BEHAVIOR IN ORGANIZATION

A PAPER PRESENTED IN PARTIAL

FULFILMENT OF THE
REQUIREMENTS FOR BUS 817
(MANAGEMENT USE OF CONTROL
SYSTEM)

Introducti
on

Organizational behavior is the study of

human behavior in organizations. It is an
academic discipline devoted to
understanding individual and group
behavior, interpersonal processes, and
organizational dynamics with the goal of
improving the performance of organizations
and the people in them (Schermerhorn et
al.,2010).

Individual members have personal

goals as well as the organizational
goals to achieve.
The purpose of control is to ensure
that an individual member behave in a
manner consistent with organizational
objectives. Management control is the
process of influencing others in a
company in order to effectively and
efficiently achieve the goals.

Goal Congruence
Goal congruence process, is when
the actions people are led to take is
in accordance with their perceived
self-interest are also in the best
interest of the organization.

2 most important questions

What actions does it motivate
people to take in their own selfinterest?
Are these actions in the best
interest of the organization?
Both formal and informal processes
influence human behaviour in
organization which affect the degree to

Informal Processes
There are external and internal forces that
play key role in achieving goal congruence:
External forces; work ethic, loyalty,
diligence
Internal forces; Culture: common beliefs,
shared values, norms of behaviour

Informal Organization
Perception and communication
The manager of the organization do receive information both from formal and
informal channel about what is to be done which might not be clear enough
of what management wants done. The message received from different
sources may conflict with one another or subject to different interpretation.

Formal Control System

This can be classified into two:
The management control system itself
Rules
Rules are formal instructions and controls e.g.
standing instructions, job description, standard
operating procedure, manuals

Formal control process

Goal and
strategies

Other
information

Rules

Reward
feedback

Strategic
planning

Revise
Revise

Budgeting

Responsibilit
y center

Correctiv
e action

Report
actual
versus plan

Measurement
Feedback
Communication

Was
performanc
e
satisfactory
?

Yes

No

Types Of Organization
Firms strategy has an influence on its
structure, the type of structure influences the
design of the organization control system
There are 3 types of organizational structure;
Functional
Business unit and
Matrix structure;

Functional structure

Business Unit
Structure

The controller
This is the person who is responsible for
designing and implementing the
management control system. A
controller plays an important role in
design and operations of the control
system. In many organizations the title
of the controller is called chief financial

The business unit

controller
The controller function is a staff function
Business unit controller inevitably has divided
loyalty
On one hand they owe some allegiance to the
corporate controller
on the other hand they owe allegiance to the
managers of their own units

conclusion
Regardless of the reporting
relationship, the business unit
controller is expected not to condone
or participate in the transmission of
misleading information.
Organizations should choose a design
structure that is likely to benefit them
the most. The best form is the one
which operates at minimum cost per

Thank You

References
Anthony, R.N. and Govindarajan, V.
(2002). Management control system.
(11th ed.) . McGraw Hill, Irwin.
Schermahorn,J.R., Hunt,J.G.,
Osborne,R.N.and Uhl-Bien,M.
(2010).Organizational behaviour .(11th
ed.).John Wiley & Sons Inc.