ORGANIZATIONAL THEORIZINGMGT 6381- Advanced Organizational Theory
Author: Mike Reed
Professor and Associate Dean Cardiff Business School (Wales) Research
Theoretical development in organizational analysis
Managerial/professional/expert work New forms of work organization and control Changing forms of organization and
management in UK public services
Early organization literature
Viewed organizations as rational, streamlined structures
Separate out the values + emotions in organizations
Like Frederick Taylor “The One Best Way” Fused the individual and the collective Somewhat utopian? Do we still see organizations in this light?
We are at a juncture
We are in a period of “revolutionary” science Normal – puzzle solving Revolutionary – Assumptions being
challenged, internal conflict, critique, reevaluation
Three possible responses Retreat to orthodoxy Embrace diversity and discontinuity Retell the history of OT
Time and theorizing
Theory Historically located Constantly evolving Acceptance and impact depends on
receptiveness of the academic community Theory making
“assembling and mobilizing ideational, material and institutional resources to legitimate certain knowledge claims and the political projects that flow from them”
Dynamism in theorizing
Despite ongoing debate, still a basis for evaluating new knowledge “Grounded Rationality”
Negotiated rules and norms for generation of new knowledge
Vocabulary and grammar of organizational analysis
Perhaps not as ubiquitous as in hard sciences
Is the academic community an institution?
Historical Themes
Rationality Integration Market Power Knowledge Justice Network
Rationality
Logic of organization Technical function defines socio-economic
location, authority, behavior of everyone Social order based on organization
Not randomly assigned, birthright, etc Basically, a rationally constructed artifice Frederick Taylor’s “One Best Way” approach
Is this true everywhere? Dictatorships? Family businesses?
Rationality
“Human beings become the raw material to be transformed by modern organizational technologies into well-ordered productive members of society unlikely to interfere with the long-term plans of ruling classes and elites”
What do you think? Is this a reasonable theory given what you know of
modern organizations?
Challenges to Rationality
Simon (1945): Bounded rationality Author
Reduced to rationality to individual cognitive processes “Politics, culture, morality, and history are significant
by their absence of bounded rationality” Do you agree with this de minimis statement
about bounded rationality? Inability to deal with dynamism Instability of complex organizations Doesn’t address problem of social integration
and maintain social order
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
Integration
Why do people cooperate in organizations? HR perspective
Management as benevolent and socially skilled
Didn’t like tunnel-vision of rationalism Organizations adapt to changes in
environment to help restore equilibrium where rational model pitches “one best way”
Organizations help integrate individuals into wider society
Integration
Borrowed Systems Theory from natural sciences Structural functionalism
Internalist focus on Org Design... But external concern on env. Uncertainty Need the right fit between the two to survive
Conflicts over valued means and ends into technical issues that can be solved through effective design and management Frictional elements in an otherwise perfectly
functioning system?
Integration
Can organizations’ ills really be fixed through socio-organizational differentiation/ functional systems analysis?
Major output: Contingency theory Use social engineering and flexible org
designs to solve major institutional and political problems.
Drawbacks Social, economic and political reality didn’t
comport to the theories.
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
Market
If markets behave in neoclassical ways… …then there’s no need for organizations. Fortunately for us, they don’t
Organizations form when markets fail Market theory tried to integrate rational
and integration approaches Rational: Bounded Rationality,
Efficiency/Effectiveness Integration: Organizations must respond to
their environment
Market
Two major theories arose Transaction Cost Economics
Organizations formed by internalizing transactions based on transaction costs
Organizations respond to environment to maximize efficiency
Population Ecology Competitive pressures influence organizational design
Both: design, functioning and development as outcomes of
universal and immanent forces – can’t be changed by strategic action
Market
More attention to resource allocation as a determinant of organizational behavior and design
Shortcomings Doesn’t talk much of social power or agency Unitary social and moral order in which individual and
group interests and values are simply derived from overarching “system interests and values” uncontaminated by sectional conflict and power struggles.
No emphasis on community, public service, and social concern – all you have to do is respond to market demands
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
Power
Most overused and least understood Roots (interplay of both)
Social power Human Agency
Former theories Too deterministic Too unitary
If deployed properly, creates and recreates a hierarchy of autonomy and dependence
Power
Two perspectives Max Weber – Theory of domination
(Institutional) Machiavelli – Organizational Politics
(Processual) Key difference between the two
approaches: Processual (bottom-up)
asks how people lower on the totem pole sway/gain power over those above them.
Examples: unions? collective bargaining?
Power
Three faces of power: Episodic - observable conflicts of interest between
identifiable social actors with opposing objectives Manipulative – behind the scenes activity through
which powerful groups manipulate decision-making agenda to screen out issues that may threaten their control
Hegemonic – strategic control of existing ideological and social structures in constituting and limiting the interests and values (and thus action options) available No longer a human phenomenon, now ideas have power
Power
Field tried to synthesize institutional and processual perspectives by looking at ‘expert’ discourses and practices Which particular patterns of organizational
structuring and control are established in different societies/sectors?
A key shortcoming: Doesn’t deal with the material cultural and
political complexities of organizational change
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
Knowledge
Previous approaches Too deterministic Totalizing logic of explanation
More micro-level than previous approaches
Less rationalist/functionalist/positivist Organizing as a temporary patterning of
interactions and alliances Shifting networks of power Always prone to internal decay and
dissolution
Knowledge
Organizations are Preserves of specialist/expert groups Localized knowledge stores Means for sharing and acting on knowledge
Knowledge is key cognitive and representational resource
for the application of a set of techniques from which disciplinary regimes can be constructed
A strategic resource to be produced, codified, stored, and used to generate power
Knowledge
Theoretical approaches drawing on knowledge Ethnomethodology Postmodernist approaches to org culture and
symbolism Neo-rationalist decision making theory Actor-network theory Post-structuralist/modernist theory
A Key Shortcoming Perhaps too localized – what happened to
external environment?
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
Justice
Bring field back to the macro level Attention to global issues Discussion of governance and control and
“fairness” Several theories using justice approach
Neo-institutionalism Political economy of organization Organizational democracy and participation
in governance
Justice
Neo-institutionalism More than just an aggregation of individual
actions Looks at rules that bind organizations Emphasis on entities that penetrate
organizations state, social class, professions, industry
Central concern: “cultural and political processes through which
actors and their interests/values are institutionally constructed and mobilized in support of certain organizing logics rather than others.” (Structure)
Justice
Neo-institutionalism (cont’d) Secondary concern
“complex overlapping organizational discourses in which institutionalization is practically grounded and precariously realized” (agency)
Attempted to reconnect Local with the global Organizational practices/policies with
institutional rationalities and structures Negotiated order with strategic power and
control
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
Network
Has a major influence on the literature Multiple definitions/approaches taken Has explained many changes in OECD
countries Has been applied to many settings (see p.
35) Talk more to system-wide changes than
specific phenomena The big picture
emergence, development and impact of discontinuous or disjunctive change
Network
Three major research approaches Macro
Wide-ranging and broadly focused studies - theory of network-based organizations and societies as a whole
Mid-range Uses network-based theories to understand dynamics and
outcomes of change within and between specific institutional fields/sectors
Attempts to explain new, different organizational forms Micro
Identify, map and describe the highly complex networking activities and relations that lie beneath the surface level of institutionalized orders and regimes
Workplace restructuring
Network
Can be seen as a lever of control / power Shortcomings
Very different from older OT literature Are they irreconcilable?
Organizations have resisted the logical change in organizational form Highly centralized Distant from local needs Unable to change rapidly
Big OT questions:
Why do organizations exist? Why are firms the same/different? What causes changes in organizations? Why do some firms survive and others
don’t? Emerging issue?
The intersection
A highly contested domain Advocates from each approach Thus “Revolutionary” period
Ontology/Epistemology How is reality defined?
Positivism? Socially constructed? Critical Realism?
Fundamental assumptions in approaches
The intersection
Agency/Structure How are creation and constraint related
through social activity? How do creation and constraint coexist? Agency – Humans create and reproduce
institutions Structure – Institutions constrain human
actions
The intersection
Local/Global At what level should organizational
analysis/theorizing take place? Is there one “right” level?
Individualism/Collectivism Is all organizational action/behavior just a
sum of it’s individual parts? Can organizations “act”?
Where do we go from here?
Two options from the beginning Retreat to orthodoxy Embrace diversity and discontinuity
Or both?