The paradox of management control and employee empowerment
Rachael Nash1*, David A. Brown2 and Nicole Sutton3
1
School of Accounting, University of Technology Sydney, Australia
Email: Rachael.Nash@uts.edu.au
2
School of Accounting, University of Technology Sydney, Australia
Email: David.Brown@uts.edu.au
3
School of Accounting, University of Technology Sydney, Australia
Email: Nicole.Sutton@uts.edu.au
*
Corresponding author at School of Accounting, University of Technology Sydney,
Quay St, Haymarket, NSW, 2001, Australia.
Email: Rachael.Nash@uts.edu.au
Tel: +61 2 9514 3587
Fax: +61 2 9514 3669
The paradox of management control and employee empowerment
ABSTRACT
The objective of this research is to identify the components of the organising paradox
created by simultaneous pressure for both employee empowerment and management
control in organisations, and to explain how management control systems both create and
mitigate this tension. Employee empowerment has presented significant challenges to
researchers due to the ambiguities in existing definitions and applications. By
distinguishing between two distinct perspectives on empowerment, structural and
psychological, this research identifies four distinct forms of empowerment which can occur
in practice. The dynamic equilibrium model of organising developed by Smith and Lewis
(2011) is used to explore the different kinds of tension inherent in each of these four types,
and to develop an understanding of the implications of this variation for the design and use
of management control systems. Accountability provides an important link between the
two competing elements, as the manner in which accountability relationships are
established and enacted within the organisation will affect the extent to which employees
feel empowered and the extent to which they feel controlled.
i
The paradox of management control and employee empowerment
1. INTRODUCTION
Organisations in contemporary business environments are increasingly subject to
demands to facilitate the empowerment of employees (Belasco & Stayer 1994; Bowen &
Lawler 1995; Bowen & Lawler 1992; Byham & Cox 1998; Herbert 2009; Ogden, Glaister &
Marginson 2006; Otley 1994; Spreitzer 2008). Furthermore, empowerment has been
offered as an alternative to inflexible and costly bureaucracy and is central to many
management practices aimed at adapting organisations to the uncertain and rapidly
changing operational, social and political landscapes and continuous technological
advances (Argyris 1998; Bowen & Lawler 1995; Bowen & Lawler 1992; Byham & Cox 1998;
Ezzamel, Lilley & Willmott 1994; Herbert 2009; Johnson 1992; Peters & Waterman 1982;
Teece 2007). Renewed interest in empowerment has been driven largely by enthusiasm for
“excellence” in organisation design and management (Eccles 1993; Herbert 2009) and
related modern management practices, such as total quality management and business
process reengineering (Hackman & Wageman 1995; Lawler, Mohrman & Benson 2001).
Central to calls for greater empowerment of employees is the idea that granting
individuals greater discretion over their role can encourage greater creativity, flexibility
and commitment to organisational goals (Belasco & Stayer 1994; Bowen & Lawler 1992;
Byham & Cox 1998; Maynard, Gilson & Mathieu 2012; Seibert, Wang & Courtright 2011).
Such characteristics represent an advantage, if not necessity, for developing organisational
capabilities and enabling an organisation’s survival (Adler & Chen 2011; Lawler, Mohrman
& Benson 2001). Further, affording employees greater discretion and decision-making
authority has been associated with psychological and motivational benefits, such as an
2
increase in work satisfaction and reduced job-related strain (Karasek 1979; Spreitzer,
Kizilos & Nason 1997; Vroom 1964).
However, the notion of employee empowerment becomes problematic when
juxtaposed with the parallel changes in organisations’ institutional environment. At the
same time as needs for creativity and flexibility become more salient, organisations and
their managers are under pressure to be ever more transparent and accountable to
stakeholders (Power 1997; Sundin, Granlund & Brown 2010). Increasing corporate
accountability is inherent in company boards and executives establishing high standards of
corporate governance, and being increasingly answerable to shareholders and regulators
for any perceived breaches (see also Armstrong, Guay & Weber 2010 for a review of the
recent financial reporting and corporate governance literature; Power 1997). This
increased corporate accountability can be translated into the need for increased
managerial control within the organisation (Messner 2009), while external pressures such
as shareholder demands and market competition may be used to justify changes in
managerial control strategies (Frow, Marginson & Ogden 2010).
At an organisational level, the tension inherent in the need to establish managerial
control while simultaneously empowering employees would appear to form a paradox. The
paradox stems from the idea that empowerment entails a decentralisation of decisionmaking authority away from senior management and into the hands of employees; by
granting individuals an increased level of discretion over their own work processes,
managers are effectively relinquishing their own opportunity for direct control over worker
behaviour (Mills & Ungson 2003). These competing pressures create what Smith and Lewis
(2011) term an organising paradox. In this case, the paradox arises when an organisation
requires systems which can facilitate both of the apparently mutually exclusive outcomes
of management control and employee empowerment.
3
It is in the design and use of management control systems (MCS) that the organising
paradox is manifest. MCS establish the form and extent of control exercised by managers
over employees; however MCS also determine the level of autonomy afforded to
employees (Ouchi 1979; Otley & Berry 1980; Otley 1994; Simons 1995; Malmi & Brown
2008). By attempting to implement MCS that simultaneously facilitate the empowerment
of employees and exercise managerial control, managers can create a tension which is
embedded in organisational processes and has implications for individual behaviour and
psychological well-being.
The objective of this research is to first identify the components of the tension
between employee empowerment and management control, then explain how
management control systems both create and mitigate this tension, and finally discuss the
impact this has on organizational members. In Section two of the paper we will develop
the construct of employee empowerment, making a distinction between a purely
structural dimension of empowerment1, and psychological empowerment2. In the third
section of the paper, a conceptual framework is developed which relates these two
dimensions and identifies four distinct forms of empowerment that may exist as a result.
We apply arguments from the emerging theory of organizational paradox to explain the
relationship between empowerment and control in each of the four forms, arguing that
different forms of empowerment result in different kinds of tension between
empowerment and control.
For each of the four forms of empowerment, we undertake an analysis of the kind of
tension that exists between the particular form of empowerment and the overarching
1
This is the extent to which decision-making authority is decentralised (Bowen & Lawler 1992;
Mills & Ungson 2003).
2
This is the approach of researchers in the field of psychology, who consider empowerment to
be degree to which an individual feels empowered in the workplace (Conger & Kanungo 1988;
Quinn & Spreitzer 1997; Spreitzer 1995; Spreitzer, Kizilos & Nason 1997; Thomas & Velthouse 1990)
4
control needs of the organization, and relate this to existing structures in the literature
that exhibit similar characteristics. We use the MCS package typology (Malmi & Brown
2008) as a framework to develop an understanding of the role of the various types of
control mechanisms we expect to be present in each of the scenarios, and to explore the
interplay between the functional distribution of decision-making authority in the
organisation and the formal and informal accountability relationships that are established
as a result.
Section four of the paper contains a discussion of the implications of the conceptual
development undertaken in this paper for future research. This discussion addresses the
potential for application of this set of ideas to other areas of management accounting and
management research, and highlights specific areas which appear promising with respect
to further theoretical extension of this framework.
We make five distinct theoretical contributions to the management control systems
literature. Firstly, we outline the conceptual landscape (Whetten 1989) of the problem
caused by simultaneous demands for control and empowerment which to our knowledge
has been latent in practice and academic literature despite the symptoms apparent in
difficulties in implementing empowerment initiatives in practice as well as in related
conceptual issues in the literature. Secondly, we establish the domain of the theory
(Whetten 1989) by identifying an interactive effect between different forms of
empowerment (reflected in the conceptual framework) and explicating the relation
between these forms and control and accountability.
Our third contribution is the identification of the “obstructed” form of empowerment,
which has not previously been articulated or discussed in management or accounting
literature to the best of our knowledge. As such, obstructed empowerment represents a
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potentially useful sense-making tool for both researchers and managers who are
confronted with these characteristics in practice.
Our fourth theoretical contribution is made through theorizing relations between
empowerment, control and accountability and the relating three forms of empowerment
to existing organisational structures from the literature: the iron cage, authentic
empowerment, and the more recently developed glass cage which has had little
application within management accounting research to date. The analysis of the role of
MCS is helpful in explaining how these organisational types develop and their implications
for individual behaviour and psychological well-being; particularly in the as yet underresearched glass cage. Finally, we contribute to management control theory by applying
and further developing the emerging paradox theory which provides an intuitive
underlying psychological and social dynamic to explain the different control outcomes in
each of the organisational types, and suggests a potentially fruitful approach to exploring
other phenomena of interest to management control researchers.
2. TWO DIMENSIONS OF EMPOWERMENT
The term empowerment has its roots in the fields of social activism and reform, and
has historically been used to describe the process by which marginalised groups come to
recognise the power they have to improve their circumstances (Potterfield 1999). In an
organisational context, empowerment has come to refer broadly to a redistribution of
power from being concentrated in the hands of senior management to being dispersed
throughout the ranks of the organisation (Lawler, Mohrman & Benson 2001; Spreitzer
2008). However, two distinct approaches to understanding empowerment have emerged
in the literature: structural empowerment and psychological empowerment (Conger &
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Kanungo 1988; Menon 2001; Seibert, Silver & Randolph 2004; Spreitzer 2008). These two
dimensions represent different views on the relevant level of analysis, to the extent that
structural empowerment represents a macro perspective that tends to focus on
organisation-level processes, while psychological empowerment is focused on the level of
the individual and as such represents a micro perspective (Seibert, Silver & Randolph
2004). These two perspectives reflect alternative views of dynamics of power and control
in organisations, and have different implications for understanding the relationship
between the empowerment and control of employees.
Structural empowerment
The notion of structural empowerment is largely concerned with the act of
empowering others through the granting of power or decision-making authority (Menon
2001; Potterfield 1999) . Following Kanter (1977), this perspective considers the manner in
which power is shared between senior management and other organizational members,
and generally entails a formal decentralisation of authority in a way that affords employees
opportunity and discretion to exercise their decision-making prerogatives (Mills & Ungson
2003). Structural empowerment has been conceptualised as a spectrum of approaches
that range from being purely control oriented to being primarily involvement oriented
(Bowen & Lawler 1995; Bowen & Lawler 1992)3, and as embedded in the structural design
of the organisation (Eccles 1993), specifically in the extent to which employees are subject
to centralisation and formalisation.
3
Eccles (1993) protests the triviality of many empowerment schemes which follow the
approach outlined by Bowen and Lawler (1995; 1992), arguing that in many of the examples cited as
succesful implementations of empowerment initiatives (such as the GE ‘Workout’ program),
decision power and control over resources remained ultimately with management. Instead, Eccles
suggests that a more appropriate test of empowerment might be to question the degree to which
employees can decide what they do as opposed to how they carry out specified tasks.
7
However, empowerment as a macro construct reflecting managerial structures and
practices remains theoretically underspecified and ambiguous4 (Eccles 1993; Maynard,
Gilson & Mathieu 2012; Seibert, Silver & Randolph 2004). By equating empowerment with
the sharing of power or delegation of authority, the structural approach to empowerment
makes it difficult to distinguish from the more traditional constructs of power and control
(Conger & Kanungo 1988), and provides limited insight beyond the effects of delegation
and decentralisation (Menon 2001). Conger and Kanungo (1988) argued that to consider
the process of delegation alone would not adequately capture the complexity of the
empowerment construct, as it overlooks the self-efficacy of individual employees. Their
seminal work laid the conceptual groundwork for the development of the second approach
to empowerment: psychological empowerment.
Psychological empowerment
The psychological perspective of empowerment focuses on the individual employee’s
perception or subjective experience of being empowered (Conger & Kanungo 1988;
Spreitzer 1995; Spreitzer, Kizilos & Nason 1997; Thomas & Velthouse 1990). This view
considers empowerment as a micro level construct, manifested as increased intrinsic
motivation of the individual employee (Thomas & Velthouse 1990). Under this approach,
alternative work environments are sought which are more relaxed and have an emphasis
on achieving internalised commitment of the individual to the task itself. Spreitzer et al.
4
Firstly, there is some confusion as to whether empowerment lies in an individual’s
responsibility for decision-making or involves the power to actually enact these decisions. Secondly,
it is not clear whether empowerment involves the acquisition or receipt of power, or whether the
empowerment of a group of organisational members necessarily involves the diminishing of power
of another group. Finally, the domain over which increased decision-making authority applies is not
well established; this could refer to greater autonomy in determining work processes, or greater
involvement or ‘voice’ in the broader strategic decision making process of the organisation as a
whole (Hales 2000).
8
(1997) consider each of the four cognitions5 identified by Thomas and Velthouse (1990),
and examine their relationship with three predicted outcomes of empowerment:
effectiveness, work satisfaction and job-related strain. Taken together their results
reinforce the multidimensional nature of the empowerment construct and suggest that all
four cognitions interact to produce the anticipated outcomes of increased intrinsic
motivation.
Relating the dimensions of empowerment
Recent reviews of the extant empowerment literature have called for further research
examining the relationship between the structural and psychological dimensions of
empowerment (Maynard, Gilson & Mathieu 2012; Seibert, Wang & Courtright 2011;
Spreitzer 2008). Most studies elect to focus on a single dimension of the empowerment
(either structural or psychological) to the exclusion of alternatives (Bowen & Lawler 1995;
Bowen & Lawler 1992; Mills & Ungson 2003), while others to attempt to integrate
competing perspectives into a single, measureable construct (Conger & Kanungo 1988;
Menon 2001). Of those studies that incorporate both perspectives as distinct dimensions
of empowerment, the most common approach is to conceptualise structural
empowerment as an antecedent of psychological empowerment (Maynard, Gilson &
Mathieu 2012; Seibert, Silver & Randolph 2004; Seibert, Wang & Courtright 2011)
However, attempts to develop an integrative theory of empowerment have been
frustrated by the ambiguities in existing definitions and the current lack of direct or
objective measures of the structural characteristics of an organisation that support
employee empowerment (Seibert, Silver & Randolph 2004). In this paper, we consider the
interactive relationship between the two dimensions of structural and psychological
empowerment, treating them as analytically interdependent constructs. Although the
5
These are the degree to which an individual’s role provides them with a sense of meaning,
competence, self-determination and impact (Thomas & Velthouse 1990).
9
distinction between these two dimensions of empowerment may not be clear empirically,
treating them as analytically distinct potentially opens up space for new insights about the
dynamic of the relationship between them, particularly in terms of implications for
managerial control.
Within the management accounting discipline research tends to adopt either a
psychological or an implicitly structural approach to employee empowerment, and few
studies have explicitly addressed the relationship between these two dimensions.
However, the interrelated nature of structural and psychological empowerment has been
acknowledged and investigated in a rather more implicit fashion. Recent studies include
Abernethy et al (2010), who find that the decision to delegate decision rights to
subordinates is not systematically related to the leadership style demonstrated by senior
management but is determined primarily by the operating context of the firm, and Hall
(2010) who provides some empirical evidence on the mediating effect of motivational and
cognitive constructs on the relationship between specific management control systems
and performance outcomes. Taken together, these studies suggest rich potential insights
flowing from the application of research in management control systems to building an
integrative theory of empowerment and control.
3. THE PARADOX OF EMPOWERMENT AND CONTROL
A certain amount of tension exists between the concepts of management control and
employee empowerment. Proponents of the structural view equate empowerment with a
loosening of management control, and the loosening of control with losing it (Herbert
2009; Mills & Ungson 2003). That is, by allowing individuals greater amounts of discretion
and autonomy in their roles, managers must give up direct control over that employee’s
behaviour. Tension is also evident when empowerment is interpreted as a psychological
10
state. In this case, the exercise of control by managers through overt control mechanisms
is likely to promote a feeling of being controlled on the part of the individual that is
inconsistent with the experience of being psychologically empowered. When defined in
this way, being controlled and being empowered represent apparently mutually exclusive
psychological states. In both of these examples, the simultaneous achievement of both
control and empowerment appears difficult, if not impossible. Yet, competing pressures on
organisations and their managers to engage with both of these concepts means that this is
often the aim, explicit or otherwise, of empowerment programs in practice (Hales 2000).
The tension between control and empowerment, in all its different guises, would
appear to form a paradox. Organisational theorists have repeatedly suggested that the
study of paradox is important for developing an understanding of organisations and their
management (Argyris 1988; Cameron & Quinn 1988; Clegg, da Cunha & e Cunha 2002;
Lewis 2000; Smith & Lewis 2011). A recent review by Smith and Lewis (2011) of the extant
paradox literature identifies one of the challenges faced by researchers as the difficulty in
defining and articulating exactly what a paradox looks like in an organisational context.
Smith and Lewis distinguish a paradox from other kinds of organisational tension, such as
dilemmas and dialectics, arguing that a paradox is characterised by contradictory but
interrelated elements that exist simultaneously and persist over time. This distinction is
particularly relevant for understanding the relationship between empowerment and
control.
This tension between control and empowerment is paradoxical in the sense that
control and empowerment are both oppositional and relational; while empowerment
seems to imply a lack of control over employee behaviour, the act of empowering
employees only accentuates the need for some level of direction of effort toward
organisational objectives and coordination of the activity of autonomous workers (or
11
teams). Where an individual has no discretion, means of controlling their decision making
are not necessary. This relation also holds in reverse, observed in contexts in which an
over-reliance of the direct control of employee behaviour has resulted in inhibited
creativity and reduced flexibility, as well as eliciting dysfunctional behavioural and
motivational responses from employees (Adler & Chen 2011).
The mediating role of accountability
Accountability as a construct can help explain the paradoxical relationship between
empowerment and control. Accountability represents an important instrument of control
in organisations which structurally empower employees, as it allows autonomous
individuals to give an account for the exercise of their discretion (Roberts & Scapens 1985,
Ogden et al 2006). However, the manner in which accountability relationships are
established will have a significant effect on the psychological empowerment of individuals.
Variation in accountability for what (for example, results as opposed to specific
behaviours) and accountability to whom (either hierarchical superiors or peers) contribute
to an overall individualising or socialising effect of accountability demands on the
employee (Roberts 1991; Boland & Schultze 1996). Each of these effects can be expected
to have a considerably different impact on the experience of empowerment of the
individual.
The idea that different kinds of accountability can be embedded in management
control systems is central, if implicit, in Ouchi’s (1977) discussion of the relative merits of
behaviour control, output control and rituals.6 In the absence of formalisation or the ability
6
Ouchi argues that direct control over the behaviour of employees is only possible where
knowledge of the transformation process is relatively high; that is, in order to be able to tell the
employee what to do and evaluate their compliance, managers must have a good understanding of
what it is that must be done in order to produced desired outcomes. Output controls, or results
controls, are a particularly important mechanism for facilitating employee empowerment, as these
12
to evaluate the performance of individuals based on results alone, alternative forms of
accountability are likely to play a significant role in enacting organisational control. Otley
(1994) suggests that performance appraisal and accountability would remain central to the
effectiveness of management control systems will be crucial to facilitating effective
employee empowerment and organisational adaptive behaviour. Similarly, Ogden et al
(2006) observe that managers in the privatised UK water industry who experience a
greater sense of empowerment also experience greater accountability pressures, lending
support to the argument that accountability is an important mechanism for controlling
empowered workers.
allow employee’s performance to be monitored and evaluated while simultaneously allowing the
individual discretion in how they go about achieving those results (Merchant & Van de Stede 2003)
13
4. A CONCEPTUAL FRAMEWORK
In order to analyse the paradoxical tension between empowerment and control, we
develop a conceptual framework relating the two interdependent dimensions of
empowerment: structural and psychological. These two dimensions are combined to
produce a matrix, revealing four distinct forms of employee empowerment that may
manifest in organisations (Figure 1). Underlying this framework is the notion that as the
form of empowerment varies, the kind of tension that exists between empowerment and
the need for management control will also change.
Figure 1: Alternative forms of empowerment
Empowerment
Structural empowerment
Structural
HIGH
Obstructed Empowerment
Authentic Empowerment
Low Empowerment
Illusory Empowerment
LOW
HIGH
Psychological Empowerment
In the following sections, we discuss in depth the particular kind of tension implicit in
each of the four forms of empowerment identified in the framework. Based on their
review of the paradox literature, Smith and Lewis (2011) develop a dynamic equilibrium
model of organizing, which we use to explore the different kinds of tension and to develop
an understanding of the implications of this variation for the design and use of
management control systems. We also identify organisational types or structures from the
14
literature which may contribute to the production of each form of empowerment, and
apply these ideas to develop the relationship between empowerment and control. Finally,
we consider the mediating role of accountability in each of the forms, and develop some
expectations with regard to individual motivational and behavioural consequences.
Low empowerment
Low empowerment occurs where an organization neither structurally nor
psychologically empowers its employees. In this scenario, the tension that exists between
control and empowerment on a conceptual level will be latent and unnoticed, or
considered unproblematic by organisational members. This is most likely to occur where
the organization is not subject to demands for employee empowerment, as the need to at
least demonstrate control is common to most organisations.
The iron cage, or bureaucracy, is a historically ubiquitous and comparatively effective
form of organisational design and control (Weber 1958; Mintzberg 1979; Ouchi 1979) in
which control over behaviour is paramount and the empowerment of employees is neither
sought nor encouraged. The iron cage is an organisational type which already has a
substantial body of research associated with it, and remains a commonly used metaphor in
the management and sociology literatures (Dimaggio & Powell 1983; Barker 1993; Prasad
& Prasad 2000; Kärreman & Alvesson 2004; Styhre 2008). In the iron cage, the trade-off
between control and empowerment is enacted not by the organisation but by its
members, who willingly and knowingly give up their individual freedoms in the workplace
and subordinate themselves to the wishes of their hierarchical superiors.
MCS and the impact of hierarchical accountability on behaviour
Control in the iron cage is embedded in organisational structure. Bureaucratic control
is achieved primarily through the formalisation of work processes, specialisation of roles
15
and the establishment of a clear vertical hierarchy (Adler & Borys 1996; Mintzberg 1979).
In a bureaucracy, the information required for decision-making is contained in the rules
established by formal policies and procedures. These rules form somewhat arbitrary
standards against which managers are able to compare an individual’s observed
performance and make an evaluation. Miller and O’Leary (1987) argue that it is the use of
cost standards and budgeting that makes the individual suddenly visible in the production
process and individually accountable for their own efficiency.
The use of management control systems to make employees accountable for the
productivity of their own labour creates the metaphorical cage bars which restrict
employee behaviour and ensure compliance with organisational directives. Accountability
in the iron cage is closely tied to the formal hierarchy of the organisation, and is enacted
through largely calculative practices such as output measurement and productivity
reporting. The use of cybernetic controls such as performance measurement systems and
budgets shifts accountability from the level of the organisation to the individual employee
through the process of developing, communicating and enforcing expected standards of
behavior from individuals. This kind of hierarchical, calculative accountability has a
powerful individualising effect on the employee, resulting in what Roberts (1991) describes
as a “nervous preoccupation” with how one is seen by superiors and subsequent patterns
of self-monitoring and self-control.
While the tension between the competing demands for control and empowerment is
latent at the organisational level of the iron cage, the tension may nonetheless be
experienced by individuals where control is achieved at the expense of any opportunity for
individual autonomy and self-direction. A reliance on overt control mechanisms and
individual accountability to obtain desired behaviour from employees has the potential to
provoke a dangerous cycle of control and deceit, as excessive reliance on such mechanisms
16
may offend the sense of self-control of the employee and erode any trust that may have
existed in the superior-subordinate relationship (Ouchi 1979; Willmott 1996). A second risk
associated with the reliance on accountability for behaviour in the iron cage is that the
actual process of accounting for the performance of a task or activity may become more
important than the activity itself (Willmott 1996).
In summary, low empowerment can be the result of the use of management control
systems to communicate specific expectations of employee behavior and to establish
hierarchical systems of accountability which ensure compliance. While the tension
between empowerment and control is seen to be latent at an organisational level, the
individualising effects of the hierarchical accountability inherent in the iron cage result in
the psychological disempowerment of employees and accompanying behavioural issues.
The manner in which accountability is enacted in the organisation thus forms the key
difference between the low empowerment evident in the iron cage, and the form of
empowerment identified in the following section, illusory empowerment.
Illusory empowerment
Illusory empowerment is the result of an organisation’s attempts to psychologically
empower its employees without accompanying increases in structural empowerment. This
particular kind of paradox implies a certain level of acceptance of the tension; by engaging
with both control and empowerment outcomes simultaneously, the need for both
contradictory elements is at least acknowledged. Within the dynamic equilibrium model
developed by Smith and Lewis (2011) acceptance represents a management strategy of
“working through” paradoxical tension, rather than confronting and attempting to resolve
the tension in a way that contributes to organisational sustainability. Instead, the fact that
employees are told they are empowered without experiencing any real gains in autonomy
17
or control over their own work processes suggests that empowerment in this scenario is
little more than an illusion.
Constructing and maintaining the illusion of empowerment
Illusory empowerment is an example of the kind of socially constructed “action
paradox” described by Argyris (1988), which reflects the inconsistency, or hypocrisy,
between the organisation’s espoused goal of empowerment and the underlying reality of
often very tight control. Consider the statement of a manager or partner to their
subordinates that; “You are empowered”. Despite this rhetoric, we know that the manager
has no intention of actually relinquishing any of the control they may have previously held
over the behaviour of the subordinate, but does not wish to create the impression that the
subordinate is controlled for fear of dysfunctional motivational consequences. Following
Argyris’s (1988) reasoning there are at least three components to this “action paradox”:
what the manager has said, what the manager thought but did not say, and the action
taken by the manager in behaving as if the statement was not untrue. If we take the
manager’s statement at face value, there is a clear contradiction between what the
manager has said and the reality of the organisation. However, when we consider all three
components the paradox ceases to exist, as, even though the element of untruth in the
statement remains, we understand the rationale behind the deception and the bid to cover
it up.
The contradiction between the manager’s rhetoric and reality can be problematic due
to the undiscussability generated by the action paradox. The manager is unlikely to be
willing to discuss the inconsistency between their statement and beliefs as doing so would
reveal the contradiction to the “empowered” employees. While the employees may sense
that there is a contradiction in the manager’s talk and action, they are equally unlikely to
18
force a discussion of the inconsistency due perhaps to the asymmetrical power relationship
between the two parties or out of their own natural preference for consistency (Festinger
1957). In this situation, the attempt of the organisation to empower employees
psychologically but without delegating decision rights not only forms an apparent paradox,
but does so in such a way that both parties are acting in ways that are made undiscussable
and unlikely to ever be raised explicitly as an organisational issue.
Illusory empowerment in the glass cage
This kind of undiscussable, illusory empowerment can be the result of a glass cage. The
glass cage is a term which has roots in sociology and has been used to describe an
organisation in which members feel as though they have choice and autonomy but are
actually tightly controlled through mechanisms which are largely transparent and more
subtle than the overtly bureaucratic practices of the iron cage (Gabriel 2005; Courpasson &
Clegg 2006; Clegg & Baumeler 2010). The glass cage allows the organisation to retain
managerial control while avoiding both the costly demotivational effects of bureaucracy
and potential damage to the organisation’s reputation or legitimacy incurred by ignoring
pressures to empower employees. Gabriel describes the experience of the glass cage as
“the feeling of having choice but being unable to exercise it” and captures its enigmatic
nature in his observation; “It is as if the door of the iron cage is open, yet a strange and
paralysing force prevents us from getting out.” (2005, p. 17)
Individuals in a glass cage are subject to similarly tight administrative controls and
pervasive monitoring systems as those in an iron cage. In their case study of a global
professional services firm, Alvesson and Kärreman (2004) observe formal control
mechanisms such as a clear vertical hierarchy, standardisation of work procedures,
extensive surveillance of employees and an integrated HRM system including recruitment,
19
promotion, performance evaluation and development programs. Where individuals within
similar organisations might be very conscious of the tension between management’s
demands for compliance and their own need for autonomy, employees at Global appear to
unhesitatingly comply with the demands of the organisation. Further, the employees of
Global are highly educated and highly mobile, and while they clearly have the ability to
protest practices which could be construed as exploitative, such concerns are rarely voiced.
Alvesson and Kärreman (2004) argue that technocratic control systems alone were not
sufficient to explain the unusual level of commitment to goals and rules observed, and
examine the role of technocratic structures in the creation of the norms and meaning
which form the basis of a strong meritocratic ideology within Global.
Relating accountability and empowerment
Accountability represents a key difference between the glass cage and the iron cage,
and provides insight into how such high compliance is extracted from individuals within the
glass cage. The power of the glass cage lies in the intersection of the strongly
individualising accountability embedded in the organisational hierarchy with an equally
powerful lateral accountability that exists between colleagues. A distinguishing feature of
the accountability environment at Global is that the organisational unit is primarily the
project team, and it is the team that is held accountable for the delivery of projects with
tight deadlines and financial margins. This collective responsibility encourages mutual
dependence between team members and gives rise to a binding social obligation of each
individual to act in the interest of the group. Within project teams, the relative symmetry
of power and opportunities for face-to-face contract and informal communication allows
this more socialising from of accountability to develop. Roberts (1991) argues that such
socialising forms of accountability are the foundation of reciprocal obligation and ties of
friendship and loyalty.
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It is the use of management control systems to promote socialising accountability that
facilitates the psychological empowerment of employees in spite of the lack of structural
empowerment in this organisational type. In the glass cage, tight administrative and
cybernetic controls enclose employees in an inescapable cage of hierarchical
accountability, but the individualising effects of these on individuals is masked by the
simultaneous operation of strong socio-ideological controls. Cultural and socio-ideological
controls are subtle yet deep and pervasive, and are crucial to the development of lateral
accountability within and between project teams. The development of lateral
accountability is assisted through such control mechanisms as the communication of
organisational values and company missions throughout the organisation, and the
socialisation of employees through rigorous selection and induction programs. Such
socioideological controls reinforce organisational rhetoric about empowerment and
encourage the development of shared meaning and expectations of behavior amongst
organisational members. In this way, management control systems support socialising
forms accountability which contribute to the experience of psychological empowerment of
individual employees.
Behavioural implications of lateral accountability
Lateral accountability may also contribute to the effectiveness of control in this
organisational form. The glass walls of the metaphorical cage suggest its critical function as
an instrument of control: they allow essentially constant, lateral surveillance of the
employee they contain (Courpasson & Clegg 2006). By establishing very high expectations
of team performance, but basing performance measurement and associated reward and
compensation schemes at the level of the individual, the glass cage transforms every team
member into both the watcher and the watched. In conjunction with the use of
information systems to measure and monitor nearly every aspect of the employee’s role in
21
the organisation, lateral accountability ensures that employees are completely visible and
their activities rendered transparent to both associates and superiors alike. Such
transparency heightens the individualising effects of accountability, resulting in intense
self-regulation through what Roberts describes as a “constant vigilance over one’s self and
a restless and endless comparison and differentiation of the self from others.” (1991,
p360). Somewhat ironically, Roberts also observes that part of the product of transparency
is the reproduction of one’s belief in the self as an autonomous entity (2009). True to the
paradoxical nature of the underlying tension, lateral accountability in the glass cage
simultaneously reinforces both control and psychological empowerment.
Illusory empowerment represents a response to paradoxical tension in which
employees are psychologically empowered but remain subject to tight managemerial
control. While the tension is accepted at an organisational level and both elements of the
paradox are incorporated into control system design, the “undiscussability” of the
inconsistency between empowerment rhetoric and the reality of control makes this
response to paradoxical tension particularly fragile. Strong socio-ideological control works
to disguise the source of tension from the individuals within the organisation; however,
this does not mean that the effects of tension are not perceived. While there are
significant factors that prevent open discussion of, or attempts to resolve, contradictions
when these are uncovered (such as the “ghosting” phenomenon described by Alvesson
and Kärreman), individuals may nonetheless experience performance anxiety, stress and
cognitive dissonance, without necessarily being able to articulate the source of the tension.
Authentic empowerment
Authentic empowerment is the result of both the psychological empowerment and the
genuine structural empowerment of employees. Not only do individuals have substantial
22
discretion over their work objectives and processes, they also feel empowered and
supported by management in working toward the achievement of these. In authentic
empowerment, the use of management control systems to both allow discretion and
autonomy at lower organisational levels while also coordinating activity and ensuring
compliance with organisational objectives embeds the organising tension within these
systems in such a way the competing outcomes will become apparent, or salient, to
organisational members.
Implications of salient tension and establishing virtuous cycles
Once the tension between the need for control and empowerment is rendered salient
to the individuals within the organisation, the contradictions inherent in the paradox will
provoke responses which can be either positive or negative (Smith and Lewis 2011). Smith
and Lewis argue that both kinds of responses to tension lead to self-reinforcing cycles of
behavior; in the case of authentic empowerment, the acceptance of the paradoxical
demands is a necessary first step in stimulating a virtuous cycle. Virtuous cycles require
active engagement with both elements of the paradox, and are perpetuated through
constant iterations between simple acceptance of the presence of tension, and attempts
to temporarily reconcile the competing elements. When managed effectively, this strategy
constitutes a paradoxical resolution of tension leading to short-term peak performance
and long-term organisational sustainability.
In the first instance, resolution of paradoxical tension involves framing the tension as
an opportunity for the application of creativity and the discovery of new opportunities. By
framing the tension as an opportunity, acceptance allows individuals to engage with both
elements rather than necessitating a choice between them (Smith and Lewis 2011). Until
individuals recognise the persistent and interrelated relationship of paradoxical tension,
23
they will be unable to pursue more complex resolution strategies. On an individual level,
acceptance of a paradox and the stimulation of a virtuous cycle are most likely to succeed
when organisational members have cognitive and behavioural complexity and emotional
equanimity (Smith and Lewis 2011). Cognitive complexity refers to the ease with which
individuals can hold paradoxical ideas simultaneously and can seek out the differences and
synergies between apparently contradictory elements, while behavioural complexity is
concerned with the ability of individuals to adopt competing behaviours. Emotional
equanimity is a state of emotional calm in which the strong negative emotions that are
often provoked by contradiction are minimised, lessening the risk of individuals reacting to
paradoxical tension with defensiveness and the paralysing effects of anxiety.
Psychological empowerment and virtuous cycles
Psychological empowerment encourages acceptance of paradoxical tensions by
supporting both the cognitive complexity and emotional equanimity of organisational
members. The distinction between the structural and psychological views of
empowerment is thus significant in developing an understanding of the manner in which
individuals respond to pressure for greater employee autonomy. Thomas and Velthouse’s
cognitive model of psychological empowerment aims to explain how changes in cognitive
variables (the way in which individuals perceive their work environment and the tasks at
hand) produce intrinsic task motivation, as well as identifying “key interpretive processes
that introduce diversity into individual’s cognitions” (1990, p668). Intrinsically motivated
employees are more likely than their extrinsically or de-motivated counterparts to
demonstrate the behavioural traits of flexibility, initiation and resiliency (Deci & Ryan 1985;
Spreitzer 1995; Spreitzer, Kizilos & Nason 1997; Thomas & Velthouse 1990); these
characteristics all contribute to an individual’s willingness to be adaptable, to seek out
opportunities, and to maintain motivation and a positive affect in the face of inconsistency
24
and ambiguity. Due to the diversity and developed nature of their cognitions and the
resulting increase in intrinsic task motivation, psychologically empowered employees are
more likely to accept the paradoxical tension between the demands on them to be both
autonomous and subject to the control and accountability requirements of supervisors.
To enable authentic empowerment, management control systems must be able to
facilitate both the structural and psychological empowerment of employees, while also
ensuring that the behaviour of employees is directed at achieving organisational
objectives. In this case, it is possible that a scenario approximate to Ouchi’s (1979) market
mechanism would develop, in which the individual is structurally empowered and made
individually accountable. In this scenario, control is relinquished by the organisation’s
managers in favour of a more organic system of internal markets made possible by the
authentic empowerment of employees. Both autonomy and entrepreneurship are
requirements for the development of such market structures (Halal 1994), which Mills &
Ungson (2003) argue can coexist with authority structures within the organisation as
employees accept this authority as part of their contractual employment arrangement.
This coexistence indicates that even where relationships within the organisation have
some of the characteristics of a pure market, there remains scope for management control
to govern the transactions and relationships that develop within these structures.
Role of MCS in an authentic empowerment environment
One of the important functions of management control systems in facilitating
psychological empowerment is the identification and removal of conditions that foster
feelings of powerlessness among organisational members (Conger and Kanungo 1988).
Adler and Borys (1996) provide some insight into how the use of essentially bureaucratic
control systems can be enabling rather than coercive, and used in such a way can
25
contribute to employees making positive rather than negative task assessments. Used
effectively, they argue that even these administrative control mechanisms can provide
employees with guidance and role clarification that may contribute to feelings of efficacy
and fulfillment. The facilitation of authentic empowerment through the use of
management control systems which promote autonomy and psychological empowerment
does not necessarily imply a corresponding loss of management control. Barker (1993)
undertakes a longitudinal case study of a small electronics manufacturing company, and
documents its transition from a traditional production line approach to management
control to a team-based empowered environment, and argues that the concertive control
which developed as a result was even more powerful than the bureaucratic control which
preceded it. In this case, teams of production line workers were formed and given
responsibility for the end-to-end production of particular items. Supervisors who had
previously overseen the production line were retrained as coaches for the teams, who
were led and spoken for by members of the team according to a rotating schedule. Each of
the four ‘cognitions’ of psychological empowerment (Thomas & Velthouse 1990) are
apparent in this case.7
Lateral accountability and behavioural outcomes
Once again, accountability plays a key role in enabling the simultaneous empowerment
and control that is evident in this case organisation. While each of the work teams were
answerable to the general manager for customer-oriented outcomes such as on-time
delivery, team members experienced a much stronger lateral accountability to each other
7
Besides autonomy, competence was supported by cross-training of all team members to
perform all tasks potentially required of the team; a sense of impact was encouraged by making the
team responsible for the entire production process and customer shipments for their assigned
product(s); and meaning was enhanced through the processes described in the case study whereby
the company’s value statement was adopted, internalised, and enforced as rational rules by the
team.
26
in working towards these outcomes. As in the glass cage, this lateral accountability is the
product of the use of socio-ideological control systems which accompanied the structural
changes to the organisation. The distribution of the company’s value statement and its use
by the teams as a basis for developing a social contract between team members effectively
locked team members in to patterns of behaviour that they themselves established and
enforced through the socialisation of new team members and disciplining of old. However,
the decoupling of the work teams from any organisational hierarchy ensures that the
effect of this lateral accountability is essentially socialising rather than individualsing
(Roberts 1991).
The case in Barker (1993) provides clear support for Munro and Hatherly’s (1993)
proposition that lateral accountability may represent an advance in the strategy of
substituting direct control with true employee autonomy and social commitment. Even
though the organisation had authentically empowered its employees, the lateral
accountability established through the use of socio-ideological controls implemented with
the restructure effectively generated yet stronger influence over employee behaviour.
However, despite evidence of the positive cognitive and behavioural effects of
psychological empowerment, it was observed that the empowered employees in this
example periodically experienced high levels of stress and reported feeling burdened by
the need to self-manage. Nevertheless, these negative psychological outcomes were not
necessarily such that the employees would willingly give up the control that they had
painstakingly established for themselves.
Obstructed empowerment
Obstructed empowerment occurs when organisations structurally empower
employees but do not simultaneously accommodate the psychological empowerment of
27
these individuals. When empowerment is obstructed in this way, individuals respond to
paradoxical demands with defensiveness and denial rather than accepting of the presence
of tension. Such a vicious cycle reflects the antithesis of the virtuous cycle provoked by
awareness of the tension in the authentic empowerment scenario, and can lead to
dysfunctional behaviour and inhibited organisational performance (Smith and Lewis 2011).
Vicious cycles develop when management of the paradox is absent or ineffective, and
occur due to factors such as our natural preference for consistency of beliefs and actions,
as well as emotional anxiety and defensiveness in the face of contradictions. Obstructed
empowerment may occur where the structural empowerment of employees is not a choice
but necessity; where employees hold specialised or craft knowledge that is not accessible
to managers, it is the employees who are often better equipped to make decisions about
how they go about their work than their superiors. In this case, psychological
disempowerment might be desirable from a managerial perspective for its potential to
constrain behaviour in an otherwise autonomous environment.
MCS, accountability and psychological disempowerment
There are a number of ways that psychological disempowerment may arise in the
presence of structural empowerment. Conger and Kanungo (1988) identify four categories
of contextual factors that are likely to contribute to employees’ experience of
powerlessness: organisational characteristics, supervisory style, reward systems and job
design. Organisational characteristics such as competitive pressures, poor communications
and network systems, and the level of centralisation of resources can all impact an
employee’s ability to exercise their autonomy. Supervisory style can have a strong
influence on employee’s perception of self-efficacy, and subsequently their experience of
psychological empowerement, with authoritarian styles and those characterised by
arbitrariness and negativism in interaction and performance evaluation likely to foster
28
feelings of powerlessness and frustration. Reward systems can undermine rather than
improve an employee’s sense of self-efficacy when they are not tied to demonstration of
competence or innovation, or have low incentive value. Finally, elements of what the
authors term job design also have a potential effect on feelings of empowerment, such as a
lack of role clarity, training and technical support, unrealistic or meaningless goals, and low
advancement opportunities. Thomas and Velthouse’s (1990) four dimensions of
psychological empowerment are here significant in their absence (Hall 2010); as the
experience of psychological empowerment is the product of all four dimensions (Spreitzer,
Kizilos & Nason 1997), if an individual does not have a positive sense of any individual
aspect then it is unlikely that they will feel empowered in the workplace despite their
functional autonomy.
Accountability plays a particularly important role in producing obstructed
empowerment. With structural empowerment comes increased demands for the
accountability of employees (Ogden, Glaister & Marginson 2006), however the manner in
which this accountability is enacted will affect the psychological empowerment of those
individuals. Just as the powerful control of the glass cage was seen to be the product of
both hierarchical and lateral systems of accountability, the dysfunctional consequences of
obstructed empowerment stem from the conflict between these. The role of
administrative controls in an obstructed empowerment environment is not to prescribe
behavior but to formalise accountability relationships within the organisational hierarchy.
Nonetheless, accountability for behavior may still exist where the organisation exhibits a
strong organisational culture. In this case, the formal autonomy of the individual may be
tempered by a tacit understanding of what kinds of behaviors are expected and which are
not considered acceptable by the peer group. Roberts argues that the interdependencies
between socialising and individualising forms of accountability can be experienced by
29
individuals as conflict (1991), and it is this conflict that is likely to contribute to feelings of
powerlessness and frustration in the ostensibly empowered individual.
Conflicting forms of accountability
Conflict between the formal and informal organisation may arise when lateral
accountability is mobilised in the interest of local coalitions rather than that of the
organisation (Roberts 1991). We have argued that accountability acts as an important
reconciling force between control and empowerment when employees are structurally
empowered. However, the socialising benefits of lateral accountability will only manifest
when the individuals implicated have some form of shared meaning or common
understanding of purpose and direction. To this point, Roberts observes:
“Whatever the latent possibilities of community within the informal
organsiation, it is also often the site of divisions and splits. One can think here
of emotionally highly charged differences that preclude talk, of the abuse of
localized unsurveilled power, of the vagaries of favouritism, and nepotism and
persecution, or of local collusion that subverts or disregards wider
responsibilities beyond the group.” (1991, p. 364)
In these circumstances, the demands of lateral accountability on the individual may be
inconsistent with the expectations of the formal organisation. Such inconsistency is likely
to contribute to feelings of powerlessness, or the perceived inability to fully exercise one’s
autonomy in a structurally empowered environment.
This sentiment is echoed in the findings of Ezzamel and Willmott (1998) in their study
of a UK manufacturing organisation’s attempt to shift from a vertical hierarchy to a system
of self-managing teams. Their analysis suggests that the successful implementation of the
30
new system of empowered teams was partly contingent on how new lateral systems of
accountability and self-managment were received by individual employees. That is, where
the requirement that each team-member act as both supervisor and supervisee conflicted
with their personal narrative of self (e.g. friend, provider), the employees came to view the
system of empowerment as “an intrusive and divisive form of control ... instead of an
opportunity to become more self-determining” (Ezzamel & Willmott 1998, p. 388). This
conflict is an example of the competing sources of identity offered by the formal and
informal organization and their associated accountability relationships, and their uneasy
coexistence in empowered teams. The case provides an interesting counterpoint to the
organisation studied by Barker (1993), as resistance here could be interpreted as the
outcome of an organisation which delegates control down to the lower organisational
ranks, but does not adequately facilitate the acceptance of greater individual responsibility
through simultaneous psychological empowerment.
Behavioural implications of plurality
Dysfunctional behaviour may also be expected when the demands of the formal
organization are themselves inconsistent. When the priorities of the organization are
unclear, unknown or dependent of the decision at hand, it is particularly difficult to
program desired behaviour of employees (Sundin et al 2010). For the same reason, the
empowerment of employees to make decisions and act on their private information may
be problematic when objectives are vague or conflicting, as the lack of a single clear
objective or discrete hierarchy of goals carries a risk of arbitrary decision-making or action
which is inconsistent with organisational strategy. In such situations it is also difficult to
expect individuals to be able to give an account of their exercise of this discretion in the
absence of clear expectations or standards of behaviour.
31
Inconsistent or competing demands on psychologically disempowered employees can
provoke the defensive reactions characteristic of vicious cycles. Where individuals are not
in a position to influence the source of the contradictory demands, they may experience
anxiety and paralysis a result of this inconsistency. Finding themselves in such a situation,
an empowered worker may adopt a strategy of avoidance of exercising their decisionmaking authority when they are not provided with clear expectations for behaviour or
outcomes, but are nonetheless monitored and evaluated on this basis. The impact of such
strategies may be mitigated where organisations simultaneously facilitate employee’s
perception of empowerment, and exacerbated when psychological empowerment is
neglected.
Managers may also respond defensively to conflicting demands to both empower and
control their subordinates (Pfeffer et al. 1998). Demands for managers to empower their
subordinates may be met with resistance, as such demands can represent a threat to the
manager’s identity and understanding of his or her role in the organisation (Ezzamel, Lilley
& Willmott 1994). In this case, managers may respond by deliberately impeding change
processes, increasing their commitment to a single agenda (control) and revising personal
beliefs and values to be consistent with this. Where organisations attempt to redefine the
role of middle management from being direct supervisors to acting as facilitators or
coaches of autonomous workers or teams the potential for defensive and
counterproductive responses is particularly significant, especially where it is the same
middle managers who are expected to implement and support the changes (Potterfield
1999). In such circumstances, managers may react by attempting to perpetuate the control
they previously held over their subordinates even while maintaining the organisational
rhetoric of empowerment and autonomy (Pfeffer et al. 1998).
32
Within the conceptual framework developed in this paper, the key difference between
management control systems which provoke vicious cycles and those which encourage
virtuous cycles is the psychological empowerment of employees. Where management
control systems structurally empower individuals but do not provide them with a sense of
meaning, competence, impact or choice, it is unlikely that a strategy of embracing
paradoxical tensions will be ever be achieved. In this sense, obstructed empowerment
represents an ineffective method for managing this tension, resulting in a threat to the
sustainability of the organisation and to the psychological well-being of its members.
4. IMPLICATIONS
This analysis of the paradoxical relationship between control and empowerment gives
rise to a number of theoretical issues which offer potential avenues for further exploration
of these ideas. Three main themes are outlined below: ambiguities around the
antecedents of the different forms of empowerment; the significance of aligning the
design and use of management control systems and the implications for individual
behaviour and cognition; and the possibility of a contingency-style fit between the
organisational forms and their environment.
The first theme relates to the antecedents of the different forms of empowerment.
While it sits outside the scope of this research, consideration of the antecedents of the
different forms identified holds particular significance for further extension of this work.
There are several bodies of literature which suggest approaches to addressing this issue,
such as contingency theory or institutional theory, which have not been drawn upon here.
Rather, this research has developed from the relatively unproblematic assumption that
these types of empowerment exist, and was not concerned with why or how each of these
33
comes into being. However, a key issue for future research in this area is to identify the
extent to which the forms of empowerment identified in this research are the result of an
explicit choice made by the senior management of an organisation, or if these are in fact
the inadvertent product of an evolutionary process of incremental change and forces for
inertia around existing systems.
If we understand extant management control systems to be primarily the product of
an evolutionary process rather than explicit choice, then the distinction between explicit
design of systems and the manner in which these are used is of particular relevance. The
four forms of empowerment identified in this research correspond with the organicmechanistic organisation structures identified by Burns and Stalker (1961), in that both the
low empowerment and illusory empowerment forms are the product of essentially
mechanistic structures, whereas obstructed and authentic empowerment result from a
more organically structured organisation. It could be that the package of management
control systems in each of these pairs is substantially similar, but the effect of these
systems on the organising tension between empowerment and control, and the way the
tension is experienced by individuals, could vary considerably in the way in which these
systems are used by the organisation. A more thorough analysis of the manner in which
the use of specific management control systems affects individual’s experience of their
organisational environment could be particularly enlightening.
The second main theme considered here is the effect of tension on individual members
of the organisation, specifically the manner in which it is created and managed through
management control systems. Individual factors such as cognitive and behavioural
complexity and emotional equanimity mark the difference between productive, virtuous
cycles and destructive, vicious cycles in Smith and Lewis’s (2011) dynamic equilibrium
model of organising, indicating the potential value of studying the effect of paradox in
34
organisations at the level of the individual, rather than abstracting analysis to a purely
maro level. It would potentially be fruitful to investigate the effect of the different forms of
tension on individuals in terms of stress, anxiety, and emotional arousal in order to better
understand the burden that management control systems can place on organisational
members. Factors such as individual values and emotional state are likely to affect the way
that individuals respond to tension and may cause variation in the behavioural responses
observed in organisations.
The distinction between psychological and structural empowerment made in this
paper raises further questions with respect to the design and use of management control
systems. To the extent that the psychological empowerment of employees can be
attributed to the use of MCS as opposed to the functional design, there appears to be a
potential issue to do with the level of agreement between design and use, and the
consequences for behaviour and performance where these do not align. To illustrate, low
empowerment and authentic empowerment represent scenarios in which the levels of
structural empowerment and psychological empowerment are equivalent, and the
discussion of both of these types revealed that in these cases the tension between
empowerment and control is either latent or considered unproblematic by organisational
members. However, the paradox and resulting tension is much more prominent in both
the illusory and obstructed empowerment forms: scenarios in which psychological and
structural empowerment are misaligned. If the individuals in the former two scenarios are
more likely to experience the tension as stressful or uncomfortable, it could be that
matching the use of management control systems to their design aims serves to reduce the
ethical burden on employees and mitigates potential dysfunctional behaviour as a result.
The final theme relates to the notion of a contingency-style fit relating the four forms
of empowerment to specific environmental contexts in which they can be expected to
35
result in optimised performance. Smith and Lewis (2011) suggest that a theory of paradox
might offer an alternative to the approach to organisational control system design adopted
by proponents of contingency theory. A contingency approach implies that different
organisational contexts require different approaches to control, while Smith and Lewis’s
synthesis of the paradox literature suggests that an alternative way to frame the problem
of designing systems for empowerment or control is to identify ways in which an
organisation can engage with both elements simultaneously. However, the preceding
discussion would lead us to a slightly different conclusion: that there are particular
contexts in which it may be necessary to engage with the paradox and others in which the
tension may be latent and unproblematic. Further, contextual factors are likely to
determine how the paradox can be managed effectively, as there is no single strategy that
will be effective for every organisation. The factors identified by Smith and Lewis have
been used here to explicate firstly where the paradox is likely to be salient and
experienced by organisational actors; when the paradox is and isn’t appropriate; and how
it can be engaged with in such a way that it generates the benefits of greater learning and
creativity, flexibility and the unlocking of human potential. Further development of this
argument may generate insights into the specific contexts in which each of the four forms
of empowerment result in such a “fit”, as well as potentially exploring the consequences of
fit or misfit with respect to organisational performance and the impact of the tension on
individual organisational members.
A related issue is the need to develop an understanding of the relative stability of the
different kinds of empowerment. The dynamic equilibrium model of organising, developed
by Smith and Lewis (2011) and used in this research to explore the different kinds of
tension which might be present in an organisation, implies that paradoxical relationships
are rarely static and will usually provoke self-reinforcing cycles of behaviour. Where the
36
tension between empowerment and control is latent, however, organisational forms can
be expected to be more or less stable; bureaucracy is renowned for its ability to persist
through dramatic changes in the operating environment and, as seen in this work, often in
spite of efforts to change this. However, organisational forms which experience this
tension as salient may be more prone to transition along the two dimensions of
empowerment. Illusory empowerment and obstructed empowerment are likely to be
particularly vulnerable, owing to the fragility inherent in the gap between rhetoric and
reality in the glass cage, and the theoretically unsustainable behaviour of the vicious cycle
evident in obstructed empowerment. Can organisations shift from one form to another? If
so, what factors are associated with this change, and what are the implications for
management control systems?
One final consideration worth noting here is the possibility that the forms of
empowerment identified in this research are not mutually exclusive, and can potentially
exist simultaneously in a single organisation. A close-to-home example of this
phenomenon is the university environment, in which several of these forms can be
observed in different functional areas of the institution. Academics reading this paper may
find that the ideas developed in the authentic empowerment scenario resonate with them:
teaching and research in a university environment is typically associated with a high level
of autonomy and discretion with respect to what kinds of research are undertaken and
how courses are run, and the psychological empowerment of academic staff generally is
evident in the comparatively high levels of intrinsic motivation reported by this group.
Student administrators, on the other hand, might identify instead with the low
empowerment inherent in the bureaucratic iron cage. Here, interactions with clients
(students) are high-volume and relatively homogenous, such that the necessity of ensuring
consistency of service requires a high level of standardisation in the procedures carried out
37
by administrative staff. The experience of managers of research groups may well be
different again: despite having high levels of discretion with regard to how the group is
managed, demands for accountability for the group’s performance which flow from a
centralised administrative structure may impede the effective facilitation of the production
of quality research. Such accountability structures may contribute to the psychological
disempowerment of the manager, resulting in obstructed empowerment rather than the
healthier authentic empowerment scenario. Where different forms of empowerment exist
in a single organisation, a meta-paradox arises which carries its own implications for the
design and use of control systems which span functional areas. It would be particularly
interesting to examine the interactions between these functional areas, with a view to
exploring the potentially mediating role of management control systems in this situation.
38
5. CONCLUSION
The objective of this paper was to explore the nature of the relationship between
control and empowerment, and to investigate the different ways that the apparent
paradox might manifest in organisations. By distinguishing between structural and
psychological interpretations of empowerment, this paper develops a conceptual
framework consisting of four distinct forms of empowerment which were argued to
generate different kinds of tension in the relationship between empowerment and control.
The paper draws on Smith and Lewis’s (2011) dynamic equilibrium model of organising to
explore these different kinds of tension, and discusses the role of management control
systems and accountability relationships in creating and mitigating the effects of the
paradox in each of the theorised forms of empowerment.
Additionally, we identified three main areas for further extension of the ideas
developed in this research. The first of these themes related to the ambiguities around the
antecedents of the different organisational forms. Secondly, the potential implications of
aligning the design and use of management control systems are discussed. Finally, the
possibility of a contingency-style fit between the organisational forms and their
environment was discussed, as well as the potential for multiple organisational forms to
exist simultaneously in a single organization.
39
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