A hierarchical control structure is a traditional organizational framework where decision-making authority flows from top management down through various levels of hierarchy. It is characterized by centralized control, strict policies, formal procedures, and well-defined roles. This structure impacts organizational commitment and employee behavior in several ways:
Centralized Decision-Making:
Employees have limited autonomy in decision-making, leading to reduced job satisfaction and lower commitment to the organization.
Decisions are made at higher levels, and lower-level employees often feel disconnected from strategic goals.
Strict Policies and Procedures:
While hierarchical structures emphasize control, they often result in excessive bureaucracy, reducing employees’ sense of ownership.
Employees may perceive rigid rules as restrictive rather than empowering, diminishing their commitment.
Emphasis on Extrinsic Rewards:
In hierarchical organizations, extrinsic motivators such as salaries, promotions, and benefits are emphasized more than intrinsic motivation factors like personal growth, autonomy, or recognition.
This focus can lead to employees feeling less engaged or committed.
Higher Turnover Risk:
Employees with lower organizational commitment may seek opportunities elsewhere, increasing turnover rates.
Research indicates that organizations with rigid hierarchical structures tend to have higher turnover compared to flexible, participative structures.
Option A (Less use of policies and procedures): Incorrect. Hierarchical control structures rely heavily on policies and procedures to maintain control and consistency.
Option C (Less emphasis on extrinsic rewards): Incorrect. Hierarchical structures often focus more on extrinsic rewards such as salary, promotions, and bonuses to motivate employees.
Option D (Less employee turnover): Incorrect. Due to decreased organizational commitment, hierarchical structures often experience higher turnover rather than lower.
IIA Standard 1100 – Independence and Objectivity: Hierarchical structures can impact the independence and objectivity of internal auditors due to rigid reporting lines.
IIA’s Global Perspectives & Insights Report – "The Future of Work": Discusses how traditional hierarchical structures may reduce employee engagement and commitment.
COSO Internal Control – Integrated Framework: Highlights the importance of organizational structure in shaping control environments and employee commitment.
Why Other Options Are Incorrect:IIA References:Thus, the correct answer is B. Less organizational commitment by employees.
