Great Writers on Organizations

The Third Omnibus Edition

Derek S. Pugh, David J. Hickson

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317124801
• Edition: 3
• Topic: Business
• Subtopic: Industrial Management
• Index: Business

Great Writers on Organizations presents succinctly each of the contributions made by 80 of the most prominent management thinkers to the understanding of organizational behaviour and managerial thinking. Among those included are early theorists such as Henri Fayol, Frederick W. Taylor and Max Weber, classical writers such as Alfred D. Chandler, Peter Drucker and Frederick Herzberg, through to modern thinkers such as Oliver Williamson, Rosabeth Moss Kanter, and Charles Handy. New writers included in the Third Omnibus Edition are: Lex Donaldson, Stewart Clegg, Richard Whitley, Michel Foucault and Kathleen Eisenhardt. The volume is an indispensable resource for academics, students and managers on what the great writers have to say about the key managerial tasks of how to organize and motivate.

1 The Structure of Organizations

The decisive reason for the advance of bureaucratic organization has always been its purely technical superiority over any other form of organization.

MAX WEBER

It would be entirely premature, then, to assume that bureaucracies maintain themselves solely because of their efficiency.

ALVIN W. GOULDNER

It may not be impossible to run an effective organization of 5000 employees non-bureaucratically but it would be so difficult that no one tries.

THE ASTON GROUP

The danger lies in the tendency to teach the principles of administration as though they were scientific laws, when they are really little more than administrative expedients found to work well in certain circumstances but never tested in any systematic way.

JOAN WOODWARD

The managers are mainly conduits of causation, adding little independently in the causal sense, since the structural outcome has already been shaped by the contingencies.

LEX DONALDSON

The organization and control of bureaucracy can be designed so as to ensure that the consequential effects on behaviour are in accord with the needs of an open democratic society, and can serve to strengthen such a society.

ELLIOTT JAQUES

The visible hand of managerial direction has replaced the invisible hand of market mechanisms in coordinating flows and allocating resources in major modern industries.

ALFRED D. CHANDLER

Transaction cost economizing is, we submit, the driving force that is responsible for the main institutional changes [in corporations].

OLIVER E. WILLIAMSON

Adhocracy [the innovative configuration] is the structure of our age.

HENRY MINTZBERG

Increasingly your corporations will come to resemble universities or colleges.

CHARLES HANDY

The task [of the transnational organization] is not to build a sophisticated matrix structure, but to create a ‘matrix in the minds of managers’.

CHRISTOPHER BARTLETT AND SUMANTRA GHOSHAL

Where modernist organization is rigid, postmodern organization is flexible.

STEWART CLEGG

All organizations have to make provision for continuing activities directed towards the achievement of given aims. Regularities in activities such as task allocation, supervision and coordination are developed. Such regularities constitute the organization’s structure and the fact that these activities can be arranged in various ways means that organizations can have differing structures. Indeed, in some respects every organization is unique. But many writers have examined a variety of structures to see if any general principles can be extracted. This variety, moreover, may be related to variations in such factors as the objectives of the organization, its size, ownership, geographical location and technology of manufacture, which produce the characteristic differences in structure of a bank, a hospital, a mass-production factory or a local-government department.

The writers in this section are concerned to identify different forms of organizational structures and to explore their implications. Max Weber presents three different organizational types on the basis of how authority is exercised. He views one of these types – bureaucracy – as the dominant modern form. Alvin W. Gouldner also examines the bureaucratic type and shows that, even in one organization, three variants can be found. Derek Pugh and the Aston Group suggest that it is more realistic to talk in terms of dimensions of structures rather than types. Joan Woodward argues that production technology is the major determinant of the structure of manufacturing firms. Lex Donaldson examines the factors which lead an organization to a particular structure fitting to its needs.

Elliott Jaques examines the psychological nature of the authority relationships in a bureaucratic structure, and Alfred Chandler shows how the management structure flows from the company strategy. Oliver E. Williamson points to the way in which the pressures on the organization to process its information efficiently leads to the type of relationship – market or hierarchical – which is developed. Henry Mintzberg describes a range of types of modern organizations and their effectiveness. Charles Handy identifies some established structures of organization, but suggests that a distinctively different new form is coming into being. Christopher Bartlett and Sumantra Ghoshal argue that, for multinational firms to be successful in the current global market environment, they must develop an innovative new structure and culture of working. Stewart Clegg looks forward to a new relationship between superiors and subordinates in the ‘post-modernist organization’.

All the contributors to this section suggest that an appropriate structure is vital to the efficiency of an organization and must be the subject of careful study in its own right.

Max Weber

Max Weber (1864–1920) was born in Germany. He qualified in law and then became a member of the staff of Berlin University. He remained an academic for the rest of his life, having a primary interest in the broad sweep of the historical development of civilizations through studies of the sociology of religion and the sociology of economic life. In his approach to both of these topics he showed a tremendous range in examining the major world religions such as Judaism, Christianity and Buddhism, and in tracing the pattern of economic development from pre-feudal times. These two interests were combined in his classic studies of the impact of Protestant beliefs on the development of capitalism in Western Europe and the US. Weber had the prodigious output and ponderous style typical of German philosophers, but those of his writings which have been translated into English have established him as a major figure in sociology.

Weber’s principal contribution to the study of organizations was his theory of authority structures which led him to characterize organizations in terms of the authority relations within them. This stemmed from a basic concern with why individuals obeyed commands, why people do as they are told. To deal with this problem Weber made a distinction between power, the ability to force people to obey, regardless of their resistance, and authority, where orders are obeyed voluntarily by those receiving them. Under an authority system, those in the subordinate role see the issuing of directives by those in the superordinate role as legitimate. Weber distinguished between organizational types according to the way in which authority is legitimized. He outlined three pure types which he labelled ‘charismatic’, ‘traditional’ and ‘rational-legal’, each of which is expressed in a particular administrative apparatus or organization. These pure types are distinctions which are useful for analysing organizations, although any real organization may be a combination of them.

The first mode of exercising authority is based on the personal qualities of the leader. Weber used the Greek term ‘charisma’ to mean any quality of individual personality by virtue of which the leader is set apart from ordinary people and treated as endowed with supernatural, superhuman or at least specifically exceptional powers or qualities. This is the position of the prophet, messiah or political leader, whose organization consists of a set of disciples: the disciples have the job of mediating between the leader and the masses. The typical case of this kind is a small-scale revolutionary movement, either religious or political in form, but many organizations have had charismatic founders, such as Henry Ford or Richard Branson. Because the basis of authority lies in the characteristics of one person and because commands are based on that person’s inspiration, however, this type of organization has a built-in instability. The question of succession always arises when the leader dies and the authority has to be passed on. Typically, in political and religious organizations, the movement splits, with the various disciples claiming to be the ‘true’ heirs to the charismatic founder. Thus, the process is usually one of fission. The splitting of Islam into Sunni and Shia sects on the death of the founding prophet Mohammed, exemplifies the problem. Even if the leader nominates a successor, that person will not necessarily be accepted. It is unlikely that another charismatic leader will be present, and so the organization must lose its charismatic form, becoming one of the two remaining types. If the succession becomes hereditary, the organization becomes traditional in form; if the succession is determined by rules, a bureaucratic organization develops.

The bases of order and authority in traditional organizations are precedent and usage. The rights and expectations of various groups are established in terms of taking what has always happened as sacred; the great arbiter in such a system is custom. Leaders have authority by virtue of the status that they have inherited, the extent of their authority being fixed by custom. When charisma is traditionalized by making its transmission hereditary, it becomes part of the role of the leader rather than being part of the founder’s personality. The actual organizational form under a traditional authority system can take one of two patterns. There is the patrimonial form where officials are personal servants, dependent on the leader for remuneration. Under the feudal form the officials have much more autonomy, with their own sources of income and a traditional relationship of loyalty towards the leader. The feudal system has a material basis of tithes, fiefs and beneficiaries all resting on past usage and a system of customary rights and duties. Although Weber’s examples are historical, his insight is equally applicable to modern organizations. Managerial positions are often handed down from one generation to the next as firms establish their own dynasties based on hereditary transmission. Selection and appointment may be based on kinship rather than expertise. Similarly, ways of doing things in many organizations are justified in terms of always having been done that way as a reason in itself, rather than on the basis of rational analysis.

The concept of rational analysis leads to Weber’s third type of authority system, the rational-legal one, with its bureaucratic organizational form. This Weber sees as the dominant institution of modern society. The system is called rational because the means are expressly designed to achieve certain specific goals (that is, the organization is like a well-designed machine with a certain function to perform, and every part of the machine contributes to the attainment of maximum performance of that function). It is legal because authority is exercised by means of a system of rules and procedures through the office which an individual occupies at a particular time. For such organizations, Weber uses the name ‘bureaucracy’. In common usage, bureaucracy is synonymous with inefficiency, an emphasis on red tape, and excessive writing and recording. Specifically, it is identified with inefficient public administrations. But in terms of his own definition, Weber states that a bureaucratic organization is technically the most efficient form of organization possible. ‘Precision, speed, unambiguity, knowledge of files, continuity, discretion, unity, strict subordination, reduction of friction and of material and personal costs – these are raised to the optimum point in the strictly bureaucratic administration.’ Weber himself uses the machine analogy when he says that the bureaucracy is like a modern machine, while other organizational forms are like non-mechanical methods of production.

The reason for the efficiency of the bureaucracy lies in its organizational form. As the means used are those which will best achieve the stated ends, it is unencumbered by the personal whims of the leader or by traditional procedures which are no longer applicable. This is because bureaucracies represent the final stage in depersonalization. In such organizations there is a series of officials, whose roles are circumscribed by written definitions of their authority. These offices are arranged in a hierarchy, each successive step embracing all those beneath it. There is a set of rules and procedures within which every possible contingency is theoretically provided for. There is a ‘bureau’ for the safekeeping of all written records and files, it being an important part of the rationality of the system that information is written down. A clear separation is made between personal and business affairs, bolstered by a contractual method of appointment in terms of technical qualifications for office. In such an organization authority is based in the office and commands are obeyed because the rules state that it is within the competence of a particular office to issue such commands. Also important is the stress on the appointment of experts. One of the signs of a developing bureaucracy is the growth of professional managers and an increase in the number of specialist experts with their own departments.

For Weber this adds up to a highly efficient system of coordination and control. The rationality of the organization shows in its ability to ‘calculate’ the consequences of its action. Because of the hierarchy of authority and the system of rules, control of the actions of individuals in the organization is assured; this is depersonalization. Because of the employment of experts who have their specific areas of responsibility and the use of files, there is an amalgamation of the best available knowledge and a record of past behaviour of the organization. This enables predictions to be made about future events. The organization has rationality: ‘the methodical attainment of a definitely given and practical end by means of an increasingly precise calculation of means’.

This is where the link between Weber’s interest in religion and organizations occurs. Capitalism as an economic system is based on the rational long-term calculation of economic gain. Initially for this to happen, as well as for world markets to expand, a particular moral outlook is needed. Weber saw this as being supplied by the Protestant religion after the Reformation, with its emphasis on this world and the need for individuals to earn their salvation through their industry on earth. Thus, economic activity gradually became labelled as a positive good rather than as a negative evil. Capitalism was launched on its path; this path was cleared most easily through the organizational form of bureaucracy which supplied the apparatus for putting economic rationality into practice. Providing it does so with efficiency and regularity bureaucratic administration is a necessity for any long-term economic calculation. Thus with increasing industrialization, bureaucracy becomes the dominant method of organizing. So potent is it that it becomes characteristic of other areas of society such as education, government, politics and so on. Finally, the bureaucratic organization becomes typical of all the institutions of modern society.

Most studies of the formal, structural characteristics of organizations over the past five decades have started from the work of Max Weber. His importance lies in having made the first attempt to produce systematic categories for organizational analysis.

BIBLIOGRAPHY

GERTH, H. H. and MILLS, C. W. (eds), From Max Weber: Essays in Sociology, Routledge & Kegan Paul, 1948.

WEBER, M., The Protestant Ethic and the Spirit of Capitalism, Allen & Unwin, 1930.

WEBER, M., The Theory of Social and Economic Organization, Free Press, 1947.

Alvin W. Gouldner

Alvin W. Gouldner (1920–1980) was an American sociologist who held the Max Weber Chair of Social Theory at Washington University, St Louis. He conducted research into social problems for the American Jewish Committee and worked on industrial organization, including consulting for the Standard Oil Company of New Jersey. In the last two decades of his life he was particularly concerned with the development of sociological theory and with the role of knowledge in society.

Gouldner has applied Weber’s concept of bureaucracy and its functioning to modern industrial organizations. Weber’s analysis was based on the assumption that the members of an organization will in fact comply with the rules and obey orders. He asked on what basis do the rule-promulgators and the order-givers obtain their legitimate authority. He paid no attention to the problem of establishing the legitimacy of authority in the face of opposition and a refusal to consent on the part of the governed. This is a situation frequently met, for example, when a bureaucratic authority attempts to supplant a traditionalistic one, or when the rule of the expert or the rational legal wielder of power is faced with resistance.

On the basis of a very close study of this type of situation in an American gypsum mine, Gouldner has described the effects of the introduction of bureaucratic organization in the face of opposition. The previous management system of the mine was based on ‘the indulgency pattern’. The rules were ignored or applied very leniently; the men were only infrequently checked on and were always given a second chance if infringements came to light. There was a very relaxed atmosphere and a favourable attitude of the workers to the company. Into this situation came the new mine manager who set about seeing that the rules were enforced, that the authority structure functioned effectively, and in general that an efficient rational-legal organization was operated. But this also resulted in a great drop in morale and increased management-worker conflict – including a wildcat strike.

In his analysis of this situation Gouldner was able to distinguish three patterns of bureaucratic behaviour: mock, representative and punishment-centred – each with its characteristic values and conflicts.

In mock bureaucracy the rules are imposed on the group by some outside agency; for example, a rule laid down by an insurance company forbidding smoking in a shop, or official returns required outside the organization on the activities of members. Neither superiors nor subordinates identify themselves with or participate in the establishment of the rules, nor do they regard them as legitimate. Thus the rules are not enforced, and both superiors and subordinates obtain status by violating them. Smoking is allowed unless an outside inspector is present; purely formal returns are made, giving no indication of the real state of affairs. The actual position differs very much from the official position and people may spend a lot of time going through the motions. This behaviour pattern of mock bureaucracy corresponds with the common conception of bureaucratic red tape administration which is divorced from reality. However,...

Table of contents

• Cover Page
• Dedication
• Title Page
• Copyright Page
• Contents
• Introduction to the Third Omnibus Edition
• 1 The Structure of Organizations
• 2 The Organization in its Environment
• 3 The Functioning of Organizations
• 4 The Management of Organizations
• 5 Decision Making in Organizations
• 6 People in Organizations
• 7 Organizational Change and Learning
• 8 The Organization in Society
• Name Index
• Subject Index