An Examination of Control Mechanisms in Organizations with Ill-Defined Technology and Output

Abstract

AN implicit assumption underlying incentive compensation systems is that the systems' performance measures should relate to desired or successful outcomes for the organization. The predominant view is that efficiency is, or at least should be, the underlying metric for decisions on resource allocation and that control systems should be designed to promote efficiency. It is not clear, however, that all organizations use the efficiency criterion or that it explains behavior within all organizations. At least some organizations adopt control systems for reasons other than efficiency (Tolbert and Zucker, 1983 ). Some control systems may have a symbolic role (Meyer and Rowan, 1977).