ECONOMIC THEMESекономски-факултет.срб/Ekonomske-teme...UNIVERSITY OF NIŠ FACULTY OF ECONOMICS "ECONOMIC THEMES" Year 50, No. 3, 2012, pp. 273-287 Address: Trg

ECONOMIC THEMES

Niš, 2012

year 50

eISSN 2217-3668

ECONOMIC THEMES

Published by: Faculty of Economics, University of Niš

Editor: Dr Evica Petrović, Dean

Editorial Board : Dr Dejan Spasić, Faculty of Economics Niš Dr Blagoje Novićević, Faculty of Economics Niš Dr Sreten Ćuzović, Faculty of Economics Niš Dr Vera ðorñević, Faculty of Economics Niš Dr Srñan Marinković, Faculty of Economics Niš Dr Biljana Rakić, Faculty of Economics Niš Dr Bojan Krstić, Faculty of Economics Niš Dr Ljiljana Maksimović, Faculty of Economics Kragujevac Dr Dragana Pokrajčić, Faculty of Economics Belgrade Dr Robert Gora, University of Information Technology and Management, Rzeszow, Poland Dr Robert Vodopivec, University of Maribor, Slovenia Dr Angel Georgiev Angelov, Faculty of Management and Informatics, UNWE, Sofia, Bulgaria Dr Penka Goranova, Tsenov Academy of Economics - Svishtov, Bulgaria Dr Dino Martellato, Faculty of Economics, University "Ca' Foscari" Venezia, Italy Dr Ljubica Kostovska, Faculty of Economics Skopje, Macedonia Dr Tatiana Orekhova, Donetsk National University, Ukraine Dr Alexandru Trifu, University ,,Petre Andrei” of Iasi, Romania Dr Ümit Gökdeniz, Marmara University, Istanbul,Turkey Dr Nikola Knego, Faculty of Economics Zagreb, Croatia Dr Veselin Drašković, Maritime faculty, University of Montenegro Dr Predrag Ivanović, Faculty of Economics Podgorica, Montenegro

Editor-in-Chief: Dr Ljiljana Stanković E-mail: [email protected]

ECONOMIC THEMES was partly financed by MINISTRY OF EDUCATION AND SCIENCE OF THE REPUBLIC O F SERBIA

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Address of the Editor and staff: Niš, Trg kralja Aleksandra Ujedinitelja br. 11, phone: +381-18-528-624, 528-601 E-mail: [email protected] web: http://eknfak.ni.ac.rs/ekonomske-teme/

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UNIVERSITY OF NIŠ

FACULTY OF ECONOMICS

ECONOMIC THEMES YEAR 50

No. 3

Niš, 2012

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SADRŽAJ

1. Živorad Gligorijevi ć, Vidoje Stefanović TOURISM AS A SOCIO-ECONOMIC PHENOMENON: CONCEPTUAL AND TIME COVERAGE ........................................................273-287

2. Nebojša Janićijević

THE IMPACT OF ORGANIZATIZONAL CULTURE ON CONTROL OF BEHAVIOR IN ORGANIZATIONS ..................................289-308

3. Maja Ivanovi ć-ðukić, Ivana Simić, Vinko Lepojević

DEALING WITH INTERNAL CAUSES OF INSOLVENCY IN ENTREPRENEURIAL ORGANIZATIONS IN SERBIA AS A CHALLENGE TO SERBIAN ENTREPRENEURS .................................309-326

4. Suzana Stefanović, Danijela Stošić

SPECIFICS AND CHALLENGES OF FEMALE ENTREPRENEURSHIP .....327-343

5. Dragana Radenković-Jocić, Igor Mladenović PROTECTION OF INTELLECTUAL PROPERTY RIGHTS IN THE CONTEXT OF SERBIAN ECONOMIC DEVELOPMENT ..................345-359

6. Ivan Markovi ć

A MATRIX OF SERBIAN ACCESSION TO THE EU .....................................361-374 7. Slavica Jovetić

METHODOLOGY OF SUPERVISING AND IMPROVING MAINTENANCE PROCESS PERFORMANCES ..............................................375-396

8. Nenad Janković, Nenad Stanišić CHALENGE OF CHOOSING AN APPROPRIATE EXCHANGE RATE REGIME IN SERBIA ........................................................397-421

9. Milica Radović, Aleksandar Vasiljević THE STABILITY OF THE BETA COEFFICIENT FOR THE MOST LIQUID STOCKS IN THE CAPITAL MARKET IN SERBIA IN THE PERIOD 2006-2011 ...........................................................423-441

UNIVERSITY OF NIŠ FACULTY OF ECONOMICS "ECONOMIC THEMES"

Year 50, No. 3, 2012, pp. 273-287 Address: Trg kralja Aleksandra Ujedinitelja 11, 18000 Niš

Phone: +381 18 528 624 Fax: +381 18 4523 268

TOURISM AS A SOCIO-ECONOMIC PHENOMENON: CONCEPTUAL AND TIME COVERAGE

Živorad Gligorijevi ć∗∗∗∗

Vidoje Stefanović∗∗∗∗∗∗∗∗

Abstract: Tourism is a multi-dimensional phenomenon that, under modern conditions, attracts the attention of many researchers, that among other issues, deal with the issue of conceptual determination, that is the definition of tourism. However, in literature, there is still no single definition of tourism. A large number of researchers, also address the question of the historical development of tourism, looking at (specifying individual stages or phases), its development path, from the distant past to the present day. With that in mind, this paper represents a contribution to the consideration of issues relating to the conceptual and temporal coverage of tourism as a socioeconomic phenomena.

Keywords: tourism, definition of tourism, tourism features, stages and phases of development of tourism.

Introduction

Judging by its dimensions, that is, the number of participants in the tourist travel (domestic and international), and the effects that allow both economic and social development of many countries, it can be said that tourism does not have a counterpart in a similar phenomenon of the modern world. Tourism has, in fact, become a kind of socioeconomic phenomenon, an integral part of life, the dominant part of the world's population and demand for tourism has become almost part of the basic needs of man.

Because of its importance and the spectacular results achieved in the development during the second half of the twentieth and early twenty-first century tourism is increasingly becoming an object of interest for many researchers. Tourism is, in fact, analyzed from different aspects and we are looking at a number of questions. Questions that almost all the researchers deal with determine the

∗ University of Niš, Faculty of Economics, [email protected] ∗∗ University of Niš, Faculty of Sciences, [email protected] UDC 338.48, review paper Received: 18.06.2012. Accepted: 20.09.2012.

Živorad Gligorijevi ć, Vidoje Stefanović

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definition of conceptual and historical development of tourism as a socioeconomic phenomenon and category.

1. Tourism as a Multidimensional Phenomenon - Approach to Defining Tourism

When it comes to conceptualizing and defining the definition of tourism, it is necessary, first of all, to note that, in the economic literature, there is no single, universally accepted definition but rather there are many definitions. This is a consequence of different scientific approaches to this phenomenon, which is a sufficient argument for different aspects of its observations, and therefore the definition.

In defining tourism one usually starts with the word "tourism" which comes from the English word "tour", which means: time, round trip, touring etc. In doing so, the trip is done for pleasure and retention in different places and, a person who undertakes such a journey is known as the tourist.1 However, it must be noted that each passenger is not a tourist. A tourist, is in fact, a person in the place, outside of his/her residence, that spends at least one night in a hotel or other facility for the accommodation of guests, for the purpose of resting, recreation, health, study, sports, religion, family, public affairs mission and conferences. (Cohen E.,1994; Pirjavеc B., 1998, pp. 17-20; Milenkovic S., 1999, pp. 20-26; Ekonomska enciklopedija, 1984).

Tourism is, by its nature and content, a very complex phenomenon. Therefore, an expert in tourism will explain this phenomenon systematically and restrained, with no great pretensions to explain in one form of manifestation of tourism everything about it. To create a simple picture of tourism is not easy and simple, because too many factors are "in play", i.e. it is a multidimensional phenomenon.

1.1. Tourism as a Social Phenomenon

Tourism, as a social phenomenon, is a movement of people in order to meet tourist needs.2

As man is a tourist, the main subject and a driver of tourism as a whole, this must be borne in mind when defining tourism. Compared to modern tourism, man - tourist appeared much, much earlier. However, only at a certain stage of development of human society, and by the development of the social division of labor, and achieving an appropriate volume of tourist travel, there was an appearance of activity that was the basis of its development based on meeting the needs of tourists. 1 In recent history, traveling for pleasure was first used by the British and their habits very quickly spread to the population of other European countries. Therefore, the term "tourism" had quickly spread and was accepted by other European countries (France, Spain, Italy etc.). 2 This is a phenomenon that is present in all countries, but the extent and effects manifest differently.

Tourism as a Socio-Economic Phenomenon: Conceptual and Time Coverage

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The notion of tourists is related to the concept of travel, but not all, but only for those trips that are motivated by a desire to rest and for leisure, in physical and psychological sense. In fact, just such a trip can be considered as tourism. In addition, tourist trips can be categorized as travels that are motivated by a desire to meet the cultural needs, in terms of mental recreation.

From this we can conclude that, in determining the term tourists, one must consider the following two conditions, namely: (a) a journey that allows a temporary stay in places outside their place of residence and (b) that this trip (change of residence) is conditioned by the desire for rest and relaxation, both in mental and physical sense.

Everyday environment obviously makes man seem tired, nervous and eager for change. An interruption of everyday life is required as well as a need to escape from routine life, lethargy; it is necessary to leave the place of residence, experience something new. This generator is expected pleasure of tourist travel. Change of residence leads to the concentration of tourists in certain places - tourist places. In these places tourists establish certain relationships, on economic grounds. Specifically, they require appropriate services (accommodation, meals, entertainment, culture etc.), to meet their (tourist) needs. It is, therefore, necessary that, in the tourist areas, there are certain economic and non-economic activities that can meet the tourist demand.

Aside from economic relations, wider social relations in the tourist areas are established, i.e. relations between tourists and local residents, as well as relations between the tourists themselves.

Bearing this in mind, one can access the definition of tourism as a social phenomenon, and so have many of the theorists, but the literature states that the most acceptable definition has been given by the Swiss authors W. Hunziker, and K. Krapf, who state: "Tourism is a set of relationships and phenomena arising from the travel and stay of visitors in a place, if such residence is not based permanent residence if such residence is not with any of their associated economic activity." (Markovic S. and Z ., 1970, p. 10).

Tourism is seen and regarded as a complex social (sub)system, which develops and operates the entire development. Such a perception of tourism highlights the impact on interdependent units of which tourism depends and the tourism impacts on.

1.2. The Economic Concept of Tourism

Tourism in its development played a series of very important (internal and external) transformation: it took on different forms, it used various means, extending the scope of the spatial and quantitative terms, changing characteristics of the structure, enriched by new motives, received new functionality, different impact and serve the various purposes and in doing so, it never lost its economic characteristics.


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In economic theory and analysis a tourist is seen as a consumer so that, accordingly, tourism is seen as a kind of consumer movement whose goal is to meet the specific needs of man. You need to call the tourist needs. This understanding of tourists and tourism essentially reflects their economic side. However, tourism as a complex phenomenon, as already mentioned, has broader (cultural, social, political) meaning, which is constantly being enriched in line with modern social development.

In the time of travel and recreation, man - the consumer is excluded from the sphere of work and included in the sphere of leisure and recreation and, especially important, included in the sphere of consumption, which is a major economic feature of tourism.

The essence of tourism as an economic phenomenon stems from a variety of relationships within the social and economic relations that man establishes to meet tourist needs. In addition, every relationship is defined by the role of different actors, and some arise on the occasion. Tourism, as well as economic relations, on the occasion arises to meet tourist needs. The essence of these needs, their structure and size are defined by the overall social development and relationships in the production process. This means that the economic relations that are established because of tourism production, defined as the economic relations between tourism and tourist economic relations. These relationships generate economic, and other consequences, which in economic practice, express economic categories.3

The economic aspect of tourism is the object of interest of economic analysis. It describes and analyzes the resulting interrelationship between economic categories that arise as a result of economic relations in tourism, which, in turn, represent the origin of the behavior of actors in them. These are the subjects of consumption or tourism operators and offers. On this basis, it may be pointed out that the main and important characteristics of tourism as an economic category, is contained in the fact that there are: (a) tourists as consumers of tourism services, who have the financial means to pay for these services, on the one side and (b) tourist economy, which should provide a variety of satisfying tourist needs on the other side.

Therefore, when the defining tourism as an economic activity, one should consider tourists separately as consumers that occur on the demand side, the activities that make up the tourism industry, the supply side. With this in mind the economic literature, dealing with its study, offers different terms for flagging tourism as an economic activity, such as "tourist trade" (tourist trade), "tourism industry" (tourist industry), "travel industry" (travel industry) etc.

3 The most important of which are: consumption, production, income, profits, employment, expenditures, exports, imports, balance of payments tourism, tourist traffic and the like.


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1.3. The Statistical Concept of Tourism

According to statistical criteria, tourism is an aggregate term of the term "tourists". The concept of "tourists", as defined by national statistics, includes "persons ... in any place outside of his/her residence spending at least one night in a hotel or other facility for accommodation and the reasons they stay home or recreation, health preservation, study, sport, religion, family, business meetings and a public mission." Well, statistics does not define all its forms and their contents which define man as a tourist, products. This is why the additional researches on the statistical characteristics and behavior of tourists are conducted.

The statistical definition of "tourists" as well as definitions tailored to the needs of research of this phenomenon, are used as criteria by which the form and structure of tourism research, is sorted out, that is exploring its economic, cultural, spatial, environmental and many other aspects.

Statistics is based on criteria such as time travel and stay, or reason for travel (leisure, health etc.), and is applied in order to include the structuring of the phenomenon being seen as a statistical weight. Of course, the statistical definition contributes to the understanding and monitoring of the evolution of phenomena, but is not intended to explain the nature of the phenomenon, its causes and consequences. All sizes and all forms of manifestation of tourism statistics can not be identified. Therefore, the statistical monitoring reduces the normative (system) defined by the choice of passengers who are, typically, included (or excluded) in the term "tourist".

National statistics generally often has different approaches and criteria in the collection of statistical material on tourism. Therefore, the monitoring of international trade, international conventions, seeks to unify tourism statistics and statistical coverage of passengers, to ensure that information on tourist traffic numbers are comparable between different countries.

In the collection and use of statistics on tourist movements some problems occur, especially when it comes to foreign tourism. In addition, there are two real possibilities for the collection of statistical data in the tourism industry.

The first option is to register the arrival of tourists during the tourist destination or accommodation facility. However, tourists coming to one place or accommodation facility, very often, do not stay there during the entire planned stay, and there is the problem of multiplicity of data. Thus, statistics records here the number of tourist arrivals and not the number of tourists which is, de facto, less.

Another option is to register tourists crossing the state border, including 24-hour counting of passengers. This is a plain, hard work and economically not feasible and such a count would record passengers whose travel is not motivated. At the same time, these domestic tourists could not be registered. So, there are no overnight stays, or spatial distribution of tourist traffic within the national territory.


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2. Tourism as an Economic Activity - Basic Characteristics

Tourism as an economic activity is such an activity that in many of its characteristics differs from all other activities. In fact, the most important characteristics of tourism as an economic activity are: heterogeneity (diversity and complexity) the structure of tourism, the specifics of the constituent elements of the tourism market (high elasticity of demand of tourist services, on the one side and the inelasticity of tourism, on the other side), seasonal business the tourist market and the specifics regarding the (lack of) labor productivity in the tourism industry.

2.1. The Heterogeneity of the Structure of Tourism

Starting from general systems theory, namely the systematic approach, it can be concluded that tourism is a very complex system, composed of a number of subsystems. Tourism is, in fact, a diverse economic activity - consisting of a variety of economic and noneconomic activities that work together in meeting the needs of tourists (domestic and foreign). In addition, the basis of tourist business activities includes: hotel and catering, transport, tourism and travel agencies, followed by retail trade, crafts and various utilities. Since non-economic activities should emphasize the cultural, artistic, sporting and other activities, and the work of various tourist organizations.

All these activities, directly or indirectly affect the formation of tourist attractions. In this sense, aggregate travel or travel system consists of: C1 - means of transport (planes, cars, railways, maritime and river ships, buses, etc), C2 - facilities for board and lodging (hotels, motels, restaurants, private households and so on), C3 - travel agencies, C4 - travel guides, C5 - other facilities for tourists feeding, C6 - shop for souvenirs and specific items, C7 - manufacturers of specific items and souvenirs, C8 – folk art and C9 - various shapes and forms of organization for fun and entertainment. (Unkovic S., 1995, p. 26).

Within each section, the above system or systems can be performed for further classification. For example, in transport: C1 = A1, A2, A3, A4, ..., An, where A1 – is domestic air transport, A2 - international air traffic, A3 - public road transport, A4 - rail and so on. Tourism is, therefore, not a particular activity, such as, for example, industry, agriculture, transport, etc., since there is no possibility for strictly qualitative and quantitative determination of the tourism industry as separate and independent entity.

The above characteristics of tourism are, however, important to define the tourism policy, tourism planning, determination of investment activities, as well as to determine the nature of its work from the standpoint of productivity.

2.2. The Elasticity of Tourist Demand and Inelasticity of Tourism

Tourist market, as well as any other industry, has its main elements, namely: tourism demand and tourism offer, subject to exchange (the product or


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service) and price. Functioning components of tourism market exhibit certain characteristics of this market, and tourism is viewed as a special kind of market, this market is "sui generis". The most important specific features of the tourism market, of course, are: elasticity of tourism demand and tourism supply inelasticity.

Travel demand is highly elastic market category. For a more complete and easier understanding of this concept one must keep in mind that tourists’ needs are secondary to human needs, and as is well known that every man needs no primary or existential character, has a smaller or greater degree of flexibility in meeting.

Flexibility in travel terms can be defined as a change in behavior or change the amount of tourist demand for certain services, due to changes in personal income, prices, or some of the important elements within the tourism offer. Moreover, the causal links between variables, from which it examines the demand elasticity, reveal two types of elasticity of demand as follows: primary and secondary elasticity.

Primary elasticity implies growth or decline in the amount of travel demand due to change in the amount of personal earnings or due to change in the price level of tourism services. In this sense, there are: income and price elasticity of demand.

Given that tourism activities are still, generally, as already stated, human’s secondary purpose, it is understandable that the strongest impact on meeting those needs with personal incomes of the population from which it derives a possible excess of available resources to satisfy the tourist needs. In fact, the higher personal income, or the higher standard of living, the greater the opportunities for involvement in tourism trends. Accordingly, the impact of high bid price is inversely proportional to the size of personal income, which means that the elasticity of demand decreases with the increase of living standards.

To examine tourism demand elasticity is very important to mention the impact on the demand arising from the different changes that occur in the supply sector, not just tourism.4 New tourist facilities, from accommodation to entertainment, cause new or additional interests demand. Until yesterday elite, cult, or by something else, a mass gathering places, they lose that epithet, plunging into mediocrity supply and demand is "moved" in the newly formed, interesting tourist centers. This is the case when it comes to secondary elasticity, or the amount of change in tourism demand for a tourist service, if there is a radical change in the tourist industry.

Unlike the tourist demand, on the other hand, the tourism offer is inelastic, meaning that its capacity can not be modified and adapted to current demand.

4 For example, the opening of a new, modern, fast road route, in full, may devalue until recently a very attractive and frequented tourist area. In addition, the construction or modernization of a road route towards insufficiently valorized tourist space can affect the substantial increase of interest in this area.


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Therefore, when considering the problem of the inelasticity of tourism one should primarily take into account the time dimension of the term. This, therefore, that any tourist facility, ready for action in one year or one season, in that period of time can change and adapt to their overall capacity to market demands. If meanwhile, need is found for changes or adaptations, the same can be done only after the end of the season and converted facility put into operation until next season. Moreover, these changes can be so radical that almost represent a new bid. This is best displayed by graphics.

Based on the graphic, as well as on the basis of the foregoing, it can be concluded that, during one season, the accommodation capacity is a constant variable. The number of tourists who are below the level of accommodation is excess capacity, a number above is the lack of accommodation facilities. The points where the curves intersect is the optimal ratio of incoming tourists and accommodation. It also means that the forecast of future demand and capacity calculation was successful.

Tourist facilities are, generally speaking, very difficult to adapt to the demands of tourism demand (only with large investments), which means that the pre-sizing of facilities, their purpose, their content, are very important detail when preparing the construction of tourist facilities. Therefore, in countries with receptive tourist season (time limited) business, tourism planners of construction, often discuss with investors on the subject of debate: whether the size of the object is determined using the method of average peak or peak capacity?

The method of peak capacity, in a nutshell, means the size of the demand equation that can be expected in a shorter time, in midsummer, with a total capacity of the future project. Intention is to enable a large number of visitors the reception

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into a new accommodation facility but at the same time deliberately downplay the degree of capacity utilization due to seasonal and a very short period of concentrated tourist traffic.

Using the average peak capacity, on the other hand, consciously rejecting the maximum demand in the peak season and determining the lower carrying capacity, which will therefore allow a higher average level of capacity utilization, and significantly decrease the primarily fixed costs.

When analyzing the inelasticity of tourist facilities, there is often a question or a dilemma: if the capacity is oversized or size of the effective demand is not, for whatever reason, of the expected magnitude? A possible answer to a rule, should be looked on both sides.

2.3. Seasonal Nature of Business

One of the distinctive characteristics of tourism demand is its seasonal nature. It is caused by climatic conditions and the use of annual leave. Thus, the most common motives that forced the tourist movement, is a reason enough to talk about the seasonal nature of demand. There are swimming and skiing, which is repercussed on the two main tourist season, as follows: summer and winter tourist season. However, the trends of modern life are increasingly breaking the great utility of the holiday season in several smaller ones. In addition, every tourist wants a tourist destination that is not similar to their place of residence, on any grounds. Therefore, the travel demand is subject to constant change, which requires variation of tourism services, because fluctuations in demand take place in the season, day, and in periods during the day. In addition, one should not forget the impact of seasonal demand in the economic and social trends (economic activity in the summer months almost dying etc.).

The tourist offer also has a pronounced seasonality, which means that at all times of the year it does not occur with the same intensity. The basic determinants characterizing certain climatic seasons is a factor that, in principle, forms two of the main tourist season, as follows: summer and winter tourist season.

Summer season is characterized by bright sun, warm atmosphere, appropriate temperature, lakes and flowing waters, rich flora and fauna, which favors multiple activities, of course, related to these natural resources. Widespread human knowledge and experience of the usefulness of the sea (to the coast and open sea) has created the preconditions for the formation of a mass of other receptive possibilities for accommodation of a large number of visitors who wish to take advantage of a good time to stay at sea. The more suitable the climate, the more sunny days, the sea is warmer, the season can be longer and offer better facilities and successfully completed.

Seen from the standpoint of climate, the situation is completely analogous to the winter tourist season. The main factor that determines the quality of winter


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season is the thickness and durability of snow, again depending on the altitude of the study area, the geographical position of the space. Capacity of supply is adapted to climate conditions prevailing in these areas during the winter period, while their availability and the length of the season, primarily dependent on snow conditions.

Using these two different resources two large blocks of time, two tourist seasons have been created, used worldwide, as a rule, for travel, temporary stays outside the residence.

Climatic conditions in certain areas are the main determinants of the formation of different forms of tourism, of the objects on the beach to the ski slopes, the resort towns with thousands of beds to a different club village far from "civilization", the residence of the great tourist centers attractive for picnic etc. Therefore, all parties in the seasonal tourism are trying to, through various activities, extend the season of action, especially if they have not achieved it during the season, with occupancy and economic performance, which enable them to "survive" until the next season.

2.4. The Character of Work in Tourism

In defining the structure of tourism activity it is pointed out that tourism is a complex system, that represents a different set of economic and noneconomic activities that all work together in meeting the needs of tourists and, precisely because of the complexity of tourism as an activity, the nature of work in this field is not easily determined. In order to determine this accurately, it is necessary to determine the nature of work in all the activities that make a complex system.

Hospitality as an integral and important part in meeting the needs of tourists in accommodation, food and drink. The basic question to be asked to assess the character of work is whether the result of human activity is a material product or service? It can be said to be the result of personal services in the hospitality industry, except for the food preparation and pouring drinks. Specifically, here occurs as the result of human labor materialized product (for example, from raw material one meal is made, it can be lunch or drinks making a new drink - a cocktail).

Transportation meets the needs of tourists for transport, but with this activity the products that will be the subject of tourism spending are transported also. If one takes into account passenger transport (e.g. air, rail, road), then the whole question of personal service (provision of transport services), and this activity is treated as unproductive.

Trade is unproductive activity, except in the area of the preparation, packaging and sorting of products.


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Tourism (or travel) agency-employed, which are, in general, non-productive in nature, they provide personal service to tourists. The same is true for all other activities, such as utilities sector (water supply, electricity), postal services, hospitals, museums, galleries and the like.

Trades is also unproductive activity, as it provides services. The exception is one part of which is called the production trades (for example, production of souvenir shops, which artisans are engaged).

If we define a product that is available as a tourist in a country, region or tourist site, it would be a personal service to over 2/3 of cases. The rest of the material products that are sold as souvenirs, food and beverages are consumed, as well as other products for daily use.

Based on all the above, we can conclude that tourism is, essentially, an unproductive economic activity that can not be involved in activities that are considered the creators of the social product and national income, although having a direct impact on increasing the national income.

3. The Development Path of Tourism

Seeking the origins of tourism, many researchers date back to the past. However, from the economic point of view, traveling in the past and modern tourist travel significantly differ in motifs, number, social composition, shapes, and the temporal frequency, spatial orientation and, above all, by visible or invisible results, i.e. results.

3.1. Start of Development of Tourism

The basis of tourism lies in the biological nature of man, which is demonstrated through his/her movement in space, and the roots of tourism, it can be said to date back to the prehistory of human society. In addition, at the beginning, the movement of people was disorganized, only for providing food or escaping from danger, discovering new places.

Over time, these movements have become organized. The writings, of prominent thinkers of Greece and Rome in ancient times, and adventurers such as Marco Polo in the Middle Ages tastify this.

The word "tourist" was first recorded in 1800 , when Pegg defined a tourist as a traveler on a trip, and the word "tourism" was first mentioned in 1811 in the journal the Sporting Magazine. However, everyone agrees that Thomas Cook’s organized travel in 1841, played a pioneering role in the creation of tourist activities and the beginning of the development of modern tourism. T. Cook first organized group travel by rail for members of an antialcocholic company, which offered a rented train composition (for transport between the two cities in England,


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where the railway, at the time, was the real attraction), with music and serving tea and at the unique price.

The trip was very well received, and immediately afterwards (in 1845) T. Cook founded the first travel agency, ranging from the serious business in the tourism business.5 T. Cook was also an innovator, as introduced into circulation reservation voucher program times and, in effect, because the founder of modern - organized - forms of travel. He mediates between tourist demand and tourism, but in-house real rounded tourist services in the form of these trips (i.e. packages) that will, in particular, become popular after World War II. So rounded tourist services were to become, among other things, the most important factor of popularization of tourist demand, that is, one that, the dominant individual tourism would turn into a mass phenomenon.

The pioneering role of T. Cook in creating the conditions for the development of modern tourism, travel related to the above, follows from the following facts: (a) it was the first time that it was revealed what, in the modern understanding of travel, a large group of passengers who gathered to travel meant, although they had not met before, (b) for the first time in one place, the passengers could solve the problem related to travel, and by purchasing a package from the agency were willing to pay for the comfort of a price, and (c) for the first time, the opportunities were perceived that for the agency and the passengers stem from the fact that offered service united many different and individual services. (W. Freyer, Tourism, 1988).

3.2. Stages of Tourism Development

When it comes to the way tourism developed, it should be noted that there are many attempts to define individual stages or phases in the history of travel and tourism, which is practically very difficult. Thus, for example, tourism development phases, interestingly, as M. Vukicevic, explains that development of tourism trends is divided in four stages.

In the first stage of tourism development, which includes the Old Century, played a phenomenon that was slightly alike tourism. Since this is a very long period, this stage is divided into two subperiods - slavery (Greece, Rome, Egypt, Babylon, etc) and the Middle Ages - feudalism.

The second stage includes the development of tourism in the period from the beginning of the nineteenth century until the First World War. As the socio-economic role of tourism trends began to be understood, it comes to activation of the state through some measures of economic policy and the organization of tourist

5 Thus, for example, in 1851, he organized a trip and visit to the World Exhibition in London (165 000 tourists), in 1867 the visit to the exhibition in Paris (20,000 passengers). In 1867 he established new outlets in London, and in 1871organized the first trip around the world.


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events. Progress is born during tourist trips as well as organized forms of receptive forms of tourism and tourism market, the emergence of professional organizations to carry out tourist activities on a commercial basis. Favorable conditions for developing tourism phenomenon also created a growing fund of leisure time. However, this period is characterized by monostructure, keeping abreast of tourist consumption (catering services, receptions, tours, concerts etc.), but, nevertheless, a direct forerunner of the modern tourist developments.

The third phase of development has elements of mass tourism. Its duration was from the First World War to 1950. With minor changes in tourist travel motivations it came to the creation of different subgroups of tourism: excursions, spa, seasonal, and the like, and "union tourism" also appeared (in Eastern Europe). The structure of tourist was predominated by, the higher layers, but there were considerably increases in the participation of other layers. The state has an active attitude to tourism. The nonstructural is changed into nature of tourism.

Polystructured tourism, as the fourth stage of tourism development, occurred early in the second half of the twentieth century and lasts until today. At this stage, tourism has become an inseparable part of economic and social system. Tourism, in fact, becomes an integral part of the national economy, the element of social and cultural policies of each country, as well as significant political events. Tourism, too, received the dynamic nature of mental and physical recreation with learning about other places and peoples of the world, cultural heritage and the like. More and more different manifestation forms of tourism are being allocated– such as holidays, sightseeing tourism, spa, health, social, cultural, hunting and, especially, congress tourism. (Vukicevic M., 1980, pp. 1-10).

Taking into account all the phenomena that today might be called tourism, viewed from a historical standpoint, S. and Z. Markovic see the path of development of tourism through three stages (periods) as follows:

"First, the period of travel for recreation, in which subjects are only a privileged class, but that kind of travel is not called tourism, this period extends into the deepest past and takes up half of the 19th century;

Second, the period in which the predominant subjects of tourism were still privileged members of society, but the number of tourists was significantly higher than before, and their travel for recreation, but we referred to travel: symbolically period begins with the first well organized tourist action and lasts until the First World War;

Third, the period of modern tourism, tourism in which the majority are working people and it's got its initial period of the characteristic forms of content after the First World War and after the Second World War and turned into a mass phenomenon to the greatest possible extent. "(Unkovic S., Zecevic B., 2007, p. 6).

The development path of tourism, in literature in sociology of tourism, is viewed through three phases:


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First, pre-modern tourism - related to traditional societies, when tourism was single and the occasional occurrence of the wealthiest strata (the age of tourism characterized by privileged classes in the time of slavery and feudalism),

Second, modern tourism - related to modern industrial society, when tourism became a mass phenomenon and

Third, post-modern tourism - related to post-industrial civilization, "... which provides conditions for the jump from the" realm of necessity "in the" realm of freedom "... to minimize the necessary extension of working hours and leisure time ..." (Mitrovic Lj ., 2005. p. 96).

Conclusion

In a relatively short period, during the second half of the twentieth century, tourism has become a kind of socio-economic phenomenon and, given the number of participants, certainly most widespread phenomenon in international relations, but also one of the most important areas of research. In addition, the economic literature discusses a number of questions. Within these issues, there are those that relate to the conceptual and temporal coverage of tourism so that we can certainly say that no commercial activity has provoked so many attempts to define and analyze the historical development, as is the case with tourism.

As for the conceptual determination of tourism, it must be noted that, at least for now, there is no single definition. On the contrary, the literature is full of various definitions of tourism, and many rightly point out that there are as many definitions as there are researchers who deal with this issue. When considering tourism as an economic activity, all considerations state its specific features and characteristics, based on which tourism differs from other economic activities. These are the following features: heterogeneity of the structure of tourism, tourism demand elasticity and inelasticity of tourism, seasonality of business in tourism and non-production nature of work in tourism.

When it comes to tourism development path, there are also different views. Some researchers suggest that tourism roots date back to ancient history, that is to the prehistory of human society. Others argue that tourism is a recent phenomenon, namely that the development of modern tourism began in the first half of the nineteenth century. In addition, many researchers analyzed the development of tourism by defining certain stages or phases of its development.

References

1. Aranñelović Z., Gligorijević Ž., (2008) Nacionalna ekonomija, Niš: Petrograf. 2. Gligorijević Ž., Stefanović V., (2012) Ekonomika turizma, Niš: SVEN. 3. Ekonomska enciklopedija, (1984) Beograd: Savremena administracija. 4. Freyer W., (1988) Tourismus, München: Oldenbourg.


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5. Marković S., Marković Z., (1970) Osnovi turizma, Zagreb: Školska knjiga. 6. Milenković S., (1999) Turistička aktivnost u tržišnoj privredi, Paraćin: Vuk Karadžić. 7. Mitrović Lj., (2005) Sociologija turizma, Niš: Centar za balkanske studije. 8. Pirjavеc B., (1998) Ekonomska obilježja turizma, Zagreb: Golden marketing. 9. Unković S., (1995) Ekonomika turizma, Beograd: Centar za izdavačku delatnost,

Ekonomski fakultet. 10. Unković S., Zečević B., (2007) Ekonomika turizma, Beograd: Ekonomski fakultet,

Centar za izdavačku delatnost. 11. Vukićević M., (1980) Ekonomika turizma, Novi Sad: Viša ekonomsko-komercijalna škola. 12. Gligorijević Ž., Stanojević J., (2010) Mision and Goals Contemporary Tourism of

Development, The challenges of economic science and practice in the 21ST century: 207-218. Niš: Faculty of Economics.

13. Gligorijević Ž., Stefanović V., (2011) Ekonomika turizma kao naučna i nastavna disciplina, Ekonomika, br. 3, str. 48-55, Niš: ”Ekonomika” Društvo ekonomista.

14. Cohen E., (1994) Who is Tourist?, Sociological Review No 4, New York.

TURIZAM KAO DRUŠTVENO-EKONOMSKI FENOMEN: POJMOVNI I VREMENSKI OBUHVAT

Rezime: Turizam predstavlja višedimenzionalnu pojavu koja, u savremenim uslovima, privlači pažnju brojnih istraživača koji se, pored ostalih pitanja, bave i pitanjem pojmovnog odreñivanja, to jest definisanja turizma. Meñutim, u literaturi, još uvek, nema jedinstvene definicije turizma. Veliki broj istraživača se, isto tako, bavi i pitanjem istorijskog razvoja turizma, sagledavajući (preciziranjem pojedinih etapa odnosno faza) njegov razvojni put, počev od daleke prošlosti, pa sve do današnjih dana. Imajući to u vidu, ovaj rad predstavlja prilog sagledavanju pitanja koja se odnose na pojmovni i vremenski obuhvat turizma kao društveno-ekonomskog fenomena. Klju čne reči: turizam, definisanje turizma, karakteristike turizma, etape i faze razvoja turizma.

UNIVERSITY OF NIŠ FACULTY OF ECONOMICS "ECONOMIC THEMES"

Year 50, No. 3, 2012, pp. 289-308 Address: Trg kralja Aleksandra Ujedinitelja 11, 18000 Niš

Phone: +381 18 528 624 Fax: +381 18 4523 268

THE IMPACT OF ORGANIZATIZONAL CULTURE ON CONTROL OF BEHAVIOR IN ORGANIZATIONS

Nebojša Janićijević∗∗∗∗

Abstract: The paper explores the impact of organizational culture on control of organization members’ behavior. Every organization must develop a certain method of behavior control in order to provide coordinated and effective collective action in accomplishing its goals. Organizational culture with its assumptions, values and norms defines how an organization understands the nature of human behavior in social groups, and thus a suitable manner of control of this behavior. The paper uses Mintzberg’s classification of five methods of organizational behavior control which are differentiated according to two basic criteria: the level of restrictiveness and the level of formalization or personalization. On the other hand, organizational culture classifications by Handy and Trompenaar each recognize four types of culture, which can be differentiated according to two criteria: distribution of power and orientation towards work or social structure. Based on matching of the criteria for organizational culture types differentiation and methods of behavior control, the hypotheses on causal relations between them are established in the paper.

Keywords: organization, control, organizational culture, organizational behavior

Introduction

Organizational culture has a strong impact on organization and management, which emerges from its nature and its content. Organizational culture is defined as a “system of assumptions, values, norms and attitudes, manifested through symbols which the members of an organization have developed and adopted through shared experience and which help them determine the meaning of the world around them and how to behave in it” (Janićijević, 2011, 70). Assumptions, values, norms, and attitudes that the members of an organization share significantly shape their interpretative schemes. Through interpretative schemes the members of an organization assign meanings to occurrences within and outside the organization and understand the reality that surrounds them (Fiske, Taylor, 1991;

∗ University of Belgrade, Faculty of Economics, [email protected] UDC 005.32, review paper Received: 31.07.2012. Accepted: 20.09.2012.

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Smircich, 1983). The behavior, actions, and interactions of the members of an organization emerge from the meaning that the reality of that organization has for them (Alvesson, 2002; Martin, 2002). Organizational culture is a form of collective interpretative scheme shared by the members of an organization, due to which they assign meanings to occurrences, people, and events within and outside of the organization in a similar way and treat them similarly (Schein, 2004). Such a powerful culture of an organization implies that all the members of the organization similarly understand the organization, as well as a suitable way of its functioning, managing, and changing. The character of different components of management and organization, such as strategy, structure, leadership style, organizational learning, system of rewards, and motivation, emerges precisely from the way in which employees and management understand organizational reality and behave in it (Wilderom C. et al., 2000). Thus, organizational culture, through its influence on the interpretative schemes and behavior of the members of an organization, participates in shaping other components of organization and management. Depending on the values and norms contained by the organizational culture, top management selects strategy and designs organizational structure, managers shape their leadership style, employees define their motives and needs, and the human resource manager designs the compensation system in a company. A concrete form of the impact of organizational culture on an organization and management is observed in the fact that components of an organization and management differ in different types of organizational culture. In other words, different types of culture in organizations imply different strategies, organizational structure models, compensation systems, leadership styles etc.

One of the important components of management that is impacted by organizational culture is the method of control of the organization members’ behavior. Organizational culture impacts the selection of adequate method of control of the organization members’ behavior in the same way it impacts all other aspects of management. Namely, cultural assumptions and values shared by the members of an organization determine the way in which they will understand the organization itself, and thereby the adequate way to control and direct the behavior in the organization. What will be determined as a suitable, efficient, or useful way of control will depend significantly on the shared assumptions and values of employees and managers built in their interpretative schemes. Whether the control and coordination of individual behavior of organization members are conducted restrictively or non-restrictively, through direct or indirect communication, by focusing on tasks and structures or people and their relations, will all to a great extent depend on how the leader and the members of the organization see its functioning and a suitable, useful, or effective way of control. This is the reason why different methods of control will be applied in different organizational cultures.

The described impact of organizational culture on behavior control in an organization is, however, too general in character and calls for operationalization which would consist of generating and testing the hypothesis on the causal relationship between certain types of organizational culture and certain methods of

The Impact of Organizatizonal Culture on Control of Behavior in Organizations

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control. In other words, it is necessary to prove that specific methods of behavior control are applied or are more efficient in specific types of organizational cultures. Such operationalization of relationships between organizational culture and methods of control so far has not been dealt with in the literature. The purpose of this paper is to fill this gap. The paper is explorative in character, which means that it will generate hypotheses suitable for empiric testing. The structure of the paper is as follows: first, behavior control will be defined, and classification through which methods of control in organizations are differentiated will be presented. Then the classification through which organizational culture types are differentiated will be presented. Finally, in the last segment of the paper, based on the described classifications of culture and methods of control, hypotheses will be established in which it will be stated that implementation of a specific method of control is conditioned by a certain type of organizational culture.

Methods of Control in an Organization

There are different methods of control in organizations. They are mostly differentiated according to the object of control, so we may speak of performance control, accounting or financial control, technical control, quality control, safety control, ecological control etc. Each kind of control basically has the same objective – to ensure achieving of certain goals or to ensure that certain processes in the organization are achieved according to some prearranged manner. For example, company performance control by means of Balanced Scorecard examines whether balanced goals are achieved in for areas (Kaplan, Norton, 2008). Control of the organization members’ behavior is a kind of control in which the object of control is individual behavior, i.e. actions and decisions by the members of the organization, and the goal is to harmonize these decision and actions both one with another, as well as with organizational goals.

Each organization has the need to control the behavior of its members. This system should provide for the decisions and actions of the members of an organization to be such that functioning of organization follows the planned course and streams towards previously defined goals. Through the process of control, an organization restricts the behavior of its members. The basic reason for this is that an organization is in its essence a system of collective action through which mutual goals are achieved. In order to achieve mutual goals through a collective action, individual actions, i.e. behavior, of the members of an organization must be restricted, directed and controlled. An organization must have a mechanism through which it would decrease the degree of freedom of the employees’ choice in decision-making and action taking in order to provide that these actions and decisions are mutually harmonized and in order for them to jointly flow towards achieving previously defined goals. Otherwise, without control, individual actions of the members of an organization would be uncoordinated and would not be in the function of achieving organizational but individual goals of the members of the organization. The discretion


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of the members of an organization regarding the selection of the manner in which they will perform their tasks in the organization is to a smaller or greater extent restricted by the method of control. This restraint on the freedom of decision-making and behavior of organization members is inevitable in every organization. If every member in an organization would have a complete freedom of behavior, a collective action would then be impossible, and that would altogether mean the end of the organization. Control of behavior of organization members represents a necessary precondition for their coordination. Individual activities and work tasks of the employees can mutually be coordinated into a single unique collective action only if they are partially or completely anticipated which is accomplished precisely by the method of control.

The method of behavior control is a necessary element of organizational design, and the very process of control is one of the four primary tasks of management (along with planning, leadership and organizing). System of control includes the carriers of control and their tasks, means or mechanisms of control, and the documents accompanying control. It is a system of management which the management of an organization uses as a tool for managing the organization. The system of control is the ‘hard’ component of organization. It is more or less a formalized system which is shaped by the decisions of the management of an organization and is often “covered” by the required documents. The most frequently quoted classification in the literature of methods or systems of control of organization members’ behavior is the one given by Henry Mintzberg (Mintzberg, 1979). Within his analysis of the manners in which organizations are structured, he differentiated five basic mechanisms of behavior control on which he also based his organizational models classification.

Standardization of Processes. This control mechanism implies that the manner in which the members of an organization will do their job, i.e. perform each work activity, is prescribed in advance. The means to achieve this are different formal documents: standards, procedures, regulations and instructions. They standardize the way in which each member of an organization performs the work tasks at his/her job. Work processes standardization implies a very low degree of autonomy or discretion of employees, and this is why it is a very restrictive mechanism of behavior control. An employee must do only what is prescribed, in the way it is prescribed, at the prescribed time and using the prescribed tools, which means that there is no room for any kind of deviations. This is why this control mechanism is possible only in the case of relatively simple and repetitive operations or work tasks, whereby the number of exceptions is reduced to the smallest possible extent. Also, this control mechanism is suitable for mass processes, when the number of job positions and operations is very high. An example is the job position of a teller in a bank or an assembly line worker in a car factory. Through standardization of their work activities, what they should do and how they should do it is exactly defined. This is a very firm and reliable control mechanism, since it leaves people little room for a free choice, and thereby also for their mistakes. However, for the same reason, this control mechanism negatively


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impacts the innovativeness and creativity in an organization. Processes standardization is a centralized method of control since all the standards, procedures, instructions and regulations are produced in a single place in an organization and then imposed on the employees in operative sphere. Processes standardization is an ex ante control since the way in which work should be conducted is determined in advance, before the work starts. It is a depersonalized method of control since it is task oriented, and not personality oriented, and since the behavior control comes down to controlling the manner in which tasks are performed. Monitoring of the accomplished in the process of control is conducted through impersonally set standards and mechanisms. Processes standardization is a highly formalized method of control since prescribing of the manner in which the work processes are conducted is done through formal means, such as procedures and regulations. Restricting the behavior of organization members in this way emerges from formal documents. Due to all above said, work processes standardization is a control mechanism that bureaucratizes the organization.

Standardization of outputs. Organizations turn to this mechanism of control when work processes are too complex or variable and cannot be standardized, but the outputs (results) of these processes can be prescribed. In this case, an employee is given the freedom or discretion right to decide how he/she will perform the task, but the output that he/she must achieve is specified or standardized in advance. Standardization of outputs is a nonrestrictive method of control which provides a high level of autonomy to the employees to define their actions. This method of control also requires a relatively high degree of structure decentralization so the organization members and their organizational units would have the freedom of choice of action in achieving the prescribed outputs. A typical example of this control mechanism implementation is divisional organization, in which the top of the company prescribes only the level of performances that the divisions should achieve (e.g. percentage of profit, level of sale, market share), while it leaves them the freedom to make their own decisions about the way in which they will accomplish it. This mechanism of control is also applied in project organizations, i.e. the organizations in which operative processes are conducted mostly through projects realized by project teams. The project results, time and tools are specified, and then it is left to the project team to decide on the manner in which they would complete the project. This is, unlike standardization of work processes, an ex post control since deviations from the planned outputs are discovered and eliminated only after the work task is completed. Performance standardization is, like work process standardization, a depersonalized mechanism of control. The behavior of the members of an organization is controlled through achieving the tasks set in advance. The focus is on the output, and not on the people who achieve it. Standardization of outputs is also a formalized method of control because performance standards that restrict the behavior of the employees are formally prescribed through management decisions and formal documents. Standardization of outputs is most often applied through business and operative plans and budget.


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Standardization of knowledge and skills. This mechanism of employees’ behavior control is applied in the situation when neither the manner of performing the work tasks (process) nor the result (output) can be standardized. The only manner of control in such a situation is the standardization of behavior inputs, and these are knowledge, skills and ethic standards in performing of the tasks. The work process, as well as its effects or outputs (results), can at least to some extent be controlled through standardization of knowledge and skills necessary for performing of the work, as well as through establishing professional norms and standards which those who perform the work should comply with. This mechanism of control is used mainly for performing of the so-called professional jobs, such as, for example, jobs of an economic analyst in a company, doctor, lawyer, professor, researcher in a development laboratory, and the like. By standardization of knowledge, skills and standards that they put into performing of their job the work process, as well as its effects, become significantly more predictable and controllable. Due to standardization of professional knowledge, skills and behavior norms, it can be with certainty anticipated what the doctor will do when he/she encounters a patient with the flue or how the professor of economics will explain what is product cost price. Standardization of knowledge and skills is usually conducted through a long-lasting process of schooling of experts–professionals. Schooling is usually done outside the organizations in which they work, i.e. in educational institutions. However, experts acquire a significant part of the package of professional knowledge and standards in the organizations in which they work. Namely, through the process of socialization and learning from senior colleagues young experts expand, modify and improve the package of knowledge, skills and norms their profession requires. This mechanism of control provides the greatest degree of autonomy to an executive, which is only logical having in mind the nature of jobs that this mechanism of control is used for. This method of control is therefore nonrestrictive and gives a high degree of discretion to the members of an organization regarding the manner in which they perform their tasks. Standardization of knowledge seeks and correlates with decentralization in an organization since it implies that the executives, who are at the same time experts–professionals, have the freedom to independently make decisions. On the other hand, this mechanism of control is, unlike the previous two, personalized and informal. It is people oriented, and not task oriented. It makes the person the center of attention, and not his/her role or task. The degree of formalization of this control system is very low. Socialization and learning of knowledge, skills and professional standards by the newly admitted experts are usually the result of informal contacts with colleagues, although some forms of introduction to work operations, instructing and training can also be observed in companies. The low formalization of knowledge standardization emerges from the fact that behavior of the members of an organization is not restricted by some formal document, but by their professional knowledge, skills and ethics. Just like standardization of work processes, this form of control is based on and ex ante control, i.e. the tendency is to avoid deviations form the desired output, and not to eliminate them after they have already appeared.


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Direct supervision by the management. In this system, control is achieved by the manager who, based on his/her position in the organizational structure, has the authority over a certain number of subordinated employees. The manager supervises the progress of the work process, decisions and actions of the employees, in particular through immediate contact and communication with the subordinate who performs his/her work tasks. The manager gives instructions to the subordinate regarding how, when and what should be done and he/she immediately reacts if he/she notices deviations with regard to his/her instructions. The method of control through direct supervision has several control points in an organization; more specifically it has as many control points as it has managers. But, even so, a significant disadvantage of this method of control is the span of control. This method of control can be efficient only if the managers do not have a too wide span of control, i.e. if the number of subordinates under their control is not too large. This method of control is restrictive and leaves little room for autonomy, i.e. it leaves little room for the employees to have the freedom of choice regarding the manner in which they will perform their work tasks. The manager most often defines methods of work, but also solves the problems that emerge during the work process. The method of control through direct supervision corresponds with centralization in decision-making in an organization, since decisions about the manner of work are reached by the manager, and the employees only execute them. Like standardization of processes, it may be used only for relatively simple and repetitive work tasks. This is why this method of control is the alternative to standardization of work processes, particularly when the organization is small and young or when due to other reasons excessive formalization is not desirable. This method of control is more flexible that standardization of processes and allows somewhat greater degree of creativity and initiative. However, it is also less effective and reliable than standardization of processes. Control through direct supervision is personalized since its focus is the impact on people, and not on tasks. The managers control the behavior of employees through direct impact on them, and not through tasks. Although based on hierarchical superordination and subordinacy, this method of control is significantly informal because the source of restriction of organization members’ behavior is not a formal document but a person, i.e. the supervising manager.

Direct interpersonal communication. Control can also be conducted through a direct interpersonal communication of the employees, i.e. the members of an organization. In this case, the employees who comprise one team control and coordinate each other in direct interpersonal contact and thus coordinate their activities and influence one another. Basically, direct interpersonal communication is more a coordinative than it is a control mechanism. Its purpose is not to control the behavior of organization members, but to coordinate individual actions and behaviors of the members of an organization in order to achieve efficient collective action. But, precisely this coordination of actions with the actions of other members of the team is the source of control, i.e. the source of restriction of the team members’ behavior. They are not entirely free regarding the choice of their actions since they are restricted


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by the need for their action to be coordinated with the actions of other team members. This mechanism of control is very flexible, nonrestrictive and allows for the highest degree of freedom to the employees. They are completely free and autonomous regarding the selection of their behavior while performing the work tasks and restricted only by the need to coordinate their behavior with behavior of the other members of the team. Hence this mechanism of control provides the conditions for the highest degree of creativity and flexibility in an organization. Due to a high autonomy of the members of an organization it implies, interpersonal communication also requires a high degree of decentralization of decision-making in an organization. Also, it is suitable for performing of very complex tasks which cannot be in any way coordinated and controlled from the outside. The main disadvantage of this mechanism of control is that it is limited to control of a relatively small number of employees. Direct interpersonal communication is simply not possible to apply in coordinating and controlling a large number of people. The reason for this is the limited capacity of people to receive, process and give information, which prevents direct interpersonal communication of a large number of people at the same time. Direct interpersonal communication is a personalized method of control oriented towards people, and not towards tasks. It is also an informal method of control since the source of restriction of the organization members’ behavior is not some formal document, but other members of the team. In this respect, it is similar to direct supervision by the management, with the difference being that the source of restriction in direct supervision by the management is the supervising manager and the source of restriction here are the colleagues in the team.

Although Mintzberg did not explicitly write about it, it is clear that the described methods of control of organization members’ behavior can be differentiated according to two criteria: the degree of restrictiveness or autonomy that the method of control leaves to the employees with respect to selection of the way in which they will perform their work tasks, as well as the degree of personalization and formalization of control. According to the criteria of the degree of restrictiveness or autonomy that the method of control leaves to the employees, we may distinguish restrictive and nonrestrictive systems of control. Restrictive methods of control are the ones that leave little room to the members of an organization with respect to selection of method and manner of work and also imply a low degree of their discretion or autonomy and impose a greater number of restrictions. In restrictive methods of behavior control, the members of an organization have very little room for free decision-making and taking actions. Restrictive methods of control are standardization of processes and direct supervision by the management. Nonrestrictive methods of control are the ones that impose smaller number of restrictions in organization members’ behavior and which give them greater discretion and autonomy and leave more room for selecting the manner of work. In nonrestrictive methods of behavior control, the members of an organization have more room for free decision-making and taking actions. Nonrestrictive methods of control are: standardization of knowledge, standardization of outputs and direct interpersonal communication.


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According to the second criterion, we distinguish between formalized and depersonalized methods of control and personalized and lowly formalized methods of control. Depersonalized and formalized methods of control are the ones which restrict organization members’ behavior by means of formal documents, such as: plans, standards, procedures, instructions etc. Standardization of processes and standardization of outputs fall under this type of method of control. They control people’s behavior through controlling the tasks that they should perform. Personalized and lowly formalized methods of control are primarily focused on people and their behavior, and are only secondarily focused on tasks they should perform. The source of restriction of organization members’ behavior are not formal documents but other people: managers, colleagues and the employees themselves (their knowledge and ethics). Direct supervision, standardization of knowledge and direct interpersonal communication are part of personalized and lowly formalized methods of control. By combining the two criteria of differentiation of methods of behavior control in an organization we may design the following matrix:

Table 1: Types of Behavior Control in Organizations

Formalization, personalization of control

Restrictiveness of control, autonomy

Formalized, depersonalized Non-formalized,

personalized

Low autonomy, restrictive Standardization of

processes Direct supervision

High autonomy, nonrestrictive Standardization of outputs Standardization of knowledge, Direct

interpersonal communication

The matrix shows all the differences between the described methods of behavior control in a company. Standardization of processes is a formalized and depersonalized method of control which is also highly restrictive and allows little freedom to employees. Standardization of outputs is also formalized and depersonalized method but, unlike standardization of processes, allows relatively high autonomy to the members of an organization with respect to selection of the method of work. Direct supervision is, like standardization of processes, a restrictive method and allows relatively low autonomy to the employees, but unlike standardization of processes it is a highly personalized and lowly formalized method of control. Standardization of knowledge and interpersonal communication are also personalized and lowly formalized methods but, unlike direct supervision, they provide a high level of autonomy and are not restrictive.

The selection of an adequate method of behavior control represents a very important decision by the company management. Inadequate method of control can


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not only decrease efficiency of the control process, but can also disturb relations and atmosphere in an organization. Numerous factors influence the selection of the method of control in a company. Certainly, the nature of the work being controlled is the most important one among them. It was already noted that the complexity of the work and its repetitiveness significantly narrow the possibility of the selection. Complex and variable jobs and tasks may be controlled through standardization of outputs and knowledge, while standardization of processes and direct supervision may be used only in the case of simple and repetitive jobs. The size and age of a company also have a strong impact on the selection of method of control, as well as the organizational structure of the company. Thus, divisional and project structures call for the application of standardization of outputs, while functional structure implies standardization of processes and hierarchical control. Finally, a very important factor of selection of the method of control is also a degree of education and expertise of the employees. As a rule, standardization of outputs and knowledge requires a higher degree of education and expertise.

In this paper, the hypothesis is established that organizational culture is one of the factors in selecting the system of behavior control in an organization. The prevailing assumptions, values and norms in a company significantly influence the control system selection. For example, the selection between restrictive and nonrestrictive methods of control depends on beliefs on human nature which are the content of the given culture. A culture in which distrust of people prevails will impact the application of restrictive methods of control leaving little room for autonomy of the employees. On the other hand, a culture in which attitudes that creative energy of people should be released prevail is a factor to the benefits of selection of nonrestrictive methods of control, such as standardization of outputs and knowledge. Also, beliefs regarding uncertainty and risk impact the selection between restrictive and nonrestrictive methods of control. Higher tolerance of uncertainty, changes and risks favors nonrestrictive systems of control, while opposite attitudes lead to implementation of standardization of processes and direct supervision, as well as restrictive methods of control. Selecting between personalized and depersonalized methods of control depends on beliefs about the nature of interpersonal relations in an organization. Cultures which assume that every organization is a rational system for achieving of the specific goals, and that interpersonal relations are always in the function of achieving of these goals, favour depersonalized systems of control. Cultures which hold the assumption that every organization is, above all, a social structure in which interpersonal relations determine both the organizational goals and the ways in which they are achieved, are the factor in favor of personalized methods of control selection – the standardization of knowledge and direct supervision.

The preceding analysis implicates that certain mechanisms of employees’ behavior control will be more suitable and effective in certain organizational culture types. In other words, the efficiency of the method of control will depend on the extent in which this particular method of control is compatible with the culture of the


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organization in which it is being implemented. In order to determine which concrete mechanisms of control are suitable and effective in specific types of culture we must identify organizational culture types, determine the criteria of their differentiation, relate these criteria with the criteria of methods of control differentiation, and then relate the types of culture with the methods of control they imply.

Types of Organizational Culture

The next step in the analysis of the impact of organizational culture on the method of control selection is organizational culture type classification. Numerous and diverse organizational culture type classifications can be found in literature (Cameron, Quinn, 2011; Deal, Kennedy, 2011; Balthazard, Cooke, Potter, 2006; Denison, Mishra, 1995; O’Reilly, Chatman, Caldwell, 1991). However, for the analysis of the impact of organizational culture on behavior control in organizations two organizational culture classifications by two authors, Charles Handy (Handy, 1979) and Fons Trompenaars (Trompenaars, 1994), are very helpful. Handy’s classification recognizes power culture, task culture, role culture, and people culture. Trompenaars’ classification recognizes: family culture, “Eiffel Tower” culture, “guided missile” culture, and incubator culture. These two classifications use the same criteria for differentiation of organizational culture type; hence the recognized types are similar.

Power or family culture is authoritarian. In this type of organizational culture the metaphor for organization is the patriarchal family with a powerful father figure at the head. Just as all the power in the family is concentrated in the hands of the pater familias, likewise an organization with this type of culture is highly centralized. Just as interpersonal relations are the most important aspect of the family, similarly in this type of culture social structure and interpersonal relations will dominate over work structure and tasks. Therefore the degree of formalization of relations in an organization with this type of culture is low, so the culture is informal and without developed structures, systems, or procedures. Implementation of the leader’s decisions is conducted through his/her direct and personal influence on the organization members. Power or family culture implies high dependence of organization members on their leader, who makes all the decisions and coordinates and controls all the processes in the organization. The source of the leader’s power is control over resources or charisma, while the organization members draw their power from closeness to the leader. This type of culture implies a high degree of flexibility, because the members of the organization readily accept all the changes coming from the leader.

Role or “Eiffel Tower” culture is bureaucratic. In this type of culture rationality is highly valued, and it therefore has a high level of standardization, formalization, and specialization, as well as depersonalization. In this type of culture the organization is understood as a machine in which every part must


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perform its role in a prescribed manner. Formal rules, procedures, systems, and structures are highly respected, and therefore are highly developed and have a critical role in the functioning of the organization. This is why an organization with role or “Eiffel Tower” culture functions through dependence on work structure and division of labour and tasks, while relations between people are of secondary importance. Role or “Eiffel Tower” culture presumes unequal distribution of power in an organization, because the rules the members are obliged to obey are prescribed from the top. This type of culture implies rigidity and resistance to change, since change disturbs the harmonious functioning of the ‘machine’.

Task or “guided missile” culture is a culture in which organization is a tool for problem solving and accomplishing tasks. Results, competency, creativity, achievement, and change are highly valued. Since tasks are often very complex entire teams are needed to solve them: therefore teamwork is also highly valued. Complex problems solving is entrusted to professionals who have the necessary knowledge and skills. But in order to use all the potential of the professionals’ knowledge and competency they must have autonomy in their work. Therefore in this type of culture it is presumed that the power in an organization must always be distributed relatively evenly among its members. Since an organization with task or “guided missile” culture is focused on tasks, relationships and social structure are of secondary importance.

People or “incubator” culture values individualism and individual growth the most. The organization is understood as an incubator of ideas and people. Individual goals are more important than organizational goals to the members of an organization, and hence organization is regarded merely as a suitable context for achievement of personal goals. This context may be more or less adjusted to the individual needs of the members of an organization and this is the basic criterion according for valuation of the quality of the organization. The consequence is that egalitarianism in distribution of power is preferred in organizations with this type of culture. The organization members, most often experts, participate in organizational decision-making in order to provide conditions for their development. Since everything is observed through the prism of organization members personal development, this type of culture is focused on social structure and interpersonal relations, while work structure is secondary.

The four described types of organizational culture differ in many elements. However, key differences emerge between organizational culture types in both Handy’s and Trompenaars’ classifications, based on two criteria. The first criterion is the distribution of power that is implied by a specific type of organizational culture in an organization. Distribution of power among members of a social group, such as an organization, is one of the fundamental issues that every group must solve in order to be able to function. Resolution of this issue is then built into the culture of the group in the form of cultural assumptions (Hofstede, 2001). According to this criterion, organizational cultures which imply authoritarian or


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hierarchical distribution of power and organizational cultures which imply egalitarian or equal distribution of power can be distinguished. These differences in organizational culture occur due to differences in the assumptions which they contain and which Hofstede recognized, at the level of national culture, as “power distance” (Hofstede, 2001). In authoritarian or hierarchical cultures the basic assumption is that unequal distribution of power in social systems is inevitable, useful, and even necessary, and that it is the only way that the system can function. Such are Handy’s power and role culture and Trompenaars’ family and “Eiffel Tower” culture. In egalitarian cultures the assumption prevails that social systems, such as organizations, need as equal a distribution of power as possible, and that such a distribution of power will provide more efficient functioning of social systems and achieving of goals. Such are Handy’s task and people culture and Trompenaars’ incubator and “guided missile” culture.

Table 2: Types of Organizational Cultures

Framework of collective actions

Power distribution

Work structure, tasks

Social structure, relations

Authoritarian, hierarchical distribution of power

Role culture (H)

„Eiffel Tower” culture (T)

Power culture (H)

Family culture (T)

Egalitarian distribution of power

Task culture (H)

“Guided missile” culture(T)

People culture (H)

Incubator culture (T)

The second criterion according to which these organizational culture types differ in both classifications is the framework of collective action through which the organization achieves its goals. The framework of collective action is also a fundamental iss

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