Mullins L.J. Management and organisational behaviour, Seventh edition

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CHAPTER 20 RESOURCING THE ORGANISATION

CASE STUDY 20.1

Wessex Computers has been running for five years

now, and it is still virtually a ‘one-person business’

though there are 20 employees. While the firm sells

books, magazines and small ‘micro’ games, its busi-

ness is predominantly in microcomputers. Staff thus

spend their time in selling computers and persuad-

ing clients that package programs are applicable to

their business or in providing software packages to

suit individual requirements. The employees are

nearly all in the 20–25 age group, and very keen and

interested in their jobs, obviously involved in learn-

ing a trade which has every prospect going for it in

the years ahead. Every opportunity is taken to dis-

play their wares at computer shows and exhibitions

and to help in running courses on micros in an

effort to make people aware of the ‘user-friendly’

nature of the equipment.

The site of the main part of the business is in what

was once a main shopping street but has now been

bypassed, and is in fact a cul-de-sac. The premises con-

sist of a small shop front with 600 square feet of

shopping area in which are displayed microcomputers,

books, computer games, calculators and standard soft-

ware. Behind is a workroom, and above more

workrooms and office space, in all 3000 square feet.

Over the shop itself lived a tenant, who has just left

the property so that another 1000 square feet has

become available. The proprietor hopes to use this to

solve the storage problems and to create one large

room which can be used for setting up a permanent

training section. His idea is to charge customers a

moderate fee so that their employees can be taught

how to run their computers. The staff currently con-

sists of the proprietor, a secretary/bookkeeper, three

receptionists/assistants and seven programmers/cus-

tomer support staff. As this is a small organisation and

somewhat overworked the specific tasks are flexible

and depend on individual preferences.

The other part of the premises is about five miles

away in Embridge; three years ago Wessex Computers

won a local ‘Enterprise’ competition run by the cor-

poration, for which the prize was this site rented at a

reduced cost. It is used as working quarters for five pro-

grammers, two customer support staff involved in

repairing and servicing the microcomputers and two

administrative staff. Control of these staff and effective

charging-out of their work to customers has not

proved very satisfactory.

As far as Wessex Computers is concerned, some suc-

cess has been achieved by lending out the

microcomputers free of charge for about ten days or by

renting them out at a minimal charge for a month or

two so that customers have a chance to get acquainted

with them. Ninety per cent of such clients end by

buying the machine and to some extent the rental

could be offset against the capital cost. The owner is

considering going into the leasing business as poten-

tial buyers are worried about machines becoming

quickly outdated; a financing company deals with the

funding of this side of the business. Maintenance work

has to be done at times, although most frequently

problems are caused by either mishandling of floppy

disks by the customers, or failure to read the instruc-

tion handbooks carefully. Staff have to spend about

one or two hours with each customer teaching them

to use the machines even though comprehensive

instruction manuals are available.

Some six months ago, with everyone working

particularly hard, the record keeping was neglected,

and the overdraft increased rapidly. The bank

became nervous and was only reassured when an

independent accountant was called in to complete

the year’s accounts, and to produce a report and

cash flow forecast for a few months ahead.

Among the accountant’s remarks was the com-

ment that the owner was working far too hard, for

too many hours, trying to be sales manager, general

manager and office manager. Obviously this pressure

of work could not be maintained and some aspect of

his work had to be shed. Since the least interesting

part of the business for him was the ‘paperwork’, and

the most interesting was selling microcomputers,

meeting people and solving problems with them, he

decided to appoint an office manager to take control

of office procedures, in the most convenient way.

YOUR TASKS

(a) Produce a job description and person specifica-

tion for the appointment of the office manager.

(b)

Prepare a press advertisement covering the vacancy

and list other sources which could be used.

which could be used.

(Make clear any reasonable assumptions you feel are necessary.)

825

Please enter your password: effective resource management

at Wessex Computers

826

PART 7 MANAGEMENT OF HUMAN RESOURCES

CASE STUDY 20.2

Inky fingers: HRM failure at Sumprint Ltd

Sumprint Ltd was established in the mid-1980s as a

partnership. The enterprise was converted to a private

limited company in the second year of operation.

The shares were wholly owned by members of the

two families of the original founders.

The business was initially concerned with print-

ing of leaflets, club newsletters and similar small

jobs. This aspect of the company’s activities had

been largely superseded by firm contracts for print-

ing technical manuals and brochures.

By the end of 2000 the company had grown to

employ around 180 staff. Fifty of these employees

were engaged in marketing, finance, administration

and personnel functions. There was minimal inter-

action between these functions and each tended to

operate as separate entities.

The financial department and small marketing

section kept the general operation of the sales and

production activities closely under their supervision.

The administration department operated all the

monitoring and control systems and provided clerical

support to finance, sales and production. The func-

tion was well organised and was managed by the

daughter of the founders. She had gained consider-

able working experience, initially with a large charity

and subsequently as office manager in a small engi-

neering business. She had held her present post for

four years and had acquired a high level of self-

assurance. Her confident manner made her dealings

with the other departments easier to manage. Indeed,

on some occasions it made the situation possible.

The same level of development and attention had

not been give to the personnel aspects of the business.

This function had always tended to receive less atten-

tion and had been without any designated person in

charge for some months. Now that the Directors had

taken on an experienced Personnel Manager there

were hopes that the situation would improve.

Almost of necessity each department had handled

their own personnel needs. With this background it

was no surprise to the new Personnel Manager that

there was little in the way of formal systems and pro-

cedures. He was working on these when there was an

incident in the production department.

The supervisor wished to take disciplinary action

against an employee for disobeying an instruction

and the employee wished to register a grievance

against the supervisor for the way the supervisor had

acted. This situation, if properly handled, would pro-

vide the Personnel Manager with the opportunity to

show the importance of the function.

At the same time the Administration Manager

had employed two new staff to start at the begin-

ning of the next month. This gave her three weeks

to produce an induction programme.

One of the prospective employees was a mature

woman with considerable experience of office rou-

tine while the other was an eighteen-year-old

straight from college.

The Administration Manager knew she would get

no help from personnel as she had always been very

critical of the way the personnel function had been

neglected. In contrast to this she offered some assis-

tance to the Personnel Manager, both personally

and by two of the staff. Unfortunately, this offer was

rejected in a rather offhand manner. He said that he

wanted to sort things out himself.

The purchasing of materials and general items had

always been the responsibility of the Administration

Manager, but stock control and the small warehouse

was the responsibility of the Production Supervisor.

The arrangement normally worked satisfactorily, but

when there was a breakdown on the flow of informa-

tion, production could be interrupted.

YOUR TASKS

(a) Discuss the weakness of the informal structure in

Sumprint and suggest how improvements could

be made.

(b) Advise the Personnel Manager on the immediate

way forward in the combined disciplinary and

grievance case.

should take to devise the induction programme

for the two new staff.

CHAPTER 20 RESOURCING THE ORGANISATION

827

NOTES AND REFERENCES

1. West, M. and Patterson, M. ‘Profitable Personnel’,

People Management, 8 January 1998, p. 29.

2. Riches, A. ‘How Do You Attract and Retain the Best

People?’ Organisational Change & Leadership Development,

www.anneriches.com.au, accessed 11 March 2003.

3. Rabey, G. ‘The Changing World of Job Recruitment

and Selection’, New Zealand Management, vol. 49, no.

10, November 2002, pp. 38–41.

4. Holloway, A. ‘Finding the Right Fit’, Canadian Business,

vol. 75, no. 22, 25 November 2002, pp. 119–22.

5. Beardwell, I., Holden, L. and Claydon, T. Human

Resource Management: A contemporary approach, Fourth

edition (2004), p. 181.

6. Recruitment and Induction, Advisory Booklet, ACAS,

April 2003, p. 7.

7. Torrington, D., Hall, L. and Taylor, S. Human Resource

Management, Fifth edition, Financial Times Prentice

Hall (2002), p. 63.

8. William Mercer Frazer Ltd. Manpower Planning Survey

Report, August 1989.

9. Recruitment and Induction, Advisory Booklet, ACAS,

April 2003, p. 5.

10. See, for example: Mullins, L. J. ‘Job Analysis – Know

the Job and the Person to Do It’, International Journal of

Hospitality Management, vol. 4, no. 4, 1985, pp. 181–3.

11. Senter, A. ‘Recruiting to Stop the Revolving Door’,

Management Today, February 1999, pp. 80–2.

12. Townsend, R. Further up the Organisation, Coronet

Books (1985), pp. 115–16.

13. Belbin, R. M. Changing the Way we Work, Butterworth-

Heinemann (1997), p. 13.

14. Peters, T. Thriving on Chaos, Pan (1989).

15. Plachy, R. J. ‘Writing Job Descriptions that Get Results’,

Personnel, vol. 64, no. 10, October 1987, pp. 56–63.

16. Employment Department Group, Equal Opportunities:

Ten Point Plan for Employers, 1999.

17.

See for example: ‘Why Employers Must Look Further

than Usual Suspects’, Employment News, no. 285, February

2001, Department for Education and Employment.

18. Cane, D. Kaizen Strategies for Winning Through People,

Pitman Publishing (1996), p. 75.

19. Rodger, A. and Cavanagh, P. ‘Personnel Selection and

Vocational Guidance’, in Welford, A. T. et al. (eds)

Society: Problems and Methods of Study, Revised edition,

Routledge and Kegan Paul (1967).

20. Garcia, B., Meador, M. G. and Kleiner, B. ‘ How to Hire

the Right Person the First Time’, Nonprofit World, vol.

21, no. 2, March/April 2003, pp. 9–11.

21. Simms, J. ‘Unnatural Selection’, Director, vol. 56, no. 8,

March 2003, pp. 70–4.

22. Armitage, K. ‘Fine … But What Do You Actually Mean?’,

The British Journal of Administrative Management,

January/February 1998, p. 22.

23. Reed, J. ‘The Scatter-gun Approach’, People Management,

26 October 2000, p. 69.

24. Lucas, E. ‘Online Talent Pool’, Professional Manager, vol.

12, no. 2, March 2003, pp. 29–32.

25. ‘Effective Organisations: the People Factor’, Advisory

Booklet, ACAS, November 2001, p. 20.

26. Some of the ideas expressed are based on the author’s

experience as a visiting selector for a number of organi-

sations, including study of the selection process for

long-term volunteers with the United Nations

Association International Service.

27. See, for example: Thatcher, M. ‘A Test of Character’,

People Management, 15 May 1997, pp. 34–8.

28. Lucas, E. ‘Virtual Realities of Candidate Selection’,

Professional Manager, March 1999, pp. 10–12.

29. Barrett, R. S. ‘Guide to Using Psychological Tests’, in

Fleishman, E. A. (ed.) Studies in Personnel and Industrial

Psychology, Revised edition, Dorsey Press (1967), p. 58.

30. See, for example Furnham, A. The Psychology of

Behaviour at Work, Psychology Press (1997); and

Wilson, C. ‘Tough Choices’, The British Journal of

Administrative Management’ May/June 1999, pp. 10–12.

31. Anastasi, A. Fields of Applied Psychology, McGraw-Hill

(1964), p. 71.

32. See, for example: Shipton, H., Shackleton, V. and

Gillespie, M. ‘Assessment Centres’, People Management,

8 January 1998, pp. 41–2.

33. See for example: Burn, A. ‘Testing times’, The British

Journal of Administrative Management, November/

December 1998, pp. 16–17.

34. Butcher, D. ‘The Interview: Rights and Wrongs’,

Management Today, April 2002, pp. 52–7.

35. Losyk, B. ‘How to Hire the Right People’, Public

Management, vol. 85, no. 5, June 2003, pp. 24–6.

36. See, for example: Green, J. ‘Pride and Prejudice: Playing

Fair in the Interview’, Administrator, April 1996,

pp. 18–19.

37. See, for example: Muir, J. ‘Nobody Expects the Spanish

Inquisition’, Chartered Secretary, June 1996, pp. 26–7.

38. Simons, T. ‘Interviewing Job Applicants – How to Get

Beyond First Impressions’, Cornell Human Resource

Administration Quarterly, December 1995, pp. 21–7.

39. See, for example: Glaser, C. B. and Smalley, B. S. ‘Four

Minutes That Get You a Job’, Reader’s Digest, January

1994, pp. 69–72.

40. See for example: Pilbeam, S. and Corbridge, M. People

Resourcing: HRM in Practice, Second edition, Financial

Times Prentice Hall (2002).

41. Farnham, D. and Stevens, A. ‘Developing and

Implementing Competence-based Recruitment and

Selection in a Social Services Department: a Case Study

of West Sussex County Council’, The International

Journal of Public Sector Management, vol. 13, no. 4, 2000,

pp. 369–82.

42. Whiddett, S. and Kandola, B. ‘Fit for the Job?’, People

Management, 25 May 2000, pp. 33–8.

43. Moloney, K. ‘History Repeating’, People Management, 6

July 2000, pp. 43–6.

44. Meyrick, M. ‘In Search of Excellence’, The British Journal

of Administrative Management, September/October 2001,

pp. 24–5.

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PART 7 MANAGEMENT OF HUMAN RESOURCES

45. See, for example: Green, J. ‘Pride and Prejudice: Playing

Fair in the Interview’, Administrator, April 1996,

pp. 18–19.

46. Drucker, P. F. ‘Getting Things Done: How to Make

Good People Decisions’, Harvard Business Review, vol. 4,

July–August 1985, p. 22.

47. Recruitment and Induction, Advisory Booklet, ACAS,

April 2003, pp. 34–5.

48. See, for example: Tyson, S. and Fell, A. Evaluating the

Personnel Function, Second edition, Stanley Thornes

(1992).

Use the Financial Times to enhance your understanding of the context and practice of management and

organisational behaviour. Refer to articles 3, 21, 22 and 24 in the BUSINESS PRESS section at the end of

the book for relevant reports on the issues explored in this chapter.

IMPROVING

ORGANISATIONAL

PERFORMANCE

Part 8

Part 2

THE

ORGANISATIONAL

SETTING

Part 3

THE ROLE OF

THE MANAGER

Part 6

ORGANISATIONAL

STRUCTURES

Part 7

MANAGEMENT

OF HUMAN

RESOURCES

Part 5

GROUPS AND

TEAMWORK

Part 1

MANAGEMENT AND

ORGANISATIONAL

BEHAVIOUR

Part 4

THE

INDIVIDUAL

Part 8

IMPROVING

ORGANISATIONAL

PERFORMANCE

Technology and innovation

Despite the bad odour that clings to the very

notion of power because of the misuses to which

it has been put, power in itself is neither good nor

bad. It is an inescapable aspect of every human

relationship.

Alvin Toffler

Powershift, Bantam (1990)

The success of any form of social influence or

control depends ultimately upon altering the

ability of others to achieve their goals or satisfy

their needs.

Douglas McGregor

The Human Side of Enterprise, McGraw-Hill (1960)

An underlying feature of the

people–organisation relationship is

management control and power. Control

systems exist in all spheres of the operations of

the organisation and are a necessary part of the

process of management. Work organisations

are complex systems of social relationships,

status and power and attention should be

given to the manager–subordinate

relationships. The manager needs to

understand the nature of power and control in

order to improve organisational performance.

LEARNING OUTCOMES

After completing this chapter you should be able to:

 explain the nature and importance of control as an

integral part of the process of management;

 identify the essential elements in a management

control system, and different forms and classifications

of control;

 detail characteristics of an effective control system,

and examine the importance of behavioural factors;

 explain the nature of power and management control,

and review perspectives of organisational power;

 explore the process of delegation, and detail a

planned and systematic approach to delegation;

 examine the concept and importance of empowerment;

 assess the nature and impact of financial and

accounting systems of control.

ORGANISATIONAL CONTROL

AND POWER

Photo: Belinda Lawley/Panos Pictures

In our discussion of the nature of management (Chapter 6) we drew attention to the

motivation of staff and the importance of control over the performance of other

people’s work. 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 individual derives from membership of an organisation

and the costs of such benefits.

Organization implies control. A social organization is an ordered arrangement of individual

human interactions. Control processes help circumscribe idiosyncratic behaviors and keep them

conformant to the rational plan of the organization. Organizations require a certain amount of

conformity as well as the integration of diverse activities. It is the function of control to bring

about conformance to organizational requirements and achievement of the ultimate purposes of

the organization.

Control is therefore an integral part of the process of management.

Management control is primarily a process for motivating and inspiring people to perform organ-

ization activities that will further the organization’s goals. It is also a process for detecting and

correcting unintentional performance errors and intentional irregularities, such as theft or

misuse of resources.

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 is critical to make very clear to individual contributors exactly what performance –

what results, within what guidelines, parameters and deadlines – the organization

needs, and will therefore reward.’

Control is also often associated with the act of delegation. For example, Payne and

Payne define control as: ‘monitoring the performance of the delegated task so that the

expected results are successfully achieved’. However, this does not imply that control is

undertaken only by the manager. The person to whom the task is delegated can also

often effectively identify and operate day-to-day controls.

Delegation and empower-

ment are discussed later in this chapter.

Control can stand for reliability, order and stability. Whenever a person inquires ‘I

would like to know how well I am doing’, this in effect can be seen as asking for con-

trol. Members of staff want to know what is expected of them and how well they are

performing. This places emphasis on the exchange of information, and feedback and

comparison of actual results against planned targets. Control is a basis for training

needs, the motivation to achieve standards and for the development of individuals.

However, as Wilson, for example reminds us, individuals are not just passive objects

of control: ‘They may accept, deny, react, reshape, rethink, acquiesce, rebel, or conform

and create themselves within constraints impose on them.’

Most people show an ambivalence towards control. While they may not wish to

have them applied by other people to their own performance they recognise the need

for, and usefulness of, control systems. Under certain conditions, however, people may

actually desire control. Lawler, for example, 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.

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PART 8 IMPROVING ORGANISATIONAL PERFORMANCE

THE MEANING OF CONTROL

Individual

behaviour

At the organisational level, management need to exercise ‘control’ over the behaviour

and actions 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, for example, an

organisation without control is impossible.

Every organization has control systems that co-ordinate the exercise of decision rights that are

dispersed among individuals. Control systems also serve another important function in the

organization. They measure how effectively decisionshave been translated into results. This

second feature of control systems relates to the goal achievement of the company. In this per-

spective, control systems are about influencing the behaviour of individuals in the interest of the

corporation. Both functions are closely interlinked.

Control completes the cycle of managerial activities. It involves the planning and

organisation of work functions, and guiding and regulating the activities of staff.

Control provides a check on the execution of work and on the success or failure of the

operations of the organisation. The whole purpose of management control is the

improvement in performance at both the individual and organisational level. (See

Figure 21.1.) Lack of adequate supervision and control, or of an effective risk-manage-

ment system, are a major feature of poor organisational performance and can even lead

to the collapse of a company.

A major international report undertaken by Proudfoot

Consulting found that poor management in terms of inadequate planning and control,

and insufficient day-to-day supervision of work is still the largest single reason for lost

productivity.

The controversial nature of control

The concern for the regulation of behaviour and improvement in performance raises

questions as to the ethical nature of control. For example, in discussing the goals of

organisational behaviour (OB) Robbins makes the following observation:

The most controversial goal is using OB knowledge to control behavior. When a manager asks,

for instance: ‘What can I do to make Dave put more effort on his job?’ that manager is concerned

with control. Why is control controversial? A democratic society is built upon the concept of

CHAPTER 21 ORGANISATIONAL CONTROL AND POWER

833

Organisational

performance

Figure 21.1 The nature of management control

personal freedom. Therefore, the idea that one person should attempt to get others to behave in

some premeditated way, when the subjects of that control may be unaware that their behavior is

being manipulated, has been viewed in some circles as unethical and/or repugnant … However,

you should be aware that the control objective is frequently seen by managers as the most valu-

able contribution that OB makes towards their effectiveness on the job.

Unfortunately, ‘control’ often has an emotive connotation and is interpreted in a nega-

tive manner to suggest direction or command by the giving of orders. By their very

nature, control systems are concerned with the regulation of behaviour. People may be

suspicious of control systems and see them as emphasising punishment, an indication

of authoritarian management, and a means of exerting pressure and maintaining disci-

pline. Some writers seem to take this view, and even to suggest that organisational

control is exploitation of employees.

This is too narrow an interpretation, however. There is far more to control than

simply a means of restricting behaviour or the exercise of authority over others.

Control is not only a function of the formal organisation and a hierarchical structure

of authority. It is also a feature of organisational behaviour and a function of interper-

sonal influence.

Control is, therefore, a general concept which is applied to both

individual behaviour and organisational performance. Nevertheless, we should

note, for example, the comments by Drummond who in a critical discussion about

mechanistic thinking in organisations makes the point: ‘common sense suggests that

control is preferable to anarchy, and more control is preferable to less. While such

assumptions are not necessarily wrong, they are not universally correct either.’

In a discussion of management processes in the new century, Lorange notes that the

control process will also change dramatically:

Perhaps the name ‘control’ will no longer exist, given the behaviourally dysfunctional overtones

that tend to come with it. We shall, however, still use it here as a convenient term of reference,

and remember that the content behind the phenomenon will be dramatically different.

One view of control is based on the classical approach and traditional assumptions of

organisation and management. Control is viewed as an essential feature of formal organ-

isation and a hierarchical structure of authority. It may also be recalled that the idea of

‘Taylorism’ and scientific management (discussed in Chapter 3) can be seen as represent-

ing a form of management control over workers and the actual process of work. A

distinguishing feature of scientific management was that workers should be controlled

not only by the giving of orders and maintenance of discipline, but also by removing

from them decisions about the manner in which their work was to be carried out.

The traditional view assumes the amount of control is fixed. It is based on the use of

routine procedures, and the exercise of rules and regulations in an attempt to create

consistency and predictability in behaviour. As a consequence of their status and posi-

tion within the hierarchical structure, managers have control over the flow of

information which mainly moves down the organisation through vertical lines of com-

munication. For example, Argyris maintains that traditional forms of managerial

controls tend to create situations in which the employees feel dependent on their super-

iors and fearful of the staff in charge of the various types of control.

By contrast, the human relations approach places emphasis on the social organisa-

tion, and the importance of groups and informal relationships. Control is seen more as

a feature of interpersonal influence and takes place within a network of interaction and

communications. Those writers who place emphasis on the social needs of individuals

within the work organisation tend to see a high level of control as self-defeating. It

834

PART 8 IMPROVING ORGANISATIONAL PERFORMANCE

ASSUMPTIONS OF ORGANISATION AND MANAGEMENT