Grameen Bank’s Concertive Control Systems Report

Introduction

Grameen bank (over 2 million members) has successfully offered small collateral-free loans to the poor and still maintains a steady loan recovery rate of 99%.

Examining its organizational processes in view of concertive control, we identify the paradoxes associated with democratic practices in organizations for social change.

In this paper, I examine the empowering and controlling aspects of Grameen’s development organizing, focusing on its management style options.

The structured analysis of development organizing with Grameen bank is as follows:

1. Concepts of concertive control, empowerment, identification, and disciplinary.
2. Description of its social context, evolution, and organizational features.
3. Examination of stories and metaphors gathered from its members & workers.
4. Finally, I conclude the analysis with questions for development organizers.

Main Body

Explanation of Concepts used in the Article

Concertive control is a decentralized, participative, and democratic system of control in an organization that gives the worker some power to make guiding decisions. It exists when control is shared down the hierarchy within an organization. The locus of control shifts significantly from management to workers who collaborate to create rules and norms to govern their behavior. Top management or workers producing value-based corporate vision statements can effectively stimulate this collaborative process.

Opportunities for individual and collective empowerment can emerge where employees collaborate to create their own social rules. Empowerment is viewed both as perception and a process. Empowerment as perception is a belief that one can influence people and events in an organization to achieve desired ends. In the Grameen bank, empowerment evolves as a process where workers and members collaborate to uplift the poor hence sustaining the collaborative mission of the organization.

For effective regulation of worker behavior in concertive control systems, workers must identify with a set of values and factual premises that guide their decision-making and work activities. When workers find the organization’s values relevant in evaluating the alternatives of choice, they exhibit their identification with the organization’s vision. As workers identify themselves with one another by acting together, they become empowered them specific communication strategies, such as negotiating, collaborating to reach decisions, and determining courses of action to reach codetermined goals.

Discipline can be defined as a social force that operates differentially and precisely on bodies. Worker-maintained systems of control include micro-techniques of discipline to regulate and normalize individual and collective actions in organizations. The members become part of the standard operating procedure when they internalize these disciplinary techniques. For example, a worker is able to control their behavior when the discipline concerned with task performance becomes internalized.

The rationale for selecting the theory of concertive control system is three-fold. First, the Grameen bank empowers its affiliates to create their own rules and norms for the execution of economic and socio-development programs. Second, the bank’s loans programs establish a system where workers and members monitor and control each other’s behavior. Lastly, the theory provides a framework for understanding how member identification with value-based appeals masks the mechanisms of discipline.

Explanation of Methods Used in the Article

The methods that have been used to collect and analyze the data in the case include:

1. Study of information materials and scholarly literature on the Grameen bank.
2. Observation and interviews of the Grameen bank in (1991, 1993, and 1994).
3. Communication with the top-level officials of Grameen bank officials since 1990.
4. Documentary films and reports about the Grameen bank (e.g., FAO, 1987).

The field survey was pre-tested and administered by author Muhammad A. Auwal, a native citizen of Bangladesh, with the help of two Bangladeshi university students. The survey instrument used in 1993 consisted of closed-ended demographic questions (e.g., age, sex, and health) and open-ended questions that focused on social and economic changes experienced by members since their affiliation with the bank. Probing follow-up questions would sometimes be used to get deeper information. Using this survey instrument, 270 Grameen bank members in nine village centers (incorporating 30 members each) in three different regions of rural Bangladesh were interviewed. Three interviewers photographed important events and gatherings, took notes on all significant conversations, and tape-recorded the in-depth personal interviews. They also conducted structured focus group discussions with Grameen Bank workers (n=20) to gain different insights into the bank’s operation. In addition, 50 more members and 25 workers were interviewed informally in field visits in 1991 and 1994. Thus, the analysis draws interview data of approximately 320 members and 45 workers.

Explanation of the Main Highlights in the Case

• The Grameen [“rural”] bank, founded by Muhammad Yunus, the managing director of the bank, has come out loud as the perfect solution to these problems.
• Located in Bangladesh, the bank offers innovative approaches to development by organizing grassroots micro-enterprises for productive self-employment and social change among the poor in the region.

• Grameen gives collateral-free loans to the poor and landless in Bangladesh to start their own businesses and become able to repay the loans and improve their own lives.
• With 2+ million members, Grameen bank has successfully offered small collateral-free loans to the poor and still maintains a steady loan recovery rate of 99%.
• This represents their rather unique philosophy and practice of micro-capitalism directed at the poorest of the poor in Bangladesh.
• Grameen’s social services address health, nutrition, sanitation, and education.
• Grameen has inspired similar projects in nearly 70 countries on the globe, such as the Mudzi fund in Malawi, the Amanah Ikhtiar program in Malaysia, and the over 150 micro-enterprises set up recently in the United States.

Explanation of the Main Discussion Points

• The theory of concertive control effectively illuminates several practical aspects of the Grameen Bank and gives us insight into issues in organizing for social change.
• We now consider the insights derived about concertive control systems, as well as the practice and paradoxes of workplace democracy.
• Grameen bank targets the poorest for social and economic development programs.
• Grameen’s model of development organizing has a significant impact on millions of poor Bangladeshis, evidenced by success stories of people uplifting themselves.

• The main purpose has been to note some of the surprises, contradictions, and paradoxes encountered in an avowedly humane and democratic organization.
• Worker dedication to the bank’s mission is an integral part of the bank’s success,

Conclusion

In conclusion, I find Grameen bank as the most encouraging solution to eliminating poverty in most affected countries and developing nations.

As I had explained earlier, the purpose of this analysis was to examine the empowering and controlling aspects of Grameen’s development organizing, focusing on its management style options and how it can be an employer in other countries.

Reference

Papa, M. J., Auwal, M. A., & Singhal, A. (1997). Organizing for social change within concertive control systems: Member identification, empowerment, and the masking of discipline. Communication Monographs, 64(3), 219–249. Web.