The Basic Building Blocks of Organizational Structure

Instead of measuring results (as in outcome control) or dictating behaviour (as in behavioural control), clan control is an informal type of control. Specifically, clan control relies on shared traditions, expectations, values, and norms to lead people to work toward the good of their organization (Figure 9.20 "Clan Controls"). Clan control is often used heavily in settings where creativity is vital, such as many high-tech businesses. In these companies, output is tough to dictate, and many rules are not appropriate. The creativity of a research scientist would be likely to be stifled, for example, if he or she were given a quota of patents that must be met each year (output control) or if a strict dress code were enforced (behavioural control).

Figure 9.20: Clan Controls

Google is a firm that relies on clan control to be successful. Employees are permitted to spend 20 percent of their work week on their own innovative projects. The company offers an ‘‘ideas mailing list'' for employees to submit new ideas and to comment on others' ideas. Google executives routinely make themselves available two to three times per week for employees to visit with them to present their ideas. These informal meetings have generated a number of innovations, including personalized home pages and Google News, which might otherwise have never been adopted.

Figure 9.21: As part of the team-building effort at Google, new employees are known as Noogles and are given a propeller hat to wear.

Some executives look to clan control to improve the performance of struggling organizations. In 2014, Rogers Communications CEO Guy Laurence formally unveiled his plan to revitalize growth at the country's largest communications firm. The strategy, dubbed "Rogers 3.0," aimed to improve the customer experience and use the company's assets - which include everything from magazines to the Toronto Blue Jays - together in a more effective way. Laurence explained the issues he believed the company struggles with, and how his plan will address them. The reorganization is aimed at focusing on better customer service by bringing together all of the elements of customer experience - 10,400 staff - into a single unit reporting to him. In plans to improve customer service to business and enterprise customers, Rogers has split out consumers from enterprise users, believing there's a growth story in enterprise. Finally, Laurence said that Rogers' stable of sports, broadcast, and publishing properties would differentiate the company from its telecom peers and commented, "I believe content is the most important part of our mix".

Clan control is also important in many Canadian cities. Vancouver has the steam clock and Wreck Beach; Toronto has the CN Tower and the Blue Jays; Edmonton has the Oilers and West Edmonton Mall. These attractions are sources of pride to residents and desired places to visit for tourists; they help people feel like they belong to something special.

It is worth noting that control systems, once embedded in an organization, become very difficult to change. Control systems emerged within an organization, not by accident, but in response to the firm's need to monitor employees' work to encourage high performance. Changing results metrics is an invitation for gaming the data with employees finding innovative ways to ensure that the data shows they are performing at the expected level, while behaviour and clan culture are notoriously difficult to change, often taking a decade or more to truly change. New senior executives often tweak control systems in an effort to improve performance. However, the time required to actually implement such changes often exceeds the executive's tenure with the firm - thus the phrase, latest (management) fad.