Chapter A: Basics of Organization Theory

Where can the organization theory be found?

Human Resource Area: Organization theory is evident in the recruitment, selection and training procedures of the organization.

Strategy Area: Organization theory is used to direct the accomplishment of the organizations goals.

Marketing Area: Organization theory helps everyone understand the organization itself, its strategy and its brand.

Operations Area: Organization theory influences areas such as production, logistics and sales.

What is a theory?

Theory: “The phenomenon of interest” + concepts

• Phenomenon of Interest: This is the main part of the theory which is explained by the concepts. Even though this can be expressed as a formula, this is not always the case. For instance, some phenomenon of interest can be explained in terms of statistics, or sayings. This is extremely common when it comes to explaining human behaviour, as it is very difficult to describe.

• Concept: These are like folders, which we create to store similar experiences and ideas, only highlighting a few similar features. A concept is formed after abstraction has taken place. The diagram below describes abstraction further:

By matching more personal experiences to a concept, the more elaborate the concept will become and the more likely you are to remember and understand it.

Chunking: Abstraction also allows the “chunking” of information. This is the process that enables us to think of many different things at the same time. This is evident in concepts as they are made up of large or big “chunks” of information.

Analysing Organizations – How?

There are three perspectives, collectively known as multiple perspectives which help to analyse and understand organizations. These include the modern, symbolic interpretive and post modern perspectives.

In order to understand these perspectives, one must know about ontology and epistemology.

Ontology: Area of study that focuses on what we think is real. It also asks questions such as whether or not we believe if our lives are already planned out for us, or if we control it ourselves.

• Subjectivists: believe that reality varies from person to person due to differing viewpoints and experiences.

• Objectivists: believe that our behaviour is predictable and can be controlled.

Epistemology: Area of study that focuses on “knowing how you can know.”

• Positivist Epistemology: This area says that an organization can be understood through the means of measurement, such as statistics, or scientific experimentation.

• Interpretive Epistemology (Anti-positivist): this area says that an understanding of the organization can only be gained from the employees’ experiences.

Modernist Perspective: The modernist definition of knowledge is what we are able to collect from our senses; touch, smell, sight, taste and hearing. The main aims of modernists are to eliminate bias and focus on objective knowledge.

Symbolic Interpretive Perspective: Concerns knowledge that is considered as subjective – knowledge that cannot be measured as easily as those from the five senses, for example, personal experience and emotion. However, this perspective can introduce bias.

Postmodern Perspective: Describes how knowledge is used for power. In addition, it highlights the importance of language, and how language can reflect reality.

Chapter B: Beginnings of Organization Theory

How did it all start?

The Prehistory of organization theory is mostly concerned with the modernist perspective. It should also be mentioned that at this time, the field of organization theory did not exist. Theorists of the time employed inductive and deductive methods of reasoning.

• Inductive Reasoning: using experience and input from workers to create a theory.

• Deductive Reasoning: using measurement and scientific research to prove against the inductive reasoning.

The prehistory of organization theory evolved from two schools of thought:

Sociological School of Thought: This is concerned with the effects of the industrial revolution and society on organizations. It involves the following scholars:

• Emile Durkheim

• Max Weber

• Karl Marx

Classical Management School of Thought: This is concerned with the managers and their involvement with the organization. It involves the following scholars:

• Fredrick Taylor

• Mary Parker Follet

• Henri Fayol

• Luther Gulick

• Chester Barnard

Influential scholars – their main ideas

Karl Marx: Theory of Capital

• Stated that there is a conflict of interest between workers and the owners of the organization.

• Wrote that alienation in the work place can occur due to depersonalisation of workers.

• From this theory, critical organization theory emerged, concerning how power is delegated in an organization and the empowerment of employees.

Emile Durkhein

• Main focus on division of labour

• Specialization

• Describes the informal (e.g. culture) and formal organization

• The effects of industrialisation

Max Weber

• How industrialisation affected authority

• There are different types of authority:

  • Traditional Authority: Prevalent before industrialisation. This type of authority meant that positions of authority were usually inherited.

  • Charismatic Authority: Authority is gained from the personal liking of someone. For example, Martin Luther King Jr.

  • Rational-Legal Authority: This type of authority arose during industrialisation. It is a mixture of traditional and charismatic authority.

• Max Weber wrote “Theory of Bureaucracy.”

• He also distinguished between:

• Formal Rationality: Rationality based on measurements and calculations

• Substantive Rationality: The wanted outcome of calculations and measurements.

Fredrick Taylor

• Author of “scientific management.”

• Carried out scientific research to enhance productivity and efficiency. For example, employee -product output rate measured.

• Incentive systems introduced.

• Criticised for treating employees as machinery rather than human beings.

Mary Follet

• Embraced democratic ideals for the work place – work place democracy.

• Believed in organizations functioning as a community.

Henri Fayol

• Established his Administrative Principles, which included:

• Span of Control: the amount of people that report to one manager.

• Formation of departments.

• Hierarchy: the ‘position’ and communication of everyone in the organization.

• Exceptions to routine: a concept which involves managers only having to deal with issues that cannot be handled by the subordinates.

• Emphasised organizational culture.

• Defined managerial duties including: planning, coordination, control, commanding and organising.

Luther H. Gulick

• Defined the duties of a chief executive as: Planning, organizing, staffing, directing, coordinating, reporting and budgeting.

Chester Barnard

• Emphasized the “informal organization”.

• Discussed how organizations should be moulded into Cooperative Social Systems - This is similar to Follett’s idea of the organization as a community, as well as emphasis on employee involvement and motivation and communication of all organizational goals.

The Three Perspectives in Further Detail

Modernist Organizational Theory: there are three theories that help to make up this theory:

General Systems Theory: Ludwig Von Bertalanffy is the founder of this theory. The theory assumes that anything can be classified as a system.

• System: made up of subsystems (which can also be defined as systems) and their relationships with one another. A system can only be understood fully only if all subsystems and their relationships are understood.

• The Level of Analysis: This has to be defined when looking at a system. For example, if an organization is being analysed, then the organization is the system and the departments within the organization a subsystem. The organization is surrounded by a Super System, the environment, and the subsystems of an organization include:

• Social Structure

• Physical Structure

• Culture

• Technology

Socio-Technical Systems Theory: This theory is concerned with the relationship between technology and society (workers). It focuses on the effects of technology on productivity and motivation. The theory highlights the benefits of group work and delegation of responsibility. For instance, autonomous workgroups were investigated: these were groups of workers that were free to decide their division of work and their tasks. This resulted in improved motivation (this was also known as the short wall method).

Contingency Theory: States that the organization is based on reactions to different situations.

Symbolic-Interpretive Theory: focuses on individual and group experiences within the organization and how these are interpreted. This theory can be seen as being based on the following theories:

• Social Construction Theory: Society is based on our interpretations and experiences. Social construction is made up of three phases: externalisation, objectification and internalisation- we learn something new, ‘internalise it’ from someone else’s perspective of reality ‘objectivised reality’ and then you ‘externalise’ it. An organization can also go through the aforementioned phases.

• Sense making Theory: “Organizations exist largely in the minds of organization members in the form of cognitive maps, or images of particular aspects of experience.”

Chapter C: The Internal Organization and its Environment

The environment is a source of inputs for the organization and receives the outputs that the organization creates.

Before you can start to analyze the environment, you need to know where the organizational boundary is - that is, where the organization stops and the environment starts. The boundary can differ depending on what you are trying to find out about the environment.

One can analyze the environment by splitting it up into 3 different levels:

1. Stakeholder Level: Stakeholders include all the actors in the environment of an organization, for example, unions, suppliers, partners, customers, competitors and regulatory agencies. In order to map out the relationships of various stakeholders, and the position of the organization, an Inter-organizational network analysis can be carried out. This also shows how resources and information move to and from stakeholders and the organization.

2. The General Environment: The impact that several factors in the general environment have on the Inter-organizational Network must be understood in order to fully appreciate the relationship between the environment and the organization. The general environment can be split into the following sections:

   • Social: Involves demographics, lifestyles, social institutions and social movements.

   • Cultural: Concentrates on the effects of beliefs, values, traditions and history

   • Legal, Political and Economic: These sectors are grouped together as they influence one another. For example, trade restrictions on businesses are both a political and economic issue.

   • Technology: Provides knowledge and information for the organization, for example, in the form of Computer technology. This sector also has connections with other areas in the general environment such as the legal sector, for example, the abuse of copyrighted materials.

   • Physical: Provides the organization with natural resources. Trends that should be noticed include the increase in natural disasters which have economic, legal and cultural effects as well.

When analyzing the organization and its environment, the different areas of the general environment don’t all have to be used for the analysis - only what is most important for your case.

3. The International Environment: This includes all the organizations that operate in more than one country.

Theories about the Organization and the Environment

Modernist Theories:

1. Environmental Contingency Theory

Burns and Stalker describe how the environment and the organization’s structure relate to one another. They suggest that in stable environments, organizations are more successful if they adopt mechanistic properties and in changing environments, organic structures are better, as they help the organization meet the demands of the environment, for example through innovation.

Environmental uncertainty is calculated by the amount of complexity (the range and amount of elements in the environment and rate of change (the speed at which these elements changes). For example, if there is a low rate of change, and low amount of complexity, then the environment is seen to have a low amount of uncertainty.

The main issue with ‘environmental complexity’ is that it suggests that there are no different reactions to the environment - everyone experiences it in the same way. Therefore, the information perspective on uncertainty was introduced. This highlights that rather than the environment being uncertain, the people who analyze the environment may feel uncertain about it.

The figure below illustrates how perceived uncertainty arises:

The organization and environment can also be looked at in terms of ‘fit’- does the organization fit the environment? The law of requisite theory describes that in order for a system to handle another system properly, they must have the same level of complexity, and with organizations this occurs through isomorphism - the complexity of the organizational structure, is the same as the complexity of the environment.

2. Resource Dependency Theory

• Developed by Jeffrey Pfeffer and Gerald Salancik, this theory proposes that the organization is controlled by the environment due to its dependencies on it. It depends on the environment for:

• Resources in order to create products and services.

• Somewhere to sell or distribute these products and services.

• In order to know which resources are the most important ones, they need to be evaluated in terms of criticality and scarcity. Criticality refers to how important the resource is and scarcity refers to the amount of the resource there is. If a resource is both critical and scarce, then it is the first priority of the organization.

• These resources dependencies can be controlled by buffering (making sure that you have enough resources to survive any conflict or transition period with suppliers) and boundary spanning (‘keeping your enemies at a close distance’).

• Some dependencies can be solved by adopting the following strategies: vertical and horizontal mergers, different recruitment techniques, and by changing the environment within which the organization operates.

3. Population Ecology Theory

Population Ecology asks why populations of organizations are composed as they are.

• The population is made up of two groups: Generalists (usually large companies trying to achieve economies of scale) and Specialists (companies that serve the needs and desires of individual and specific tastes).

• In population ecology, only the ecological niche is looked into. This “consists of a resource pool upon which a group of competitors depends” (Hatch and Cunliffe, 2006).Those organizations competing in the same resource pool are known as a population.

• Population ecologists study the death and birth rate of organizations. In addition, it is described that the survival of an organization depends on its environment. Organizations can go through three phases:

1. Variation: Innovation leads to new organizations, and organizations change to satisfy differing demands in the environment.

2. Selection: Organizations are selected based on whether or not they fit properly into the niche. If not, they move into a new environment or ‘die’.

3. Retention: Organizations have enough resources in order to survive for a certain period of time.

However, there are problems with this theory. These include:

• There is no way to detect survival. It can only be seen if an organization has survived after it has done so
• Some environments are composed of few organizations
• Every population is not necessarily very competitive

Symbolic-Interpretive Theories:

1. Institutional Theory

This theory began with Philip Selznick who believed that the organization was based on those working within the organization, as well as the external society.

An organization faces demands from the environment. These include (Hatch and Cunliffe, 2006):

1. Technical, economic and physical demands (these are satisfied through the exchange of goods and services).

2. Social, cultural, legal and political demands (these are satisfied by trying to conform to the different groups values).

Institutionalization is the “process by which actions are repeated and given similar meaning by self and others”, (Hatch and Cunliffe, 2006).

Some things are repeated and therefore institutionalized due to:

1. The law and politics: this can be seen in the form of rules and laws and occurs through coercive pressures.

2. Culture: this can be seen in the form of norms, laws and values and occurs through normative pressures.

3. Social influences: this can be seen when organizations want to look or behave like others. This occurs through mimetic pressures.

The Institutional Theory also states that organizations depending on the factors of production from the environment, also need approval from society, and this is known as social legitimacy.

2. The Enacted Environment

It is assumed that the way in which you interpret the environment affects the way you respond to the environment. For example, if you think that your organization is sustainable, then you behave in a sustainable manner, and this way you create a sustainable environment.

3. Ambiguity Theory

Equivocality: This is a term used to describe that an organization acts in different contradictory ways, so that different groups are targeted (they appeal to different groups in the environment), and those groups believe the organization to be a certain way. Therefore, this can lead to ambiguity.

Postmodernist Perspective on the Organization and the Environment:

The enactment theory holds a view that postmodernists, but not symbolic interpretive theorists, agree on - that once we have created our own realities, we can choose to get away from the ones we do not like.

Industrialization

Postmodernists also focus on context, especially historical context, where they centre their attention on Industrialization, and the effects of the technology (involved in this stage of history) on organizations.

The three stages of industrialization include:

1. Factory System

• Machines were used for simple tasks and complex operations were carried out using subcontracting.

• The positions that men and women had at work reflected their positions in real life; for example, in the work place, men had higher positions than women.

2. Factory system changed into more complex manufacturing of clothing, food, chemicals, iron and steel.

• More complex tasks to carry out and greater need for communication.

• More rules and control, as well as ranking systems.

3. The third stage involved organizations producing more than was being demanded

• More focus on customers and specialization.

After industrialization, computer and other communications technology appeared to be changing the way organizations worked, as well as society in general. In addition, the service sector became more and more important.

In today’s organizations stakeholders are of extreme importance. Postmodernists believe that organizations that satisfy the needs of all stakeholders perform better than those who don’t.

Chapter D: Organization's Social Structure

Some theorists claim that organizations have been formed in order to carry out activities that individuals could not do alone - it would be more efficient to carry out that activity in a group.

There are two types of organizational structure:

1. Physical Structure: This refers to the organization’s literal structure. For example, its geographical locations and buildings.

2. Social Structure: This includes the relationships amongst employees of the organization. In addition, the different departments or groups that people within the organization belong to.

Weber and Bureaucracy

Where ‘Social Structure’ came from:

Weber believed that the ideal model of an organization was a bureaucracy.

Weber’s theory of organizational structure is made up of the three parts which follow below:

1. Division of Labor

• Increases efficiency due to task specialization - i.e. in a group of workers, each specializes on a specific task to complete the whole product.

• This also includes departmentalization (similar activities are carried out by groups of people).

2. Hierarchy of Authority

This shows who has the authority (who makes decisions) in the organization and who has to report to these people. The relationships throughout the organization between managers and subordinates are usually displayed in a pyramid.

• When a person leaves their position of authority, the next person to fill the position has that authority again.

• Hierarchy also allows us to see who reports to who - if communication is moving downwards, then subordinates are being told what to do, whereas if it is moving upwards, the subordinates are reporting back to management.

Unity of Command Principle: Earlier employees used to report to only one senior member of staff. Now, dual reporting also occurs.

Lateral Connections: This is when employees on the same level report to each other.
3. Rules and Procedures

Examples of Formalization include manuals, rules and management systems.

This can simplify the work of supervisors and help to control the organization; however, it can lead to a decrease in creativity and individuality.

Theories about an Organization’s Social Structure

Modernist Theories:

Modernists believe that by finding relationships between the organization’s structure and its performance, a recipe for an efficient and effective organizational structure can be found.

1. Contingency Theory

This theory shows that not all organizations are the same, due to differing environments and other factors.

Contingency theorists believe that the best performing organizations are those whose internal organizational structure fits their external environment.

Burns and Stalker identified two different types of organizations:

1. Mechanistic Organizations: Operate like machinery - they are formalized, standardized and specialized (Hatch and Cunliffe, 2006), and usually run with supervision. They are most efficient in stable and unchanging environments.

2. Organic Organizations: Are more ‘flexible’ than mechanistic organizations. They have less formalization, and more decentralization. These organizations are more efficient in unstable and changing environments, as they can easily adapt to change.

2. Differentiation and Integration

Lawrence and Lorsch also proposed that for an organization to be most efficient and effective, their internal organization must fit the environment in terms of differentiation and integration.

In order to identify differentiation, the following can be analyzed: time orientation, formality, goal orientation and task versus relationships.

Task orientation is more common in production areas as there are specific targets that need to be met, whereas relationship orientation is more common in sales departments where customer relationships need to be strong.

Lawrence and Lorsch also described integration, especially in large and diverse organizations, as communication and coordination becomes more complex. Forms of integration include hierarchy, rules and teams within the organization.

When conducting studies on different organizations, the theorists found that unstable environments required organizations with more differentiation whereas stable environments need low amounts of differentiation. In all environments, integration is needed, but in different ways.

3. Centralization

When studying centralization, it was found that size is an important factor. When the organization is larger, the more centralization and specialization occurs.

However, sometimes it is difficult to measure centralization in an organization because some activities are centralized whilst others are decentralized.

Bureaucracies and mechanistic organizations appear to be similar; however, the main difference between the two is that bureaucratic organizations are decentralized, whilst mechanistic organizations are centralized.

4. Types and Taxonomies

Henry Mintzberg describes five structures of organizations including:

• Simple Structure: This includes sole proprietorships, where the manager or owner makes the majority of decisions.

• Machine Bureaucracy: Operates like a machine - there are specialized tasks and high formality. Mass production companies are an example of this.

• Professional Bureaucracy: There is a lot of standardization, and employees follow procedures. For example, a university.

• Divisionalized Form: Organizations that have different divisions, for example General Motors.

• Adhocracy: Involves teams that work together on different projects and that are able to make their own decisions. Usually provides for those with specific desires and tastes, for example, advertising companies. As well as types of organizations, there are also taxonomies. William McKlevey proposed that organizations could be classified just as different species of animals are classified.

5. Models of Structural Change

Greiner’s Organizational Lifecycle:

Greiner proposes that an organization, just like a human has a life cycle. This is comprised of the entrepreneurial, collectivity, delegation, formalization and collaboration stages.

Entrepreneurial Phase:

• Development and sale of products

• Entrepreneur is in control and maintains close relationships with employees.

• If the organization is successful it will need new managing staff, but the entrepreneur may not realize this until a crisis occurs, known as the leadership crisis. When this is solved, the organization moves into the collectivity phase.

Collectivity Phase:

• Management is introduced and centralized decision making occurs. Goals are also set.

• The organization becomes bigger and more complex

• Decision making becomes too complicated due to centralization and then the crisis of autonomy occurs. This crisis is overcome by the delegation stage.

Delegation Stage:

• Delegation occurs and decentralization follows, however, after a while this becomes harder to control and thus the crisis of control occurs.

• At this point, to regain control, rules and policies have to be implemented (bureaucratic features) - this is known as the formalization stage. However, too much of this bureaucratic control can result in the crisis of red tape.

Collaboration Stage:

• When the crisis of red tape is overcome, employees begin to work in groups by taking work that has been separated too much and allocating it into similar groups.

• Managers now focus on motivating employees, but if they fail to do this a crisis of renewal will occur. After this crisis occurs, either the organization does not recover, or the organization develops a new form.

6. Katz and Kahn’s Open Systems Model

“The open systems model illustrates how social structure emerges from organizational responses to both technical and environmental pressures” (Hatch and Cunliffe, 2006).

An organization has no structure to begin with; however, if it wants to grow and develop then a social structure will begin to form.

7. Structuration Theory

Structure: The people who believe in structure describe how our structures exist first and how they determine what we do.

Agency: the people who believe in agency question the origins of structure. In addition, they also see humans as creating their own structures.

Symbolic Interpretive Theories:

• Believe that structures are there as a result of humans.

• You can study organizing through observation and interaction with employees.

8. Routine and Improvisation

Routine: Routines are used to help transfer knowledge and skills throughout an organization; for example, instructions on how to put a chair together.

Routines change as people find different ways to improve them, usually through improvisation. Improvisation occurs in new situations, and can then become a new routine if it is repeated enough and finally acknowledged.

9. Social Structures

Communities of Practice: people who have similar ideas and knowledge come together to further expand their knowledge. Within an organization there can be many communities of practice that acknowledge different needs.

Language Communities: different communities have different ways in which they use language to communicate - they have their own ‘jargon’.

Postmodernist Theories:

“Postmodernists are extremely skeptical of the principle of hierarchy, centralization, control and integration, insisting that these are merely words used to legitimize those who hold power” (Hatch and Cunliffe, 2006).

Postmodernists have come up with two concepts that clash with other structural theories:

1. De-differentiation: Postmodernist theorists believe that too much differentiation has taken place in organizations, therefore, de-differentiation occurs, which means that employees within the organization manage themselves and coordinate their own activities.

2. Feminist Organizations: it has been claimed that bureaucracies favor men, as individual performance is evaluated against formal criteria which favors the male gender.

   • Feminist organizations (for example, health centers and NGO’s) are less formal, and there tends to be more equality amongst everyone.

   • Feminist Bureaucracies would combine features prevalent in both ‘bureaucracies’ and ‘feminist organizations’.

Chapter E: Technology

The word technology used to refer to the skills that the crafts person or artist had. However, due to modernists we now usually associate technology to machinery and tools, but it can be seen that skills are once again being focused on, for instance, in activities such as marketing.

Theories concerning Technology

Modernist Theories

From a modernist perspective the organization is seen as being a technology that turns inputs into outputs.

Technology is also looked into at from a micro level and this includes the analysis of the task level and unit level. For example, a unit level can be a department and this involves:

1. Physical objects or machinery

2. Activities and Processes

3. Knowledge and Concepts

Definitions

There are three main modernist definitions of technology and these include:

1. Core Technology: This is the main technology used to transform inputs into goods and services (some organizations may have more than one core technology). This technology refers to:

   • Technology involved in production (machinery).

   • Technology that maintains production (sales and communication).

   • Technology that helps the organization fit with the environment (market research).

2. High Technology

• Computer based technologies

• Transformation processes using computer based technologies such as CAD and CAM.

3. Service Technology

• Used for services that are intangible, are unable to be stored and “consumed as they are produced” (Hatch and Cunliffe, 2006).

• Most organizations use a combination of service and manufacturing technology.

Modernist Typologies of Technology

Joan Woodward’s Typology

• Woodward started with trying to find which structures of organizations performed the best.

• Whilst conducting research, it was found that there was a relationship between technical complexity (the degree of mechanization) and performance.

• The three types of core technologies are:

  1. Unit and small batch production (low technical complexity):

     • Products are produced in small amounts; this usually involves customized items.

     • Organizations that employ this technology are more successful when decision making is decentralized and whilst there are small spans of control.

  2. Large batch or mass production:

• The same types of products are produced usually in large amounts.

• Production includes steps that are carried out by machinery and by hand.

• Usually successful when centralized decision making and large spans of control are practiced.

1. Continuous Processing (high technical complexity)

• Humans are not directly involved in the production of goods - they watch over the production process.

• Decentralized decision making and small spans of control are better, but they need a lot more levels of management.

However, the typologies have some problems as:

• Only small and medium sized organizations were analyzed.

• The relationship between technology and structure performance is not as important in larger organizations.

Thompson’s Typology

• Based on the open systems model of organization.

• His typology is based on three types of technology:

  1. Long-linked: mass production and continuous processing, for example, an assembly line.

  2. Mediating: brings together interests of two or more groups, for example, banks.

  3. Intensive: specialized knowledge, for example, hospitals.

Perrow’s Typology

• Task level of analysis

• Meanings of task variability and analyzability (as well as measures of these) established.

Task Variability: is the amount of time when something other than standard procedure has to be carried out.

Task Analyzability: “The extent to which, when an exception is encountered, there are known analytical methods for dealing with it” (Hatch and Cunliffe, 2006).

1. When there is high task analyzability and low task variability, routine technology is apparent. This usually involves long linked technology. For example, administrative work.

2. When there is low task analyzability and low task variability, craft technology is apparent. If any exceptions to standard procedures occur, there are not many solutions available. For example, construction works.

3. When there is high task variability and high task analyzability engineering technology is apparent. There are many exceptions to procedures, but there are also solutions for these.

4. When there is low task analyzability and high task variability non-routine technology is apparent. There are usually a lot of problems encountered and it is not usually known how to solve them. For example, research and development departments.

Symbolic Interpretive Theories:

• Technology is made up of physical objects and the symbols we define them by.

• Zuboff says that today’s technology (which consists of high technology) needs to be interpreted as data uses symbolism rather than objects.

• Weik defines 3 factors that make new technologies different from other technologies:

  1. Stochastic Events: these are occurrences that are not expected, such as a computer suddenly breaking down. As new technology tends to be stochastic, we don’t really learn from our mistakes, because most of the time we don’t understand what happened.

  2. Continuous: New technologies seem to be able to run on a continuous basis and whatever is continuous also needs to be reliable. Continuous technology is also complex because if it ever needs to be changed, it needs to be done while maintaining the operation.

  3. Abstractness: In some instances, you have to imagine what the technology is doing, as you are unable to see everything that is occurring (for example, we cannot really see an email being sent). This can lead to error and differing interpretations if the technology is to break down.

• Weik also says that new technologies are more complex and non-routine.

SCOT- The social construction of technology

Technology does not only involve science, it is also influenced by social, cultural, economic and technical factors. For example, it is said that women’s clothing changed the design of bicycles.

Postmodernism and Technology

Technologies of Representation

“Technologies of representation are all ways of managing organizations by remote control, through the representation of humans, and work processes” (Hatch and Cunliffe, 2008).

For example, humans are no longer needed to make some decisions. For instance, a computer can give a quiz and determine your score, without anyone actually having to interact with the machine.

Technologies of Control

• Society is being controlled by being valued only on their efficiency (i.e. their output).

• IT (information technology) and managerial control have direct link - by reporting information, processing and counting that makes people think about nothing more than quality.

• Employees can avoid control by: sabotaging, non-responsiveness and joking.

Technology in Social Structure and the Environment

• From a modernist perspective, it is seen that technology has made it possible to reduce physical proximity, hierarchical controls, and direct integration mechanisms.

• It has also enabled the work of virtual organizations and teams, as well as allowed for more decentralization.

• Technological Imperative: “the belief that choosing a technology determines other aspects of the organization like its structure” (Hatch and Cunliffe, 2006). The bigger the organization is, the more effect the technology has on this organization.

Routineness of Work

Woodward identified that:

1. Unit and Continuous Technologies do well with organic structures because they are composed of non-routine tasks (i.e. they produce different products for specific tastes).

2. Mass Production is associated with mechanistic structures because these structures usually support routine tasks (i.e. mass production is highly repetitive).

Interdependence and Coordination

Thompson: “Work processes associated with a technology vary in the extent to which they are interrelated” (Hatch and Cunliffe, 2008).

Mediating Technology:

• Tasks are carried out independently of each other (employees working alone). This is known as pooled task interdependence.

• The output equals all the tasks of individual units added together.

• Coordination is established through rules and standard procedures.

Long-linked Technology:

• Both pooled and sequential task interdependence. Sequential because the work of one worker depends on the work of the worker before him, such as in an assembly line.

• Planning and scheduling needed in order to achieve coordination.

Intensive Technology:

• Requires reciprocal task interdependence.

• Information needs to be exchanged during tasks (communication flows in two ways), making the workers all dependant on one another.

• Sometimes team work is required.

• Coordination is achieved through scheduling, plans, rules and procedures.

Chapter F: Organization's Physical Structure

Hawthorne Studies: “How the physical setting of work affects worker productivity” (Hatch and Cunliffe, 2006).

• When physical settings were being manipulated, this was thought to have an effect on productivity. However, the reason why the productivity increased was not due to changes in physical settings, but rather the fact that workers were under observation.

• George Homans said that the physical change in setting represented that the group was being given special treatment by management (and thus acquiring a special status) and this was the result of their increase in productivity - because of the change in physical structure.

What is Physical Structure?

The most important physical elements include the organization’s geography, layout, landscaping and décor.

The Organization’s Geography

Space: This is where the organization conducts its business; it is where suppliers, customers, partners and stakeholders are located. These can be mapped on a spatial map, showing the activities of the organization around the world.

• The more activities the organization has across the world, the higher its geographic extent. This means that coordination and communication will become more complicated.

• Examples of the geographic features of a location include climate, terrain, natural resources, and population. These features can influence recruitment due to the attractiveness of a particular site.

• Some locations have specific reputations and theorists from the symbolic interpretive perspective describe this in terms of place versus space.

• A place has meaning and experience attached to it

• A physical environment can also be given symbolic meaning, such as a church.

Layout

Modernists: measure the different factors that make up layout:

• Proximity

• Openness

• Privacy

• Accessibility

Layout affects communication within the origination as well as the coordination of activities.

Symbolic Interpretive Theorists: The way things are laid out in the organization, represents their organizational culture (and attitude towards work methods) as well as the different positions and status that employees have.

Postmodernists: Layout used to represent those in power and those who are not in power.

Landscaping, Design and Décor

As well as furniture and other decorations, the way employees look and dress also represents the organization. In addition, postmodernists and symbolic interpretive theorists see landscaping, design and décor to be symbolic of the organizations values, and how they wish themselves to be seen.

Physical, Technological and Social Structure

Modernists

• The behavior of employees is influenced by the layout of objects in which they work in.

• Even though technologies such as telephone and internet can be used to communicate, face to face communication is perceived as being the best mode of communication.

• It has been found that the greater distance between employees work places, the less likely they are to communicate.

Symbolic Interpretive Perspective

• Physical Structures within the organization can be seen as symbols (for example, a reserved parking place can be symbolic of that workers position and power within the organization).

• Buildings (architecture and design) can also be seen as symbolic of what the organization represents, as well as its values.

The Postmodern Perspective

• “Space is used to maintain superiority over others” (Hatch and Cunliffe, 2006)

The Organization’s Physical Structure and Organizational Culture

Symbolic Conditioning: This refers to the way we automatically behave when we are in a certain place or observing a certain object - we have been conditioned to behave that way. In addition, the organization’s identity is influenced by spatial elements and relationships.

Status, group boundaries and corporate image help to explain the association that physical structure and organizational identity have.

Status: this can be seen through status indicators. These include size and location of spaces occupied, as well as value of furniture and decorations, and equipment used by different workers.

Boundaries: employees mark their territory with their own belongings to show that the space is theirs. These markings become symbolic of the people or groups occupying that territory.

Corporate Image: this involves the perceptions that the people outside of the organization have of the organization. Organizational identity refers to the workers experiences and beliefs of the organization as a whole. In a way, this is influenced by the corporate image.

Chapter G: Organization and its Culture

Companies have different ways of distinguishing themselves from competitors and this can be a reflection of their organizational culture.

When we join an organization we bring our own values with us, which then mix with those present in the organization.

A subculture is a group of individuals within the organization who share similar views and act upon these views - in a way they form their own culture. In an organization, there are usually different subcultures that have relationships with each other. There are four different ways in which they act towards each other:

1. Dominating: this is when a subculture is adopted by management and therefore becomes the main culture or corporate culture (corporate subculture).

2. Enhancing: these cultures support the corporate culture.

3. Orthogonal: these cultures have their own values that do not get in the way of, or celebrate the dominant culture.

4. Countercultural: “hold values and beliefs that actively challenge corporate culture” (Hatch and Cunliffe, 2006).

Within an organization, the silo metaphor describes the different values and routines that subcultures have, which make relationships between them difficult. This problem is usually solved through the formation of a strong culture, “agreement about what is valued and the intensity with which these values are held.” (Hatch and Cunliffe, 2006).

The History of Organizational Culture

Early cultural anthropologists studied the differences between humans and animals. Culture was at first identified as being the main characteristics of humans that made them different from other species.

Then primitive tribes were studied but it was realized that their cultures were not inferior to other cultures, as it was initially believed.

Then, anthropologists moved onto studying the characteristics of different groups and compared them.

Ethnography is a method for studying organizational culture. It involves observation, direct participation and interviews within the group or unit that is being studied.

Organization Culture- The Modernist Perspective

The main modernist theorists of organization culture are Geert Hofstede and Edgar Schein.

Hofstede identified that a country’s national culture also affects organizational cultures. There were four (later one dimension was added), now five dimensions of national culture difference:

1. Power Distance: this is the willingness to accept an unequal distribution of power and status - the extent to which people find it natural to have several layers of power. In low power distance cultures, people find it hard to accept the unequal distribution of power, for example, in Denmark. In high power distance countries, for example, Brazil, people respond well to authority.

Therefore, expectations of management in countries are different and difficulties may occur, for example, when someone from a high power distance culture tries to manage people from a low power distance culture.

2. Uncertainty Avoidance: this is the extent to which nations are willing to accept uncertainty in their environment. Cultures with low uncertainty avoidance, for example, The Netherlands, are more open, curious and willing to accept new technology. Countries with high uncertainty avoidance include Japan and Greece.

3. Masculine versus Feminine: “this refers to the degree of separation between gender roles in society.” (Hatch and Cunliffe, 2006). Feminine countries include The Netherlands and Sweden, whereas masculine countries include Austria and Japan. In masculine cultures, career advancement and achievement of goals are important, whereas in feminine cultures relationships and services are of importance.

4. Individualism versus Collectivism: Individualistic cultures focus on making their own decisions and looking after themselves whereas in collectivistic cultures great importance is placed on the community and relationships with other people. The USA is an example of an individualistic culture and China an example of a collectivist culture.

5. Long Term versus Short Term Orientation: cultures that focus on hard work believe that this will lead to long term rewards, whereas other cultures may only be focused on gaining short term rewards.

Schein and Organization Culture

Schien describes the organizational level of culture, rather than the national level.

The aspects of our culture that we fail to notice because we are so used to them are known as Basic Assumptions. You will only begin to realize what your culture is like and its assumptions when you experience a culture that is different to your own.

Cultural Values: these are also known as our moral codes. They are specific principles that individuals within a culture follow and believe in.

Norms: “are expressions of values” (Hatch and Cunliffe, 2006). They indicate how individuals in a culture should behave and act - what actions of behavior will receive a reward or not.

Artefacts: are symbolic of the organizations culture. However, identifying culture from artefacts is very difficult to do, as they may have ambiguous meanings. Examples of artefacts include objects, verbal expressions and activities.

Modernist Methods for Analyzing Organizational Culture

Modernist theorists employed quantitative methods in order to analyze the relationship between cultural strength and organizational performance. They found that the stronger the culture, the better the organization performs.

In addition, those organizations operating in complex and changing environments perform best when they have an adaptability culture (value flexibility and change) or involvement culture (value organizational commitment and participation).

A mission culture works best in a stable environment, with a shared view of the future, and the consistency culture also works well in a stable environment, where the organization has strong values for tradition and conformity.

The Organizational Culture Instrument (OCI) is another modernist method, which measures how much the culture is maintained by different norms. From this, three cultural types have been identified.

1. Constructive cultures: these are related to employee motivation, job satisfaction and teamwork.

2. Passive defensive cultures: these lead to the opposite of that stated in constructive cultures.

3. Aggressive defensive cultures: these are related to high stress levels, low work relations and customer contact.

Symbolic Interpretive Methods for Organizational Culture Research

Garfinkel told students to go and behave against everyday norms and see what reactions they received. He concluded that “people conspire to achieve and maintain the taken-for-grantedness of their lives,” (Hatch and Cunliffe, 2006), i.e. everyone tries to maintain order, and what they are used to. Therefore, this also shows that the world is defined through shared experiences (i.e. social construction).

Symbolic Interpretivists say that the meaning of something depends on the context it came from.

Symbols, Symbolism and Symbolic Behavior

A symbol stands for something, or is when something has a specific meaning. The denotative meaning of symbols is when symbols are used to signify something specific, for example, a white flag signifies the act of surrendering. Symbols also have connotative meanings, which concentrate on how the meaning of a symbol is created.

Symbolic interpretivists do not concentrate on artefacts, rather they concentrate on symbolic meaning and how that meaning came about. In addition, they believe that meaning of the symbol is a result of interaction between people.

Thick Description

This “is a form of ethnography that is extremely sensitive to symbols, their context and how cultural members interpret them” (Hatch and Cunliffe, 2006).

To explain what symbolic behavior is, the example of a wink and twitch were used - whereas a twitch just happens (we don’t control it, it just happens) we wink on purpose (it is symbolic as it has some form of meaning).

Organizational Stories, Narratives and Narrating

An organizational narrative is a form of storytelling. They include a plot and characters and it is representative of the organizational reality. The narrative helps to find out what the organizational culture is.

Terse Stories are those which outsiders of the organization do not realize how important they are to organizational members.

Narrative Epistemology: this describes how knowledge is developed in an organization through sharing stories with one another. The organizations culture and values can be studied from this.

There are realistic tales and confessional tales. Confessional tales allow for empathy and thus more understanding of the culture.

There are three types of narratives used within an organization (Hatch and Cunliffe, 2006):

1. Personal Narratives: “life history, dreams and visions of founder”

2. Generic Narratives: “business plans and strategy”

3. Situational Narratives:”histories of critical events that explain why things are done in a certain way around the organization.”

Dramaturgy and Performativity and the Theatre Metaphor

The Theatre Metaphor: organizations and theatres are very similar in that they involve the playing of roles (the employees and their different positions within the organization), and the audience, which in this case would be stakeholders.

Dramaturgy involves acting, staging, masks and scenery, which is related to performativity, which is the skill that is required in order to perform.

Postmodern and Organizational Culture

Postmodernists believe that cultures do not exist; they are merely an ‘illusion’ used by top management to control and manipulate employees within the organization.

Deconstructing Organizational Culture

Modernists believe that the control and socializing of employees can occur through the use of stories.

By deconstructing stories, the reason for the division of groups and favoritism of one group rather than the other can be explained. The main point of deconstruction is to show how much confusion there can be with meaning.

Culture can also be seen as a polyphony and dialogue. A dialogue organization is one which is made up of language and dialogue. Polyphony relates to this as organizations are also made up of different ideas and views which are all being expressed at the same time.

Culture used for strategy and Organizational Identity

Gagliardi describes that the primary strategy of an organization is to maintain and safeguard the identity of the organization. Secondary strategy, (which can help to change behavior, technology, symbols and structures) is made up of:

• Instrumental Strategies: how to achieve measurable objectives, such as selling products.

• Expressive Strategies: usually express something symbolically.

Culture can change in three ways:

1. Apparent Change: happens within culture, but there is no large, noticeable difference.

2. Revolutionary Change: occurs when there is a strategy brought forward, which clashes with the original culture and values, thus changing the culture. This may be the result of new management due to a merger or acquisition.

3. Incremental Change: this occurs when new values are imposed, which are kept with the old values

Hatch’s Cultural Dynamics Theory

This theory focuses on the processes that connect values, assumptions and artefacts. It is made up of four processes which are described below (Hatch and Cunliffe,2006):

1. Manifestation: “This is when assumptions and values create expectations about the world that produce images to guide action.”

2. Realization: this is the process of “the production of artefacts.” This means that values and assumptions can now be seen in tangible forms.

3. Symbolization: this is when symbols are created from artefacts.

4. Interpretation: “uses assumptions to help determine the meaning of symbols, but allows symbols to wither maintain or challenge existing assumptions.”

Chapter H: Power, Conflict and Control in the Organization

Karl Marx: described that there is no organization that is completely unified- there are many groups within the organization that have differing interests.

Max Weber: “Assumed that legitimate power is embedded within a hierarchy that gives owners and managers the right to control the means of production and laborers who employ these means.” (Hatch and Cunliffe, 2006).

Many modernists believed that power was simply a part of management, and that control could lead to resistance and therefore conflict.

H. Simon: Developed theories about decision making, and that it is not as rational as we think. He described that within the organization there is not always agreement on organizational goals, as well as people making use of different decision rules- how to make the decision and who should be involved in the decision making process.

Power

Power is used to make someone do something that they usually would not do.

Power is relational- this means that power always occurs between people, departments or groups.

There are different sources of power:

1. Formal Authority: power in the form of the hierarchy- power always moves top-down. Other forms of power flow in different directions, such as through lateral communication between departments.

2. Personal Characteristics: this includes features such as charisma.

3. Expertise: knowledge and skills that others are dependent on, or require.

4. Coercion: the use of force.

5. Control of Resources: those who are in possession of needed resources are more powerful.

6. Applying Norms: informal rules, expectations and culture.

7. Opportunity: having access to important or powerful people.

Authority and Power: power becomes authority when it becomes recognized and anticipated by everyone within the organization.

The Organization Politics and Politics

An organization can be seen as a political system. For example, you can perceive groups in the organization as coalitions. These are groups of people who share similar interests and points of view. Therefore, it can be said that an organization as a whole is made up of differing interests all of which have to be managed and controlled.

The two following theories explain how power in the organization is gained and how politics also comes into play.

1. Strategic Contingency Theory:

This says that the coalition group or whoever is able to protect the organization at that moment from uncertainty will have power within the organization.

“Hickson and his colleagues suggested three coping strategies that at least partly determine whether or not uncertainty will translate into power” (Hatch and Cunliffe, 2006):

1. Prevention

2. Forecasting

3. Absorption

2. Resource Dependence Theory:

Uncertainty arises from the scarcity of resources. The one group who at that moment has the resources needed to protect the organization from environmental uncertainty will have the most power.

In addition, the individual or group who is managing this uncertainty is likely to be rewarded, and this is where politics begins to come into play. For example, members may be given a higher status or budget, and power may eventually become authority.

Power is also maintained through language and symbols. For example, language can be seen in the way titles (e.g. sir, doctor) are used by those in power, highlighting and reaffirming their status. Symbols include the size of an individual’s office, whether not they have their own parking place, and any extra benefits that they are given.

Control and Modernist Control Theories

People within the organization have different interests, and therefore control is needed. Control can be found in three forms:

1. 1. Output Control: only the results of the individual or groups are measured.

   2. Behavioral Control: the concerns controlling the manner in which output is achieved.

   3. Symbolic Control: informal control through the organizational culture, which can also be informal.

The following are modernist control theories:

1. Cybernetic Control Theory:

The purpose of this type of control is to ensure that organizational performance is in line with achieving goals, using both output and behavioral control. This is achieved adopting the following processes:

1. Describing organizational goals and objectives in non measurable terms

2. Then measurable standards are set.

3. Performance is then recorded and monitored.

4. Results are then checked, and if there are any negative relationships between goals and performance, these are fed back into the system and corrected.

5. If results are positive and are in line with goals, rewards are given.

2. Agency Theory:

This theory explains how the principles (owners) control agents (managers) within the organization.

Usually, agents are monitored and rewarded according to their performance. However, the agent has more access to information than the principle, and therefore this information is easy to manipulate, resulting in the agency problem.

Behavioral controls include hiring others to monitor agents, but this can be too complicated and expensive.

Output controls could also be used, but this is not appropriate in all cases. For example, it is very difficult to measure the output of customer service.

Therefore, the agency problem could be solved by:

i) A simple job routine could be used, so that simple evaluation of performance can be carried out. This would be a form of behavioral control.

ii) Both output and behavioral control could be used together.

iii) The implementation of a system where agents face the same risks as principles, therefore having the same interests and a lower need for monitoring will result. For example, salary or bonus related pay based on the performance of the organization. As there will be bigger risks for the agents, they will get rewarded more.

3. Market, Bureaucracy and Clan Control:

These different forms of control try to achieve coordination between all the different units or coalitions (different interests and values) within the organization.

The following forms of control were proposed by Ouchi.

• Market Control: performance can be evaluated and controlled using profits. In addition, different units (divisions) can be compared using the amount of profit each unit generates. Therefore market control is based on output (which can be defined and priced).

• Bureaucratic Control: here, behavior is monitored through the use of rules and procedures. Bureaucratic control involves the use of authority to supervise and direct workers.

• Clan Control: this occurs through symbolic control. It involves members in the organization internalizing the culture, norms and values present, which help to control their behavior.

Power and Control from the Critical and Postmodern Perspectives

Whereas modernists focus on the distribution of power within the organization, critical and postmodern theorists look at the relationship between ideology and power.

Critical theorists focus on why and how power is legitimized and institutionalized within the organization. Their “ultimate goal is to create communication and decision making processes that represent the full range of stakeholder interests.” (Hatch and Cunliffe, 2006).

Ideology: Within an organization, managers’ ideology (the shared beliefs in the same ideas) is that they have the right to have power over workers, ultimately leading to control over workers.

Workers end up being in a state of false consciousness because they legitimize their managers and owners ideology- they fall into place.

Hegemony: this concerns how values, culture and institutions within an organization lead to individuals readily giving into power. The power and control used over workers is made to seem normal, and part of thier everyday activities through influence, and not force. Hegemonic practices include clan control and total quality management.

Power and its Three Faces

Steven Lukes says that power has three faces (or three different sides):

Decision making: there is some type of forum where individuals and groups meet together to make decisions.

Non Decision making: this is when those with power prevent those with no power from being able to make any decisions.

Shaping preferences and perceptions of others without their awareness: this involves hegemony in that individuals gradually accept their domination, as it becomes a part of everyday activities.

Labor Process Theory

This theory describes how work is controlled by deskilling labor. This means that management simplifies tasks through job fragmentation and more routine work. Eventually, the need for training decreases and it becomes very easy to find new employees for the job (labor also becomes cheaper).

Habermas and Foucault

Habermas said that power is used in an instrumental way, for instance, the most efficient ways of completing something are focused on, or reaching a target which he defines as instrumental rationality. Habermas argues that we should move towards communicative rationality, which is defined as “debate, open discussion and consensus” (Hatch and Cunliffe, 2006).

Habermas also says that we should try to get communication free of manipulation, and that we should also try to communicate without power.

Foucaul describes that in everyday social relationships there are natural power differences. In these power difference relationships, power is internalized. Therefore, individuals are controlled by self control (we adopt external power and internalize it).

Power and Control from the Feminist and Post Modern Perspective

Dual Market Labor Theory

This theory describes the labor market as having a primary and secondary sector; the primary sector offering high wages and good career prospects, and the opposite in the secondary sector. This is an example of stratification (the division of society in relation to labor).

However, this theory does not explain why other groups of individuals are so few in the primary sector.

Gender and Organizations

Gendered Organizations: Joan Acker said that within an organization, there are:

• Gender based power relations.

• Bureaucratic organizations are masculine due to the focus on hierarchies, authority and impersonal relationships. For instance, hierarchy works in a way that female staff tends to support their male bosses.

In addition Joyce Fletcher identified that ways in which one could get promoted were very ‘masculine.’ For example, one could get promoted through autonomy, technical competence and self promotion. Whereas the more feminine ‘relational practices’ are not paid attention to and disappearing (seen as inappropriate and a sign of weakness).

What is Disciplinary Power and Surveillance?

Foucault says that disciplinary power is used to “explain that the anticipation of control causes people to engage in self surveillance.” This type of power does not come from a person or a specific position; rather, it arises from our values, beliefs and culture that occurs between people - it is relational. Whereas sovereign power lies within a person and hierarchical power lies within a position.

Foucault describes how an individual or group’s behavior can be controlled by self surveillance i.e. they conform to rules and act in a certain way because they believe that they are being watched. Self surveillance is made up of the gaze (“managers employ a number of surveillance techniques to set up the expectation of surveillance”) and interiorization (“anticipation of the gaze and self monitoring”).

There are also other tools that control and make workers self monitor themselves. These include the use of job descriptions, as well as performance appraisals- also known as economies of power, making power seem normal.

Stewart Clegg describes how three ‘circuits’ make up power relations. These are “episodic (daily interaction), dispositional (socially constructed rules) and facilitative (systems and mechanisms including technology, work and rewards) and these can lead to either the empowerment or disempowerment of groups” (Hatch and Cunliffe, 2006).

Organizational Performance and Conflict

This section discusses conflict in relation to the organization’s environment, social structure, technology, culture, physical structure and power.

Modernists have identified that some conflict within the organization is good for performance. In addition, it stimulates the formation of new ideas, productivity, as well as strengthening both group relationships and identity.

Strategies for reducing conflict include (Hatch and Cunliffe, 2006):

• Avoidance: Physical Separation, Increases Resources, Repress emotions and opinions.

• Collaboration: Create super-ordinate goals.

• Soothing: Emphasize similarities.

• Compromise: Negotiate.

• Hierarchical Referral: Appeal to higher authority.

• Structural Change: Rotate jobs.

• Confrontation: Confrontation.

The Inter-unit Conflict Model

Explaining conflict after it has happened is a lot easier than predicting it. The purpose of this model is to identify sources of conflict (was created by Walton and Dutton).

They first begin by identifying local conditions for inter-unit conflict:

• Individual Differences: Individuals within the organization might have their differences, but when looking at conflict from the organizational level, this is not a good enough reason.

• Group Characteristics resulting from differentiation: Subcultures and identities can develop and may result in conflicting interests. These arise from differentiation of groups (in order to perform different tasks or to handle a different part of the environment.

Task Interdependence:

• Pooled Task Interdependence: not much conflict due to limited interaction.

• Reciprocal Task Interdependence: a lot more interaction so there is a bigger chance of conflict, but as groups are mutually dependant on one another there is actually less conflict.

• Sequential Task Interdependence: there is a high chance of conflict because one unit is dependant on the other, and naturally, the independent unit does not really care about the dependant unit.

• Rewards and Performance Criteria: when individual units are rewarded, they begin to focus on themselves rather than the whole organization, thus hindering cooperation.

• Common Resources: When having to share and use the same resources, conflict is very likely to arise.

• Status Incongruity: when people of different statuses come to work together conflict may occur. This usually happens when a person of lower status tries to direct someone of higher status.

• Jurisdictional ambiguities: this occurs when there is confusion about who has the responsibility of something and who should be given credit or blame.

• Communication Obstacles: the use of different languages or jargon can spark conflict.

The Context of Conflict

1. The Environment: through isomorphism the organization matches the environment through differentiation. The changing environment is perceived as uncertainty in the organization and the groups who are able to cope with this uncertainty gain power and thus control. Thus these can influence local conditions of conflict such as group characteristics.

2. Strategy: the strategy of an organization can affect the organization in either a positive or negative way. For example, if they have a growth strategy, the organization will become more complex and thus may increase the effects of local conditions.

3. Technology: technology can influence local conditions such as group characteristics, status incongruity (some people will have the expertise and knowledge of the technology and will have to direct people in a higher status than themselves), and reward criteria.

4. Social Structure: hierarchy can lead to vertical conflict, whereas division of labor can lead to horizontal conflict.

5. Organizational Culture: the formation of subcultures can lead to communication problems.

6. Physical Structure: the actual physical layout of the organization can affect groups within the organization which can accent local conditions of conflict. The main affects could be more or less communication between groups and individuals.

Chapter I: Applying Theory to Real Life

This section focuses on organization design, how organizations change and how this is managed.

Organizational Design

Modernists usually use prescriptive theories. These mainly look at how to enhance the organization’s performance.

Symbolic interpretivists try to persuade organizational designers to be wary of the symbolism that different structures and design can convey.

Postmodernists use symbolic interpretive studies “for prescribing ethically desirable objectives and means for structuring these into organizations” (Hatch and Cunliffe, 2006).

Modernist View on Organizational Design

Modernists believe that the organization’s design should enhance organizational performance.

In order to check whether or not the organizational design is good, efficiency and effectiveness are assessed:

• An effective organizational design allows easy identification of differentiated activities, and also makes sure that integration can take place easily.

• An efficient organizational design is identified when effort, time and resources are reduced.

• Modernists also promote the use of organization charts to give an overview of the organization’s design. However, it lacks information concerning informal relationships, coordination mechanism and the distribution of power outside of the hierarchies.

Some Organizational Designs:

The Simple Organization

• Examples of these include, small, organic and new organizations.

• The simple designs allow for flexible relationships, limited differentiation and almost no hierarchy.

• Usually no need for delegation

• People are usually working together in order to complete the job, task or project.

The Functional Organization

• Examples of these include organizations with different departments specializing in certain functions, such as sales, marketing and research and development.

• Helps to maximize economies of scale.

• Problem is that employees may become more loyal to their function rather than the organization as a whole.

• Manager usually has the most power, which can have both negative and positive effects.

The Multidivisional Form (M-Form)

• This type of organization has different divisions according to geographic region, products and customer types.

• Each division has their own functional departments (for example, sales, marketing and r&d).

• Divisions can be compared with other competitors in the market.

• As divisions are more specialized (i.e. to a specific product, or location), this means that they are more responsive to functional forms.

• Companies that have divisions in different industries are known as conglomerates.

• M-forms are usually less profitable than functional forms because:

  • The M-form has different departments for every division making it less cost efficient. It can also lead to redundancy.

  • They are more complex

Advantages of the M-form include:

• • • They usually become bigger or are already bigger than functional organizations, which means that they can have greater influence over their environments.

    • They also have a better pool of workers to choose from, and usually more resources.

The Matrix Form

The purpose of this design was to combine the efficiency of the functional design and the flexibility and responsiveness of the M-form.

Within the matrix design, there are two sides (structures) which each being the responsibility of different types of managers:

• Functional Side: This side is coordinated by general managers who allocate different people to projects.

• Project Side: This side is coordinated by project managers whose main task is to oversee specific projects. Other activities include:

  • Planning the project

  • Allocating resources

  • Coordinating work

  • Monitoring task performance

  • Making sure that deadlines are being met.

How Managers and Employees Handle the Situation

Employees

• There can be problems due to dual lines of authority

• If there is more than one project occurring at the same time, then the employee may be faced with conflicting demands from different project leaders.

Managers

• Managers need to ensure that there is a balance between both sides, otherwise conflict and confusion may occur.

Advantages of the matrix form include:

• Projects are extremely flexible, as managers and teams of employees are easy to locate and use.

• Specialists can be used on many different projects. This means that they are being used to their full capacity, so the company is getting ‘their money’s worth.’

Hybrid Designs of Organizations

1. Strategic Alliances and Joint Ventures:

Strategic Alliance: “represent contractual, often long term, relationships created between different organizations to allow collaboration on new opportunities, such as the development of a product or technology transfer” (Hatch and Cunliffe, 2006).

Joint Venture: two companies join together to form a separate organization (a joint venture). This means that organizations:

• Share the risk

• Learn from each other

• Minimize Costs

• Reduce Uncertainty

• Entry into new markets becomes cheaper

• Multinationals and the Global Matrix:

Multinationals have operations in more than one country.

Global Organizations have “worldwide presence in one or more activities… and adopt worldwide strategy and develop an outlook focused on the world” (Hatch and Cunliffe, 2006).

• Culture is less standardized

• They are more flexible

Organizational Networks and Virtual Organizations

Network Organizations are formed by non-hierarchical relationships comprised of human points of contact called nodes. These help to link the headquarters with important stakeholders and other business units.

Virtual Organizations involve networks connecting people mainly through the use of electronic media.

The following include some advantages of networks:

• information sharing

• more free decision making

• more room for innovation

• easy and fast access to information

Organizational Change

Levin’s Model for Change

Kurt Levin’s model for change explains how to introduce change to an organization. Change involves three different activities:

1. Unfreezing: this is when organizational stability is stopped - for example, when there is a greater force for change, than the force resisting change. This causes an unbalance, and then the organization will move towards change.

2. Movement: this process is concerned with directing the change after unfreezing has taken place. These activities include training, changing reporting relationships, reward system and maybe even management styles. This occurs until the system is balanced again, which happens during the refreezing stage.

3. Refreezing: This when there is a balance again, new forms of management, behavior, training and so on are established and finally institutionalized.

Weber’s Routinization of Charisma

This theory explains what happens when change is introduced into the organization.

This theory describes how a charismatic leader brings about new ideas to the organization, which influence the change in the culture. However, this change is actually brought about through routinization.

Charisma is routinized due to systematization (‘disciples’ link and extend charismatic influence to everyday life) and accommodation (negotiation over interpretations and implementations of new beliefs and obligations suggested by new ideas.)

How does an Organization Learn?

Organizational Learning and Knowledge Management

There are two main modes of organizational learning:

1. Exploitation: “the use of existing knowledge and resources to reap value from what is already known by refining procedures in order to do same things more efficiently.” (Hatch and Cunliffe, 2006)

2. Exploration: “rethinking knowledge and redeploying resources in previously unforeseen ways including searching for new options, experimenting and conducting research all of which represent organizational flexibility and create organizational change.” (Hatch and Cunliffe, 2006).

Learning Curves and Tacit Knowledge

Learning curves show a negative relationship between production costs and the quantity of an item produced. As more of something is produced, the cost of producing one unit falls which show that something has been learned!

There are two types of knowledge: tacit and explicit. One is able to explain and describe explicit knowledge. Tacit knowledge on the other hand is very difficult to copy or replicate (for example, knowing how to ride a bicycle is tacit knowledge), therefore, it gives a company competitive advantage.

Single and Double Loop Learning

Single loop learning: “learning from the consequences of previous actions in order to develop successful patterns of behavior” (Hatch and Cunliffe, 2006). Feedback mechanisms are used to encourage this- when something wrong is noticed, the system automatically adjusts itself.

The only problem with single loop learning is that the reason for the problem arising in the first place cannot be found out.

Double loop learning: this system monitors and corrects behavior as well as having the ability to deem whether behavior is appropriate or not, as a result, this system is far more subjective.

Self organizing Systems: “learn to learn and thus become intelligent enough to define their own fundamental operating criteria, behavior and identity.” (Hatch and Cunliffe, 2006)

Year of summary

• 2013-2014