Inpact of Org Cultural and Behaviour

8/12/2019 Inpact of Org Cultural and Behaviour

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UNIVERSITY OF NIFACULTY OF ECONOMICS

"ECONOMIC THEMES"Year 50, No. 3, 2012, pp. 289-308

Address: Trg kralja Aleksandra Ujedinitelja 11, 18000 NiPhone: +381 18 528 624 Fax: +381 18 4523 268

THE IMPACT OF ORGANIZATIZONAL CULTUREON CONTROL OF BEHAVIOR IN ORGANIZATIONS

Neboja Janiijevi

Abstract:The paper explores the impact of organizational culture on control

of organization members behavior. Every organization must develop acertain method of behavior control in order to provide coordinated and

effective collective action in accomplishing its goals. Organizational culture

with its assumptions, values and norms defines how an organization

understands the nature of human behavior in social groups, and thus a

suitable manner of control of this behavior. The paper uses Mintzbergs

classification of five methods of organizational behavior control which are

differentiated according to two basic criteria: the level of restrictiveness and

the level of formalization or personalization. On the other hand,

organizational culture classifications by Handy and Trompenaar each

recognize four types of culture, which can be differentiated according to two

criteria: distribution of power and orientation towards work or social

structure. Based on matching of the criteria for organizational culture types

differentiation and methods of behavior control, the hypotheses on causalrelations between them are established in the paper.

Keywords:organization, control, organizational culture, organizational behavior

Introduction

Organizational culture has a strong impact on organization andmanagement, which emerges from its nature and its content. Organizational cultureis defined as a system of assumptions, values, norms and attitudes, manifestedthrough symbols which the members of an organization have developed and

adopted through shared experience and which help them determine the meaning of

the world around them and how to behave in it (Janiijevi, 2011, 70).Assumptions, values, norms, and attitudes that the members of an organization sharesignificantly shape their interpretative schemes. Through interpretative schemes themembers of an organization assign meanings to occurrences within and outside theorganization and understand the reality that surrounds them (Fiske, Taylor, 1991;

University of Belgrade, Faculty of Economics, [email protected] 005.32, review paperReceived: 31.07.2012. Accepted: 20.09.2012.


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Smircich, 1983). The behavior, actions, and interactions of the members of anorganization emerge from the meaning that the reality of that organization has forthem (Alvesson, 2002; Martin, 2002). Organizational culture is a form of collectiveinterpretative scheme shared by the members of an organization, due to which theyassign meanings to occurrences, people, and events within and outside of theorganization in a similar way and treat them similarly (Schein, 2004). Such a powerfulculture of an organization implies that all the members of the organization similarlyunderstand the organization, as well as a suitable way of its functioning, managing,and changing. The character of different components of management andorganization, such as strategy, structure, leadership style, organizational learning,system of rewards, and motivation, emerges precisely from the way in whichemployees and management understand organizational reality and behave in it(Wilderom C. et al., 2000). Thus, organizational culture, through its influence on theinterpretative schemes and behavior of the members of an organization, participates inshaping other components of organization and management. Depending on the valuesand norms contained by the organizational culture, top management selects strategyand designs organizational structure, managers shape their leadership style, employeesdefine their motives and needs, and the human resource manager designs thecompensation system in a company. A concrete form of the impact of organizationalculture on an organization and management is observed in the fact that components ofan organization and management differ in different types of organizational culture. Inother words, different types of culture in organizations imply different strategies,organizational structure models, compensation systems, leadership styles etc.

One of the important components of management that is impacted byorganizational culture is the method of control of the organization members behavior.Organizational culture impacts the selection of adequate method of control of theorganization members behavior in the same way it impacts all other aspects ofmanagement. Namely, cultural assumptions and values shared by the members of anorganization determine the way in which they will understand the organization itself,and thereby the adequate way to control and direct the behavior in the organization.What will be determined as a suitable, efficient, or useful way of control will dependsignificantly on the shared assumptions and values of employees and managers builtin their interpretative schemes. Whether the control and coordination of individualbehavior of organization members are conducted restrictively or non-restrictively,through direct or indirect communication, by focusing on tasks and structures orpeople and their relations, will all to a great extent depend on how the leader and themembers of the organization see its functioning and a suitable, useful, or effectiveway of control. This is the reason why different methods of control will be applied indifferent organizational cultures.

The described impact of organizational culture on behavior control in anorganization is, however, too general in character and calls for operationalizationwhich would consist of generating and testing the hypothesis on the causalrelationship between certain types of organizational culture and certain methods of


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The Impact of Organizatizonal Culture on Control of Behavior in Organizations

control. In other words, it is necessary to prove that specific methods of behaviorcontrol are applied or are more efficient in specific types of organizational cultures.Such operationalization of relationships between organizational culture and methodsof control so far has not been dealt with in the literature. The purpose of this paper isto fill this gap. The paper is explorative in character, which means that it will generatehypotheses suitable for empiric testing. The structure of the paper is as follows: first,behavior control will be defined, and classification through which methods of controlin organizations are differentiated will be presented. Then the classification throughwhich organizational culture types are differentiated will be presented. Finally, in thelast segment of the paper, based on the described classifications of culture andmethods of control, hypotheses will be established in which it will be stated thatimplementation of a specific method of control is conditioned by a certain type oforganizational culture.

Methods of Control in an Organization

There are different methods of control in organizations. They are mostlydifferentiated according to the object of control, so we may speak of performancecontrol, accounting or financial control, technical control, quality control, safetycontrol, ecological control etc. Each kind of control basically has the same objective to ensure achieving of certain goals or to ensure that certain processes in theorganization are achieved according to some prearranged manner. For example,company performance control by means of Balanced Scorecard examines whether

balanced goals are achieved in for areas (Kaplan, Norton, 2008). Control of theorganization members behavior is a kind of control in which the object of control isindividual behavior, i.e. actions and decisions by the members of the organization, andthe goal is to harmonize these decision and actions both one with another, as well aswith organizational goals.

Each organization has the need to control the behavior of its members. Thissystem should provide for the decisions and actions of the members of an organizationto be such that functioning of organization follows the planned course and streamstowards previously defined goals. Through the process of control, an organizationrestricts the behavior of its members. The basic reason for this is that an organizationis in its essence a system of collective action through which mutual goals areachieved. In order to achieve mutual goals through a collective action, individualactions, i.e. behavior, of the members of an organization must be restricted, directedand controlled. An organization must have a mechanism through which it woulddecrease the degree of freedom of the employees choice in decision-making andaction taking in order to provide that these actions and decisions are mutuallyharmonized and in order for them to jointly flow towards achieving previouslydefined goals. Otherwise, without control, individual actions of the members of anorganization would be uncoordinated and would not be in the function of achievingorganizational but individual goals of the members of the organization. The discretion


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of the members of an organization regarding the selection of the manner in which theywill perform their tasks in the organization is to a smaller or greater extent restrictedby the method of control. This restraint on the freedom of decision-making andbehavior of organization members is inevitable in every organization. If everymember in an organization would have a complete freedom of behavior, a collectiveaction would then be impossible, and that would altogether mean the end of theorganization. Control of behavior of organization members represents a necessaryprecondition for their coordination. Individual activities and work tasks of theemployees can mutually be coordinated into a single unique collective action only ifthey are partially or completely anticipated which is accomplished precisely by themethod of control.

The method of behavior control is a necessary element of organizationaldesign, and the very process of control is one of the four primary tasks of management(along with planning, leadership and organizing). System of control includes thecarriers of control and their tasks, means or mechanisms of control, and thedocuments accompanying control. It is a system of management which themanagement of an organization uses as a tool for managing the organization. Thesystem of control is the hard component of organization. It is more or less aformalized system which is shaped by the decisions of the management of anorganization and is often covered by the required documents. The most frequentlyquoted classification in the literature of methods or systems of control of organizationmembers behavior is the one given by Henry Mintzberg (Mintzberg, 1979). Withinhis analysis of the manners in which organizations are structured, he differentiated

five basic mechanisms of behavior control on which he also based his organizationalmodels classification.

Standardization of Processes. This control mechanism implies that themanner in which the members of an organization will do their job, i.e. perform eachwork activity, is prescribed in advance. The means to achieve this are different formaldocuments: standards, procedures, regulations and instructions. They standardize theway in which each member of an organization performs the work tasks at his/her job.Work processes standardization implies a very low degree of autonomy or discretionof employees, and this is why it is a very restrictive mechanism of behavior control.An employee must do only what is prescribed, in the way it is prescribed, at theprescribed time and using the prescribed tools, which means that there is no room for

any kind of deviations. This is why this control mechanism is possible only in the caseof relatively simple and repetitive operations or work tasks, whereby the number ofexceptions is reduced to the smallest possible extent. Also, this control mechanism issuitable for mass processes, when the number of job positions and operations is veryhigh. An example is the job position of a teller in a bank or an assembly line worker ina car factory. Through standardization of their work activities, what they should doand how they should do it is exactly defined. This is a very firm and reliable controlmechanism, since it leaves people little room for a free choice, and thereby also fortheir mistakes. However, for the same reason, this control mechanism negatively


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impacts the innovativeness and creativity in an organization. Processesstandardization is a centralized method of control since all the standards, procedures,instructions and regulations are produced in a single place in an organization and thenimposed on the employees in operative sphere. Processes standardization is an ex antecontrol since the way in which work should be conducted is determined in advance,before the work starts. It is a depersonalized method of control since it is task oriented,and not personality oriented, and since the behavior control comes down tocontrolling the manner in which tasks are performed. Monitoring of the accomplishedin the process of control is conducted through impersonally set standards andmechanisms. Processes standardization is a highly formalized method of control sinceprescribing of the manner in which the work processes are conducted is done throughformal means, such as procedures and regulations. Restricting the behavior oforganization members in this way emerges from formal documents. Due to all abovesaid, work processes standardization is a control mechanism that bureaucratizes theorganization.

Standardization of outputs. Organizations turn to this mechanism of controlwhen work processes are too complex or variable and cannot be standardized, but theoutputs (results) of these processes can be prescribed. In this case, an employee isgiven the freedom or discretion right to decide how he/she will perform the task, butthe output that he/she must achieve is specified or standardized in advance.Standardization of outputs is a nonrestrictive method of control which provides a highlevel of autonomy to the employees to define their actions. This method of controlalso requires a relatively high degree of structure decentralization so the organization

members and their organizational units would have the freedom of choice of action inachieving the prescribed outputs. A typical example of this control mechanismimplementation is divisional organization, in which the top of the company prescribesonly the level of performances that the divisions should achieve (e.g. percentage ofprofit, level of sale, market share), while it leaves them the freedom to make their owndecisions about the way in which they will accomplish it. This mechanism of controlis also applied in project organizations, i.e. the organizations in which operativeprocesses are conducted mostly through projects realized by project teams. Theproject results, time and tools are specified, and then it is left to the project team todecide on the manner in which they would complete the project. This is, unlikestandardization of work processes, an ex post control since deviations from theplanned outputs are discovered and eliminated only after the work task is completed.Performance standardization is, like work process standardization, a depersonalizedmechanism of control. The behavior of the members of an organization is controlledthrough achieving the tasks set in advance. The focus is on the output, and not on thepeople who achieve it. Standardization of outputs is also a formalized method ofcontrol because performance standards that restrict the behavior of the employees areformally prescribed through management decisions and formal documents.Standardization of outputs is most often applied through business and operative plansand budget.


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Standardization of knowledge and skills. This mechanism of employeesbehavior control is applied in the situation when neither the manner of performing thework tasks (process) nor the result (output) can be standardized. The only manner ofcontrol in such a situation is the standardization of behavior inputs, and these areknowledge, skills and ethic standards in performing of the tasks. The work process, aswell as its effects or outputs (results), can at least to some extent be controlled throughstandardization of knowledge and skills necessary for performing of the work, as wellas through establishing professional norms and standards which those who performthe work should comply with. This mechanism of control is used mainly forperforming of the so-called professional jobs, such as, for example, jobs of aneconomic analyst in a company, doctor, lawyer, professor, researcher in adevelopment laboratory, and the like. By standardization of knowledge, skills andstandards that they put into performing of their job the work process, as well as itseffects, become significantly more predictable and controllable. Due tostandardization of professional knowledge, skills and behavior norms, it can be withcertainty anticipated what the doctor will do when he/she encounters a patient with theflue or how the professor of economics will explain what is product cost price.Standardization of knowledge and skills is usually conducted through a long-lastingprocess of schooling of expertsprofessionals. Schooling is usually done outside theorganizations in which they work, i.e. in educational institutions. However, expertsacquire a significant part of the package of professional knowledge and standards inthe organizations in which they work. Namely, through the process of socializationand learning from senior colleagues young experts expand, modify and improve the

package of knowledge, skills and norms their profession requires. This mechanism ofcontrol provides the greatest degree of autonomy to an executive, which is onlylogical having in mind the nature of jobs that this mechanism of control is used for.This method of control is therefore nonrestrictive and gives a high degree of discretionto the members of an organization regarding the manner in which they perform theirtasks. Standardization of knowledge seeks and correlates with decentralization in anorganization since it implies that the executives, who are at the same time expertsprofessionals, have the freedom to independently make decisions. On the other hand,this mechanism of control is, unlike the previous two, personalized and informal. It ispeople oriented, and not task oriented. It makes the person the center of attention, andnot his/her role or task. The degree of formalization of this control system is very low.Socialization and learning of knowledge, skills and professional standards by the

newly admitted experts are usually the result of informal contacts with colleagues,although some forms of introduction to work operations, instructing and training canalso be observed in companies. The low formalization of knowledge standardizationemerges from the fact that behavior of the members of an organization is not restrictedby some formal document, but by their professional knowledge, skills and ethics. Justlike standardization of work processes, this form of control is based on and ex antecontrol, i.e. the tendency is to avoid deviations form the desired output, and not toeliminate them after they have already appeared.


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Direct supervision by the management. In this system, control is achieved bythe manager who, based on his/her position in the organizational structure, has theauthority over a certain number of subordinated employees. The manager supervisesthe progress of the work process, decisions and actions of the employees, in particularthrough immediate contact and communication with the subordinate who performshis/her work tasks. The manager gives instructions to the subordinate regarding how,when and what should be done and he/she immediately reacts if he/she noticesdeviations with regard to his/her instructions. The method of control through directsupervision has several control points in an organization; more specifically it has asmany control points as it has managers. But, even so, a significant disadvantage of thismethod of control is the span of control. This method of control can be efficient onlyif the managers do not have a too wide span of control, i.e. if the number ofsubordinates under their control is not too large. This method of control is restrictiveand leaves little room for autonomy, i.e. it leaves little room for the employees to havethe freedom of choice regarding the manner in which they will perform their worktasks. The manager most often defines methods of work, but also solves the problemsthat emerge during the work process. The method of control through directsupervision corresponds with centralization in decision-making in an organization,since decisions about the manner of work are reached by the manager, and theemployees only execute them. Like standardization of processes, it may be used onlyfor relatively simple and repetitive work tasks. This is why this method of control isthe alternative to standardization of work processes, particularly when theorganization is small and young or when due to other reasons excessive formalization

is not desirable. This method of control is more flexible that standardization ofprocesses and allows somewhat greater degree of creativity and initiative. However, itis also less effective and reliable than standardization of processes. Control throughdirect supervision is personalized since its focus is the impact on people, and not ontasks. The managers control the behavior of employees through direct impact onthem, and not through tasks. Although based on hierarchical superordination andsubordinacy, this method of control is significantly informal because the source ofrestriction of organization members behavior is not a formal document but aperson, i.e. the supervising manager.

Direct interpersonal communication. Control can also be conductedthrough a direct interpersonal communication of the employees, i.e. the members ofan organization. In this case, the employees who comprise one team control andcoordinate each other in direct interpersonal contact and thus coordinate theiractivities and influence one another. Basically, direct interpersonal communication ismore a coordinative than it is a control mechanism. Its purpose is not to control thebehavior of organization members, but to coordinate individual actions and behaviorsof the members of an organization in order to achieve efficient collective action. But,precisely this coordination of actions with the actions of other members of the team isthe source of control, i.e. the source of restriction of the team members behavior.They are not entirely free regarding the choice of their actions since they are restricted


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by the need for their action to be coordinated with the actions of other team members.This mechanism of control is very flexible, nonrestrictive and allows for the highestdegree of freedom to the employees. They are completely free and autonomousregarding the selection of their behavior while performing the work tasks andrestricted only by the need to coordinate their behavior with behavior of the othermembers of the team. Hence this mechanism of control provides the conditions for thehighest degree of creativity and flexibility in an organization. Due to a high autonomyof the members of an organization it implies, interpersonal communication alsorequires a high degree of decentralization of decision-making in an organization. Also,it is suitable for performing of very complex tasks which cannot be in any waycoordinated and controlled from the outside. The main disadvantage of thismechanism of control is that it is limited to control of a relatively small number ofemployees. Direct interpersonal communication is simply not possible to apply incoordinating and controlling a large number of people. The reason for this is thelimited capacity of people to receive, process and give information, which preventsdirect interpersonal communication of a large number of people at the same time.Direct interpersonal communication is a personalized method of control orientedtowards people, and not towards tasks. It is also an informal method of control sincethe source of restriction of the organization members behavior is not some formaldocument, but other members of the team. In this respect, it is similar to directsupervision by the management, with the difference being that the source of restrictionin direct supervision by the management is the supervising manager and the source ofrestriction here are the colleagues in the team.

Although Mintzberg did not explicitly write about it, it is clear that thedescribed methods of control of organization members behavior can be differentiatedaccording to two criteria: the degree of restrictiveness or autonomy that the method ofcontrol leaves to the employees with respect to selection of the way in which they willperform their work tasks, as well as the degree of personalization and formalization ofcontrol. According to the criteria of the degree of restrictiveness or autonomy that themethod of control leaves to the employees, we may distinguish restrictive andnonrestrictive systems of control. Restrictive methods of control are the ones thatleave little room to the members of an organization with respect to selection ofmethod and manner of work and also imply a low degree of their discretion orautonomy and impose a greater number of restrictions. In restrictive methods ofbehavior control, the members of an organization have very little room for freedecision-making and taking actions. Restrictive methods of control are standardizationof processes and direct supervision by the management. Nonrestrictive methods ofcontrol are the ones that impose smaller number of restrictions in organizationmembers behavior and which give them greater discretion and autonomy and leavemore room for selecting the manner of work. In nonrestrictive methods of behaviorcontrol, the members of an organization have more room for free decision-making andtaking actions. Nonrestrictive methods of control are: standardization of knowledge,standardization of outputs and direct interpersonal communication.


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According to the second criterion, we distinguish between formalized anddepersonalized methods of control and personalized and lowly formalized methodsof control. Depersonalized and formalized methods of control are the ones whichrestrict organization members behavior by means of formal documents, such as:plans, standards, procedures, instructions etc. Standardization of processes andstandardization of outputs fall under this type of method of control. They controlpeoples behavior through controlling the tasks that they should perform.Personalized and lowly formalized methods of control are primarily focused onpeople and their behavior, and are only secondarily focused on tasks they shouldperform. The source of restriction of organization members behavior are notformal documents but other people: managers, colleagues and the employeesthemselves (their knowledge and ethics). Direct supervision, standardization ofknowledge and direct interpersonal communication are part of personalized andlowly formalized methods of control. By combining the two criteria ofdifferentiation of methods of behavior control in an organization we may designthe following matrix:

Table 1: Types of Behavior Control in Organizations

Formalization,personalization of control

Restrictiveness of control,autonomy

Formalized, depersonalizedNon-formalized,

personalized

Low autonomy, restrictive Standardization ofprocesses Direct supervision

High autonomy, nonrestrictive Standardization of outputsStandardization ofknowledge, Direct

interpersonal communication

The matrix shows all the differences between the described methods ofbehavior control in a company. Standardization of processes is a formalized anddepersonalized method of control which is also highly restrictive and allows littlefreedom to employees. Standardization of outputs is also formalized anddepersonalized method but, unlike standardization of processes, allows relativelyhigh autonomy to the members of an organization with respect to selection of themethod of work. Direct supervision is, like standardization of processes, arestrictive method and allows relatively low autonomy to the employees, but unlikestandardization of processes it is a highly personalized and lowly formalizedmethod of control. Standardization of knowledge and interpersonal communicationare also personalized and lowly formalized methods but, unlike direct supervision,they provide a high level of autonomy and are not restrictive.

The selection of an adequate method of behavior control represents a veryimportant decision by the company management. Inadequate method of control can


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not only decrease efficiency of the control process, but can also disturb relationsand atmosphere in an organization. Numerous factors influence the selection of themethod of control in a company. Certainly, the nature of the work being controlledis the most important one among them. It was already noted that the complexity ofthe work and its repetitiveness significantly narrow the possibility of the selection.Complex and variable jobs and tasks may be controlled through standardization ofoutputs and knowledge, while standardization of processes and direct supervisionmay be used only in the case of simple and repetitive jobs. The size and age of acompany also have a strong impact on the selection of method of control, as well asthe organizational structure of the company. Thus, divisional and project structurescall for the application of standardization of outputs, while functional structureimplies standardization of processes and hierarchical control. Finally, a veryimportant factor of selection of the method of control is also a degree of educationand expertise of the employees. As a rule, standardization of outputs andknowledge requires a higher degree of education and expertise.

In this paper, the hypothesis is established that organizational culture is oneof the factors in selecting the system of behavior control in an organization. Theprevailing assumptions, values and norms in a company significantly influence thecontrol system selection. For example, the selection between restrictive andnonrestrictive methods of control depends on beliefs on human nature which arethe content of the given culture. A culture in which distrust of people prevails willimpact the application of restrictive methods of control leaving little room forautonomy of the employees. On the other hand, a culture in which attitudes that

creative energy of people should be released prevail is a factor to the benefits ofselection of nonrestrictive methods of control, such as standardization of outputsand knowledge. Also, beliefs regarding uncertainty and risk impact the selectionbetween restrictive and nonrestrictive methods of control. Higher tolerance ofuncertainty, changes and risks favors nonrestrictive systems of control, whileopposite attitudes lead to implementation of standardization of processes and directsupervision, as well as restrictive methods of control. Selecting betweenpersonalized and depersonalized methods of control depends on beliefs about thenature of interpersonal relations in an organization. Cultures which assume thatevery organization is a rational system for achieving of the specific goals, and thatinterpersonal relations are always in the function of achieving of these goals,favour depersonalized systems of control. Cultures which hold the assumption thatevery organization is, above all, a social structure in which interpersonal relationsdetermine both the organizational goals and the ways in which they are achieved,are the factor in favor of personalized methods of control selection thestandardization of knowledge and direct supervision.

The preceding analysis implicates that certain mechanisms of employeesbehavior control will be more suitable and effective in certain organizational culturetypes. In other words, the efficiency of the method of control will depend on theextent in which this particular method of control is compatible with the culture of the


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organization in which it is being implemented. In order to determine which concretemechanisms of control are suitable and effective in specific types of culture we mustidentify organizational culture types, determine the criteria of their differentiation,relate these criteria with the criteria of methods of control differentiation, and thenrelate the types of culture with the methods of control they imply.

Types of Organizational Culture

The next step in the analysis of the impact of organizational culture on themethod of control selection is organizational culture type classification. Numerousand diverse organizational culture type classifications can be found in literature(Cameron, Quinn, 2011; Deal, Kennedy, 2011; Balthazard, Cooke, Potter, 2006;Denison, Mishra, 1995; OReilly, Chatman, Caldwell, 1991). However, for theanalysis of the impact of organizational culture on behavior control inorganizations two organizational culture classifications by two authors, CharlesHandy (Handy, 1979) and Fons Trompenaars (Trompenaars, 1994), are veryhelpful. Handys classification recognizes power culture, task culture, role culture,and people culture. Trompenaars classification recognizes: family culture, EiffelTower culture, guided missile culture, and incubator culture. These twoclassifications use the same criteria for differentiation of organizational culturetype; hence the recognized types are similar.

Power or family culture is authoritarian. In this type of organizationalculture the metaphor for organization is the patriarchal family with a powerful

father figure at the head. Just as all the power in the family is concentrated in thehands of the pater familias, likewise an organization with this type of culture ishighly centralized. Just as interpersonal relations are the most important aspect ofthe family, similarly in this type of culture social structure and interpersonalrelations will dominate over work structure and tasks. Therefore the degree offormalization of relations in an organization with this type of culture is low, so theculture is informal and without developed structures, systems, or procedures.Implementation of the leaders decisions is conducted through his/her direct andpersonal influence on the organization members. Power or family culture implieshigh dependence of organization members on their leader, who makes all thedecisions and coordinates and controls all the processes in the organization. Thesource of the leaders power is control over resources or charisma, while theorganization members draw their power from closeness to the leader. This type ofculture implies a high degree of flexibility, because the members of theorganization readily accept all the changes coming from the leader.

Role or Eiffel Tower culture is bureaucratic. In this type of culturerationality is highly valued, and it therefore has a high level of standardization,formalization, and specialization, as well as depersonalization. In this type ofculture the organization is understood as a machine in which every part must


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perform its role in a prescribed manner. Formal rules, procedures, systems, andstructures are highly respected, and therefore are highly developed and have acritical role in the functioning of the organization. This is why an organization withrole or Eiffel Tower culture functions through dependence on work structure anddivision of labour and tasks, while relations between people are of secondaryimportance. Role or Eiffel Tower culture presumes unequal distribution of powerin an organization, because the rules the members are obliged to obey areprescribed from the top. This type of culture implies rigidity and resistance tochange, since change disturbs the harmonious functioning of the machine.

Task or guided missile culture is a culture in which organization is atool for problem solving and accomplishing tasks. Results, competency, creativity,

achievement, and change are highly valued. Since tasks are often very complexentire teams are needed to solve them: therefore teamwork is also highly valued.Complex problems solving is entrusted to professionals who have the necessaryknowledge and skills. But in order to use all the potential of the professionalsknowledge and competency they must have autonomy in their work. Therefore inthis type of culture it is presumed that the power in an organization must always bedistributed relatively evenly among its members. Since an organization with task orguided missile culture is focused on tasks, relationships and social structure areof secondary importance.

People or incubator culturevalues individualism and individual growththe most. The organization is understood as an incubator of ideas and people.Individual goals are more important than organizational goals to the members of anorganization, and hence organization is regarded merely as a suitable context forachievement of personal goals. This context may be more or less adjusted to theindividual needs of the members of an organization and this is the basic criterionaccording for valuation of the quality of the organization. The consequence is thategalitarianism in distribution of power is preferred in organizations with this typeof culture. The organization members, most often experts, participate inorganizational decision-making in order to provide conditions for theirdevelopment. Since everything is observed through the prism of organizationmembers personal development, this type of culture is focused on social structureand interpersonal relations, while work structure is secondary.

The four described types of organizational culture differ in many elements.

However, key differences emerge between organizational culture types in bothHandys and Trompenaars classifications, based on two criteria. The first criterionis the distribution of power that is implied by a specific type of organizationalculture in an organization. Distribution of power among members of a social group,such as an organization, is one of the fundamental issues that every group mustsolve in order to be able to function. Resolution of this issue is then built into theculture of the group in the form of cultural assumptions (Hofstede, 2001).According to this criterion, organizational cultures which imply authoritarian or


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hierarchical distribution of power and organizational cultures which implyegalitarian or equal distribution of power can be distinguished. These differences inorganizational culture occur due to differences in the assumptions which theycontain and which Hofstede recognized, at the level of national culture, as powerdistance (Hofstede, 2001). In authoritarian or hierarchical cultures the basicassumption is that unequal distribution of power in social systems is inevitable,useful, and even necessary, and that it is the only way that the system can function.Such are Handys power and role culture and Trompenaars family and EiffelTower culture. In egalitarian cultures the assumption prevails that social systems,such as organizations, need as equal a distribution of power as possible, and thatsuch a distribution of power will provide more efficient functioning of socialsystems and achieving of goals. Such are Handys task and people culture andTrompenaars incubator and guided missile culture.

Table 2: Types of Organizational Cultures

Framework ofcollective actions

Power distribution

Work structure, tasks Social structure, relations

Authoritarian,hierarchical distributionof power

Role culture (H)

Eiffel Tower culture (T)

Power culture (H)

Family culture (T)

Egalitarian distribution ofpower

Task culture (H)

Guided missile culture(T)

People culture (H)

Incubator culture (T)

The second criterion according to which these organizational culture typesdiffer in both classifications is the framework of collective action through whichthe organization achieves its goals. The framework of collective action is also afundamental issue that a social group, such as an organization, must solve in orderto be able to function normally. Every organization is a social system created inorder to achieve its stakeholders goals through collective action. An organization,however, has its work component and its social component, and therefore thefollowing issue must be solved: which of these components is the primaryframework of collective action through which goals are achieved? Are the goals ofan organization achieved through collective action within the framework ofstructures, systems, and procedures, or are they achieved within the framework ofinterpersonal relations? According to the criterion of a suitable framework forcollective action in organizations, we distinguish organizational cultures whichimply collective action through work structures and tasks, and cultures whichimply collective action through social structure and relations. Power culture, familyculture, and people and incubator culture all imply supremacy of social over work


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structure, as well as supremacy of relationships over tasks: the most importantmeans of achieving the goals are people and their relationships. In role culture andEiffel Tower culture, and in task culture and guided missile culture, the goalsof the organization are achieved by depending primarily on work structure andtasks, while people and their relationships are of secondary importance.

Combining both criteria for differentiation of organizational cultures weare able to construct the following matrix:

Correspondence of Organizational Culture Typeand Method of Control in an Organization

The presented classification of organizational cultures and methods ofbehavior controlshows a high degree of correspondence between the criteria usedto differentiate them. The assumptions regarding suitable distribution of power inan organization, by which organizational cultures are differentiated, are obviouslyconnected with the degree of restrictiveness or autonomy which differentiatesmethods of control. Also, the assumptions regarding the suitable framework ofcollective action in an organization, by which organizational cultures aredifferentiated, are obviously connected with the degree of formalization andpersonalization in the methods of control. This enables us to establish hypothesesabout the causal relationships between certain organizational culture types andcertain methods of control.

In authoritarian or hierarchical cultures, in which assumption of unequaldistribution of power prevails, the possible, probable, and efficient methods ofcontrol are restrictive methods which enable low discretion or autonomy of themembers of an organization. Centralization of power implies a strict control of theorganization from one center, most often from the top of the organization. This inturn implies that the employees at the lower hierarchical levels cannot be entrustedwith autonomy and discretion of behavior. Thus, Handys power and role culture,as well as Trompenaars family and Eiffel Tower culture will both imply theimplementation of standardization of processes or direct supervision by themanagement as restrictive mechanisms of control. This is why we may establishthe following hypothesis:

H1: Organizational cultures which assume authoritarian or hierarchical distributionof power imply the implementation of restrictive methods of behavior control in an

organization.

In egalitarian cultures, which assume the need for more equal distributionof power, the possible, probable, and efficient methods of control are methodswhich enable a high degree of autonomy or discretion in organization membersbehavior. In these cultures the organization members expect to play an active rolein everyday functioning of the organization, whereby the autonomy in performing


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of tasks is the necessary prerequisite. Harmony in distribution of power in anorganization precisely implies a higher autonomy and influence of organizationmembers on works processes and performing of tasks. Thus, Handys task andsupport culture, as well as Trompenaars guided missile and incubator culturewill both lead to the implementation of standardization of knowledge, interpersonalcommunication and standardization of output as nonrestrictive methods of control.Therefore we may establish the following hypothesis:

H2: Organizational cultures which assume egalitarian distribution of power imply the

implementation of nonrestrictive methods of behavior control in an organization.

In cultures in which problem solving and achievement of goals is

accomplished primarily through work or formal structure, the possible, probable,and efficient methods of control will be formalized and depersonalized methods ofbehavior control. Cultures oriented towards work structure and tasks will imply theuse of formalized and depersonalized methods of control in which control isachieved by impact on the tasks, and not directly on people. This practically meansthat Handys role and task culture, as well as Trompenaars Eiffel Tower andguided missile culture will imply the implementation of standardization ofprocesses or outputs. Therefore we may establish the following hypothesis:

H3: Organizational cultures oriented towards work structure and tasks imply the

implementation of formalized and depersonalized methods of behavior control in an

organization.

In cultures where problem solving and the achievement of organizationalgoals is accomplished primarily through social structure and relations, the possible,probable, and efficient methods of control will be those in which the primary tool ofcontrol is precisely this social structure and relations. Cultures predominantlyorientated towards social structure and relations will imply the implementation ofpersonalized and lowly formalized methods of control in which control is achievedthrough a direct influence on people, and not on tasks. This means that Handys powerand people culture, as well as Trompenaars family and incubator culture will implythe implementation of direct supervision, standardization of knowledge orinterpersonal communication. Therefore we may establish the following hypothesis:

H4: Organizational cultures oriented towards social structure and tasks imply the

implementation of lowly formalizedand personalized methods of behavior control inan organization.

Based on compliance of the basic criteria for differentiation oforganizational cultures and methods of control we can construct the followingmatrix, from which emerge hypotheses on the direct causal relations betweencertain organizational culture types, and suitable control systems in these cultures.


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Table 3: Alignment of Organizational Cultures and Behavioral Control Types

Framework of collectiveaction / control tool

Power distribution/restrictiveness

Cultures oriented toward andcontrol achieved throughwork structure and tasks

Cultures oriented toward andcontrol achieved through social

structure and relations

Authoritarian,hierarchical cultures

Restrictive control

methods

Role culture (H)

Eiffel Tower culture (T)

Standardization of processes

Power culture (H)

Family culture (T)

Direct supervision

Egalitarian cultures

Non restrictive methods

Task culture (H)

Guided missile culture (T)

Standardization of outputs

People culture (H)

Incubator culture (T)

Standardization of knowledge

Direct interpersonalcommunication

The presence of role or Eiffel Tower culture in an organization impliesthe implementation of standardization of processes as the method of control oforganization members behavior. There is a high degree of compliance between the

assumptions of this type of organizational culture and the assumption underlyingstandardization of processes. Both role culture and Eiffel Tower culture assumethat an organization is a rational instrument for achieving goals, which basicallyunderlies standardization of processes as a control mechanism. Since the rationalityof all processes in an organization is assumed in this type of culture, it is onlynatural that control of these processes is achieved through a rational, formalizedand depersonalized system. Role and Eiffel Tower culture assume the necessityof unequal distribution of power in an organization, which is also the condition forthe implementation of standardization of processes in which the members of anorganization have very low degree of autonomy and discretion with respect to theselection of methods, manners and tools for performing of work tasks. Theassumption of rationality in role culture and Eiffel Tower culture also implies

their focus on work component and tasks. Since work component of theorganization and tasks are the fundamental object of control in standardization ofprocesses, it is clear that this method of behavior control fits this organizationalculture type. This is why we may establish the following hypothesis:

H5: Role culture and Eiffel Tower culture imply the implementation ofstandardization of processes as the method of behavior control in an organization.


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The basic assumption in power culture and family culture is that anorganization is an instrument in the leaders hands. There is also the assumptionthat the leader, or the head of the family, should concentrate all the power in theorganization, while the rest of the members of organization, or members of thefamily, should obey. Starting from such assumptions, the control of organizationmembers behavior can only be accomplished through implementation of directsupervision by the leader or other managers. Since the metaphor of this type ofculture is a family with a strong father figure at the head, it is clear that in thisculture everything will depend on the leader of the organization. Hence, itsmembers expect the leader to directly control the behavior of all the members ofthe organization by personally supervising them. Compatible with the familymetaphor is the assumption of the need for authoritarian or hierarchical distributionof power in the organization. It is this assumption that implies the implementationof direct supervision by the management as a restrictive method of control whichoffers low autonomy to the members of an organization. The metaphor of theorganization as a family in this type of culture also leads to orientation towardssocial structure and relations. Just as interpersonal relations, and not tasks, areprimary in a family, likewise social structure and relations are the key componentin organizations with power culture and family culture. Therefore, this type ofculture is compatible with direct supervision by the management as a method ofcontrol, since it implies that control is achieved through people and not throughtasks. This is why we may establish the following hypothesis:

H6: Power culture and family culture imply the implementation of direct

supervision as the method of behavior control in an organization.Task culture and guided missile culture contain assumptions and beliefs

which direct managers and employees to understand the organization as a meansfor problem solving and task accomplishment. In this type of culture the membersof the organization value highly individual accomplishment, results, and creativity.Therefore the most suitable method of control in organizations with task andguided missile culture is standardization of outputs which starts from the controlof the output (results). Task culture and guided missile culture assume the needfor egalitarian distribution of power in which all the members of an organizationimpact on the functioning of organization. This type of culture creates theconditions for standardization of output because this method of control implies

active role of the members of an organization, their high autonomy and discretionregarding the selection the suitable manner of work. Task culture and guidedmissile culture impose a focus on tasks and work structure on the members of anorganization, which complies with the implementation of standardization of outputsince through the implementation of this method the control is conducted preciselythrough controlling tasks and outputs. Therefore a system of standardization ofoutput seeks conditions which are enabled by task culture and guided missileculture: a high level of autonomy for the organization members and their focus ontasks. This is why we may establish the following hypothesis:


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Neboja Janiijevi

H7: Task culture and guided missile culture imply implementation ofstandardization of output as the method of behavior control in an organization.

People culture and incubator culture assume the egalitarian distribution ofpower in an organization, and also an orientation towards social structure andrelationships, which implies the application of direct interpersonal communicationor standardization of knowledge as a method of control of organization membersbehavior. These two mechanisms of control imply that it is conducted through theinfluence on people either through direct communication with them or throughshaping of their knowledge, skills, ethic norms etc. This is why these methods ofcontrol can be efficiently implemented only in organizations in which socialstructure and interpersonal relations between organization members are highly

valued, which is precisely the characteristic of people and incubator culture. Sincestandardization of knowledge and direct interpersonal communication cannot beimplemented without the active involvement and a high degree of participation ofthe members of an organization, the application of these two control mechanisms ispossible only in cultures with egalitarian distribution of power, such as in peopleand incubator culture. Therefore we may establish the following hypothesis:

H8: People culture and incubator culture imply the implementation of directinterpersonalcommunication and standardization of knowledge as the method ofbehavior control in an organization.

Implications and Limitations

This paper has several significant theoretical and practical implications.The most important theoretical implication is the usefulness of further research intorelations between organizational culture and behavior control in organizations. Thepaper has shown that there is a theoretical basis for the assumption thatorganizational culture is one of the factors in selection of method of control in anorganization. Now it is necessary to empirically test this assumption by testing thehypotheses generated in this paper. This paper also implies the need to expandresearch into the impact of organizational culture to other aspects of control, suchas motivation and other reactions of the members of an organization, flexibility ofthe method of control etc. It is also necessary to explore whether the organizationalculture impacts the control systems efficiency? From this paper an assumption alsoemerges that there may be a feedback effect of the method of behavior control onorganizational culture. Can the long-lasting application of a certain method ofbehavior control influence the assumptions, values and norms of the employees,and thereby the organizational culture as well, and if so, how? Finally, the paperhas pointed out the need to explore the impact of organizational culture on otherelements of organization and management, such as leadership style, organizationalstructure, organizational learning, motivation, and reward system. Practicalimplication of this paper is that the company management can be recommended to,


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during designing of method of control, choose the method of control which iscompatible with the culture of their organization. This will indeed contribute to theefficiency and success of control.

This paper also has significant limitations. The first and foremost limitationis in the very nature of this paper, which is explorative and theoretical. The paper hasresulted in hypotheses regarding the relations between organizational culture andmethods of control which are yet to be empirically proven. Without empirical testingthe findings of this paper are not entirely valid. Also, the paper is limited toinvestigating organizational culture impact on just one aspect of control in anorganization control of behavior of the members of an organization. It does notexamine the impact of culture on other aspects of control, such as performance

control, which would complete the picture of the impact of organizational cultureof control in an organization. Finally, the limitation of this paper is the exclusivereliance on just one classification of methods of control and two similarorganizational culture types classifications. Given the abundance of classificationsof both methods of control and organizational culture, it is possible that differentresults would have been obtained had those other classifications been used.

References

1. Alvesson, M. (2002) Understanding Organizational Culture.London: Sage2. Balthazard P. et al. (2006) Dysfunctional Culture, Dysfunctional Organization: Capturing

the Behavioral Norms that Form Organizational Culture and Drive PerformanceJournal

of Managerial Psychology, 21 (8): 709-732.3. Cameron, K.S., Quinn, R.E. (2011)Diagnosing and Changing Organizational Culture:The competing vales framework. Reading, Ma: Addison-Wesley.

4. Deal T., Kennedy A. (2011) Corporate Cultures: The Rites and Rituals of CorporateLife. New York: Perseus Books Publishing.

5. Denison, D. R., Mishra, A. K. (1995). Toward a theory of organizational culture andeffectiveness Organization Science, 6: 204223.

6. Fiske, S.T., Taylor, S.E., (1991) Social cognition.. New York: McGraw Hill.7. Handy, C. (1979) Gods of Management. London: Pan.8. Hofstede, G. (2001) Cultures Consequences, Thousand Ouks, CA: Sage Publications9. Janiijevi N. (2011) Methodological Approaches in The Research of Organizational

Culture.Economic Annals, LVI (189): 69 -100.10. Kaplan,R., & Norton, D. (2008). The Execution Premium. Boston. Harvard Business

Press.11. Martin, J. (2002) Organizational Culture: Mapping the Terrain. London: Sage.12. Mintzberg H. (1979) The Structuring of Organizations. Englewood Cliffs: Prentice Hall.13. OReally C.A., Chatman J.A., Caldwell D.F. (1991) People and Organizational Culture:

A Profile Comparation Approach to Assessing Person Organization Fit. Academy ofManagement Journal, (34): 487 516.

14. Schein E. (2004). Organizational Culture and Leadership. Thousand Oaks: SagePublications.

15. Trompenaars F. (1994)Riding Waves of Culture. New York: Irwin.


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16. Smircich L. (1983) Organizations as shared meanings, in L. Pondy, P. Frost, G, Morgan,T. Dandridge (eds) Organizational symbolism, (pp 55 65). Greenwich, CT: JAI.17. Wilderom C. et al. (2000) Organizational Culture as a Predictor of Organizational

Performance in N. Ashkanasy et al. (eds) Handbook of Organizational Culture &Climate. (pp 193-209). Thousand Oaks: Sage.

UTICAJ ORGANIZACIONE KULTURENA KONTROLU PONAANJA U ORGANIZACIJAMA

Rezime: U radu se istrauje uticaj organizacione kulture na kontroluponaanja lanova organizacije. Svaka organizacija mora da razvije odreenimetod kontrole ponaanja lanova kako bi obezbedila koordiniranu i efikasnu

kolektivnu akciju u ostvarivanju svojih ciljeva. Organizaciona kultura svojimpretpostavkama, vrednostima i normama opredeljuje nain na koji se uorganizaciji razume priroda ljudskog ponaanja u socijalnim grupama, patako i pogodnog naina kontrole tog ponaanja. U radu se koristiMincbergova (Mintzberg) klasifikacija pet metoda kontrola ponaanja uorganizacijama koji se diferecniraju po dva osnovna kriterijuma: nivorestriktivnosti i nivo formalizacije odnosno personalizacije. S druge strane,klasifikacije organizacionih kultura autora Hendija (Handy) i Trompenara(Trompenaar) prepoznaju po 4 tipa kultura koji se mogu izdiferencirati na poosnovu dva kriterijuma: distribucija moi i orijentaicja na radnu ili socijalnustrukturu. Na osnovu slaganja kriterijuma diferenciranja tipovaorganizacionih kultura i metoda kontrole ponaanja u radu se postavljajuhipoteze o uzrono-posledinim relacijama izmeu njih.

Kljune rei: organizacija, kontrola, organizaciona kultura, organizacionoponaanje


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