Page 53 - The Handbook - Law and Accoounting Networks and Associations 3
P. 53
Law and Accounting Networks and Associations
A group theory of social behavior suggests that groups — associations of two or more
people influencing one another through direct communication over time — benefit
individuals by “providing information resources, emotional resources, and identity
support.”234
Groups then benefit organizations through coordinating joint activities, promoting
specialization, and facilitating organizational learning. Aside from collective productivity,
however, groups concern themselves with identity maintenance where recognition, fear of
shame, and peer pressure play a role. Members tend to judge actions for consistency with
identity, using peer pressure to sanction behaviors apposite of group norms: the nail that
sticks up is the one hammered down. Japanese companies pursue extra-curricular group
activities to socialize to enhance this.235
Networks have a very different model when it comes to authority as discussed in the governance section. The
networks are based upon extensive collaboration and information sharing.
Decentralizing authority reduces the number of hierarchical ranks and increases
responsibility among those who were not previously decision makers. With better decision
support, the rank of a person required to make a decision becomes less important. Joint
control tends to accompany “empowerment,” meaning that individuals receive information
about their own and the organization's performance, they are rewarded for performance,
they possess the skills required to perform, and they are granted decision authority.236
Decentralizing authority reduces the number of hierarchical ranks and increases
responsibility among those who were not previously decision makers. With better decision
support, the rank of a person required to make a decision becomes less important.237
Joint control tends to accompany “empowerment,” meaning that individuals receive
information about their own and the organization's performance, they are rewarded for
performance, they possess the skills required to perform, and they are granted decision
authority. Not surprisingly, this can win autonomy by losing unanimity and purchase
participatory buy-in at the cost of political bail-outs.
Shared control in network organizations leads to more consensus management which tends
to increase “buy-in” among employees affected by new decisions. “Research suggests that
hierarchical design dampens employee motivation because individuals are likely to be
more committed when they have participated in a decision, and much less enthusiastic
when they have been ordered by superiors to undertake a particular task.”238 Participatory
involvement of committees and line management in the process of setting strategy
increases group member acceptance of and responsibility for final recommendations.239
234 Van Alstyne, supra note 9, citing T. Finholt & L. S. Sproull, Electronic Groups at Work, 1 ORG. SCIENCE, 41, 41-64 (1990).
235 Id.
236 Van Alstyne, supra note 9, citing S.L. Jarvenpaa & B. Ives, The Global Network Organization of the Future: Information Management Opportunities
and Challenges, 10 J. OF MGMT. INFO. SYS. 25, 25-27 (1994).
237 Van Alstyne, supra note 9, citing L. M. Applegate et. al, Information Technology and Tomorrow's Manager, HARV. BUS. REV. (1988), at 128-136.
238 Id., citing W. W. Powell, Neither Market Nor Hierarchy: Network Forms of Organization. 12 RES. IN ORG. BEHAV. 295, 295-336 (1990).
239 Id., citing R. Howard, The CEO as Organizational Architect: An Interview with Xerox's Paul Allaire, HARV. BUS. REV. (Sept.-Oct. 1992) at 107-
121; see also T. PETERS, LIBERATION MANAGEMENT: NECESSARY DISORGANIZATION FOR THE NANOSECOND NINETIES 834 (1992).
41
A group theory of social behavior suggests that groups — associations of two or more
people influencing one another through direct communication over time — benefit
individuals by “providing information resources, emotional resources, and identity
support.”234
Groups then benefit organizations through coordinating joint activities, promoting
specialization, and facilitating organizational learning. Aside from collective productivity,
however, groups concern themselves with identity maintenance where recognition, fear of
shame, and peer pressure play a role. Members tend to judge actions for consistency with
identity, using peer pressure to sanction behaviors apposite of group norms: the nail that
sticks up is the one hammered down. Japanese companies pursue extra-curricular group
activities to socialize to enhance this.235
Networks have a very different model when it comes to authority as discussed in the governance section. The
networks are based upon extensive collaboration and information sharing.
Decentralizing authority reduces the number of hierarchical ranks and increases
responsibility among those who were not previously decision makers. With better decision
support, the rank of a person required to make a decision becomes less important. Joint
control tends to accompany “empowerment,” meaning that individuals receive information
about their own and the organization's performance, they are rewarded for performance,
they possess the skills required to perform, and they are granted decision authority.236
Decentralizing authority reduces the number of hierarchical ranks and increases
responsibility among those who were not previously decision makers. With better decision
support, the rank of a person required to make a decision becomes less important.237
Joint control tends to accompany “empowerment,” meaning that individuals receive
information about their own and the organization's performance, they are rewarded for
performance, they possess the skills required to perform, and they are granted decision
authority. Not surprisingly, this can win autonomy by losing unanimity and purchase
participatory buy-in at the cost of political bail-outs.
Shared control in network organizations leads to more consensus management which tends
to increase “buy-in” among employees affected by new decisions. “Research suggests that
hierarchical design dampens employee motivation because individuals are likely to be
more committed when they have participated in a decision, and much less enthusiastic
when they have been ordered by superiors to undertake a particular task.”238 Participatory
involvement of committees and line management in the process of setting strategy
increases group member acceptance of and responsibility for final recommendations.239
234 Van Alstyne, supra note 9, citing T. Finholt & L. S. Sproull, Electronic Groups at Work, 1 ORG. SCIENCE, 41, 41-64 (1990).
235 Id.
236 Van Alstyne, supra note 9, citing S.L. Jarvenpaa & B. Ives, The Global Network Organization of the Future: Information Management Opportunities
and Challenges, 10 J. OF MGMT. INFO. SYS. 25, 25-27 (1994).
237 Van Alstyne, supra note 9, citing L. M. Applegate et. al, Information Technology and Tomorrow's Manager, HARV. BUS. REV. (1988), at 128-136.
238 Id., citing W. W. Powell, Neither Market Nor Hierarchy: Network Forms of Organization. 12 RES. IN ORG. BEHAV. 295, 295-336 (1990).
239 Id., citing R. Howard, The CEO as Organizational Architect: An Interview with Xerox's Paul Allaire, HARV. BUS. REV. (Sept.-Oct. 1992) at 107-
121; see also T. PETERS, LIBERATION MANAGEMENT: NECESSARY DISORGANIZATION FOR THE NANOSECOND NINETIES 834 (1992).
41
