CASTILLO, MARGAUX JULIENNE R.

FEB 14 2022

ORGANIZATIONAL BEHAVIOUR : CHAPTER 4

QUESTION:

ClamCo, a large energy company, was once a bureaucratic organization that valued long
service and promotions through a steep hierarchy. After several years of difficult change, it is
now a much flatter organization that places more responsibility with self-directed work
teams. Explain what changes ClamCo probably would have made to align its reward system
with this new corporate philosophy.

In both the public and private sectors, a bureaucratic organization has an administrative system
based on policies, regulations, and hierarchy. ClamCo rewarded employees depending on their
employment rank and years of service. Longer service was rewarded with possibly higher pay,
higher pensions, and prolonged vacations. Companies that choose a steep hierarchy have more
power, status, and influence imbalances. It depended on status-based incentives to keep staff
motivated to go up the corporate ladder. ClamCo most likely established each role precisely and
used quantitative job evaluation tools to properly evaluate its value. ClamCo would prefer to
move from a status-based reward system toward a competence-based award system as a result
of its transformation into a lighter, simpler company.