THE DEVELOPMENT OF MANAGEMENT AND ORGANIZATIONAL THINKING

Sue Gilly

Organizational Theory Overview

January 29, 1997

(Based on Summer Session workshop by Frank Friedlander, July 20, 1996

Updated from Winter Session workshop by Frank Friedlander and Sue Gilly, January 19, 1998)

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[ INTRODUCTION (From the Fielding Study Guide)| TERMS AND DEFINITIONS| STRUCTURES/SYSTEMS| SOME BASIC CONCEPTS UNDERLYING M&O; THINKING| PARALLEL SOCIETAL EVOLUTIONS]

INTRODUCTION (From the Fielding Study Guide)

While most scholars agree that an organization is a collective of individuals, and that organizational theory is any theory that explains organizational phenomena, these simple definitions mask tremendous differences in the ways people view and study organizations. The roots of organizational theory lie in psychology, social psychology, sociology, anthropology, systems theory and economics. In each field, even in the subfields within them, scholars use different interpretations of organization, different assumptions about the nature of reality, and different beliefs about the organizational phenomena of critical interest. Organizational Theory requires people who study phenomena at different levels of analysis, with different assumptions about reality, and with different definitions of phenomena.

Organization Theory takes a sociological approach, deals with structural issues, and considers inter-organizational phenomena and interactions between the organization and its environment. Examples include organizational design, organization culture, organization structure, organization learning, and large-scale or complex organization change. Organization Theory draws more upon sociology, systems theory, economics, and anthropology. Management and Leadership takes a more psychological perspective and deals with human processes, and considers intra-organizational phenomena. The disciplines underlying Management and Leadership tend to be psychology and its derivatives of social and industrial psychology.

TERMS AND DEFINITIONS

CULTURE

The prevailing patterns of values, beliefs, assumptions, behaviors and artifacts;

STRUCTURE

Allocation of formal responsibilities, the typical organization chart, the linking mechanisms between the roles, and the coordinating functions within the organization;
(Handy, C. (1993). Understanding organizations. New York: Oxford University Press)

POLICIES

Statements that specify overall guidance and direction, establish standards and set priorities;

VALUES

Used to specify daily behaviors with each other, our customers, our community and our suppliers;

VISION

An ideal image of the organization in the future, the primary focus of effort, helps employees set goals;

MISSION

More specific than a vision, indicates the reason for the organization's existence and suggests what it must do to succeed, clarifies what products or services will be provided and to whom, and it sets the boundaries and guidelines;

STRATEGY

Derives from the Greek word strategia meaning generalship, first used in English in 1688, in military terms it is the work done out of sight of the enemy while tactics were enacted immediately in front of an adversary, brought into commerce due to competition, work that is done to guide the operations of the organization, what makes an organization unique.
(Whipp, R. (1996). Creative Deconstruction: Strategy and Organizations. In S. R. Clegg, C. Hardy & W. R. Nord (Eds.), Handbook of Organization Studies (pp. 261-275). London: Sage Publications.)

STRUCTURES/SYSTEMS

Simplest form of social structure. Leaders do not exercise coercive control over others. Characterized by a uniformity of living standards and amenities. Hunters and shamans may acquire honor and respect but not material wealth. Reciprocal-exchange systems keep the equal structural form in place.

Limited number of valued and sought-after positions that are labeled and formalized. Redistribution of wealth by those in power maintains this structural form. Resources are seen as belonging to the community and not to those in high-ranking positions.

Society is divided into categories in a hierarchical order and those in the upper group usually exerts some control over the lower ones through control of resources. This stratification of people into groups is usually accepted as natural. Marx believed class structure came about with the institution of private property but class structure existed in ancient Mesopotamia when land was owned by the gods and the priests just administered his land. When a ruling class can intervene in some critical phase of production they can control both resources and production. Elites became the managers when societies grew more complex and greater coordination between functions was required.
(Source for Egalitarian Structures, Ranked Societies, and Social Class from - Murphy, R. F. (1989). Cultural & Social Anthropology: An Overture. Englewood Cliffs, NJ: Prentice Hall.)

FEUDAL STRUCTURES/SYSTEMS

The lord has complete control of people and work

BUREAUCRATIC/HIERARCHICAL STRUCTURES

BUREAUCRATIC

• Based on a model from the military and the Catholic Church.
• Authority based on codified rational-legal.
• Limits of work are defined, division of labor, functional departments, job descriptions
• Authority in office that is clearly defined for each member, not person rather than hereditary rule or force, individuals are appointed rather than elected
• Position power
• Hierarchy of authority with clear chain of command
• Centralization, coordination provided by management
• Discipline
• Rules
• Controls
• Procedures
• Incentives provided for disciplined action and following rules
• Tenure
• Security and predictability
• Appropriate for a stable environment or environment can be controlled
• Provide economy of scale
• Slow to change, inflexible
• Fiol, Weber

ORGANIC STRUCTURES

• Burns and Stalker (1961)
• Structure happens spontaneously based on probable task.
• Flexibility and sensitivity to the market and environment, innovation
• Hard to develop economies of scale or depth of expertise
• Control by management is difficult, it resides in the individuals and groups at all levels
• Decentralization

HUMAN RELATIONS MOVEMENT

The Human Relations Movement began to counteract the perspective of organizations as machines and the concepts of scientific management. The perspective of an organization became one of a biological system. The emphasis was on delegation of authority, employee autonomy, trust and openness, concerne with the whole person, and interpersonal dynamics. In the 1930s Chester Barnard pointed out that organizations were not machines. They are cooperative communities, management authority comes from those you manage and people need to be persuaded. He advocated natural work groups, upward communication, authority coming from below rather than above and the leader as a cohesive force.

There were many reasons for this shift to a Human Relations Movement - more sophisticated technology required a more trained workforce so labor became critical; changes in the market place required more adaptive organizations; political, social and cultural changes with regard to how people should be treated; and the search for more appropriate leadership began. We now needed leaders who were more entrepreneurial and many believed anyone could e trained to be a good leader. Out of the research to discover appropriate leadership traits came the understanding that there were employee and task aspects to leadership. Those focused on employee aspects were such thing as T-group programs. At about this same time the Tavistock Institute's work promoted the importance of both the social and the technical aspects of the whole organizations. (See Emery & Trist for information about Sociotechnical Systems Theory ) New work structures were developed to produce more flexible organizations to function in turbulent environments.
(Handy, C. (1993). Understanding organizations. New York: Oxford University Press; Perrow, C. (1973). The Short and Glorious History of Organizational Theory. Organizational Dynamics, 2(1), 2-15.)

• Hawthorne Studies (1930's)
  looked at productivity in the Hawthorne plant of Western Electric and demonstrated the importance of the informal group. Elton Mayo with the Harvard Committee on Industrial Physiology began research to explore the relationship between physical conditions and worker productivity. They became aware that there was a "human relations" factor that influenced the output of the relay assembly test room workers independent of any physical conditions or psychological attributes. An anthropologist was brought in to produce a systematic study of a work group under nonexperimental conditions. This work helped researchers see the factory as a social system in which both horizontal and vertical relationships affected output. (Baba, M. L. (1986). Business and Industrial Anthropology: An Overview [NAPA Bulletin, 2]. Washington, DC: American Anthropological Association.)
  (Parallel Societal Evolutions 1927 to 1932 is the beginning of the Great Depression, rising industrial unrest leading to an organized labor movement in the US.)
• Elton Mayo (1930's)
  a social philosopher who concluded the following based on the Hawthorne studies:
• People are motivated by social needs.
• Social relationships at work now provide meaning for individuals since the work has become so routinized.
• The work group focus has a greater influence on workers than the incentives and controls of managers.
• Supervisors need to be concerned about satisfying workers' social needs.
  (Handy, C. (1993). Understanding Organizations. New York: Oxford University Press.)
• Societal centered human interaction
• Social factors have high influence
• Mary Parker Follett (1930's) - early conflict management, collaboration
• Joan Woodward
• Mintzberg
• Stanley Seashore - cohesion
• Maslow (1940s)
  McGregor (1957) - psychologist linked psychology (motivation) to org/mgmt. The functions of mgmt are to arrange the org conditions so people can achieve their own goals.
• Argyris (1950's)
• Shepard (1950's & 1960's)
• Bennis (1960's)
• Herzberg (1950-1970)
• Likert (1961) - prescriptive,
  first theory of orgs, System I-IV
• Rosabeth Moss Kanter
  See ACTION RESEARCH
  See OD IN 60's AND 70's

TECHNOLOGY & SYSTEMS I

• Emery and Trist (1950's - 60's)
  Sociotechnical Systems Theory (STS) was developed through work of researchers from the Tavistock of Human Relations in England. First work was done with the coal mining industry. Researchers used open systems theory to look at the organization. They found that the organization is composed of a social subsystem and a technical subsystem. The social subsystem is consists of the division of labor, coordination of work, and job satisfaction. The technical subsystem consists of the tools, techniques and processes to convert inputs into outputs. These two subsystems are interconnected and they both have to be jointly optimized for greatest effectiveness and quality of work life. The Tavistock researchers advocated greater participation from all levels of the organization in the design of the work. In the work with the coal mining industry small independent work teams were formed which was a return to a structure that coal miners used to use before automation was introduced. This form of organizing has now been adopted by many manufacturing organizations to improve flexibility and to move more responsibility to lower levels of the organization.
  See SOME BASIC CONCEPTS UNDERLYING M&O; THINKING - Technology
  (Trist, E. L., & Bamforth, K. W. (1992). Some Social and Psychological Consequences of the Longwall Method of Coal-Getting. In R. Glaser (Ed.), Classic Readings in Self-Managing Teamwork (pp. 2-42). King of Prussia, PA: Organization Design and Development, Inc.)
  
  focus on social factors, groups, collaboration
  first theory to incorporate technology.
  (contradicts Likert)
  first to see impact of external environment
  Related materials: "The Question of Fit: Technical Professionals in Self-Managed Work Teams" by Ann Jordan, Ph.D. and Sue Gilly (Org Theory Depth Assessment)
• Joan Woodward (1960s) - different organizational structures depending on the nature of the task and technology. Different units of an organization can be organized differently depending on the task.
• Lawrence and Lorsch (1960's & 70's) - structure is a function of environment and task, they added environment as an important concept in how to organize. A bureaucratic structure is appropriate for a stable environment while a more flexible one is necessary when the environment is chaotic. They also did research that looked at the level of differentiation in organizations. Those that had different goals, time-horizons, and working practices in different parts of the organization is necessary when technology or the environment is changing but there is also a high need for integrating mechanisms.
• Contingency Theory (Fiedler, Hersey & Blanchard, Adams) - a theory that says the appropriate organizational design and effectiveness depends upon a set of variables such as environment, technology, and size. It is based on an organic model that says an organization develops depending on its form and environment.
• Organizational goals and the environment - inside an organization conflicting goals can be pursued if there are slack resources. There were found to be ideal and real aspects to organizations. For example, the formal, announced goals of the organization were not the only goals other, more informal ones are also pursued. It was also found that organizations are very much a product of their unique history and this makes change difficult.
• Open Systems - out of the above work came the systems view. Organizations are open and complex systems where "everything is related to everything else, though in uneven degrees of tension and reciprocity. Every unit, organization, department, or work group takes in resources, transforms them, and sends them out, and then interacts with the larger system. The psychological, sociological and cultural aspects of units interact" (Perrow, 1973, p. 11). Unfortunately the sytems concepts have not been that easy for us to use but it is encouraging organizational theorists to stretch their ways of seeing and their development and use of analytic tools.
  See SOCIETY -- ORGANIZATION -- SOCIAL ISSUES
  (Handy, C. (1993). Understanding organizations. New York: Oxford University Press; Perrow, C. (1973). The Short and Glorious History of Organizational Theory. Organizational Dynamics, 2(1), 2-15.)

SYSTEMS II

• MATRIX STRUCTURES (1950's)
  Combines project groups or teams with functional groupings by technical specialty. It is an attempt to achieve flexibility of resources so workers can be moved as needed between projects. This structure attempts to combine both a bureaucratic and a more organic structure. According to Charles Handy the matrix organization was first used by the aerospace industry in order to satisfy customer needs, provide economies of scale, and develop expertise.
• Way to bring together the right resources
• Expert power
• Individuals can be split between responsibility to the project and to their functional area
• two hierarchies - conflict
• ORGANIC SELF-MANAGING WORK GROUPS
  when gains can be achieved through cooperation around a discrete segment of work. These groups can be permanent or short term, task or project based. The management of the work resides within the group such as scheduling, hiring, budget, performance review, discipline, etc. The group or team has measurable goals and the members continually work to improve their processes. Cross-training between all members of the group is another key element in manufacturing groups. There is usually a need for training in interpersonal and management skills.
  Problems with changes in group membership
  Problems with Self-Managing Groups within a hierarchical organization
  Usually necessary to change reward/compensation structures
  conflict 1960's - Political scientists began contributing to organizational theory by focusing attention on the power and conflicting goals that exist in every organization. This confused the Bureaucratic school because organizational design was supposed to prevent these things. Presenting power and conflict to the Human Relations School did not fit with their view of organizations as cooperative systems. They came around to proposing that conflict can be healthy and power was seen as influence instead.
  (Perrow, C. (1973). The Short and Glorious History of Organizational Theory. Organizational Dynamics, 2(1), 2-15.)
  IPR 1970's
  empowerment 1980's vs. involvement (Max Eldon)
• NETWORKS AND NETWORKING
  Independent firms that specialize in such things as marketing, supplies, distributors, etc. are linked through market and electronic means to produce products and offer services. These can be informal or formal alliances and they may be brought together by a broker or naturally arise from firms interacting. The benefits include spreading the risk, sharing resources, greater flexibility and being able to support different strategies depending upon the needs of the customers.
• MODULAR CORPORATIONS
  "all non-core activities, from the cafeteria to all information technology and computer operations, are subcontracted to outsiders" (p. 9).
• STRATEGIC ALLIANCES
  this is a way to form partnerships especially internationally. Well established companies can form strategic alliances with small innovative companies in order to be more competitive. Benefits include "shared risks, accelerated technical progress, established market linkages and resources for subsequent product development" (p. 10).
• VIRTUAL CORPORATION
  where groups are linked electronically as needed in order to collaborate on short term projects.
  (Clegg, S. R., Hardy, C. (1996). Organizations, Organization and Organizing. In S. R. Clegg & C. Hardy (Eds.), Handbook of Organization Studies (pp. 261-275). London: Sage Publications.)
• WWW
• interorganizational issues and orgs
• borrowing from the hard sciences -
• biology, physics - Wilber, Bohm, Prigogine, Capra, Pribrim - 1970s, Von Bertalanffy
• metaphorical systems - Morgan

SYSTEMS III

• Organizational Learning
  Weick and Westley begin their chapter, in Handbook of Organization Studies, by pointing out that organizing and learning really oppose each other since learning involves disorganization and increased variety while organizing results in forgetting and reduced variety. They suggest focusing on organizations as cultures because this brings in social and experiential aspects that can acknowledge the inherent tension in organizational learning. To them the relevant subsystems of culture are language, artifacts and action routines which serve to make them both repositories of learning and self-designing systems.

• Argyris and Schon (1978)
• Senge (1991)
  Reference: Senge, P. M. (1990). The Fifth Discipline: The Art & Practice of The Learning Organization. New York: Doubleday.
• Chaos and complexity
• Gleick
  Reference: Gleick, J. (1987). Chaos: Making a New Science. New York: Penguin Books.
• Wheatly - brought Chaos Theory into mgmt and organizational thinking
  In the new book, A Simpler Way, by Meg Wheatley and her partner Myron Kellner-Rogers, they begin by telling the reader they are examining the question "How could we organize human endeavor if we developed different understandings of how life organizes itself?" (p. 2). They think the theories of survival of the fittest have given us incorrect perspectives about life, that life is a struggle and we have to compete. Instead life naturally occurs, it is creative, experimenting, attracted to order and it naturally organizes into greater complexity to support more diversity and create greater sustainability. Organizing is an act of creating an identity. The authors propose that our business organizations are living systems so these concepts apply to them too.

• Waldrop
  Reference: Waldrop, M. M. (1992). Complexity: The Emerging Science at the Edge of Order and Chaos. New York: Simon & Schuster
• Stacey
  In the book Complexity and Creativity in Organizations, Ralph Stacey looks at organizations as if they are complex adaptive systems (CAS) and applies the information from the new sciences. One of his key concepts is based on the organization being a network of interacting individuals.

• focus on lack of control, lack of heart in organizations, org as a dead machine, patterns do lurk beneath seemingly random behavior
• not breaking everything down, but incorporating entire system - certain paths make more sense and occur more frequently - strange attractors, post-modern, anti-positivist movement
  See FOUR ENERGIES - Spiritual
  See Quote by Dick Richards
• Complex behavior (Wadrop, Stacey)
  self-organizing systems - with no central control (like colonies of ants, brain, ecology of rain forests)
• Growing recognition of messes and wicked problems.
• Organized complexity, organizations as coherent systems

SPIRITUALITY/HOLISM IN THE WORK PLACE

• Peter Block (1993) Stewardship. Reference: Block, P. (1993). Stewardship: Choosing Service Over Self-Interest. San Francisco: Berrett-Koehler Publishers.
• Joseph Campbell (1956) Hero with 1000 faces
• Bob Greenleaf - servant leadership
• Stephen Covey - Principle Centered Leadership 1992
• Kastenbaum - the inner side of greatness
• Jack Hawley - reawakening the spirit in work 1993
• Harrison Owen - Transformation and Development in Orgs
• D Whyte - The Heart Aroused. Reference: Whyte, D. (1994). The Heart Aroused: Poetry and the Preservation of the Soul in Corporate America. New York: Doubleday.
• Dick Richards - Artful Work 1995
• Boleman & Deal - Leading with Soul 1995
• Thierry Pauchant - In Search of Meaning 1995
• Alan Briskin - Stirring of the Soul in the Workplace 1996
  See FOUR ENERGIES - Spiritual

NEW PARADIGMS

• Feminist perspectives. Reference: Barrentine, P., (Ed.) (1993). When the Canary Stops Singing: Women's Perspectives on Transforming Business. San Francisco: Berrett-Koehler Publishers.
• Radical-Subjective - Burrell & Morgan
• Goia and Petrie
• Western parochialism
• the social basis of knowledge
• confronting values
• post modernism
• spirituality in the workplace
• Communities of practice
  See FOCUS ON ENVIRONMENT

SOME BASIC CONCEPTS UNDERLYING M&O; THINKING

• Control
• Control through information
• Control through membership
• Control through bureaucratic structures
• Control though wages
• Control through human relations
• Control through participation

• Technology
• Taylor, F. W. , Scientific Management, 1947 - based on simple maxims such as plan ahead, count things and movements, allocate tasks and responsibilities, and limit your span of control, and review results. Essentially people were left out of the equation though. It was the beginnings of time and motion studies and of industrial engineering. Taylor believed that engineers were the only ones who could properly design how the work should be done.
  (Handy, C. (1993). Understanding organizations. New York: Oxford University Press.)
• Herzberg, S-T
• Leadership - our intrigue
• Humanism - labor
  (See CONTROL VS PARTICIPATION)
• Competition - int'l
• Belief Systems

GLOBAL PRESENCE

• Competition
• Cost reduction
• Downsizing
• Lean & Mean Orgs
• Strategy, Reengineering

CHANGING CONTRACT BETWEEN ORGANIZATIONS AND EMPLOYEES

• increasing project jobs
• outsourcing of work
• far flung meeting places, rather than a place to work
• changing loyalties
• The "Protean Career" - Doug Hall
• free agents

"There is the promise of a leisured, rich future for the whole world. But technology has not produced stable employment, more leisure time, and higher productivity. Rather we have managed to consume and dispose of our selves as so much waste on our way to work" John Kenneth Galbraith, 195?

CONTROL VS PARTICIPATION

• control through wages
• control through bureaucratic structure
• control through human relations
• control through participation

PERSONAL GROWTH

• t-groups
• encounter groups
• therapy

See SOCIETY -- ORGANIZATION -- SOCIAL ISSUES

ACTION RESEARCH

• Lewin, 1940's - social causes
• Coch & French - industrial causes 1950
• individual development - 1960s
• Schein - culture
• participative action research
• Paulo Freire - empowerment 1989
• small groups

See SOCIETY -- ORGANIZATION -- SOCIAL ISSUES

ORGANIZATION DEVELOPMENT (OD)

• According to French and Bell (1990) from the perspective of behavioral science, organization development has a specific definition. "Organization development is a top-management supported, long-range effort to improve an organization's problem-solving and renewal processes, particularly through a more effective and collaborative diagnosis and management of organizational culture - with special emphasis on formal work team, temporary team, and inter-group culture - with the assistance of a consultant-facilitator and the use of the theory and technology of applied behavioral science, including action research" (p. 17). (culture - the prevailing patterns of values, beliefs, assumptions, behaviors and artifacts.)

• psychological (the person & group)
• sociological (the structure)
• technological (the way task is done)
• organization transformation
• appreciative inquiry
• large scale systems change
• reengineering
• virtual organization
• change management

See OD Values

WHY OD FAILS

• Mgmt's need to control
• Mgmts need to think hierarchically, not latterly
• mgmts inability to see total system and where they are in it
• mgmt is always in charge - so little change in paradigms
• org culture difficult to change
• OD colludes with mgmt -
  provides books, articles on how (to look) participative & humanistic in the American culture which blesses democracy and humanism
• OD practitioners who do their schtick only training with no org change context

OD IN 60'S AND 70'S

• as problem solving remedies
• incremental change
• major shifts in equilibrium - transformational

FOCUS ON ENVIRONMENT

financial, community, technology, political, economic, racial, ethnic, gender

SOCIETY

ORGANIZATION - - - SOCIAL ISSUES

racism, gender, sexual preference, ethnic mix, ecological perspectives

FOUR ENERGIES

1. Physical - structures, policies
2. Mental - thoughts, ideas, evaluations, memories, plans (energy comes from words and numbers)
3. Emotionality - Feelings, Joy, sorrow, shame, wonder (Hawthorne Studies and T-groups)
   See PERSONAL GROWTH
4. Spiritual - beliefs about unforeseen forces that shape our reality and about our relationship to these forces. It gives meaning to our lives and bonds us together into community. It is the source of impulse to create (in our work). It is the energy behind the meaning. (see Maslow, Wheatly, ST, Argyris)
   See Quote by Dick Richards

PARALLEL SOCIETAL EVOLUTIONS

1780-1850: Agrarian (agriculture)

1850-1950: Manufacturing

1950-2000: Service (social relations)

2000-2100: Knowledge (information systems)

2100- : Existential - mental/spiritual

Family Structures

• extended - - -> communal
• nuclear
• non-family

RESEARCH

• empirical, analytic
• interpretative, intuitive
• decuctive --- inductive
• status quo --- action --- PAR

Organizations
Feudal Bureaucratic Hierarchical Organic Networks

Organization Development
Human growth groups orgs communities

OD Values
personal growth intellectualization strategy and bottom line
existentialism rationalism pragmatism
See Quote by Dick Richards

Systems
unidirectional open systems cybernetic evolutionary chaos and complexity

ORGANIZATIONAL CULTURES

INFORMATION

• one to many - radio, TV
• many to many - networks, webs

WORK FAMILY RELATIONSHIP

integration of W & H separation of W & H integration of W & H

MAJOR CHALLENGES FOR MGMT (Vaill, 1989?)

• Mgmt of complexity
• Mgmt of diversity
• Mgmt of interdependence and integration
• Mgmt of change
• Mgmt of worker in far-flung work places

EXTERNAL ENVIRONMENT

"The hidden and neglected side of corporate life, where one's soul has been forced to reside in dark and subterranean caves" Dick Richards, Artful Work

"We have taken the soul out of corporate life" David Whyte, The Heart Aroused

HAVE THINGS GOTTEN BETTER?
HAVE THINGS GOTTEN WORSE?

or are we simply recycling, and things really don't change?

ie. Taylorism -- and now back to reengineering

ie. 1890-1900 the expanding underclass 1990-2000

ie. Robber Barons (1920's) stock options of CEOs (1990's)

Person vs Organization (Argyris, 1950's) still here

Committed work forcealienated work force

People technology people