Organizational Theory

The Basics

There are three phases of Western industrial development (Burns). First, the factory system – machines extend and enlarge the productivity of work. Second, an increased technical complexity of these manufacturing operations. This comes with a parallel growth in social organization and bureaucracy (control, routine, specialization). In the third phase, production overtakes demand, leading to new customer focus, new techniques to stimulate consumption, search of new markets, and new technical developments.

Industrial societies are organized around the control of labor in the production of goods. Post-industrial societies are organized around the creation of knowledge and the uses of information.

Classical management theory (Frederick Taylor, Henri Fayol, Chester Barnard) focuses on the practical problems faced by managers of industrial organizations. Classical management focuses on scientific management and the reliance of universal principles for the rational administration of organizational activities. When thinking of Classical management theory, think: machine.

The modern approach to organizational theory is the General Systems theory, which states there are essential laws and principles that explain all systems (supersystems, systems, and subsystems). Organizations as open systems depend on the environment for inputs. Inputs are transformed into outputs and outputs become inputs for other systems. When thinking of modern theory, think: organism.

In the symbolic-interpretive approach (for instance, Karl Weick’s enactment theory, we create realities and treat them as if they are. Man is an animal trapped in webs of significance that he has spun himself. So when using concepts like the “organization,” we create the phenomenon that we are trying to study. Our organizational realities are subjective. We make patterns of meaning out of our activities, then assume that these meanings have an objective reality of their own. When thinking of symbolic-interpretive theory, think: culture (though they, of course, prefer no label).

Postmodernism is the most recent theory. It’s a relativistic approach that abandons notions of universal criteria for truth and excellence, seeing knowledge as fundamentally fragmented. This theory views questions of right/wrong and good/bad as social constructions that are usefully deconstructed. There is a quest for objective truth and unifying views. When thinking of postmodern theory, think: collage.

Fredrick Taylor’s Five Principles: (1) Shift responsibility for the organization of work from worker to manager. (2) Use scientific methods to determine the most efficient way of doing work. (3) Select the best person for the job thus designed. (4) Train the worker to do the work efficiently. (5) Monitor worker performance to ensure that the appropriate work procedures are followed and appropriate results are achieved.

The Environment and its Influences on Organizations

When exploring the organizational ecology, there are many things to take into consideration. Here is a broad overview of the sectors that influence the environment: (1) Industry: competitors, industry size and competitiveness, related issues; (2) Raw Materials: suppliers, manufacturers, real estate, services; (3) Human Resources: labor market, employment agencies, universities, training schools, employees in other companies, unions; (4) Financial Resources: stock markets, banks, savings and loans, private investors; (5) Market: customers, clients, potential users of products and services; (6) Technology: techniques of production, science, research centers, automation new materials; (7) Economic Conditions: recession, unemployment rate, inflation rate, rate of investment, economics, growth; (8) Government: city, state, federal laws and regulations, taxes, services, court system, political processes; (9) Socio-cultural: age, values, beliefs, education, religion, work ethic, consumer and green movements; (10) International: competition from and acquisition by foreign firms, entry into overseas markets, foreign customs, regulations, exchange rates.

Organizations have strategies for controlling the external environment. One strategy is to establish inter-organizational links within ownership, contracts, or joint ventures. This strategy may also utilize cooptation (agreement not to hire another company’s employees, if they agree not to hire yours), interlocking directorates, executive recruitment, advertising, and public relations. A second strategy is to control the environmental domain, such as a change of domain, political activity, regulation, trade associations, or illegitimate activities.

In the traditional orientation, competition was the standard; however, the new orientation embraces partnership and collaboration.

The traditional orientation, focusing on adversarial measures, was laden with suspicion and competition, keeping others at arm’s length. The focus was on price, efficiency, and a company’s own profits. There was limited information and feedback. Conflicts were resolved under the legal system and the path of business included minimal involvement and up-front investment. Contracts were done in the short-term and they limited the relationships.

The new orientation focusing on trust, adds value to both sides. It demands a high commitment, equity, and fair dealing. Electronic linkages are used to share key information, receive feedback, and have discussion. There are mechanisms for close coordination and people are on-site. There is involvement in partner’s product design and production, long-term contracts, and business assistance beyond the contract.

“Survival of the fitting,” or viewing organizations as organisms, involves these components: open systems, homeostasis, entropy, structure (function, differentiation, integration), requisite variety, and equifinality.

Elements in the Population Ecology Model of organizations are as follows: (1) Variation (large number of variations appear in the population of organizations) -> (2) Selection (some organizations find a niche and survive) -> (3) Retention (a few organizations grow large and become institutionalized in the environment).

In population ecology theory (how things come to be institutionalized) there are three mechanisms for institutional adaptation: (1) Mimetic; (2) Coercive; and (3) Normative.

In utilizing the mimetic mechanism, the reason to become similar is uncertainty. The events that lead to this are innovation or visibility. The social bias for this institutional adaptation is culturally supported. An example would be re-engineering or benchmarking.

In utilizing the coercive mechanism, the reason to become similar is dependence. The events that lead to this may be political law, rules, or sanctions. The social bias for this institutional adaptation is legal. An example would be pollution controls or school regulations.

In utilizing the normative mechanism, the reason to become similar is duty or obligation. The event that leads to this tends to be professionalism (ie: certification or accreditation). The social bias for this institutional adaptation is moral. An example would be accounting standards or consultant training.

In considering the resource dependency theory, we take a more pro-active approach to controlling the environment. Minimize dependence and keep an eye on resources that are critical to your survival. Minimize threats and think about vulnerabilities.

Organizational Structure

In classical and early modernist approaches, structure is static and highly routinized. In open systems theory, organic growth and development leads to change and evolution in structure. In the symbolic-interpretive and postmodern approaches, the focus is on processes and relationships; social structure influences and is influenced by the everyday interactions of employees.

Differentiation and integration is the fundamental issue/tension in organizing. Differentiation (the degree to which differences in function are separated) makes it harder and harder for employees to perform their activities and coordinate with other employees. Strain on communication and coordination leads to pressure for integration.

The structural lens: (1) Organizations exist to achieve established goals and objectives; (2) Organizations increase efficiency and enhance performance through specialization and clear division of labor; (3) Appropriate coordination and control ensure that diverse efforts mesh; (4) Organizations work best when rationality prevails; (5) Structures should be designed to fit the organization’s goals, technology, & environment; (6) Problems arise from structural deficiencies and can be resolved through restructuring.

Organizations may be integrated by grouping based on knowledge/skill, product, client/customer, process, around place or geography, or on the basis of time.

Vertical structure is designed for efficiency. The vertical structure is dominant in specialized tasks, strict hierarchy, and vertical communication and reporting systems. There are many rules but few teams, task forces or integrators. There is centralized decision making. (Note: a bureaucracy is decentralized.)

Horizontal structure is designed for learning. The structure is dominant in shared tasks, empowerment, relaxed hierarchy, few rules, and face-to-face communication. There are many teams and task forces with decentralized decision making.

The structural design for grouping employees into departments may either be functional grouping or divisional grouping.

In a functional organizational structure, there are specific departments (ie: Engineering, Marketing). This structural grouping allows economies of scale within functional departments. It enables in-depth knowledge and skill development and enables organization to accomplish functional goals.
It is best with only one or few products. On the other hand, these organizations may have slow response times to environmental changes and decisions may pile on top leading to a hierarchy overload. There can be poor horizontal coordination among departments, resulting in less innovation. It involves restricted view of organizational goals.

In a divisional organizational structure, there are specific divisions divided by product (ie: Product Division 1, Product Division 2). This structural grouping allows for fast changes in unstable environments. There tends to be higher client satisfaction because product responsibility and contact points are clear. It involves high coordination across functions and allows units to adapt to differences in products, regions, and clients. It is best in large organizations with several products as it decentralizes decision-making. On the other hand, it eliminates economies of scale in functional departments and leads to poor coordination across product lines. It eliminates in-depth competence and technical specialization and makes integration and standardization across product lines difficult.

A matrix organizational structure (could be functional or organizational) has a dual-authority structure, so employees could have multiple bosses. It achieves the coordination necessary to meet dual demands from customers. There is a flexible sharing of human resources across products. It is suited to complex decisions and frequent changes in unstable environment, providing opportunity for both functional and product skill development. It is best in medium-sized organizations with multiple products. On the other hand, a matrix organizational structure causes participants to experience dual authority, which can be frustrating and confusing. Employees in this structure need to have strong interpersonal skills and extensive training. It may be time-consuming, with frequent meetings and conflict resolution sessions and will not work unless participants understand it and adopt collegial rather than vertical-type relationships. It requires great effort to maintain power balance.

Organizations with a horizontal structure have the benefit of flexibility and rapid response to changes in customer needs. These organizations direct employees’ attention toward the production and delivery of value to the customer. Each employee has a broader view of organizational goals. There is a focus on teamwork and collaboration with a common commitment to meeting objectives. It improves quality of life for employees by offering them the opportunity to share responsibility, make decisions, and be accountable for outcomes. However, determining core processes to organize around is difficult and time-consuming. It requires changes in culture, job design, management philosophy, and information and reward systems. Traditional managers may balk when they have to give up power and authority. It requires significant training of employees to work effectively in a horizontal team environment and can limit in-depth skill development.

Organizational contextual variables that influence structure include culture, size, technology, environment, and strategy goals. When there is a structural deficiency, the symptoms include: delayed decision making, poor decisions, lack of an innovative response to the ever-changing environment, or too much conflict from departments being at cross purposes.

Organizations are important because they bring together resources to achieve desired goals and outcomes. They produce goods and services efficiently and facilitate innovation. Not only do they adapt to their ever-changing environment, but they also influence it, and organizations create value for owners, customers, and employees.

Organizational Strategy

In defining what organizations do, traditionally their tasks were defined as top management’s planned efforts to influence organizational outcomes by managing the organization’s relationship to its environment. This military-like terminology to discuss strategy was applied to organizations in the 1950s.

The rational model introduces a problem in looking at ideal vs. reality. It is built on a top-down linear model where ideas flow from top to bottom. There is a separation between strategy formulation and implementation. This rational model has inherent communication, coordination, and motivation problems.

In viewing strategy as symbol, we reverse the direction of causality because implementation precedes analysis and formulation, tending to legitimizes organizational actions. Strategy can be inferred from what works. Action leads to strategy. We look for leadership in the form of strategy

Which comes first, strategy or goal? Strategy stretches into the environment. Goals stretch into the organization.

Official goals (the organization’s mission) are stated for the purpose of legitimacy. Operative goals are outlined for the purpose of employee direction and motivation, decision guidelines, and performance standards.

Efficient performance tends to come from vertical, functional groupings. Tasks are routine and narrowly defined and formal control systems are implemented to manage complex information. The top management strategy is competitive and the organizational culture may become rigid from success in stable environment.

Learning organizations tend to have horizontal workflows or processes. Empowered roles are emphasized. The open channels of communication facilitate the sharing of information. A collaborative strategy emerges and culture is adaptive to the external environment.

Donaldson advocates that organizations design their structure to fit their strategy. His primary focuses are on coordination mechanisms, task interdependence, size, innovation, diversification, and geographical diversification.

Porter was unmoved by SWOT analyses, finding them too vague so he created his own competitive strategies varying in their scope and emphasis. Walmart is an example of a company with a broad competitive scope, a low-cost competitive emphasis, and a low-cost leadership strategy. Starbucks is an example of a company with a broad competitive scope, a competitive emphasis on uniqueness, and a strategy of differentiation. Enterprise is an example of a company with a narrow competitive scope, a low-cost competitive emphasis, and a focused low-cost leadership strategy. Edward Jones is an example of a company with a narrow competitive scope, a competitive emphasis on uniqueness, and a strategy of focused differentiation.

According to Miles and Snow’s Strategy Typology, there are four types: prospector, defender, analyzer, and reactor. The prospector has a fluid and flexible earning orientation and a decentralized structure. This involves strong R & D and organizations tend to value creativity, risk-taking, and innovation. The defender has an efficiency of orientation and serves as a centralized authority with tight cost control. There is an emphasis on production efficiency, low overhead, close supervision, and little employee empowerment. The analyzer balances efficiency and learning, also balancing tight cost control with flexibility and adaptability. This type of organization has efficient production for stable product lines and places an emphasis on creativity, research, and risk-taking for innovation. The reactor has no clear organizational approach. Design characteristics may shift abruptly depending on current needs.

The reported goals of U.S. companies are ranked from the largest percentage of companies who say they support them to the smallest. At the top of the list, 89% of companies state their goal is profitability, 82% state growth, and 66% state market share. The bottom of the list is management development at 35%, resource conservation at 39%, and financial stability at 49%. The most interesting of these stated goals from a time and trend perspective is 65% of U.S. companies reporting having a goal of social responsibility.

Technology

Rogers stated that in order for technology to evolve, it must go through the diffusion process. New technology must have a clear relative advantage over the current technology. It must be compatible with people’s existing values. The complexity must be manageable. People must be able to give the new technology a trial and lastly, this technology must be able to be observed. Michele gave the example of TIVO. She was recommending it to her friends, but no one would bite. They did not see an advantage over the current technology, which was simply recording via VCR. Also, her friends assumed that TIVO would encourage more television viewing, something not compatible with their goals. They weren’t able to test it at Best Buy or observe changes to her life by her TIVO-viewing. They were also fearful of its complexity.

There are differences between manufacturing and service technologies. Service technology offers an intangible product. Production and consumption take place simultaneously. Labor and knowledge is intensive and customer interaction is generally very high. The human element is very important. Quality is perceived and is difficult to measure. Rapid response time is usually necessary and the site of the facilities is extremely important. In manufacturing technology, there is a tangible product that can be inventoried for later consumption. The capital asset is intensive and there tends to be little direct customer interaction. In manufacturing, the human element may be less important, though quality is directly measured. A longer response time is acceptable and the site of facility is moderately important.

In service organizations, there are few separate boundary roles, geographical dispersion is vast, decision making is decentralized, and there is lower formalization. In terms of recruiting from the HR office, the ideal employee skill level is high and the skill emphasis is interpersonal. In product organizations, there are many separate boundary roles, geographical dispersion is small, decision making is centralized, and there is higher formalization. In terms of recruiting from the HR office, the ideal employee skill level is low and the skill emphasis is technical.

Departmental technologies can be routine, craft, engineering, or non-routines. In routine technology, there is high analyzability and low variety. Examples include sales positions, clerical, drafting, and auditing. In craft technology there is low analyzability and low variety. Examples include positions in the performing arts, trades, and fine goods manufacturing. In engineering technology, there is high analyzability and high variety. Examples include legal, engineering, tax accounting, and general accounting. In non-routine technology, there is low analyzability and high variety. Examples include strategic planning, social science research, and applied research.

There is a relationship between departmental technology and structural/management characteristics. Craft technology has a mostly organic structure (moderate formalization, moderate centralization, work experience, moderate to wide span, and horizontal, verbal communications). Non-routine technology has an organic structure (low formalization, low centralization, training plus work experience, moderate to narrow span, and horizontal communications meetings). Routine technology has a mechanistic structure (high formalization, high centralization, little training or experience, wide span, and vertical, written communications). Engineering technology has a mostly mechanistic structure (moderate formalization, moderate centralization, formal training, moderate span, and written and verbal communications).

In Thompson’s classification of interdependence and management implications, he labels three forms of interdependence: pooled, sequential, and reciprocal. In pooled (ex: bank), there is low communication with a divisional structure loaded with standardization, rules, and procedures. The priority for locating units close together is low. In sequential (ex: assembly line), there is medium communication with task forces focusing on plans, schedules, and feedback. The priority for locating units close together is medium. In reciprocal (ex: hospital), there is high communication with a horizontal structure focusing on plans, schedules, and feedback. The priority for locating units close together is high. (For example you cannot have a hospital and keep radiology far from the E.R.)

To continue the metaphor from the previous paragraph, baseball has a pooled interdependence with rules that govern the sport and management’s job is to select players and develop their skills. The physical dispersion of players is high. Football has a sequential interdependence with a game plan and position rules, where management’s key job is to prepare and execute the game. The physical dispersion of players is medium. Basketball has a reciprocal interdependence with mutual adjustment and shared responsibility, with management’s job to influence the flow of the game. The physical dispersion of players is low.

There are two approaches to knowledge management: explicit and tacit. In explicit, the aim is to provide high-quality, reliable, and fast information systems for access of codified reusable knowledge; think: people-to-documents. The knowledge management strategy is to develop an electronic document system that codifies, stores, disseminates, and allows reuse of knowledge. Explicit tends to invest heavily in information technology, with a goal of connecting people with reusable codified knowledge. The mechanisms used are data warehousing, knowledge mapping, electronic libraries, intranets, and networks. In tacit, the idea is to channel individual expertise to provide creative advice on strategic problems; think: person-to-person. The knowledge management strategy is to develop networks for linking people so that tacit knowledge can be shared. Tacit tends to invest moderately in information technology, with a goal of facilitating conversations and the exchange of tacit knowledge. The mechanisms used are dialogue, learning histories and storytelling, and communities of practice.

Organizational Culture

Organizations exist to achieve established goals and objectives. Organizations increase efficiency and enhance performance through specialization and clear division of labor. The appropriate coordination and control ensure that diverse efforts mesh. Organizations work best when rationality prevails and structures should be designed to fit the organization’s goals, technology, and environment. Problems arise from structural deficiencies and can be resolved through restructuring.

The assumptions in the structural approach are as follows: formal rules & regulations, impersonal treatment, division of labor, hierarchical structure, an authority structure, a lifelong career commitment, and rationality.

Taylor’s five principles are as follows: (1) Shift all responsibility for the organization of work from the worker to the manager; (2) Use scientific methods to determine the most efficient way of doing work; (3) Select the best person for the job thus designed; (4) Train the worker to do the work efficiently; (5) Monitor worker performance to ensure that the appropriate work procedures are followed and appropriate results are achieved.

Items to consider when assess how an organization is integrated: Are functional groups based on knowledge or skill? Are units created on the basis of time? Are groups organized by product, by client/customer, by geography, or by process? What are the organization’s goals? Are they formal, with a stated mission? Are they honorific, meaning fictitious goals crediting the organization with desirable qualities? Are they taboo, referring to the goals an organization pursues but does not talk about? Are they stereotypical and fitting for any reputable organization? Are they existing and quietly pursued even though inconsistent with the organization’s stated values and self-image?

The symbolic frame highlights a few concepts. First, what is most important is not what happens, but what it means. Also, activity and meaning are loosely coupled; events have multiple meanings. People use symbols to resolve confusion, increase predictability, and find direction in the face of uncertainty. Events and processes may be more important for what is expressed rather than for what is produced. Essentially, culture is the glue that holds the organization together.

Schein’s definition of culture is as follows: “Culture is a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to these problems.”

Culture is loaded with recursive relationships that react and cause reactions. Artifacts and espoused beliefs and values influence one another. In turn, these espoused beliefs and values interact with Underlying assumptions in a give and take manner.

Organizations are laden with symbols, which reveal and communicate culture. An example of symbol is McDonald’s with its golden arches and the legend of Ray Kroc. Myths are another form of symbol, involving deeply-rooted narratives that explain, express, and build cohesion. These myths are often rooted in origin legends (“how it all began”). Another organizational symbol is found in values, namely what an organization stands for and cares about. An organization’s vision is another way to look at organizational symbols. In this instance, the image of future rooted in core ideology. Heroes and heroines are icons and living logos who embody and model core values. Stories and fairy tales can also serve as organizational symbols. Good stories convey information, morals, values and myths vividly, memorably, and convincingly. Ritual involves repetitive, routinized activities that give structure and meaning to daily life. Ceremony, another instance of an organizational symbol, is used on grand, infrequent symbolic occasions. Finally, metaphor, humor, and play can be used as organizational symbols. These three involve “as if” and provide indirect approaches to issues that are too hard to approach head-on. Metaphor involves an image to compress ambiguity and complexity into an understandable, persuasive message. Humor provides a way to illuminate and break frames. Play permits relaxing rules to explore alternatives, encourages experimentation and flexibility.

Do organizations have cultures or are they cultures? A simple definitions of culture is: “How we do things around here.” It is both product and process, embodying accumulated wisdom. It must be continually renewed and recreated as newcomers learn old ways and eventually become teachers. Managers who understand culture are better equipped to understand and influence organizations.

Keeping in tune with the frequent metaphors of organizational theory, the organizational process can metaphorically be seen as theater. One example is in seeing meetings as “garbage cans” in that they attract an unpredictable mix of problems looking for solutions, solutions looking for problems, and participants seeking opportunities for self-expression. Another theater metaphor involves viewing planning as ceremony in order to maintain legitimacy and reinforce participants’ bonds. Plans are symbols, they become games, they become excuses for interaction, and become advertisements.

Continuing with the organizational process as theater, we look at evaluations, collective bargaining, and power. Evaluations often fail in the intended goals of improving performance and identifying strengths and weaknesses, but the ceremony signals the organization as being well-managed and caring about performance improvement. In collective bargaining, the public face is an intense, dramatic contest. However, the private face is a back-stage negotiation riddled with collusion. Power exists in eye of beholder. A person is powerful if others think they are. Power may be attributed based on outcomes.

In closing, organizations are judged by appearance. The right drama provides a ceremonial stage, reassures stakeholders, and maintains confidence and faith. Drama serves powerful symbolic functions, in that it engages actors in their performances and builds excitement, hope, and a sense of momentum.

Innovation and Change

Morgan states that change is like a whirlpool; the water in a whirlpool is constantly moving. There are a variety of metaphors and are definitely alternate views of change. In one view of change, the aim of organizations is to reproduce themselves and their identities. In another view, the line between organization and environment is artificial; they are ever-interacting systems. Organizations and their environment are part of the same broad pattern, so the question in that becomes: how does this pattern evolve? Another view states that organizations interact with projections of themselves and their environments. The challenge becomes understanding how organizations change and transform themselves along with, or in tandem with, their environments.

In Morgan’s postmodern view of change, change is not a linear progression of “a” causing “b.” Instead, change can be viewed through the lenses of circular loops, attractor patterns, the study of opposites, and the management of paradox. We are never “in control;” we are no more than butterflies. However, small changes can set in motion patterns of change with tremendous consequences. Even though our actions shape and are shaped by change, we are part of an evolving pattern that we can not entirely control.

Incremental change is a continuous progression and affects the organization through normal structure and management processes. This may be from technology improvements or product improvement. Radical change, on the other hand, is a paradigm-breaking burst
that transforms the entire organization, creating new structure and management. This may be from breakthrough technology, be it through new products or new markets.

Change may either be top-down or bottom-up. When downsizing, the best strategy is mechanistic. When bottom-up production techniques dictate the workflow, it is best if it is organic.

In the modern approach, there are stages to the commitment to change. In this view, change is seen as either creating new attractors or breaking down resistors in terms of unfreezing, attracting, and refreezing. Stage 1 is preparation, including initial contact and awareness. Stage 2 involves acceptance in terms of understanding and the decision to implement. The final stage is commitment meaning installation and institutionalization.

Barriers to change in the modern approach are as follows: excessive focus on costs, failure to perceive benefits, lack of coordination and cooperation, uncertainty avoidance, and fear of loss. Techniques for change implementation in the modern approach are as follows: identify a true need for change; find an idea that fits the need; obtain top management support; design the change for easy implementation (in stages/steps); develop plans to overcome resistance; create change teams; foster idea champions. When implementing, the emphasis is on control, rationality, and planned change.

Looking at change implementation and barriers in the post-modern view involve asking the following questions: What are the forces locking the organization into its existing pattern? Is the “attractor” appropriate? Should it be changed? How can small changes be used to create large effects? How can we manage inherent contradictions and inconsistencies to support change? How can we manage through chaos? How can we influence new forms (because we can’t entirely control them)? In this, the emphasis is on fluidity, complexity, chaos. Some caveats include superstitious learning (misattribution where organizations learn the wrong thing), ambiguity of success (difficult to know when success has occurred), and competency traps (improving ‘great’ procedures that may no longer be relevant or needed).

Yet another perspective for change is in viewing organizational ecology. In this perspective, there is a higher level of analysis, viewing populations and communities of organizations. The questions we ask are as follows: Why are there so many different kinds of organizations? How do we explain diversity among organizations? How can we explain variation at this level of analysis? The emphasis is on the creation and extinction of organizations.

In a broad perspective, we view organizational founding and failure. In the demographic approach, we view age and size. In the ecological approach we view niche dynamics, particularly assessing specialists versus generalists. In the population approach, the focus is upon the dynamics and density of the population (its interdependence). In the institutional approach, the focus is upon the role of political turbulence, government regulation, and institutional linkages. In the technological approach, we focus on the cycles of technology.

Organizations have difficulty changing strategy and structure quickly. Under uncertain conditions, there are severe constraints on the ability of individuals to correctly conceive of and implement needed changes. Therefore, the actions of individuals don’t explain much of the variation and diversity of organizational populations. Individuals still matter, but they have bounded rationality and limited resources. These issues represent underlying issues in the structural inertia theory.

In assessing the structural inertia theory and change, we must consider how changeable the organization is. Organizations have pressure to be reliable and accountable for their actions, which leads to institutionalization and standardization. This, in effect, is strongly anti-change. Inertia has a strong effect on organizations and varies by age and size. Some features of the organization have more inertia (goals, authority structure, core technology) and less inertia (size of subunits, spans of control, communication patterns).

In conclusion, we must ask ourselves: Is change good? Attempting core changes turns an organization back into a newcomer and undermines its built-up legitimacy. In the short-term there is an increased risk of failure (though it should decline over time). Organizations large in size can be an important buffer in the short-term. Organizations may fail as a result of trying to survive if they are unwilling or unable to change fast enough.

Power and Politics in Organizations

Hatch defined conflict as an overt struggle between two or more groups in an organization, or between two or more organizations. Katz and Kahn defined conflict as a particular kind of interaction, marked by efforts at hindering, compelling, or injuring and by resistance or retaliation against those efforts. Kolb and Putnam defined conflict as not necessarily overt, often private, informal, and irrational; responses include avoidance behavior, development of cultural norms, and emotional behavior.

In viewing conflict as dysfunctional, conflict is the antithesis of cooperation and is a sign of a defective or incomplete social structure. The response to conflict is to create structural mechanisms for dealing with the underlying issues that generate conflict.

In viewing conflict as natural, it is an inevitable part of organizing, not a sign of mismanagement, and should be accepted. The response should be to focus on sources of conflict and its underlying conditions.

When viewing conflict as functional, it can stimulate innovation and adaptability. In this way, it challenges the assumption that organizations should be cooperative systems. Conflict leads to stimulation, adaptation, and innovation, as well as better decision-making. It is psychologically and sociologically healthy, encouraging divergent opinions and challenges to the status quo and encourages respect for diversity and pluralism.

Conflict solidifies group identity and enhances cohesiveness. Competition between units can help to maximize productivity. There is a tradeoff between the productive influences of competition and the conflict it can generate.

Here are a few ways to reduce conflict: physical separation (avoidance), increased resources (avoidance), repress emotions/opinions/actions (avoidance), create superordinate goals (collaboration), emphasize similarities (smoothing), negotiate (Compromise), appeal to higher authority (hierarchical), rotate jobs (structural change), or increase physical proximity (confrontation).

Here are some ways to simulate conflict: acknowledge repressed conflict, role model functional conflict, alter communication channels, hold back information, over-communicate, deliver ambiguous messages, differentiate activities or outcomes, challenge the existing power structure, alter resource allocation, and alter reward structures.

Contexts for inter-group conflict include: environment, strategy, technology, social structure, culture, and physical structure.

Sources of potential inter-group conflict include: goal incompatibility, differentiation, task interdependence, and limited resources. When conflict is low, the rational model describes organizations — goals are consistent, power is centralized, the decision process is orderly, rules and norms value efficiency, and information is extensive and accurate. When conflict is high, the political model describes the organization. In this instance, goals are inconsistent, power is decentralized, the decision process is disorderly, rules and norms allow free play on the market, and information is ambiguous and strategically withheld.

Power is the ability to influence others to bring about desired outcomes. Authority, on the other hand, flows down the vertical hierarchy, is prescribed by the formal hierarchy, and is vested in the position held.

The strategic contingencies that influence horizontal power among departments are as follows: dependency, financial resources, centrality, nonsubstitutability, and coping with uncertainty.

Tactics for increasing the power base: (1) enter areas of high uncertainty; (2) create dependencies; (3) provide resources; (4) satisfy strategic contingencies.

Political tactics for using power: (1) build coalitions; (2) expand networks; (3) control decision premises; (4) enhance legitimacy and expertise; (5) make preferences explicit but keep power implicit.

Tactics for enhancing collaboration: (1) create integration devices; (2) use confrontation and negotiation; (3) schedule inter-group consultation; (4) practice member rotation; (5) create superordinate goals.

In negotiating, there are two common strategies: win-win strategy and win-lose strategy. In the win-win strategy, define the conflict as a mutual problem, pursue joint outcomes, find creative agreements that satisfy both groups, use open, honest, and accurate communication, avoid threats, and communicate flexibility. In the win-lose strategy, define the conflict as a win-lose situation, pursue self outcomes, force other group into submission, use deceitful, inaccurate communication, use threats, and communicate rigidity.

Power Domination

According to French and Raven, power can be legitimate (role or position), constituent (given), reward (ability to give “good” things), coercive (ability to punish), expert (special skills or knowledge), or control over resources (gatekeeper).

According to management, power is viewed as functional. It is used in the pursuit of collective, functional goals. Power is viewed as dysfunctional when used by those who challenge organizational goals and seek self-promotion. Power is the means by which legitimacy is created.

Max and Weber have a model of power that involves a double-headed arrow between power and domination and this relationship is moderated by structure.

Strategies of domination, according to Clegg and Hardy, are as follows: (1) Barriers that prevent powerful groups from fully participating in decision-making; (2) Powerless are “duped, hoodwinked, coerced, cajoled, or manipulated” into inactivity/inaction; (3) Ability to define reality used by dominant classes to justify status quo; (4) Absence of knowledge resources, inability to recognize the game.

Structures supporting domination and exploration include examples such as: (1) Enron – leadership abusing position of power for personal gain; (2) California farm workers and car washes- exploiting “secondary labor;” (3) San Onofre; (4) Military – water contamination; (5) Wall Street – was the individual investor “outflanked” by the investment community? (6)Unpaid internships.

In Closing

Metaphors create insight, but also distort. They create ways of seeing, but also ways of not seeing. The challenge is how to find ways of seeing, understanding, and shaping situations from multiple perspectives? The goal is not to limit thinking or limit range of action.

The theory-practice divide is a limitation. OT is a theory of, and for, management. It has much less to say of and for those who are managed. OT as a contest of the future shaping of organizations and the lives of those within them. “Theories are not like explorations where a flag is planted for the first time. They are “attacks” upon another theory.” (Wolin, 1981) Perhpas the past is no longer an adequate guide for the future. Rather than choose between normal and contra organization science, it is more productive to think of them as the two faces of modernity: efficiency and dehumanization.

Metaphors include: machine, brain, organism, domination, flux & transformation, psychic prison, political, culture.

“What is truth? A moving army of metaphors, metonymies and anthropomorphisms, in short a summa of human relationships that are being poetically and rhetorically sublimated, transposed, and beautified until after long and repeated use, a people considers them as solid, canonical, and unavoidable. Truths are illusions whose illusionary nature has been forgotten, metaphors that have been used up and have lost their imprint and that now operate as mere metal, no longer as coins.” — Nietzsche