of the New.’14 A similar point is made by Lucas:

Command and control is out. Consultation and communication is in . . . The idea of a leader as anautocratic, domineering, opinionated character is fast becoming outmoded in industry. It just doesn’tfit with the new knowledge-driven economy where people expect to be consulted not commanded, nurtured not nannied.15

However, according to Cloke and Goldsmith, many employees have grown up in hierarchicalorganisations and become accustomed to external authority and the dead weight of organ-isational history.

Many employees actually prefer being told what to do by autocratic managers and are willing to acceptbeing treated like children in exchange for irresponsibility and reduced stress. They are willing to blindlyobey hierarchical authority and keep silent before their superiors in exchange for job security. It is easier by far to be an unthinking drone who obeys orders from above than a self-managing team member who is responsible for results.16

(You may wish to remind yourself of the discussion on Theory X and Theory Y managementin Chapter 12.)

Figure 17.2 The five essential stages of organisational control


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ELEMENTS OF AN ORGANISATIONAL CONTROL SYSTEM

Whatever the nature of control and whatever form it takes there are five essential elementsin an organisational control system (see Figure 17.2):

■ planning what is desired;■ establishing standards of performance;■ monitoring actual performance;■ comparing actual achievement against the planned target; and■ rectifying and taking corrective action.

1 Planning what is desired involves clarification of the aims to be achieved. It is importantthat people understand exactly what should happen and what is required of them. Thisrequires that objectives and targets are specified clearly, particularly key activities, andwherever possible given some measurable attribute. Planning provides the frameworkagainst which the process of control takes place.

2 Related to planning is the establishment of defined standards of performance. Thisrequires realistic measurements by which the degree and quality of goal achievement canbe determined. Whenever possible these measurements should be stated in quantitativeterms. Planning and measurement are prerequisites of control. Without them there can beno control. Objectives and targets, and standards of performance, should be stated clearlyand communicated to those concerned, and to those who are subject to the operation ofthe control system.

3 The third aspect of control is the need for a means of monitoring actual performance.This requires feedback and a system of reporting information that is accurate, relevant andtimely, and in a form that enables management to highlight deviations from the plannedstandard of performance. Feedback also provides the basis for decisions to adjust the control system, for example the need to revise the original plan. Feedback should relateto both the desired end-results and the means designed to achieve them.

4 Next, it is necessary to compare actual performance against planned targets. Thisrequires a means of interpreting and evaluating information in order to give details ofprogress, reveal deviations and identify probable causes. This information should be fedback to those concerned to let them know how well they are getting on.

Critical reflection

‘Criticism by certain writers of management control is totally misplaced. Control is anindispensable and welcomed process of the work organisation. Although they may notalways admit it openly, most members of staff prefer to know exactly what they areexpected to do and how to behave, and to receive regular management review andfeedback on their performance.’

How would you attempt to present a counter argument?


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5 The final element of a management control system is the taking of corrective action torectify the situation that has led to the failure to achieve objectives or targets, or other formsof deviations identified. This requires consideration of what can be done to improve performance. It requires the authority to take appropriate action to correct the situation,to review the operation of the control system and to make any necessary adjustments toobjectives and targets or to the standards of performance.

FORMS OF CONTROL

Control is far-reaching; it can serve a number of functions and can be manifested in a number of forms. For example, controls can be concerned with:

■ observance of legislation and recommended codes of practice;■ policies and procedures, standing orders;■ the structure of the organisation and role relationships;■ type of production system or use of technology;■ systems that focus on the measurement of inputs, outputs, processes or the behaviour

of people;■ general results or specific actions;■ the measurement and performance of day-to-day operational activities – this calls for

more specific standards of performance and speedy corrective action;■ recruitment and selection, socialisation, training and development;■ an evaluation of overall performance of the organisation as a whole or with major parts

of it. This requires broadly based standards of performance and remedies for correctiveaction. Total quality control, concerned with all areas of the organisation, can be seen aspart of total quality management programmes (see Chapter 20).

According to McKenna, codes of conduct (discussed in Chapter 18) can constitute anotherform of control:

Developing and distributing a code of conduct is a form of control that sets out the rules of behaviourand values with which an organisation’s senior managers expect their subordinates will conform. Sucha code will only be accepted if subordinates observe that managers at all levels live this code in theiractions, beliefs and involvement in collective learning.17

Control in the public sector

Public sector organisations have political purposes and are concerned with service to and thewell-being of the community. However, in recent years there has been a vigorous policy ofprivatisation and creating freedom from direct state control and the transfer of businessundertakings to private hands. At the same time, there has been increased government pres-sure to ensure cost-effectiveness, investment by private sector involvement, and efficiencyand economy in their operations. The demand for uniformity of treatment and publicaccountability for their operations results in high levels of statutory controls, legislation and

Table 17.1 Relationship between control system and classification of technology

Control Control Control Control system A1 system B1 system B2 system A2 (%) (%) (%) (%)

Unit and small batch production 75 25 – –Large batch and mass production 15 35 40 10Process production – – 5 95

Total firms 28 21 18 33

Source: Woodward, J. Industrial Organization: Theory and Practice, second edition, Oxford University Press (1980), p. xxi. Reproduced withpermission from Oxford University Press.


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ministerial guidance. In the case of local government, for example, there is the added consideration of the relationship between elected members and permanent officers.

Despite the apparent relaxation of authority and transfer of power from central governmentthere is evidence that public sector managers are under increasing political pressure. Thedemand for strategic management in the public sector has resulted in a greater emphasis on performance output measures with indicators of both a qualitative and quantitativenature. Shovelton draws attention to the increasing importance of accountability as one of the foundations of public services. Public sector organisations need to demonstrate share-holder value, fair treatment of employees and high environmental standards to a range of stakeholders, and public services face a difficult challenge in providing ‘more’ or ‘better’or ‘clearer’ accountability.18 In the case of local government there is also much publicitydirected to the accountability of senior management and the effectiveness of control systems,especially, for example, with high-profile social services cases.19

Technology and control systems

From a further analysis of the data collected from Woodward’s south Essex study of 100 manufacturing firms (discussed in Chapter 15), clear links emerged between the originalclassification of technology and the above categorisation of managerial control systems (seeTable 17.1).

Unit and small batch production firms tended to have unitary and mainly personal controls (A1). Process production firms tended to have unitary and mainly impersonal con-trols (A2). The similarities in some organisational characteristics between unit productionfirms and process firms identified in Woodward’s south Essex study could be explained bythe fact that in both groups unitary control systems predominated.

In the case of large batch and mass production firms, those with predominantly personalcontrols (B1) had similar organisational characteristics to unit firms and those with pre-dominantly mechanical controls (B2) had an organisation structure similar to process firms.

From the analysis, Reeves and Woodward suggest that control systems may be theunderlying variable that links organisational behaviour and technology. The class-ification of control systems they propose might provide a better means of predicting certain facets of organisational behaviour than the classification of technology.20

Wilson points out that technology is not just about devices and machines but also aboutsocial relations that encourage some form of interaction. Technology is a human, politicaland social activity. ‘The locus of control cannot always be moved from workers to managersduring technical change nor from managers to workers. Control ultimately does lie withmanagement, though workers may resist it.’21

Critical reflection

‘Technology is the ultimate determinant of the design of an effective control systemwhether for mass production systems, virtual team or remote working, personalsurveillance or working from home. There is not less control today, only different formsof control.’

What are your views? How has technology influenced the nature of control over yourbehaviour at work?


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Information technology

In previous chapters we have referred to the impact of developments in information tech-nology and these developments will also have a significant impact on management controlsystems. Processes of communication are increasingly linked to computer systems with therapid transmission of more information to more people including immediate access to othernational or international offices. Information technology and office automation are changingthe nature of the workplace and the way in which people work. For example, advances intelecommunications have resulted in a significant growth in teleworking, with staff workingfrom home with a computer network, telephone and fax. This has many potential advantagesbut also raises questions of self-motivation, security and systems of management control.

Nordström and Ridderstråle suggest that with increasing use of IT, control will not dis-appear but become more indirect. Information systems will be used to increase control bymeasuring more things, new things at multiple levels, and at a greater frequency than before.To a certain extent this is a substitute for the loss of hierarchy control resulting from theintroduction of new structures.22 Another interesting situation arising from the increasinguse of information technology is the legal position on organisations monitoring staff emailsand internet usage.23 A more detailed discussion on technology, work and organisationalbehaviour is included in Chapter 16.

STRATEGIES OF CONTROL IN ORGANISATIONS

Six significant strategies of control in organisations are explained by Child (see Figure 17.3):

1 personal centralised control;2 bureaucratic control;3 output control;4 control through electronic surveillance;5 HRM control; and6 cultural control.24

Personal centralised controls

This approach is often found in small owner-managed organisations and is characterised by the centralisation of decision-making and initiative around a leadership figure. Controlconsists largely of personal inspection to see that decisions are carried out, and the leadermay spend a high proportion of time supervising the work personally. Once the organisa-tion grows large enough to employ someone to undertake detailed supervision of everydaytasks, the locus of decision-making and close supervision will tend to become separated. The authority of the leader will usually rest upon the rights of ownership, special personalqualities (charisma) or technical expertise.

Bureaucratic control

This approach to control is familiar in public sector organisations and in many other typesof large organisations. It is based on the specification of how members should behave

Figure 17.3 Strategies of organisation control

Source: Child, J. Organization: Contemporary Principles and Practice, Blackwell Publishing (2005), p. 121. Reproduced with permissionfrom Wiley-Blackwell.

1 Personal centralised control1.1 direct supervision of people’s activities1.2 centralised decision-taking1.3 personal leadership: founded upon ownership rights, charisma, and/or technical expertise 1.4 reward and punishments reinforcing conformity to personal authority

2 Bureaucratic control2.1 breaking down of task into easily definable elements2.2 formally specified methods, procedures and rules applied to the conduct of tasks2.3 budgetary and standard cost-variance accounting controls2.4 technology designed to limit variation in conduct of tasks, with respect to pace, sequence

and possibly physical methods*2.5 routine decision-taking delegated within prescribed limits2.6 reward and punishment systems reinforcing conformity to procedures and rules

3 Output control3.1 jobs and units designed with responsibility for complete outputs3.2 specification of output standards and targets3.3 use of ‘responsibility accounting’ systems3.4 delegation of decisions on operational matters: semi-autonomy3.5 reward and punishment linked to attainment of output targets

4 Control through electronic surveillance4.1 speed and quality of work recorded and assessed remotely via information and

communication technology (ICT)4.2 employee’s performance assessed against that of other employees and trends4.3 such monitoring of performance used to reward and discipline employees

5 HRM control5.1 use of selection methods to ensure that new recruits ‘fit’ the profile of attitude, behaviour,

and capabilities desired by management5.2 training and development designed to reinforce this desired profile5.3 assessment procedures and reward systems used to encourage conformity

6 Cultural control6.1 development of employees’ personal identification with management goals6.2 strong emphasis on the collective and mutually supportive character of the organisation –

e.g. analogy with the ‘family’6.3 employment characterised by security of tenure and progression within the organisation6.4 semi-autonomous working: few formal controls

*Some authorities distinguish this as a separate control strategy. For example, Richard Edwards (1979),Contested Terrain: The Transformation of the Workplace in the Twentieth Century, New York, Basic Books.


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and carry out their work. There is an attempt to ensure predictability through formal jobdescriptions and procedures, the breaking down of tasks into constituent elements, and thespecification of standard methods for the performance of tasks. Reward and punishment systems can be designed to reinforce this control strategy. Compliance can be rewarded byupgrading, improved status, favourable employment benefits and job security. Bureaucraticcontrol will make use of accounting control systems such as budgetary control and standardcost variances. The bureaucratic strategy also permits delegation without loss of control.Managers can delegate routine decision-making within formally prescribed limits of discretion.


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Output control

This approach relies upon the ability to identify specific tasks having a measurable output or criterion of overall achievement – for example, an end-product, a part manufactured to agreed standards, batch production or a sub-assembly. Rewards and sanctions can berelated to performance levels expressed in output terms. Output control strategy is aimed atfacilitating the delegation of operational decision-making without the need for bureaucraticcontrols or relying on close personal supervision. Once output standards have been agreed,subordinates can work with a ‘semi-autonomous’ relationship to management, free fromdetailed control over how tasks are carried out. Output control may be difficult to apply tocertain activities, such as the legal department of a business organisation. Although it maybe difficult to establish suitable and agreed measures of output, and it may be difficult formanagement to codify the activities involved, output control may be more appropriate thanthe application of a bureaucratic control strategy.

Control through electronic surveillance

The essence of control is that the speed and quality of work is recorded and assessed remotelythrough the use of ICT without reliance on personal supervision. Control data are preciserather than impressionistic and subject to management bias. Monitoring of performance canbe used readily as the basis for reward and discipline. Control through electronic surveillanceis applied to many types and levels of activity. A common example is call centres althoughcustomer service representatives dislike the pressure from this form of control and the objectivity of relying on electronically produced statistics is subject to challenge.

HRM control

HRM procedures can be used both to develop people at work and to control their behaviourand performance. They enhance the contribution to the achievement of organisational goalsand objectives. Systematic selection techniques are designed to ensure new recruits fit theprofile and technical competencies required by management. Performance evaluation andappraisal provide feedback to both management and employees. Appraisals should providethe basis for reward and for an assessment of the need for further training or development.If training and development programmes are attuned to the needs of employees and therequirements of their jobs this should contribute to better performance.

Cultural control

This approach has been identified with moves away from conventional forms of organisationand is based on maintaining control through internalised compliance rather than externalconstraint. The basis of cultural control is the acceptance and willing compliance with therequirements of management and belief of the organisation. A major example is the culturalcontrol that tends to be exemplified by larger Japanese corporations, although this is subjectto criticism of compulsory sociability. Although a strong corporate culture is intended toprovide an alternative to control, in practice strenuous efforts are usually made to ensureemployees conform to the culture. Provided members have the necessary skills and abilitythey can be given wide freedom of action in deciding how to undertake their responsibil-ities. Cultural control, combined with personal autonomy, has long been associated with theprofessions. Despite criticisms of cultural control it is in tune with the increasing number ofprofessional and knowledge workers, and is consistent with self-managing units or teamsworking with only limited formal controls.

CHARACTERISTICS OF AN EFFECTIVE CONTROL SYSTEM

Whatever the nature or form of control there are a number of characteristic features of an effect-ive control system. Control systems can have positive as well as negative effects. It is importanttherefore that they are designed and implemented in a constructive and rewarding way.


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Although they do not readily admit it, most people probably prefer some degree of control overtheir lives because it gives them some stability and contributes to their general welfare andsafety. Nevertheless, the negative connotation of control still exists and is amplified by the waysin which controls have been traditionally set, implemented, and used in formal organizations.

F. Luthans, Organizational Behavior25

According to Hicks and Gullett, ‘Control systems should be understandable and economical,be related to decision centres, register variations quickly, be selective, remain flexible andpoint to corrective action.’26 Developing the suggestion of Hicks and Gullett, we can identifya number of important characteristics of an effective control system.

■ For a control system to be meaningful, it must be understood by those involved in itsoperation. The purpose of the control system and the information it provides must befully comprehensible to those who have to act on the results. The level of sophisticationof a control system should be related to the nature of the activities involved and to thetechnical competence of the staff. Information must be presented in a suitable form. If information is presented in a way which people do not understand they are likely todisregard it, and the full potential of the control system will not be realised.

■ Controls should conform with the structure of the organisation and be related to decision centres responsible for performance. Information should be supplied to thosemanagers who have the responsibility for specified areas of activity and who are capableof using this information to evaluate the degree of success in achievement of objectives.The information should enable managers to control their area of responsibility, and shouldbe presented in a form that shows clearly when corrective action is necessary.

■ An effective control system should report deviations from the desired standard of performance as quickly as possible. Ideally, indications of likely deviations should bediscovered before they actually occur. It is important for deviations from the plan to bereported in good time so that corrective action to remedy the situation can be undertakenpromptly. For example, information that the budget is likely to be overspent or under-spent should arrive in sufficient time to enable the manager to do something about it andavoid drastic last-minute action.

■ The control system should draw attention to the critical activities important to the success of the organisation. An unnecessary number of controls over comparativelyunimportant activities are uneconomic and time-consuming; they can have a demoralisingeffect on staff and may possibly result in lack of attention to the key control points. Certaincontrol points are more important than others. Careful control must be maintained in keyresult areas and in those activities that are crucial to the success of the organisation. Forexample, a restaurant manager would need to have information on the number of orderstaken at different times, and the number and type of meals provided, in order to deploystaff in the most effective manner.

■ To be effective, a control system must be flexible. It must yield information that is notinfluenced by changes in other factors unconnected to the purpose of the control system.For example, a control system established five years ago, which specifies that reports totop management should be made whenever expenditure exceeds the budget by more than£x, is unlikely to be effective if no account has been taken of the effects of inflation. Also,if the same amount is applied in all cases, high-spending departments may be subject toexcessive control and low-spending departments not monitored closely enough.

■ The control system should be consistent with the objective of the activity to which itrelates. In addition to locating deviations from the planned standard of performance, thecontrol system should be sophisticated enough to indicate ways in which performancecan be improved. For example, in the field of social services it may not be sufficient justto know that expenditure has been kept within the budget. It would be more helpful toknow in what areas expenditure has been incurred. It might be that the highest share of


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expenditure has gone to those who may be more knowledgeable of their rights and theprocedures involved, than those who may arguably be in greater financial need. The controlsystem should therefore address itself to causes of deviations rather than to symptoms.

■ Controls may point to a number of possible problem areas for corrective action. Managementwill need to investigate these possibilities and determine the most appropriate form ofcorrective action to deal with the causes of the deviation and solve the problems identified.

■ Control systems should themselves be subject to a continual review to ensure they areeffective and appropriate in terms of the results they produce. They should not be toocostly or elaborate, but should satisfy the characteristic features suggested above.

POWER AND MANAGEMENT CONTROL

Work organisations are not only systems of hierarchical structure, they are also systems ofintricate social relationships, status and power. Power is a complex and dynamic conceptand difficult to define easily. At a broad level, power can be interpreted in terms of control or influence over the behaviour of other people with or without their consent.Sometimes power is interpreted in terms of the extent of the influence which can actually beexercised over other people, and sometimes it is taken to include influence over objects orthings as well as people. In exploring the nature of organising work, Knights and Willmott suggest that ‘Power is often associated with coercive and repressive features of social life. It is the means through which a ruling class, political elite or managerial group controls subordinate strata within a society or an organisation.’27

Robbins and Judge suggests that as power may exist but not be used it implies a potentialthat need not be actualised to be effective. Power is therefore a capacity or a potential. Themost important aspect of power is probably dependency. ‘A person can have power over youonly if he or she controls something you desire.’28

Power is an inherent feature of work organisations and is often the underlying reality behindthe decision-making process. It is central to the framework of order and system of commandthrough which the work and activities of the organisation are carried out, for example throughthe operation of bureaucratic structures and the implementation of policies, rules and pro-cedures. Lack of power and influence, and office politics, are among the main sources of managerial stress within organisations. The view of power as of functional importance is inkeeping with a unitary approach to organisation. Management control is the predominantmeans by which the activities of staff are guided towards the achievement of organisationalgoals. The exercise of power is that which comes from a position of formal authority within themanagement structure of the organisation and which legitimises control over subordinate staff.

Power, involvement and compliance

From a comparative analysis of complex organisations, Etzioni provides a classification oforganisational relationships based on structures of control and the use of power resources asa means of ensuring compliance among members.29 The Etzioni typology involves threedimensions: power, involvement, and the identification of kinds of power with kinds ofinvolvement. Compliance is the relationship between the kinds of power applied by theorganisation to control its members and the kinds of involvement developed by membersof the organisation.

Power differs according to the means by which members of the organisation comply.

■ Coercive power relies on the use of threats, or physical sanctions or force, for example,controlling the need for food or comfort.

■ Remunerative power involves the manipulation of material resources and rewards, forexample, through salaries and wages.

■ Normative power relies on the allocation and the manipulation of symbolic rewards, forexample, esteem and prestige.

Figure 17.4 Organisational relationships and compliance

Source: Adapted with the permission of The Free Press, a Division of Simon & Schuster, Inc. from Etzioni, A. A Comparative Analysis ofComplex Organizations, Revised edition, Free Press (1975), p. 12. Copyright © 1975 by Amitai Etzioni. Copyright © 1961 by The FreePress. All rights reserved.


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Involvement is the degree of commitment by members to the organisation.

■ Alienative involvement occurs where members are involved against their wishes. There isa strong negative orientation towards the organisation.

■ Calculative involvement occurs where attachment to the organisation is motivated byextrinsic rewards. There is either a negative orientation or a low positive orientationtowards the organisation.

■ Moral involvement is based on the individual’s belief in, and value placed on, the goalsof the organisation. There is high positive orientation towards the organisation.

Matching power with involvement

When considered together, nine logical types of organisational relationships and complianceresult from this typology (see Figure 17.4). Based on this analysis, Etzioni suggests that a particular kind of power usually goes with a particular kind of involvement:

■ coercive power with alienative involvement – relationship 1 (typified, for example, byprisons);

■ remunerative power with calculative involvement – relationship 5 (typified, for example,by business firms);

■ normative power with moral involvement – relationship 9 (typified, for example, bychurches).

The matching of these kinds of power and involvement is congruent with each other andrepresents the most common form of compliance in organisations. The other six types oforganisational relationships are incongruent. Etzioni suggests that organisations with con-gruent compliance structures will be more effective than organisations with incongruentstructures.

PERSPECTIVES OF ORGANISATIONAL POWER

There are many potential sources of power which enable members of an organisation to further their own interests and which provide a means of resolving conflicts. Sources oforganisational power include, for example, structure, formal authority, rules and regulations,standing orders, control of the decision-making process, control of resources and technology,control of information or knowledge, trade unions and staff organisations, age coupled withexperience, gender and the informal organisation.


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Gender and power

You may recall the suggestion of the sex power differential as part of the evaluation of theHawthorne experiments, discussed in Chapter 2.

An example of gender and power is given by the Equality and Human Rights Commissionwho report on a survey on women in positions of power and influence. The survey found a glaring example of the lack of women in senior positions of power, including those in thecivil service, top management, senior positions in the judiciary, directors of FTSE companies,Members of Parliament, and senior appointments in local authorities, the armed forces andthe police force.

Britain cannot as an economy afford to go on asking people to fit their families around the demands ofever-more intense ‘24/7’ global competition, and marginalizing or rejecting workers who fail to fit intotraditional and inflexible working arrangements. Only when we get this right will we see women aswell as men making it into positions of real power and influence.30

Different levels of power

Power can also be viewed in terms of the different levels at which it is constituted. Finchamlooks at organisational power in terms of three types or levels of analysis: processual, institutional and organisational.31

■ At the processual level power originates in the process of daily interaction. The level ofanalysis is that of lateral relations between management interest groups and the basis ofexplanation is strategic. Processual power focuses on the ‘micro-politics’ of organisationallife. It stresses power as negotiation and bargaining, and the ‘enactment’ of rules and howresources are employed in the power game.

■ At the institutional level managerial power is seen as resting on external social and economic structures that create beliefs about the inevitability of managerial authority.Power is explained as being ‘mandated’ to the organisation. When managers seek to exercise power they can draw on a set of institutionally produced rules such as culturalbeliefs about the right to manage.

■ The organisational level stresses the organisation’s own power system and the hierarchyas a means of reproducing power. Dominant beliefs, values and knowledge shape organi-sational priorities and solutions or reflect the interests of particular groups or functions.Those in authority select others to sustain the existing power structure. Organisationalhierarchies transmit power between the institutional interests and the rules and resourcesgoverning action.

Organisational sources of power

Pfeffer has identified a number of critical ways in which individuals or groups may acquirepower in organisations when viewed as social entities:

■ providing resources – for example money, prestige, legitimacy, rewards and sanctions,and expertise that create a dependency on the part of other people;

■ coping with uncertainty – the ability to permit the rationalisation of organisational activity, for example through standard operating procedures, or to reduce uncertainty orunpredictability;

■ being irreplaceable – having exclusive training, knowledge or expertise that cannot readily be acquired by others, or through the use of or lack of adequate documentationor specialised language and symbols;

■ affecting decision processes – the ability to affect some part of the decision process, forexample by the basic values and objectives used in making the decision, or by controllingalternative choices;

■ by consensus – the extent to which individuals share a common perspective, set of valuesor definition of the situation, or consensus concerning knowledge and technology.32


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PLURALISTIC APPROACHES TO POWER

In Chapter 10 we discussed a classification by French and Raven of social power based on a broader perception of leadership influence.32 French and Raven identified five main sourcesof power:

■ reward power;■ coercive power;■ legitimate power;■ referent power;■ expert power.

Power, however, arises not only from sources of structure or formal position within theorganisation but from interpersonal sources such as the personality, characteristics and talents of individual members of the organisation. For example, in Chapter 10 we also discussed charisma, or personal power, as a feature of transformational leadership. We canalso distinguish between legitimate (organisational) power, which derives from a person’sposition within the formal structure of the organisation and the managerial hierarchy ofcommand, and personal (informal) power, which derives from the individual and is in theeye of the beholders who believe that person has the ability to influence other people orevents and to make things happen.

The exercise of power is, then, a social process that derives from a multiplicity of sourcesand situations.34 This suggests a more pluralistic approach and recognises power as a majororganisational variable. Many different groups and individuals have the ability to influencethe behaviour and actions of other people, and in a number of different ways. This is not a new concept, however. In the 1920s the renowned management writer Mary Parker Follettfocused on a human behaviour aspect, rejected the notion of domination and the exerciseof power over other people, and argued for developing power with others in the organisationto make things happen. Effective control over work processes and social relationships wouldbe achieved through group power and co-operative management. Follett advocated thereplacement of personal power with the authority of task or function, and successful management based on the ‘law of the situation’.35

Network of social relationships

Organisations function on the basis of networks of interdependent activities. Certain jobs or work relationships enable people to exercise a level of power in excess of their formalposition within the structure of the organisation. A classic example is someone, perhaps a personal assistant or office manager, who fulfils the role of gatekeeper to the boss. There is an inherent danger with this type of role relationship that the boss may become toodependent upon the gatekeeper. Undertaking the responsibilities delegated by the boss andmaintaining control can lead to the gatekeeper’s misuse of their role and to an abuse ofpower. Another example is with information technology problems where comparativelyjunior members of staff with particular technical expertise may have a way of ignoring thenormal chain of command.

Many people within organisations also have the ability to grant or withhold ‘favours’within the formal or the informal interpretation of their job role – for example, secretaries,caretakers, security staff and telephonists. Staff may exercise negative power – that is, ‘thecapacity to stop things happening, to delay them, to distort or disrupt them’.36 A commonexample could be the secretary who screens and intercepts messages to the boss, delaysarranging appointments and filters mail. Negative power is not necessarily related propor-tionately to position and may often be exercised easily by people at lower levels of the hierarchical structure.

Another example is given by Green who refers to the negative power that can be held bycomparatively junior staff. The person who sorts and distributes the incoming mail has

Critical reflection

‘It is a very poor manager who relies on the exercise of formal power, position within theorganisation structure, and rules and procedures. A high level of control is self-defeatingas it is likely to produce a negative response, increase internal conflict and restrict thefreedom and initiative of the individual.’

What do you think? How would you prepare a counter argument?


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the opportunity to use negative power by the delay or disruption of items for reasons that maybe entirely personal.37 A reality of organisational life is the vagaries of social relationshipsincluding office politics, and also the grapevine and gossip. Although it is a difficult topic to pindown, Mann refers to the key role that gossip plays in power relationships and knowledgeproduction in organisations and maintains that ‘There is an undeniable relationship betweenknowledge and power which lies at the root of gossiping.’38

Motivational need for power and control

Power can be a positive source of motivation for some people (see the discussion on achieve-ment motivation in Chapter 7). There is often a fine line between the motivation to achievepersonal dominance and the use of social power. It has to be acknowledged, however, that there are clearly some managers who positively strive for and enjoy the exercise of power over other people. They seek to maintain absolute control over subordinates and theactivities of their department/section, and welcome the feeling of being indispensable. Thepossession of power is an ultimate ego satisfaction and such managers do not seem undulyconcerned if as a result they are unpopular with, or lack the respect of, their colleagues orsubordinate staff.

Kirwan-Taylor discusses control freaks who exist in every office and are capable of makingeveryone’s life a misery. Control freaks try to dominate the environment by establishingorder on what they perceive as chaos and attempting to control how other people think and behave. At one end of the spectrum are motivated and organised employees and at theother end obsessional, temperamental bullies. Sometimes, however, being a control freak isconsidered a positive attribute and key to success. Although control freaks function to a highstandard, few people can bear to work with them.39

THE BALANCE BETWEEN ORDER AND FLEXIBILITY

Stewart refers to the classic dilemma that underlies the nature of control: finding the rightbalance for present conditions between order and flexibility. This involves the trade-offbetween trying to improve predictability of people’s actions against the desirability ofencouraging individual and local responsiveness to changing situations. The organisationmay need a ‘tight–loose’ structure with certain departments or areas of work closely con-trolled (‘tight’) while other departments or areas of work should be left fluid and flexible(‘loose’).40

Three main forms of control

According to Stewart, ‘control can – and should – be exercised in different ways’. She identifiesthree main forms of control:

■ Direct control by orders, direct supervision and rules and regulations. Direct controlsmay be necessary, and more readily acceptable, in a crisis situation and during training.But in organisations where people expect to participate in decision-making, such forms ofcontrol may be unacceptable. Rules and regulations which are not accepted as reasonable,


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or at least not unreasonable, will offer some people a challenge to use their ingenuity infinding ways round them.

■ Control through standardisation and specialisation. This is achieved through cleardefinition of the inputs to a job, the methods to be used and the required outputs. Suchbureaucratic control makes clear the parameters within which one can act and paradoxic-ally makes decentralisation easier. Provided the parameters are not unduly restrictive theycan increase the sense of freedom. For example, within clearly defined limits which ensurethat one retail chain store looks like another, individual managers may have freedom todo the job as they wish.

■ Control through influencing the way that people think about what they should do.This is often the most effective method of exercising control. It may be achieved throughselective recruitment of people who seem likely to share a similar approach, through thetraining and socialisation of people into thinking the organisation’s way, and throughpeer pressure. Where an organisation has a very strong culture, people who do not fit in, or learn to adapt, are likely to be pushed out, even though they may appear to leaveof their own volition.

Stewart also refers to a second, related dilemma of finding the appropriate balance betweencentralisation, as a means of exercising control, and decentralisation. (Centralisation anddecentralisation were discussed in Chapter 14.)

BEHAVIOURAL FACTORS IN CONTROL SYSTEMS

We have seen that control systems can help fulfil people’s needs at work and their presencemay be welcomed by some members of staff. Often, however, control systems are perceivedas a threat to the need satisfaction of the individual. Control over behaviour is resented andthere is a dislike of those responsible for the operation of the control system. Control systemsprovide an interface between human behaviour and the process of management.

The broad objective of the control function is to effectively employ all the resources committedto an organization’s operations. However, the fact that non-human resources depend on human effort for their utilization makes control, in the final analysis, the regulation of human performance.

C. Reeser and M. Loper, Management: The Key to Organizational Effectiveness41

Control often provokes an emotional response from those affected by it. It should berecognised, therefore, that the activities of a management control system raise importantconsiderations of the human factor and of the management of people. The effectiveness ofmanagement control systems will depend upon both their design and operation, and theattitudes of staff and the way they respond to them. The manner in which control is exer-cised and the perception of staff will have a significant effect on the level of organisationalperformance.

Overcoming resistance to management control

Even when control systems are well designed and operated there is often strong resistance,and attempted non-compliance, from those affected by them. Control systems are bound tobe viewed with a certain amount of suspicion and possible resentment by members of staff.Therefore, if they are to be successful in leading to improved performance and organisationaleffectiveness, they require attention to factors that influence human behaviour.

No form of control is absolute and organisations can achieve their objectives only throughthe efforts of their members. There are a number of factors, discussed in other chapters, that canaffect the successful implementation of management control systems, including the following.


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■ Consultation and participation. If staff are committed personally to particular objectivesthey are more likely to direct themselves and to exercise self-control over their level of per-formance. Staff should understand, and accept, the purpose and nature of control systems.

■ Motivation. People are influenced by the expected results of their actions. Motivation is a function of the relationship between effort expended and perceived level of performance,and the expectation that reward will be related to performance. Recognition given for asatisfactory level of attainment coupled with a suitable reward system, as integral parts ofcontrol, can do much to motivate staff and encourage improved performance.

■ Organisation structure. The structure of an organisation and its pattern of managementcan affect the implementation of control systems. Organisations with a mechanistic structure are more readily suited to the operation and implementation of traditional systems of control. In organic structures the effectiveness of control is more dependentupon individual involvement and commitment to the aims of the organisation. Traditionalsystems of control are therefore less suited to organisations with an organic structure.

■ Groups and the informal organisation. Membership of a harmonious and effective workgroup can be a source of motivation and job satisfaction. Socialisation can help create a feeling of commitment to the group and reduce the need for formal management control.With the development of autonomous work groups, members have greater freedom andwider discretion over the planning, execution and control of their own work. Informalgroup ‘norms’ and peer pressure can be one of the most powerful forms of control. Inorder to maintain co-operation and commitment of staff the manager must continuallyreview at both the individual and group level the operation of the control system and theprogress made in achieving objectives.

■ Leadership style and systems of management. The style of managerial leadership is a function of the manager’s attitudes towards people, and assumptions about humannature and behaviour – for example McGregor’s Theory X and Theory Y. The central principle of Theory X is direction and control through a centralised system of organisa-tion and the exercise of authority. By contrast, Theory Y is based on the principle of theintegration of individual and organisational goals, and the exercise of self-direction and self-control in the service of objectives to which they are committed. The character ofcontrol processes is one of the organisational variables identified in Likert’s four-foldmodel of management systems. In System 1 (exploitive authoritative) the major concernwith performance of the control function is at the top hierarchical level in the organisa-tion and concentrated in top management. In System 4 (participative group) concern for performance of control functions is spread throughout the organisation, review andcontrol functions are carried out at all levels, and the formal and informal organisationshare the same goals.

FINANCIAL AND ACCOUNTING SYSTEMS OF CONTROL

Management control systems are frequently thought of in terms of financial and accountingsystems. The reasons for this are easy to understand.

■ The stewardship of financial resources is of vital concern to the majority of organisations.In both private enterprise and public sector organisations there is an increasing need to demonstrate value for money expended. Control systems are often geared to highlighteasily identifiable performance of sales, costs and profits.

■ Organisational aims, objectives and targets are often expressed in financial terms andmeasured in terms of profitability. Results are measured and reported in financial terms.

■ Money is quantifiable and is a precise unit of measurement. It is easily understood, andis often used as a common denominator and as a basis for comparison.

■ Financial limits are easy to apply as a measure of control and easy to relate to. For example,the need for control is an integral part of the process of delegation or empowerment. This


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control may easily be applied where, for example, a manager gives a subordinate theauthority, without prior reference, to incur expenditure on certain items up to a givenfinancial cost limit.

It is understandable, therefore, that so much attention is given to financial and account-ing systems of measurement and control. Managers rely on accurate information systems asa basis of control and this information is frequently expressed in financial terms. However,accounting statements focus on only a limited area of activity. ‘Thanks to the need for objectivity, everything in accounting statements is inward looking, concentrating on costsand based on the concept of capital maintenance.’42

Strategic control and financial control

Management control, however, embraces far more than just financial or accounting con-siderations. It is concerned with the whole process of management: with the extent to whichorganisational aims are achieved and with improvement in performance. Control includesconsiderations of such factors as production, inventory, quality, judgement, consumer satisfaction, market share, social responsibilities and the human factor and management ofpeople. For example, Goldsmith and Clutterbuck point out that high-performance companieskeep their operating businesses in line with a mixture of both strategic and financial control.Most high-performance companies give strategic control equal or near-equal priority tofinancial control.43

Design and application of systems

In their discussion of the role of accounting systems in organisational control, it is interest-ing to note the words of Berry, Broadbent and Otley:

Accounting systems provide a fundamental way of handling high levels of complexity by the impositionof a set of standard operating procedures; this provides a major strength of accounting as a control system. However, weaknesses also stem from the imposition of standard systems in complex situationsbecause inventive human minds find ways of reporting desired results through the manipulation of thesystem rather than by behaving in expected ways.44

This wording appears to imply that the accounting system is the arbiter of correct behaviourand that people are to ‘blame’ for their failure to act in the way imposed by accounting systems (and presumably by the accountants who designed them).

Budgetary control and human behaviour

Accounting control systems such as internal audit, management by exception and budgetarycontrol tend to operate in a negative way and to report only on the unfavourable, or onfavourable variances which may have adverse consequences, for example less spent thanbudgeted. ‘Success’ for the accounting staff may be equated with the ‘failure’ of other staff.As a result there is no specific recognition from management. There is only a limited senseof achievement or self-esteem for favourable performance or where no corrective action isrequired. There is little, if any, positive motivation.

As Hannagan points out, budgeting involves participation of managers and workforce representatives, and by its nature is the responsibility of people.

Budgeting by its nature necessitates the authorisation and delegation of budget activities between indi-vidual managers and other personnel. This principle is known as ‘control by responsibility’ – it makesan individual responsible for the whole or part of a particular budget. It is designed so that the targetsset can be achieved – if the machine groups achieve their targets the production department concernedachieves its target, and so on.45

There is, of course, nothing wrong with the use of accounting systems of control such as internal auditing, management by exception and budgetary control. What needs to be


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considered is the manner in which these controls and techniques are applied and the differ-ences in use as a result of the attitudes adopted and the motives felt to be important. Controlsystems can have positive as well as negative effects. Financial and accounting control systems,as with other forms of control, should be designed and implemented in a constructive andrewarding way. To do this, they must take account of individual, social and organisationalfactors that determine people’s patterns of behaviour.

THE CONCEPT OF EMPOWERMENT

Discussion on the balance between order and flexibility, and control versus autonomy,draws attention to the importance of empowerment. Despite the general movement towardsless mechanistic structures and the role of managers as facilitators, there appears to be somereluctance especially among top managers to dilute or weaken hierarchical control. A studyof major UK businesses suggests that there are mixed reactions to the new wave of manage-ment thinking. While the prospect of empowerment can hold attractions for the individualemployee, many managers are keen to maintain control over the destiny, roles and respon-sibilities of others. Beneath the trappings of the facilitate-and-empower philosophy the command-and-control system often lives on.46 However, in a discussion on modern leadership and management, Gretton makes the point that ‘Today’s leaders understand thatyou have to give up control to get results. That’s what all the talk of empowerment is about.’47

The meaning of empowerment

Empowerment is generally explained in terms of allowing employees greater freedom, auto-nomy and self-control over their work, and responsibility for decision-making. However,there are differences in the meaning and interpretation of the term. Wilkinson refers to prob-lems with the existing prescriptive literature on empowerment. The term ‘empowerment’ canbe seen as flexible and even elastic, and has been used very loosely by both practitioners andacademics. Wilkinson suggests that it is important to see empowerment in a wider context.It needs to be recognised that it has different forms and should be analysed in the context ofbroader organisational practice.48

The concept of empowerment also gives rise to a number of questions and doubts. Forexample, how does it differ in any meaningful way from other earlier forms of employeeinvolvement? Is the primary concern of empowerment getting the most out of the workforce?Is empowerment just another somewhat more fanciful term for delegation? Some writers see the two as quite separate concepts while other writers suggest empowerment is a moreproactive form of delegation.

According to Mills and Friesen, ‘Empowerment can be succinctly defined as the authorityof subordinates to decide and act.’

It describes a management style. The term is often confused with delegation but, if strictly defined,empowerment goes much further in granting subordinates authority to decide and act. Indeed, within acontext of broad limits defined by executives, empowered individuals may even become self-managing.49

Empowerment and delegation

Attempting to distinguish clearly between empowerment and delegation is not easy.However, there appears to be general agreement that empowerment describes a managementstyle and the granting of genuine additional power to other members of staff. Empowermentis viewed as the more embracing process. Arguably, it is the process of empowerment thatgives rise to the act of delegation. According to Tulgan, for example, ‘The key to empowermentis effective delegation; giving individual contributors ownership of tangible results.’50

At the individual (or personal) level, delegation is the process of entrusting authority and responsibility to others throughout the various levels of the organisation. It is the


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authorisation to undertake activities that would otherwise be carried out by someone in a more senior position. Downsizing and de-layering have arguably limited the opportunitiesfor delegation, although this may be offset by demands for greater flexibility and empower-ment. In any event, delegation is still an essential process of management. As Crainer pointsout, in the age of empowerment, the ability to delegate effectively is critical.

Delegation has always been recognised as a key ingredient of successful management and leadership.But, in the 1980s delegation underwent a crisis of confidence . . . The 1990s saw a shift in attitudes.No longer was delegation an occasional managerial indulgence. Instead it became a necessity. This hascontinued to be the case.51

Extreme forms of behaviour

The concept of delegation may appear to be straightforward. However, anyone with experienceof a work situation is likely to be aware of the importance of delegation and the consequencesof badly managed delegation. Successful delegation is a social skill. Where managers lackthis skill, or do not have a sufficient awareness of people-perception, there are two extremeforms of behaviour that can result.

■ At one extreme is the almost total lack of meaningful delegation. Subordinate staff areonly permitted to operate within closely defined and often routine areas of work, withdetailed supervision. Staff are treated as if they are incapable of thinking for themselvesand given little or no opportunity to exercise initiative or responsibility.

■ At the other extreme there can be an excessive zeal for so-called delegation when a man-ager leaves subordinates to their own resources, often with only minimal guidance ortraining, and expects them to take the consequences for their own actions or decisions.These ‘super-delegators’ misuse the practice of delegation and are often like the ArtfulDodger, and somehow contrive not to be around when difficult situations arise. Such aform of behaviour is not delegation; it is an abdication of the manager’s responsibility.

Either of these two extreme forms of behaviour can be frustrating and potentially stressfulfor subordinate staff, and unlikely to lead to improved organisational effectiveness. The natureof delegation can have a significant effect on the morale, motivation and work performanceof staff. In all but the smallest organisation the only way to get work done effectively isthrough delegation, but even such an important practice as delegation can be misused orover-applied.

THE MANAGER–SUBORDINATE RELATIONSHIP

Delegation is not just the arbitrary shedding of work. It is not just the issuing and followingof orders or carrying out of specified tasks in accordance with detailed instructions. Withinthe formal structure of the organisation, delegation creates a special manager–subordinaterelationship. It is founded on the concept of:

■ authority;■ responsibility; and■ accountability (ultimate responsibility).

Delegation means the conferring of a specified authority by a higher authority. In its essence itinvolves a dual responsibility. The one to whom authority is delegated becomes responsible tothe superior for doing the job, but the superior remains responsible for getting the job done. Thisprinciple of delegation is the centre of all processes in formal organization.

J. D. Mooney, The Principles of Organization52

■ Authority is the right to take action or make decisions that the manager would otherwisehave done. Authority legitimises the exercise of empowerment within the structure and

Figure 17.5 The basis of delegation


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rules of the organisation. It enables the subordinate to issue valid instructions for othersto follow.

■ Responsibility involves an obligation by the subordinate to perform certain duties ormake certain decisions and having to accept possible reprimand from the manager forunsatisfactory performance. The meaning of the term ‘responsibility’ is, however, subjectto possible confusion: although delegation embraces both authority and responsibility,effective delegation is not abdication of responsibility.

■ Accountability is interpreted as meaning ultimate responsibility and cannot be delegated.Managers have to accept ‘responsibility’ for the control of their staff, for the performanceof all duties allocated to their department/section within the structure of the organisation,and for the standard of results achieved. That is, ‘the buck stops here’.

The manager is in turn responsible to higher management. This is the essence of thenature of the ‘dual responsibility’ of delegation. The manager is answerable to a superior andcannot shift responsibility back to subordinates. The responsibility of the superior for theacts of subordinates is absolute.53 In order to help clarify the significance of ‘dual respon-sibility’ in delegation, it might be better expressed as:

The subordinate is responsible to the manager for doing the job, while the manager isresponsible for seeing that the job gets done. The manager is accountable to a superiorfor the actions of subordinates.

Authority commensurate with responsibility

Delegation, therefore, embraces both authority and responsibility. It is not practical to dele-gate one without the other (see Figure 17.5). Responsibility must be supported by authorityand by the power to influence the areas of performance for which the subordinate is to beheld responsible. Authority can be delegated readily, but many problems of delegation stemfrom failure to delegate sufficient authority to enable subordinates to fulfil their respon-sibilities. For example, if a section head is held responsible to a departmental manager for the performance of junior staff but is not empowered (given authority) to influence theirselection and appointment, their motivation, the allocation of their duties, their training and development, or their sanctions and rewards, then the section leader can hardly be

Critical reflection

‘The idea of empowerment and helping people accept a feeling of ownership andpersonal responsibility for their actions and to exercise a high level of self-control is all right in theory. But as I am held accountable for the performance of staff in mydepartment and have to accept any adverse consequences of their behaviour it is onlyright that I should exercise close control and supervision over them.’

What is your point of view?


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held responsible for unsatisfactory performance of the junior staff. To hold subordinatesresponsible for certain areas of performance without also conferring on them the necessaryauthority within the structure of the organisation to take action and make decisions withinthe limits of that responsibility is an abuse of delegation.

The manager should accept the blame as the person accountable for the performance of the department/section, and obligated to see that the task was completed satisfactorily. Itis necessary to maintain the organisational hierarchy and structure of command. Managersshould protect and support subordinate staff and accept, personally, any reprimand forunsatisfactory performance. It is then up to managers to sort out things in their own department/section, to counsel members of staff concerned and to review their system ofdelegation.

BENEFITS OF DELEGATION

It is a principle of delegation that decisions should be made at the lowest level in the organisation compatible with efficiency. It is a question of opportunity cost. If decisions aremade at a higher level than necessary they are being made at greater cost than necessary.Delegation is therefore a matter of sound economics as well as good organisation. Properlyhandled, delegation offers many potential benefits to both managers and staff. Delegationshould lead to the optimum use of human resources and improved organisational perform-ance. Studies of successful organisations lend support to the advantages to be gained fromeffective delegation.54

Best use of time

Time is one of the most valuable, but limited, resources and it is important that the managerutilises time to the maximum advantage. Delegation leaves the manager free to makeprofitable use of time, to concentrate on the more important tasks and to spend more timein managing and less in doing. This should enable the manager to be more accessible forconsultation and improve the process of communications.

Training and development

Delegation provides a means of training and development, and of testing the subordinate’ssuitability for promotion. It can be used as a means of assessing the likely performance of a subordinate at a higher level of authority and responsibility. Delegation thereby helps toavoid the ‘Peter Principle’ – that is, ‘in a hierarchy every employee tends to rise to his levelof incompetence’ (discussed in Chapter 1). If managers have trained competent subordinatesthis will not only aid organisational progress but should also enhance their own prospectsfor further advancement.

Strength of the workforce

Delegation should lead to an improvement in the strength of the workforce. It should givesubordinates greater scope for action and opportunities to develop their aptitudes and


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abilities. Delegation is a form of participation and can lead to improved morale by increas-ing motivation and job satisfaction. If empowerment focuses attention on ‘motivators’ or‘growth’ factors it can help satisfy the employee’s higher-level needs. Delegation creates a climate in which subordinates can become more involved in the planning and decision-making processes of the organisation.

REASONS FOR LACK OF DELEGATION

With so many good reasons for delegation, why is it that managers often fail to delegate or do not delegate successfully? Delegation is influenced by the manager’s perception of subordinate staff. It is also influenced by the subordinate’s perception of the manager’s reasons for delegation. Failure to delegate often results from the manager’s fear.

■ The manager may fear that the subordinate is not capable of doing a sufficiently good job.Also, the manager may fear being blamed for the subordinate’s mistakes.

■ Conversely, the manager may fear that the subordinate will do too good a job and showthe manager in a bad light.

The manager should, of course, remember that the task of management is to get workdone through the efforts of other people. If the subordinate does a particularly good job thisshould reflect favourably on the manager.

Assumptions about human nature

A reluctance to delegate might arise from the manager’s belief in, and set of assumptionsabout, human nature and behaviour (discussed in Chapter 12).55 The Theory X managerbelieves that people have an inherent dislike of work, wish to avoid responsibility, and must be coerced, controlled, directed and threatened with punishment in order to achieve results. Such a manager is likely, therefore, to be interested in only limited schemes of delegation, within clearly defined limits and with an easy system of reward andpunishment.

The Theory Y manager believes that people find work a natural and rewarding activity,they learn to accept and to seek responsibility, and they will respond positively to oppor-tunities for personal growth and to sympathetic leadership. Such a manager is more likely tobe interested in wider schemes of delegation based on consultation with subordinates, andwith responsibility willingly accepted out of personal commitment.

Trust and empowerment

An essential ingredient of effective management is the ability to put your trust in others and to let go some of the workload. Empowerment is also a matter of confidence and trust– both in subordinates and the manager’s own performance and system of delegation. Inallowing freedom of action to subordinates within agreed terms of reference and the limitsof authority, managers must accept that subordinates may undertake delegated activities ina different manner from themselves. This is at the basis of the true nature of trust. However,learning to put trust in other people is one of the most difficult aspects of successful delega-tion for many managers, and some never learn it.

As Stewart points out, managers who think about what can be done only in terms of whatthey can do, cannot be effective. Managing is not a solo activity.

Managers must learn to accept their dependence upon people. A key part of being a good manager ismanaging that dependence. Managers who say that they cannot delegate because they have poor staffmay genuinely be unfortunate in the calibre of the staff that they have inherited or been given. Moreoften this view is a criticism of themselves: a criticism either of their unwillingness to delegate whenthey could and should do so, or a criticism of their selection, training and development of their staff.56


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The process of empowerment entails the removal of constraints and the granting ofautonomy for independent actions. As part of her discussion on the democratic enterprise,Gratton refers to the importance of trust and power.

The re-appropriation of choice from senior members of the organization to individuals themselvesimplies trust on both parts, but particularly on the part of senior members. It is they who have to cedepower to individual employees and to trust them to behave in an autonomous manner and make decisions and take action that serve their personal good and the good of the organization. Democracyimplies the giving of authority to individuals to make choices within the context of obligations andaccountabilities. Authority, obligations and accountability are deeply bound up with trust. Trust without accountability and obligation is likely to become one-sided, that is, to slide into dependence.Accountability without trust is impossible because it would mean the continual scrutiny of the motivesand actions of individuals.57

According to Watson, there has been a growing trend of questioning the extent to whichsocial science study of work behaviour and managerial practice has been sufficiently critical.

The crux of the problem that all writers and researchers interested in managerial issues have to face upto is the fact that managerial activities are always and inevitably implicated in issues of power and relative advantage and disadvantage between human groups and human individuals . . . Helping makework organisations more efficient or more effective is not a politically neutral matter.58

THE ART OF DELEGATION

Empowering other people is a matter of judgement and involves the question of discretion.Delegation is not an easy task. It involves behavioural as well as organisational and economicconsiderations, and it is subject to a number of possible abuses. Effective delegation is asocial skill. It requires a clear understanding of people-perception, reliance on other people,confidence and trust, and courage. It is important that the manager knows what to delegate,when and to whom. Matters of policy and disciplinary power, for example, usually rest withthe manager and cannot legitimately be delegated.

Training and learning experience

Delegation involves subordinates making decisions. For example, as Guirdham points out: ‘A strict separation of manager and subordinate roles sends the message to workers that they are only responsible for what they are specifically told to do. Managers who neglect to, or cannot, delegate are failing to develop the human resources for which theyhave responsibility.’59

Mistakes will inevitably occur and the subordinate will need to be supported by the man-ager, and protected against unwarranted criticism. The acceptance of ultimate responsibilityhighlights the educational aspect of the manager’s job. The manager should view mistakesas part of the subordinate’s training and learning experience, and an opportunity for furtherdevelopment. ‘Even if mistakes occur, good managers are judged as much by their ability tomanage them as by their successes.’60

Individual characteristics

Notwithstanding any other consideration, the extent and nature of delegation will ultimatelybe affected by the nature of individual characteristics. The ages, ability, training, attitude,motivation and character of the subordinates concerned will, in practice, be major determin-ants of delegation. An example is where a strong and forceful personality overcomes the lack of formal delegation; or where an inadequate manager is supported by a more com-petent subordinate who effectively acts as the manager. Failure to delegate successfully to a more knowledgeable subordinate may mean that the subordinate emerges as an informalleader and this could have possible adverse consequences for the manager, and for theorganisation. Another example, and potential difficulty, is when a manager is persuaded


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to delegate increased responsibility to persons in a staff relationship who may have littleauthority in their own right but are anxious to enhance their power within the organisation.

The need for control

Authority, responsibility and accountability must be kept in parity throughout theorganisation. This is essential in order to maintain effective co-ordination and control, andto maintain the chain of command. The manager must remain in control. The manager must be on the lookout for subordinates who are more concerned with personal empirebuilding than with meeting stated organisational objectives and prevent a strong personalityexceeding the limits of formal delegation. We have said that delegation creates a specialmanager–subordinate relationship and this involves both the giving of trust and the reten-tion of control. Control is, therefore, an integral part of the system of delegation. However,control should not be so close as to inhibit the effective operation or benefits of delegation.It is a question of balance.

A SYSTEMATIC APPROACH TO EMPOWERMENT AND DELEGATION

In order to realise the full benefits of empowerment and delegation without loss of control,it is necessary to adopt a planned and systematic approach. Setting up a successful system ofdelegation involves the manager examining four basic questions.

■ What tasks could be performed better by other staff?■ What opportunities are there for staff to learn and develop by undertaking delegated tasks

and responsibilities?■ How should the increased responsibilities be implemented and to whom should they be

given?■ What forms of monitoring control system would be most appropriate?

In order to set up an effective system of delegation, subordinates should know exactlywhat is expected of them, what has to be achieved, the boundaries within which they havefreedom of action, and how far they can exercise independent decision-making. It is pos-sible to identify six main stages in a planned and systematic approach to delegation (seeFigure 17.6).

■ Clarification of objectives and suitable patterns of organisation. Policies and proce-dures must be established and defined in order to provide a framework for the exercise ofauthority and the acceptance of responsibility.

■ Agreement on terms of reference and acceptance of authority and responsibility. Themanager can then negotiate and agree the subordinate’s role prescription and terms of reference. Those areas of work in which the subordinate is responsible for achievingresults should be identified clearly. Emphasis should generally be placed on end-resultsrather than a set of detailed instructions.

■ Guidance, support and training, and patterns of communication. When subordinateshave agreed and accepted the delegation, they should be properly briefed, given guidanceand support and any necessary training. They should be advised where, and to whom,they could go for further advice or help.

■ Effective monitoring and review procedures. The manager should agree time limits fordelegation (such as a target date for completion of a specific task or a specified time period).It is necessary to agree the level and nature of supervision, and to establish a system tomonitor progress and provide feedback. Delegation is not an irrevocable act; it canalways be withdrawn. It is also important to make clear expected levels of achievementand agree on performance standards (wherever practically possible in quantitative terms),and how performance in each area is to be measured and evaluated.

Figure 17.6 Main stages in the process of delegation


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■ Freedom of action within agreed terms of reference. The subordinate should then beleft alone to get on with the job. One of the most frustrating aspects of delegation is themanager who passes on authority but stays close behind the subordinates’ shoulderskeeping a constant watch over their actions. This is contrary to the nature of delegation.The true nature of successful delegation means that the subordinate is given freedom ofaction within the boundaries established and agreed in the previous stages.

■ Related reward system. Wherever possible, the process of delegation should be related tosome form of associated ‘reward’ system. Examples could include bonus payments,improved job satisfaction, reduction of work stress and enhanced opportunities for promotion or personal development, including further delegation.

A planned and systematic approach means that effective delegation can be achievedwithin the formal structure of the organisation and without loss of control. It is important,however, to make sure that subordinates accept the extent of, and any restrictions on, theauthority and responsibility delegated to them. Subordinates should feel a sense of commit-ment to their new tasks or assignments and should feel free to discuss any doubts or concerns. Delegation involves the acceptance theory of authority. Davis and Newstrom explainthis as follows:

Although authority gives people power to act officially within the scope of their delegation, this powerbecomes somewhat meaningless unless those affected accept it and respond to it. In most cases whendelegation is made, a subordinate is left free to choose a response within a certain range of behaviour.But even when an employee is told to perform one certain act, the employee still has the choice of doingit or not doing it and taking the consequences. It is, therefore, the subordinate who controls the responseto authority. Managers cannot afford to overlook this human fact when they use authority.61

A summary of delegation, authority, power and responsibility is given in the concept mapset out in Figure 17.7.

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DOES EMPOWERMENT DELIVER?

Effectively managed, empowerment can offer a number of potential benefits throughout alllevels of the organisation. But does empowerment promote greater motivation and increasejob satisfaction and work performance? Does empowerment deliver? From a study of 171 employees in a major Canadian life insurance company, Thorlakson and Murray foundno clear evidence for the predicted effects of empowerment. However, they suggest that thepotential effectiveness of empowerment should not be ruled out. The larger the organisa-tion, the more difficult to institute participatory management. In this study, the participantswere members of a large organisation and corporate size, together with the top-down imple-mentation of empowerment, could have played a major role.62

Although there is a continuing debate about the real benefits of empowerment thereappears to be a general assumption that ‘empowerment programmes will result in motivatedstaff, quality customer service and improved profits’.63 From a discussion of the benefits andproblems of empowerment and a review of its operation in a number of companies, Pickardconcludes that empowerment does appear to be having a radical effect on the way peoplework. As an example, Pickard describes improved job satisfaction and the changing attitudeof staff arising from the introduction of empowerment at Harvester restaurants. Within aframework handed down from head office, staff work in teams which are responsible formaking decisions on the running of individual restaurants.64

Peiperi poses the question ‘Does empowerment deliver the goods?’ and concludes:

Empowerment says that employees at all levels of an organization are responsible for their own actionsand should be given authority to make decisions about their work. Its popularity has been driven by the need to respond quickly to customer needs, to develop cross-functional links to take advantage ofopportunities that are too local or too fleeting to be determined centrally. Better morale and compensa-tion for limited career paths are other advantages. Potential difficulties include the scope for chaos andconflict, a lack of clarity about where responsibility lies, the breakdown of hierarchical control, anddemoralization on the part of those who do not want additional authority. Successful empowerment will typically require feedback on performance from a variety of sources, rewards with some group com-ponent, an environment which is tolerant of mistakes, widely distributed information, and generalistmanagers and employees. The paradox is that the greater the need for empowerment in an organiza-tion, the less likelihood of success. It has to be allowed to develop over time through the beliefs/attitudesof participants.65

According to Erstad, among the many fashionable management terms, empowermentrefers to a change strategy with the objective of improving both the individual’s and theorganisation’s ability to act. In the service sector, for example, empowerment is often seen as a way to gain competitive advantage but the true potential is broader. From the context of articles specialising in this area, Erstad concludes that empowerment is a com-plex process. In order to be successful it requires a clear vision, a learning environment both for management and employees, and participation and implementation tools and techniques.66

Potential benefits of empowerment

Empowerment makes greater use of the knowledge, skills and abilities of the workforce; itencourages teamworking; and if there is meaningful participation, it can aid the successfulimplementation of change programmes.67 Wall and Wood suggest that although few manu-facturing companies empower their staff, research shows that empowerment can be one ofthe most effective tools in raising both productivity and profit. Empowerment improves performance because of the opportunities empowerment provides for them to do their workmore effectively. It develops an individual’s knowledge so they take a broader and more

The Police Service has statutory responsibility for thetreatment of persons detained by them (and otheragencies such as HMRC which brings people into a police station). These people must be treated inaccordance with the Police & Criminal Evidence Act1984 (PACE) that was enacted in January 1986 andany code of practice issued under the Act.

Section 39 of PACE specifies that these duties shouldbe the duty of the custody officer at a police station. The same section goes on to declare where

an officer of higher rank than the custody officergives directions . . . which are at variance with anydecision or action taken by the custody officer inthe performance of a duty imposed on him underthis Act the matter shall be referred at once to anofficer of the rank of Superintendent or above whois responsible for that police station.

There is statutory backing for the decisions andactions taken by custody officers in the performanceof their duties.

PACE sets out the provisions regarding theappointment of custody officers (Section 36). Custodyofficers are appointed to designated police stations,which are effectively police stations equipped toreceive and house detained persons in the conditionsthat PACE requires. Subject to limited exceptions alldetained persons must go to a designated policestation. Custody officers are appointed by the ChiefOfficer of Police for that area or by an officer directedby that Chief Officer of Police to do so. Importantly nopolice officer may be appointed a custody officerunless at least the rank of sergeant, and significantlynone of the functions of a custody officer shall beperformed by an officer who is involved in theinvestigation of an offence for which the person is indetention (and there is case law that identifies whatbeing involved in an investigation entails).

Most forces have adopted the sergeant rank as thebest suited to the custody officer role (custody officersno longer have to be a police officer). On appointmenttraining is given in the role of sergeant and specificallycustody officer duties. Custody officers, though theywork for the same organisation, have an element ofimpartiality through the statement that they must not

be involved in the investigation of an offence for which that person is detained. This allows for their decision-making to be non-partisan. There is an argumentperhaps that for the decision-making to be completelyimpartial custody provisions should be independent ofthe police service but in practice it is argued thatcustody officers value their impartiality and theirdecision-making is reflected in this.

The Act clearly defines the process for any challengeto custody officers’ decision-making and that is byappeal to the station commander, a Superintendent.As well as providing support for custody officers intheir decision-making it also affords protection forthem from rank pulling in a hierarchically structuredorganisation such as the police.

Custody officers deal with people’s liberty anddetermine whether they enter the legal process bycharging them to appear at court. This is seriousbusiness and in practical terms it is taken veryseriously. Their decision-making in this process issubject to periodic review. In the first 24 hours of aperson’s detention that review is undertaken at the 6-, 15- and 24-hour stages. Any detention beyond 24 hours requires the authority of a Superintendentand any detention beyond 36 hours requires a warrantfrom a court. The custody officer’s decision-making issubject to close scrutiny through the training process,accreditation process and local inspection processes.Most importantly, it is a legal requirement now that alldesignated custody centres are videotaped, which isperhaps the ultimate scrutiny. The arrival of videorecording tapes in custody centres was welcomed bycustody officers as it saw a corresponding fall in thenumber of complaints against them in the chargeroom process.

In practical terms it is rare that decisions of a custodyofficer are challenged by a more senior officer (a Detective Chief Inspector). The fact that theseoccasions are so rarely reported is evidence of the seriousness and professionalism adopted by Custody Sergeants in their decision-makingprocess. A process that would only work withempowerment.

(I am grateful to Sergeant Robert Collier of The HampshireConstabulary for providing this information.)

The police custody officer and empowerment


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proactive orientation towards their job and are more willing to suggest new ways of doingthings and to engage in meaningful teamworking.68 Findings from a Whitehall II study ofover 10,000 civil servants on work-related stress suggests that giving people more controlover their jobs can greatly benefit their health.69

Critical reflection

‘Some form of hierachical power and order is an essential feature of effective workperformance, but the nature of modern organisations has noticeably diminisheddemands for management control over the actions and behaviour of people at work.’

What is your considered opinion? Do you favour more or less control over your workactivities?


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Control versus autonomy

Whatever the extent of employee empowerment, there is still a requirement for some form of management control and this gives rise to a number of important behavioural considerations. From their study of top-performing companies in the 1990s, Goldsmith andClutterbuck refer to the sharing of power, and to the balance between control and autonomy.They question how companies manage to balance giving people maximum freedom againstexerting controls to ensure the benefits of size and a common sense of direction. The moremanagers share power, the more authority and resources they gain:

The way to exert the most effective control is to limit it to the few simple, readily understandable pro-cesses that have the greatest impact on group performance, and to maximise the freedom that managersat all levels have to achieve clear goals in their own way. And the more rigidly those core controls areenforced, the greater are the freedoms people need in order to compensate and to release their creativ-ity, initiative and proactivity. Control and autonomy are therefore two sides of the same coin . . . Whatdo we mean by control and autonomy? Formal control seems to be exercised in three main ways:through setting or agreeing targets for performance (mainly but not exclusively financial); through measurement and reporting systems; and through certain decisions to be made centrally or corporately.Autonomy is, in essence, an absence of formal control: once clear goals are set, the individual managerhas greater or lesser freedom to determine how they will be met. There are still controls in place, butthey are much less obvious or intrusive.70

SYNOPSIS

■ Control is an integral part of the process of manage-ment. There are, however, varying connotations of themeaning and exercise of control. It is often interpretedin a negative manner to suggest direction or command,the restriction of behaviour or even exploitation ofemployees. However, control is not only a function ofthe formal organisation, it is also a function of inter-personal influence. Control is a general concept that is applied both to individual behaviour and organ-isational performance.

■ Control can serve many important functions and bemanifested in a variety of forms. There are a numberof important characteristics of an effective control system. The system should be understood, conformwith the structure of the organisation, report deviationsquickly, draw attention to critical activities of the organ-isation, be flexible, consistent with the activity to which

it relates and subject to continual review. If controlsystems are to be successful in leading to improvedperformance, then attention must also be given to thefactors which influence human behaviour.

■ Work organisations are not only systems of hierarchical structure, they are also systems of socialrelationships, status and power. Power is an inherentfeature of work organisations and an underlying reality behind the decision-making process. Organ-isations can be classified in terms of the relationshipbetween power, involvement and the compliance of their members. The pluralistic approach, however,recognises power as a social process. Power is a majororganisational variable that derives from a multiplicityof sources and situations. A dilemma that underliesthe nature of control is finding the right balancebetween order and flexibility.

1 Give your own views on the controversial nature of management control. What do you see as the purposes ofmanagement control in work organisations?

2 Detail with supporting examples the essential elements of a management control system.

3 Discuss the main factors that are likely to affect resistance to, and the successful implementation of,management control systems.

4 Explain fully the importance of the concept of power to management and organisational behaviour.

5 Discuss critically the nature of pluralistic approaches to power and give your own practical examples.

6 How would you explain the organisational and personal relationships between a manager and subordinatestaff that are created by the process of empowerment?

7 As a departmental manager explain fully how you would attempt to realise the full advantages of delegationwithout loss of control over subordinate staff.

8 Discuss critically what you see as the likely consequences of a manager exercising close personalsupervision as a means of maintaining control and power over the work of subordinate staff.

REVIEW AND DISCUSSION QUESTIONS

The undercover bossStefan Stern

MANAGEMENT IN THE NEWS

Employee attitude surveys, brown bag lunches, focusgroups, informal chats: managers try quite hard to findout what their staff are thinking. But the results aremixed at best. What are your staff thinking? Admit it –you don’t really know. Is there any way of finding out?Electronic surveillance would be a bad idea. Cloaks of

invisibility work for Harry Potter, but are not availableto the rest of us. One chief executive has done the next best thing. He went undercover in his ownbusiness for two weeks, disguised as an office worker,completing shifts on ten different sites. He has heardfor himself what his people really think. It has been


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■ Management control systems are frequently thoughtof in terms of accounting or financial systems. The reasons are easy to understand but accounting controlsystems tend to operate in a negative way, and to givelittle specific recognition from management and onlya limited sense of achievement. What need to be considered are behavioural factors and the manner inwhich control systems motivate people to improvetheir performance. To do this, they must take accountof individual, social and organisational factors thatdetermine people’s patterns of behaviour.

■ Discussion on the balance between control andautonomy draws attention to the importance of em-powerment and allowing employees greater freedom.Attempting to distinguish between empowerment and delegation is not easy but empowerment can beviewed as the more embracing process that gives rise

to delegation. At the individual level, delegation is theprocess of entrusting authority and responsibility toothers but ultimate accountability cannot be delegated.A planned and systematic approach to delegationmeans that it can be achieved without the loss of management control.

■ In order to realise the full benefits of empowermentand delegation without loss of control it is necessaryfor the manager to examine four basic questions andto adopt a planned and systematic approach with six main stages. Despite the continuing debate aboutwhether empowerment actually delivers, effectivelymanaged it does offer potential benefits throughoutall levels of the organisation. However, whatever theextent of employee empowerment there is still arequirement for some form of management controland there are a number of behavioural considerations.

➔

FT

Management in the news – continued

a revelatory experience. Stephen Martin is the 43-year-old CEO of the Clugston Group, a medium-sizedcivil engineering and logistics company based in thenorth of England. But for two weeks earlier this year,as far as his colleagues were concerned he was‘Martin Walker’, an ordinary co-worker trying to earn aliving like everybody else.

How did Mr Martin avoid being found out? He is still a relatively new CEO, having started in December 2006. He grew a beard and turned up to work in protective clothing rather than a suit. His down-to-earth, approachable style does not mark him out immediately as ‘boss class’. ‘This was a once-in-a-lifetime opportunity to hear unfiltered what my employees were really thinking,’ Mr Martintold me last week. ‘They said things to me that theywould never have told their managers.’ What lessonshas he learned? ‘Our key messages were just notgetting through to people,’ Mr Martin says. ‘Peopleworking a shift on a large site do not have time to read newsletters or log on to websites. You have to communicate with people on their terms, and it is different for every location. One size does not fit all.’

For example, Mr Martin found that an apparentlysensible idea – encouraging his workers to take a tea-break where they were working rather than comingback to a canteen – was taken to mean that the breakhad been cut. What is more, having worked thesephysically demanding shifts, which involved pouringconcrete, laying kerbs and clearing drains, the bossnow has a better informed view of the job. Hisconclusion: ‘We were asking the impossible of someof them.’ This experiment has highlighted a classicmanagement problem. Leaders may know exactlywhat they want to see happening. They send outmessages down the management line. Employeesought to understand. But between the top table andthe shopfloor something goes wrong. And right nowthere is a bigger, more urgent point. In a recession it is even harder to have an effective, open dialoguewith an anxious workforce.

Mr Martin feels he needs to ‘over-communicate’ to reassure staff who have seen big redundancies in recent months. ‘If you don’t pass on enoughinformation, even if it is bad news, they will fill the gap with something else, probably worse than the truth.’ Key messages to staff should never goundercover, even if one boss had to don a disguise to find this out.

Source: Stern, S. ‘The Undercover Boss’, Financial Times, 8 June2009. Copyright © 2009 The Financial Times Limited, reproducedwith permission.

Discussion questions1 What does Stephen Martin’s experience tell us

about the problems associated with both direct(notice boards, websites) and indirect (delegatedvia managers) systems of organisationalcommunication and control? How can they beovercome?

2 Use either Table 17.1 or Figure 17.3 to suggestwhich sort of control system you believe is bestsuited to organisations like the Clugston Group,and why.


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The Empowerment QuestionnaireThe following questionnaire consists of managerial behaviours that promote empowerment. Think of any workexperience you have had – even a short-term, vacation or part-time job. How frequently did your manager doeach of the following? Please mark the response that best describes the manager’s behaviour.

My Manager Very Very infrequently Infrequently Sometimes Frequently frequently

1 Lets me do my job without interfering � � � � �

2 Makes an effort to locate and remove barriers that reduce efficiency � � � � �

3 Encourages all of us to work as a team � � � � �

4 Clearly defines what is expected of me � � � � �

5 Provides me with honest feedback on my performance � � � � �

6 Openly recognises work well done � � � � �

7 Keeps me focused on customer needs � � � � �

8 Encourages me to monitor my own efforts � � � � �

9 Makes sure I have the training I need to do my job � � � � �

10 Allows me to make decisions about my own work � � � � �

11 Listens to me before making decisions affecting my area � � � � �

12 Provides me with an environment conducive to teamwork � � � � �

13 Rewards me for meeting company goals � � � � �

14 Informs me regularly about the state of business � � � � �

15 Encourages me to make suggestions � � � � �

16 Makes sure I have all the information I need to do my work � � � � �

17 Behaves in ways that demonstrate respect for others � � � � �

18 Explains how my job fits into the company objectives � � � � �

Source: Osland, Joyce S., Kolb, David A. and Rubin, Irwin M. Organizational Behaviour: An Experimental Approach, seventh edition,Prentice Hall (2001). Copyright © 2001. Reproduced with permission from Pearson Education, Inc.

a If this was not a permanent, full-time position, to what extent do you think this influenced your manager’sbehaviour towards you?

b How did your experience compare with the manager’s behaviour to other members of staff in the samedepartment/section?

c How would you describe the manager’s general belief in, and approach to, empowerment? And what wasyour perception of the manager’s overall effectiveness?

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ObjectivesCompleting this exercise should help you to enhance the following skills:

■ Assess the extent to which you are in danger of becoming a control freak.

■ Review honestly and reflect upon features of your own personality.

ExerciseWorking in small self-selected groups, individually answer the following questions honestly. If necessary thinkhow you would be likely to behave in the given situation. Then compare and discuss responses with yourcolleagues. (Your tutor will provide one suggested set of guidelines.)

I trust others to get the work done on time and to a good standard

(a) rarely

(b) generally

(c) always

I find other people have better ideas than me

(a) rarely

(b) sometimes

(c) often

I normally find I am right

(a) mostly

(b) sometimes

(c) it depends on your perspective

During the course of a meeting, do you:

(a) Take notes, because someone has to?

(b) Take down the important points?

(c) Assume someone else is paying attention?

At the end of the day are you more likely to:

(a) Stay until you have returned every email before going home?

(b) Make a list of relevant things to tackle tomorrow?

(c) Start calling around your colleagues to see who wants to go out for a drink?

When faced with a menu in a restaurant, do you:

(a) Think it is sensible to order for everyone to save time?

(b) Ask everyone else what they would like first and then order?

(c) Wait until it’s your turn to order?

Do you feel that if you were to take a holiday your business would:

(a) Fall apart because no one knows how to do anything properly?

(b) Suffer a bit, but not as much as it would were you not to have a holiday?

(c) Allow others a chance to take charge and show what they can do?

When planning a trip, do you:

(a) Allow extra time for traffic and unexpected delays and bring a briefcase full of work to occupy your time incase you arrive early?

(b) Follow the airline’s instructions?

(c) Wait until the last minute, at which point you rush like mad?

PERSONAL AWARENESS AND SKILLS EXERCISE


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What You Say Is What You Get . . . ?

CASE STUDY

The onset of the financial crisis which hit the bankingand finance sector in 2007 has had dramaticrepercussions in most areas of working life. The inquesthas thrown up many questions about the decision-making process and the degree of responsibilityexercised by top finance teams. Some of the fallout issuggesting that a big part of the problem was the lack ofwomen at the top. Women are showing themselves tobe a significant presence in the financial sector; it isargued that they do not exercise power as recklessly asmen, take fewer risks and are a potential source oforganisational stability. So why don’t they make it tothe top? For a number of researchers and campaignersin the field, it’s all about what you say. The way inwhich people in organisations communicate, and howthose communications are perceived and acted uponcan have a major impact on individual success, teamperformance and personal career paths. Whilstquestions of perception and communication may nottell the whole story about the position of women inorganisational life, they do tell part of it. Many womenmay not be able, or even wish, to challenge thedominant masculine model of society in general andwork organisations in particular (this dominance of a male paradigm is often termed patriarchy).Nevertheless, information about gender-relateddifferences in matters of perception and communicationcan help individuals, both men and women, to becomemore effective in their working lives.

Learning two languagesIn August 2006 Alison Maitland, writing for theFinancial Times, reported on a training event held for

a group of 20 high-ranking female executives at a venuejust outside Paris.71 The course was run by a Paris-basedtraining consultancy called Diafora,72 which has links to the European Professional Women’s Network73 viaone of its founding partners, Avivah Wittenberg-Cox.Wittenberg-Cox is co-author of the book Why WomenMean Business, and CEO of 20-first, a consultingorganisation which aims to work

with organisations that seek to move from 20th centurymindsets, management styles and marketing approachesinto more progressive 21st century forms – and to stayfirst at the game.74

At the session described the women were practisingsaying ‘no’ in a language which would get the messageacross clearly to a bullying male boss who was trying to offload his unfinished work. They were learning to

When setting off on holiday, do you:

(a) Go through everyone’s suitcase to make sure it is packed properly before heading off?

(b) Pack your suitcase and figure everyone else can do their own?

(c) Pack when the taxi arrives?

Source: For exercise questions, Kirwan-Taylor, H. ‘People Who Can’t Let Go’, Management Today, March 2007, p. 47. Reproduced fromManagement Today magazine with the permission of the copyright owner, Haymarket Business Publications Limited.

Discussion■ Do you think you have controlling issues or can you exercise flexibility?

■ How would you draw the line between being easygoing and being irresponsible?

■ To what extent do you see yourself as a team player and how does this fit with your answers?


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speak ‘masculine’. The session was addressing a problem which stems from the tendency for womenand men to learn different ways of speaking whichreflect differing assumptions about the purpose ofcommunication. Women, it has been discovered, tendto communicate in order to make people feel at ease, toinclude people and to create a sense of harmony. Mentend to communicate as a means of getting a pointacross, or making an argument. This is part of thesocialisation process and is based on commonconventions about the role of women and men insociety. It results in differences both in the languageused and the linguistic structures and habits employed.Deborah Tannen,75 an American professor of linguistics,who has researched and written extensively on thenature of communication patterns between men andwomen, notes that women tend to use more ‘tag’questions at the end of sentences as a way of attemptingto draw the other party into further discussion. Mentend to make statements or express opinions withoutthese mechanisms for encouraging further discussion.For instance, where a woman might say:

I thought the report John gave into the problems at theZurich office was very clear, didn’t you? Should we act onhis recommendations?

a man might simply state:

John’s Zurich report was very clear. We’ll do what hesuggested.

Both might actually wish to convey the same message;that the report was clear and the recommendationssound. However, the ‘female’ version, which aims toelicit an opinion or confirm agreement, contains whatto the ‘male’ listener sounds like uncertainty orhesitancy. By contrast, to the female listener, the ‘male’version might seem abrupt or arrogant and convey animpression that her views on the subject were irrelevant.Either way, the unconscious message behind the speechpattern can be damaging to the image of the speaker inthe eyes of their colleague.

Tannen also noted that women were much morelikely to use ‘weak’ words and phrases in theirconversation.

A woman manager might say to her secretary, ‘Could youdo me a favor and type this letter right away?’ knowingthat her secretary is going to type the letter. But her maleboss, on hearing this, might conclude she doesn’t feel shedeserves the authority she has.76

Another illustration is the phrase ‘I’m sorry’, whichwomen often use to smooth conversation or to expressregret that something has happened and to minimise it,not as an admission of error. For men, ‘I’m sorry’ isoften used to mean something much tougher; it equatesto admitting a mistake and apologising for it. Women

who are ‘always apologising’ thus give an impression ofincompetence.

How to make an impressionTraining women to say no to an unreasonable demandis only part of the agenda addressed by the Diaforaprogrammes. Beefing up their language to avoid weakphrases such as ‘as soon as possible’ or ‘I don’t knowbut . . .’ or ‘I guess I could . . .’ might help women limitsome of the day-to-day perceptual damage, but there areother more fundamental problems to consider. One ofthem is the issue of women’s self-promotion and theirapproach to achieving career success. Wittenberg-Coxfinds that many young men have already learned whatis known as the 80/20 rule of power politics by the timethey embark on their careers: that you should spend 80 per cent of your time at work actually working, and20 per cent communicating your achievements andgaining visibility.

This appears to be news to the women on the [Diafora]course, but may be more familiar to their male colleaguesback at the office. Guys have told me this rule as if theywere fed it with their mother’s milk.77

These anecdotal findings are supported by those ofsenior academic researcher Dr Val Singh, working atCranfield’s International Centre for Women Leaders.Writing about the question of impression management(IM)78 she reports that the young men in one of herresearch samples had learned to use IM at a younger agethan their female counterparts, and might therefore begetting a head start on the career ladder. For instance,60 per cent of the junior males in her sample activelysought out key people for the purpose of networkingwhereas very few junior females did so.

Some men and women trust the formal HRM systems toprovide career opportunities, underestimating theimportance of informal networks . . .

Women tended to adopt IM strategies later in theircareers, usually having noticed their equally capablemale colleagues achieving more and more rapidpromotions. The Cranfield studies identify three typesof IM: self-focused (which is to do with packaging and‘branding’ oneself ), manager-focused (which is aboutbuilding and maintaining relationships in a fairlyinstrumental way) and job-focused (which is aboutdelivering extra levels of job performance).79 Menappear to be readier to engage in manager-focused IM,even if they don’t like it much, than women. Also,according to research done internally for Hewlett-Packard, men apply earlier for promotion.

women apply for open job positions if they think theyrespond to 100% of the criteria listed, while men respondas soon as they feel that they cover 60% of therequirements. Worse though, she noted, is that hiring

Your tasks1 Analyse the issues raised in this case using the concepts of legitimate (organisational) power and personal

(informal) power. What can we learn about the relationship between perception, communication, status andpower in organisations?

2 How should senior managers, in particular those who are responsible for the assessment and promotion ofstaff, act in the light of the concept of the ‘80/20’ rule?

3 Discuss the reasons for and against the use of women-focused training such as that offered by Diafora andthe Cranfield International Centre for Women Leaders. How else might organisations ensure thatopportunities for career enhancement are fair? How important is this for organisational effectiveness?


701

Notes and references

managers do the same. They recruit women if theyrespond to 100% of the criteria, but they are ready torecruit men as long as they respond to 60% (and women recruiters are tougher on women candidates than men are).80

Women managers and cultural differenceBoth Diafora and 20-first suggest that the culturaldifference between men and women is as tangible asthat between different nationalities, and should betreated as such. The group hopes to encourage and train not only women, but also men, to become ‘gender bilingual’ in the search for managerial talentand business success. And indeed national culturaldifference itself should not be forgotten as something which might affect perceptions andbehaviours, not necessarily to the detriment of women. Some research into both managerialeffectiveness and the perception of what makes a good manager is beginning to reveal different levels ofsex stereotyping in different cultures. For instance, astudy by Chow81 seems to indicate that in Hong Kongfinancial and telecommunications businesses, theperceptions of both men and women about thecharacteristics of an effective business leader aresubstantially gender neutral;

A less assertive and more individualist, more genderegalitarian culture may offer a favourable and women-friendly culture toward female leaders in managementpositions in Hong Kong organisations in the future,especially if women aspiring to become leadersdemonstrate the attributes that subordinates seek.

On a lighter note, Wittenberg-Cox recently perceiveda difference between French female managers and thosefrom the US or the UK in relation to the way in whichthey assert femininity. In an article celebrating theapparent return of high heels to businesswomen’swardrobes at a conference involving the CEOs of somevery substantial companies, she observed that they nolonger signified the ‘dumb-blond plaything of yesteryear’but power. But only, so far, for French women:

American women have been forced to adapt too much tothe male model in their rise to power . . . Frenchwomen,in particular, were never asked, like their unfortunateAnglo-Saxon sisters, to choose between family and career,and between femininity and power. Despite the supposedmacho nature of Latin men, France has created one of theworld’s only societies where women work full-time (80%of women between 25 and 50), have lots of children (thehighest birth rate in Europe after Ireland) and still lookand sound like – and are loved for being – women.82

1 See, for example, Salaman, G. Class and the Corporation,Fontana (1981).

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4 Drummond, H. Introduction to Organizational Behaviour,Oxford University Press (2000), p. 25.

5 Child, J. Organization: Contemporary Principles and Practice,Blackwell Publishing (2005), p. 112.

6 Lawler, E. E. ‘Control Systems in Organizations’, inDunnette, M. D. (ed.) Handbook of Industrial andOrganizational Psychology, Rand McNally (1976).

7 For example, see Mullins, L. J. and Banks, G. ‘How Well Am I Doing?’, Euhofa Journal, Association Internationale desDirecteurs d’Écoles Hoteliers, Lausanne, Switzerland, no. 18,June 1986.

8 Tulgan, B. ‘Winning the Talent Wars’, in Crainer, S. andDearlove, D. (eds), Financial Times Handbook of Management,second edition, Financial Times Prentice Hall (2001), p. 351.

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11 Zimmermann, J. ‘The Different Centres of Control’,Mastering Management, Financial Times/Pitman Publishing(1997), p. 21.

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13 ‘Untapped Potential: The Barriers to Optimum CorporatePerformance’, Proudfoot Consulting, October 2002.

14 Obeng, E. ‘New World Organization’, in Crainer, S. andDearlove, D. (eds), Financial Times Handbook of Management,second edition, Financial Times Prentice Hall (2001), p. 85.

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34 For an account of the use of power, see, for example,Guirdham, M. Interactive Behaviour at Work, third edition,Financial Times Prentice Hall (2002), Chapter 9.

35 Parker, L. D. ‘Shock of the New a Century On’, ProfessionalManager, November 2005, pp. 34–5; and ‘Mary ParkerFollett: Prophet of Management’, Thinkers Checklist No. 24, Chartered Management Institute (1998).

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39 Kirwan-Taylor, H. ‘People Who Can’t Let Go’, ManagementToday, March 2007, pp. 45–7.

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42 Allen, D. ‘There’s More to Accountancy Than Accounting’,Administrator, March 1992, p. 6.

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56 Stewart, R. The Reality of Management, third edition,Butterworth Heinemann (1999), p. 180.

57 Gratton, L. The Democratic Enterprise, Financial TimesPrentice Hall (2004), pp. 188–9.

58 Watson, T. J. Organising and Managing Work, secondedition, Financial Times Prentice Hall (2006), p. 12.

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71 Maitland, A. ‘Learn the Masculine Imperative’, FT.com, 1 August 2006.

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3 August 2009).75 Tannen, D. Talking from 9 to 5: Women and Men at Work,

HarperCollins (2001).76 Tannen, D. ‘The Talk of the Sandbox: How Johnny and

Suzy’s Playground Chatter Prepares Them for Life at the Office’, Washington Post, 11 December 1994.

77 Maitland, A. ‘Learn the Masculine Imperative’, FT.com, 1 August 2006.

78 Singh, V. ‘Impression Management’, CranfieldInternational Centre for Women Leaders, 2000.

79 Singh,V., Kumra, S. and Vinnicombe, S. ‘Gender andImpression Management: Playing the Promotion Game’, Journal of Business Ethics, vol. 37, no. 1, 2002, pp. 77–89.

80 Wittenberg-Cox, A. and Maitland, A. Why Women MeanBusiness, Jossey-Bass (2008), p. 114.

81 Chow, I. ‘Gender Differences in Perceived LeadershipEffectiveness in Hong Kong’, Women in Management Review,vol. 20, no. 4, 2005, pp. 216–33.

82 Wittenberg-Cox, A. ‘High Heels Scale New Heights’,European Professional Women’s Network, 2005,http://www.europeanpwn.net/index.php?article_id=144(accessed 3 August 2009).

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Chapter 17 Organisational Control and Power

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