Fundamentals of Management, 8th ed

Chapter 14: Basic Elements of Control

4 4 1

Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).

Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

---

Bureaucratic Control

Bureaucratic control

is an approach to organization design characterized by formal

and mechanistic structural arrangements. As the term suggests, it follows the bureau-

cratic model. The goal of bureaucratic control is employee compliance. Organizations

that use it rely on strict rules and a rigid hierarchy, insist that employees meet mini-

mally acceptable levels of performance, and often have a tall structure. They focus their

rewards on individual performance and allow only limited and formal employee

participation.

McDonald’s applies structural controls that reflect many elements of bureaucracy.

The organization relies on numerous rules to regulate employee travel, expense

accounts, and other expenses. A new performance appraisal system precisely specifies

minimally acceptable levels of performance for everyone. The organization’s structure

is considerably taller than those of the other major networks, and rewards are based on

individual contributions. In another example, a large oil company recently made the

decision to allow employees to wear casual attire to work. But a committee then spent

weeks developing a 20-page set of guidelines on what was and was not acceptable. For

example, denim pants are not allowed. Similarly, athletic shoes may be worn as long as

they are not white. And all shirts must have a collar. Nordstrom, the department store

chain, is also moving toward bureaucratic control as it works to centralize all of its

purchasing in an effort to lower costs. Similarly, Home Depot is moving more toward

bureaucratic control to cut its costs and more effectively compete with its hard-

charging rival, Lowe’s.

Dimension

Employee compliance

Goal of control approach

Strict rules, formal controls,

rigid hierarchy

Directed toward minimum levels

of acceptable performance

Directed at individual

performance

Limited and formal

Employee commitment

Group norms, culture, self-control

Directed toward enhanced

performance above and beyond

the minimum

Directed at group performance

Extended and informal

Performance expectations

Degree of formality

Organization design

Reward system

Participation