Scandinavian Working Papers in Business Administration

SSE/EFI Working Paper Series in Business Administration,
Stockholm School of Economics

No 4: Process Orientation, Integration of Work Teams and Management Control

Göran Nilsson
Additional contact information
Göran Nilsson: Stockholm School of Economics, Postal: Department of Accounting and Finance, Box 6501, 113 83 Stockholm

Abstract: There is a trend in Swedish companies to use team-based organisational design when striving for process orientation. The first question put forth in this paper is whether this design supports a process orientation. Since the teams usually are rather autonomous it is not obvious that they become integrated with other teams in the process. The second question put forth is if and how management control, in a broad sense, can support an integration of the teams. In an explorative field survey, aiming for an overview of the topic, eight industrial plants have been studied. Four of the cases are presented in this paper. Observations and conclusions are presented as follows; Firstly, the teams can become objects of suboptimization, but they can also support integration by creating empowerment with the employees. Secondly, there seem to be two basic modes of process orientation, one more mechanically and one more mentally focused. Not surprisingly, a mental mode seems to better support an integration of the teams. Thirdly, the control system used in one of the cases is compared with Ouchi's clan concept. Fourthly, the control mechanisms do seem to be of importance, either supporting or preventing a mental process orientation. One important aspect is if the different control mechanisms are integrated themselves, or if they are sending contradictory signals. Another aspect is the object of the performance measures. Finally, to continue the research, use of an action research method is proposed in order to study the implementation process.

Keywords: Process orientation; Integration; Work teams; Management control

JEL-codes: L60; M11; M40

25 pages, First version: October 30, 1998. Revised: June 10, 1999.

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