BAHAVIOR IN ORGANIZATION

BY

NWOSU SAMUEL

149023163

ODEHI OKUOFO

149023156

LAWAL IDRIS 149023165

A PAPER PRESENTED IN PARTIAL FULFILMENT OF THE

REQUIREMENTS FOR BUS 817
(MANAGEMENT USE OF CONTROL SYSTEM)

DEPARTMENT OF BUSINESS ADMINISTRATION

SCHOOL OF POSTGRADUATE STUDIES
UNIVERSITY OF LAGOS

SEPTEMBER 2015

INTRODUCTION
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 in an organization do have personal goals as well as the organizational
goal to achieve. The purpose of control is to ensure that an organization meets desired
objectives and that individual members behave in a manner consistent with organizational
objectives. Management control is the process of influencing others in a company to
effectively and efficiently achieve the goals.
However the high level of complexity of individual behavior and group or organizational
behavior, should be managed, because in the end the work of the organization is achieved
through people, either individually or collectively. Therefore, the management of
organizational behaviour has a central position in the organization due to some issues related
to the goals of organizational behavior itself. Management control system influence
organization behaviour in a goal congruent manner.
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
Adequate control system will encourage individual not to act against the best interest of the
organization.
There are 2 most important questions to ask in evaluating any management control practices
1. What actions does it motivate people to take in their own self-interest?
2. Are these actions in the best interest of the organization?
Both formal and informal process influence human behaviour in organization which affect
the degree to which goal congruence can be achieved
INFORMAL PROCESSES
There are external and internal forces that play a key role in achieving goal congruence
External forces

These are norms of desirable behaviour that exist in the society. Norms refer to as work ethics
manifested in employees examples; loyalty to the organization, diligence, their pride in doing
their job. Some of these attitudes are peculiar to the region where the organization operates
from.
Internal forces
Culture: common beliefs, shared values, norms of behaviour and assumptions that are
accepted in the organization. Organization culture can be influenced by the CEO, managers
and union
Management style is another internal factors which has a strong impact on management
control. Managers comes in all shapes and sizes, some are charismatic, outgoing others are
not.
In order to choose the type of control to be adopted for the organization, a manager has to
first analyze his style of management. If his style is participatory in nature, than internal
control would be a better. If it is authoritative, then adopting the internal control style would
not work, as the subordinates may not be used to putting forward their views during the
decision-making. They may not be in a position to set realistic goals. Hence, there is a need
for congruency between the managerial style and the control style.
INFORMAL ORGANIZATION
Apart from the formal line of relationship in the organization, individual do communicate
with other member of organization in different functions who are probably friends or
acquaintances.
Management decisions are based upon experience, intuition and feeling. Informal control
processes are formed as a result of interaction between people.
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 receive from different sources may conflict with one another or
subject to different interpretation.
Without the cooperation of the employees, managers cannot implement their decisions.

THE FORMAL CONTROL SYSTEM

The Formal control systems are written, management-initiated mechanisms that influence the
behavior of employees in achieving the organizations goals. Formal system can be divided
into 2;
1. The management control system
2. Rules
Rules
Rules include standing instructions, job description, standard operation procedure, manuals.
Some rules are guide that is organization is permitted to depart from them under some
specified circumstance while some should never be broken under any circumstances.
Types of rules;
Physical controls; safeguards, computer password etc
Manuals; rules written into manual has some consideration to be noted
Task control system; as discussed earlier, which is defined as the process of assuring that
specific task are carried out efficiently and effectively.

Formal control process

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 organization
This is where managers with specialized knowledge make decision related to a specific
function e.g. skilled marketing manager, skilled finance manager and they are likely to make
better decision within their respective field than manager of general function. Disadvantage is
that they are inadequate for a firm with diversified product and market which is one of the
advantage of business unit structure.

A simple functional organization structure

Business unit organization

Also called division, is responsible for all function producing and marketing a specified
product line. Example Dangote Plc which different business unit like cement, pasta etc; flour
mills also. Advantage of this structure is that it provide a training ground in general
management. Setback of this structure is the possibility of each business unit staff may
duplicate some work that in a functional organization is done at headquarters, which may cost
more than the value gained in divisionalization. Moreover skilled specialist in certain
functions is in short supply and individual business unit may be unable to attract qualified
people. This is issue is one of the merits of a matrix structure.

Business unit structure

Matric structure
A matrix organizational form is a mixed organizational form in which normal hierarchy is
overlayed by some form of lateral authority, influence or communication. There are two
chains of command, one along functional lines and other along project lines. The matrix
structure evolved in response to needs of organizations that pursue high technology projects,
provide complex products and services and have operations in different countries
In the matrix structure, managers not only achieve the goals and objectives of the project, but
also share the resources economically among the various departments for the achievement of
the goals and objectives. The matrix organization is extensively being used in the
management of the projects that require complex activities.

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 officer
(CFO). And the CFO is typically responsible for both the controller function and treasury
function. The main responsibilities of a controller are:
To design and operate the control system
To prepare financial reports and statements for the clear understanding of shareholders and
external parties
To develop internal auditing systems for the control of the physical and monetary assets of
the firm.

 To develop personnel through educative sessions on matters relating to the controller's

function.
To advice the management on the financial implications of decisions under consideration.
To analyze program and budget proposals and bring together the various segments of an
organization under a single organizational budget
The Business unit controller
Typically 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, for whom they provide
staff assistance.
The controller relationship is into 2 types; the dotted line and the solid line relationship. In an
organization where the business unit controller report directly to the business unit manager
then it has the dotted line relationship with the corporate controller. In other organization the
business unit controller report directly to the corporate controller and that is indicated with a
solid line in the organization chart.

CONCLUSION
Regardless of the reporting relationship, it is expected that the business unit controller will
not condone or participate in the transmission of misleading information or in the
concealment of unfavourable information.
Organizations should choose a design structure that is likely to benefit them the most. Each
design must be evaluated on the basis of efficiency and coordination. The best form is the one
which operates at minimum cost per unit of output.
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.