An Eclectic Explanation of Shopfloor Control Using Efficiency and Power Theories

Abstract

The paper identifies four control mechanisms on the shopfloor and explains their determinants. By enriching contingency and transaction cost theories with power notions, several hypotheses are tested in a dataset composed of 329 Spanish firms in the food and electronic industries. Results show that shopfloor control is shaped by efficiency concerns, power asymmetries and interdependences between control modes. In particular, control mechanisms depend on several structural traits of the firm and labour transaction attributes. However, managers’ opportunism also plays an important role through its effect on workers’ opportunism. This fact calls for the internalization of principals’ opportunistic behaviour in efficiency-driven organizational theories. Furthermore, control mechanisms also show specific interdependences through their relations with certain labour transaction attributes and organizational traits. In fact, the level of human capital can at the same time be the outcome and the cause of certain control mechanisms. A relevant by-product is therefore that the level of human capital is not necessarily the main reason — as suggested by transaction cost economics — to internalize a labour transaction within the firm.

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