Affinity Plus Case Hbs
Case Assignment 3
Affinity Plus (A)
Table of contents
Introduction 2
The benefits of “employee latitude” 2
The disadvantages of “employee latitude” 3
Balancing the tradeoffs between different degrees of latitude 3
Reasons for the high employee turnover at Affinity Plus 4
Management control system changes 5
The alignment of indirect lending and the MOE 6
Conclusion 6
Bibliography 8
Introduction
In this case assignment the credit union Affinity Plus, which is based in Minnesota, will be examined. As they implemented a new control system, focusing primarily on customer needs, they forgo classical principals as authorization processes and limitations for employees. In the following assessment we will evaluate Affinity’s strategy including benefits and drawbacks of employee latitude. Furthermore, Affinity’s current indirect lending model will be evaluated, as there were questions raised whether this kind of program might compromise the ideals introduced by the guidelines focusing on customer satisfaction, namely the Member – Organization – Employee (MOE) guideline.
The benefits of “employee latitude”
Increasing employee latitude means to widen the degree of freedom, an employee can use in making decisions. At Affinity Plus this policy was taken to an extreme, as employees were empowered to make all operational decisions by themselves. For example they enjoyed unlimited freedom with regard to deciding how to proceed with delinquent members and also concerning the setting of credit levels. Providing employees with this degree of freedom requires releasing tight controls, such as action and result controls and relying more on softer controls, such as cultural controls. Although cultural controls can be highly effective, tight control is unlikely to be achieved with cultural controls alone. Why would an organization accept loosening the Management Control System (MCS) in favor of higher employee latitude?
In theory the benefit of a tighter MCS is a
Affinity Plus (A)
Table of contents
Introduction 2
The benefits of “employee latitude” 2
The disadvantages of “employee latitude” 3
Balancing the tradeoffs between different degrees of latitude 3
Reasons for the high employee turnover at Affinity Plus 4
Management control system changes 5
The alignment of indirect lending and the MOE 6
Conclusion 6
Bibliography 8
Introduction
In this case assignment the credit union Affinity Plus, which is based in Minnesota, will be examined. As they implemented a new control system, focusing primarily on customer needs, they forgo classical principals as authorization processes and limitations for employees. In the following assessment we will evaluate Affinity’s strategy including benefits and drawbacks of employee latitude. Furthermore, Affinity’s current indirect lending model will be evaluated, as there were questions raised whether this kind of program might compromise the ideals introduced by the guidelines focusing on customer satisfaction, namely the Member – Organization – Employee (MOE) guideline.
The benefits of “employee latitude”
Increasing employee latitude means to widen the degree of freedom, an employee can use in making decisions. At Affinity Plus this policy was taken to an extreme, as employees were empowered to make all operational decisions by themselves. For example they enjoyed unlimited freedom with regard to deciding how to proceed with delinquent members and also concerning the setting of credit levels. Providing employees with this degree of freedom requires releasing tight controls, such as action and result controls and relying more on softer controls, such as cultural controls. Although cultural controls can be highly effective, tight control is unlikely to be achieved with cultural controls alone. Why would an organization accept loosening the Management Control System (MCS) in favor of higher employee latitude?
In theory the benefit of a tighter MCS is a
Bibliography: Lawler, E. (1969): “Job design and employee motivation”, Personnel Psychology, Vol. 22 (4), pp. 426-435. Merchant, K.A.; Van der Stede, W.A. (2012): “Management Control Systems: Performance measurement, evaluation and incentives”, Prentice Hall, Third Edition, 2012. -------------------------------------------- [ 1 ]. Merchant, K.A.; Van der Stede, W.A. (2012), p. 131. [ 2 ]. Merchant, K.A.; Van der Stede, W.A. (2012), p. 123. [ 3 ]. Lawler (1969) p. 431. [ 4 ]. Merchant, K.A.; Van der Stede, W.A. (2012), p. 88.