Computer modelling the costs of management control in the development of knowledge-based SMEs Online publication date: Fri, 09-Dec-2016
by Robert B. Mellor
International Journal of Knowledge-Based Development (IJKBD), Vol. 7, No. 4, 2016
Abstract: Organisational development involves minimising internal transaction costs ('friction'). 'Self-interest seeking with guile' introduces friction raising internal costs and management control (in the sense of the control of management) introduces checks and balances to limit extensive 'guile', but control mechanisms themselves incur costs and ideally the costs for control should not exceed the costs of the friction. Costs are not well-quantified and if estimates occurring in case studies are seldom and often oblique. To obtain precise values scientific methods are needed. One computer model can predict outcomes of changes within organisations; this model shows the costs of 'guile' are small in the short term: One departmental manager blocking information flow reduced the financial performance organisation-wide by 1.4% in that department plus 1.2% elsewhere in the organisation. Two such managers reduced performance by 4.1% and four such managers reduced performance by 6.4%. Guileful behaviour also added instability at size over 150 employees.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Knowledge-Based Development (IJKBD):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook