behavior in organization
TRANSCRIPT
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Behavior in OrganizationsBehavior in Organizations
MCS influence human behavior.MCS influence human behavior.
Good Management Control SystemGood Management Control System
influence behavior in goal congruentinfluence behavior in goal congruentmanner.manner.
In a goal congruent process ,the actionsIn a goal congruent process ,the actions
people are lead to take in accordance withpeople are lead to take in accordance with
their perceived self interest are also in thetheir perceived self interest are also in the
best interest of the organization.best interest of the organization.
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Goal CongruenceGoal Congruence
Individuals work in differenthierarchies and handlesdifferent responsibilities &may have different goals.
But they must come together asfar as Company’s Goal isconcerned,(there action mustspeak Co’s language.)
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Goal CongruenceGoal Congruence
• Example 1– The HR manager has deviseda HR training program to enhance the skillsof its sales personnel, with an objective toenhance their productivity
But if company is in strategic need of attaining a certain sales volume in a givenquarter, it can not do so on account of nonavailability of personnel.• Example 2– The marketing department
has planned an impressive advertisingcampaign, which promises good returns,
But say due to cash crunch Company’scurrent financial position may not let tolose the strings
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Goal CongruenceGoal Congruence
• After completing the given activity inmore efficient manner the concernedmanager scores the point/s on his score
card.
• Example 3 – Production Manager may get agood applause for reducing cycle time;
But at what cost? Building up the high inventoryi.e. Higher investment in current assets. While
doing so he just overlooked the financial interestof the company.
• Whether his actions are leading to scoring of points on the organization’s score card too??,if it is so then only one can say the
organization is marching towards a commongoal.
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Goal CongruenceGoal Congruence
• Goal congruence ensures that the actionof manager taken in their best interest isalso in the best interest of the
organization.
• Every individual working in an organization
has got his own motive to do the work.Individuals act in their own interest, based ontheir own motivations. And it is always notnecessarily consistent with the Co’s goal.
• In a goal congruence process, the actionsthe people are led to take in accordancewith their perceived self interest are also inthe best interest of the organization i.e.
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Goal CongruenceGoal Congruence
Strategic
Goal
S c ope of S t r at egy
ex ec ut i on
Control Efforts
• MCS sees that how actions of individuals are put/led toachieve the Co’s goal?
• Management control process helps in brining the
consistency, as far as possible, in these diverse goals.
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Significance of Goal CongruenceSignificance of Goal Congruence
• Ensures frictionless working.
• Ensures achievement of organization’s goal/strategic
objective•
Ensures coordination & motivation of allconcerned.• Ensures consistency in the working of all concerned.
• Gives fair chance to its employees to achieve theirpersonal goals.
• Enhances the loyalty towards the company.
• Satisfies prime requirement of MCS.
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II Formal Factors –
A. MCS strategy itself
B. Rules – Instructions, manuals andcirculars
Physical controls,system safeguards,
task control system.
Factors those influence the Goal CongruenceFactors those influence the Goal Congruence
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MCS - A Formal process Relating MCS to Organizational GoalMCS - A Formal process Relating MCS to Organizational Goal Co’s Goals & Strategies
Satisfactory Non-Satisfactory
Compare A V/s B
Report Actual &
Budgeted
Measure
Responsibility Center’s
Performance
Prepare Annual
Programs/ Budgets
Prepare Strategic
Plans for
Implementation
Revise
Revise
Corrective Action
Reward
Feedback
Feedback
Revise the
Goals
/Policies
(Interactive
MCS)
Everythingpercolates fromthe Company’sstrategic goal.
Anything loosingthe sight of goalwill beimmediately takennote of and a
corrective action isinitiated to bringback the activityon the track.
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Types of OrganizationsTypes of Organizations
Functional OrganizationsFunctional Organizations
Business Unit OrganizationsBusiness Unit Organizations
Matrix OrganizationsMatrix Organizations
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Advantage of functional organizationAdvantage of functional organization
Benefit of specializationBenefit of specialization
Efficient Operation of specific functionEfficient Operation of specific function
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Disadvantages of functional organizationDisadvantages of functional organization
No unambiguous way of measuringNo unambiguous way of measuring
effectiveness of separate functional managerseffectiveness of separate functional managers
Decision and communication can be timeDecision and communication can be time
consuming and frustratingconsuming and frustratingFunctional structures are inadequate for a firmFunctional structures are inadequate for a firm
with diversified products and marketswith diversified products and markets
Tends to create “silos” for each functionTends to create “silos” for each function
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Advantages of Business Unit OrganizationAdvantages of Business Unit Organization
It provides training ground in generalIt provides training ground in general
managementmanagement
As business unit is closer to market for itsAs business unit is closer to market for its
products, the manager may make sounder products, the manager may make sounder production and marketing decisions thanproduction and marketing decisions than
headquarters might.headquarters might.
The unit as a whole can react to new threats or The unit as a whole can react to new threats or
opportunities more quicklyopportunities more quickly
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Disadvantages of Business Unit OrganizationsDisadvantages of Business Unit Organizations
There are the possibilities that each businessThere are the possibilities that each businessunit staff may duplicate some work that in aunit staff may duplicate some work that in afunctional organization is done at headquarters.functional organization is done at headquarters.
It is difficult to obtain skilled manpower It is difficult to obtain skilled manpower Disputes between functional specialists inDisputes between functional specialists infunctional organizations may be replaced byfunctional organizations may be replaced bydisputes between business units in business unitdisputes between business units in business unit
organizationsorganizationsThere may also be disputes between businessThere may also be disputes between businessunit personnel and headquarters staff unit personnel and headquarters staff
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Implication on system designImplication on system design
If control is the only criterion, thenIf control is the only criterion, then
business unit organization is feasiblebusiness unit organization is feasible
If in addition to control, the weight is alsoIf in addition to control, the weight is also
to be given to economies of scale,to be given to economies of scale,
specialization benefit then functionalspecialization benefit then functional
organization is good.organization is good.
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Controller Controller
Controller is the person who is responsibleController is the person who is responsible
for designing and operating thefor designing and operating the
management control system.management control system.
The title of this person in manyThe title of this person in many
organization is CFO.organization is CFO.
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Functions of the Controller Functions of the Controller
Designing and operating information andDesigning and operating information and
control systemscontrol systems
Preparing financial statements andPreparing financial statements and
financial reportsfinancial reports
Preparing and analyzing performancePreparing and analyzing performance
reports, interpreting those reports for reports, interpreting those reports for
managers.managers.
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Functions of the Controller (Conti.)Functions of the Controller (Conti.)
Analyzing program and budget proposals fromAnalyzing program and budget proposals fromvarious segments of the company andvarious segments of the company andconsolidating them into overall annual budgetconsolidating them into overall annual budget
Supervising internal audit and accounting controlSupervising internal audit and accounting controlprocedures to ensure the validity of information,procedures to ensure the validity of information,establishing adequate safeguards against theftestablishing adequate safeguards against theftand fraud, and performing operational auditsand fraud, and performing operational audits
Developing personnel in the controller Developing personnel in the controller organization and participating in the education of organization and participating in the education of management personnel in matters relating tomanagement personnel in matters relating tocontroller functioncontroller function
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Business Unit Controller Business Unit Controller
Dotted Line Relationship with CorporateDotted Line Relationship with Corporate
Controller Controller
Solid Line Relationship with CorporateSolid Line Relationship with Corporate
Controller Controller