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Challenges Of Good Governance Implementation Management Essay

The good governance program in the researched organization has been acknowledged to be well implemented. During his annual tax report submission event, the President of Indonesia claimed that the reform at the organization is a success story for other public institutions in Indonesia. However, some challenges are still faced by the organization in implementing and sustaining good governance, which are discussed in the following sections.

To Control or to Trust

Being a member of the researched organization has provided the researcher with the real experience of good governance implementation. It includes the governance mechanism employed in the case organizations as a result of the bureaucratic reform program. In this research, governance mechanism is conceptualized as means for implementing governance, including the structure, process and relationship of governance (Williamson, 1996).

The Debate

When discussing about what governance mechanism an organization should adopt, some refer this to an on-going debate of control versus trust or collaborative approaches (Donaldson and Davis, 1994; Mayer, Davis, Schoorman, 1995; Davis et al., 1997; Grey and Garsten, 2001; Sundaramurthy and Lewis, 2003; Puranam and Vanneste, 2009; Yang, Z. et al., 2010). The association between these two methods of governing the institutions can be seen as either contradictive or mutual.

The work of Sundaramurthy and Lewis (2003), juxtaposes these two methods to understand each of their pros and cons. The former concept, control, can be claimed to stem from the traditional Agency theory of governance (Sundaramurthy and Lewis, 2003 and Shapira, 2000). This theory is based on the assumption that principal and the agents do not share same objectives; therefore, the latter required to be controlled (Shapira, 2000).

An alternative way of governing the organization is to utilize the approach that based on collaboration or trust. One of the main theories inspires this approach is the Stewardship theory (Donaldson and Davis, 1994). In contrast with the Agency theory that sees principal and agents’ goals are divergent, Stewardship theory position agents as stewards, who aim to support the principal’s, thus organizational objectives (Davis et al., 1997). Furthermore, these writers argue that in this type of institution, control mechanism become irrelevant; it is the governance by empowerment that fits the context. Because the basic premise of this approach is that the agents are trusted, the organization should, by design, provide autonomy to gain the optimum advantage of a steward (Ibid).

Yang, Z. et al. (2010), elucidate the relationship between formal control and trust in the context of inter-organizational or between companies. This work has categorized some authors as proponents of the negative relationship view of control and trust (for examples: Aiken & Hage, 1966; Barkema, 1995; Bernheim & Whinston, 1998; Das & Teng, 1998; Frey, 1993; Ghoshal & Moran, 1996; Gulati, 1995; Wuyts & Geyskens, 2005). These advocates argue that if companies adopt both control and trust as their governance mechanism, in particular to protect their settlements, the optimum effect of either method will be undermined (in Yang, Z. et al., 2010). Furthermore, because of their similar objectives to minimize opportunistic behaviour, the adoption of both governance mechanisms can be overlapping (Dyer & Singh, 1998) and therefore organizations should decide on either/or (Wuyts & Geyskens, 2005). As a consequence of this negative correlation between trust and control, an organization should select one of them. One argue that organizations can diminish their dependence on the costly complex governance mechanisms by promoting trust within organization (Bradach and Eccles,1989).

In a more in-depth analysis, some empiric studies have been conducted to investigate the control versus trust association in the context of inter-organizational transactions. It is suggested that the adoption of formal control can potentially decrease trust between organizations because one party may perceive the formal regulation as a sign of doubt from other group (Das & Teng, 1998 and Wuyts and Geyskens, 2005, as summarized in Yang Z., et al., 2010).

Despite of the convincing materials of the mutually exclusive association between control and trust, some see the need for organization of the parallel adoption of both governance mechanisms, particularly due to increased uncertainty faced by the organizations nowadays (Demb and Neubauer, 1992, in Sundaramurthy and Lewis, 2003).

Yang J, et al. (2010) also summarizes the proponents, who believe that control and trust are complementary (for examples: Friedberg, 2000; Jaworski, Stathakopoulos, & Krishnan, 1993; Luo, 2002; Poppo & Zenger, 2002). They suggested that although organizations may incur the cost of maintaining formal control and trust, they both are not excessive.

From the work of Mollering (2005), it is claimed that instead of being treated as a dualism, control and trust actually should be seen as having a dualistic association. In other words, control and trust does not stand as two opposite poles of the continuum. “Each assumes the existence of the other, refer to each other and create each other, but remain irreducible to each other” (Ibid, p. 1).

By acknowledging the complementarities of control and trust, writers also note some limitations of each method if they stand alone (Bradach & Eccles, 1989; Cannon et al., 2000; Poppo & Zenger, 2002). It is argued that trust may fill the gap leave by formal control mechanism (Yang Z, et al., 2010). The latter bestows basic, structural institutions (Lewicki, McAllister, & Bies, 1998; Mollering, 2005), which safeguards the usual organizational transactions. It will, later, reinforce positive expectations for a stable long-term relationship amongst the related parties, and eventually it can encourage trust. On the other hand, by promoting trust in the business relationship, it will protect some transactions that cannot be contained by the formal control (Yang Z, et al., 2010). By this, Poppo and Zenger (2002) argue that control mechanism support the utilization of trust and vice versa.

The third stance suggests that control and trust are neither substitution nor complementary. Control and trust are independent (Bradach and Eccles, 1989). They can be combined depends on organization’s needs. Others argued that there is no correlation between these two variables (for examples Mellewigt, Madhok, & Webel, 2007, in Puranam and Vaneste, 2009). Skinner and Spira (2003) suggested that to treat control and trust as opposite can be misleading because they are interdependent.

Governance Means Controlling

The principal-agent relationship not only represents the relationship between board and management but also management and employees (Shapira, 2000). Therefore, the two abovementioned theories can be employed to gain a better understanding of governance mechanism adopted by the case organizations in their day-to-day activities.

The Concept of Control

Control can be conceptualized as “a regulatory process by which the elements of a system are made more predictable through the establishment of standards in the pursuit of some desired objective or state” (Leifer & Mills, 1996, p. 117 as cited in Yang Z., et al., 2010). It is suggested that control is essential as a governance mechanism to ensure that the organizational objectives are realized (Mayer, Davis, Schoorman, 1995). The adoption of such mechanism may affect other organizational elements, including reward systems, organizational structures, and power distribution (Sundaramuthy and Lewis, 2003).

As previously mentioned in the discussion of the debate of control and trust, the adoption of control is inspired by the approach of Agency theory, which is rooted in the area of economics and finance (Sundaramurthy and Lewis, 2003). The justification of the adoption of control mechanism is the existence of potential conflicting interests between management and employee. Therefore, Agency theory advises organizations to control the agents to from their self-serving activities that may affect the achievement of principals’ goals (Eisenhardt, 1989).

Some of the features of control mechanism includes tight monitoring (Anderson & Oliver, 1987), extrinsic reward, dominance of institutional power (Sundaramurthy and Lewis, 2003), and detailed contract drafting (Wuyts & Geyskens, 2005). By utilizing the model used in the works of Sundaramurthy and Lewis (2003) and Davis et al., (1997), the governance mechanism in the researched organizations will be analyzed based on its features, namely organizational structure, internal process, reward and punishment, power distribution. These will be utilized to analyze some factors that constitute good governance implementation in the researched organization, as previously explained in chapter five.

Control as Governance Mechanism in the Researched Organization

From the researcher’s experience of being a member of the organization during the field work, it can be understood that by introducing and implementing good governance within the organization, the ministry attempt to control every single activity of its members. The previous mentioned narration of the everyday life of an AR and Customs officer demonstrated this control system, from the finger-print presence system to the door access system. One of the reasons of adopting this way of doing business in the organization might be due to management needs for the assurance of the achievement of the organization goal without any misuse organization’s assets (Hagel and Brown, 2002).

Organization Structure

As a part of bureaucracy, the researched organizations still adopt a hierarchical organization structure. There are, at least, five layers of decision making process in the organizations. The following organization structure illustrates these layers:

Directorate General

Director

Head of Division

Head of Sub Division

Head of Section

Staff

Auxiliary

In the researched organizations, people are regarded as opportunistic; thus they have to be tightly controlled and monitored. It is argued that organizations that adopt control mechanism to have higher hierarchy in their structure. This is a logical consequence of the underlying view that agents have to be tightly monitored in order to alleviate their personal agenda. By designing such a long hierarchical structure, control and monitoring process are better ensured (Grey and Garsten, 2001).

Besides its feature of long hierarchical structure, the control adopting organizations also ensure the segregation of different functions. According to Lawler (1992), by adopting a control-oriented mechanism, the organization must create a clear boundary between the thinking and controlling functions of the work with the implementing part of the work.

The separations of function and duty in the researched organizations, which was resulted from bureaucratic reform, may verify the abovementioned characteristics of a control-based organization. As discussed in chapter five, the new structure of the ministry separate the policy making, implementing, and monitoring functions. The segregation of duty is also another feature of the control mechanism both in the tax and customs offices.

Internal Process

It has been acknowledged by the researched organization that the generation of SOP (Standard Operating Procedures) marked the newly modernized office.

We brought our 8,000s SOPs in the printed form to the house of parliament. We used two super-market trolleys to bring those massive stacks of documents. This was to demonstrate to the public that the ministry has been undergoing a serious improvement on the business process. That the public will find uniform and standardized services throughout our offices; hence such deviation can be reported. [1] 

The practice of establishing standardization is argued as one of the features of control-based organization, which is similar with the traditional bureaucratic organization (Grey and Garsten, 2001). Standardization is important for the control-oriented organization since it provides uniformity of doing business and hence creating more predictability. Such view is also applied in the researched organization, that SOP could provide certainty both for internal stakeholders (employees) and external stakeholders (the public as service users).

Another attributes of a control-based governance mechanism is to promote formalization. Poppo and Zenger (2002) provide examples of this formalization, which is the use of formal contracts within or between organizations. This contract symbolizes promises or obligations of one party to deliver particular actions in the future (Macneil, 1978 in Poppo and Zenger, 2002). In addition, these authors emphasise that in the control-oriented organization, the formalisation of agreement between principal and agents depends on the complexity of the relationship that want to be built through the creation of the contract. It may include, for example, list of roles and responsibilities, details of procedures for evaluation and punishment, in case of non-performance of the jobs, and obviously, notifications on end products required from the tasks (Popo and Zenger, 2002).

In the researched organization, the creation of RKO may represent the adoption of this detail formalization. Besides creating day-to-day activities, each employee has to sign a form of willingness to perform the written tasks accordingly. This one-page paper is an integral part of the rests pages of RKO. As the head of office, who introduced RKO, suggested that:

By creating and signing their own RKO, each employee has a binding contract with the tax office. [2] 

Reward and Punishment

In the control-based organization, the certain level of control as required by the institution to govern the relationship between managers and agent can be maintained by establishing relevant reward and punishment system (Sundaramurthy and Lewis, 2003). One suggestion on how to generate appropriate incentive and sanction scheme in the organization is by using the perspective on how to fulfil employees’ motivation as the basis of it.

As previously mentioned in chapter five, subsection 2.4, the new reward and punishment system has been introduced in the researched organization, including the improvement of salary system and enforcement of sanctions on indiscipline. It is documented that the average salary of the ministry of finance employees has increased four to five times compared to it is prior to the implementation of bureaucratic reform (Ministry of Finance, 2009 ; Ministry of Administrative Reform, 2009; Kompas, 2010). One of the justifications of the increase was the importance duty and commenced by the ministry and its risks burden.

Prior to the [bureaucratic] reform, a staff like me could not pay for my basic necessities. Don’t ask me to perform my job well. [3] 

Davis et al., (1997) accentuate the different, even contradicting, views of human motivation, namely extrinsic versus intrinsic motivation. They argue that the former is usually adopted by control-oriented entities, as motivated by the Agency theory. The latter, tend to be employed by trust-based organization, adopting Stewardship theory. Extrinsic motivations can be fulfilled by providing extrinsic rewards, which are characterised as tangible and exchangeable (Davis et al., 1997). The commonly used extrinsic reward is monetary remuneration scheme, for example high employee salary.

From the above statement of a customs office employee, it can be implied that the researched organization still focus on the fulfilment of employee’s premier needs. This has been argued as one of the characteristic of the control-oriented organization, which concentrates to establish reward system that can satisfy the lower order needs of Maslow's hierarchy (Sundaramurthy and Lewi, 2003).

On the punishment side, the case organization can be classified as a control-oriented, even too tight, institution. One of the most conspicuous examples of this current tight control system is the attendance system. As previously mentioned in chapter five of the daily activities of Mr. A as an AR in the tax office, an employee’s salary is automatically deducted as a result of any late coming or early going from the office. Despite having a tolerance for a force majeure reason of absence, this new system can be seen as a too tight control system in the organization.

Power Distribution

When analyzing an organization’s governance mechanism, one should scrutinize the nature of the principal-agent relationship. To do so, one focal concept needs to be involved, which is the use of power. By investigating the types of power exercised in the organization, one can infer which governance mechanism employed in that organization, whether control or trust-based approach. The seminal work of French and Raven (1959) on types of power can be used to elaborate in more detail of the difference of control and trust-based governance.

It is argued that control oriented organization dominantly utilize institutional power whilst the trust-based organization tend to exercise personal power (Sundaramurthy and Lewis, 2003). The former refers to the power that exists because of someone’s position in the organization; the latter is power which is embedded in someone, regardless of his/her status to the organization (Gibson, Ivancevich, & Donnelly, 1991). Using different classification of power from previous work of French and Raven (1959), institutional power encompasses coercive, legitimate and many aspects of reward power.

In the case organization, institutional power is seemed to dominate the manager-employees relationship. The long hierarchical structure of organization can be one of the antecedents of this condition. One following event may illustrate the exercise of institutional power in the case organization.

I [the Director General of Tax], with my authority, will not be hesitant to transfer you [heads of offices] if you still allow mistakes that you or your subordinates created. [4] 

Since relationship between superior and subordinated are seemed as transactional in nature in the control-oriented organization, institutional power is arguably relevant (Sundaramurthy and Lewis, 2003).

Impact of Control as a Governance Mechanism

From the above discussion it can be inferred that the researched organization tends to utilize a control-oriented method. The following discussion will elaborate on the positive and negative impacts of the selected approach of governance mechanism.

As one of its prime services offered to the public, the ministry promised to deliver their service on time, on specification, and on budget (Ministry of Finance, 2008). This has given certainty to the service users, something that was extinct. The adoption of control-based mechanism, particularly the standardization has provided predictability and certainty. This may satisfy the purpose of the control, itself, which is to create predictability (Grey and Garsten, 2001).

Another constructive impact of the utilization of control is the establishment of clearer accountability. This has resulted, among other things, from the organizational separation, which is in place to eliminate conflict of interest and enable check and balance mechanism.

However, some critical effects may occur as the consequence of the adoption of the control-oriented approach. The introduction of the RKO (Rencana Kerja Operational or Operational Work Plan) gives example of how control can affect people’s motivation. As previously discussed in the chapter five on the section of the need of measurability, RKO was adopted as a tool of measurement in order to enhance the good governance implementation at the Gambir 4 tax office.

In generating RKO, some employees felt of being closely watched by the office. Moreover is with the fact that by the RKO, each employee has to record every activity. This has created a general impression among the employees that the organization does not trust them. This has resulted hesitation from people in commencing their duties. One expresses:

I feel like I were a kindergarten kid being watched by the teacher in every second of my presence. [5] 

It is argued that employees tend to trust their managers less when they have feel that the superiors’ monitoring is intended to control their behaviour (Etchegaray & Jones, 2001, in Costa and Bijlsma-Frankema, 2007). The control and monitoring mechanism will be effective when employees comprehend the procedure as a medium for the managers to demonstrate their care, appreciation, encouragement, and direction (Bijlsma-Frankema & Van de Bunt, 2003).

There seemed to be a trade-off of controlling the member and their behaviour. Although controlling may minimize the employee’s most opportunistic actions, the decision to control significantly decreases the subordinate’s motivation to conform the superior’s interest (Armin and Kosfeld, 2005).

The success of standardization to bring certainty and predictability also give potential problem of affecting employee’s creativity. With rigid uniformity and formal standardization, people tend to just follow the system. As the consequence, the organization will lose its ability to adapt with the dynamic business environment. According to one of the members of the reform program at the tax office:

Good governance has no meaning in people’s heart; people now tend to comply with SOP without any creativity to modify the rules to follow its context. [6] 

Trust-Based Collaboration as an Alternative Governance Mechanism

From the previous discussion, it is implied that despite of its advantages of establishing predictability and accountability, some inherent limitations of control-based governance mechanism, adopted in the researched organization, still persist. Therefore, the following section will elaborate on the alternative way of governance mechanism possibly employed by the case organization.

Goold and Quinn (1990) argue that the failure of the concept of control systems is due to the risk that it could undermine the mutual trust intra-organization and later lead to unexpected and detrimental negative impacts. Therefore, organization needs to find an alternative way of governing, which paved the way of the introduction of trust. Previously, the focus of governance mechanism was on control but presently the alternative way of governing the organization, using trust, has been more appreciated and increasingly discussed (Costa and Bijlsma-Frankema, 2007).

The seminal work of Argyris (1952 in Davis et al., 1997) challenged the dominant control mechanism strategy because it has made the managers to focus only on the tangible output criteria; they have lost the big picture of the corporation. By exercising a control approach, it creates stress in the organization and it, later, may damage the mutual trust within the organization. Argyris claims that the management philosophies, which condition the principals to distrust their agents, could invite defensive behaviour and prevent openness (Ibid).

Concept of Trust

Trust can be defined as “a willingness to be vulnerable in the context of a relationship” Mayer, Davis, and Schoorman (1995, p. ) or as “the expectation that an exchange partner will not behave opportunistically, even when such behaviour cannot be detected by the victim” (Puranam and Vanneste, 2009, p. 11).

As previously discussed on the debate of trust and control nexus, the adoption of trust as the governance mechanism is motivated by Stewardship theory. Trust is the centre variable in the Stewardship theory since it is built on the basic premise that agents can be trusted to "behave in ways that are consistent with organizational objectives" (Davis et al., 1997, p. 25).

Therefore, organization has to be designed to allow trust to blossom in the organization. This initiative could include the flatter organization, empowerment of employees, and open communication (Sundaramurthy and Lewis, 2003).

Evidence of the Use of Trust in the Researched Organization

Despite the office use of the formal control mechanism, trust is utilized in term of intra-organizational trust or trust within organization (Grey and Garsten, 2001). The following case may illustrate this practice:

Even though all of the good governance tools have been in place, I could not rely on them. Instead, I need to trust my ARs. By this, they will, in return, trust me and give respect to me. [7] 

This can be implied that trust fulfils the loop hole in the control system (Mayer, Davis, Schoorman, 1995).

In the researched organization, trust is also used in the inter-organizational relationship. In the case of the tax office, some employees are face by the ambiguity, whether to control or to trust their taxpayers. In fact, related to good governance implementation, some ARs argue that one of the most effective ways to reach the tax revenue target is by using personal approach instead of being suspicious to them. The taxpayers are treated as family, so they can 100% trust the officers. As the consequences, the taxpayers will be reluctant to avoid paying their tax or give manipulated financial information:

We try to give our best and [consequently] they [taxpayers] will pay their taxes correctly and report on time. [8] 

Another official from claim section shares similar thoughts that the most effective approach to ask tax payer to pay his/her tax debt is the use of persuasive approach. By this, the taxpayer is felt to be given room for solution. The section head explained that since the ultimate goal of this section is to gain revenue from tax debt payment, this office could offer negotiable approaches for the payment. One of the approaches is to offer partial/instalment payment. This practice is not against the rule. By this, the tax payer also shows he/her good intention to finalize their obligation.

In fact, the current tax administration system adopts the self assessment report, by which taxpayers determine the amount of their tax obligation by themselves. This policy is based on the basic assumption that taxpayers are honest (similar to McGregor’s Y Theory). Previously, it is the tax office which decided of how much to pay. This has shifted the approach from the tax office to its taxpayers to rely on mutual trust.

This new approach practicing by the tax office requests the member organization to seldom talk about crimes or violations. The emphasis is on persuasive approach, giving incentives and creating trust and co-operation with the taxpayers (Larsson, 2007).

The previously mentioned practices of trust in the case organisation have demonstrated the possibility of the adoption of trust as an alternative governance mechanism. The following sub-sections will elaborate more on the practices of trust-based process in the case organizations, in terms of its open communication, intrinsic motivation, and use of personal power (Sundaramurthy and Lewis, 2003).

Open Communication

An open communication within organization is one of the key attribute that characterizes trust-oriented organization. This is enabled because of minimum stress level in the organization as a result of a relatively more relaxed monitoring process compared to it is in the control-oriented institutions (Frey, 1997).

In the tax office, it can still be found the conducive climate for open communication albeit its tight control system. One of the examples is practiced by one of the directors at the tax office. The director establishes an informal dialogue with his subordinate. I had to wait for sometimes to interview him because some of his employees were queuing to meet him. From the interview he explained that people’s hearts have to be touched with humanly direct approach to stop or prevent them from any illegal practices. Dialogues have to be established to change people’s behaviour. He later emphasized:

First, I must be convinced that my employees are good people. Then, I need to involve them in a dialogue, from heart to heart, to make them trust me. Finally, once I gain their trust, they will follow what the organization requires. [9] 

Appreciation

In adjacent to the fulfilment of extrinsic motivation, I could find some practices of the give away of intrinsic reward in the case organization. In the Customs office, an appreciation, as one of the form of intrinsic reward to fulfil self-esteem need, was given to an employee who demonstrates high dedication to the office task. In the case of the prevention of illegal export, an analyst was appreciated in a ceremonial event. The analyst was given a token of appreciation, handed directly by the office head in front of all employees. Even though the appreciation was not in form of monetary rewards, by this, an employee felt more appreciated and confident that his action is right and supported by the office.

Personal Power

While a control-oriented tends to exercise more institutional power, the trust-based organization rely on personal power, an inherent part of the individual in the context of the interpersonal association, regardless of his/her position in the organization (Robbins, 2003). This type of power is the foundation of the principal-steward relationship.

In the Customs office, personal power was applied by some managers. For example, the previous Mr. P, the intelligence officer, has become the important subject matter expert in the case of illegal export or import. When, he was transferred to other customs office, people still contacted him to ask for advice and suggestions regarding the modus of malevolent importers/exporters. This has demonstrated that despite the dominant use of institutional power in the case organization, personal power can also complement.

The Effect of Culture on Trust

The creation and implementation of trust is argued to be influenced by situational factor, such as culture, therefore when analyzing trust one has to frame it in its cultural context (Sundaramurthy and Lewis, 2003). In terms of the role of culture in the life of organization, the researched organization, in general, shares similar portrait with other Indonesian bureaucracy. As previously mentioned in chapter four, one of the dominating factors that shape the Indonesian bureaucracy is the impact of native culture, especially Javanese culture. This culture has a strong feature of paternalistic and hierarchical bond among people (Vatikiotis, 1998).

The seminal anthropological work of Geertz (1961), who plunged himself to live in the Javanese community in the late 1950s, provide some characteristics of Javanese culture. One of the prevailing features of Javanese culture is the concept of ’rukun’ or the maintenance of social harmony (Useno, 1999).This concept implies harmonious social integration in the sense of obedience to superior (‘manut’), kindness, avoidance of conflict, understanding of others, and empathy (Geertz, 1961; Koentjaraningrat, 1985). Geertz (1961, p. 114) describes ‘rukun’ as “basic social properties of self control and avoidance of disapproval.” These embedded norms make people tend to feel awkward toward their superior or someone whom they respect. Feeling of ‘pekewuh’ (embarrassed reverence) that is considered as the basic elements of human virtue grows within this kind of circumstance.

To relate to previous use of trust in the researched organization, people believe that by giving trust, others will be reluctant to damage this trustworthy relationship. In case of intra-organizational trust, the relationship built by a section head and his staffs illustrate the cultural effect on trust:

Since I trust my ARs, they feel awkward to practise deviant behaviours. But this ideal condition requires a necessary precondition, which is the consistency of me as their superior. Once this prerequisite condition is fulfilled, I can be regarded as someone who is respectful. [10] 

The influence of culture on trust is also found in terms of inter-organizational trust, as expressed by one of the ARs:

Since I already give my trust to them, the taxpayers will feel ‘pekewuh’ (reluctant) to behave malevolently, such as not to pay their tax or not to submit their tax reports. [11] 

Reflection

From the previous discussed materials, it can be implied that both control and trust are required as the governance mechanism in the case organizations. The control-oriented nuance is dominant in the organization in terms of current governance practices. However, trust-based mechanism seemed to work and can function as the complement of the control-based approach.

This finding echoes the complementary view of the relationship between trust and control (Friedberg, 2000; Jaworski, Stathakopoulos, & Krishnan, 1993; Luo, 2002; Poppo & Zenger, 2002). The choice whether to control or to trust the members of the organization should be understood as a contextual decision.

It is advised that in stable environments, the control-oriented approach is best, whilst unstable, uncertain environments the trust-oriented approach is more effective (Eddlstone, et al., 2010). The challenge of the organization is to find the appropriate balance in complementing both approaches.

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