Ouchi Paper

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Paul Wanja Pacholski (Student ID# 1151300)

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Pre-course assignment for “Strategy Implementation” (Dec 21) William G, Ouchi (1979) with his conceptual framework for the design of organizational control mechanism makes a valuable contribution to the field of organizational theory that deals with the problem of evaluation and control. In his paper, the author designates three approaches through which organizations can achieve cooperation among its members to achieve a common goal: Namely, these mechanisms, which subsequently will be briefly introduced, are: Market control, bureaucratic control and clan control. Besides describing the fundamental characteristics of each control mechanism, Ouchi’s most remarkable contribution can be seen in his critical discussion of the limits, costs and prerequisites for the efficient applicability of each mechanism. To begin with, let us highlight the distinguishing remarks of the three control mechanisms described in the paper. Market control is based on price competition to evaluate productivity. Comparing profits and prices, the manager can determine the efficiency of the organization and the work of individuals. Ouchi provides the example of a purchasing department where price information makes it possible for the buyer to make efficient decisions when choosing between different suppliers of goods and services. Bureaucratic control is comparable to the results and action control mechanisms discussed in class and involves the use of precise rules, written documentation, formal policies, operating procedures, close personal surveillance and direction of employees by their superiors, reward systems, and other routines to influence employee behavior and assess performance. Clan Control is analogue to the ideas of cultural control and personnel control, relying on shared values, beliefs, a strong corporate culture, common norms, and social relationships to control employee behaviors and promote the realization of the firm’s...
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