The Short and Glorious History of Organizational Behaviour

The study of how people behave in organizations is useful to all organizational participants. It helps the top level participants understand how to manage the organization. It helps managers become better at controlling their departments. It helps lower level participants understand why things are the way they are and how to protect themselves against being victimized by a system that appears to largly take them for granted. It offers help in understanding orgaizations from operational, tactical and strategic viewpoints.

One interesting introduction to this field, and a favourite of mine, is an overview written by Charles Perrow entitled "The Short and Glorious History of Organizational Theory". The article was originally published in Organizational Dynamics (Summer 1973). I read it in a compilation called Classics of Organization Theory while in a masters program in the early 1980's. The author employs a tongue in cheek style and renders the history as a struggle between the forces of light and the forces of darkness. What follows is my synopsis of Perrow's article.

Perrow characterizes organizational history in terms of two main forces. Those forces of research which treated an organization as a mechanical thing, he characterizes as the forces of darkness. The forces of light collectively refer to research that has a more humanistic basis and theme. "From the beginning, the forces of light and the forces of darkness have polarized the field of organizational analysis and the struggle has been protracted and inconclusive." The forces of darkness refer to such things as Taylorism (father of time and motion studies), division of labour, specialization, and line of authority. The forces of light comprize the human relations movement, Hawthorne studies and related themes. These aspects of organizational investigation emphasize people, accomodations and biological analogies over mechanical ones.

Scientific Management

The show gets started with the rise of Scientific and Classical Management. Emphasis was on planning, record keeping, reduction of span of control to about six, decisiveness and other rather simplistic pronouncements. The primary examples of organizations were the military and the Catholic church and organizations were seen as mechanical entities. As organizations expanded, most of these admonitions worked. However, the one constant in human affairs is change, and several factors arose which were problems for the formulae of the time. These included:
  1. Increasing importance of Labour accompanied by its rise in power.
  2. Increasing diversity of markets, proliferation of products, and increased complexity of technology.
  3. Changes in cultural, political and social changes altered the expectations of the general population with respect to the workplace.
  4. As growth increased organizations became too large and diverse to be seen as an extension of their owner. Mergers proliferated and a general preoccupation with management and leadership emerged.

Enter Human Relations

Although some individuals had opposed Scientific management they were mostly ignored. However, these voices received a tremendous boost from the publishing of two studies. The first was a book by Chester Barnard who proposed the theory that an organization is a "cooperative system" rather than a mechanical system. Then came the Hawthorne studies which emphasized the importance of human factors such as informal work groups, norms, and social relationships and their effects on productivity.

Attention then turned to the study of leadership. At first the emphasis was on leadership traits and the list sounded, as Perrow stated, "like an enumeration of Boy Scout qualities: kind, curteous, loyal, courageous". The research did turn up differences between employee centered aspects of leadership (consideration) and job centered aspects of leadership (initiating structure) and this provevd to be a fruitful area of investigation. It also bolstered the human relations approach to the study of organizations.

The Tavistock investigations into what is now known as sociotechnical systems also found important relationshsips between productivity and work groups. The practical negative impact of actions such as routine tasks, submission to authority, specialization of task, ignorance of the goals of a firm and centralized decision making on a group's morale were well documented. Another interesting discovery was how social systems interacted with job task considerations. Far from having only a negative influence on work productivity, social interaction was found, under certain circumstances, to improve work productivity.

The pace of change of technologies and the turbulence of the environment brought new views of how organizations ought to be organized. Models of the organization began to move toward organic and social systems rather than mechanical. While the models became much more complex, most agreed the models were much more realistic and very much more revealing.

Bureaucracy's Comeback

The forces of darkness came storming back. The mechanistic school countered with the numbers men: linear programmers, budget experts and financial analysts. Unburdened by most of the scientific management ideology and unchallenged by the human relations school, they began to put meaning into those maxims: plan ahead and keep records. With emerging systems concepts they pushed the mechanistic analogy to its fullest and it was very productive! They were untouched by organizational theory implying that the theory would have to adjust to them and not the other way around.

Identified by Max Weber and written about around 1910, bureaucracy was at first seen as an enlightened step forward. A bureaucracy is an organization based on rules, where the authority resides with the office not with the person, and everyone is treated equally. These changes were seen as progressive and enlightening steps forward in a time when the whim of the monarch or their representatives was the only thing that mattered. The reaction of the masses was generally positive. In this change, the losers were those who had the favor of the King for under the new system they had trouble getting their way.

The writers were all against bureaucracy. But those who were inside organizations generally favoured it. Managers like the ideas of clear lines of communication, clear specification of authority and responsibility and clear knowledge of to whom they were responsible. Bureaucracy came to be seen as efficient, flexible and effective. It worked well in eliminating favouratism, discrimination, aribrary use of authority, kickbacks and incompetence. However, the works of Weber were not translated from German to English until the 1940s and for a time were not readily accepted. Gradually studies showed that Bureaucratic organizations could change faster than non-bureaucratic ones and that morale could be higher when there was clear evidence of a bureaucracy. A closer examination of this organizational type began to suggest that the sins of bureacracy arose from failing to follow its principles.

Power Conflict and Decisions

To this point, conflict had been almost universally viewed as a negative consequence of either a failure in communication or recalcritrant managers who refused to learn new behaviour and follow the new ideas of bureacracy. Several studies pointed out conflict was not only rampant but also to be expected. Conflict was not only - not always bad for organizations - but it could be and was often functional! This new view occurred partly because the arena of organizational theory expanded to include political scientists as well as social psychologist and socialogists who had been participants from earlier times.

In turn these discussions about conflict led to the recognition and legitimization of discussions around power in organizations. This was not just the formal division or allocation of power but the behaviours associated with its accrual, its use and its maintenance. Power had come out of the closet and was recognized as a legitimate force to be reconned with in organizations.

The emergence and open recognition of power as a force in organizations did not sit well with the view of organizations as cooperative systems. Power involves conflict and this appears to be the antithesis of cooperation. It also discomfitted the bureaucracy advocates since the rules of bureaucracies were intended to resolve issues of power and prevent the very conflict which was now beginning to be openly embraced.

Two main things came to bear on this dilemma which helped push it from the center of the stage. First power was rebranded as influence thus softening the tone of the issue. Second it was suggested that it was not whether it wxisted that mattered so much as how it was used. Influence used for the good of the organization was recognised as having a place in the organizational world.

At this point the work of Herbert Simon and James March on decision making began to have an impact on those in the field of organizational theory. For many decades the model of decision making esposed by business and organizational theorists was that of economic decision making. There were two important assumptions which characterised the economic decision making approach.

First: the decision maker had perfect information about all things affecting the decision. Everyone knew this was not the case but in order to facilitate a decent discussion about the topic this assumption was made.

Second: the decision maker would optimise when making the decision. In other words you searched until you found the best alternative and then selected it. On this one we rationalized our way to thinking that this is indeed what was done.

Into this situation came Simon with his theory of administrative decision making. His ideas about decision making made two main points and they totally destroyed the assumptions of the economic model:

First: Human beings are intendedly rational. We try to be rational, but we are limited in intellegence, time, talents resources and understanding. It was a potent acknowledgement that perfect knowledge is impossible.

Second: When people make a decision they do not optimize, they satisfice. Satisfice means that we select the first acceptable alternative to make our decision.

The new rules of decision making also implied that existing situations were never changed unless they deteriorated badly. Today this is explicilty affirmed by the expression: If it isn't broken, don't fix it.

The new theory also had some unusual implications. It suggested that people can be rather easily controlled. It is not necessary to give full and direct orders, effectivly assuming managers are idiots who have to be told everything, nor to leave them to their own devices, effectively assuming they are supermen who can automatically anticipate and do whatever is needed for the good of the organization, but rather all that is necessary was to control the premises upon which they made their decisions. Since people were intendedly rational controlling their decision premises and using organizational precedents are all that is necessary to produce predictable and stable behaviours from them.

March and Simon went on to spell out generally what some of these premises are that can be controlled. Perrow also wrote of these premises more systematicaly. A couple examples:

Attention Directing Eskimos have a dozen words for snow because they need to make decisions in their lives which depends upon which type of snow they are dealing with. City dwellers just call it all snow. Their children may differentiate as to whether it packs - good for making smowmen and snow forts.

Reward Systems As Michael Lebouf has written: What Gets Rewarded Gets Done By altering the reward system we can change behaviours in the desired direction. This is not only done in organizations but it is mechanism used by governments to control their citizenry. The principle is sound and straighforward but as with most things in life it isn't entirely that simple. There are other factors involved which can impact people's behaviours.

What did becomme clear is that bureaucracy, alone, or human relations, alone, is not sufficent to understand organizations. Perrow uses the example of a brueacracy as the skeleton of the organizations. it provides the framework upon which the rest of the necessary controls are then placed. Things like conflict, power and decision making are some of the muscles and ligaments which then move the skeleton in usefule ways to accomplish organizational purposes.




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