New Technology, Organizational Change and Governance

E. Avril, C. Zumello, E. Avril, C. Zumello

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137264237
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

Globalization and the technological revolution have forced organizations to rethink decision-making structures favouring the adoption of highly innovative practices. This book analyzes the impact of new technologies testing empowerment, engagement and democratization against the new organizational morphology of political parties and corporations.

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Introduction: Towards Organizational Democracy? Convergence and Divergence in Models of Economic and Political Governance

Emmanuelle Avril and Christine Zumello

This study on organizational change begins with the idea that globalization and the development of the new information and communication technologies (ICTs) have favoured the structural convergence of organizations, resulting in the hegemonic dominance of business values and practices in virtually all types of organizations, notably political parties and public or semi-public organizations. So far, very few scholars have tried to make this convergence between business organization paradigms and those present in other types of organizations, notably political parties, semi-public bodies and non-governmental organizations (NGOs), explicit, with the notable exception of Max Weber, who pointed out in his 1925 book Economy and Society the continuities of structure and practice deriving from the bureaucratic form present within all large-scale organizations (Weber, 1978), and Robert Michels, who highlighted in 1911, through his theory of the ‘Iron law of oligarchy’, the process of bureaucratization of political parties (Michels, 1915).

Although internal tensions between different organizational models have inevitably manifested themselves, particularly through the resistance of those actors whose traditional significance and influence came to be eroded by the adoption of new processes and tools, the business ‘model’ has come to be regarded as a benchmark to be emulated by all organizations, in a quest for greater adaptability, efficiency, and competitiveness, often shrouded in a democratizing discourse. However, the succession of bubbles and, since 2008, the global financial collapse have brought the so-called business ‘model’ into disrepute and given greater importance and credibility to alternative organizational models which claim to reflect truly democratic principles. This has allowed for the emergence of a renewed and much more explicit debate on organizational design within organizations, between advocates of competing organizational models: organizational issues may even take precedence over goals and tactics.

The objective of this book is dual: first, it aims to confront the over-arching rhetoric of democratization – born out of the new governance apparatus which emerged out of the recent environmental changes – with the empirical effects of the new practices on decision-making structures. What are the practical manifestations of the replacement of the old insular hierarchical organizational model with participative horizontal structures? Has the new paradigm really displaced the old? Second, this book aims at assessing the future evolution of organizational models, whether through a revival of traditional and supposedly more democratic forms or through the development of alternative models breaking away from a dominant ‘model’ which many now consider to have failed.

What is an ‘organization’? Definitions and methodology

‘Organization’ is a generic term which describes a variety of different aggregations of people and structures with a final goal. An organization’s structure is the framework whereby the final desired goal can be achieved. This structure is made up of a range of components, including complexity, formalization, and centralization. The degree of complexity is set out right at the beginning on the number of aims the organization has; formalization relates to the number of rules an organization has and its reliance on these rules and procedures to direct behaviour; centralization is a way in which to analyse where the decision-making powers within an organization develop from (Hall and Tolbert, 2008). Some organizations choose to be highly centralized, where most decisions are made at the highest level of management and orders flow down to other members. In a decentralized organization, the authority to make decisions is more widespread to all levels. It should be noted that the centralized and decentralized forms are extremes and that organizations employ a variety of these forms at different levels, and even combine elements of both. Other factors exist which can affect organizational structures, such as the organization’s external environment. Factors beyond the organization’s control (price fluctuations, laws, etc.) affect its performance, so changes may be needed within the organizational structure in order for the organization to survive.

This thrust for change can originate from a variety of sources, insofar as large-scale organizational changes are influenced by factors as diverse as downsizing workforces, the globalization of markets, the flattening of hierarchies or the influence of new information technologies (Harvey and Brown, 1996: 90), in particular what has been called Web 2.0, the second-generation Web-based communities where users can generate and distribute the content. But the champions of change have to pay attention to the potential for resistance within organizations (Burnes, 1996), a phenomenon which may be preempted through the creation of a climate conducive to change, where change is accepted as the norm. Indeed, the more transformational the change, the more imperative it becomes that the organization’s culture also changes, or large-scale organizational transformations will be resisted. Organizations therefore strive to create an atmosphere conducive to change among their employees or members, although most change management theorists agree that cultural change is particularly difficult to achieve (Miller, 1998: 375). Paradoxically, though, an organization’s culture is that which might protect it from significant changes that would compromise its identity, both internally and externally.

Although specialists usually trace its roots back to Max Weber, organizational studies began as an academic discipline with the advent of scientific management in the 1890s, of which Taylorism represents the most striking manifestation. After the First World War the focus of organizational studies shifted to the ‘human’ dimension and to the study of how psychology affected organizations, an evolution partly triggered by the identification of the so-called Hawthorne Effect. This human relations movement, led by high-profile scholars such as Abraham Maslow, David McClelland, and Victor Vroom, focused on motivation and the actualization of the individuals’ goals within the organization. The field shifted even further after the Second World War, when the invention of large-scale logistics and operations research led to a renewed interest in rationalist approaches, together with a growing interest in scientific theories and methods, as illustrated by the ‘Carnegie school’ of organizational behaviour, whose main proponents, Richard Cyert and James G. March, championed a decision-centred view of organizations (Cyert and March, 1963). The field was strongly influenced by social psychology as illustrated by the development, for example, of the ‘bounded rationality’ theory by Herbert Alexander Simon, whose aim was to challenge the comprehensive rational model used in economics. This theory recognized that it is impossible to comprehend all of the potentially relevant information in making choices. It is worth pointing out that this notion originated in political science and that Simon himself was at the crossroads of political science, economics, psychology, and computer science (Simon, 1947, 1979, 1995). Starting in the 1980s, cultural explanations of organizations and change also became an important area of study, with qualitative methods, informed by anthropology, psychology, and sociology, becoming more acceptable.

As a result, if we take a classic definition of organization which sees it as ‘a structured social system consisting of groups of individuals working together to meet some agreed-on objectives’ (Greenberg and Baron, 2003), what we notice is that the key elements of this definition (individuals, groups, social systems, and objectives) are not confined to a single analytical model but relate instead to a wide range of disciplines such as psychology, sociology, economics, anthropology, political science, and management. As for organization theory, this draws on the sciences, the humanities, and the arts, and so presents the intellectual challenge of thinking in interdisciplinary ways. In this respect, British sociologist Gibson Burrell and British organization theorist Gareth Morgan were among the first to draw attention to the multiple perspectives of organization theory, arguing that knowledge is based on different paradigms, each with its own assumptions about the world (Burrell and Morgan, 1979). It follows that organizational studies, as illustrated by the analyses contained in this volume, draw from a variety of methods, including the quantitative methods found in other social sciences, as well as qualitative methods, such as ethnography and case analysis. In recent years, ‘systems thinking’ has been developed to provide techniques for studying systems in holistic ways to complement traditional reductionist methods. The systems framework (an early exponent of which was Alexander Bogdanov, who sought to identify the organizational principles that underlie all systems [Bogdanov, 1980]) also transcends the perspectives of individual disciplines. Drawn from physical and engineering models, systems theory considers organizations as systems which must adapt to environmental changes in order to survive, an approach made popular with the advance in information technology which sees organizations changing in line with new technical possibilities. Yet organizations cannot be viewed simply as communications networks, and such an approach overlooks the human dimension. A fruitful dialogue can therefore be established across disciplines, which highlights the increasing structural convergence of various types of organizations as well as the convergence of both the discourses on internal reform and the tools employed to bring about a perceived improvement in the efficiency of processes.

Our perspective seeks to establish a parallel in organizational changes within organizations which are not usually thought of as similar. We show that both economic organizations and businesses, political parties and public organizations have undergone similar transformations due to several factors, both internal and external, which have led to a re-composition of organizational barycentres. The studies collected in this volume share an underlying concern to return to the organizational level of analysis which seems to be have been lost, or at least overlooked, in recent years.

Governance and organizational structure

As Gerald Davis has shown, corporate governance was mainly confined to law and business schools before the 1990s and has, since then, become a ubiquitous concept (Davis, 2009: 32–57). Governance addresses the question of the distribution of power within an organization, whether public or private. If one adopts this definition then one needs to identify the whole range of participants in an organization. The participants, also known as stakeholders, need to be recognized as constituents of the organization. From that perspective, recent changes have definitely provided some stakeholders with a stronger input and thus have affected the structure of the organization itself. Among those changes, one needs to stress the growth of markets or rather the growth of reliance on markets for both businesses and political parties. Under the Efficient Market Hypothesis (EMH) the power of prediction of markets became the major reference and thus informed the ‘new managerialism’. Corporations would thus be reshaped around the fleeting trends of the market. Karen Ho refers to the ‘liquidation’ of corporations (Ho, 2009): under the diktats of short-termism and immediate performance, the boundaries of organizations have been ‘liquefied’. The organizational structure is no longer rigid and set; it needs to be constantly adapted. Similarly, with the technical and communication revolution of Web 2.0, stakeholders, whether they are party members, voters, or clients, can almost instantly send signals to the organization, which both needs to pay attention to those signals and, in turn, tries to re-establish a top-down form of management in which ICTs are used to shape the needs of its constituents, members, or clients. In such a case we would then resort to a common and well-established trend of advertisers and marketers: create a need. This book will look at the ways in which ICTs are used by economic organizations and political parties alike to shape their stakeholder base.

The concept of governance has been explored in many academic fields, including political science, public administration, policy-making, planning, and sociology (Rosenau and Czempiel, 1992; Kooiman, 1993; March and Olsen, 1995; Peters, 1996; Rhodes, 1996). While government refers to the planning and implementation of activities backed by those with legally and formally derived authority and policing power, governance refers to the planning and implementation of activities backed by the shared goals of citizens and organizations, who may or may not have formal authority and policing power. As an activity, governance seeks to share power in decision-making, encourage autonomy and independence in citizens, and provide a process for developing the ‘common good’ through civic engagement.

One noticeable evolution is that the frontiers between different types of organizations have become increasingly porous. An interesting aspect of the new governance of public administration is that it is characterized by increased collaboration among private, public, and non-profit organizations. Thus there is a need for researchers to describe and analyse these new models of governance and help understand their impact on both citizens and traditional democratic institutions. As pointed out above, technological change also plays an important part in setting out a specific context: Helen Margetts and Patrick Dunleavy, among others, have striven to identify the specific elements of the so-called digital-era governance (Dunleavy et al., 2006). The purpose of this book, however, is to focus on issues of internal governance rather than those related to external controls, although external governance, or the way democracy is regulated in a given country, obviously has an impact on the way organizations in a given context operate internally (Norris, 2004; Janda, 2005; Scarrow, 2005). We therefore take the concept of governance as referring to the internal structure, organization, and management of autonomous institutions.

Democracy and governance

The focus on the need to change is best reflected in the widespread organism metaphor, which has come to replace the machine metaphor prevalent in the age of scientific management and encapsulates the notion that an organization which fails to evolve and adapt is doomed to extinction (Morgan, 1986). The evolutionary and biological metaphor emphasizes the survival of the organization as a key aim and places greater emphasis on the relation between the organization and its environment. This has resulted in the emergence of an ethos of change in all types of organizations – change becoming a cardinal value irrespective of its actual effects on the efficiency of processes and regardless of the human cost attached to the changes. This book seeks to uncover the hidden rationale behind change practices in various types of organizations to highlight the ascent of an ideology of change which carries with it t...

Table of contents

• Cover
• Halftitle
• Title Page
• Copyright
• Contents
• List of Illustrations and Tables
• Notes on Contributors
• 1. Introduction: Towards Organizational Democracy? Convergence and Divergence in Models of Economic and Political Governance
• Part I: New Paths of Governance
• Part II: Breaking Organizational Boundaries
• Part III: Emerging Patterns of Organizational Design
• Index