Affinity Plus Case Hbs Essay

Words: 2337
Pages: 10

Case Assignment 3
Affinity Plus (A)

Table of contents
Introduction 2
The benefits of “employee latitude” 2
The disadvantages of “employee latitude” 3
Balancing the tradeoffs between different degrees of latitude 3
Reasons for the high employee turnover at Affinity Plus 4
Management control system changes 5
The alignment of indirect lending and the MOE 6
Conclusion 6
Bibliography 8

In this case assignment the credit union Affinity Plus, which is based in Minnesota, will be examined. As they implemented a new control system, focusing primarily on customer needs, they forgo classical principals as authorization processes and limitations for employees. In the following assessment we will evaluate Affinity’s
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However, a low degree of latitude facilitates tight controls and supervisors are better able to allocate resources, steering the company and knowing the abilities of employees.
A large degree of latitude can result in a situation where employees have too much freedom to incorporate resources and time in the way they think is best to do. This can result in the creation of slack resources and decisions that are not in the best interest of the company. However, customer satisfaction can rise at Affinity because employees are better able to use their own abilities, experience and sound judgment to solve problems. Also, operating delays can be minimized because employees can make decisions for themselves without first asking their supervisors and waiting for authorizations.
It is important that a company finds a balance between the benefits and the sacrifices in the control environment it has to make. It is in the best interest of a company to implement a regulation system concerning the part of the organization where latitude is applied. This is necessary to be sure that the given latitude is being monitored and thus used in a responsible way.
Reasons for the high employee turnover at Affinity Plus
In our first part we followed the argument of Lawler (1969) that increasing employee latitude results in higher intrinsic motivation. The fact that 65% of employees left the company after they were empowered to use a much bigger degree of freedom