SNFs publikasjonsserier

Tidsskrift Tittel og forfatter
Employee Relations, Vol. 39 (2017), No. 2, 240-253 Never walk alone: achieving work performance through networking ability and autonomy
Nesheim, T., Olsen, K.M. and Sandvik, A.M.

The formalisations that exist in an organisation are thought to have a substantial influence on how employees interpret the organisation’s Management Control System (MCS) (Malmi & Brown, 2008). Previously, researchers claimed that an increase in formalisation would have a negative attitudinal effect on employees, while a decrease induces an autonomous and positive view of the MCS (Burns & Stalker, 1969). Adler & Borys (1996) broke with this notion and argued that it is not the degree of formalisation that determines employee interpretation, but rather the distinctive features of the way rules and procedures are designed and implemented. The purpose of this study is to explore how the introduction of two contradictory formalisations influences the users’ interpretation of the MCS in an organisation.
This thesis conducts a case study of Statoil who have recently introduced two contradictory degrees of formalisations to their MCS. One is a decrease where the aim has been to give employees more freedom to decide what rules and regulations should be defining for them. The other represents an increase through the introduction of a detailed procedure for risk management. By applying a qualitative research methodology, we study how employees have interpreted corporate’s intentions behind the two formalisations. Further, we compare how this has influenced their experience of the MCS in the different cases.
Overall, our conclusions support the argument made by Adler & Borys (1996) through revealing that how the increased and decreased formalisations in Statoil have been interpreted has been a consequence of their inherent features. We find that corporate have designed and implemented enabling formalisations that have had a positive attitudinal influence on the users. Further, our study suggests that generating an understanding of the underlying rationales behind the formalisations is of particular importance in this process. Finally, we also find that the contradictory degrees of formalisation have induced different interpretations of support roles in the MCS. Where they are regarded as an interference to decision-making latitude in the case of decreased formalisations, support roles are viewed as a positive feature in the case of the opposite.