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What functions does hierarchical control play in firms/organisations - Essay Example

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Current paper focuses on the analysis of the potential functions of hierarchical control in the modern market;reference is made to the traditional functions of the specific mode of organizational control but also to its alterations under the pressure of the extensive changes in the structure of markets…
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What functions does hierarchical control play in firms/organisations
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Download file to see previous pages In order to understand the role of hierarchical control in modern organizations, it is necessary to identify its key characteristics – as developed in the context of the social, economic or political environment, i.e. independently to the organizational framework. The term ‘hierarchy’ is used in order to describe a sequence of objects, principles or roles. Combined with the term ‘control’, hierarchy indicates the power of control on the activities performed by individuals or the use of principles as indicated by their functions (Mutch 2008, 37). In accordance with the above, hierarchical control has certain requirements: a) an order (hierarchy) needs to exist – referring to order of objects/ roles, b) the supervision of the objects/ roles has to be delegated to a particular person (controller); without the power of the controller to supervise the lower levels of the hierarchy there is no sense of hierarchical control, c) hierarchical control can perform better under certain organizational conditions, for instance in highly bureaucratic environment (Mutch 2008, 37). The development of hierarchical control in modern organizations is initiated for the achievement of a series of targets; in other words, hierarchical control serves specific organizational needs, a fact that leads to the assumption that the modes of hierarchical control across organizations can vary meeting the organizational needs and goals....
In accordance with the above, hierarchical control has certain requirements: a) an order (hierarchy) needs to exist – referring to order of objects/ roles, b) the supervision of the objects/ roles has to be delegated to a particular person (controller); without the power of the controller to supervise the lower levels of the hierarchy there is no sense of hierarchical control, c) hierarchical control can perform better under certain organizational conditions, for instance in highly bureaucratic environment (Mutch 2008, 37). The development of hierarchical control in modern organizations is initiated for the achievement of a series of targets; in other words, hierarchical control serves specific organizational needs, a fact that leads to the assumption that the modes of hierarchical control across organizations can vary meeting the organizational needs and goals. The above fact is made clear in the study of Lammers (1979) where reference is made to the following function of hierarchical control: the development of complex financial functions. In accordance with Lammers (1979) organizations, which have to deal with financial functions, show ‘a higher intensity of hierarchical control’ (Lammers, 1979, 154) compared to those organizations that operate in different areas. In this context it is expected that the organizations operating in the manufacturing industry have less developed hierarchical control compared to the organizations of the financial services sector. The view of Lammers that hierarchical control is more valuable in the financial services sector may be criticized as for its relevance in the current market conditions. In the modern market, the operational activities of firms in various industries can be quite complex – ...Download file to see next pagesRead More
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