Control Processes in Declining Organizations: The Polish Economy, 1971-1981

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Abstract
This paper presents an analysis of changes in control processes in a declining economic organization. The main analytical tool is a model of control cycles which hypothesizes that, in the face of decline, management tends to move from looser to tighter modes of control. Four modes of control are differentiated: persona-, action-, ideological- and ecological control. The subject of the analysis is the Polish economy from 1971-1981; a period during which the national economy was centrally steered and could therefore be treated as one organization. The analysis suggests that tightening internal control is a defensive reaction of a management which feels threatened by a degenerating situation. It is suggested that the phenomenon is common in economic organizations. One could speculate whether a reverse move, i.e. towards looser control, might be more functional.

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