Employee Resistance to Management Control - Research Paper Example

Unit Assessor Ken Lovell Semester 2009 Due 11th May By Amie Bienke 21410839 Table of contents .....................................................................................................3 Introduction .....................................................................................................3 Theoretical Background ..................................................................................................4 The organization .....................................................................................................5 Organizational Culture ....................................................................................................5 Control Strategy .....................................................................................................6 Employee Resistance to Management Control................................................................8 Appendix .....................................................................................................11 1.0 Executive summery The aim of this study was to explore the systems that management has adopted in the organisation to control employees and the extent to which employees try to resist management control in the organisation. A semi-structured interview was conducted with a middle manager in a Multinational Corporation receiving government intervention occasioned by the global meltdown. Schein’s organisational culture model was used to identify what constitutes the culture of the organization under scrutiny. It was found that the organization has a formal management and control systems that sustains strong corporate culture and employee loyalty. It adopted cultural control strategy at strategic level of control and output strategy at operational level. However, in a bid to meet conditions laid for accessing government intervention, certain decisions were taken, which affected the relationship between middle managers and top management. The managers devised various ways of resisting the managerially-imposed change. They planned collectively but acted individually. They capitalized on their good relationship with the factory workers to manipulate the sentiments of the latter against the top management. Their resistance is resentment-based and not necessarily resistance to changes aimed at reducing wastages. 2.0 Introduction For the purpose of this study Oracle Computers Inc. was used as an explanatory case study for some theoretical underpinnings. A middle manager in human resource department was interviewed. The interviewee has worked in the organization for ten years and has been working as a Human Resource manager for 2 years. This report does not claim that this is exactly what the organization is like. The information used relies on the interviewee’s perception. 3.0 Theoretical background Schein’s (1992) organisational culture model was used to identify what constitutes the culture of the organization under scrutiny. Schein describes that organisational culture constitutes the unspoken and tacit guidelines and expectations that enable people within an organization to get along (Schein 1992). Schein’s model portrays organisational culture as having three levels. These are underlying assumptions, values and artefacts (Linstead, Fulop & Lilley 2004). Underlying assumptions identify the beliefs held by members within the organisation about the organization. Values indicate what staff consider to be important about working within the organization. Artefacts, according to Schein, pertain to visible aspects such as formal procedures and material symbols that say something about organization (Linstead et al. 2004). Child (2005) identified six control strategies used in organizations. These are personalized centralized, bureaucratic, human resource management, output, cultural control and control through electronic surveillance. Folger & Skarlicki’s (1999) provide a working definition. They defined resistance "employee behaviour that seeks to challenge, disrupt, or invert prevailing assumptions, discourses, and power relations". However, Piderit (2000) notes that resistance is also conceptualized as cognitive or emotional state. Resistance is not just behaviour but also a belief or an emotion (cited in Bolognese 2002). Thus employee resistance is an inevitable response to organizational change as employee will naturally defend the status quo when such change threatens his/her security or status (Bolognese 2002). 3.0 The Organization Oracle Computers Inc produces computer hardware and accessories of digital-based technologies. The corporation is headquartered in Australia and it has offshore operations The Corporation is undergoing significant reform with recent government intervention. The corporation has been compelled to cut down bonuses, close a number of local factories and increase working hours for managers of functional factories. These actions are not going down well with the middle managers, who believe the top management (Board of Director) has, on the one hand, compromised its authority to Canberra and, on the other, has unjustly taken unfair advantage over the middle managers. (interview, Part 3, Q. 26) 4.0 The organisational culture Using Schein’s model the following levels of organizational culture were identified in Oracle Computers: 4.1 Significant Artefacts 1. Open office set up that allows a visual between team members and managers and encourages communication (Interview, Part 2, Q.13), 2. Social clubs facilitated by the organization and friendships (Interview, Part 2, Q.13). 3. Formal practices such as one-day orientation of the organisation where policies and responsibilities are clarified, on-the-job training, dress code for identification, half-yearly drug testing (Interview, Part 2, Q. 18). 4.2 Values 1. Goals: get products out 100% on time, on specification and on budget (Interview, Part 2, Q.18). 2. Strategy: train and keep members happy (Interview, Part 2,Q.18) 3. Managers being approachable, servicing machinery regularly (Interview, Part 2, Q. 13). 4. Core team interpersonal compatibility (Interview, Part 2, Q.13). 5. The common belief that ‘We are only as good as our weakest link’ is held by all employees (Interview, Part 2, Q.13). 6. Trust and open communication (Interview, Part 2, Q.13). 4.3 Assumption 1. Good company, making good products that meets international standard (Interview, Part 2, Q. 13). 2. Good working environment and job security (Interview, Part 2, Q.13). 5.0 Control Strategy The organization uses two levels of control: strategic control—“control over the means and methods on which the whole conduct and future direction of the organization depends”—and operational control—“control over work done within an organization, in the sense of determining how employee perform their jobs” (Child 2005). The organization studied uses output control strategy at the operational level of control and cultural control at the strategic level. The organization adopted output control strategy given its number of staff and production units in different locations within Australia and without. The features of this strategy include 1) production targets for units, 2) specifications on quality 3) reward and punishment for meeting or failing to meet targets, and 4) appreciable delegation of decisional powers to middle mangers.In addition, the organization adopted cultural control to respond to the contemporary realities that requires significant change in employee behaviour. Cultural control, according to Child (2005), emphasizes individual employee’s willingness to comply with management’s directions of change. The employee recognizes the legitimacy of the management and readjusts to meet organizational goals. In essence, this control strategy relies on “internalized compliance rather than external constraints” (Interview, Part 2, Q. 13 and 18). Measures approved by the top management to ensure that middle managers adapt to the changing realities, while maintaining a strong corporate culture include: 1. Increased number of trainings and training allowances 2. Leveraging workload target to create room for more socialization 3. Introduction of bi-weekly social clubbing (Interview, Part 3, Q.27). These actions were implemented but the effect has increased loyalty of factory workers to middle managers through constant informal interaction between the two categories of employees and the leeway given to the former by the latter. The increased loyalty is however detrimental to the corporation as middle managers uses it as a tool for protest. 6.0 Employee Resistance to Management Control The lifeline accepted and decisions taken by the top management in response to conditions government conditions were believed to be unnecessary. There is a general reservation as to why the management accepted Canberra’s billions. Most employees believe that was ‘managerial greed’ and lust for ‘cheap dollars’. It is believed that the corporation could survive the economic tremble without any government intervention. Accepting public fund was done to cover up managerial flaws. The affected employees believe more billions would be saved by cutting down bonuses and extraneous allowances of top management officials. This is perceived as a case of top management’s protection of executive flamboyance at the detriment of employee welfare, comfort and safety (Interview, Part 3, Q. 26). This perception resulted in adversarial relationship between the middle managers and top management. The management control system was resisted in the following ways: 1. Making out: more ‘idle hours’ are leveraged to factory workers as middle managers compromise their supervisory roles; endorsing unofficial shifting arrangements among factory workers for fiddles. 2. Fiddling: over-invoicing, unsubstantiated waybills and making private phone calls 3. Sabotage: reluctance to service factory machineries; non-replacement of warn out gears and inciting labour actions; distorting records of surveillance cameras mounted in factories (Interview, Part 3, Q. 23). The actions and inactions of the middle managers are largely at individual level although they frequently hold informal meetings. Top management’s decisions are considered palliative and they give a wrong impression to the government and public that wastages in corporations supported by government are reduced significantly. The impact of measures taken to change the way things are done (increasing productivity and employee loyalty) in the organization is uncertain. The middle managers’ central role of communicating and managing organizational changes has been compromised. To further express their dissatisfaction, the middle managers encouraged factory workers to resist by threatening to embark on industrial action to attract the attention of government to the unfair decisions. The middle managers see their actions and inactions as circumstantial and subjectively justifiable, which is in line with Towsend’s (2003:455) conclusions in study of resistance in 2 leisure companies. It is important to note that middle managers are not really resisting change that will reduce wastages and increase productivity rather they are resisting the loss of bonuses and comfort, and the receipt of government funds. This is in line with Dent & Goldberg’s (1999) assertion as they explain the practical implications of conceptualization of employee resistance as purely resistance to change. In essence, the middle managers are undertaking what Folger & Skarlicki (1995) termed resentment-based resistance—“reactions by disgruntled employees regarding the perceived unfairness of the change”. Also the resistance witnessed in the corporation can be liken to what Burawoy’s (1985) argument of ‘politics of production’ at the micro-level (across the organizational structure) and the involvement of the state. Middle managers are exercising their power and control subversively as a protest to top management’s impositions. References Bolognese, A. F. (2002), “Employee Resistance to Organizational Change”, Accessed April 24, 2009, from http://www.newfoundations.com/OrgTheory/Bolognese721.html Burawoy, M (1985) The Politics of Production, London, Verso. Child, J (2005) Organization: Contemporary Principles and Practice, London: Blackwell. Dent, E. & Goldberg, S. (1999), Challenging "resistance to change." Journal of Applied Behavioral Science, Vol. 25, No.41. Folger, R. & Skarlicki, D. (1999), “Unfairness and resistance to change: hardship as mistreatment”, Journal of Organizational Change Management, Vol. 35, No.50. Linstead, Fulop & Lilley 2004.............. Towsend, K. (2003), “Leisure at work, who can resist it? An investigation into workplace resistance by leisure service employees”, Journal of Industrial Relations, Vol. 45, No. 4. Appendix A Part 1 Q.3 What is your position in the organization? Human Resource Manager Q.4 How long have you been working in the organization? Five years. Q.5 How long have been occupying your present position? Two years. Q.7 What is the work force of your organization? ...we have 1576 employees under the Australian division of the corporation. Part 2 Q. 13 What is the nature of the management system in your organization? We use both formal and informal strategies to get things done in this organization. We operate an open door policy. Our managers are approachable, which gives employees unfettered access to their managers. Our office settings encourage constant communication. As you can see, for us here in the HRM, we make visual contact with each other. That is keeps us connected. Here, we believe and promote teamwork. We achieve that by building confidence and trust among team members. We try to make the working condition and environment as conducive as possible. We believe with a conducive working environment and condition, we would have the best product in the increasingly competitive market. Don’t forget Australia is not known for computers. But we believe we can break even. We believe ‘We are only as good as our weakest link’. That is the motivating force...Besides, we socialize very well. We have social clubs that promote friendship among employees. This informal strategy work well. Q. 18 What is the nature of the control system in your organization? Here we believe training and constant communication is the key to a successful control system. Every employee undergoes orientation training before s/he starts working. And we organize training periodically. Importantly, we share our experiences and exchange ideas through supervision. Thus, we train them to build their capacity not just to work for the company...In addition; we are very much concerned with our employee welfare and comfort. We used to have the best health and safety support package in the whole of Australia. All our employees undergo free half-yearly medical check up. They also undergo drug test half-yearly...We believe in orderliness is the foundation of control. We keep a dressing code and support (at times psychologically) employees to abide by it. Generally, we believe every employee will perform optimally if given the chance t. In the offices or factories our goal is our goal is ‘get products out 100% on time, on specification and on budget’. We only help employee to understand this goal and leave them to internalize it. Here, we have a culture of leveraging decisions to managers, who collectively, for instance, workout production output target with factory workers while ensuring specifications are not compromised. We allow every employee to learn to learn from others and share with others his ‘secrets’. Part 3 Q. 21 Do you observe employee resistance? Yes. We’ve observed it at different levels; at the level of factory workers and middle managers... Q.23. What actions or inactions were taken by the employee involved? There quite a number of actions taken by employees depending on their positions in the corporation. For the factory workers, making out is very common and frequent. For the managers, we felt betrayed. We put in our best to see that they smile. Why then should they decide to treat us shoddily? This informed our actions. You know we interact with the factory workers. They respect us. They are very loyal to us. So we collectively agree to give them more breathing space. Some factory mangers give them additional day off. They work out a shifting arrangement that favours factory workers. In fact, some managers are a bit nasty. I know of a particular case, the manager refused to replace warn out gear. In another case, we discovered maintenance was compromised. Over-invoicing and unsubstantiated waybills are common practices that we noticed since managers started complaining... You may say this is sabotage. Yes. But that to us is the price of being insensitive to the plight of those that sweat to make other comfortable. I mean our actions are justifiable, given the way we were treated. Don’t forget, we are in constant communication. We meet secretly and decide how to hit them without suspecting our subversive actions. Q.26. What is the possible cause of the employee resistance? Employee resistance can be attributed to the unpopular decisions of top management. In a bid to meet conditions laid by the Government of the Commonwealth for accessing fund for ailing corporations, the top management decided to shot down some local factories and imported parts from offshore factories in Indonesia, India and South Africa. The laid off factory workers. They increased the working hours of factory and other middle managers. Yet, they cut down our bonuses. We work more and get little. Conversely, they marginally cut down their bonuses, which run in millions every year. That wasn’t fear. Decisions were taken without adequate consultation and considerations. We frowned at that. But they were not interested in our views. So we wondered who was managing the corporation. Was it the ‘pleasure savvy’ directors or Canberra? I believe, like many others, that the corporation need no government intervention. It is healthy. But they want ‘cheap dollars’ to cover up their mess. That was clearly a manifestation of managerial greed. Q. 27. What was the response of the top management to these acts of resistance? They felt it was coming. They knew we can do. Yet the stubbornly took their decisions. When it started happening, they responded. They failed to dialogue with us. Rather they took palliative measure that will make us comply. They organized trainings and increased training allowances of managers. They delegated to power to decide the workload of production units to allow us more time to socialize. In fact, the introduced bi-weekly club for senior employees, where we meet and interact informally with them. But frankly speaking all these wasn’t enough. What we were expecting was a candid discussion to air our views and make suggestion as to how to best save cost in the corporation. I don’t think they are ready for that. Greed has consumed their reasoning. And I don’t think they will observe any reasonable change in managers’ attitudes. It is like a stalemate. This gives room for some factory managers to manipulate factory workers to embark on industrial action. Read More