Summary of the article: "Control in an Age of Empowerment".
Part of the subject: Strategy Implementation.
Article: 4
Week: 3
Part of the master: Strategic Management
Tilburg University 2016.
Fine explanations are created between livers and the relationships between them
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By: viviyu366 • 7 year ago
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Art. 4: Simons, R. 1995 Control in an age of
empowerment - Harvard Business Review
Robert Simons (1995), a professor in Harvard Business School, identified that leaders in
today’s dynamic organizations are challenged on how to use sufficient control that will still
promote “flexibility, innovation, and creativity” among employees. One of the most difficult
problems managers face today is maintaining this control, efficiency and productivity while
still giving employees the freedom to be creative, innovative and flexible. Giving employees
too much autonomy has led to disaster for many companies, including such well-known names
such as Sears and Standard Chartered Bank. In these companies and many others, employees
had enough independence that they were able to engage in and mask underhanded, and
sometimes illegal, activities. When these deviant behaviors finally came to light, the
companies incurred substantial losses not only financially, but also in internal company morale
and external public relations.
One method of preventing these kinds of incidents is for companies to revert to the
“machinelike bureaucracies” of the 1950s and 60s. In these work environments, employees
were given very specific instructions on how to do their jobs and then were watched constantly
by superiors to ensure the instructions were carried out properly.
In the modern corporate world, this method of managing employees has all but been
abandoned except in those industries that lend themselves to standardization and repetition
of work activities (e.g., in casinos and on assembly lines). In most industries, managers simply
do not have time to watch everyone all the time. they must find ways to encourage employees
to think for themselves, to create new processes and methods, while still retaining enough
control to ensure that employee creativity will ultimately benefit and improve the company.
To reconcile the conflict between creativity and control, Simons (1995) created tools
identified as the four levers of control. Each lever has its own specific purpose that will aid
leaders in bringing out employee creativity and dedication toward achieving organizational
goals. The four control levers or “systems” that can aid managers in achieving the balance
between employee empowerment and effective control are the following:
1. Diagnostic control systems;
2. Beliefs systems;
3. Boundary systems, and
4. Interactive control systems.
Diagnostic control systems
This control lever relies on quantitative data, statistical analyses and variance analyses.
Manager use these and other numerical comparisons (e.g. actual to budget, increases/decreases
in overhead from month to moth, etc.) to periodically scan for anything unusual that might
indicate a potential problem.
The diagnostic systems can be used to monitor progress towards goals, measuring output in
comparison with “preset standard of performance”, and fine-tuning efforts and practice to
ensure that upcoming output will “more closely match goals”. When solely using diagnostic
, systems may not be effective and may lead to risky behaviors. To avoid risky behaviors, belief
and boundary systems (“the yin and the yang”) need to be enforced. However, to be efficient
and effective diagnostic systems need to also be in partner with interactive control systems.
Diagnostic systems can be very useful for detecting some kind of problems, but they can also
induce employees and even managers to behave unethically in order to meet some kind of
preset goal. Meeting the goal, no matter how it’s done, ensures the numbers won’t fluctuate in
a manner that would draw negative attention to a particular department or person.
Employee bonuses (and sometimes even employment, itself) are often based on how well
performance goals have been met or exceeded, measured in quantitative terms. If the goals
are reasonable and attainable, the diagnostic system works quite well. It enables managers to
assign tasks and go on to other things, releasing them from the leash of perpetual
surveillance. Empowered employees are free to complete their work, under some but no undue
pressure to meet a deadline, productivity level, or other goal, and to do it in a way that may
be new or innovative.
However, when goals become unrealistic, empowered employees may sometimes use their
capacity for creativity to manipulate the factors under their control in order not to fall short
of their manager’s expectations. Such manipulation can only have very short-term positive
effects and can very possibly, depending on their magnitude, lead to long-run disaster for the
company.
Beliefs Systems
This control lever is used to communicate the tenets (=a principle or belief, especially one of
the main principles of a religion or philosophy) of corporate culture to every employee of the
company. Beliefs systems are generally broad and designed to appeal to many different types
of people working together in many different departments.
Belief systems will aid leaders empower and move the team in committing to the
organization’s resolve by communicating “core values”. Frequent reminder of company values
will provide direction to influence employees to strive for excellence, to respect others, and
create more business value. The beliefs system draws motivation and inspiration in the
achievement of goals.
In order for beliefs systems to be an effective lever of control, employees must be able to see
key values and ethics being upheld by those in supervisory and other top executive positions.
Senior management must be careful not to adopt a particular belief or mission simply because
it is in vogue to do so at the time, but because it reflects the true nature and value systems of
the company as a whole.
It is easier for employees to understand on an informal, innate level the mission and credo of
a company that operates in only one industry, as did many companies in the past. As companies
grow more complex, however, it is becoming more and more necessary to establish form,
written mission statements and codes of ethics so that there can be no mistaking where the
company is going and how it is going to get there.
Boundary Systems
This control lever is based on the idea that in an age of empowered employees, it has become
easier and more effective to set the rules regarding what is inappropriate rather than what is
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