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Control strategies in organizations play a very important role in regulating employee behaviors and act as a boundary to help employees at various levels to distinguish what practices need to be adopted so that there would be no issues for the organization due to wrong practices. There have been many companies which were performing extremely well and suddenly have gone down owing to frauds committed by employees because of the pressure to perform well. Enron Inc., for example was the biggest example how corporate fraud can make a company fail utterly. Since the exposition of such incidents of corporate governance has always come up from time to time and the underlying reason in most cases is lack of proper control strategies at different levels in the organization. While it becomes the responsibility of the top management to set up various diagnostic control systems in order to make employees aware of what are the criteria in which their performance is measured, there also has to be a sound beliefs system which has been well communicated throughout the organization. However presence of just these two systems would not save the organization from being the victim of compliance issues or governance. There must be clear boundaries set by the senior management as to what should not be done. While what can be done is already conveyed, what should not be done must be more importantly emphasized so that employees cannot blame ignorance as one of the reasons for misdoings. Finally there has to be an efficient interactive control system which ensures that the senior management understands and interacts with the employees under them and actually successful implementation is being done across the organization. All these elements of control would ultimately ensure that the organization has an effective and efficient strategy places through which employees performance is maximum and more importantly in the direction of the organization's objectives at the same time.
Let us consider the organization General Electric for this purpose. GE is one of the leading technology based companies in America and has its operations spread across the world. Known for various successful business innovations in products and services in diverse fields, the company has learnt a lot of lessons the hard way when it came to setting up employee control strategies. Though it was a successful conglomerate with varied businesses in almost all possible areas, which has a 125 years old history, the company had faced severe problems until Jack Welch, one of the most dynamic and revolutionary CEO s came up and changed the way GE had been doing business. Now, GE has a strict code of conduct telling employees clearly what not to do which could land themselves or the company into trouble. The company issues a Spirit and Letter Policy to all its employees, suppliers etc, in short all the stake holders to maintain a clear sense of integrity. The policy holds for all employees of GE and the rules for dealing with government, private suppliers etc are clearly mentioned for all levels of employees. While the letter is written by the most senior management, The CEO of the company, the implementation has been across the organization to all levels of employees. The policy clearly mentions what are the things which might be compliance issue and advises employees what they should do when they encounter any particular situation. While it is obvious that the code cannot contain every possible thing, it presents a fairly clear idea of how GE intends to do business and how integrity is above everything and beyond catching up with numbers. While the policy which is in ink is good enough, the implementation part of it across the various entities of GE is what makes more sense without which there is no point of compliance. In order to ensure for this every employee during orientation is made aware of the companies policies. The company has a separate team for dealing with compliance related issues at each of its branches and offices. Also, it would be obvious to say that unless the senior management adopts practices which are advocated in the policy, it would not be possible to implement it at the junior level. Thus we see how the company enforces the issues of control and makes the employees understand the compliance issues as they do business and represent GE to others. A sense of being the face of the company gives the employees a responsibility to be sincere and adhere to the code and therefore the belief system is automatically strengthened. In this way , the company has learnt to manage its employees performance at all levels and is continuously employing more strategies to ensure that it becomes more robust .The objective is to provide an environment where innovation and creativity is nurtured and at the same time stick to the ethical code of conduct within which GE does its business.
Critically assess the existing strategies identifying the positive and negative attributes at both levels.
We have seen how GE had to adopt various control strategies that were aimed at changing the way business was being done i.e. the organizational level and also at each and every employee's level. While the company has adopted these strategies by learning from experience after it had issues regarding questionable business practices especially with government when the company had to pay a fine for improper cost allocations. The company now clearly defines the way the estimations and the entire process of the deal must be transparent enough to the people in the organization responsible for it and if done otherwise would be viewed as a breach of compliance. The company stresses on integrity and clearly makes it a point for all employees at all levels to put integrity above making profits either for the organization or business. It also has a code of conduct with its suppliers where it states that it shall not do business with those who are involved in illegal or questionable practices as per the law of the state. The company clearly defines in its Spirit & letter policy which is like the book of code of conduct for everyone who works at GE how to deal with suppliers, government, prevent money laundering, indulge only in healthy competitive practices. The company has strictly focused on sticking to the control measures i.e. in short it has clearly set up a boundary system through which it can control employee activities. The implementation of this boundary system is taken care of by a separate department which looks into the compliance issues. The main purpose is to create awareness among employees across the world as to what they cannot do being a member of GE in the best interest of the organization. Also since it is a multinational company the compliance needs to take care of legal issues across the various countries it does business. Different countries have different legal and ethical issues which the company needs to communicate to its employees who work across international boundaries. Thus we see there is responsibility from the top management to look into the implementation of the boundary system and check for any deviances from it. Similarly the company has also tried to foster a strong belief system among the employees by encouraging them to discuss about any doubt they had regarding issues that would be against compliance to the set standards. The company has tried its best to reinforce positive behavior and also develop an environment where transparency to the correct extent is maintained in the employee activities. It has also clearly set up various tools to implement the diagnostic control systems to get an idea as soon as possible if something is going wrong and at the same time encourages individual accomplishments and achievements. Performance evaluation is done regularly and fairly and the company checks all aspects of the employees' contributions towards the organization. The entire system of controls includes all the four levers of control diagnostic, belief, boundary and finally interactive. While the diagnostic systems control is done through periodic evaluation and reports from the employee's immediate supervisors, sometimes it is not sufficient enough to take care of the employee's performance control issues especially in large organizations. The diagnostic control systems identify the potential to achieve among the employees of the company; however they encounter certain organizational blocks like lack of focus or resource and therefore need to take care of by the organization. This can be done by the immediate managers or the senior management with the help of an understanding of the employee build clear targets and support them. This would also lead to increased productivity within the organization as the goals are set up with mutual consent and agreement. The belief systems on the other hand unleash the employees' potential to contribute as they might be hesitating due to uncertainty about purpose. For example in most companies a person working for it does not know what is their contribution to the company i.e.; what does their work do for the company. If the employees are communicated the importance of their work and made to understand their role in the entire organization, it would provide intrinsic motivation for them to contribute for the organization's goals on the whole. The role of belief systems is very crucial as the employees who actually believe in the organization's mission and vision would be the ones who are a part of it all the time. The boundary systems on the other hand give an idea of what not to do and therefore guide the employees to do right. However pressure from superiors or other organizational blocks might hamper the intentions of an employee who otherwise would have stuck to the boundary system. In order to make this effective, the company must clearly specify what it stands for so that there is no question of any deviant behavior. The interactive control systems finally un tap the potential to create in the organization. While lack of opportunity and fear of risk might be holding back the employee from contributing something innovative and new, providing an environment where they are encouraged would be beneficial for the company more than it is for the individual.
GE focuses on creativity and innovation. It is one of the companies which have done marvelous innovations in technology at a very high end level. This could not have been possible without a reinforcing belief system which was obviously checked by boundary systems to ensure that things do not violate any laws or land either the employee or the organization into trouble. As mentioned earlier, the company has learnt to develop the control systems very carefully after it had some bad experiences and it therefore currently is trying its best to make it as successfully implemented across all of its entities fully. The negative aspects however include the fact that more interaction needs to be done to ensure that the entire idea is spread across the organization. Employees might still be ignorant of certain practices being out of the book which could damage the reputation of the company. For this more and more interaction until a new employee sets into the company must be done to make him/ her aware of the level of importance that GE gives to maintaining integrity and being guided by the policy which it has in reality. While too much control might make employees uncomfortable and environment of trust and openness might help in improving relations between the senior management and its employees. The senior management while making an effort to implement any control system must also make the idea open to all and allow for interaction with the employees to get a feedback on their opinion which would ultimately help them in setting more realistic and practically implementable standards. Otherwise all the rules would be there only in the book and employees might also get a feeling of distrust as they have not been informed or even given a chance to voice their concerns. However GE has been trying to take care of this through an Ombudsperson.
At every entity to whom employees might report the issues or concerns they have about any practice being followed by the organization. This would not only be beneficial for the company as it gets a chance to correct a wrong practice but also at the same time inculcates a feeling of trust and belonging to the employee who has willingly shared the information and who finds that his/ her opinion or perspective has been considered and recognized. In this way the various control strategies have their positive or negative impacts on the organization at different levels. While some create a positive impact at one level, they might at the same time create a negative impact on the other and vice versa. It therefore becomes important for the senior management to choose the best control strategy which is accepted across the organization and also yields the desired outcomes.
Make recommendations for improving one or more of the control strategies.
The various control strategies which GE has adopted have come a long way in implementation. They have been extremely influential in improving the control standards in the organization and encouraging performance productivity from employees. The company has adopted these strategies based on their learning and pitfalls in the past. However there are certain issues which need to be dealt while implementing these strategies. It is a well known fact that nobody likes being controlled, however for organizational purposes there needs to be some control so as to ensure that the company and its employees are working ethically and in the best interest where no other party is being cheated or any other harm is being done. Thus it becomes the senior managements' responsibility that they create control strategies which are effective but at the same time they need to be efficient for successfully implementing them in the first place. For instance, if the organization comes up with an excellent control strategy but the people do not consider welcoming it, there cannot be much done even if the system is forcefully implemented. This would simply lead to unrest and disappointment among already good employees which could actually harm the organization rather than working for improving it. Therefore while considering to implement a strategy especially for controlling the employees performance in the organization, care must be taken to carefully and fairly evaluate the pros and cons on both the sides i.e. employees and management. In order to implement the control strategy through the Spirit & Letter Policy, the organization must ensure that the entire idea is properly communicated across the organization. Though the idea is good on paper, and seems to be working well on the whole where there can be certain issues in its implementation. So, to ensure that the strategy is well implemented across the organization in all of its entities, more emphasis must be laid on educating employees formally in the early months of their work and there must be a formal workshop or lecture organized otherwise an online tutorial which is a compulsory activity. Though GE takes care of reminding through e- mails, it can be clearly seen that employees might not be interested on their own unless senior management show interest and makes the issue more important. Also, employees tend to follow only those guidelines or rules which they see and believe that their seniors at work are adopting. That is to say, unless the senior management is able to convince that the proposed strategy is for all and it is mandatory to every single person belonging to the organization, they would not sincerely adopt it. This would also need to create a belief system by making employees feel a part of the organization and make them understand what each of one does for the organization, what is the contribution they give every day by doing their work rightly, what would be the consequences if they were to fail in adhering to the set standards. This would ultimately help the employee in identifying himself/ herself with organization and be more responsible in their actions. Recognition for work is an important motivation factor and therefore every positive step an employee takes towards embracing the control strategy out of their own interest must be encouraged and recognized. All this forms a part of connecting with the employee and him/ her more loyal part of the organization. The implementation of a strategy which happens through the willingness of the people it is meant for would definitely be many times better than if it's implemented from the top management side only. In the earlier case the employees would be more participative while in the latter case more resistive to the change taking place. Ultimately, it becomes the senior management's decision as to which way they would like to implement the strategy. This does not mean to say that GE is currently not considering the employee side of implementation; it rather is to emphasize the importance of employee oriented decision making at times when it is necessary. Thus the current strategy which the company is following is definitely a good one but it needs to take care of the implementation process more seriously and look at ways in which it can involve employees in the process. The idea of creating an innovative and friendly atmosphere would be successful only when such aspects are taken care of and so far GE has been doing well. It just needs to take a little more effort in making the control strategies successful by implementing them for real all across in reality. This would need more of the interactive control systems strategy where the employees are made aware of what the company wants from them through interaction directly between both the levels. For a large organization like GE, it might be difficult for personal interaction, but the company can work towards making a periodic interactive session once in a while to foster a healthy culture as well. Thus it is in the hands of the company to choose how to implement the strategy for real and in practice so that the best results are achieved which is the goal of any organizational control strategy. With its history of working through difficulties, it would not be a big deal for the company to make this little step successful and sooner or later the company would be able to do it. We can see through this study how control strategies can be useful and their role in improving organization's productivity and the best way for implementing such control strategies.