University | Singapore Management University (SMU) |
Subject | Strategic Management |
Shifting Control Away From the Top and Center
The Spirit of the Forest
Americans know about the National Forest Service through its fire-prevention mascot, Smokey the Bear. Smokey is a septuagenarian, and the service is even older. Teddy Roosevelt and Gifford Pinchot, the governor of Pennsylvania, invented it at the turn of the century to promote forest conservation and to supply clean water and timber products. Pinchot became its first chief. Nearly a century later. Forest Service officials still post his shortlist of common-sense rules for managing the organization.
By the mid-1980s. Congress had expanded the service’s original mandate to include protection of wildlife and wilderness and provision of recreational opportunities to the public. The agency controlled more than 191 million acres of federal land—holdings as big as all of Texas and Louisiana combined. It employed more than 40,000 people. Most of them worked in ranger districts, subdivisions of the system’s more than 150 forests. Each forest had a supervisor who reported to one of nine regional offices, which reported to the national office in Washington. It took more than $2 billion a year to run the organization.
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The Control Strategy
The fourth critical chunk of DNA determines where the decision-making power lies. In bureaucratic systems, most of the power remains near the top of the hierarchy. In democracies, power first flows from citizens to elected officials; then from elected officials to central “staff’ agencies such as budget and personnel offices; finally from those central control agencies down to agency (“line”) managers. Typically, elected officials keep as much power as possible in their own hands, and the central control agencies guard their power even more jealously.
Line managers find their options limited and their flexibility constrained by detailed budget instructions, personnel rules, procurement systems, auditing practices, and the like. Their employees have almost no power to make decisions. As a result, government organizations respond to new orders rather than to changing situations or customers’ needs. The control strategy pushes significant decision-making power down through the hierarchy, and at times out to the community. It shifts the form of control used from detailed rules and hierarchical commands to shared missions and systems that create accountability for performance.
It empowers organizations by loosening the grip of the central control agencies—as the U.K.’s Treasury Department did in response to the success of the Next Steps agencies. It empowers employees by pushing authority to make decisions, respond to customers, and solve problems down to those with frontline knowledge—as some executive agencies have.
Some reinventors use a third approach: they shift control from public organizations to the community, empowering community members, and organizations to solve their own problems and run their own institutions. Margaret Thatcher did this when she sold 1.25 million public housing units to tenants and gave control over schools to community-based governing bodies. (For more, see part V, chapter 16-19.)
Assignment Question: What are the control strategy challenges that Malaysia faces?
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