Chapter 3 Kashem
Chapter 3 Kashem
Chapter 3 Kashem
Behavior in Organizations
Goal Congruence
Good MCS influence behavior in a goal congruent manner.
Goal Congruence means that the goals of an organization’s individual members should be
consistent with the goals of the organization itself
Informal factors refer to the non-official or unofficial aspects within an organization that can
influence goal congruence. These factors may not be explicitly stated in formal policies or
procedures but can significantly impact the alignment of individual and organizational goals.
Informal factors can be categorized into two broad categories: external factors and internal
factors.
External Factors:
External factors are influenced by the environment surrounding the organization. These factors
can include:
a. Market Competition: Intense competition in the market can influence employees to focus
more on individual or departmental goals rather than the overall organizational goals. This can
create conflicts and hinder goal congruence.
Example. Silicon Valley—a stretch of northern California about 30 miles long and 10 miles
wide—is one of the major sources of new business creation and wealth in the American
economy. Silicon Valley attracts people with certain common characteristics: an entrepreneurial
spirit, a zest for hard work, high ambition, and a preference for informal work settings. Over the
last 50 years, Silicon Valley has created companies such as Hewlett-Packard, Microsoft, Apple
Computer, Sun Microsystems, Oracle, Cisco Systems, and Intel. Even after the most recent
boom-and-bust cycle, the old-line companies and the “dot com” survivors have kept up Silicon
Valley’s reputation as the center of technology innovation.
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Internal factors that influence goal congruence within an organization include:
a. Culture: Organizational culture refers to the shared values, beliefs, and norms that shape
the behavior and attitudes of employees. If the organizational culture does not emphasize
goal alignment, collaboration, and a sense of shared purpose, it can hinder goal
congruence. A culture that promotes teamwork, open communication, and a focus on
organizational goals can enhance alignment.
b. Management Style: The management style employed within an organization can have a
significant impact on goal congruence. Autocratic or directive management styles that do
not involve employees in goal-setting or decision-making processes can create a lack of
ownership and alignment. In contrast, participative and inclusive management styles that
encourage employee involvement and empowerment can foster goal congruence.
Addressing these internal factors requires a proactive approach from organizational leaders and
managers. This can involve fostering a culture of goal alignment, promoting participative
management practices, recognizing and leveraging the informal organization, and establishing
effective communication channels and feedback mechanisms. By actively managing these
internal factors, organizations can enhance goal congruence and improve overall performance.
1. Rules
Rules are an important component of the formal control system. Rules are established to provide
clear guidelines and standards for behavior within the organization. They define the acceptable
and unacceptable actions and help ensure that employees act in accordance with organizational
goals and values. Rules can cover various areas such as ethical conduct, workplace safety,
financial practices, quality standards, and compliance with legal and regulatory requirements.
By establishing and enforcing rules, organizations can promote consistency, fairness, and
accountability. Rules help create a level playing field and prevent individuals from pursuing their
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own objectives at the expense of organizational goals. They provide a framework for decision-
making and help ensure that actions and behaviors are aligned with the desired outcomes.
Enforcement of rules is a crucial aspect of the formal control system. Organizations may have
mechanisms in place to monitor compliance with rules, such as audits, performance evaluations,
and disciplinary procedures. Violations of rules can lead to consequences such as warnings,
reprimands, and even termination of employment, depending on the severity of the infraction.
b. Manuals: Manuals provide written guidelines and instructions for various aspects of
organizational operations. They can include employee handbooks, policy manuals, procedural
guides, and operational manuals. Manuals outline the rules, procedures, and best practices to be
followed by employees in performing their tasks. They provide a standardized approach and
promote consistency in actions and behaviors.
c. System Safeguards: System safeguards refer to rules and measures put in place to protect
information systems and data within an organization. These rules can include password policies,
access controls, data encryption, firewalls, and antivirus software. System safeguards help
prevent unauthorized access, data breaches, and ensure the integrity, availability, and
confidentiality of information systems.
d. Task Control Systems: Task control systems involve establishing rules and procedures to
monitor and regulate specific tasks or processes within the organization. These rules can include
quality control measures, checklists, standard operating procedures (SOPs), and workflow
management systems. Task control systems ensure that tasks are performed consistently,
efficiently, and in alignment with organizational goals and quality standards.
These specific types of rules contribute to the formal control system by providing clear
guidelines and procedures for employees to follow. They help create structure, accountability,
and consistency within the organization, promoting goal congruence and efficient operations.
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f. If it was not, do corrective action in the responsibility center and possible plan
revision.
Types of Organizations
A firm’s strategy has a major influence on its structure. The type of structure, in turn, influences
the design of the organization’s management control systems. Although organizations
come in all sizes and shapes, their structures can be grouped into three general categories:
1. A functional structure, in which each manager is responsible for a specified function such as
production or marketing.
2. A business unit structure, in which business unit managers are responsible for most of the
activities of their particular unit, and the business unit functions as a semi-independent
part of the company.
3. A matrix structure, in which functional units have dual responsibilities.
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excavators, etc., targeted at building contractors), Consumer Equipment (lawnmowers, snowblowers,
etc., targeted at individual homes), and Credit (a unit that provided financing for equipment purchase).
Given the diversity of products and customer segments that the company served, Deere & Co. could not
adopt a functional structure
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3. Matrix Structure: A matrix structure combines elements of both functional and project-
based structures. In a matrix structure, employees report to both a functional manager
(based on their area of expertise) and a project or product manager (based on the project
or product they are working on). This dual reporting allows for the utilization of
specialized skills and resources across different projects or initiatives. Matrix structures
are often used in complex and dynamic environments where cross-functional
collaboration and coordination are critical. However, the matrix structure can lead to
ambiguity in roles and authority, and effective communication and conflict resolution are
crucial for its success.
These different organizational structures offer various advantages and challenges, and the choice
of structure depends on factors such as the organization's size, industry, goals, and the nature of
its operations. Organizations may also adopt hybrid or customized structures that combine
elements from multiple structures to best suit their specific needs.
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