ModernOrganizationsTeoria y Practica

Modern Organizations

Modern OrganizationsTHEORY AND PRACTICE

Second Edition

EDITED BYAli Farazmand

Library of Congress Cataloging-in-Publication Data

Modern organizations : theory and practice / edited by Ali Farazmand.—2nd ed.p. cm.

Includes bibliographical references (p. ) and index.ISBN 0–275–96140–0 (alk. paper)1. Public administration. 2. Organizational sociology. I. Farazmand, Ali.

JF1351.M57 2002351—dc21 2001133083

British Library Cataloguing in Publication Data is available.

Copyright � 2002 by Ali Farazmand

All rights reserved. No portion of this book may bereproduced, by any process or technique, without theexpress written consent of the publisher.

Library of Congress Catalog Card Number: 2001133083ISBN: 0–275–96140–0

First published in 2002

Praeger Publishers, 88 Post Road West, Westport, CT 06881An imprint of Greenwood Publishing Group, Inc.www.praeger.com

Printed in the United States of AmericaTM

The paper used in this book complies with thePermanent Paper Standard issued by the NationalInformation Standards Organization (Z39.48–1984).

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To My Son, Cyrus

Contents

Preface to the Second Edition ix

Preface to the First Edition xiii

Introduction: The Multifaceted Nature of ModernOrganizations xvAli Farazmand

I. Society and Modern Organizations 1

1. Public, Nonprofit, and Private Organizations: Similaritiesand Differences 3Nicholas Henry

2. Organization Theory: From Pre-Classical to Contemporaryand Critical Theories—An Overview and Appraisal 19Ali Farazmand

3. Emergent Theories of Organization: An Overview andAnalysis 63Ali Farazmand

4. Elite Theory of Organization: Building a NormativeFoundation 97Ali Farazmand

II. Public Organization Design and Reorganization ofAdministration 133

viii Contents

5. The Public Service Configuration Problem: Designing PublicOrganizations in a Pluralistic Public Service 135Charles R. Wise

6. Government Reorganization: Theory and Practice 159Guy Peters

III. Organizations, Individuals, and Administration: Issues andPerspectives 181

7. Diversity in Public Organizations: Moving toward aMulticultural Model 183Sally Coleman Selden and A. Frank Selden

8. Organizational Socialization 207Michael Klausner and Mary Ann Groves

9. Is Organizational Membership Bad for Your Health? Phasesof Burnout as Covariants of Mental and Physical Well-Being 231Robert T. Golembiewski

10. God, Science, and Administrative Theory: An UnfinishedRevolution 251Frederick C. Thayer

For Further Reading 267

Index 273

About the Editor and Contributors 283

Preface to the Second Edition

Publication of the first edition of Modern Organizations was an over-whelming success, as the book was well received by scholars, students, andinstructors around the world. The book was reprinted twice, and it wasadopted widely as the primary textbook in graduate and undergraduatecourses in organization theory and administrative behavior. Actually, thebook became a classic, as many scholars commented in recent years. I amhonored to have had the cooperation of the contributing authors to thefirst edition.

The second edition of the book is significantly revised and updated. Sev-eral chapters have been deleted and an equal number of chapters added toupdate the materials reflecting the latest perspectives on organization theoryand behavior. The subtitle of the book is also changed to emphasize theoryand practice of modern organizations. The themes of the book remain thesame, reflecting the integrity and aims of the materials covered. The bookis devoted to presenting materials that balance the interests of managementor organization on the one hand, and those of the individuals and citizenson the other. As noted in the Introduction and in the Preface to the firstedition, it is this balance of interests that has been neglected in most of theliterature on modern organization theory and behavior, from classical tocontemporary. Today most of the knowledge on modern organizations hasbeen developed with a managerial bias and in favor of organizational in-terests, subordinating or neglecting the interests of individual membersworking in organizations as well as of citizens outside organizations ininteraction with them. This imbalance has created, over a long time, a hugegulf between what organizations try to achieve and what the human side

x Preface to the Second Edition

of organizations—organizational members and citizens outside—expect toreceive or accomplish.

The changes in the second edition are as follows: The Introduction isslightly expanded to include the latest changes and developments in modernorganizations, including the phenomenon of globalization and its implica-tions for organization theory at global levels. Significant revision and ex-pansion have been incorporated in the theoretical part of the first fewchapters. First, there is a new chapter on public, private, and nonprofitorganizations and their differences and similarities. Second, the originallong and exhaustive chapter on organization theory with an assessment hasbeen broken into two separate chapters, with significant expansion on sometheories. For example, in Chapter 2, the section on agency theory has beenelaborated extensively while a new major section, devoted to the analysisof transaction-cost theory, has been added, bringing market theory up todate.

Chapter 3 now has a focus on critical and emergent theories of organi-zation. Here institutional theory has been significantly elaborated andexpanded, and an entirely new theory of organization, chaos and trans-formation theories has been presented and analyzed extensively with im-plications for world systems theory, organization theory, and publicmanagement. Chapter 4 is also an entirely new and long chapter with thesole focus on the new, normative organizational elite theory. Together,these three theoretical chapters present, with assessment and analysis, thelatest knowledge and perspectives on organization theory. Some of thesetheories, such as chaos and transformation theories and elite theory, areoriginal contributions of the editor, while other chapters also provide sig-nificant, up-to-date information on various issues and themes of modernorganizations.

The deleted chapters include the chapter on Talcott Parsons by HarryJohnson, who is no longer with us in this world, the two chapters on theadministrative state, and the chapter on public policy. An entirely rewrittenchapter with theoretical analysis on government reorganization, reform,and change, and a new chapter in the latter part of the book on diversityand public organizations, are presented. Finally, the rest of the chapters onorganizational socialization, burnout, and the debate on God, science, andadministrative theory have been revised significantly. These changes, revi-sions, and alterations have made the second edition a much more lively,up-to-date, and reliable book that is intended as a primary textbook inorganization theory and behavior at graduate and undergraduate levels.While the presentation of sophisticated analysis of the latest research in thetheoretical chapters meets the highly demanding needs of doctoral andPh.D. courses, the systematic discussions and easy reading of all chaptersis intended to suit the graduate MPA, MBA, and other masters level, aswell as undergraduate, courses in organization theory and behavior.

Preface to the Second Edition xi

We live in an organizational society, a society that is being increasinglyglobalized by corporate organizations of advance capitalism and the dom-inant governments that support them. These globalizing organizations areexpanding worldwide and centralizing through mergers and megamergers,concentrating an ever greater amount of power in the hands of the fewcorporate organizational elites who can dictate public policy and admin-istration and use supranational organizations to enforce their dictates tonation-states and peoples worldwide. This phenomenon has had significantnegative implications for the democratic theory of self-determination, aswell as caused major gaps in distribution of resources, wealth, and oppor-tunities around the globe.

In this world environment of globalization, almost all governments andtheir public organizations have been pressured to privatize public spheresand public-service organizational functions. Privatization has become a cen-tral ideological, as well as economic, strategy of promoting globalization.Consequently, with the drastic shrinkage of public-sector and governmentalfunctions, public organizations have become transformed with a multitudeof characteristics featuring corporate-oriented institutions that enhance themanagerial interests of the elites, often at the expense of the interests ofindividuals and citizens. This book reflects, in part, much of this process,a phenomenon that is transforming the world at the turn of the new cen-tury.

This book attempts to shed light on the growing complexity of modernorganizations with implications for public, private, and nonprofit sectorsand for individuals and society around the world. Both macro and microlevels of analysis are used in presenting perspectives on organizations, withimplications for individuals, groups, government, administration, and so-ciety. The view used in the book raises the concepts of organization andadministration to the highest level of macro analysis: the organization of aparticular society, say a nation-state, or even of a global society, into sec-tors; institutional frameworks; and the administration of society or globe.Therefore, the concepts of organization and administration used herebroaden the scope and perspectives of our understanding and explain howsocieties are organized and administered. These broad concepts embodyeven the subset concepts of policy, management, legislation, and judicialprocess for conflict resolution. The micro and meso levels of analysis arealso employed to explain how organizations operate—what theoretical andconceptual approaches are most suitable under what conditions—for man-agement and individuals.

The purpose of the book, therefore, is to present original chapters on thenature, structure, process, and values of organizations in modern societywith implications for both management and individuals. It is hoped thatstudents, instructors, and scholars will find the book another original con-tribution to the field. The book is primarily suggested for students of public

xii Preface to the Second Edition

administration, nonprofit organization management, political science, andbusiness management. But since the relationship between individuals andsociety is discussed in connection with organizations, students of sociologyand social psychology will also find the book useful.

This book could not have been completed without the cooperation of itscontributors. I am particularly grateful to all of them, who despite theirheavy research and teaching agenda, always responded promptly to myinquiries and demands. I am sure they all are pleased to see the book pub-lished. The publisher has been very patient and cooperative in extendingthe deadlines to allow the acquisition and updating of new manuscripts. Iam particularly thankful to the senior editor, Dr. James Sabin, for his pa-tience, cooperation, and editorial support. This book was overdue, but Iam pleased to see it finally out. I also appreciate the valuable work ofpeople in the production department at Greenwood and Rainsford Type,especially John Donohue.

Preface to the First Edition

Modern organizations—public, private, and nonprofit—perform manyfunctions in societies. We live in an organizational society in which almostevery aspect of life is affected by organizations. It is almost impossible toescape them. Organizations may be studied from different perspectives andwith different levels of analysis. While studies on private-sector organiza-tions are monumental, studies about public organizations are still in thedevelopmental stage with significant contributions being made to the field.Research on nonprofit organizations has just begun, but good progress isbeing made.

It is ironic that much of the literature produced on the so-called genericorganization theory is indeed biased toward business management withlittle or no reflection of realities about the distinct nature of public andnonprofit organizations. This business management bias of organizationalstudies has been deeply rooted in the instrumental rationality of the earlydays and still tends to dominate the field of organization theory. However,new studies from public and nonprofit sector perspectives appear to bechanging this imbalance and are producing a realistic picture of modernorganizations.

This book is an attempt to shed light on the complex nature of modernorganizations with implications for public, private, and nonprofit sectorsand for individuals and society. The approaches used in this book includemicro, macro, and meso or micro-macro levels of analysis. Individuals,groups, government and administration, and society in general are treatedin connection with modern organizations. The purpose of the book is topresent original chapters on the nature, structure, functions, and processesof organizations in modern society with implications for both management

xiv Preface to the First Edition

and individuals. It is hoped that students of organization theory will findthis book another original contribution to the field. The work is primarilysuggested for students of public administration, political science, nonprofit-organization management, and business management. But the book alsoaddresses fundamental issues that concern individuals and society in rela-tion to organizations. Therefore, students of sociology and social psychol-ogy may also find the book useful. It presents a balanced view oforganizational and individual perspectives in contemporary society.

This book could not have been completed without the cooperation ofthe contributors. I am particularly grateful to all of them, who despite theirheavy research and teaching agenda, always responded promptly to myinquiries and demands. I am sure they all are pleased to see that the bookis finally out. Regrettably, however, one of our contributors, Harry John-son, could not see the outcome of his labor; he passed away while the bookwas in print. Professors Dwight Waldo of Syracuse University, Robert Den-hardt of the University of Central Florida, and Fred Thayer of the Univer-sity of Pittsburgh read the original draft of my manuscript of Chapter 1and made encouraging comments, remarks, and suggestions. I am mostgrateful to them. I would also like to acknowledge the assistance of myformer graduate assistant Mike Marshall, at Northern Kentucky University,who was instrumental in getting this project completed. The publisher hasbeen very cooperative in extending the deadlines for submitting the man-uscript, which enabled me to complete the book without rushing. I amparticularly thankful to the editors, Jim Dunton and Lynne Goetz, for theircooperation and editorial suggestions.

Introduction: The MultifacetedNature of Modern Organizations

Ali Farazmand

Modern organizations play a pervasive role in societies. Indeed, we live inan organized society in which almost everything is accomplished in an or-ganizational context. From birth to death we deal with organizations, smallor large, public or private. Organizations are formed by human beings, butthe former often act independent from the latter; organizations even controlus, dominate society, stifle development or progress, promote growth andchange, alter our environmental conditions, and at the same time fulfill ourhuman and societal needs. Their role is multidimensional and dual in na-ture: they can make possible the progress and fulfillment of human needs,but at the same time they can be a major obstacle to our achieving thosesame goals. They are a powerful instrument in governance and the pro-motion of democratic values, therefore enhancing human values. But, iron-ically, they may serve at the same time as a formidable instrument ofrepression.

Organizations are indispensable to human and civilizational progress andin meeting societal needs, but they can also be a force of destruction. Or-ganization and civilization are interdependent twins; one could not developwithout the other. From their birth, organizations were simple in structureand management, but as they grew larger they became sophisticated andcomplex in structure and function, requiring managerial skills and tech-niques beyond the comprehension of many people. Today, in modern so-cieties, organizations shape values, set structural roles and norms incivilizational directions, change and determine human destinies, and per-form a wide range of functions from integration and human fulfillmentto disintegration and individual alienation. In a sense, there are few thingsin modern society that either are accomplished without organizations or,

xvi Introduction

to say the least, are not affected by organizations, public, private or non-profit.

Is organization or bureaucracy an exclusively human phenomenon? Ab-solutely not. A host of other species, small and large, organize and livethrough organizations. Perhaps the only major advantage we human crea-tures have over other species is our intelligent ability to advance in tech-nology and strategies to both develop and destroy.

By instinct and by learning, animals have for millions of years lived inan organized manner. Their organizations pursue purposes and have spe-cialized roles and a hierarchy of authority, and one of their purposes isself-protection. Many find safety in numbers while others “divide guardduties and authority among specific individuals” (Steinberg, 1975: 10). Oneof the most highly developed organizations with specialized role playing isfound in the ant colony. In an intricate bureaucracy, each ant in a colonyperforms functions that set its rank from the queen ant at the top, whichbears young to the thousands of soldiers, foragers, and nurses. The systemhas existed for some “40 million years, suggesting that ant organizationsare more successful than man’s” (Steinberg, 1975: 10).

Similar observations can be made of bulls, disciplined to serve as guardsin migratory bands of hundreds of thousands seeking better grazing, or oflarge bands of zebras moving in concentrated herds deliberately strength-ening their defense against such predators as lions that can only succeedwhen the prey is isolated from the herd. Other creatures like penguinscongregate in organized groups not only for safety but for warmth, or thefasciolar fish that finds safety from attack by swimming in a school thatmoves with precision but is leaderless (Steinberg, 1975: 10–11). Other ex-amples include beavers that show their organization through teamwork inengineering and skill precision in building and repairing dams in order tomaintain and improve their living environment.

Human civilization from the earliest time was also formed around or-ganizations arranged in different forms and for different purposes. Theseorganizations grew in size as a form of collective action from serving limitedgroup interests—namely hunting and food gathering of the primitive com-mune system—to large organizations of governance. The best example ofthe latter is ancient empires performing massive public works projectsthrough huge organizations made up of various functionaries and slaves.Egyptians, Assyrians, Chinese, Persians, Romans, and Greeks all undertookgigantic public works that were accomplished by large organizations bu-reaucratically set up with functional specializations, role specifications, andchain-of-command systems with a clear line of authority from top to bot-tom.

These ancient empires—along with India, the city state of Sumer, Bab-ylonia, and Elam in modern Iran—established and advanced the ancientcivilization that has served as the foundation of modern world civilization.

Introduction xvii

It is beyond the scope of this study to elaborate on the significance of theseancient civilizations, their achievements, and their legacies for the modernworld. Suffice it to emphasize here that modern organizations have evolvedfrom these ancient civilizations with an impressive record of organization/institution building, forming the foundations of empire states with enor-mous socio-economic, cultural, political, and administrative achievements.Their legacies and contributions to modern organization, administration,and civilization are too many to cite here. (For some of these legacies andcontributions, see Farazmand, 1998.)

What is the extent of our conceptual knowledge about modern organi-zations and the real world in which they operate? What functions do or-ganizations perform in society, and what behavioral characteristics can wediscern about organizations? And what is the role of public organizationsin modern governance? While volumes of books may be needed to answereach of these questions, for the literature on organization theory and be-havior is monumental, the following attempts to touch on some of the basicelements of modern organizations. An overview of some of the major the-ories of organization is given in Chapters 2 and 3, but what follows is aresume of some of the major functions of modern organizations. This in-cludes a short discussion of the modern administrative state and bureauc-racy and the role they play in governance and administration. Finally, aplan of the book is given with a brief introduction of the chapters presentedin this volume.

ORGANIZATIONAL FUNCTIONS

Modern organizations perform a variety of functions, from maintaininglaw and order to providing services to taking care of the dead. A list of themajor functions of organizations requires an exhaustive analysis. The fol-lowing is a brief outline of what the various types and sizes of organizationsdo in modern society.

Organizations as Human Facilitators

From the dawn of civilization to the present day, human beings haveengaged in various organizing activities to get things done and to servetheir social, political, economic, and cultural needs. Organizations havebeen used to facilitate human activities and to make achievement of indi-vidual and community goals possible. Collective organizational arrange-ments have proven superior to individual actions for different reasons:speed, accuracy, collegiality, gratification of social needs, public works,community interests, and so on. Today, many nonprofit organizations anda host of other organizations strictly serve that purpose. But like the giantcorporations, the administrative state of contemporary societies has been

xviii Introduction

transformed from a facilitating state in providing harmony and making lifeeasier for citizens to a more dominating, coercive corporate state. Citizensand societies have become captives of this dominating state and are affectedby numerous organizational actions about which they have little say (Scottand Hart, 1989).

Organizations as Society

The concept of organizational society has been established as a fact oflife (Presthus, 1962). In modern times, we live in an organizational societyin which almost every aspect of life is organized and almost everything isdone in an organizational setting, whether small or large, private or publicor nonprofit in nature. There is no escape from organizations. From smallcommunities to large nations to the global community, the reality of or-ganizational pervasiveness is present; even in remote areas of deep forestor uninhabitable parts, earth organizations enforce their identity. And, ofcourse, even outer space is invaded by human organization.

Organizations as Spiritual Institutions

Spiritual organization is one of the oldest kinds of organizations. Humanbeings have always found ways to institutionalize and externalize theirways of serving their spirituality or healing spiritual wounds. There are asmany types of spiritual organizations as there are religions and beliefs.Temples, houses of God, churches, mosques, and so on perform this func-tion. What is significant about organizations as spiritual institutions is thatthey regulate the lives of their members, provide them with comfort, calmthem in stressful stages of life, and mediate between them and God or theirsupreme being, often providing hope of life beyond this world. Spiritualorganizations come in a variety of forms, structures, missions, norms ofoperation, role specifications, and cultural indoctrinations. Some promotea passive and peaceful existence while others promote an active life ofaggressive pursuit of material and spiritual needs, all in the name of servingGod or one’s spiritual needs. But these organizations have also separatedpeople from each other, caused wars as well as peace, hatred as well aslove.

Spiritual institutions or organizations are present everywhere in theworld, in each neighborhood or community. But these organizations alsoplay other significant roles in politics, economics, social welfare, and cul-tural development. The multifaceted nature of spiritual organizations en-compasses all spheres of life and society. Since ancient times, temples werethe centers of economic and social activities; modern spiritual organizationsare also involved in heavy business enterprises, many operating with their

Introduction xix

own sophisticated telecommunications systems around the globe and withtheir own shares in stock markets.

Organizations as Political Institutions

All organizations—public, private, and nonprofit—are involved in poli-tics and political processes and activities. Indeed, all organizations may beconsidered political institutions, for they all perform political functions inone way or another. Internal politics, group politics, interorganizationalpolitics, bureaucratic politics, interest group politics, policy politics, per-sonal politics, and partisan politics are common to most organizations.Contrary to the view of the traditional, purely rational theories of organ-izations (Taylor, 1911, 1947; Weber, 1947; Gulick and Urwick, 1937;Simon, 1976; and others), organizations of modern society are not apolit-ical, and their political nature is explained by many activities that directlyor indirectly relate to the political processes, domestically or internation-ally. Among the public, governmental organizations, variations may befound from military-security and foreign-relations organizations to thepresidential offices and the legislature to social services and similar organ-izations; all are political institutions. Similarly, private-sector organizations,particularly giant corporations, are involved in various forms of local, na-tional, and international politics. Local politics is heavily influenced andshaped by the business community. Similar, but perhaps a stronger, influ-ence is exercised by large organizations at the national and internationallevel. The same may also be said about the for-profit business and nonprofitorganizations. Barry Bozeman (1987) argues that “all organizations arepublic” because they all perform public functions and use public funds.Robert Miles (1980: 157) argues that organizational politics and powercompose one of the two major realities of the “dual organizational life.”As he put it, “purely rational conditions rarely obtain” (157).

Indeed, all organizations are involved in one way or another in politicalsocialization, in ideological promotion of the political system in which theyoperate, in political mobilization for governmental actions, and in the pro-motion of political symbols serving system maintenance. In cases of hos-tility with another nation, they play a mobilization role. Organizations alsocollect individual taxes for the government, gather intelligence and infor-mation about individual members, and report undesirable citizens to au-thorities. Multinational and transnational organizations also play aformidable role in foreign relations and in international politics; they be-come virtual extensions of their own governments, and, when faced witha challenge from the indigenous forces of a country in which they operate,they play a formidable role in suppressing or eliminating those forces. Chileunder Salvador Allende in the 1970s and Iran under the Premier Mosad-degh in the 1950s—both legitimate and democratically elected govern-

xx Introduction

ments—are but two examples (for more on this, see Morgan, 1986). Inthese cases, General Motors, International Telephone and Telegraph (ITT),and the British Oil Company played fundamental roles in bringing down,through military coups d’etat, the legitimate, democratically elected gov-ernments and replaced them with absolute dictatorships of Augusto Pin-ochet and the Shah. The first was removed in 1991, while the second ruledfor over two decades until his removal by a bloody revolution in 1978.

Organizations as Instruments of System Maintenance andEnhancement

Following the above discussion, all organizations are also involved insome way in activities of not only maintaining but also enhancing the po-litical, economic, and social systems in which they operate. This is done inmany ways, including member socialization, promotion of nationalistic orpatriotic ideas, propaganda activities, social and political mobilization insupport of government policy, and usage of political symbols like flagsshowing support for those systems (e.g., “Support Our Troops” bumperstickers). Even purely rational organizations may also engage in antiforeignpolitical activities by firing and discriminating against their employees offoreign origin. The Japan-bashing activities of many business organizationsin the United States during 1991–1992 are a recent example, not to men-tion the private-sector organizations’ full cooperation with the governmentin detention of the Japanese-American citizens during World War II.

The system maintenance and enhancement activities of organizations,including religious organizations, are common to almost all organizations.Organizations that are not involved in such activities either never get li-censed or, once in existence, may face termination. Any system is concernedwith its survival and maintenance and, therefore, is likely to use any meas-ure to enhance itself. Modern organizations of all types are involved insuch functional activities. Churches and schools play a major role in citi-zens’ socialization and political indoctrination in the neighborhood andperform a watch-dog function for the authorities, but larger organizationsin public, private, and nonprofit sectors also provide jobs and opportunitiesfor social mobility, keep people busy, and promote the system of whichthey are a part. Obviously, system-challenging organizations are outlawedand illegal to operate in most societies, and in cases of some democracieswhere tolerance is exercised, their activities are closely monitored. Evenorganizations involving sports, entertainment, academia, and the media areinvolved in the political processes of every nation; they are as political asthey are businesslike. Political neutrality is rare among organizations.

Organizations as Change Agents

The role organizations play in social, economic, cultural, and politicalchanges is significant, though some bureaucratic organizations act more as

Introduction xxi

conservers or preservers than as promoters of change. But many also resistchange. Nevertheless, the organizational role in implementing reforms andchanges in various societies is fundamental, for organizations possess masscapacity and expertise that make them indispensable. Large corporationschange our daily life habits and present us with new ways of living, butmany people have almost no say in these changes. For example, medianetworks change people’s attitudes, Hollywood’s entertainment organiza-tions inject new cultural values into society, and universities promote theextent of our knowledge about phenomena with deliberately organizedfunctional orientations.

Organizations as Culture and Counterculture

Art, music, and other culture-oriented organizations are not the onlyorganizations that promote, change, and reshape specific cultural normsand values in society. Indeed, all organizations produce and promote twotypes of culture. One is the general cultural values that are shared by thesociety, whose citizens acquire them through family and school socializa-tion processes; these values are reinforced by all types of organizations. Thesecond type of culture is the purely organizational or bureaucratic culturethat generally contradicts the popular culture of the society.

The organizational or bureaucratic culture is different and separate fromthe popular culture in that it produces an entirely different system of norms,values, and rules that may alienate the general populace. They are notreflective of the popular culture, contrary to the claims made by some the-orists (Ott, 1989). And a truly representative bureaucracy may be more anillusion than a reality, for bureaucracies, once established, have a tendencyto develop their own identities with distinct cultural values and norms thatare different from those of the general public and society. Their elite ori-entations create a gap between the mass culture and bureaucratic culture.Indeed, the general public is generally suspicious of the bureaucratic cul-ture, and in some societies it is considered an instrument of political ruleand is, therefore, resented by citizens (Farazmand, 1989, 1991; Rosen-bloom, 1989). Therefore, the organizational or bureaucratic culture maybe considered a “counterculture” working against and gradually changingthe popular culture (Farazmand, 1989). This seems to be already happeningaround the globe (Scott and Hart, 1989; Shaiken, 1986).

Organizations as Tools of Policy Implementation

Organizations are the best tools for policy implementation, and to MaxWeber (1947), bureaucracy is the most efficient type of organization fordecision implementation. Organizations are rational while individuals arenot or are significantly less so (Simon, 1976). People in organizations arelocked into roles that are more or less defined from an instrumentally ra-

xxii Introduction

tional perspective. Individual personality is expected to be left behind whenentering an organizational role (Barnard, 1968). Organizations also providestability and predictability, and they can be dependable for their actions;individuals may not (see Chapters 2 and 3 for more details on this).

Organizations as Tools of Development

Organizational functions in implementing developmental policies andprograms are imperative everywhere. In developing countries, public andprivate organizations are heavily involved in massive developmental proj-ects and programs. Similarly, in advanced, developed societies the contin-uing role that private and public organizations play together in advancingscience, technology, and other aspects of life is highly significant. Throughorganizational processes, new progress is made every day that benefits hu-manity. But organizations may also be antidevelopmental.

Organizations as Destructive Forces

Organizations may be considered destructive. In their processes of de-velopment and progress, many of them may also inflict heavy costs onsocieties and human lives. Environmental pollution, work-related casual-ties, and other health-related problems are but a few examples. The militaryand civilian organizations that are involved in the business of national de-fense are potentially destructive to other nations; weapons are produced tobe used, not to play with. Generally, military organizations are in the busi-ness of destruction, not construction, though they may also provide jobsand contribute to state-building and the economic growth of a nation.

Organizations as Instruments of Repression and Domination

Organizations, particularly security and military ones, are dominant inmany societies considered repressive. As instruments of repressive rule in adictatorship, or even in some democracies, the role these organizations playin controlling and dominating people and violating their individual rightsand liberties is common around the world. Every political system is con-cerned with its maintenance and has, therefore, at its disposal organizationsto deal with opposition and challengers of the system. In some societies,however, organizations play more repressive and dominating roles thanthat of service delivery. Most developing and underdeveloped societies ex-perience this bitter trend as a rule.

Organizations may also be viewed as instruments of class rule and ex-ploitation. The radical view of class exploitation under capitalism is notexclusive to Marxism. The idea that organizations enrich the upper, ruling

Introduction xxiii

class of capitalists who own, control, and dominate modern organizationsis shared by many non-Marxists.

Organizations as Alienators

By virtue of their hierarchical nature and their power orientations, mod-ern organizations may also be considered alienating and as generating in-equality. Individuals are increasingly becoming cogs in the system that,because of increasing bureaucratization, is not conducive to individualgrowth and fulfillment of personal life (Denhardt, 1981; Hummel, 1976).Hierarchy generates inequality, as major work decisions are made not byworkers and employees who implement them but by those at higher levelsto which the ordinary organizational members do not have access (Thayer,1981; Harmon, 1981).

Organizations as Tension-Management Systems

The tensions that arise as a result of the major gaps that exist betweenindividual goals and expectations and organizational goals are fundamentalconcerns in the management of modern society in which the conflict be-tween worker and organization is inevitable. Chris Argyris (1962) calls thisan incompatibility gap that is permanent but should be closed by integrat-ing the two. But the radical view of Marxists also tends to relate this prob-lem to capitalism in which organizations are, according to their view, bothalienating and repressive.

Organizations, therefore, play a major role in managing tensions betweenmanagement and workers. Cooperation is constrained by the fundamentaldifferences and conflicts that naturally develop between management seek-ing maximum efficiency and productivity, on the one hand, and labor seek-ing job satisfaction, individual development, and personal growth, on theother (Argyris, 1962; Tausky, 1970). Organizations also manage the socialclass tensions that arise between the rich and the poor and between theworking class and the capitalist and managerial classes (Fischer, 1984;Clawson, 1980).

Organizations as Threats to Individual Rights

Organizations, particularly large ones, have a tendency to dominate so-cieties. People working in organizations are forced to give up some of theirindividual rights of freedom of speech, personal appearance (in the publicsector), associations, and so on. While members of public organizations insome democratic societies enjoy greater individual rights than in most othersocieties, the private sector corporate organizations actually hinder suchrights, except for freedom of association. In fact, by merely joining an

xxiv Introduction

organization, an individual’s rights are limited and controlled by the neworganizational rules, values, and norms that govern organizational life andmust be observed by the members. Once in organizations, people are nolonger free individuals, for organizational role expectations lock them intoimpersonal positions of “office” governed by hierarchy, formal rules, reg-ulations, and procedures (Weber, 1947; Hummel, 1976; Rosenbloom,1989).

Organizations as the Administrative State of Governance

Organizational societies are administered by a professional, managerialclass as well as being ruled by the more affluent elite. The modern statehas become increasingly administrative in terms of structure, functions, andprocesses. The structure integrates the web system consisting of the public,private, and nonprofit sectors. Despite its seeming decentralization, thestructure is centralized and concentrated. The corporate sector and the gov-ernment work together in a partnership. They have little incongruencies atthe top where strategic alliance is achieved through “iron triangles” andother interest-based arrangement networks. The functions and processes arecarried out in relative harmony, although the state sector may at timesintrude into corporate-sector organizations’ operations.

Not only are the public, governmental organizations or public bureauc-racies a major part of the administrative state, but private, corporate or-ganizations and many nonprofit organizations may also be considered anintegral part of it. The administrative state of modern governance admin-isters societal affairs—economics, finance, politics, business, industries,commerce, and so on—and regulates human lives; it is also in the businessof managing and controlling people. While public organizations of the ad-ministrative state are directly involved in such functions, the corporate-sector organizations and many nonprofit organizations—like universitiesand hospitals—perform similar functions for the state; they also receiveprotection from the administrative state.

The administrative state grew large everywhere, and its power and pol-itics affected every aspect of life and society for decades in the twentiethcentury. However, the recent bureaucracy-bashing and anti-administrativestate by an array of forces from conservative politicians to academics hasresulted in a significant diminution and crisis in the administrative stateand public-sector institutions worldwide. Today, the changed—in structureand process—administrative state has become an aggressive instrument ofthe corporate welfare state, and its new militaristic and policing charactershave become more intrusive and repressive to individual citizens and or-ganizational members alike. With the growth of sweeping privatizationaround the world, the shrunken administrative state has changed from itsformer broad public-interest service orientation to a noncivil, security-

Introduction xxv

policing orientation, reducing its primary role to system maintenance andthe maintenance of social control.

Organizations as Instruments of Globalization

Globalization is a phenomenon that is not new; it has been around formany decades, even a century. However, what is new is the rapidity andaccelerated rate of surplus accumulation of capital in the globalizing worldof capitalism, aided by leaping advancement in technological innovations.Globalization is a process through which worldwide integration and tran-scendence take place. Globalization is the hallmark of the rapturingchanges that are affecting lives, systems, and organizations worldwide andcausing chaotic consequences for society and people locally, nationally, andglobally. These rapturing changes are qualitative and produce megapara-digmatic patterns with a high qualitative power. Globalization is producingnumerous quantitative changes around the world with massive uncertainty,unpredictability, and instability in and out of organizations. However, asdiscussed in Chapter 3, many of these quantitative as well as qualitativechanges associated with globalization of capital are deliberate human de-signs of the globalizing corporate elites (Farazmand, 2002a, 2002b).

Elsewhere (Farazmand, 1999), I have discussed in detail the causes andconsequences of globalization with implications for public administration,accountability, and organizations (see also Farazmand, 1994). Globaliza-tion of capitalism has changed the structure, processes, and values of mod-ern organizations, hence ushering in new institutional mechanisms for rapidaccumulation of capital worldwide. Some of these global organizationaltheories and behaviors include global centralization of economic, political,and administrative powers concentrated in the hands of a few globalizingcorporate elites; centralization of globalizing organizations’ structures andvalues while diversifying and decentralizing the processes of organizationalactions to facilitate global surplus accumulation; overcentralization of po-litical and administrative powers under the new hegemonic world orderdominated by the United States and its European allies; standardization ofglobally directed and controlled operational procedures; convergence ofethnic and national cultures of nations and peoples around the world intothe Western globalizing culture of self-interested corporate capitalism; dis-empowerment of people and members of organizations around the worldwhile at the same time raising the slogans of empowerment and decentral-ization; and conformity to global corporate organizational rules in themidst of rhetorical organizational diversity.

In this global environment, organizations of modern society are trans-formed into instruments of surplus accumulation of capital, worldwideintegration of cultures, nation-states, and value systems into a global “cor-pocracy” instead of promoting democracy. Under the global corpocracy, a

xxvi Introduction

few super-wealthy corporate elites hold and manipulate economic and po-litical powers and dictate organizational, administrative, and policy choicesto citizens, groups, and nation-states. Corpocracy is rule by the few pow-erful rich over mass citizens (Parenti, 1995) while democracy is rule by themajority of ordinary people with respect for the minority rights (Waldo,1980). Corpocracy is plutocracy, or rule of the rich.

Under globalization, corpocracy has replaced democracy, and privatiza-tion has replaced or shrunk the “public sphere” in favor of corpocraticsurplus accumulation of capital and is paving the road to global serfdom.It is also producing the epic of a new global totalitarianism in the name ofmarket-oriented reform, freedom of choice, and organizational flexibility.While this may be true for the few monied elites, the reality speaks of theopposite for billions of people as well as most nation-states around theglobe. Modern organizations have become powerful instruments of glob-alization, and they have to be watched closely and carefully, locally andglobally. Under globalization, many if not most private-sector organiza-tions are no longer independent or local/national organizations; they maybe viewed as global and globally motivated, directed, and managed forrapid profit accumulation.

Similarly, public, and many nonprofit, organizations may be viewed aspowerful instruments of globalization facilitating the process of capitalaccumulation. They are in the service of global elites who are organiz-ing, reorganizing, downsizing, and transforming public and nonprofitorganizations into profit-maximizing machines and order-maintenanceinstitutions. Modern organizations have entered a new age of historicaldevelopment.

PLAN OF THE BOOK

This book is divided into three parts and ten chapters. Part I deals withsome of the major theoretical and conceptual perspectives on modern or-ganizations. It presents chapters on the diverse and interdisciplinary natureof the field of organization theory. In Chapter 1, Nicholas Henry presentsa discussion of public, nonprofit, and private organizations, their differ-ences and similarities. This is a new chapter that was missing in the firstedition. In Chapter 2, Ali Farazmand presents a long overview of many ofthe theories on organization with appraisals and with implications for so-ciety, management, and individuals. Discussions include organization the-ory from pre-classical Marxist theory to classical to contemporary theoriesof market to critical and interpretive theories.

Chapter 3, by Ali Farazmand, is an analysis of some emergent theoriesof organization, including, especially, an extensive analysis of institutionaltheories and the brand new, chaos and transformation theories with im-plications for world systems and organization theories. Chapter 4, by Ali

Introduction xxvii

Farazmand, is a full presentation of the new, original theory of organiza-tional elite. Both this chapter and the chaos and transformation theories,as well as a major part of the institutional theories of the previous chapterare original contributions of the contributing author and editor to modernorganization theory; they are new materials in the second edition. Together,these four chapters, plus the introductory chapter present the full range oftheoretical perspectives on modern organizations.

Part II deals with some major issues of organizational design, reorgani-zation of governance, change, and administrative reforms currently in proc-ess around the world. Chapter 5, by Charles Wise, is an analysis of theorganizational configuration of public organizations into a pluralistic pub-lic service delivery system. Guy Peters presents a theoretical analysis ofgovernment reorganization, reform, and change in Chapter 6.

Part III presents some central issues and critical perspectives on organi-zational theory and practice, on the relationships between organizationsand individuals with implications for administrative theory and fulfillmentof human life. Chapter 7, by Sally Coleman Selden and Frank Selden, pres-ents a discussion of diversity in public organizations, followed by an inter-esting presentation by Michael Klausner and Mary Ann Groves onorganizational socialization and culture in Chapter 8. In Chapter 9, RobertGolembiewski analyzes the negative side-effects of organizational member-ship in terms of phases of burnout that individuals may experience in mod-ern organizations; we need to be aware of what organizations can do toour health. It is followed by the concluding chapter, Chapter 10, on the“unfinished revolution” about God, Science, and administrative theory.Here, Frederick Thayer presents a thought provoking, critical analysis ofthe analogies that may be found among those practicing management, thoseinvolved in the discovery and application of scientific knowledge, and thoseexercising God’s authority on earth.

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——— (1964). Integrating the individual and the organization. New York: JohnWiley and Sons.

Barnard, Chester (1968). The functions of the executive. First published in 1938.Cambridge, MA: Harvard University Press.

Bozeman, Barry (1987). All organizations are public: Bridging public and privateorganizational theories. San Francisco: Jossey-Bass.

Clawson, Dan (1980). Bureaucracy and the labor process. New York: MonthlyReview Press.

Denhardt, Robert B. (1981). In the shadow of organization. Lawrence: The RegentsPress of Kansas.

xxviii Introduction

Farazmand, Ali (1989). The state, bureaucracy, and revolution in modern Iran:Agrarian reforms and regime politics. New York: Praeger.

——— (1991). Bureaucracy and revolution: The case of Iran. In Handbook ofcomparative and development public administration, edited by Ali Faraz-mand, 755–767. New York: Marcel Dekker.

——— (1994). The new world order and global public administration. In PublicAdministration in the Global Village, edited by Jean-Claude Garcia-Zamorand Renu Khator. Westport, CT: Praeger.

——— (1998). Introduction. Contributions of the ancient civilizations to modernpublic administration: A symposium. International Journal of Public Ad-ministration 21(1): 1–6.

——— (1999). Globalization and public administration. Public Administration Re-view 59(6) (November/December): 509–522.

——— (2002a). Globalization and privatization: A theoretical analysis with impli-cations for public administration. Public Finance Management (March).

——— (2002b). Chaos and transformation theories: Implications for organizationtheory and public management. Paper presented at the annual conference ofthe American Society for Public Administration (ASPA), Phoenix, AZ,March 23–26.

Fischer, Frank (1984). Ideology and organization theory. In Critical studies in or-ganization and bureaucracy, edited by Frank Fischer and Carmen Sirianni,172–190. Philadelphia: Temple University Press.

Gulick, Luther, and L. Urwick (1937). Papers on the science of administration.New York: Institute of Public Administration.

Harmon, Michael (1981). Action theory for public administration. New York:Longmans.

Hummel, Ralph (1976). The bureaucratic experience. New York: St. Martin’s Press.Miles, Robert (1980). Macro organizational behavior. Glenview, IL: Scott, Fores-

man.Morgan, Gareth (1986). Images of organizations. Beverly Hills, CA: Sage.Ott, J. Steven (1989). The organizational culture perspective. Chicago: Dorsey

Press.Parenti, Michael (1995). Democracy for the few. New York: St. Martin’s Press.Perrow, Charles (1986). Complex organizations: A critical essay. 3rd ed. New

York: Random House.Presthus, Robert (1962). Organizational society. New York: Vintage.Rosenbloom, David (1989). Public administration: Understanding management,

politics, and law in the public sector. 2nd ed. New York: Random House.Scott, William, and David Hart (1989). Organizational values in America. First

published in 1979. New Brunswick, NJ: Transaction Publishers.Shaiken, Harley (1986). Work transformed: Automation and labor in the computer

age. Lexington, MA: Lexington Books.Simon, Herbert (1976). Administrative behavior. 3rd ed. New York: The Free Press.Steinberg, Rafael (1975). Human behavior: Man and the organization. New York:

Time-Life Books.Tausky, Curt (1970). Work organizations: Major theoretical perspectives. Itasca,

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Introduction xxix

Taylor, Frederick W. (1911). The principles of scientific management. New York:Harper & Row.

——— (1947). Scientific management. New York: Harper & Brothers.Thayer, Frederick (1981). An end to hierarchy and competition: Administration in

the post-affluent world. 2nd ed. New York: Franklin Watts.Waldo, Dwight (1961). Organization theory: An elephantine problem. Public Ad-

ministration Review 21(4) (Autumn): 210–225.——— (1978). Organization theory: Revisiting the elephant. Public Administration

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London: Routledge and Kegan Paul.

Part I

Society and Modern Organizations

Chapter 1

Public, Nonprofit, andPrivate Organizations: Similarities

and Differences

Nicholas Henry

To paraphrase Wallace Sayre’s immortal line, public organizations are sim-ilar to private organizations in all unimportant respects. Increasingly, or-ganization theorists are writing empirical, and even useful, analyses of thedifferences between organizations found in the public sphere (that is, gov-ernment agencies, public authorities, and nonprofit organizations) andthose in the private one (that is, for-profit organizations). To a degree largerthan we public administrationists may be comfortable with, this is new.

In this chapter, we highlight some of the more intriguing findings lurkingin the literature on public versus private organizations. This review is po-tentially helpful to those who find themselves in organizations (that is, al-most everyone), whether public or private, because it can yield the readerat least some limited predictability about one’s organizational lot. To knowwhat is likely to happen in a public organization or a private one—becausethey are public or private—can render an administrator more savvy andeffective in either.

Our review begins with the individual organizational member—or, moreprecisely, pre-member—and accretes to the point of large-scale organiza-tional change. Specifically, we shall discuss the differences between publicand private organizations in terms of the motivations of people to jointhem, the kinds of satisfaction that people derive from them, the waysdecisions are made in them, the ways they are managed, and the waysorganizations in each sector change.

MOTIVATING MANAGERS: PUBLIC VERSUS PRIVATE

Public administrators have a quite different set of motivations than dotheir commercial counterparts. One of the earliest students of these differ-

4 Society and Modern Organizations

ences contrasted federal managers with those in business and concludedthat middle managers in the federal service had higher needs for achieve-ment than did their private-sector colleagues (a finding that runs directlycounter to the popular stereotype of lethargic government bureaucrats),about the same needs for power as business managers, and lower affiliationneeds (that is, their concern with acceptance or rejection by their col-leagues) (Guyot, 1962). Later research largely supports these findings(Rawls, Ulrich, and Nelson, 1975; Schmidt and Posner, 1987); one studyof graduating college students found that those students entering the non-profit sector had a stronger motivation to dominate, were less rigid, andhad a higher need for status and lower needs for wealth than studentsentering the for-profit sector (Rawls and Nelson, 1975). In fact, a study oflocal employees found “evidence to question the use of monetary incentivesystems as the primary way to motivate public employees, especially at thesenior level” (Lion and Nyhan, 1994: 112).

Most of this chapter concurs that public managers, as compared to com-parable groups in business, give lower ratings to the importance of highfinancial rewards as career goals and higher ratings to the importance ofworthwhile social or public service (Rainey, 1982; Wittmer, 1991). Theseare the most consistent conclusions of this research.

Most of the studies also agree that “public employees have greatersecurity-seeking tendencies than private employees” (Baldwin, 1990–1991:7). There are a couple of significant exceptions to this generalization, how-ever. For one, the higher that one rises in the governmental hierarchy theless security seems to be a concern (Hartman and Weber, 1980). For an-other, whereas a high need for security might apply to government em-ployees, it does not seem to pertain to the employees of other public-sectororganizations, notably those in nongovernmental, not-for-profit organiza-tions. When these workers are taken into account, the “stereotype thatpublic employees are preoccupied with job security is not supported. . . .On the contrary, the data indicates that private managers, to a statisticallysignificant degree, rate job security as more important” (Wittmer, 1991).Despite these differences in motivation among administrators in the twosectors, however, both groups work equally hard (Rainey, 1983; U.S. Officeof Personnel Management, 1979). “The findings . . . do not indicate a ter-rible malaise in the public sector if the private sector is used as a baseline”(Rainey, Traut, and Blunt, 1985: 9).

SATISFYING ADMINISTRATORS: PUBLIC VERSUSPRIVATE

Just as differing motivations account for a person’s decision to enter thepublic sector or private one, so it is that, once employed in one sector orthe other, people derive satisfaction from their work for differing reasons.

Public, Nonprofit, and Private Organizations 5

Research has found that, although employees in both sectors emphasizedintrinsic, or motivator, factors in deriving satisfaction from their work(such as opportunities for growth and attaining goals), public employees“tended to value the extrinsic, or hygienic, factors [such as relations withcoworkers, working conditions, and organizational policies] significantlyhigher than those in the private sector” (Maidani, 1991: 441). More fo-cused study supports the idea that public administrators gain considerablyhigher levels of satisfaction from a “sense of being able to make a differencein what gets done in their organizations” than do private managers (Fal-cone, 1991: 394).

Most research, however, suggests that, although the gap may be narrow-ing over time (Schneider and Vaught, 1993), public administrators are dis-satisfied compared to private managers. Polls taken of public administratorsand private managers indicate that public administrators are much lesslikely to feel that pay in their organizations depends upon performance,and that their own pay represents a reward for good performance. Publicmanagers generally express feelings that they have less security, less auton-omy, and are less “self-actualized” than are managers in the private sector(Buchanan, 1975a, 1975b; Paine, Carroll, and Leete, 1966; Porter andLawler, 1968; Rainey, Traut, and Blunt, 1985, 1986; Rinehart et al., 1969).

Although much of the research indicates that many public administratorsexperience less satisfaction with work than do most private administrators,there are some significant exceptions to this generalization. For example, ithas been found that, while college graduates and certain kinds of public-sector professionals were less satisfied with their work than were theircounterparts in the private sector, federal executives were quite comparableto business executives in terms of job satisfaction (Kilpatrick, Cummings,and Jennings, 1964). Blue collar workers in the public sector appear to bemore satisfied with most of their work than are blue collar workers in theprivate sector. White collar public-sector workers are much less satisfiedwith coworkers and supervision and show less interest in their work thando their counterparts in business (Smith and Nock, 1980).

Level of American government may also make a difference. State work-ers, for example, may be more satisfied with their work than are both theircorporate and federal counterparts (Rainey, 1979). But perhaps the mostintriguing finding is that local administrators seem to defy most consistentlythe despondency found among federal managers when compared with ex-ecutives in the corporate sector. In a study of three different surveys takenof private sector managers, federal career executives, and city managers inCalifornia, the differences among the three sets of respondents were stun-ning. Nearly three-fourths (72 percent) of the federal executives stated thatthey did not feel that they would ever fulfill their life’s ambition, comparedto only 17 percent of the city managers and 18 percent of the private-sectoradministrators. City managers and private-sector executives were upbeat


about economic, social, and political trends, and their own futures; bothcity managers and private-sector executives were consistently more opti-mistic on all these variables than were federal administrators. Two-thirdsof the city managers would advise bright young people to seek careers inlocal government, but less than a fourth of federal executives would counselbright young people to seek careers in the federal government (Schmidt andPosner, 1987).

Before closing this discussion, we should note that “job satisfaction” isa hugely studied topic in organizational research, but one that is notablyill-defined. One review (Locke, 1983) of some 3,500 analyses of job satis-faction concluded that researchers had not come to any clear agreementabout what job satisfaction even meant! So any generalizations about howsatisfied employees in the public sector are with their jobs should be madewith caution.

In sum, public administrators seem to be more frustrated in their workthan are their colleagues in private companies. Their dissatisfaction may bea consequence of uniquely high psychological needs among public admin-istrators for achievement and status, as the research indicates, relative toprivate managers, or their dissatisfaction may be attributable to objectivereality: the low levels of their satisfaction, which seem to concentrate inthe areas of promotions and rewards for work well done, “could simplyreflect more stringent norms or expectations among government managers”of their colleagues than are held by corporate executives (Perry and Porter,1982: 96).

DECISION MAKING IN ORGANIZATIONS: PUBLICVERSUS PRIVATE

An important component of one’s satisfaction in an organization oftenis one’s sense of (to employ a modish word) “empowerment,” and theessential expression of anyone’s empowerment is making decisions. Unsur-prisingly, perhaps, knowledge of financial performance is more importantto decision makers in the private sector than in the public sector (Solomon,1986; Schwenk, 1990), but deeper differences exist, too. Decision makingis less autonomous than in the private sector (Buchanan, 1975a; Gawthrop,1971; Mainzer, 1973), and procedures are more constricting (Holdaway etal., 1975; Mainzer, 1973; Millett, 1966). Professionals who have served inboth the public and private sectors at high levels note that legislators (whoare the equivalent of board directors in the business world) are less likelyto concur with public administrators on organizational objectives, are lessinformed on issues, and are less consistent in dealing with public executivesand constituents than are board members (Rumsfeld, 1979; Weiss, 1974).Such phenomena have a distinct impact on the decision-making process ofpublic organizations and require that decision makers be more aware of


their “image management,” deal with vastly more complexities and partic-ipants, and have a broader scope of decision; as a consequence, decisionmaking in the public sector is slower than in the private sector (Dahl andLindblom, 1953; Golembiewski, 1985).

In one of the larger empirical studies of public and private decision mak-ing, it was found that decision makers in public organizations did not nec-essarily make decisions slowly as a conscious act, but there seemed to bea clear tendency toward a “vortex-sporadic” style of decision, by whichwas meant that decision makers in public organizations tended to inter-mittently swirl through a series of intense meetings and conversations witheach other when making decisions. This study of thirty British public andprivate service and manufacturing organizations also found that decisionmakers in public organizations were much more likely than those in privateorganizations to engage in more interaction with other members of theorganization when making decisions (Hickson, Butler, Cray, and Wilson,1986).

A survey of over 200 “upper managers” in thirty-nine public and privateorganizations in Syracuse, New York, substantiated the findings of otherstudies that decision making is more participative and sporadic in the publicsector than in the private sector: “publicness is associated with greater de-cision participation but not smoothness” (Coursey and Bozeman, 1990:525). Another study found a much greater tendency among not-for-profitorganizations to “recycle” decisions back to earlier stages in the process,supporting the observation that decision making in the public sector in-volves far more “steps” than in the private sector (Schwenk, 1990).

Another analysis based on the Syracuse data was more explicit: “Theimage of public organizations that emerges is one of little organizationalcoherence in the identification of strategic decisions. In addition, the abilityof top-level managers to control the decisions and actions of their organi-zations is called into question.” Whether the sector is public or private“creates substantive differences” in decision-making (Kingsley and Reed,1991: 409).

One difference is the role of conflict. Research on forty executives in for-profit and not-for-profit organizations (Schwenk, 1990) found that execu-tives in both types of organizations found conflict to be unpleasant, but thefor-profit executives found conflict to be more unpleasant than their not-for-profit counterparts. For-profit executives were more likely to believethat conflict resulted in decisions of poorer quality, whereas not-for-profitexecutives thought just the opposite—that conflict defined issues moresharply and therefore produced better decisions! In addition, conflictemerged earlier in the decision-making process in not-for-profit organiza-tions than it did in for-profit ones.

In the public sector, organizational decision making is rougher, broader,and slower than it is in the private sector.


MANAGING ORGANIZATIONS: PUBLIC VERSUS PRIVATE

These unique characteristics of public-sector decision making translateinto a unique style of management. Administration, of course, involvespeople and forces “outside” the organization (that is, in the organization’stask environment), as well as “inside” the organization, and we considerthese in turn.

The Heavy Hand of Constituents

Public managers are faced with “accomplishing” enormously complexbut ill-defined objectives. Goals are vague, and public organizations areappropriately sprawling as structures meant to achieve the vagaries of largeorganizational missions; judging organizational effectiveness, as a result, isdifficult. These unique problems of management in public organizationsare attributable to forces in their highly politicized task environments, suchas legislatures, pressure groups, and elected chief executives, that constantlytry to use public organizations for political as well as programmatic, eco-nomic, and social purposes (Eling, 1983; Kaufman, 1981; Lynn, 1981; Rip-ley and Franklin, 1975).

As a result, caution prevails, and innovation is less likely (Schultze, 1970;Golembiewski, 1985). Studies have found that public executives spend con-siderably more time in contact with outside groups than do topadministrators in the private sector. Moreover, the style of interaction thatthe public manager has with external interest groups is far more formal,as well as more frequent, than is the style of private-sector managers (Kurkeand Aldrich, 1983; Mintzberg, 1979).

There is also a greater sensitivity to clientele groups displayed by publicmanagers relative to private managers. One review of the findings on thistopic concluded that, “the ‘insensitive’ stereotype [of public administrators]typically evokes images of public employees who are uncaring, inflexible. . . and generally inept in dealing with the public. Although the numerousfindings related to this image are generally mixed, the modal finding indi-cates that public employees are more sensitive than private employees.[Overall, this research shows that] public employees value qualities asso-ciated with sensitivity, empathy, broad mindedness, good interpersonal re-lations, forgiveness, politeness, helpfulness—more than or equal to privateemployees” (Baldwin, 1990–1991: 9).

The Slippery Slope of Stakeholders

Just as administration that is oriented to “external” clienteles in publicorganizations differs from that of private organizations, so it is that ad-ministration which is directed to “internal” organizational affairs is differ-


ent in public organizations. For example, delegating authority tosubordinates and controlling the behavior of subordinates are more difficultin the public sector than in the private one, (Golembiewski, 1969; Macy,1972; Meyer, 1972; Rumsfeld, 1979), in part because public executives areallowed to select significantly fewer of their own subordinates than arecorporate business executives, but also because subordinates often can de-velop allies to assist them in undermining their superiors in the highly po-liticized task environment outside in which agencies function.

One kind of organizational ally, and one who, in contrast to the typejust described, is wholly positive is the mentor, or an experienced memberof the organization who takes a younger member under his or her wing.In a comparison of mentoring in public and private organizations (Hen-derson, 1985), it was found that public administrators were more likelythan were their counterparts in the private sector to find a mentor outsideof the organization in which they worked; often, the mentor of a youngpublic administrator is a former professor. Public administrators also areless likely than their private counterparts to find mentors at the top rungsof the organization, a condition that may reflect the relatively frequentturnover of top political executives. Both public and private administrators,however, found the influence of mentors on their career development to be“substantial,” and one study of Senior Executive Service of the U.S. gov-ernment concluded that these top federal administrators believed their earlymentors to have been central to their professional success (Little, 1991).Research on mentoring in county government found that “emotional sup-port, access, and feedback are critical dimensions” of mentoring in publicadministration (Altmeyer, Prather, and Thombs, 1994: 387). Women andmen seem to be equally talented at mentoring and mentor at roughly thesame rates (Ragins and Scandura, 1994).

On a wider scale, it also appears that priority setting and planning—basic tasks of administration—differ dramatically in the public sector. Plan-ning and setting priorities are considerably harder because of unfocusedorganizational goals and higher turnover among top executives (Buchanan,1975a; Gawthrop, 1969).

These difficulties are compounded by a more complex work situationthat is unique to public organizations. A study of top-level data managersconcluded that data managers in the public sector had to deal with “greaterlevels of interdependence across organizational boundaries . . . higher levelsof red tape . . . [and] more procedural steps for a specific management ac-tion” than did those in the private sector (Bretschneider, 1990: 537).

These complexities of working life in the public sphere, and the relativelystraightforward realities of working in the private one, seem to result inpolar opposites in defining just what effective administration is in eachsector! One study of executive work behavior compared managers in citygovernments with managers in industry and concluded that the public man-


agers had little control over how they used their time and thus accordedscant effort to “time management,” relative to the corporate managers.Urban managers were considerably more beset by forces in their organi-zations’ task environments than were private ones; they spent less timealone in their offices, less time on planning, were more “rushed” to getthings done, and spent nearly twice as much time on the telephone thandid corporate managers (Porter and Van Maanen, 1970). Similar researchhas found that public managers devote far more time to crisis managementthan do the private managers (Lau, Pavett, and Newman, 1980).

More significantly, effective managers display quite different work be-haviors depending on whether they work in the public or private sectors.More effective public administrators are more flexible, planned less, andhave less control over their time than do industrial managers. Less effectivepublic administrators spend more time on planning their time than do themore effective public managers, but quite the reverse holds true in the pri-vate sector: less effective private managers spend less time planning theirtime than do more effective private managers (Porter and Van Maanen,1970).

Because public administrators must deal with a more intrusive and po-liticized environment than private managers, both the nature of their workand the evaluation of their performance differ. One study concluded thatprivate managers outperformed public administrators when it came to ex-pressing and achieving organizational goals, in large part due to an absenceof clear measures of performance (e.g., profits) for public administrators.Because private managers were able to define organizational objectivesmore concretely than were public administrators, and because internal pro-cedures in the companies studied were less subject to influence by outsideinterests than in the government agencies, more strategic planning wasmade possible and used more frequently by corporate managers (Boyatzis,1982).

CHANGING ORGANIZATIONS: PUBLIC VERSUS PRIVATE

Finally, we consider that largest of organizational phenomena: changeitself. And even here, being in the public or private sphere makes a bigdifference.

Organizations change either because the people in them perceive thatchange is needed or because the environment objectively induces change.The latter phenomenon is more common among public organizations.

Anthony Downs was among the first theoreticians to assess the impactof the public organization’s task environment on its structure. Downs sug-gested that organizations deprived of free market conditions in their envi-ronments (such as public organizations) were more pressured to createadditional layers of hierarchy than were organizations that functioned in


the marketplace. Because it was so much more difficult for public organi-zations to measure output than it was for private organizations (which hadan “automatic” measure of output called the profit margin), internal ruleswere needed to control expenditures, assure fair treatment of outsidegroups, and coordinate large-scale activities. The presence of these rules, inturn, demanded extensive internal monitoring to ensure compliance, andsuch monitoring meant more reports, and more communication, and morechecks. Thus, Downs’ “Law of Hierarchy” is a function of how an organ-ization reacts to its task environment. Other theorists have expounded onthese ideas by explaining those elements in the environment that shape theinternal structure of public organizations: legislatures may do so by statute;accounting and budgeting bureaus may mandate highly bureaucratizedrecord-keeping procedures; interest groups may pressure for internalchanges; and so forth (Warwick, 1975).

A somewhat different view of the role that environmental factors playin the dynamics of public organizations also has surfaced. This perspectiveaccepts that the task environment has an unusually salient impact on publicorganizations, and that public organizations react to these impacts by “bu-reaucratizing”—that is, by adding on increasingly complex mechanisms.However, such bureaucratization is not a sign of resistance to new demandsfrom the environment but is instead one of eagerness to accommodate thosedemands; “additional layers of hierarchy result in part from their opennessto their environments” (Meyer, 1979: 5). This is a more upbeat view, butthe consequence is the same: bureaucratization.

Whether the motivation is to resist or respond to demands from the taskenvironment, bureaucratization of the public agency nevertheless is the re-sult. Later, more empirical research suggests that the two major environ-mental sources of “red tape” in public organizations are “external rulesand laws concerning such functions as personnel and procurement” (Rai-ney, Pandey, and Bozeman, 1995: 567). How public administrators dealwith this bureaucratization, however, differs from how their counterpartsin the private sector deal with it. This study of 566 top public and privatemanagers (about evenly divided between the two types) found that bothsets of executives agree in roughly equal measure on the need to enforcerules but that public administrators were much more likely to believe thattheir agency’s rules resulted in their professional performance being inad-equately recognized and rewarded in terms of pay and promotion.

In sum, public organizations are pounded by a far heavier hand, in theform of their task environments, than are private ones, and this poundinghas made public organizations more bureaucratic—often in the worst senseof the word—than are private organizations. But other differences emergefrom this pummeling, too, including how public organizations deal with a“declining environment,” or an environment that threatens the future ofthe organization.


A classic study of a university library that was in the process of admin-istratively breaking down because of too many demands and not enoughresources sheds some light on how public organizations deal with increas-ingly harsh realities. The researcher wanted to know how an institutionwithout the benefits of functioning in a free-market environment, wherethe price of the product could be raised to reduce demand, responded toenvironmental overload (Meier, 1963). He delineated fourteen strategiesused by such organizations to cope with rising levels of demand, includingqueuing (for example, keeping library patrons in waiting rooms “outside”the organization), decentralizing (such as by creating branch offices), cre-ation of a mobile reserve (such as teams of personnel transferable to unitsas needed), the setting of specific performance standards followed imme-diately by a reduction of those standards, a “brainstorming” search for a“magic formula,” promotion of self-service (for example, letting patronsinto the stacks, which is a radical strategy because it represents a deliberatereduction of organizational sovereignty), the limitation of work to capacityas determined by rigid, ritualistic rules and characterized by the denial oferror and the refusal of challenge (in other words, the kind of bureaucra-tization that we associate with totalitarian political systems), and, ulti-mately, the dissolution of the organization.

The library, in a very real sense, had no choice but to play out thisscenario. It did not have the control over demands from its environmentthat, say, International Widget would have had. International Widget couldsimply hike the price of widgets and thereby reduce demand, or overload.But the library—and, presumably, any public organization—did not havethis option. It had to adjust internally.

One can infer from this case study that, as a declining environment forcespublic organizations to change, the organization’s response grows less ra-tional, more “bureaucratic,” and more negative as its environmental con-ditions worsen. More systematic research supports this conclusion. Asurvey of 1,312 administrators and board chairs of small, independent col-leges found “that as a college moved from moderate to severe decline itexperienced a significant increase in five organizational responses: (1) cen-tralization of decision making, (2) no long-term planning, (3) high em-ployee turnover, (4) resistance to change, and (5) loss of excess resources.”Even slow growth, no growth, or moderate decline produces “the politi-cizing of the college’s climate” and an acceleration of “special-interestgroup activity” (Sellars, 1994: 13).

Nevertheless, it does appear that public organizations do find ways ofdealing with a declining environment that private organizations seem un-able to undertake. In a fifteen-year study of the ten “provinces” of thelargest religious order in the United States (the Jesuits), it was found thatthis public organization dealt with an increasingly challenging environmentby increasing cooperation among its provinces (or subunits) and placing a


priority on the internal communication. “There is little reason to believethat this would have happened without the trigger of decline” (Ludwig,1993: 54).

This kind of interorganizational coordination does not appear to occurin private-sector organizations; at least one study has concluded, for ex-ample, that cooperative, interorganizational “strategic capacity” in a hos-tile environment is essentially unobtainable to private firms (Harrigan,1980).

But this possible advantage is not without its costs. The intensifying co-operation and expanding linkages among subunits within the organizationrenders the central administrator’s role more complex and his or her powerweaker: “the administrator’s role changes from autocrat to facilitator”(Ludwig, 1993: 54). So, just as the college library experienced a loss oforganizational sovereignty when environmental overload swamped it, sothe individual public administrator loses managerial autonomy when inter-organizational cooperation and information sharing is used as a strategyto cope with an environment which is growing more difficult for the or-ganization to thrive in.

ARE PUBLIC ORGANIZATIONS DIFFERENT?

We have contended in this chapter that the sector—public or private—in which an organization finds itself makes a big difference in how anorganization and the people in them behave. Traditionally, organizationtheorists, by and large, have rejected this distinction: “virtually all the ma-jor contributors to the field [of organization theory] were conceived toapply broadly across all types of organizations, or in some cases to con-centrate on industry . . . the distinction between public and private organ-izations receive short shrift. In some cases, the authors either clearly impliedor aggressively asserted that their ideas applied to public, private, and othertypes of organizations. . . . Public organizations as a distinctive categoryreceive sporadic, speculative attention, with the clear implication that theirdistinctiveness plays a minor role compared to other influences” (Rainey,1997: 55).

Without doubt, the public/private distinction sometimes cloaks otherkinds of organizational differences which function at a deeper level thansociety’s convenient but shallow categories of “government” and “busi-ness.” For example, one study of how federal, state-and-local, and privatesector managers implemented policy found that the state and local admin-istrators and the private managers approached implementation in a fashionthat was quite similar to each other, and that only the federal administra-tors differed (McGowan, Spagnola, and Brannen, 1993)! The public/privatedistinction obviously did not explain these differences. Other research alsohas found that the public/private distinction to be inadequate as an ex-


plaining variable in predicting organization behavior, and other dimen-sions, such as organizational scope and vulnerability to the taskenvironment, may have greater explanatory power (McKelvey, 1982; Pugh,Hickson, and Hinings, 1969). Admittedly, the public/private distinctionsometimes is used as a “first-pass” that may not always apply in everyanalysis; it may well veneer more profound and important realities; it isnot perfect. But sector does seem to work rather well as an explanatoryvariable—and a simple, understandable, and consistent one—in most cases.

So, yes, public organizations are different.

NOTE

Portions of this chapter are adapted from Nicholas Henry, Public Administrationand Public Affairs, 7th ed. (Englewood Cliffs, NJ: Prentice-Hall, 1999). � 1999.Adapted by permission of Pearson Education, Inc., Upper Saddle River, NJ.

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Chapter 2

Organization Theory: From Pre-Classicalto Contemporary and Critical Theories—

An Overview and Appraisal

Ali Farazmand

INTRODUCTION

Modern organizations are complex, and understanding this complexity re-quires advanced knowledge and experience. Knowledge about organizationtheory and behavior is abundant, but the field is still developing with ad-vancements being made in various dimensions and with significant impli-cations for public administration and management. Theories attempting toexplain organizations and to predict their future actions or behaviors haveproliferated with applications in public and private sectors around theglobe. Theories simplify, and by simplification we attempt to bring phe-nomena under a focused lens to see and understand them better. Theories,then, like models, serve to explain and help us understand what happensin our surrounding world. They claim to represent reality, or they are “in-terpretations of reality” (Morgan, 1986: 12).

But simplification may also pose a danger of biased frame of mind tothe exclusion of unfavored or disliked phenomena. Consequently, gener-alizations about reality may in fact turn out to be unrealistic. As CharlesPerrow (1979, 1986) argues, over the past seventy years theories of organ-ization have produced realities that do not exist (cited in Fischer and Sir-ianni, 1984: 4). Thus, what is seen as a reality may be a social creation ofreality and, hence, a false consciousness of reality. True reality may requirecritical and interpretive thinking, a process of maturation and developmentthat enables us to see and understand phenomena in our surrounding en-vironment. Organizations play a fundamental role in the creation of socialreality. And the larger and more powerful the organizations are, the greaterthe possibility of planned, goal-directed, strategic organizational actions


that not only influence the surrounding environment but alter them alto-gether. The role of the giant organizations and multinational corporations,backed by their supportive political and military-security organizations ofpowerful states, is so formidable that few if any can escape their effects(Perrow, 1979, 1986; Morgan, 1986; Scott and Hart, 1989). Bertram Gross(1980) has called this new trend of large, centralized organizational per-vasiveness and the rise of bureaucratic capitalism “friendly fascism,” withits principal agent “the organization man” (Whyte, 1957) “replacing thefree-market entrepreneur, yet we are still guided by free market capitalism”(Fischer and Sirianni, 1984: 3).

Organization theory is a fast-growing and fascinating field that is mul-tidisciplinary or interdisciplinary in nature. Contributions have come fromsuch diverse fields or disciplines as sociology, cultural anthropology, biol-ogy, psychology, management, political science, and public administration.Research on aspects of organizations has focused on different levels of anal-ysis. Micro, macro, and meso or in-between levels of analysis have beenused to explain the complexity, ambiguity, and paradoxical nature of or-ganizations. At the macro level an organization is analyzed as a whole andin relation to the outside environment, while the micro analysis deals withissues and aspects concerning individuals and tasks within organizationsand in connection with each other. At the meso or in-between level, thegroups and their various aspects are analyzed. Different approaches to an-alyzing organizations have produced different perspectives and images, andtogether they have contributed significantly to our knowledge about or-ganizations, their nature, their actions, and their inactions—hence, organ-ization theory.

Most theories developed so far about organizations have had a mana-gerial ideology or bias; that is, they have been developed for managerialimplications. Few theories have been advanced that are either critical ofthe managerial biases or attempt to explain the other side of organiza-tions—that is, the individual side and what organizations do to society andpeople. Critical theories are among the latter, which originate in the grandworks of John Stuart Mill, Gaetano Mosca, Robert Michels, Emanuel Kant,Karl Marx, and Max Weber, and some others like Jean Paul Sartre. Someof the more well-known organization theories that are treated in this chap-ter include classical or formal theory, also called functional/structural the-ory; neoclassical decision theory; behavioral theory; systems theory;contingency theory; market and transaction-cost theories; agency theory;informal theories; organizational humanism theories; population-ecologytheory; critical and interpretive theories; Marxist theory and Marx’s alien-ation theory; Habermas’ neo-Marxist theory; and non-Marxist theories ofnatural selection, integrative, and non-hierarchical models. Other well-known and emergent theories presented in the following chapters includegarbage-can theory; institutional and neo-institutional theories; chaos and

Organization Theory 21

transformation theories; and organizational elite theory. The following isa synoptic view of the theories, presented in the current chapter, of modernorganization with implications for three groups: managers, individuals(both organizational members and citizens outside organizations), and so-ciety. Discussion of each theory is followed by a brief critique.

MARXIST AND NEO-MARXIST THEORY

Although known mostly for his philosophical and revolutionary theoriesof economic and political systems, Karl Marx (1818–1883) had perspec-tives and views on organization theory and social action that are impossibleto ignore in any major social science discussion. In organization theoryMarx’s views have powerful implications for administration and society.His perspectives on organization and society relate directly to the funda-mental issues of hierarchy, power, autonomy and freedom, authority, dom-inance, equality, inequality, contradictions and crises, change, andrevolution; hence, they pertain directly to the question of organizationalrole in governance of society, in social change, and in individual develop-ment.

At the risk of some oversimplifications, Marx’s views seem to centeraround the basic issue of dialectical change and its three principles foundin Frederick Engels’ Dialectics of Nature (1873). These principles include:(1) “the mutual interpretation (struggle, or unity) of opposites; (2) the ne-gation of the negation; and (3) the transformation of quantity into quality”(Morgan, 1986: 258). The constant changing nature of organizations as aresult of continuous tensions and contradictions between opposites and asa consequence of developmental changes rejecting changes leads to a trans-formation of quantitative changes to qualitative changes in society and itssystems of governance as well as its economic and social relations. This isaccomplished either by peaceful means or by social revolutions. Everythingin society, including its organizations and administration, is in a constantchanging process. While good elements of the past are promoted and othersare rejected, new changes lead to developments that in turn generate theirown contradictions, which may result in more changes. This is the dialec-tical process of change, which includes both positive and negative elements:contradictions leading to crises leading in turn to revolutionary changes,and complementary changes strengthening each other and leading to morequalitative changes in society. Thus, this is a historical view of the dialec-tical relationship between past and present, between present and future,and between opposite elements within the present.

In capitalism, which is the main focus of Marx’s analysis, the organiza-tion of the economic system and its social relations are dictated by theforces of capital, and labor is subordinated to those forces. The contradic-tions between labor and capital are irreconcilable, for they are two opposite


forces, each seeking to further its own interests. The organizations of mod-ern capitalism employ labor and other materials that are subordinate tocapital and its accumulation. There is a system of domination of labor—whether blue collar or white collar middle class—by capital, which ownsthe means of production. The modern organization of capitalism promoteshierarchy and domination, for it is the capitalists who hold the authorityand power and, therefore, dominate the rest of society. Thus, organizationis a rationalizing instrument of control, domination, capital accumulation,and repression; should labor resist capital’s increasing exploitation of itssurplus value, it would be denied a basic or equitable share. Modern or-ganizations are instruments of exploitation, domination, control, and re-pression of the working class and middle class who are dependent on thecapitalist ruling class.

Modern organizations perform conscious, rational, strategic functionsdecided upon by the capitalist ruling class who control them. The capitalistclass rules by means of interorganizational relationships in the form of“interlocking boards of directors” (Hall, 1991: 284), as well as internalorganizational rationality—hence, a “classwide rationality” (Useem, 1979;Moore, 1979). By occupying key governing positions of organizations, orby appointing their loyal confidants, the ruling class seeks not only to main-tain but also to enhance its position through active participation in thegovernance of modern organizations. As Richard Hall (1991: 285) notes,“there is strong evidence in regard to the presence and role of interlockingboards of directors” in almost all major organizations of modern society.

According to this theory, the same process is found within organizations.Organizations operate within an overall system of political, economic, andsocial relations that determine their parameters; they do not operate in avacuum. Organizations change as their environments change, and changesare imperative within organizations, for the internal contradictions andtensions generate demand for changes, and quantitative changes within or-ganizations lead to qualitative changes. There is a hierarchy of administra-tive authority that tends to dominate the rest of the organizationalmembers. This itself generates contradictions that develop between theleadership—as well as its ownership—and organizational members over awide range of issues from salaries and benefits to the exercise of power,decision making, and control. As new changes replace the old system, theygenerate their own negations and contradictions. For example, in capitalismthe capitalist dominates and dictates society and its socioeconomic rela-tions, it generates its own degenerating or destructive forces, and the or-ganizations operating under this system are also subject to the samedialectical processes.

Formalization, depersonalization, and bureaucratization of the nine-teenth-century organization of European industrialization led to the in-creasing development of informal organization; the same happened in the


United States in the early twentieth century (this is discussed in more detaillater). The struggle between hierarchical command of superiors and sub-ordinate members of an organization is another example of generating con-tradictions, tensions, and ultimately crises resulting in further changes.

Although not a Marxist, Frederick Thayer, a contemporary organizationtheorist, in his provocative work An End to Hierarchy and Competition(1981), makes a formidable argument against hierarchy and competition,two of many modern bureaucratic organizational characteristics that gen-erate destructive forces of inequality, domination, and so on. He proposesa consensual relationship in organizations where consensus and coopera-tion replace hierarchy of command and competition (Thayer, 1981).

Theory of Alienation

Marx’s analysis of modern organizations may also be found in his viewof bureaucracy, which is dominating and alienating. “Bureaucracy is a cir-cle no one can leave. Its hierarchy is a hierarchy of information. . . . Theuniversal spirit of bureaucracy is the secret . . . , the mystery sustainedwithin bureaucracy itself by hierarchy and maintained on the outside as aclosed corporation. . . . Bureaucracy is the imaginary state beside the realstate, the spiritualism of state. . . . Thus, everything has a double meaning,a real and a bureaucratic meaning” (Marx, 1967: 185–187: also in Fischerand Sirianni, 1984: 40–41).

Marx’s theory of alienation—both self and work alienation—is acknowl-edged even by supporters of capitalism and modern organization theoristswho continuously conceptualize ways of reducing it to promote organiza-tional productivity. His argument that the modern organization of capital-ism alienates workers and employees who, by performing in bureaucraciescharacterized by high division of labor, work standardization, and imper-sonalization, cannot identify themselves with the outcome of their laborhas profound impacts on modern social and philosophical thoughts. Ac-cording to Marx, organizational members become cogs in the machineowned and controlled by outsiders—capitalists. Being involved in only afraction of the production process or services rendered and having no con-trol over the type or nature of these products or services in modern organ-ization, the workers/employees feel alienated from their work, for they seethemselves as aliens; there is no personal attachment to the outcome oftheir labor and to the organization in which they work. This results in-creasingly in self-alienation, a phenomenon that emanates from the workthat is external and the self who is no longer a total person. Work is ex-ternal to worker; “in his work, therefore, he does not affirm himself butdenies himself, does not feel content but unhappy, does not himself developfreely his physical and mental energy but mortifies his body and ruins hismind. The worker therefore only feels himself outside his work, and in his


work outside himself. He is at home when he is not working, and whenhe is working he is not at home” (Marx, quoted in Tucker, 1978: 74).

Marx pays close attention to individual human beings whose capacitiesfor development and happiness are great, but these capabilities are con-strained or suppressed by conditions set by the ruling capitalist class, whichorganizes its institutions of governance and administration. The individualhas no autonomy of action to develop himself or herself in whatever wayshe or she freely chooses. Marx’s argument, therefore, is that it is not suf-ficient to understand or explain organizations, but it is imperative to changethe conditions that cause us suffering and unhappiness. By critically reflect-ing on the human condition and the suffering promoted by social domi-nation, “we are compelled to act to increase our autonomy andresponsibility, both for ourselves and for our society” (Denhardt, 1984:26). Observing Marx’s ideas correctly, Robert Denhardt (1984: 26) notes“the connection between reflection and action, between theory and prac-tice, is very close.” However, despite its powerful foundations, the Marxisttheory of organization seems to overlook the complexity of human nature,which is inherently conflict producing, not only among the class but alsoamong and within individuals at work and home alike. Human nature issimplified and human ability for cooperation and interest in reaching har-mony among each other, even within the same social class, is overstated.At the same time, human potential for conflicts, disagreements, and seekingpower is understated by Marxists.

Few organization theorists have recognized and paid attention to Marx’sanalysis of organization. Denhardt (1984), Gareth Morgan (1986), FrankFischer (1984), Michael Harmon (1981), and Thayer (1981) are among thefew exceptions, though Marx’s theory of alienation seems to have receivedmore attention than his political and philosophical ones. Much of organi-zation theory literature seems to be obsessed with rationality, efficiency,and control.

CLASSICAL/FORMAL THEORIES OF ORGANIZATION

Four major theories of formal organization constitute the early stage ofknowledge development in the field: Frederick W. Taylor’s “scientific man-agement” (1947), Luther Gulick and L. Urwick’s “principles of adminis-tration” (1937), Henri Fayol’s “principles of management” (1949), andMax Weber’s “ideal-type bureaucracy” (1947, 1968). But Georg Hegel’stheory of bureaucracy must not be ignored; its differences from as well assimilarities to Weber’s ideas are also explored (see Shaw, 1992).

The fundamental aspects of the classical/formal organization theory liein the formal structure in design and the technical rationality in the proc-esses of organizations toward maximizing internal efficiency while main-taining administrative control over organizational members and operations.


Unlike Marx, who views modern organizations from a critical perspectivefor taking social action to change their dominating conditions, classical/formal theorists’ main emphasis is on the internal efficiency and controlthat these modern organizations bring about; their external environment isa given.

A German sociologist, Weber was highly influenced by Marx’s writings,as Weber acknowledges himself (1947). But, unlike Marx, Weber promotesthe structural-functional theory of organization, rationalizing capitalism.To him, bureaucracy and capitalism are inseparable (1947). His ideal-typebureaucracy is, according to Weber, the most efficient type of modern or-ganization for policy implementation as well as the most effectiveinstrument of administrative and political control. In contrast to the tra-ditional and charismatically run organizations in which rationality is lostto traditional norms and the personal will of the ruler, the ideal-type bu-reaucracy is based on legal and rational principles that determine its struc-tural design, operational processes, and normative values. It is characterizedby a clear line of hierarchy and chain-of-command system, division of laborand increasing degrees of functional specialization, formal rules governingthe internal operations, formal and task-oriented communication, merit-based recruitment and promotion, and maintenance of files and records forfuture administrative action. Such an organization is a machine-like systemthat maximizes efficiency and control, hence rationalizing the modern state.

According to Weber, the more developed and industrialized the society,the greater the degree and extent of bureaucratization it will experience.And increased state ownership would also mean increased bureaucratiza-tion of society. Bureaucratization of society is inevitable for attaining highefficiency and control. Weber is, however, ambivalent about the power ofbureaucracy, which, he contends, has a tendency to “overtower” itself andto permeate society (Weber, 1947).

Weber’s ideal-type bureaucracy has been the subject of numerous studiesin various disciplines, including political science, management, and publicadministration. Critics argue that his bureaucratic organization, while itmay produce efficiency, has a tendency to dehumanize organizations andto promote red tape and delayed decision making, as well as being inflexibleand rigid in rule application. It is also argued that in the real world oforganizations, the ideal-type bureaucracy does not work or even exist (seeBennis, 1965), and that it is culturally biased and its knowledge is inher-ently against its fundamental principle of hierarchy (Thompson, 1961). De-spite the criticisms, however, Weber’s ideal-type bureaucracy as a model oforganization has invaded the modern world of public, private, and non-profit sectors. It is safe to say that most organizations in the modern worldare designed bureaucratically and seek maximum efficiency.

Hegel’s theory of bureaucracy (1976), although not widely studied yet,has powerful utilities. While both Hegel and Weber tend to stress the ra-


tionality of the modern state and its organizations, they differ fundamen-tally. For Hegel, bureaucracy is based on knowledge and practical wisdom(1830, 1975) while for Weber, it is based on technical expertise and itsapplication in modern organization—an instrumental rationality. Hegel’stheory needs yet to be developed.

Taylor’s scientific management theory is perhaps one of the most influ-ential classical theories. Focusing on internal efficiency maximization, workstandardization, separation of managerial functions from operational func-tions, and maintenance of effective managerial control, Taylor’s principlesof scientific management rely fundamentally on formal, structural designof modern organizations. It is a “machine model” of organization. Its basicpremises emphasize managerial supremacy in exercising unchallenged au-thority for the achievement of maximum organizational control, internalefficiency, and productivity. The only motivator managers can and shoulduse in achieving these goals is material rewards offered to workers.Through time and motion studies, managers can and should find out (bylearning from workers who already know) one best approach to get jobsdone and tell workers what to do, when to do it, and how to do it, andnever to question why (Taylor, 1911).

While Taylorism has been adopted in industry and government in theUnited States and around the world, its critics have argued that Taylorismwas fundamentally a managerial strategy to monopolize the workplace au-thority during the labor struggles of the industrialization period, 1880–1920, and to establish organizational control and worker exploitation bycapitalists. This was accomplished in the hands of the modern professionof management. The result was growing labor opposition to Taylorism andscientific management leading to numerous worker strikes. One majorstrike took place against it at the federal government’s Watertown Arsenalin 1915 and the subsequent congressional hearings that elevated Taylorismto “the level of national concern” (Fischer, 1984: 177; Braverman, 1974;Clawson, 1980). Indeed, according to Dan Clawson (1980), Taylor neverconducted any study that would approximate scientific experiment, and theincreasing productivity had little to do with Taylorism.

Although decades have passed since the golden age of Taylorism and itsrigid structural and functional dominance that led, ironically, to the low-ering of organizational efficiency, today’s technologically advanced andmanagerially improved organizations of modern society are operating withan even more sophisticated, Taylorized system of management than thecontrary slogans of democratization and workers participation have beenpopularizing (Shaiken, 1986). The bottom line in modern organizations ismanagerial control and increased productivity, not employee/worker’s hap-piness and development (Shaiken, 1986; Scott and Hart, 1989; Morgan,1986; Perrow, 1979, 1986; Fischer, 1984; Thayer, 1981).

Other formal/classical theories of organization include Gulick and Ur-


wick’s universally value-free principles of organization. Their theory is usu-ally identified by the acronym POSDCORB, which stands for planning,organizing, staffing, directing, coordinating, reporting, and budgeting.These principles integrate structural and functional aspects of organizationswith managerial and administrative control. The design of numerous fed-eral agencies and organizations, as well as reorganization of the federalexecutive bureaucracy in the United States, was one result of the variouspresidentially formed study commissions on improving government effi-ciency during the 1930s and 1940s. Gulick was one of the key membersof these committees.

French theorist Henri Fayol extended the principles of management,which included not only Gulick and Urwick’s who borrowed from him,but also enlarged the list of principles to fourteen, all in structural andfunctional lines. The formal theories of organization were highly preoccu-pied with the central concepts of structure, managerial control, efficiency,and work deskilling by excessive work standardization. As such, they weremanagerially biased and reflected the social and political movements of theearly twentieth century in which industrial workers played a significantrole. Also during that time were the rapid industrialization and the rise ofcorporate capitalism requiring “organizational personality” for maximizingrationality. The rise of the large-scale corporate bureaucracies was inevi-tably accepted as a “necessary evil” because of their ability to bring foodto the market during times of need (Schumpeter, 1950, 1955).

The result was bureaucratization of society and dehumanization and al-ienation of workplace bureaucratic organizations with social, economic,political, and psychological consequences. Both corporate capitalism andsocialist states achieved a high degree of rational accomplishments duringthis period, but both systems have failed in improving human conditions.Both contributed to the rise of the bureaucratic state dominated by a cen-tralized, inner circle elite with an interlocking network of political, eco-nomic, and administrative memberships—an iron web of formidable powerblocs that has masterfully utilized psychological, political, and economictools of human manipulation to maintain and enhance its interests. Havinglost in the global competitive struggle, the socialist states have virtuallypaved the way for capitalist power elites to dominate globally with littleor no challenge. The new organizational elite will play a more leadingglobal role of structural integration and administrative domination.

INFORMAL THEORIES OF ORGANIZATION

The formal theories of classical organization produced their own antith-eses. One of the most important and well-known such antitheses is thehuman relations theory of organization, born out of the experiments con-ducted at Western Electric Company at Hawthorne near Chicago in the


1920s. Examining the effect of working conditions on productivity, EltonMayo, F. J. Roethlisberger, and William J. Dickson, and their associatesfound a positive relationship between employee/worker morale and pro-ductivity (Mayo, 1933; Roethlisberger and Dickson, 1939). Their findingsled to the foundation of the significance of “informal organization” and of“the logic of sentiments” in designing and managing modern organizations,a phenomenon long neglected and in fact considered unimportant by Tay-lor’s machine. That model assumed workers were mere cogs in the machineand viewed workers/employees by nature as economic animals moved byeconomic incentives only.

Adopting almost totally Vilfredo Pareto’s (Henderson, 1935) optimalityideas regarding the imperative of maintaining “equilibrium,” Mayo and hisassociates viewed organizations as social systems that must constantly strivefor such status and avoid or eliminate causes of disequilibrium. Humanelements must be taken at least equally seriously if not more seriously thanthe technical side of organizations. Therefore, a balance must be main-tained between technical and human elements, between the formal andinformal, and between efficiency and sentiments. Later, the contributionsof Chester Barnard, Chris Argyris, and Douglas McGregor developed fur-ther the foundations of the human relations school to what has been es-tablished as a theory of organizational humanism (to be dealt with later).While Barnard may belong to the classical category, his consideration oforganizations as a “system of consciously coordinated personal activitiesor forces” (1968: 72) separates him from the earlier theorists. Reflectingthe labor discontent of the Great Depression during the 1930s and thefailure of Taylorism to increase productivity by managerial command, Bar-nard’s views seemed novel in bringing the value of treating employees de-cently into the system of organizational structure and process. To Barnard,without people, there is no organization, and without human cooperation,there is no sound management.

Barnard’s emphasis on communication and persuasion, employee coop-eration, and sound leadership decision making constitutes the essence ofmodern organizations. The crucial task of modern managers/leaders is toperform these fundamental “functions [of the executive]” to achieve a max-imum balance between the technical and human dimensions of organiza-tions. However, when faced with a crisis of survival, the collectivity oforganization as a system must be given priority over the individual; hence,“survival of the fittest.” As Barnard put it, individuals in organizations havea “dual personality—an organization personality and individual personal-ity” (1968: 88). Here, Barnard joins the classical theorists whose primaryinterest lies in the organization, not in the individuals working in them; hecould, thus, be considered a conservative theorist (Harmon and Mayer,1986). As Perrow (1979, 1986: 67) notes, to Barnard, organizations are“superior to individuals: organizations are rational; individuals are not.”


Mayo detested unions and called their leaders “psychological deviants.”His attitude toward social class conflicts was hostile, and his answer tolabor-management problems was the application of psychologicallyequipped techniques of supervision. Education of supervisory “social skills”was essential to eliminate class tensions, and as critics argue, the humanrelations theory was elevated to the “twentieth century’s most seductivemanagerial ideology” (Rose, 1975: 124; Fischer, 1984: 184–185).

CONTEMPORARY ORGANIZATION THEORY

The literature on various contemporary theories of organization is vast.But perhaps the underlying factors most commonly found in almost all ofthem include the significance of external environment and its impact onorganizations, the utility of managerial feedback, the importance of stra-tegic planning and top managerial decision making, the role of technologyand resource dependence, the necessity of worker cooperation, and the de-sire for a participative management, as well as a host of other variablesrepresenting managerial and individual employee perspectives. These the-ories reflected the post–World War II relative economic prosperity followedby the increasing social, political, racial, and economic conflicts that dom-inated the periods of the 1950s and 1960s. Attention was shifted towardstrategic, environmentally conscious, and globally motivated decisions withmanagerial innovations for meeting the ideological challenges of the ColdWar period both politically and economically. Organizational planning wasgenerally discouraged because of its being socialistic in nature, thereforerestricting individual freedom of choice.

DECISION AND BEHAVIORAL THEORIES

Herbert Simon’s decision theory of the 1950s heralded a shift in attentionfrom worker control and human relations perspectives to the top organi-zational functions of strategic decision making and searching for “behav-ioral facts,” rather than values, on which decisions should be based. Thiswas accompanied by the relative decline of the human relations theory asa managerial ideology. To Simon, administrators seek to “satisfice” ratherthan maximize, and through decision making, they exercise power and au-thority with limited alternatives. Individual administrators are rational, buttheir rationality is constrained by a given organizational environment andby the available alternatives—a “bounded rationality.” Managerial ration-ality is constrained by limitations of time, information, and resources(Simon, 1976: 81–125). Unlike Bernard’s “zone of indifference,” to Simonmost organizational decisions are accepted by subordinates (133–134).Thus, Simon is a behaviorist as well as an early advocate of systems theory,arguing for seeking equilibrium (Harmon and Mayer, 1986).


The behavioral theory of organization as purported by James March andSimon (1958) and Richard Cyert and March (1963) invaded the field oforganization and management, as did its behavioral science cosines in thedisciplines of economics, political science, sociology, and psychology. Anal-ysis of “facts” and decisions based on quantifiable facts constitute thethrust of the theory, and nonfactual values have little utility in scientificanalyses of phenomena. Modern administrators must rely on behavioralfacts, not on normative values, to make decisions and solve organizationalproblems (Cyert and March, 1963).

Behaviorism (not behavioralism based on psychology and social psy-chology) as a school of managerial, political, and economic thought hashad a powerful impact on organization theory and practice. According tobehaviorism, numerical data and quantitative analyses are the fundamentalrequirements in achieving rationality bounded by environmentally imposedlimitations. A major flaw of the behavioral organization theory is,therefore, its fanatic obsession with data crunching and quantification ofinformation, often at the expense of quality. Also, such a fanatic emphasison quantifiable data as the only acceptable facts tends to promote the pro-liferation of “artifacts” in face of obstacles or limitations. Consequently,the result of such analytical process may often be questionable, for it maynot reflect reality.

SYSTEMS THEORY

Systems theory of organization introduced a number of key elements tothe parameters of the field reflecting the evolutionary process of the time.Originating in the structural-functional sociology of the 1950s and in bi-ological science, systems theory was further developed with a wide rangeof perspectives and versions, all contributing to a body of knowledge withseveral key characteristics. The powerful works of Talcott Parsons (1951),Ludwig von Bertalanffy (1968), Daniel Katz and Robert L. Kahn (1966,1978), James D. Thompson (1967), Walter Buckley (1967), Russell Ackoff(1974), and others established a theoretical foundation for systems theoryof organization that has since the 1960s influenced almost all thinkingabout modern organizations, with worldwide applications in the public,private, and nonprofit sectors.1

Despite the divergent perspectives presented by these theorists, the sys-tems theory of organization has a number of characteristics that are im-portant to note. Modern organizations as social systems receive inputs fromoutside environments, transform them to outputs, and return them to so-ciety. And through constant interactions with their environments—politi-cal, social, economic, cultural, religious, technological, demographic,interorganizational, and so on—organizations learn, and must be able, toadapt to environmental changes. Thus, environment, change, adaptability,


and purposive goals are some of the key features of the systems theory oforganization. Other key characteristics include the interrelatedness and in-terdependence of the internal parts or subsystems of the organizationalsystem in achieving common goals, the “natural and necessary need tosurvive to seek homeostasis and to increase negative entropy” (Harmonand Mayer, 1986: 166). It is a positive quality, an antibody, that enablesthe system as a whole to detect and correct the “entropy” that tends todegenerate or decay the system from within.

There are two types of systems—closed and open. A typical closed systemis highly preoccupied with internal efficiency and is generally closed to itssurrounding environment. Stability and internal rationality are the centralfeatures of closed systems. The closed system is unable to adapt well toexternal changes and lacks the dynamic negentropy to fight internal degen-erating forces, which is opposite of the open system. Open systems havethe negentropy quality to overcome entropy and to maintain equilibrium.However, it is not impossible to conceive of a modern organization declin-ing and dying because of its lack of or diminishing ability to survive. Indeedsuch a phenomenon is becoming more commonplace in the rapidly chang-ing technological and socioeconomic environments. Therefore, internal,technical rationality is essential to the survival and equilibrium of modernorganizations, which operate within a larger system at the national andinternational level.

In order to understand an organization, we must understand the wholesocietal system—governmental, political, social, economic, and so on—within which it operates, both in the national and the international envi-ronment. And to understand how effectively or efficiently the various partsor units of an organization work, we must first understand the nature ofthe organization as a whole system. Only through the whole can we analyzeproperly the relationships and effectiveness of the parts or subsystems. Likeall social systems, organizations are in constant search for equilibrium andstability, for environmental changes may be rapid and adaptability is es-sential for survival; therefore, they have a concern and desire for systemmaintenance and system enhancement. Here, to some theorists such as Katzand Kahn (1966, 1978), environment determines organizational structureand actions, while others like Thompson (1967) argue in favor of strategiesthat organizations should use to influence and change their environmentsto suit their goals. While the mutual impacts of organization-environmentare key aspects of systems theories, it is interesting to know why and howmodern multinational corporations and certain governmental organizationsact and react to, as well as change and reshape, their environmental con-ditions around the globe. Their ability to alter political and other societalconditions worldwide to their favor is enormous, not to mention their neg-ative impacts on the environment in the forms of pollution, destruction,and global warming. Thus, organizational systems seeking maintenance,


harmony, order, and stability tend to preserve themselves at any possiblecost to society and individuals, for their main concern is to survive andexpand with an equilibrium. This is, then, according to critics, a conser-vative theory of organization favoring the status quo (Harmon and Mayer,1986; Perrow, 1979, 1986; Morgan, 1986). Systems theory, despite itspromises to the contrary, followed similar patterns that characterized thestructural, classical theories.

CONTINGENCY THEORY

Closely related to systems theory is the contingency organization the-ory. Its founders Paul R. Lawrence and Jay W. Lorsch (1967) argue thatenvironmental contingencies or situations determine the structural andfunctional aspects of organizations. Organizational effectiveness, there-fore, depends on contingencies confronted through the organization-environment interface. Multiple organizational forms are needed to re-spond to environmental situations or contingencies confronted by anorganization. Hall (1991: 283) and others (Galbraith, 1973, 1977; Negan-dhi and Reimann, 1973; Donaldson, 1985) developed the idea further, andLex Donaldson elevates contingency theory to the level of “normal science”(1985, ix; also see Hinings, 1988).

Richard Scott (1981: 114) summarizes contingency theory as “the bestway to organize depends on the nature of the environment to which theorganization must relate.” Critics (Schoonhoven, 1981; Tosi and Slocum,1984; Katz and Kahn, 1966, 1978) have questioned the foundations ofcontingency theory as a “theory” but have, nevertheless, recognized it as“an important part of the literature on organization” (see Hall, 1991: 284).Its utility is that a number of contingencies outside an organization deter-mine its structural, processual, and functional underpinnings (Daft, 1992).

POPULATION-ECOLOGY THEORY

Also closely related to systems theory is the population-ecology modelof organization. Based on the works of Howard E. Aldrich and JefferyPfeffer (1976), Michael T. Hannan and John H. Freeman (1977b), Aldrich(1979), Glenn R. Carroll (1988), and Bill McKelvey (1982), the model isbuilt around the idea that “organizational forms that have the appropriatefit with their environment are selected over those that do not fit or fit lessappropriately” (Hall, 1991: 275). Competition among organizations andthe constraints and opportunities developed in such an environment putorganizations in a dynamic situation. Organizations must respond tochanges by changing their forms and by being able to create the appropriate“fit” through finding in the environment their own “niches,” for the rule


of survival of the fittest dominates modern organizations and their effect-iveness.

Also called the “natural selection” model, the population-ecology theoryargues that the process of selection and fitness takes place “naturally” inthe environment, and those who do not find their niches will be selectedout. “Selection in” and “selection out” among organizations is as naturala phenomenon as that which takes place in the nature of animals andhuman beings—hence, a reformed version of social Darwinism (Perrow,1979, 1986: 210). Three stages constitute the natural selection process:variations, selection, and retention. This occurs as organizations go througha process of coping with environmental and situational changes.

Critics of the population-ecology model of organization charge that ittends to remove the human aspects of the environment (Hall, 1991) andthat it ignores power, conflict, social class struggle, and revolutionary up-heavals in the analysis of the social processes (Perrow, 1979, 1986: 243).Andrew H. Van de Ven (1979) and Ruth C. Young (1988) also criticizethe model for drawing too heavily on analogies with biological sciences.This analogy, they argue, is ill-founded, for it ignores human motives anddecisions, as well as its “downplaying of strategic choices made on behalfof organizations” (Hall, 1991: 276). But, perhaps more important, themodel ignores the powerful effects organizations have on their environ-ments by making deliberate changes in the ecology.

Despite the criticisms, however, the model seems to have major utilitiesfor modern organization and administration. It tends to explain the “ulti-mate test” of effectiveness, a positive or negative indication of organiza-tional growth or decline and death, an implication for managerial ideology.The model also traces the dynamics of the growth and decline of entirepopulations of organizations (Hall, 1991: 277).

RESOURCE-DEPENDENCE MODEL

What the population-ecology model has been criticized for, the resource-dependence model seems to have picked up and dealt with. Closely asso-ciated with the political economy model of organization (Wamsley andZald, 1973; Benson, 1975), the resource-dependence model is based onseveral premises. One is that no organization can generate the necessaryresources all by itself and that there is an imperative of dependence onother organizations or environmental sources for resources. Another prem-ise is that decisions are made within the internal political context of or-ganizations and that decisions deal with environmental challenges. Also,perhaps more important, is a key element of the model that considers theorganization as an active participant able to manipulate and change itsenvironment to suit its purposes. Managers and administrators are engagedin “managing their environments as well as their organizations, and the


former activity may be as important, or even more important, than thelatter” (Aldrich and Pfeffer, 1976: 83).

This is generally done by strategic-choice making, which takes place inthree ways: autonomous decisions made by organizational actors; manip-ulation of the environment; and deliberate attempts to perceive, interpret,and evaluate the environment and turn the perceptions into reality (Aldrichand Pfeffer, 1976: 83). An organization must seek ways not only to reduceits dependence on environmental resources but to try to make other organ-izations dependent on it (Dunford, 1987). The application of strategies bygiant organizations such as McDonald’s, IBM, and other multinational cor-porations (Daft, 1992) may be considered as a tested reality about thistheory of organization, though the idea is not new. James Thompson andother systems theorists, for example, had similar prescriptions for largeorganizations. Despite the criticisms raised against the model for ignoringthe goals of the organization (Hall, 1991), the power of its practical valueseems appealing to large organizations and to those in control of strategicresources. This model also has utility for modern political systems/regimesas well as multinational or transformational corporations.

MARKET THEORY

The market theory of organization is derived primarily from economictheory and secondarily from sociology. Based on the neoclassical economictheory, the market theory is based on the economic, rational assumptionsthat man is a self-interested, rational animal seeking to maximize individualinterests in the marketplace. Bargaining, exchange, and strategies to mini-mize transaction and exchange costs and to maximize benefits are centralto the market theory of organization. Modern organizations are seen asrationalizing institutions of exchange and transactions of the free marketsystem in which individuals as utility maximizers trade and exchange theirgoods and services for something in return—hence, a methodological in-dividualism. Mainly developed for application in the private sector, themarket theory of organization and administration has found its way intopublic administration and organization theories.

Drawing from neopolitical economics, public administration, and soci-ology, the works of a divergent group of theorists constitute this new andpowerful theory of organization. The sociological perspective of the theoryis mainly based on the works of Oliver E. Williamson (1975, 1981, 1985)who prefers the term “transaction-cost” model of organization in whichthe exchange of goods and services, not production, is critical, as well as the“importance of the structures that govern the exchanges” (Schutz, 1987a:148). Four components form his theory: uncertainty, small-numbers bar-gaining, bounded rationality, and opportunism (Perrow, 1979, 1986: 237).

The economic perspectives of the market theory are deeply rooted in the


much earlier works of David Hume, Thomas Hobbes, Jeremy Bentham,and John Stuart Mill (Harmon and Mayer, 1986). Utilitarianism forms thebasic principle of the theory, which is based on methodological individu-alism as a level of organizational analysis. The works of such theorists asJames M. Buchanan and Gordon Tullock (1962), Vincent Ostrom (1974),Anthony Downs (1967), Charles E. Lindblom (1959, 1965, 1977), andothers have had a major influence on modern organization and adminis-trative theories, as well as on economic and political theories.

Several principles form the foundations of the market theory, also called“public choice” theory. These include individual choice as the basis fororganizational or “collective actions,” individual preferences as expressionsof individual choices, rules to facilitate and assure order and stability inthe process, satisficing rather than maximizing strategies by individuals inthe pursuit of their self-interests, and, eventually, the incremental nature ofchanges in collective or individual decisions that are made in organizationsand society (Harmon and Mayer, 1986: 242–243).

The works of such public choice theorists as Ostrom (1974), Downs(1967), and William A. Niskanen, Jr. (1971) have had significant influenceon public organizational and administrative theory. Being critical of hier-archy and large bureaucratic organizations, the public choice or markettheory of organization calls for small organizations with overlapping juris-dictions. Criticizing the earlier theories of organization and administration,Ostrom outlines several major principles of his theory of “democratic ad-ministration” in his seminal work of 1974. These include divided politicalauthority to limit the exercise of political power, no separation of or dis-tinction between politics and administration, multiple organizational ar-rangements and competition among government agencies, overlappingjurisdictions in service delivery, and maximizing “efficiency as measured byleast-cost expended in time, effort, and resources” (Ostrom, 1974: 112).Ostrom’s public choice model of organization and administration centersaround the self-interested, rational individual seeking to maximize his orher utility in the market-like environment of public organizations and ad-ministration.

Despite their powerful implications in contemporary American societyand its public administration, the market theory of public choice in generaland Ostrom’s administrative model in particular have been criticized onmany grounds. First, the theory’s basic foundations are made on manyassumptions that are unrealistic. Second, the testability of the methodolog-ical individualism is highly doubtful (Harmon and Mayer, 1986: 260–261);the theorists offer little empirical evidence (Perrow, 1979, 1986). Third, asThomas R. De Gregori (1974: 209) notes, “Self-interest, absent of anyspecific content merely names, rather than predicts, action.” Fourth, theargument that decentralization is better or more democratic has no realempirical proof in the real world of centralizing trends of organizations,


public and private, around the world. In fact, Ostrom’s decentralized or-ganizations with multiple and overlapping jurisdictions may inherently pro-duce inefficiency and consequently lead to organizational merging andconsolidation. Empirical evidence of local government consolidation hasproven the public choice assumptions wrong (Loweri and Lyons, 1989).Besides, as Neil Gilbert (1983: 177) notes, such a decentralized arrange-ment may lead to “localism that is intrusive, parochial, and potentiallyoppressive” while, because of their lack of concern for personal affairs andspecial circumstances, “programs administered by the large scale bureau-cratic apparatus of central government allow greater latitude for privacyand individual freedom.” Also, as Robert T. Golembiewski notes, decen-tralization may simply be “chaotic localism” (Golembiewski, 1977a: 1497–1499).

There are some other facts public choice theorists either ignore or choosenot to address. The public choice theory’s self-interest utility maximizerbehaves at the expense of the broad public interest. He or she contributesto the growth of a jungle full of hungry animals in search of maximizingself-interest at the expense of community and general public interests. Onlythe more powerful are able to determine the outcome or consequences ofmarket transactions that are based more on coercion rather than freechoice. The public choice model is silent about how the poor, the sick, theelderly, and the disabled are supposed to maximize their self-interests. It isalso silent about the severe externality problems, both domestic and inter-national, particularly the problems of pollution and social displacement,that the transnational corporations cause in developing countries whereregulations either do not exist or are not enforced.

The transaction-choice model of organization mentioned above (William-son, 1975, 1981, 1983, 1985) severely contradicts the public choice theoryprinciples of decentralization, democratic administration, and responsive-ness. The model allows for market distortion and for the free market to besupplanted by hierarchies and for the organizational forms to take over themarketplace, even if this means more centralization by concentration andmerging into a few giant ones: “I argue that efficiency is the main and onlysystematic factor responsible for the organizational changes that have oc-curred” (Williamson, 1983: 125). Furthermore, the market theory of or-ganization has come under criticism from both Marxist and non-Marxistperspectives for its promotion of “moral atomism at the expense of publicmorality” (Harmon and Mayer, 1986: 264).

Despite these fundamental problems, the market theory in general andthe public choice theory in particular have since the 1980s had enormousimplications in the United States and in many nations that have adoptedor have been forced to adopt it. The economic and administrative policiesof privatization of public enterprises recommended by the public choicemodel and its zealous advocates in the United States are examples. Similar


policies have been adopted in education, health, welfare, and justice sys-tems.

TRANSACTION-COST THEORY

As a key variant of market theory, transaction-cost theory of organiza-tion has recently captured the conservatives’, and many liberals’, interestsin their rush to sweeping privatization and contractual agreements acrossthe world. Rooted in the public choice theory noted above and institutionaleconomics (Coase, 1937), the concept of transaction-cost analysis has re-surfaced through neo-institutional economics (Eggerston, 1990) and soci-ology (Williamson, 1975, 1985) and has captured much attention in publicmanagement, especially under the rubric of “new public management”originating from the British government and academic sources. It is a majorforce driving the currency of reform toward privatization, contracting out,or outsourcing, although these practices have historical roots in ancientempires, especially the World State Persian Empire in the fifth century B.C.(see Farazmand, 1998, 2000, 2001).

According to this model, transaction costs determine the organizationalcontext in which transactions occur. Transaction costs are “the costs as-sociated with carrying out two-sided transactions—e.g., the exchange ofgoods or services from one individual to another with agreed-upon pay-ment for performance. These costs vary with the nature of the transactionand the way it is organized” (Ferris and Graddy, 1998: 227; Coase, 1937).The choices of organizational form are determined by “transaction attrib-utes and include the frequency of transaction, its complexity, the extent ofuncertainty, the extent to which performance is measurable, and the spec-ificity of the required assets” (Ferris and Graddy, 1998: 227).

Uncertainty and bounded rationality are two major factors in determin-ing the frequency of the market transaction activity; the lower the uncer-tainty and bounded rationality, the higher the frequency of market-driven,transaction-cost activities, hence a higher frequency of transaction cost or-ganizational form. Conversely, the more uncertainty and bounded ration-ality, the more likely that transactions will be handled within a hierarchicalorganization (Williamson, 1985). According to this model, public organi-zations will be better off by providing service and performing directly pub-lic management functions when uncertainty and bounded rationality arelow in the environment. Therefore, formal hierarchical organizations, whilegood under stable and certainty conditions, should outsource or contract-out their functions. Here, the concepts of “transacting-out” as opposed to“transacting-in” (my added terminologies) become important as a functionof environmental contingencies.

Problems with the transaction-cost theory of organization, viewed fromeither economic or sociological perspectives, are many and have dangerous


consequences for public administration and public interests. First, it trivi-alizes the nature and functions of governance and administration, andhence of public organizations, by reducing its activities to the concept ofthe mercenary-wage relationship of the ancient and medieval ages, wherewage slavery and misery were common features of life for the majoritymillions.

Second, the application of the activity of transaction-cost analysis doesnot obscure the cardinal and ultimate purposes of the government in so-ciety. Performing its service delivery and achievement of its ultimate goalscan be done in many ways, and transaction-cost analysis approach is onlyone of them. Third, application of transaction-cost theory can be contra-dictory to the goals governments have to achieve, that is, the serving ofbroad public interests and the promotion of equity, fairness, equality, andcorrection of market failures. Fourth, cheating becomes a mutual motiva-tion for both sides of the transaction process, each trying to lower thetransaction costs; the seller or offerer of the contract tries to lower his/hercost, and the transactee finds ways to minimize his/her cost by cheap labor,cheap resources, cheap parts, and cheap product or performance. As a re-sult, quality is sacrificed and citizens are worse off.

Fifth, coercion becomes a powerful instrument in the transaction-costingprocess; that is, the more powerful party will try to manipulate the mar-ketplace, or simply the other side of the transaction, by applying forces ofcoercion to get what it wants. This leads to another, sixth problem withthe model, that the concept of voluntary entrance into the transaction proc-ess becomes meaningless when one party has no choice but to sell or offerat any price in the marketplace. An example is the millions of unskilledlabor or farm workers whose subsistence depends on the daily work theyfind, and for any wages offered; there is no voluntary transaction involvedhere. The same happens with white collar employees of the modern stateand corporate organizations who are, by multiple means of manipulation,coercion, and threat of downsizing or attrition, made to understand thatthe alternative to their employment is unemployment, homelessness. Em-ployees with many bills to pay and children to feed have no choice orpersonal preference but to agree to the wage slavery available to them.

Seventh, in the marketplace, where transaction costing takes place, thepower structure, or the power elites—from business corporate elites tothe governing elites representing and defending their interests—dominatethe transaction process and have direct and comprehensive access to sen-sitive information beneficial to their transaction analysis, whereas the in-dividuals or weaker parties of transaction fall into a disproportionatelydisadvantageous position and lose.

Finally, as noted earlier, the transaction-cost analysis model of organi-zation severely contradicts the principles of competition, decentralization,and the overlapping jurisdictional arrangement of organization of the mar-


ket theory espoused by public choice theorists. Here, Williamson (1975,1985) extends the earlier arguments of Coase (1937) by pushing them be-yond the market versus firm comparison to consider a wide variety of ‘gov-ernance systems,’ “ranging from markets to hybrid forms, such asfranchising or alliance form, to hierarchical forms, such as unified firmsand multinational corporations” (Scott, 1995, 26; Williamson, 1985,1991). Therefore, mergers, organizational centralization, concentration ofthe corporate power structure, and manipulation as well as monopolizationof the private market and of public sector by a few organizations are jus-tified according to the transaction-cost theory of organization.

This argument extends even further by justifying the globalization of theworld by corporate capitalism, a process through which fewer and fewerglobalizing, transworld, corporate organizations dominate the worldmarket, production, service, and industries, making governments either ir-relevant or agents of their successful operation. They minimize their un-certainties by imposing their will—through the powerful globalizing stateand military force—and maximize their profit. They lower their transactioncosts by exploiting cheap labor and natural resources, and under a dereg-ulated legal environment, and with no concern for the natural environmentor the local economic and social well-being of the people.

AGENCY THEORY

Still another variant of the market theory is the agency theory, an exten-sion of the transaction-cost theory of organization, which Perrow (1979,1986: 235) calls a “dangerous explanation.” The most insidious danger ofagency theory is “that all of us apply it in our daily life when we shouldn’t,and we should be aware of this” (235).

Agency theory considers social life as a series of contracts. There is abuyer of goods and services who is the “principal” and the seller or pro-vider of goods and services who is the “agent”—hence the term agencytheory. A contract governs the principal-agent relationship, and specifica-tions are spelled out regarding the terms and conditions (see Perrow, 1979,1986: 224–235). According to this model, both parties (principal andagent) apply the principles of lowering costs, maximizing certainty, andavoiding risks involved in their relationships. Having an information ad-vantage over the principal, the agent tries to exercise risk aversion andmaximize his/her chances of increasing self interests. On the other hand,the principal tries to learn as much as possible by acquiring informationand through the competitive process of selecting multiple agents to performcontractual tasks. Therefore, contracts and contract management becomecentral to the agency theory as advanced by institutional economists. Theworks of Armen A. Alchian and Harold Demsetz (1972), Eugene F. Fama


(1980), and Michael C. Jensen and William Meckling (1976) were amongthe most influential in forming the basis of agency theory earlier on.

In line with other market theories, agency theory preaches the principleof “self-regarding versus other-regarding behavior in organizations” (Per-row, 1979, 1986: 231). A proponent, Jensen (1983: 324) even proclaims“a revolution in the science of organization” based on agency theory, aview echoed by some observers (see Moe, 1984: 757). Agency theory hasgained strong strands since the 1980s, with contracting out, privatization,outsourcing, and contract management dominating modern organizationsof public, private, and nonprofit sectors. The sides of the contract, theprincipal and agent, enter into a process of contractual agreement in whichboth parties try to gain an edge over the other. The agent may have theadvantages of expertise, skills, and information, and therefore may becomeopportunistic and attempt to take advantage of the principal’s possiblyweaker position.

To guard against potential agency problems, the principal may try tocontrol opportunistic agency behavior by developing an effective and elab-orate process of contractual agreement. To do so, according to Ferris andGraddy (1998: 228), the principal may adopt three possible factors: (1)cost of information, for both obtaining the appropriate agent, and moni-toring and enforcement of the contract; (2) the uncertainty of the produc-tion and service delivery process; and (3) the risk preferences of the actorsor agents, who want to avert the risk involved in the process. The theoryimplies that the nature of the supply side determines the process of thecontractual agreement between principal and agent.

Advocates of agency theory argue in favor of its application in the publicsector (Ferris and Graddy, 1998: 229). Their argument is based mainly onsimplistic assumptions of the market theory of agency models in which theagent is portrayed as the appropriate actor of public service performance.A key example of this model application as a central instrument of the“new public management” ideology is “contracting out” of public serviceactivities and governmental functions. Contracts are considered the mostappropriate form of organizational arrangement for public management ingovernment and administration. Contracts are either negotiated or coop-eratively processed rather than competitively arrived at and closed (De-Hoog, 1990). Agency theory is nothing new, as we can trace its practicefrom over 2,500 years ago in the ancient time (see, for example, Faraz-mand, 1998, 2000).

The complexity, or perplexity, of the agency theory of organization be-comes evident when we find that agency theory is not just an economictheory of organization. It is also a political institutional theory, and herewe find confusion over the meaning and application of the theory in thereal world. For example, the concept of principal in government and publicadministration becomes fuzzy, as multiple principals and agents enter the


political and policy process. Citizens can be considered principals whereasrepresentatives may be viewed agents, who then can be considered princi-pals over the administrative agents. The same applies to the hierarchy oforganizational authorities and managers from top to the bottom; that is,the organizational heads are principals, and subordinate managers areagents who then view their subordinates as their agents. This is, of course,the organizational arrangement in public-sector organizations, where com-mand of relationship is relatively defined by legislation and constitutionallaws.

However, such a relationship is not easily understood in the marketplace,especially as the government also becomes a principal, a weak principaldealing with powerful corporate business elites whose economic powersand influence dictate the terms and conditions of contracts, and governmentactors become actual agents of corporations rather than principals. This isa point that has also been suggested by others (see, for example, Moe,1984). Advocates of the theory of organizational economics and its appli-cation to government and public administration have nevertheless arguedthe advantage of the agency theory (Ross, 1973; Williamson, 1975, 1985;Eggerston, 1990).

However, some social scientists, such as Perrow (1986: 226) point outnumerous flaws in the theory for its promotion of hierarchy and dysfunc-tional capitalism. According to Perrow, the model “gives scant attention tothe cooperative aspects of social life and ignores how exploitation is struc-turally encouraged by the asymmetric distribution of power in bureaucra-cies” (235). Furthermore, the agency theory tends to dangerously simplifythe so-called principle-agent relationship as being voluntary and free fromcoercion; far from it. All the problems associated with the transaction-costtheory directly apply to the agency theory of organization. Agency theoryclearly promotes, among other negative things, dependency in the principal-agent relationship, as the powerful always tend to dominate. And this hasbecome even far more dangerous in the age of globalization and globalizingcorporate capitalism. Wage slavery, master-servant, and hierarchical rela-tionships appear to be on the rise globally, and the agency theory of or-ganization seems appealing to some people, especially powerful corporateelites, but their actions are not accountable under most circumstances.

Even more dangerously, agency theory tends to generalize principal-agentrelationship at free will, confuses the true nature of the relationships at themacro organizational level, and trivializes the complexity of both humannature and organizational behavior at all levels. It ignores the coercion,power, and influence that dominant power structures or power elites im-pose on the conditions in which a principal-agent relationship takes shape.Options are not available to less powerful, or powerless, parties who areconditioned to play by the rules of the game dictated by capitalist powerelites and their operative organizational elites. This is a political economy


question, a normative organizational power question, that the principal-agent model avoids.

ORGANIZATIONAL HUMANISM

The earlier human relations theory, which dropped in significance forsome time (Fischer, 1984), was reinvigorated and evolved into the organ-izational humanism theory of organization. Based on the works of Mc-Gregor (1960), Abraham Maslow (1962, 1989), Argyris (1957, 1970a,1973a, 1973b), David C. McClelland (1989), Frederick Herzberg (1968),Edgar H. Schein (1970), Rensis Likert (1967), Warren G. Bennis (1966),Golembiewski (1977b, 1985), and others, the theory has gained wide ap-plications. The main themes of this later theory of organization center onthe humanization and democratization of modern organizations. Groupdynamics, planned change for organizational performance improvement,paying more attention to human needs and motives of organizational mem-bers, participative decision making, external intervention, motivation andjob satisfaction, quality circles, team management, and so on constitute thefoundations of organizational humanism. Of the above theorists, Mc-Gregor’s Theory X and Theory Y, Argyris’s psychological theory of em-phasizing human values, Herzberg’s two-factor theory of motivation,Maslow’s hierarchy of needs theory, Bennis’ democratic administration, aswell as Golembiewski’s ideas for “humanizing” public organizations arethe hallmarks of this new breed of organization theory. Organizations andmanagers are advised to pay closer attention to individual needs and ex-pectations, and employees are guided to fulfill their personal lives.

A major offspring of this theory is its subfield of organization develop-ment (OD), with wide applications reported in the public as well as theprivate sector. The purpose is to develop organizations—employees’ atti-tudes, organizational structure, and so on—through a planned changeprocess introduced via outside behavioral expert interventions. The ulti-mate objective is to optimize or maximize organizational performance andeffectiveness as well as to promote individual happiness and developmentfor employees. Worth noting in this connection are the earlier works ofsuch theorists as Mary Parker Follett (1918, 1924, 1940) who set the basicfoundations of the humanistic organization theory to balance the mana-gerial demands for efficiency and productivity on the one hand and thehuman needs of employees and democratic values in governance of organ-izations and society on the other.

The humanistic theory of organization or organizational psychology aswell as the earlier human relations theory have been severely criticized asnew managerial techniques or tools for worker manipulation and exploi-tation. As Fischer (1984: 172) notes: “to put the issue bluntly, organiza-tional psychology emerged to facilitate the bureaucratic processes of


twentieth century corporate capitalism.” What emerges from the history oforganizational psychology is a picture of ideological corruption. “Both wit-tingly and unwittingly, organizational psychology has evolved into a toolof manipulation and control in the ongoing struggle for command of theworkplace” (Fischer, 1984: 187). To correct for this corruption, Fischerargues for “a political theory of organizational science” (187).

Such a theory of organization must include the premise of knowledge asa critical resource in the politics of class struggle, both inside and outsidethe workplace, and “in the elaboration of such a theory, one must recognizethe complexity of the role of organizational expertise in the larger classstruggle between capital and labor” (Fischer, 1984: 188). Other critics havealso attacked organizational humanism as a theory. The works of JacquesEllul (1954, 1964), Robert Michels (1915, 1959), and James Burnham(1941, 1960) are but a few. To Ellul, who predicted this new theory andcalled it “human techniques,” the humanistic theory has provided new di-mensions of legitimacy through techniques of niceness. As William Scottand David Hart (1989: 23) note, “since every one is either a manager oris managed, humanistic practices have become important in establishingthe right of the new managerial elite to rule. Legitimacy is augmented byniceness.” To Michels (1915, 1959), modern organizations by nature pro-duce a managerial elite, the “tyranny of expertise” and its corollary “ironlaw of oligarchy.” In these organizations, people have little to say, and thelegitimacy of the managerial elite is beyond question (see Scott and Hart,1989: 20). To Burnham (1941, 1960), modern organizations produce amanagerial elite that is winning everywhere, for managerial expertise is theprincipal element of control inherent in modern organizations (see Scottand Hart, 1989: 21).

Closely related to organizational humanism has been a general drive,since the 1960s, for participative management in the private sector and amore powerful movement in public administration theory: the new publicadministration as a theory of organization and management for organizingand managing the public’s business and public interests. Born out of aconference sponsored by the Maxwell School of Syracuse University, thenew public administration theory was based on a number of papers andbooks reflecting the changing political, administrative, and economic en-vironments of the turbulent decade of the 1960s.

The publications of Frank Marini (1971), H. George Frederickson(1974), David K. Hart (1974), and others established the theory with ap-plications for public managers to not only act as implementors of publicpolicy, but also to actively engage in making social change possible and topromote democratic values of representation, responsiveness, social equityand justice, and individual rights and freedom. The managerial values ofefficiency and effectiveness must be balanced by the new democratic valuesof the changing society. Borrowed from political theorists (Lowi, 1969;


Waldo, 1971), from administrative theory (Frederickson, 1971, 1974,1980; Waldo, 1971), and from economic and other theories, the new publicorganization theory was a major advancement in the evolutionary processof the field (see Harmon and Mayer, 1986; Denhardt, 1984).

CRITICAL AND INTERPRETIVE THEORIES OFORGANIZATION

Originated in European social and political thought, critical and inter-pretive theories of organization maintain that an inherent and permanenttension characterizes the relationship between our true consciousness andthe limitations imposed upon us by society or environmental conditions.

Being unaware of the constraints placed upon us by those in control ofthe society, we develop a “false consciousness” that keeps us from realizingour human fulfillment. Therefore, the major concern of the critical theoryis to critique the status quo, which designs for us an artificial reality andsocial conditions, and to release those constraints by changing the statusquo. The primary concern is domination of organizations as instrumentsof rule by those in control of the status quo. Modern critical theory hascoupled the Marxian critique of capitalism with Weber’s bureaucratic in-strumentality in rationalization of societal conditions. Weber himself wasambivalent about the role of rational bureaucracy, which, he argued, hasa tendency to over-tower society and become an organization of domina-tion.

In addition to Marx’s analysis of modern capitalism and its organiza-tional domination (discussed earlier), the works of neo-Marxists and othercritical—but non-Marxist—theorists provide the foundations of this im-portant theory of organization. The works of such theorists as Jurgen Ha-bermas (1970, 1971), John Forester (1983), Denhardt (1981), R. Hummel(1976, 1977, 1982), and Thayer (1981), to name a few, represent theMarxist and non-Marxist views of this range of arguments. Habermas’analysis of social science in general and organizations in particular dealswith the relationship among modes of communication, the exercise of dom-ination, and the experience of alienation that work against authentic hu-man interaction (see Harmon and Mayer, 1986: 319).

To Habermas, the communicative practices we use every day are highlydistorted by the language we use to reason and to justify our actions; thedistortion prevents us from seeing what we should be freely seeing. In otherwords, we are conditioned by forces external to us, and our reasoning isoften instrumental rather than critical, which contributes to the legitimacyof status quo. Such a relationship between language and reason is central,for it shapes the meaning of social life. Therefore, language contributes toour alienation from both ourselves and others.

Habermas identifies three modes of reasoning: instrumental, practical,


and critical. Instrumental reasoning leads to social domination and controlbecause of its inflexible use of technique. Instrumental reasoning servestechnical interests of social control only and becomes a legitimating forceof the pregiven ends of modern capitalism. Capitalism and bureaucratiza-tion of society are rationalized by instrumental reasoning, which tends toenforce their legitimacy in society without our being consciously aware ofit. As Habermas (1970: 98) states, “traditional structures are increasinglysubordinated to conditions of instrumental or strategic rationality,” whichpermeate society and social life. Practical reasoning involves interpretationaimed at understanding and enables us to see possibilities for consciouslydeciding to change or to sustain the existing rules and ends. Practical rea-soning, according to Habermas, is concerned with matters of human choicethat encompass the broad moral choices involved in sustaining a humancommunity. Therefore, it is the communicative action, as opposed to thetechnical and instrumental action, that involves communication through“symbolic interaction” governed by “consensual norms which define recip-rocal expectations about behavior and which must be understood and rec-ognized by at least two acting subjects” (Habermas, 1970: 92).

Communicative distortions take place because of the social dominationin capitalism by the more powerful and by self-protection interests of thosewith less power. And as long as the existing consensus is taken for granteduncritically, the organizations of modern society serve the technical inter-ests of those in social control. The existing consensus that is rationalizedand accepted needs to be questioned by communicative discourse. Dis-course makes human emancipation possible, and emancipation is the goalof critical reasoning. Through critical reasoning and discourse, we questionthe existing consensus, which gives us a false consciousness of reality, andwe are able to release ourselves from an unconscious dependence on socialconditions that have forced us to reify. And reifying prevents us from takingresponsible and autonomous action. Critical reasoning, therefore, enablesus to self-reflect. Self-reflection is the ability to act with authentic freedomof choice and autonomy, allowing human emancipation, which is almostimpossible to achieve in capitalism (for more on this see Harmon andMayer, 1986). Seeing modern organizations as instruments of social dom-ination legitimized by instrumental rationality, Habermas and other neo-Marxist theorists argue that only through relentless criticism of theseinstitutions of domination can status quo legitimacy and our false con-sciousness be brought under question. And such questioning is the first steptoward achieving and exercising our true freedom.

Non-Marxist critical theorists also present formidable arguments aboutmodern organizations and their biased instrumentality. The works of suchcontemporary critical theorists as Denhardt (1981), Ramos (1981), Hum-mel (1976, 1977, 1982), Thayer (1981), Fischer (1984), Scott and Hart(1973, 1989), and Farazmand (1999) represent a wide range of perspec-


tives. Using Habermas’ ideas of communicative practices, and being criticalof instrumental rationality, Denhardt (1981, 1984) points out a fact sharedby others:

the control mechanisms of complex organizations trivialize personal interaction sothat individuals are merely objects to be used in the production process. Each be-comes an instrument to be manipulated by the other in the efficient pursuit oforganizational goals. More important, each loses that sense of self-reflection andself-understanding that is essential to creativity and personal growth. (1984: 154)

The central question is how the “individual may transcend” the existingsystem, not how he or she may contribute to it (Denhardt, 1981: 131).

For Ramos (1981), modern organization theory has been developed witha managerial tendency for the market-centered society interested only inmaximizing efficiency and “economizing” societal relations. Those in con-trol of modern organizations relentlessly seek efficiency through rational-ized production processes to meet the market demand, the result of whichhas serious consequences for the individual and society. Rationalized or-ganization leaves little place for individual self-actualization and self-development (Ramos, 1981: 23; see also Denhardt, 1984: 152–153).However, Ramos finds bureaucratic organizations indispensable require-ments for our material survival, and our job should be only to limit theirinfluence (Ramos, 1981: 123–134).

Hummel’s (1976, 1977, 1982) critique of modern organization, partic-ularly bureaucracy, similarly centers on the adverse consequences the in-dividual suffers. This is echoed by psychological theorists such as Argyris(1957, 1962) and others who raise serious concerns about the well-beingof “individuals” affected by the large, rationalizing, and dehumanizing or-ganizations of the modern world. Their answer, as discussed earlier, is “hu-manization” of organizations without changing fundamental socialrelations, an attempt which Thayer (1981) considers useless or meaningless.

Thayer’s (1981) arguments against “hierarchy and competition” chal-lenge the conventional theories of organization and administration andhave provocatively stimulated the ongoing intellectual debate on the natureof modern organization, politics, economics, and administration. ToThayer, competition, hierarchy of organizations, and political democracyare fundamental problems modern civilization has faced and is sufferingfrom. “We achieve from competition absolutely no benefits at all” for itentails market distortion and leads to “competitive waste” (Thayer, 1981:83). Organizational hierarchy as a means of rationalization instrumentalto the status quo legitimacy promotes only illegitimate authority that fur-thers inequality, injustice, and human bondage.

Hierarchy is coercive in nature, and along with competition it promotesalienation in organizations, for competition is destructive and wasteful.Both hierarchy and competition hinder rather than foster human freedom.


“Competition, hierarchy, and alienation are closely related to each otherin that they reinforce each other” (Thayer, 1981: 82). To Thayer, politicaldemocracy is undemocratic for several reasons, and “even at its best, ‘de-mocracy’ has tended only to limit the power of the rulers, without changingthe fundamental relationship between those who rule and those who areruled. This is because all theories of democracy contain within them thepervasive assumption that hierarchy is inevitable, desirable, and necessary”(1981: 44); there is “the complete marriage” between “hierarchy and de-mocracy” (53). Thayer proposes to eliminate hierarchy, competition, andpolitical “democracy as hierarchy and alienation.” In their place, he sug-gests “consensus” and consensual structure based on “nonhierarchy” asthe foundation of political, economic, and organizational theories.

To Fischer (1984), modern organization theory is a managerial ideology,therefore biased toward capitalists. Its main objective is to enhance theinterests of capitalism. “As a workplace ideology, organization theory hasconventionally represented a managerial ‘world view’. In this sense, it hasprogrammatically embodied the interests, values and objectives of theprofessional-managerial class” (Fischer, 1984: 173). Echoing this point,Farazmand (1999) argues that modern organizations are used by carefullyselected “organizational elites” who translate the will of the ruling eco-nomic and political elites—the power elites—into reality (see Chapter 4 fordetails).

The interpretive theories of organization are diverse, but they all sharecertain premises. The development of interpretive theories has been a re-action against the positivist orthodoxy of American social science dominantsince World World II. Originating primarily in European social and phil-osophical thought, the interpretive theories derive from German idealisminfluenced by Immanuel Kant (1724–1804). As Harmon and Mayer (1986:291) note, to Kant, “human consciousness, rather than the seemingly self-evident world of facts and things, is the core problem of philosophicaldiscourse.” The issue is subjectivity versus objectivity in social science. Inline with such earlier social philosophers as Jean-Paul Sartre and others,Alfred Schutz’s (1899–1959) sociological view of interpretive theory, andDavid Silverman’s (1971) “action-frame of reference” seem to provide themost direct application of the interpretive “sociology to the study of or-ganization theory” (Harmon and Mayer, 1986: 293).

The basic premise of the interpretive theory is that our real understandingof the social world occurs only through our subjective interpretations ofour everyday experience. To simplify the otherwise sophisticated interpre-tive theory, it may be said that we do things first, then try to make senseof them by making subjective interpretations of our actions. This is a self-reflexiveness and a retrospective sense-making. The social world is a prod-uct of our consciousness. Intentionality and intersubjectivity are two prin-cipal factors in the creation of the social world. What we experience is asocial world seemingly external to us, but it “is really nothing more than


the residue of our ‘sedimented’ experience which has over time accumulatedand uncritically been taken for granted” (Harmon and Mayer, 1986:295)—hence, an objectification of social phenomena. But what we mightcall “objective reality” is a creation of our subjective intentionality, andintersubjectivity socializes our subjective creation of reality. Language,therefore, plays an essential role, for it is the essence of social existence.

The implication of interpretive theories, particularly the one developedby Silverman (1971) for organization theory, is that they reject systemstheory and some of its fundamental principles such as the influence of ex-ternal forces like technology and social structure on organizations and theirstructures. The theory also rejects the structural and functional theories’preoccupation with organizational control and rationality. One outcomeeffect of this theory is the humanizing character and the new public ad-ministration movement, which have influenced the study of organizationand administrative theories. Phenomenology is embraced for taking re-sponsible action toward social change. Other contemporary interpretiveorganization theorists such as Gibson Winter (1966), Harmon (1981), andHummel (1976, 1977, 1982) shed significant light on the nature of modernorganizations that tend to dominate and alienate society and individuals.

Process, rather than ends, is important as a means of intentional subjec-tivity for the creative and conscious decisions we make. For Harmon(1981), for example, hierarchy and objectification are dangerous elementsof modern organizations, for they contribute to alienation and false con-sciousness of reality resulting in reification. To Harmon, hierarchy is oneof the five possible “decision rules” that may govern authority relationshipsin organizations. The other four are voting, contract, bargaining, and con-sensus. Here, the similarity between Harmon and Thayer is striking, forthey both prefer the values of consensus as the mode of organizationalgovernance. However, Harmon does not go as far as Thayer (1981), “whourges the outright elimination of hierarchical organizations” (Harmon andMayer, 1986: 316).

In short, the critical and interpretive theories of organization contributeto a new and important body of knowledge away from the traditionalmainstream organization theory. Several principles form the foundationsof this new body of knowledge. First, instrumental rationality of the clas-sical, neoclassical, and systems theories is rejected as a tool for social dom-ination. Second, instead of integrating individual and organizational goals,individuals should transcend organizations, and not the other way around.Third, the long-established, dominant social science of positivism is rejectedin favor of subjectivism, an epistemology that considers organizations as acreation or reflection of human consciousness. A major implication is thatwe should not take for granted, uncritically, the seeming reality of the socialworld and consider it as the only fact. Rather, we must exercise a criticalframe of mind and through subjective interpretations or readings transcendthe given world of social reality into the one that is consciously understand-


able and acceptable, the world in which we are able to make free butresponsible choices.

Administrators of modern organizations should do likewise when takingaction. Their actions should be guided by a true consciousness gained bycritical and interpretive sense-making of the phenomena in the surroundingworld. Their job is to transcend rather than to accept the given social order.The critical and interpretive theories of organization have made enormouscontributions to our knowledge of social science and of the nature of mod-ern organizations. At least they enable us to raise our level of human con-sciousness about the social reality by thinking critically, by freeing ourselvesfrom societally imposed constraints, and by making free and responsiblechoices in organizations of various natures and types. These theories mayalso contribute to our becoming more responsible and democratic globalcitizens in a world in which the existing artificially set national boundarieswill crumble. Only through such a true consciousness can we as individualstranscend the existing social order into a consciously transformed realitythat will allow us to achieve individual fulfillment and personal growth—hence, a true freedom.

Despite their significant contributions to organization theory, critical andinterpretive theories of organization suffer the same problem the Marxists’view of organization faces—that is, individual conflicts, organizationally orclass-induced and personality-based. The inherent tendency in human na-ture to dominate, to exploit, and to generate conflict is too strong to beoverlooked.

CONCLUDING POINTS

The above overview of the literature on organization theory reveals thediversity of the field in terms of both disciplinary and conceptual perspec-tives. However, the entire spectrum of the theories may fall under the threebroad categories of instrumental rationality of the classical and neoclassicaltraditions, the systems theory and its variants pointing to the broader con-cepts of organizations with their rational and environmental determinism,and the critical and interpretive theories with their main focus on processesand change-orientations leading to improvements in human life and societyentangled by organizational rationality of modern capitalism and bureau-cratic order. The central points of all these theories are the struggle betweenorganizations and individuals on the one hand, and the organizations’changing environments on the other. Pure rationality serves organizationsat the expense of individuals’ free choice and fulfillment of personal life,while rationality of organizations dealing with environmental phenomenalead to various strategic alterations of such environments around the globe.

The organization theory that developed in the past century has predom-inantly been biased with a managerial ideology. Analysis of organizationsin isolation from political and economic theories has reinforced this


ideology, which has shown us one side of the picture only. What is neededis an interdisciplinary approach to organization theory that also combinespolitical and economic theories in a comparative perspective and one thatreflects a balance between humanity and instrumental rationality, betweennormative values and positivist values, and between labor and manage-ment.

The elite theory of organization presented in Chapter 4 only attempts todemonstrate the failure of the conventional theories of organization insearching for such a balance on the one hand, and offers an alternativeperspective to broaden and enhance our social, political, and economicconsciousness and organizational knowledge toward achieving an equitableand effective balance in management and administration of society. In con-clusion, it may be said that there is no major alternative to the existingorder of elite nature, and any attempt on the part of the masses of ordinarypeople, including the white collar professionals, to replace the dominantelite would eventually lead to the emergence of another elite with a differentnature, such as the one that emerged in the socialist states of the formerSoviet Union and elsewhere. However, it is the nature and behavioral out-comes of elites’ actions or inactions toward the absolute majority of citizensthat matters most. The overriding fact is that modern organizations, by thenature of their rationality and irrationality, are alienating, and this trendwill continue to be the dominant paradigm in the new global order for thedecades to come. The tyranny of organizational rationality has just begun,and individuals have no choice in this new organization society but to playby the rules of the survival game, unless they revolt and totally alter it.

Consequently, individual citizens will be reduced to passive subjects ofthe marketplace in which human values are transformed into commodityvalues and alienation will increasingly reign. The elite theory poses a chal-lenge to conventional rational organization theorists and to political andeconomic theorists as well. As Whyte (1989: 396) concludes, “there is nosolution. The conflict between individual and society has always involveddilemma; it always will, and it is intellectual arrogance to think a programwould solve it.”

NOTE

1. For more details see Harmon and Mayer (1986): 99–100.

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Chapter 3

Emergent Theories of Organization:An Overview and Analysis

Ali Farazmand

INTRODUCTION

Like other theories of social sciences, organization theory has undergonesignificant changes during the last two decades. New models and theorieshave emerged that challenge the traditional or even critical and interpretivetheories and models of organization. New paradigms are emerging whichsuggest alternative modes of organization and administration with explan-atory and predictive powers in society. Now, the phenomenon of globali-zation and innovations in technology have also opened up new frontiersfor research and studies in organization theory, behavior, administration,politics, and management. This chapter deals with some of these recent andemergent changes in the body of knowledge in organization theory andbehavior.

This chapter and the one that follows, therefore, extend the discussionsof the previous chapter on organization theory with assessments andappraisals. In addition to some of the critical and interpretive theoriesand systems theories (Habermas, 1970, 1971; Forester, 1983; Denhardt,1981; Hummel, 1976, 1977, 1982; Thayer, 1981) discussed in the previouschapter, which have gained power over time, there are several otheremerging theories or models of organization that deserve close attentionand extensive analysis. These theories include the “garbage can” modelof organization, “natural selection” theory (Weick, 1979), the “new-institutionalism” and “institutional theories of organization,” the “chaosand transformation theories,” and “organizational elite theory” (Faraz-mand, 1999). The first of these theories are briefly presented here with


comments, while others are discussed at length. Elite theory of organizationis the topic of the next chapter.

While the garbage can and institutional models and chaos theory seemto have functional and practical implications for contemporary organiza-tions and administration, the elite theory has psychological, normative, andpolitical foundations aimed at improving individual life in organizations,at redistributing power and building equity in the organization and admin-istration of society, and at building and developing social and politicalconsciousness with predictive power for future action and change. The lat-ter has many similarities with the critical and interpretive theories in thatboth share certain premises and principles, all aimed at freeing individualsfrom the constraints of organizational life and from the prevailing givensocial order as well as promoting equity, balance of interests, and justicein society.

However, differences persist within some of the emergent theories, aswell as between this group of organization theory and the critical and in-terpretive theories. Structure and process are two determining factors ofdemarcation between and among theories discussed below.

GARBAGE CAN MODEL

The garbage can theory of organization seems to have had an enormousinfluence on organization theory, with significant implications for practi-tioners. According to Michael D. Cohen, James G. March, and Johan P.Olsen (1972: 2), “an organization is a collection of choices looking forproblems, issues and feelings looking for decision situations in which theymight be aired, solutions looking for issues to which they might be theanswer, and decision makers looking for work.” Thus, organizations aregarbage cans into which problems are tossed; the problems become solu-tions for some people, and solutions look for issues to be dealt with. Thefluid can, with its problems, then becomes full of opportunities and re-sources for others. The process is more important than the goals. In fact,goals tend to appear and take shape after the fact emerges from the process.The model tacitly approves the incremental approach to decision makingin that it rejects the traditional, structural, and rational approaches to or-ganizing and choice making. Bargaining, conflict resolution, negotiationand renegotiation, and so on are parts of the process and eventually deter-mine goals (Cohen, March, and Olsen, 1972; March and Olsen, 1976;Cyert and March, 1963).

The significance of the garbage can model can also be understood in asense that it tends to “deconstruct” the earlier and existing structural andfunctional theory of organizations. The garbage can theory is an attemptto deconstruct the existing constructed world of reality about organizationsand society, and then reconstruct out of a fluid anarchy in which all sorts

Emergent Theories of Organization 65

of garbage may enter and exit with different forms and shapes. Its premiseis that humans are not completely rational, that their planning and goalsdo not work, and that their emotions and feelings intervene in the processof actions that at times are purposeless but have consequences that producegoals and lead to new construction.

The garbage can model seems to have a mix of approaches borrowedfrom the incremental model, which rejects the rational, structural, and com-prehensive models and their acceptance of past decisions or actions (Har-mon and Mayer, 1986); from Simon’s bounded rationality model, whichpoints to imperfect information, time constraints, and lack of knowledgeof cause-and-effect relationships, and other limitations administrators facein making organizational decisions (Perrow, 1979, 1986); from the inter-pretive and critical theories, which question the structural/functional modelwith its strict interest in instrumental rationality (Weick, 1979); and fromthe behavioral and human relations approaches to organizational studies(Perrow, 1979, 1986; Argyris, 1962, 1973; Argyris and Schon, 1978). Themodel is an amalgam of several theories without cohesiveness in that itcontradicts within itself the basic elements of the model. Yet, it seems usefulto practicing administrators who find the model applicable to the unex-pected and changing outcomes of daily organizational life. As a local policechief, also a graduate MPA student of mine, put it, “I find the garbage canmodel very useful in my everyday performance. I enter the office every daywith some plans but end up doing a number of things as they arise andmaking a lot of decisions with unexpected outcomes.” And Perrow ob-serves that the garbage can theory has had “an enormous impact in thedecade since it has appeared. . . . It notes that people fight hard to gainaccess to committees, then rarely attend, because of unstable priorities andlimited attention span” (Perrow, 1979, 1986: 136). But Perrow is alsorightfully critical of the garbage can model in that by rejecting structure,the model admits the necessity of structure, and indeed it purports thatsuch a fluidity of organization will lead to a new structure, however un-planned and unintended.

Perrow’s criticism is also aimed at the deconstructionist movement andthe garbage can theory’s deemphasis not only on “rationalism but theoriesof human nature” (1979, 1986: 138). Nevertheless, garbage can theoryplays a significant role in the general trend of deconstruction in the socialsciences and humanities, a trend which is likely to be very significant intothe early twenty-first century. Such a social science trend originated in theearlier works of Friedrich Nietzsche, Ludwig Wittgenstein, Alfred Schutz,and many others who challenged rationality and introduced the notion of“social construction of reality” in criticism of what we take for granted asreality in our daily life (see Perrow, 1979, 1986: 137). The model hastheoretical and practical implications for organization theory and publicadministration. But it is also conservative in that it tends to reject the notion


of goal-directed organizational activities, particularly strategic goals aimedat altering environmental conditions.

NATURAL SELECTION THEORY

Closely related to the garbage can theory is Weick’s (1979) “naturalselection” theory of organization, a theory that is also related to the inter-pretive theories of organization. Rejecting cause-and-effect relations andemphasizing process and retrospective sense-making, Weick argues that hu-man rationality is limited by constraints imposed by inside and outsideenvironmental factors, thus embracing Simon’s bounded rationality. But hisviews are far more significant than Simon’s in that Weick rejects the con-ventional wisdom about the reality of the world, including the traditionalstructural schools of organization that emphasize that goal and structuremust precede process; he attempts also to deconstruct. By approving theassumptions of the garbage can model, Weick (1979: 86) supports multi-directional and circular, not linear, directions of relationships among peo-ple in organizations. “Most managers get into trouble because they forgetto think in circles. I mean this literally. Managerial problems persist becausemanagers continue to believe that there are such things as unilateral cau-sation, independent and dependent variables, origins, and terminations”(Weick, 1979: 86).

Weick persistently argues that “processes are logically prior to, andtherefore more important than, substantive ends” (Harmon and Mayer,1986: 351). People and their patterns of relationships shape the process,not structure or goals, and organizations are inventions of people. Through“double-interaction” of human relationships, an evolutionary process oforganization emerges. Weick’s evolutionary model of organization,therefore, is based on several principles that include process, change, andretrospective sense-making—people do things, then try to retrospectivelymake sense of what they have done. Harmon and Mayer (1986: 353–356)provide a useful analysis of Weick’s four basic steps in organizing activities:ecological change, or people’s response to environmental changes; enact-ment as a process of creating an environment that, in consequence impingeson people; selection, which is a process of sense-making activity—actionprecedes thought; and retention, as the final step of organizing which de-picts “meaning” or “believing” (“knowing what I think”).

Despite its considerable contribution to our knowledge of organizations,Weick’s theory of natural selection and the garbage can model tend tooversimplify the relationships between people in that they at least overlookthe nature of those relationships, their motifs in taking actions, as well asthe social class and power as normative factors in the process of organizingactivities. The theories do not tell us why people engage in the process ofactions and what their intentions might be. Also, the garbage can model


and Weick’s theory both seem unrealistic in the real world of modern so-cieties dominated by a web system of multinational organizations and themore powerful states that tend to reign.

Moreover, the theorists’ view of process organizing activities seems toreject the role of idea or theory as a guiding force that people may use inconstructing or changing phenomena. Weick also rejects the active role ofindividuals, particularly significant members of groups, and giant organi-zations whose strategic decisions to alter social relations and political andeconomic systems around the world are too pervasive to ignore. Both thegarbage can model and Weick’s seem to overlook the fact that organiza-tions do change society and that society must adapt to organizations. Thisproblem is also present in the institutional model of organization.

INSTITUTIONAL THEORIES OF ORGANIZATION

Institutional theories have made significant contributions to modern po-litical science, economics, sociology, and organization theory. They havereceived high currency at the turn of the new millennium. Institutions pro-vide the “basic structure by which human beings throughout history havecreated order and attempted to reduce uncertainty in exchange. . . . Theyconnect the past with the present to the future so that history is a largelyincremental story of institutional evolution,” states new-institutional econ-omist Douglas North (1990: 118). Richard Scott (1995) has traced thecontributions of institutional theory to organizational studies to the ap-pearance of systems theory in the 1960s, and others who have made directcontributions to the field (Zucker, 1977, 1988; Powell and DiMaggio,1983, 1991) have reported its emergence in organization theory since themid-1970s.

However, I have argued that contributions of institutional theories tosocial science in general and to organization theory had begun long ago. Ifwe were to trace its origin even farther back to before the nineteenth cen-tury, we will find, as I have outlined below, that institutional theory beganto emerge in the ancient time when thought and practice of organizationand administration developed along with the development of great worldcivilizations. The powerful influence of institutional theory has been re-sponsible for advancing many institutional changes in modern history ofgovernance, administration, and politics as well as economics and organi-zation theory.

Historically, institutional theories can be grouped under three labels, de-noting three historical periods of development: (1) the early institutionaltheories of the ancient time; (2) the classical or traditional theories reactingto the earlier traditional models; and (3) the contemporary, new-institutional theories. Characterized by diversity in perspectives, and some-times being contradictory with each other, these historical institutional


theories have originated from various disciplines of economics, politicalscience, sociology, and organization theory. An enormous literature hasemerged, and is still growing, on new-institutionalism commanding atten-tion from all disciplines.

Early Institutionalism

The earliest institutional tradition can be traced to the ancient and me-dieval times. These include, for example, the Greek Aristotle (fifth centuryB.C.); Persian Rozbeh (late seventh-century thinker, philosopher, writer, andthe last prime minister of the Persian Sasanid Empire, and later known asIbn Moqaffa of the eighth century); Nizam-ul-Mulk, (eleventh-centuryprime minister of the Great Saljugh Empire of Persia, thinker, and authorof the book, Governance and Administration—Seyasat-Nameh); Farabi(also known as the Second Teacher in history, after Aristotle); and TunisianIslamic Ibn Khaldun (father of sociology in the fourteenth century). Theyalso include some philosophers and thinkers of Enlightenment Europe, suchas the Italian Machiavelli (sixteenth century); the French Jean Bodin (six-teenth century), Montesquieu (eighteenth century), and Rousseau (eight-eenth century); the German Hegel (nineteenth century); and the EnglishHobbes (seventeenth century) and Jean Stuart Mill (nineteenth century).These earlier institutionalists set the foundations for the modern traditionaland new-institutional theories of organization of governance and admin-istration. Key features of these very early theorists included building majorelements of institutions—be it market, government, bureaucracy, justicesystems, and administration—such as structure, process, and values.

The early institutional theory of the modern time began in nineteenth-century Europe and later in the United States. Avoiding the exhaustivecitation, examples include Emanuel Kant (1965, 1978), Georg Hegel (1830,1975), Thorstein Veblen (1898), John Commons (1924), as well as JohnDewey, James J. Schumpeter, John Kenneth Galbraith, and Gunnar Myrdal(see Swedberg, 1991; Scott, 1995). A key feature of early institutionalismwas the focus on the “rule of conduct” (Commons, 1924: 376), thoughthe “centrality of change” as a process as well as structure in economictradition was recognized by some who tended to break away from theearlier approach (Veblen, 1919: 239), and those whose revolutionary thesiswas historical evolutionary transformation via dialectical process of mate-rialism, with “change” being constant, central, and imperative, coming outof the internal contradictions and tensions of systems (Marx, 1967; also inSabine, 1961). This shows the dialectical nature of historical developmentof knowledge on institutions, organizations, and social systems. The normalcourse of social development, according to Marx’s dialectical evolutionarytheory, is “feudalism, capitalism, and socialism, with a form of politicalorganization fitted to each” (Sabine, 1961: 767).


Much of the early institutional thought was preoccupied with “perma-nence,” and unchanging structures, rules, rights, and procedures, with aplace in the present but “no future” (see Simon’s critique, 1991: 3, 57).Exceptions were the works of Hegel and Marx. The early institutionalistswere also mostly nontheoretical, mostly “constitution-makers” (see Eck-stein, 1963: 10), crude positivist, applying philosophies to real world and“looking at hard facts.” But, Weber stood in the crossroads of three cur-rents: (1) those who viewed social sciences as natural sciences, (2) the ide-alist school of Durkheim (1893, 1949) and the historical materialist schoolof Marx (1967) with emphasis on internal contradictions as forces of in-stitutional change and transformation, such as from feudalism to capitalismto socialism (see Chapter 1 for details), and (3) the classical interest in“general theoretical principles” (Scott, 1995: 11; see also Farazmand, forth-coming).

In short, early institutional theory contributed to organization theory bylaying the foundations for the cumulative knowledge in organization the-ories for governance and public administration. History matters, and it isthe past that has given the present a frame of reference, which is also thespringboard for the future. Coherence in early institutional theory was thecentrality of institutions with structure, process, and values. Disagreementand divergence were the centrality of internal contradictions as leadingforces of institutional change, their breakdown, and evolution, qualitativelyas well as quantitatively. Therefore, continuity and change characterizedthis early tradition of institutional thought on organization theory (Faraz-mand, 1997, forthcoming).

Classical/Traditional Institutionalism

Coming from political science, sociology, philosophy, and economics,these theorists dominated public administration, governance, administra-tion, and organization theory. The classicists formed the core of the modernstructural-functional foundation of institutionalism based on constitutionallaw, economic system and structure, and top-down administrative organi-zation in both business and public administration. Organization theorythen began to reflect the writings of major institutionalists whose influenceshaped the body of knowledge in the field now known as classical andneoclassical organization theories (see Farazmand, forthcoming, for de-tails).

The works of such names as Max Weber (1924, 1947), Woodrow Wil-son (1889), Willoughby (1896, 1904), Merton (1940, 1957), Barnard(1938), Selznick (1949), Blau (1955), Simon (1945, 1957), March andSimon (1958), Gulick and Urwick (1937), Parsons (1956, 1960) andStinchcombe (1968) form the classical or traditional institutionalism. The


central characteristics of the traditional or classical institutional theory oforganization included overemphasis on permanence, stability, instrumentalrationality—whether maximizing or satisficing—maintenance of institu-tional power, structure, functionalism, order, centralization, and goals andefficiency. Students of organization theory and administration are familiarwith the body of literature on classical organization theory reviewed in theprevious chapter. Organizations become institutionalized through valuecommitments enforced through socialization and institutionalization, andit is this process that makes organizations “as structural expression of ra-tional action” (Selznick, 1948: 25).

The role of environment becomes increasingly important as time goes on,and the later institutionalists, namely some systems theorists (see, for ex-ample, Katz and Kahn, 1966), recognized this fact and placed the wholeconcept of systems analysis on the notion of organization—environmentrelations and the need for adaptability of the former to the latter. A clearexample of the application of the later traditional institutional theorists isthe strong application of “strategic action” by large organizations—espe-cially multinational corporations—to not only adapt to their changing en-vironment, but also to take “strategic actions” to alter their environmentalculture to suit their purpose (see Farazmand, forthcoming; also, discussionon systems theory in the previous chapter). This point was illustrated byParsons (1934, 1990 and 1956, 1960) and further elaborated and spelledout by Thompson (1967), whose recommendations led many large corpo-rate organizations to political and economic adventures in developing andless-developed nations rich in certain natural resources (such as oil in Iran,copper in Chile, and elsewhere) with tragic and catastrophic consequencesfor those nations and their people (see Farazmand, 1989, forthcoming,Chapter 2 of this book).

Neo-Institutionalism

A key feature of neo-institutionalism is the recognition that organizationsmust be understood and predicted within the larger system or environmentin which they operate. This is an appreciation, and extension, of the sys-tems theory concepts which, as noted in a previous chapter, underlie theimportance of the surrounding environment of which the organization is apart. Ironically, it is the older or earlier institutional theorists who advancedthis notion, which was overshadowed for decades by the instrumental ra-tionality, structure, and control of the classical theorists. They paid littleattention to the environmental changes affecting organizations.

The new-institutional theory of organization is developed mainly by Wal-ter W. Powell and Paul J. DiMaggio (1983, 1991), Richard Scott (1977),Scott and John W. Meyer (1983), Scott and Backman (1990), Scott (1995),Lynne G. Zucker (1977, 1988) and others, whose much research has been


carried out in nonprofit organizations (Hall, 1991). However, the institu-tional model is presented here within two streams of knowledge contrib-uting to organization theory and administrative behavior.

Narrow Stream

The first stream of neo-institutionalism is based on the assumption thatorganizations exist in the “fields” of other organizations of similar nature.“By organizational field, we mean those organizations that, in the aggre-gate, constitute a recognized area of institutional life” (Powell and Di-Maggio, 1983: 148). The model assumes that organizations with a certainfield become homogenous, develop sameness, and resemble each other. Ex-amples are universities, hospitals, fast food restaurants, department stores,and airlines. To the theorists, organizations are affected heavily by externalenvironmental forces—government regulations, cultural pressures, and soon—which tend to institutionalize organizations (Meyer and Rowan,1977), but they turn more inward than outward. Organizations also mimicor model each other in the field: “The rapid proliferation of quality circlesand quality-of-work-life issues in American firms is, at least in part, anattempt to model Japanese and European successes” (Powell and Di-Maggio, 1983: 151). This perspective of institutional theory seems to havegained attention much more within organizations than outside in interac-tion with other organizations. Using simplistic assumptions, this perspectivefalls short in explaining major institutional and organizational phenomenaplaying formidable roles in terms of power, authority, and control in andaround organizations in modern society. Thus, this perspective of the in-stitutional model rejects the idea that organizations plan, make strategicchoices, and have a tendency not only to influence their own external en-vironments but also to alter them. The active role of multinational corpo-rations or translational organizations in taking over, changing, anddominating societies across the world is a prime example. Their strategicdecisions, their funding, and their organizing activities have not onlychanged and dominated Third World countries’ economies and culturalmilieux, they have also played an active and leading role in altering evenpolitical systems to their favor around the globe (see Morgan, 1986). Per-row (1979, 1986) gives numerous examples in support of his criticism ofthe institutional model and the claims its proponents, including Philip Selz-nick (1948, 1957), make. As he points out, the major defect of the modelis that

the school’s view of organizations and society fails to connect the two. Parts of theenvironments are seen as affecting organizations, but the organization is not seenas defining, creating, and shaping its environment. . . . Society is adaptive to organ-izations, to the large, powerful organizations controlled by few, often overlappingleaders. To see these organizations as adaptive to a turbulent, dynamic, ever-


changing environment is to indulge in fantasy. . . . Standard Oil and Shell may com-pete at the intersections of two highways, but they do not compete in the numerousareas where their interests are critical, such as foreign policy, tax laws, importquotas, government funding of research and development. (Perrow, 1979, 1986:173–174)

Both Perrow (1979, 1986) and Hall (1991) also attack the model for itsdownplaying of goal-orientation of organizations, as well as its embracingof the “assumptions of the earlier structural-functional [model] which tendto ignore the fact of organizational power in organizational society” (Per-row, 1979, 1986: 166). To Perrow, “the area of institutional analysis re-flects in part what is worst about sociology” (166). To Hall (1991: 289),the first problem with the model is its “potential tautological reasoning,”which is “circular” in nature, thus “making causes and effect obscure anddifficult to assess” (Turner and Maryanski, 1979: 124).

As discussed earlier, the “garbage can” theory and Weick’s natural se-lection model, with their preoccupation with processes and circular multi-directional factors, face the same problem of tautological reasoning thisperspective of the institutional model makes. Hall also finds three otherproblems with the model, including the tendency to apply it in “an ex postfacto manner”; the danger of making the reality that was “the source ofthe myth into the myth itself”; and “overextension” of the theory into avast array of “situations and organizations” (Hall, 1991: 290), a problemPerrow (1979, 1986: 172) calls “trivial[izing]” organizations.

Broad-Based Stream

The second perspective of institutional theory presents a much broaderpicture of the theory and its applications to the real world of governance,administration, and organizations in society. Drawing on the traditionaland recent institutionalists in political science, sociology, and political econ-omy mentioned earlier, this new institutional perspective frames the anal-ysis around the environment and organization or institutional arrangementin a mutually interactive and dialectically operative system of relationship.Organizations feel external and internal cultural pressures as they becomemore professionalized with standardized norms. Organizations absorbthese pressures by learning from the external living eco-system in whichthey operate, but they also learn how to alter those elements in their en-vironment that are not hospitable to their goal attainment. The works ofGuy Peters (1994), Ali Farazmand (1997a, forthcoming) as well as theearlier works by Philip Selznick (1957, 1948), Karl Marx (1967), MaxWeber (1947, 1968), Parsons (1934, 1990), March and Olsen (1984), Har-old Laswell (1936), John Commons (1924 and 1950, 1970), ThorsteinVeblen (1898), Stinchcombe (1968), Curt Lewin (1951), Krasner (1988),


Thelen and Steinmo (1992), Argyris and Schon (1978), and others repre-sent, with variability, this perspective.

Central to understanding the institutional theory of organization are sev-eral elements of the institutionalism and institutional theory, such as struc-ture, process, values, change, time, environment, institutionalization, andinstitution and organization. Structure, process, and values are the keyproperties of institutions. Structure provides the physical and organiza-tional aspects of institutions, while process offers their functioning; valuescome from the environment in society, as well as being produced withininstitutions. The values embedded in society affect the ways institutions arestructured and function. In turn, institutional values influence the valuestructure of the environment in which the institutions operate. Examplesinclude religious and market institutions or marriage.

However, without organization, institutions either collapse or malfunc-tion and are subject to manipulation, decline, and death. It is possible tohave institution without sound organization, therefore subject to externalthreats. For example, many market institutions are weak in less-developednations; they are easy targets for global and Western corporations. Weakand poorly organized marriages and other forms of partnerships are fragileinstitutions.

On the other hand, institutionalization is imperative for organizationsand other structures (e.g., political systems or regimes) to survive and pros-per. Without institutionalization, structures and organizations are fragileand lack legitimacy (Farazmand, 1997a, forthcoming). Similarly, changeand environment form key bases of the institutional foundation of organ-izations. Change provides opportunities for survival, continuity, and dy-namism, whereas environment presents challenges to organizations andoffers opportunities for dynamism and evolution. It can also challenge themto death if they fail to adapt in a timely manner. Chaotic changes and long-term qualitative transformation in social systems, as well as in the biolog-ical ecosystems in which humanity and, by inference, organizations andinstitutions exist, can cause institutional crisis or breakdown, which mayresult in either death, or transformation and/or evolution into new insti-tutional entities. Therefore, time and change play a key role in theinstitution-environment relationships of organizations in public or privatesectors. It is the sudden changes and breakdowns in systems of institutionsand organizations that must concern all humanity and particularly publicorganizations with enormous responsibilities in shaping modern human civ-ilizations.

CHAOS AND TRANSFORMATION THEORIES

Chaos and transformation theories have emerged as new currencies inthe social sciences in general and in systems analysis and futuristic studies


in particular. However, the relevance and utility of chaos and transfor-mation theories to organization theory are still being developed, with thepresent analysis being one of the first contributions. These theories alsohave significant implications for governance, administration, environment,and global studies. Some social scientists have elevated its status to a “newscience” of chaos theory (Wheatley 1999), telling us that we live in a com-plex world full of uncertainties, randomness, and unpredictable events thatcan scramble plans and drive systems, including organizations into chaosand breakdown. Crises, surprises, rapid change, confusion, and things outof control prevail in our world, and we must be prepared to deal with suchchaotic phenomena and manage organizations accordingly.

A key feature of paradigmatic chaos is what Warren Bennis (1967) calls“temporary society,” Peter Drucker (1969) calls the “age of discontinuity,”and Charles Handy (1997) calls the “age of unreason,” in which we mustbe prepared to mange our public and private lives by bold imagination,and by “thinking the unlikely and doing the unreasonable” (cited in Daft,1995: 93). These warning expressions imply that current world crises, in-cluding many organizational problems, can no longer be solved or managedthrough traditional approaches and methods; they require new ways ofthinking and solutions.

One example of solving critical social problems by an old approach isthe passage of the 1994 Mandatory Arrest Law of Domestic Violence inthe United States. According to critics, it is an example of the inability ofthe modern capitalist state to deal with a gender problem with a history ofseveral millennia. The traditional business-as-usual solution, opted for bythe power structure dominated by the bourgeoises elite, has been undergrowing pressures from the female population to make mandatory the ar-rest of men, in almost any domestic conflict or potential violence, regardlessof who the victim is. Mandatory arrest of the man is a policy which lawenforcement officers must carry out, even if they see or determine that eitherno one is hurt or it is the woman who has prevailed. Consequently, thelaw has seemingly fixed a long-standing problem of female suppression bymen, but it also has created a more dangerous problem by giving a loadedgun to women, many of whom have used it and will likely use it for ven-geance, for blackmail, or gaining an edge over a man. Even though menhave for millennia suffered most from both external abuse in the forms ofslavery, heavy construction work, fighting in wars, and risking lives to workunder dangerous conditions, as well as domestic abuse by some women,they still are the first and easy targets of the new law in the United States.It automatically encourages many decent men to run for their lives wheninvolved in domestic conflicts because they fear they would not stand achance against women in an environment which considers men guilty inadvance; it is politically correct to damn them. Because police officers havethe incentive to make more arrests so as to look better in their annual


performance appraisal, the problem of mandatory arrest is further aggra-vated for men. Thus, moving from one extreme to another causes moreproblems, including the social problems of marriage breakups and everincreasing separation of men from women out of fear of their lives andcareers being ruined. Fatherless America (Blackenhorn, 1995), or crimin-alization of America, has become a common and sad reality (see Lowi,1996; Davey, 1995; Farazmand, 1997a, forthcoming). Chaos theory wouldperhaps require a much different approach to deal with this and other crisisissues, but it would also be an oversimplification of the concept if we takethis at face value. As we will see later, due to several limitations, applicationof chaos theory can also cause potential harm with unexpected conse-quences for men and women.

Understanding chaos theory requires a deeper understanding of the re-lationships between parts and whole, of segments and system, and of con-stant dialectical relationships between constant and change, and stabilityand chaos, leading eventually to a new form of order and stability. This isthe dialectical nature of phenomena, whether natural or social, in the uni-verse. Below is a succinct discussion of chaos and transformation theoriesand their assessment or critique with implications for organization theoryand public management.

Originally, the concept of chaos theory is claimed to have appeared innatural sciences—just like the earlier systems theories of the 1960s—butthen the concept began to find its equivalence in social sciences with con-tributions to recent implications for organization theory and public admin-istration. It is ironic that both chaos and transformation theories in socialsciences have a very long historical origin back to ancient times, yet asfocuses of scientific inquiries, they became subjects of interest to naturalsciences in the late twentieth century. Thus, contrary to the popularly heldview, it was not the natural sciences that started the concepts with socialsciences following; the social sciences did it first.

As a background to our main discussion we may note that the early sys-tems theories of the 1960s had brought to our attention the imperative of(1) environment and its effects on organizations; (2) the need for adaptabil-ity as a necessary property of open organizations to survive and develop; (3)the concept of negative or negentropy dynamic open organizations have asliving systems, a quality that enables systems to detect and correct malfunc-tions, system erosion, and parts that have performance disorder; (4) theinterconnectedness of parts or components of an organization or systemthat serve as subsystems functioning in harmony toward goal achievement;(5) the relationship of an organization or system in relationship to a largerand broader system or environment within which the organization or sys-tem operates; (6) the importance of feedback, and feedforward, as a warn-ing radar system; and (7) the characteristic that systems or organizationstend to maintain their stability or equilibrium at almost any cost.


Systems theories borrowed from natural sciences, but it was not the firsttime that the theories had been discussed. In fact, Marx and Engels (nine-teenth century) and before them Hegel (nineteenth century), Jean Bodin(sixteenth century) and before him the Persian philosophers Abu-Ali Sina(Avicenna, tenth century) and Farabi, (ninth–tenth century), as as well assome Greek philosophers, including Plato (fifth–fourth century B.C.) couldbe considered systems theorists who had presented eloquently some of thekey features of systems and chaos theories. These features included theinterrelationship between parts, the idea that organization is conditionedby the larger environment—sociopolitical and economic—within which asystem operates, and that systems tend to protect their equilibrium at anycost and crush forces of system challenge. Sina presented a “synthesis” ofa dialectical process of change, including chaotic change, that follow apattern of stability and order. For Sina, the dialectics of nature includedthe good and bad, and the non-linearity of the brain functions in whichpatterns of stability are always followed by turbulent commands of thoughtand action.

For Marx (1967, 1984; see also the previous chapter) and Marx andEngels (Engels, 1873), as we know, change is central in all living systems,including organizations, and there is always a dialectical contradiction, aninner tension, a tenacious urge among parts representing stability andchange, order and disorder, and stagnation and breakaway within an or-ganization or system. Dialectics of nature, as Marx and Engels (Engels,1873) presented over a century ago, formed the foundation of the scientificviews on chaos and transformation. Without turbulence and change, stag-nation and decay prevail, causing a halt in system survival and continuity.According to Plato, “wonder” produced philosophy, which served as asource of various sciences for a long time, until its bifurcation into varioussciences, such as psychology, physics, astronomy, medicine, chemistry, bi-ology, and more. As we know philosophy was until the twentieth centuryconsidered the mother of sciences, and a philosopher must have masteredall or most of those sciences.

The breakdown of philosophy into various branches of science representsan example of the bifurcation that living systems do and go through. It isthe process of transformation and evolution. Today, each of these sciencesis studied so narrowly that the big picture or the system and its holisticchange process are ignored by natural scientists. The induction approachesand methods of scientific studies have become atomistic and have lost in-terconnections with the rest of the systemic interactions and feedback proc-esses so necessary for system development, breakdown or disorder, andreturning pattern of order and stability. This dialectical law of nature isthe principle that has become deterministic in producing order and disor-der, chaos and stability.

Environments cue or stimulate, stabilize or intensify these dialectical


forces of order and disorder, resulting in new changes and possible chaos,as in the case of revolts and revolutions when systems totally break downwith uncontrollable outcomes. Further, Marx’s view was an evolutionaryone, through historical transformation of material life of nature and phe-nomena, not idealistically as Hegel’s dialectic suggested, but materialisti-cally as their existence was realized. His view was dialectical nature.Therefore, chaos and transformation theories also present implications forthe evolutionary process of humankind and provide springboards for futurestrategic social action on the basis of past and present patterns of behaviorin the universe and in living systems, including organizations and environ-ments. Thus, as we will see below, these ideas are not new, but the con-ceptualizations, methodologies, and techniques of inquiry have improved,and sophistication has characterized the modern scientific studies of chaosand transformation theories.

It is astonishing to observe how ignorant the modern Western scientificcommunity has been about the dialectical nature of chaos theory, yet allthe discoveries of this very community—in natural and social sciences—have proven the fundamental law of the dialectical nature of change andcontinuity, of chaos and order, and of stability and turbulence. How manyresources could have been saved and used for other healthy purposes withinthe scientific community—and elsewhere by the governments funding thiswork—had the dialectic nature of patterns of chaos and order, as presentedby the earlier philosophers, been perceived? How far could we have gonein our scientific enquiry regarding nature, living systems, and organiza-tions? What, then, has been discovered regarding chaos theory?

The idea of chaos or non-equilibrium theory is claimed to begin with arigorous new scientific perspective on how order gives way to chaos andhow chaos leads to order. Studies are found in both natural sciences andsocial sciences, with appealing theoretical and practical implications foreconomics, political science, governance, and public administration. Sci-entists claim a major breakthrough in discoveries about how the universeoperates and how it affects social phenomena traditionally viewed or un-derstood as developments on linear paths with predictability. The worksof the scientists in the natural science tradition can be too exhaustive tolist, but some of the key examples are Laszlo (1972), Capra (1982), Sivard(1983), Polanyi (1944), Feigenbaum (1980), Prigogine and Stengers (1984),Eldredge and Gould (1972), Csanyi (1980), Csanyi and Kampis (1985),Maturana and Varela (1980), von Bertalanffy (1968), Boulding (1978),Miller (1978), Wiener (1948), Abraham and Shaw (1984), and Loye andEisler (1987). The contemporary works in the social sciences are also toomany to cite, and their roots date back to the ancient time, as we will seebelow. Examples of these contemporary social scientists are Parsons (1968),Maslow (1966), Myrdal (1969), Marx and Engels (Engels, 1873); Pareto(1961), Durkheim (1951, 1964), Max Weber (1947, 1961), Kurt Lewin


(1951), Sorokin (1941), Spengler (1932), Toynbee (1947), Rene Thom(1972), Zeeman (1977), Jantsch (1980), Mesarovic and Pestel (1974),Capra (1982), Burns and Ogilvy (1984), Loye (1977, 1978, 1980), Eisler(1987), Drucker (1969), Allen (1981), and all the systems theorists as wellas those social scientists working on futurism and contributing to suchfuturistic research projects as Club of Rome, and so on.

Chaos

The notion of chaos denotes crisis and disorder, a state of non-equilibrium, instability, turbulence, rapid or rapturing changes that scram-ble plans and cause unpredictability, with consequences of anxiety, fear ofthe unknown, and triggering and tripling effects of destruction and systembreakdowns. A key question for social and natural scientists is how tocontrol chaos so that its destructive effects could be eliminated or mini-mized. This is a notion that has until recently prevailed in traditional waysof thought and action in social science. However, as explained by chaostheory, social and natural phenomena do not exist or develop or evolve onstrictly linear paths so that we can predict crises that would need to beavoided or controlled. The essence of chaos theory is that of the law ofnature, as explained over a century and a half ago by Marx and Engelsand long before them by earlier philosophers of the East as well as of theWest. Examples of chaotic events or systems breakdowns in the world aremany, and they may be found at macro and micro levels (see also Faraz-mand, 2001).

Contemporary scientists have grouped these crises or systems break-downs into two types: microcosmic and macrocosmic.

Microcosmic Level

The microcosmic social realities of crises and discontinuities have world-wide impacts. Examples include financial crises, population crises, globalenvironmental crises, world population explosion pressures, desertificationof productive lands, crisis of the widening gap between rich and poor coun-tries, and the possibility of nuclear wars, institutional crises, and a host ofother crises. These crises and pressures “drive the breakdowns of systemsthat lead to states of social chaos” (Loye and Eisler, 1987: 54; Capra, 1982;Sivard, 1983). These so-called “microcosmic” crises or social breakdownsare considered short-term process events, with many more micro-orientedcrises and chaotic bifurcations that affect open system organizations andliving systems. Their downside trends should not be overlooked or ignored,because human lives are at stake and institutions depend on these short-term (which are in reality also long-term) events and trends that can pro-duce long-term paradigm shifts.


Macrocosmic Level

The second type of chaos-oriented, or chaos-driving, or chaos-driven,forces that are long-term-oriented with accelerated paradigmatic shifts, aremacrocosmic. This problem is “the great, overriding churning of historyand acceleration of evolutionary forces that has led to” (Loye and Eisler1987: 54) expressions such as disintegration, paradigm shifts, and long-wave crises that threaten the whole global planet, a fundamental concernof the future that calls for present decision and social action (Salk, 1983;Meadows et al., 1972; Capra, 1982). These long-wave trends are charac-terized by mainstream social scientists as, for example, the “age of disin-tegration” (Mumford, 1944), the “age of discontinuity” (Drucker, 1969),a “crucial epoch” (Laszlo, 1983), and the age of “temporariness” (Bennis,1967). These characterizations have by no means all been conceived of astoo negative; in fact some, including the American legendary managementthinker Peter Drucker (1969), have even considered them positive evolu-tionary developments with smooth changes and transformations.

To these proponents, short-term crises and chaotic events of destructionin population, hunger-forced extermination, labor displacement, institu-tional demise, and environmental degradation are important reasons tostudy chaotic events. Some even state that there is no cause for worrybecause in the long run the system will correct itself. They argue that whatappears to be chaotic and disorderly in the short term at the microcosmiclevel, may actually contribute to the long-term order and equilibrium atthe macrocosmic level (Drucker, 1969). On the other side of the coin, crit-ical social scientists have voiced serious concerns about the consequencesof these short- and long-term paradigmatic or megatrends that have alreadyproduced many catastrophic crises and continue to threaten the entireplanet earth, the ecosystems and the biosphere that all need to live andprosper. To these critics, the overriding interests of the few powerful andsuperrich have dominated the world system and, through the political, ec-onomic, and military exploitation of the vast majority of the world popu-lation, are leading the whole world toward a global village of serfdom, acatastrophic breakdown of the whole-planet ecosystem. They argue thatthe global ecosystem is in danger, the world is closer to destruction, andhumanity is in serious crisis. This is the debate that has gained powerfulcurrency under the globalization of late capitalism, a process of world in-tegration and accumulation of surplus capital, led by a few globalizingcorporate elites and forced upon other nations through both dollar andmilitary interventions (see, for examples of this literature, Korten, 1995;Korbin, 1996; Offee, 1985; Modelski, 1979; Rifkin, 1996; Sklair, 1995;Parenti, 1995; Gill and Law, 1991; Dugger, 1989; Hankock, 1989; andFarazmand, 1999).

Whatever the debate, a solution to the above problems offered by chaostheorists is “the first transdisciplinary understanding of bifurcational and


transformational change” (Loye and Eisler, 1987: 54) that requires under-standing of natural sciences and their contribution to chaos theory. Herekey works of such scientists as Abraham and Shaw (1984), Laszlo (1972),Eldredge and Gould (1972), Miller (1978), and more notably the BelgianIlya Prigogine (Prigogine and Stengers, 1984), as well as the Hungarianscientist Csanyi and associates (Csanyi and Kampis, 1985), and Maturanaand Varela (1980) are considered to be the core of the chaos theory innatural sciences with spillover into social sciences. No reference is made inthe literature of any prior works by former Soviet scientists whose contri-butions to chaos and transformation theories emanate from Marx’s dialect-ical changes and evolutionary transformation in historical developments.

Change and how change occurs in the world and in any living systemsare central issues in all the works on chaos theory in the West. Key conceptsare nonequilibrium, non-linear dynamics, bifurcation or branching out, en-tropy, cross-analysis, dissipative structures or the formation of order outof chaos through auto-analysis, attractors, autopoiesis, autocatalysis, andself-organizing capacities of living systems including organizations as opensystems that make changes from order to chaos and make order out ofchaos possible. Many of these ideas of chaos theory are found in systemstheory discussed in a previous chapter. There are, however, differences be-tween chaos theory and systems theory. Systems theory is concerned withstability and equilibrium whereas chaos and transformation theories arecharacterized by chaotic changes that lead to order and vice versa. As wewill see below, natural and social systems theories were concerned withsystem maintainers and would do anything possible—including use ofbloody repression—to maintain stability and equilibrium. Chaos theorygoes beyond this level, and moves into a higher level of scientific analysisof systems existence, change, and evolution. Chaotic behaviors and changescaused by non-linear dynamics and through systems breakdowns and bi-furcations are considered healthy processes and should in fact be encour-aged.

Scientific observations by Feigenbaum (1980) showed recurrent patternsof order out of chaos in mathematics. Lorenz’s (1984) discovery of how“chaotic attractors” produce a complete breakdown of predictability sys-tems in weather forecasting is an example. Others point to the ideas ofsuch thermodynamic systems concepts as entropy, negentropy, bifurcationor the branching out of phenomena or matter into other forms duringchaotic states. Belgian chemist Prigogine’s idea of “dissipative structures”are forms (or formations) of order out of chaos that take place through“autocatalysis” and non-linear processes of interactions that occur withinand among the interdependent components or subsystems of a system, andthrough the mutual feedback processes or what Prigogine calls “cross-analysis” (Prigogine and Stengers, 1984). Another discovery by Eldredgeand Gould (1972) reveals that, contrary to Darwin, chaotic states are born


out of “punctuated equilibrium,” or what I would also call “the shakingand cracking state,” a process during which “peripheral isolates may even-tually” transform a system into another one, a new living identity.

This phenomenon is known by contemporary social scientists as the“butterfly effect” (see Daft, 1995: 13) meaning that a small isolate canemerge from a system periphery on the verge of chaos and break down andbecome a major core system of its own. Small changes in a system mayproduce consequences far beyond expected or planned outcomes. For ex-ample, the breakup in the AT&T monopoly led to a whole new set ofcommunication systems, and the small liberalization policy under the for-mer Shah of Iran in the mid-1970s caused a new series of serious challengesand caused the Revolution of 1978–1979 which toppled the dictatorialregime of the Shah. It is also Prigogine’s “dissipative structures” as well as“bifurcation” or branching out into new systems as a result of “shakes andcracks” as I have pointed out earlier. Then came the Hungarian biologistCsanyi’s (1980) comprehensive new general theory of evolution incorpo-rating the earlier nonequilibrium theory. Both Csanyi and Kampis (1985)expanded Progogine’s “autocatalysis” and articulated it with Maturanaand Varela’s (1980) “autopoeisis” or self-organizing, self-regulating, andself-correcting systems. Then came the general systems theory developed byvon Bertalanffy (1968), Boulding (1978), Miller (1978), and Laszlo (1972).

The concept of “self-organization” as a key characteristic of living andopen systems becomes a central determining factor in both evolutionaryand chaos-nonequilibrium theories. Self-organizing means two broadthings: one is the ability of systems to generate capacity to organize andgovern themselves, and by so doing produce inner forces of change thatgenerate energy and other forms of structures and entities capable of self-organization. Self-organization also means self-governance, self-control,and self-regulation, a capacity or quality of dynamism within a system thatdoes not need external imposition of control and governance; its innerforces cause bifurcation and chaos with the capacity of maintaining orderand stability (Farazmand, forthcoming). It is a dynamic process of self-regeneration which, along with negentropy and environmental cues, re-leases forces of new entities or bifurcative elements that lead to new systemsor dissipative structures. This is exactly what Marx and Engels (Engels,1873) called dialectical process of change, development, and evolution, abasic law of nature.

The study of chaos theory in social sciences produces similar fascinationas the urgency to deal with, and solve, global problems becomes imperative.Loye and Eisler (1987) report Prigogine and Stengers’ (1984) view thatthere are three stages of historical development in science which social sci-ence lags behind. First is the ancient Aristotelean physics and early modernthermodynamics; second is the recognition of equilibrium as a state inwhich fluctuations and oscillations occur, but the system equilibrium re-


mains intact; and third is the notion of extreme change, instability andunpredictability, or chaos “where true rather than only quasi-illusory sys-tems transformation may occur” (Loye and Eisler, 1987: 56). Systems ex-periencing extreme instability and entropy caused by either internal orexternal forces progress into the bifurcative state of breakdown with un-predictable outcome possibilities regarding how and how many new dis-sipative structures may emerge or how many new systems regenerate. Thisis a key element of the nonequilibrium chaos theory. The analogy is thecommon saying that “sometimes things must really be broken before theycan be fixed.”

Transformation and Evolution

It is this third stage of scientific evolution that social scientists have cometo claim great benefits for work on chaos and transformation theories. Theyare concerned with, and interested in, dealing with the normative questionof what kind of evolutionary ideals should humanity—or those who areable to—pursue, exercise control over, or make change for desired futuresystems. This normative question raises serious policy implications for gov-ernments and public organizations (Maslow, 1966; Myrdal, 1969; Laszlo,1984b). Other benefits of work on chaos theory are also given as ration-alizations for its application.

In social science, the concept transformation is used as a preferred termto subsume chaos, “a process out of order, through which order gives wayto chaos and chaos again leads to order” (Loye and Eisler, 1987: 58). Asnoted earlier, both chaos and nonequilibrium evolutionary theories arenothing new. Historically its origin dates back to ancient time, to the Chi-nese Book of Changes (I Ching, cited in Loye and Eisler, 1987: 59) and toGreek philosophers, notably Heraclitus (see Sorokin, 1966) and the Per-sians’ Praxis in the sixth and fifth centuries B.C. when the concept of a“synthesis of civilizations into a universal civilization under the Persianworld order” was conceived in 559 B.C. by Cyrus the Great who foundedthe first “world-state” Persian Empire in history (Frye, 1963; Olmstead,1948; Ghirshman, 1954; Farazmand, 1998). The concept was followed byAlexander’s quest to Helenize the world and by Romans who tried to en-force their system in the West as far as they could but were checked by thePersians in the East. The same concept is now being pursued by Americanswho are trying to accomplish the same through forceful globalization andglobal hegemony and the new world order (Dugger, 1989; Gill and Law,1991; Hamilton, 1989; Farazmand, 1994, 1999).

The modern origin of chaos and transformation theories begins withHegel (1830, 1975 and 1967) and Marx and Engels (Engels, 1873), whoseworks focused on historical evolution through dialectical processes of in-teractions between opposite forces of stability and change. Others like


Durkheim (1951), Weber (1924, 1947 and 1961), and Pareto (1961)should also be mentioned. All of them grappled with the idea of changeand transformation. Out of too much order develops alienation, tendencyor forces of disorder. And in social psychology we see Curt Lewin’s (1951)central concern with change in open-system organizations, including a de-liberate change of people’s attitudes and behavior toward a new order.Lewin’s work in the 1940s led to the three-stage process of change bydesign: “unfreezing” of the prevailing state or order to “break open theshell of complacency and self-righteousness,” followed by the second stageof “moving to new level” of re-shaping or desired changes, and the thirdstage of “re-freezing” the changed behavior to avoid regression (Lewin,1951: 228–229). Other early works on chaos and transformation theories,including Sorokin’s (1941), and the American Riegel and Soviet Ruben-stein’s (Riegel 1979), to name a few, have also focused on non-equilibria-orientations and have offered new insights on evolutionary history andcultures as well as on how to meet the challenges of the chaotic changesaffecting existing or emerging orders.

The third period of development of chaos and transformation theorieshas emerged through the contemporary works of both natural and socialscientists mentioned earlier. One is Zeeman’s (1977) view of “catastrophic”shifts during the nonequilibrium and nonlinear states of changes when sys-tems break down and bifurcation take place. Also, Jantsch’s (1980) TheSelf-Organizing Universe is particularly notable as an elaborate extensionof Prigogine’s idea of self-organizing capacity or negentropic quality ofsystems that produce new structures during systems breakdowns into newstructures or systems. In social as well as natural sciences, extensive re-search associated with the international Club of Rome Projects have pro-duced significant results with normative policy recommendations for socialactions regarding the future of the world and its problems. Also important,for example, are Laszlo’s (1987) Grand Evolutionary Synthesis Theories orGESTs, Capra’s (1982) synthesis of the “new paradigm” idea in The Turn-ing Point, and Salk’s (1983) concern with fundamental problems for socialnonequilibrium theory in finding possible solutions to the current crises orchaos and to “choose the most evolutionary advantageous path” (Salk,1983: 3) for human society. “Survival of the world as we know it is notpossible. . . . The world will have to be transformed and evolve for contin-ued survival” (Salk, 1983: 106; also cited in Loye and Eisler, 1987: 62).Capra cites a necessity for “a transformation of unprecedented dimensions,a turning point for the planet as a whole” (1982: 16).

Extensive studies of the last two decades have been carried out in suchCalifornia-based futuristic research institutions as SRI International (Loyeand Eisler, 1987) and elsewhere which have focused on dialectical polaritiesof systems’ changes and systems stability, norm-changing and norm-maintaining, leaders and followers, soft- and tough-minded people, and


older and younger generations. To Loye and Eisler (1987), these recentstudies on the dialectical polarities represent crucial elements of analysis ofhistorical evolution in culture and human development. To them, the re-lationship between dominator and dominated, oppressor and oppressed,leaders and followers, superiors and subordinates must be changed into acooperation and partnership-based relationship, if human evolution is tocontinue. This is what Marx and Engels called complementary dialectics asopposed to contradictory dialectics. Later on Mary Parker Follett (1918,1940) argued for “integration” and cooperation in managing the modernstate and government organizations.

According to Marx, there are two types of dialectical materialism whichcontribute to the transformation and evolutionary process of nature andsocial and natural systems. One is the internal contradictory, tension-based,or irreconcilable forces in constant struggle, with the new and evolutionaryforces breaking away from the prevailing ones. Every system, for examplecapitalism, carries within itself the forces of destruction and change thatcontribute to its evolutionary process—Prigogine’s dissipative structuresand self-organizing capacities that enable a system to survive through bi-furcation, just like new branches of a tree. The second type of dialecticspresented by Marx and Engels is the complementary and contradistinctivedialectical process, producing unity and harmony, like male and femalecreatures among humans, animals, and birds. The latter type of dialecticsis important for survival of nature, global ecosystems, and of humankind.But the former, contradictory dialectics producing bifurcative changes isalso both central and rational to historical evolution of systems.

To avoid continuous chaos, the self-organizing capacities of the dissi-pative structures reproduce order with a dynamic found in open systemsof both nature and human organizations.

Implications of Chaos and Transformation Theories in General

At least three different implications can be drawn from the chaos andtransformation theories for the current global and world-systems designs.

The first interpretation may be offered based on the late approaches ofthe former Soviet Union as the leaders of the world socialist system, firstunder Brezhnev and most notably under Gorbachev, whose ideas of inter-national “coexistence,” detente and nuclear arms control policies with theWest were purported to be a way to save the planet from total nucleardestruction. While irreconcilable contradictions between socialism and cap-italism would no doubt continue, it was nevertheless understood by bothsuperpowers—United States and USSR—that continuous confrontationswould likely lead to a catastrophic annihilation (Rosenau, 1990).

The second interpretation of the chaos and transformation theories im-plies that the world capitalist system under the United States would need


to continue to build new weapons systems to show the latest technologyin warfare to the world, and to pursue designs for control and dominationof the world, a world-system design through which forces of chaos can besuppressed or eliminated and the process of global transformation be ide-ally directed to suit the goals of capitalism and the political world orderunder its leadership. This interpretation is not without foundation, as therecent process of globalization of capital has been pursued with extraor-dinary aggressiveness through use of military force and interventionsaround the globe, i.e., the Persian Gulf war of the 1980s and the relentlessbombing of Yugoslavia resulting in its dismemberment. Both were as muchideologically and politically motivated as economically rationalized.

The third interpretation of the chaos and transformation theories is thecurrent global trends of what I call “system shake up,” which is to induceby design the dynamics of chaotic changes to maintain and enhance thesystem of late capitalism. Designed forces of chaos include, for example,corporate—and by extension government—downsizing, organizational re-structuring through mergers, massive privatization, elimination of jobsecurity and other employee rights and benefits, as well as intensificationof many institutional crises and periodic wars in various parts of the worldthat are created by the globalizing transworld corporate elites. These glob-alizing elites are backed and promoted by the globalizing military and po-litical powers, such as the United States, with aims for global dominanceand hegemony (Dugger, 1989) and for protection and promotion of“America’s global interests” (Hamilton, 1989). Chaotic workplace organ-izations of the capitalist system create pressures or bifurcations and dissi-pative structures that are hoped, by corporate designers, to produceself-organizing forces for desired system changes. These induced changesare, it may be argued, for prevention of system collapse out of the endemiccrisis of “disorganized capitalism” (Offee, 1985) and of “legitimacy” (Ha-bermas, 1984). They are also for revitalization of the system from stag-nation to pursuit of higher levels of surplus value accumulation of globalcapital, as well as for the achievement of the new world order dominatedby the hegemonic global corporate power elites (Farazmand, 1999, forth-coming; Korten, 1995).

A short period of five to ten years of adverse effects from induced chaoticchanges, such as massive labor displacement and unemployment due toprivatization and downsizing, as well as to other social costs produced bymarket chaos, for example, is considered an insignificant side-effect and yeta healthy manifestation, at the microcosmic level, for the “smooth” trans-formation of capitalism in the long run at the macrocosmic level (Drucker,1969). To chaos theorists, the opposite is also true; that is, systems mayappear stable and organized in the short run but are unstable and chaoticin the long run. According to Prigogine, while a system “appears as irreg-


ular or chaotic on the macrocosmic scale, it is, on the contrary, highlyorganized on the microcosmic scale” (Prigogoine and Stengers, 1984: 141).

Implications for Organization Theory

Chaos and transformation theories have several implications for organ-ization theory. First, chaos theory implies that organizations as open sys-tems are capable of producing within themselves, and through their internalconstitutive components, forces of dissipative structures, most of whichhave self-organizing capacities that lead to new organizational entities andorder. This is what the Marx-Engels’ dialectical nature demonstrated overa century ago (see the previous chapter for details). Like other living sys-tems (Miller, 1978), open organizations possess self-corrective mechanismsor negentropies that fight forces of decay and stagnation and revitalize thesystem. This is the dynamics of all open, living systems.

Second, historically speaking, organization theory has evolved from theclassical closed systems represented by the early twentieth-century bureauc-racy and structural/functional/formal designs characterized by stability, or-der, and avoidance of change to the newest forms of organizationalevolution characterized by instability, chaotic changes, system breakdownswith bifurcations into new orders, and negative feedbacks as well as non-equilibrium features as positive ingredients producing dynamism in the or-ganizational system.

Third, the systems theory of the 1960s and after was an evolutionaryimprovement over the previous periods. It recognized the importance ofchange, environmental interaction, feedback, entropy-negentropy, andequilibrium or stability, as well as the need for understanding organizationswithin the broader socio-political system environment in which they op-erate. Both chaos and systems theory have in common the elements ofenvironmental interaction, negentropy, and subsystem-system relationships.But chaos and transformation theories depart from the systems theory inthat the former thrive on nonequilibrium, quantum dynamics, and chaoticevents or changes with instability and negative feedbacks being positivesigns of system change and evolution toward higher levels of organic state.While systems theory suppressed forces of chaotic changes disturbing sys-tem equilibria, chaos and transformation theory foster such “dissipativestructures” in hope of revitalizing the system from entropic decline or de-cay. Therefore, organizations and their leadership must induce periodicchanges of a chaotic nature to “shake up and crack” the stable system forrenewal and revitalization.

Fourth, chaos and transformation theories imply the learning organiza-tional concept necessary for change, adaptation, and adjustments to re-spond to the external environmental changes and paradigmatic shifts ortrends. Organizations that learn, adjust, and adapt to the external pressures


causing systems breakdown and bifurcations can survive and evolve, andtheir evolution comes through internal learning and transformation. Learn-ing takes place through changes in structure, process, and values of theorganizational system, and this learning needs to be institutionalized; hencethe relevance of the institutional theory discussed earlier.

Fifth, like many dialectical processes of change and evolution, organi-zational changes and behavior—and their management—are not caused bycausal and linear-based forces alone. Nonlinear relationships, chance, andrandomness characterize much of modern organizational systems, andmany organizational problems must be managed or solved by nonlinearthinking (Kaufman, 1985). This is what Karl Weick (1979) called “naturalselection” toward evolution, with the fittest to survive and those selectedout to die.

Sixth, chaos theory may explain the current chaotic changes and trendsso pervasive in the management of public, private, and nonprofit organi-zations worldwide. Such organizational reform or change realities as mas-sive downsizing, sweeping privatization, environmental deregulation, andexpansion of the corporate-based, private sector worldwide are seen ashealthy phenomena that tend to energize and revitalize organizations andtheir management systems.

Seventh, chaos theory can help predict possible future patterns of orderout of chaotic behavioral patterns of the present and the past. Such poten-tial improvements are already explained by mathematical modeling,weather forecasting, and the prediction of climatic changes in the atmos-phere. It can also potentially help in diagnosing organizational entropiesby providing the benefits of an early warning system and the need for timelyinterventions for systems correction and revitalization.

Limits of Chaos Theory: A Critical Appraisal

Despite many perceived benefits of chaos theory, it has many limitations.In fact, chaos theory can be considered, to a great extent, a dangeroustheory that should be avoided or confronted with creative alternatives.First, the theory tends to promote deliberate chaos and destruction in socialas well as natural processes; it attempts to tamper with the dialectics ofnature by interfering in the natural evolutionary processes. Implications ofthis sort are far beyond the low-level intellectual discussions and can befrightening. Its potential to destroy, clone, and reshape by a few powerfulelites equipped with advanced technology at the global level can cause dev-astating negative effects on the future of the planet, the global ecosystem,and all humanity. However, its purported advantage of guiding humanbeings to determine human destiny should be noted.

Second, as an extension of the first, chaos theory can be a powerful toolof manipulation and control in the hands of a few powerful elites for eco-


nomic, social, political, and military reasons. Third, unpredictability of out-comes of chaotic states or systems pose further dangerous, and potentiallyfatal, threats to individuals, groups, cultures, and peoples around the globe.Unpredictability and chaotic changes also tend to produce unanticipatedsecondary or multiple consequences or outcomes that may defy any systemsdesigner’s calculated or perceived ideal or desired states. Fourth, designedorders can be repressive to millions while beneficial to a few whose eco-nomic and sociopolitical interests derive from, and drive, chaotic condi-tions. An example is the current massive marketization, downsizing,privatization, and corporatization trends pursued by globalizing capitalistelites. While the few gain in profit massively, the vast majority of humanpopulations around the world suffer from joblessness, income insecurity,job insecurity, poor health—both mental and physical—hunger, poverty,homelessness, and other crises that have been characteristics of moderncapitalist societies, West as well as East.

Fifth, ethical problems emerge with the chaos theory: Who gives the rightto the few power elites to decide the future of billions of people and toalter the global system? Why should the future generations’ right to self-determination be taken away or violated by the current few powerful elitesin both government and corporate organizational systems? Why shouldchaos designers, dictators, and directors decide the fate of billions of pop-ulations around the globe? How do we know that designed chaotic eventsor processes do not lead to global annihilation and destruction? Who willbe responsible for the grand failures and possible catastrophes?

Sixth, dissipative structures may either dissipate forever or cause unex-pected consequences or outcomes beyond anyone’s control. Besides, if cha-otic events or processes will eventually lead to order, or order to chaos,how do we know that injecting chaotic forces into a prevailing stable sys-tem will lead to eventual order, especially desired order? Could it causemassive dissipative evaporation? What do we replace it with? Further,whose order is the desired order? An order for some may be the mostrepressive and chaos-generating force for the vast majority of people whogo through chaos, lose everything they have, and become potential forcesof chaos for others—causing further social chaos. It is easy to speak ofchaos; it is a hardship to go through it. It is intellectual arrogance to assumewe know everything and can alter the natural systems by design. Marketchaos is too costly to the millions of people worldwide suffering from mal-nutrition, homelessness, joblessness, and health crises, and it requires orderwhich can be very repressive; it produces its own antithesis of system de-struction within itself.

Seventh, chaos may lead to order, an order that is often manipulated bythe power elites who then require conformity, harmony, obedience, andcooperation for promoting capitalism and its ultimate goal of rapid surplusvalue accumulation. Chaos theory may explain its own limit, that is its


gradual transformation of capitalist system into socialism. Can it be con-trolled by the designers? Who knows?

Finally, the transformation theory as espoused by the theorists suggestsa desired globally designed system dominated and led by the global capitaland its political-military system of the United States and other Westerncountries. This may backfire as dissipative structures and self-organizingforces will likely rise through the dialectical process of cross-catalysis andcross-analysis (to use Prigogine’s terms). Nation-states, peoples, and cul-tures will resist hegemonic global order dictated by the Western powersand might produce new structures capable of breaking the order into globalchaos, which then will have to be put back into order by the global powerelites through military force and coercion. The September 11, 2001 terroristattacks in New York and Washington, D.C., and the subsequent U.S.global war on terrorism is a clear example of a tragic cycle of events. Here,organizational elites will play a key role in maintaining the new globalsystem of order, and managing the induced chaotic changes that are nec-essary for system transformation into a stronger one.

Contemporary chaos theorists avoid the issue of power and power struc-tures led by the few elites, who are constantly trying to alter the naturaland human systems. Organizations play a fundamental role in the trans-postioning, exposure, and promotion of chaos. Organizations themselvesgo through chaos and chaotic stages of life cycle, but do they not returninto a sort of chaos sooner or later? This itself presents another limitationof the chaos theory.

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Chapter 4

Elite Theory of Organization:Building a Normative Foundation

Ali Farazmand

Throughout the world, public, private, and nonprofit organizations are un-dergoing significant changes. These changes include structural adjustments,organizational reconfiguration, and process improvements to maximize ra-tionality and bottom-line concepts. A radical feature of these changes is themassive downsizing of organizations almost everywhere, with the effect ofmassive social and economic displacement. Giant corporations and govern-mental organizations alike have led a crusade of turning the table upsidedown in organizational life. They have embarked on a major structuralchange in government-society-market relations that not only has altereddecades of policy on state functions but also has created a chaotic andunpredictable future for all peoples around the globe. This structuralchange will most likely continue to persist in the foreseeable future withfundamental consequences for society and implications for public and pri-vate management. Privatization, downsizing, reorganization, and redefini-tion of public and private spheres of organization and administration arebut a few of the structural changes that have had profound impacts onsociety. Chaos, disruption of traditions, and unpredictability seem to bepermeating life around the globe, causing anxiety and stress.

Behind these chaotic changes appears to be a strong ideological, market-based, conservative trend with a pursued manifest mission of antibureau-cratic character and of trimming big governments with out-of-controlbureaucracies. Proponents of these trends claim they improve service deliv-ery, increase efficiency, and promote high performance in response to citi-zens’ demands for accountability, transparency, responsiveness, and costcontrol. These trends also are said to adapt to changing environmentalpressures that affect organizational survival, competitiveness, and effective-


ness. Adaptation and effectiveness have become keywords for survival anddevelopment.

When explaining the necessity for organizations to adapt to environ-mental and technological changes, organization theorists have followed thetraditional academic line. However, what is often overlooked or avoidedin all these discussions in the organizational literature is the issue of thestrategic position of the elites who exercise power in setting long-term di-rections for organizations. Theorists have avoided the question of whomakes these decisions that affect millions of people inside and outside mod-ern organizations. People do not downsize themselves; organizational elitesdo. Common people do not privatize government functions; public organ-izational elites do. Furthermore, most organization theorists have longavoided focusing on the central normative issues of power, control, andpolitics in administration as well as the political culture that affects organ-izations from the outside. Finally, theorists have avoided the key subject ofinquiry regarding the cohesiveness or harmony with which these strategicand significant decisions are made in public and private organizations andthe ways in which strategic elites direct and redirect societal allocations ofresources and powers. Exceptions are few; they may be found in the liter-ature on sociology and political economy.

Generally, mainstream organization theorists have treated the normativeissues of power, politics, and control as internal phenomena that exist onlywithin organizations, except for the acknowledgment of an external influ-ence that organizations should adapt to or accommodate. The singular roleof technical rationality has been emphasized in explaining collective actionand organizational behavior. These theorists have focused on instrumentalrationality as a means to achieve organizational ends or goals. But howthese organizational goals, especially the long-term strategic ones, are de-termined is a central question that often is overlooked, or even ignored, inthe studies of organization. Exceptions are few (see, for example, Faraz-mand, 1994; Fischer, 1984; Kaufman, 1964; Michels, 1959, 1984; Ott,1989; Perrow, 1986; Pfeffer and Salankik, 1978; Waldo, 1978; Weber,1947).

Rarely have organization theorists embraced political theory in the de-velopment of organization theory (Kaufman, 1964). Political and organi-zation theories have been developed in parallel, one without consideringthe other. As Kaufman (1964, in Gorthner, Mahler, and Nicholoson, 1987)points out, “if there is any conscious agreement between the two fields, itis on their separateness from each other” (91). Drawing on different dis-ciplines and grounds, “political theorists are frankly normative; organiza-tion theorists generally believe their work is value-free.”

Exclusion of political theory from organization theory also is explainedby other social scientists and organizational theorists (see, for example,Miles 1980; Schein, 1977; Waldo, 1978). According to Miles, organiza-

Elite Theory of Organization 99

tions have dual realities: technical rationality and political rationality orirrationality. Exclusion of political theory from organizational theory re-sults in a presentation of only one side of the organizational reality, thetechnical rationality. Political rationality or irrationality constitutes theother side of all organizations, especially public organizations of all types.As Miles (1980) notes, “the second reality of organizational life is thatpurely rational conditions seldom obtain” (157). Power is not used by itselfin organizations and in administration; it is exercised by organizational andadministrative elites.

Similarly, political theorists have avoided a discussion of organizationtheory. This separation of organizational and political theorists actually hasimpaired rather than enhanced both bodies of knowledge about the wayssociety is organized and administered (Farazmand, 1994; Fischer, 1984;Kaufman, 1964). It is surprising to see this negligence despite the fact thatorganization and administration are central to political systems and, asMatthew Holden (1997) reminds us, administration is power. Centralityof administration and organization is beyond doubt. It is through organi-zation that power is exercised, and a long history of political changes andadministrative continuity, dating back to ancient times—Babylon, Persia,Rome, and others—has proved this over and over (Eisentadt, 1963; Jacoby,1973; Waldo 1980).

The purpose of this chapter is to present a discussion of elite theory asit relates to organizational elite, a long-neglected area of organizationalresearch. Political rationality is brought back in for prescriptive as well asdescriptive explanations. The discussion will attempt to develop a modelof organizational elite as a preliminary step toward building a normativetheory of organization. The suggestive normative organizational elite the-ory is, therefore, both descriptive and prescriptive, offering the advantagesof both explanatory and predictive powers.

Elite theory and the concept of power elite, as opposed to the Marxistnotion of ruling class, is well established in the disciplines of political sci-ence, sociology, and economics (see, for example, Balbus, 1971; Burch,1981; Domhoff, 1983, 1990; Dye and Zeigler, 1993; Etzioni-Halevi, 1992;Field and Higley, 1973, 1980; Higley and Burton, 1989; Higley and Moore,1981; Hunter, 1953, 1959; Jones, 1987; Lindblom, 1990; Macpherson,1987; Mills, 1956; Mosca, 1939; Parenti, 1988; Prewitt and Stone, 1973;Schumpeter, 1942, 1976). Surprisingly, however, even the elite theoristshave neglected in their research the centrality of organizational elite. Littlehas been published on this important, if not central dimension of elite the-ory (see Domhoff and Dye, 1987, and Farazmand, 1999, for exceptions).

Other exceptions include recent works on interorganizational networksand interlocking boards of directorate in connection with corporate powerelites (see, for example, Aldrich and Pfeffer, 1976; Domhoff, 1971; Mintzand Schwartz, 1981b; Mizruchi, 1980; Pfeffer and Salankick, 1978; Useem,


1984). However, despite these studies, no study has focused on the conceptof organizational elite. This is a grossly neglected area of research on mod-ern organizations, a fact that is admitted by elite theorists as well as main-stream organization theorists (DiTomaso, 1980; Domhoff and Dye, 1987;Gorthner et al., 1989; Perrow, 1986).

This chapter addresses this neglected area of organization theory. Suchnegligence is regrettable because it has closed the doors of opportunitiesfor researchers in social science in general and the students of organizationtheory and public administration in particular. By addressing the key andneglected area of elites, the chapter presents a novel approach to the studyof modern organizations, their management, and performance. It will openup an invitation to elite theory in the study of modern organization andadministration, hence filling in a major gap in the literature of organizationtheory.

RATIONALE, JUSTIFICATION, AND THE NOVELTY OFTHE NEW THEORY

The significance and rationale of this chapter are discussed in some detailtoward the end. Briefly noted here is that studying organizational elites isimportant for several reasons. First, we live in an organizational society.Modern society and civilization function and flourish through organization(Harmon and Mayer, 1986; Presthus, 1962). Billions of people live and diethrough organizations, and governments and their political, social, and ec-onomic systems rise and fall through organizational structure and perform-ance. Organization is a collective action, and collective action is an exerciseof power, which in turn is central to administration and politics. Therefore,organizations are indispensable to those who exercise power, power is ex-ercised through organizations, and it is organizations through which ad-ministration is practiced. As Holden (1997) asserts, “administration ispower,” which is “central to effective governance” (126). Therefore, cen-trality of organization as well as of power is both acknowledged and em-phasized almost invariably by all elite theorists as well as nonelite theoristsof organization. For example, in his analysis of “the biology of organiza-tions,” Bertrand Russell (1938) stressed organizations as necessary socialinstitutions for the exercise of power.

Power is dependent upon organizations in the main, but not wholly. Purely psy-chological power, such as that of Plato or Galileo, may exist without any corre-sponding social institution. But as a rule even such power is not important unlessit is propagated by a church, a political party, or some analogous social organism.(158)

Second, as discussed below, almost all definitions of elite theory haveinvariably stressed the word organization as a central means of exercising


power by those holding the elite power. Similarly, nonelite theorists havelong stressed the importance of organizations for the exercise of power aswell as the importance of power within organizations (see, for example,Long, 1949; Pfeffer, 1981; Scott and Hart, 1989).

Third, organizational elites are instrumental to the realization of the willof the elites in government, business, and society. They are the translatorsof power elites’ abstract ideas into practical realities. Organizational elites’socioeconomic and political backgrounds reflect the representative interestsof the power elites in society. Organizations serve this and other similarpurposes. Downsizing, reform and reorganization, and privatization aresome of the strategic organizational decisions that are made by organiza-tional elites to reflect the will of the overall power elites in society. Theseare some of the hot issues that are transforming societies’, governments’,labor, and peoples’ lives at local, national, and global levels. Globalizationis a process that is directed primarily by the corporate and governmentalstrategic elites, whose decisions are translated into operational behaviorsby organizational elites across the globe.

Fourth, organizational elites perform unique functions of maintaining the“invisibility shielding” of the power elites from the public eye, making themunaccountable for failures and taking credit for good performance. Fifth,the theory of organizational elites presents a novel dialectical approachtoward studying significant strategic issues about organizations, adminis-tration, and governance in society. Studying and understanding such issuesas elite cohesion and unity, elite disunity, elite rivalry and settlement, eliteconfiguration and reconfiguration, interelite competition, elite-nonelite ri-valry and fighting, elite recruitment and retention, and elite crisis manage-ment provide opportunities to develop a deeper understanding of the waysin which organizational elites behave, to predict those behaviors. Such aknowledge of organizational elites helps managers manage organizationalbehaviors more effectively, responding to environmental demands and pres-sures from the public—citizenry—according to the prescribed rules of con-duct in organizational behavior. Similarly, studying organizational eliteshelps citizens, employee unions, and clienteles to understand and predictelites’ behaviors and preferences and to find appropriate ways to exert pres-sures on elites and/or influence policy choices through both decision makingand organizational implementation. This counterelite or mass-based organ-ization of pressures from below is extremely important for the citizenry inits attempt to alter or modify power elites’ behaviors. Organizational elitetheory provides a useful conceptual framework for such studies and un-derstandings for citizens, managers, and employees in organizational sys-tems. No other models or theories of organization offer such a novelapproach to the study of organization and administration in society (furtherjustifications and rationales are given in a later part of this chapter under“Significance and Implications”).


The concept, assumptions, and implications of a suggestive theory oforganizational elite are presented here as a step toward developing a nor-mative theory of organization. This is done at two levels of analysis: (1)macro-organizational power environment, including the interorganizationallevel and (2) micro-, intra-organizational level.

First, a background on elite theory is provided to clarify the conceptand to prevent any confusion with similar or contending theories of orga-nization. Then, models of elite theory are presented and discussed. This isfollowed by a discussion of the organizational elite, including the charac-teristics of elites and sources of elite cohesion, solidarity, and unity. Then,an analysis is made to present possible contributions to a normative theoryof organization and to identify some implications for public administrationand modern governance.

BACKGROUND TO ELITE THEORY

No organization, public or private, operates in a vacuum. All organiza-tions and institutions perform in a political or power environment throughwhich the broad parameters are more or less defined, and any organiza-tional action contradicting rather than enhancing, or conforming to, thatenvironmental power structure is sanctioned by institutional means of thestate, whether autonomous, dependent, mediating, or weak in dealing withpowerful transnational corporations (TNCs), which are becoming “state-indifferent” (Mandel, 1975: 328; see also Held et al., 1983; Jessop, 1982;King, 1986; Miliband, 1969; and Skocpol, 1979, for a discussion on statetheories; and Korten, 1995, on the role of transnational corporations).

Peter Dobkin Hall’s (1984) The Organization of American Culture,1700–1900 describes and documents the process of Puritanism’s secularinfluence and cultural survival. “Private organizations took the place ofboth the state, the family, and the locality in conducting fundamental ec-onomic and cultural activities.” Therefore, “the rise of private corporationsbrought about political, economic, and cultural nationality” (Hall, 1984:1; also quoted in Johnson, 1988: 586). According to Hall, culture is definedneither on Weberian terms nor based on moral ethos of bureaucracy, butrather as “a set of social values and institutions used by people in orga-nizing the entire range of their fundamental activities” (8). Hall focuses onthe role of religion in shaping society; the reshaping of religion by society;the development of the notion of character; the bureaucratization of busi-ness, government, and society; and the role of elites in reorganizing Amer-ican culture. According to Hall, the story of the organization of theAmerican culture is “essentially the story of developing bureaucratic elitesin the service of economic and social nationality” (quoted in Johnson,1988: 593).

Arguing that the culture of a political system is “inextricably bound up


with the existing governmental structure,” Gortner et al. (1987) correctlystate that the power structure of a society “influences the proceduresaround and in the bureaus [public organizations] established to carry out[public] policy” (79). In other words, the political and power environmentor structure determines the broad parameters in and around public organ-izations. Actually, this also may be true of all organizations, private andnonprofit. Gorthner et al. then state, “Therefore, theories of about how thepolitical system works, who has access where, and what is considered‘proper’ within the political sphere are vital to understanding how publicstructure develops and is maintained” (79). Similarly, systems theorists em-phasize the role of environment in shaping organizational structure andprocess (Ackoff, 1974; Katz & Kahn, 1966, 1978; Thompson, 1967), butthey do not focus on the power structure in or out of organizations.

It is this understanding that is essential to explaining properly the natureand functions of modern organizations. Of the competing theories of pol-itics and democracy, the Marxists, the pluralists, and the elitists tend tohave occupied more space in the academic arena than any others in thefield. All three theories may be useful in explaining how organizations,especially public organizations, “attempt to operate as actors in the politicalsystem” (Gortner et al., 1987: 79).

Traced to the works of Benthly (1908), Truman (1951), and Dahl andLindblom (1953), the pluralist or group theory generally espouses that dis-persed, fragmented, and independent groups, individuals, and organizationspursue their interests in the governmental system. “An interest group is ashared-attitude group that makes certain claims upon other groups in thesociety. If and when it makes its claims through any of the institutions ofgovernment, it becomes a political interest group” (Truman, 1951: 37). In“a critique of the ruling elite model,” Dahl (1958) rejects the notion ofelite consensus and homogeneity in decision goals. He argues that poweris dispersed, that no one group is capable of determining the outcomes ofdecisions made in government and society in a consistent or persistent man-ner. As will be seen below, even pluralists, including Dahl and Lindblom,do not reject the notion of elites in society.

The Marxist and neo-Marxist theories of politics and economics assertthat a ruling capitalist class dominates society, including its government,business, and other social institutions. Accordingly, organizations, publicor private, are instruments of class domination, exploitation, and controlfor the purpose of maintaining and enhancing the capitalist system con-trolled by the ruling class (see, for example, Marx, 1966; Miliband, 1969;Poulantzas, 1969; Tucker, 1978). Similarly, the conservative neoclassicalpublic choice or market theory posits that organizations, like individuals,are rational decision makers and always tend to maximize their self-interests by minimizing costs and maximizing benefits in a marketplace.According to the market or public choice theory, competition and overlaps


characterize modern organizations. In the political system, they are dis-persed, not centralized or concentrated. Most other traditional organizationtheories fall under the instrumental rationality of the pluralist and markettheories of politics, economics, and democracy (see, for example, Buchananand Tullock, 1962; Downs, 1967; Niskanen, 1971; Ostrom, 1974; Stockyand Zekhauser, 1978; Williamson, 1981, 1983, 1985).

The elitist theory of politics is as “old as history, but the first presentationof it as a model of local government in the United States can be traced toHunter [1953]” (Gortner et al., 1987: 80). The elitist democratic politics,not the same as Marxist ruling class theory, asserts that a few individualsor groups make the most commanding decisions in society, and they dothis outside of the formal governmental structures. This theory holds that

Few have power and many do not; the few allocate values and resources in society,and the masses do not decide on these strategic value choices; the few who governare not typical of the mass of people.

The elite are drawn disproportionally from the upper socioeconomic strata of thesociety.

The elite-nonelite movement must be slow to preserve the structure and natureof the system.

Elites share a consensus on the basic values of the social system and tend topreserve those values, and their disagreements are on a narrow range of dispersedissues.

Public policy does not reflect the preferences of the masses, but rather the interestsof the elite, and changes in public policy are incremental rather than radical orrevolutionary.

Elites influence masses more than masses influence elites. (Dye and Zeigler, 1984:6; 1993: 5)

Elites, not masses govern all societies. (Dye and Zeigler, 1993: 3)

This theory also holds that the masses are generally frustrated by theself-perpetuating status quo but are unable to alter it incrementally. Theonly viable option is for the counterelites to take over elite power or tostage revolutions. For further assumptions of elite theory and of the sug-gestive organizational elite theory see Farazmand (1994: 36–38).

MODELS OF ELITE THEORY

The above assumptions by elite theory may be vague and subject to di-vergent perspectives on the concept of elite. However, a few definitions mayhelp in understanding the true meaning of the term elite as opposed toMarx’s ruling class.

Defining Elite

There is no single definition of the concept of elite. What the literaturereflects is a divergent array of definitions of the term. The lack of a unified


meaning of elite emanates from the scope and limit of those included inthe spectrum of elite rank, given the universality of the accepted meaningof the term itself. Therefore, various definitions arise and different modelsand constructs develop as frames of analysis.

Despite the differences in definitions, all elite theorists seem to agree onone thing: the powerful position of a small group of individuals or groupswho either shape or influence decisions that affect national outcomes. Thus,all actors occupying key positions in the political, economic, military, gov-ernmental, cultural, and administrative institutions and organizations areconsidered members of the elite because they affect the national outcomes.First, let’s settle the definition issue at hand.

According to Mosca (1939),

In all societies, from less developed to the most advanced, two classes of peopleappear, a class that rules and a class that is ruled. . . .

The class that rules is few, whereas the second, the more numerous class, isdirected at and controlled by the first, in a manner that is now more or less legal,now more or less arbitrary and violent. (50)

The few elites “acquire a stake in preserving the organization and theirposition in it. This motive gives leaders a perspective different from that ofthe organization’s members. An elite is then inevitable in any social organ-ization” (Dye and Zeigler, 1993: 2–3). To Michels (1959), “he who saysorganization, says oligarchy” (70), and “government is always governmentby the few, whether in the name of the few, the one, or the many” (Lasswelland Lerner, 1952: 7).

According to Gwen Moore (1979), the term political elite refers to “per-sons who by virtue of their institutional positions have a high potential toinfluence national policy making” (674). Therefore, it “includes politicians,government officials, and the leaders of various interest groups, which at-tempt to influence the allocation of values in society” (Moore, 1979; seealso Parry, 1969: 13). More clearly, Higley and Burton (1989) define “na-tional elites as persons who are able, by virtue of their authoritative posi-tions in powerful organizations and movements of whatever kind, to affectnational political outcomes regularly and substantially” (18).

In defense of elite theory, and signifying the importance of the organi-zational context of elites, Higley, Burton, and Field (1973) maintain thatthey have “consistently followed Weber and Michels in conceiving of elitesas rooted in bureaucratic organization. Movement leaders are elites onlyto the extent that the movements are bureaucratically structured and thuspowerful on a sustained basis.” Those leaders then “can affect politicaloutcomes regularly and substantially” (Higley, Burton, and Field, 1990:422–423).

Dogan and Higley (1996) define elites as


the few hundred or at most few thousand persons who head the major institutions,organizations, and movements in a society and who are therefore able to impel orimpede political decisions on a regular basis. Elites consist, therefore, of the topleaders of political parties, governmental bureaucracies, large and/or pivotally lo-cated business firms and large unions, the military, the media, professional, relig-ious, educational, and other major organizations, as well as the leaders of powerfulinterest groups and mass movements. (3–4)

Because these definitions are too broad, inclusive, and confusing, they aresubject to interpretations and challenges, such as the one offered by AlanKnight (1996) in his extensive and provocative analysis of elite theory.

To Hunter (1959), elites are the “top leaders” who shape and controlthe “power structure,” whereas to Mills (1956), they are the “power elite,”

composed of men whose positions enable them to transcend the ordinary environ-ments of ordinary men and women; they are in positions to make decisions havingmajor consequences. Whether they do or do not make such decisions is less im-portant than the fact that they do occupy such pivotal positions: their failure toact, their failure to make decisions, is itself an act that is often of greater conse-quence than the decisions they do make, for they are in command of the majorhierarchies and organizations of modern society. They run the big corporations.They run the machinery of the state and claim its prerogatives. They direct themilitary establishment. They occupy the strategic command posts of the social struc-ture, in which are now centered the effective means of the power and the wealthand the celebrity which they enjoy. The power elite are not solitary rulers. Advisorsand consultants, spokesmen and opinion makers, are often the captains of theirhigher thought and decision. Immediately below the elite are the professional pol-iticians of the middle levels of power, in the Congress and in the pressure groups,as well as among the new and old upper classes of town and city and region. (3–4)

Mills’ definition of the concept of power elite is both clear and compre-hensive in that it includes not only the macro elites, but also the microelites who operate the organizations and institutions controlled by thepower elite. This view is shared by the more contemporary elite theoristswho focus in their studies on interlocking organizational networks of theelites. Despite the common tenets emphasized in these definitions, the fol-lowing perspectives on elite theory may be discerned.

The Models

Different models of elite theory emerge when one examines the abovedefinitions, deriving from the fact that different perspectives represent theelite concept. Higley and Moore (1981: 584–585) identify four elite modelsbased on the two dimensions or criteria: (1) inclusiveness of personal in-


teractions among top position holders and major elite groups and (2) thestructure of interaction that facilitates contacts between these individualsand groups. These models are the consensually integrated elite model(s),the plural elite model, the power elite model, and the ruling class model(s).To these models, I propose to add a fifth, an organizational elite model,using the same dimensions or criteria offered by Higley and Burton (1989),for the reasons provided below.

Before discussing these elite models, it is useful to understand the termsinclusiveness and structure of elite as given by Higley and Burton (1989).Their criteria also include the terms fragmentation and integration, refer-ring to elite disunity and unity. This is important, according to elite theo-rists, especially for elite cohesion in determining national outcomes and forregime or political system survival (for a detailed discussion of these terms,see Higley and Burton, 1989; Higley and Moore, 1981).

Consensually Integrated Elite Model

In this elite model, “there is an inclusive network of formal and informalcommunication, friendship, and influence welding among top positionholders in all major elite groups, i.e., business, trade union, political gov-ernmental, mass media, voluntary association, academic, etc.” (Higley andMoore, 1981: 584). Prominent formal organizational positions as well ascenters of national policy making are the locus of interactions among theseelites. As decision structures, political-governmental decision centers attractthe most powerful actors for their ready accessibility. The consensuallyintegrated elites come to consensus based on a variety of system’s factors,which they all share. However, this group is relatively small and markedlycentralized, with frequent interaction among its members. These elites areintegrated after perhaps a long process of fragmentation but have come tounity through consensus and settlement. Countries such as the UnitedStates, Australia, Britain, France, and Canada are mentioned as examples(Higley and Moore, 1981).

Plural Elite Model

Like the consensus elite model, the plural model is based on interestgroups, organizations, and the prominent leaders or elite groups present inthe interaction networks located on different decision centers. This modeldepends on prominent positions and involvement in significant policy-making areas. Class membership or other background characteristics arenot major criteria for elite interaction (Dahl, 1958, 1961, 1979; McConnel,1966; Rose, 1967). The plural elite model is postulated on the premise thatno single elite group dominates the structure, that interaction among elitegroups is generally less frequent and not consciously centralized in an innercircle or core group, and that interaction occurs on specific issues. Intra-sectoral elite interaction is greater than intersectoral interaction, and direct


intersectoral elite interaction is frequent only with governmental elites.Therefore, public organizational elites are the targets of most frequent in-teraction and serve as the conduit to all other elite sectors for interest ar-ticulation and consensus building.

Power Elite Model

Unlike the pluralist model, in the power elite model an informal yet aclear hierarchy of power and influence exists among elite groups. At theapex of this hierarchical elite structure are business, political, and perhapsmilitary elites. It is not an inclusive model, the interaction network is smalland concentrated, and interaction is frequent among the uppermost elitesonly (Hunter, 1959; Mills, 1956; Porter, 1965).

Shared objectives, values, wealth, and educational and social back-grounds hold the power elite groups together. There are extensive posi-tional overlaps, interlocks, and interchanges among the uppermost elites.Business elites hold the primacy, and top military and government positionholders also occupy a core, but the former group is the determining andmost powerful actor of the circle. The executive cabinet members and toppolitical elites appear to be centrally located, with legislators and high-levelpolitically appointed officials taking secondary seats just below the firstinner circle group.

The first group of uppermost elites generally sets the broad parametersand boundaries of the political and governmental system, allowing the sec-ondary level of non-inner circle elites to interact and function on the pluralmodel. Should the secondary level elites step beyond the boundary limit,they will be subject to sanctions, including removal from membership.Whereas the first group of uppermost elites includes the boundary setters,the second elite groups are the operational decision makers and implemen-ters of the directives of the former. Autonomy of the first elite group fromthe state is expected, and the state actually is dependent on this elite. Mills(1956) calls this group the “power elite,” whereas Hunter (1953) calls itthe “power structure,” which conditions the structural parameters and theirboundaries in society.

Empirically, this model can be applied to many countries in the devel-oped and developing world, but it does not seem to apply to some, espe-cially revolutionary societies such as Iran, Nicaragua under the Sandanistas,and elsewhere, where the lower middle class, including members of thepeasantry and some professional groups, actually governs the society anddominates the politics and administration, although the economic elite maystill hold considerable bargaining power. However, the masses of people—especially the working and lower classes who exercise influence on the gov-erning elite—also have strong demand on and expectations of the govern-ment they legitimize, and their claims cannot be ignored. Therefore, theviability of the governing elite depends on the support it receives from the


lower strata of the mass people, whereas at the same time, it must accom-modate the collective body of the bourgeoisie/capitalist class. However, therevolutionary government in Iran, for example, has not hesitated to actagainst the latter in favor of policies benefiting the former (Farazmand,1989, 1996).

Ruling Class Model

Similar to the power elite model is the ruling class elite model. The apexof the elite hierarchy is occupied by the business class and some politicalruling classes. Much controversy exists surrounding this model, but whatis clear about the ruling class model is the unambiguous position of thoseuppermost elites who are present in most significant decisions, and choicesof nondecision, made in society. Different configurations may develop overtime in the ruling class elite, but eventually the configurations must gravi-tate toward and around the center elite, or ruling class.

The number of people in this circle is small, and their less powerfulpositions are delegated to the secondary elite groups, whose functions in-clude translation of policy preferences and choices of the ruling class eliteor adoption of policy choices that do not contradict the will of the rulingclass. This is the “second stratum” elite—the plural elites, or even somemembers of the power elites, or both (see, for example, Connel, 1977;Domhoff, 1967, 1970, 1974, 1978, 1983, 1990; Espingo-Anderson, Fried-land, and Wright, 1976; Miliband, 1969; Mosca, 1939; Therborn, 1978).Although both the ruling class and power elite models are similar in de-scription, they are different in the “level of interpretation” (Higley andMoore, 1981: 585) and the degree of deterministic power in society.

Organizational Elite Model

In each of these elite models, the centrality of key organizations and theirposition holders is emphasized as a necessary institutional mechanismthrough which elites act and exercise power. It is this necessity that leadsus to conceive of a fifth model, a model of organizational elite. These elitesoperate organizationally and in organizational contexts. It is this area onwhich even the elite theorists concede that research has been neglected (seeDiTomaso, 1980; Domhoff and Dye, 1977).

ORGANIZATIONAL ELITE

Implicit and explicit in all elite theories is the centrality of key organi-zations for the exercise of power and control by elites. This is especiallyemphasized by contemporary elite theorists (see, for example, Higley et al.,1990: 422).


Concept of Organizational Elite

The concept of organizational elite refers to the idea that organizations,public or private, small or large are directed, controlled, and dominated bya few whose decisions and nondecisions not only affect the entire organi-zation and its members but also are in accordance with the political andeconomic elite’s overall goals and directions. There is general harmonyamong the elite sectors in their overall policy directions, strategic consid-erations, and political as well as economic philosophies. The organizationalelite then operates in an environment in which the ordinary people or themass of lower social classes constantly strive to and struggle for elite po-sitions, which entail special power, prestige, privileges, and economic ben-efits. The elite is separated from the masses of ordinary members oforganizations and responds to their demands only when such demands ex-ert irresistible pressures. The overriding rationale and goal of the elite areto maintain and enhance itself.

To maintain itself, the elite system of organization responds to potentialchallenging demands of the masses with different methods and styles—coercion, reform, bonuses, motivation, persuasion, manipulation, elitemembership recruitment, and adaptation—but never by abdication of itspower unless forced by formidable pressures. Abdication of power is morelikely to happen in developing nations, but it can happen in advanced in-dustrialized societies as well. This also is true regarding the bureaucraticelite. Through its position and interlocking membership in political, eco-nomic, and administrative elite circles, the bureaucratic elite only enhancesits own position and the interests of the organization as well as of the largersystem of which it is a part.

Drawing on political science, economics, psychology, social psychology,sociology, cultural anthropology, history, and administration and manage-ment, the elite theory of organization, therefore, is interdisciplinary andconcerned with allocation, distribution, and exercise of power and the con-sequential conflicts and decisions that may arise from those activities inorganizations.

Assumptions and Foundations

The major assumptions of the organizational elite theory are as follows:First, organizations are creations of people, but a few people control anddominate them once created (Wamsley and Zald, 1976). Second, organi-zations operate in a sociopolitical and economic environment of which theyare a part, but the role of the political and economic elites determines thedirections and processes of most organizations (Farazmand, 1994; Selznick,1957). Third, this leads to the major limitations of the pure rationalityoften claimed by other theorists to be the only instrumentality in organizing


and achieving societal goals. Fourth, even the purest, and most businesslikeenterprise is, by nature, also political, because its processes and structurescontribute to the maintenance and enhancement of the existing politicaland economic system (Farazmand, 1982; Lindblom, 1990; Miles, 1980).Fifth, conflicts arise among members of organizations as a result of humannature and social class, the former being reconcilable whereas the latter isextremely difficult if not impossible to reconcile, because the elite will notabdicate its power and privileges (Dye and Zeigler, 1993; Fischer, 1984;Michels, 1959, 1984; Mills, 1956; Mosca, 1939).

Sixth, to gain compliance, the elite must convince the masses who areprone to withdraw their legitimacy. Legitimacy, however, is not alwaysgiven to the elite, and the masses are not always free to exercise such aright, for it is already conditioned and controlled by the elite in organiza-tions (Perrow, 1986; Scott and Hart, 1989). Seventh, the elite sits on manyinterlocking boards and resides in leadership positions to which the massesand the average individual members of organizations do not have access(Moore, 1979; Perrow, 1986; Useem, 1979, 1984). Accessibility to elitemembership is limited and controlled by numerous gatekeepers whose pri-mary function is to serve the elite’s interests rather than those of the or-dinary people. Organizations then become the private realms of a smallnumber of significant people. Secrecy is a central and essential operationalfeature of the elite power structure (Farazmand, 1994; Michels, 1959,1984; Scott and Hart, 1989). This phenomenon is prevalent in the privatecorporate sector and in large government organizations of the administra-tive state, making citizens “captives” of the modern state (Korten, 1995;Nachmias and Rosenbloom, 1980; Parenti, 1988; Rosenbloom, 1993).

Eighth, the elite may extend membership to the masses for two reasons:to recruit potential members as managers to do its job, for which the eliteis the primary beneficiary, thus rewarding the manager for his or her loy-alty; and to obtain further legitimacy and technical expertise (Perrow,1986; Scott and Hart, 1989; Selznick, 1953). Co-optation is a goodexample. Ninth, average individuals have little to say in the organization’selite decision-making and strategic directions, but they may form pressuregroups to influence or cause minor adjustments or changes in elite deci-sions, as purported by the pluralist elite theorists. Finally, the top mana-gerial/organizational elite is considered part of the elite because it servesthe interests of the strategic apex elite, and it acts and behaves like an elite.It also is separated from the rank and file in terms of its lifestyle, its com-pensations and reward systems, as well as the ideology it perpetuates andserves, consciously or unconsciously. Here, the elite theory combines in-strumental rationality with political rationality in ruling and controlling themasses in general and organizational domains in particular. Any attempton the part of the masses to join the elite circle must include proof of system


loyalty and economic, ideological, and personal qualifications. Qualifica-tions are not checked formally through interviews; rather, they are generallychecked by the norms and values of inclusion institutionalized through so-cialization in society, a process in which the strategic power elite plays thekey determining role. Organizations become centrally essential to elite dom-ination of society. Society must adapt to these large powerful organizationsdominated by the elites, who enjoy “a shield of elitist invisibility” (Scottand Hart, 1989).

Elite invisibility shielding takes place in several forms, making its mem-bers invisible, unrecognizable, and unaccountable. First, most modern cap-italist organizations are run legally and formally by managers who areseparate from the owners, whose identity is shielded by the managerialclass. Ordinary people almost never see or know who the key strategicowners are and who actually controls and dominates organizations. Sec-ond, it is often said that organizations behave this or that way, but wealways seem to forget that individuals make the decisions, not organiza-tions. This takes responsibility away from the elite members and deperson-alizes values and morality. The elitist invisibility makes it extraordinarilydifficult to hold high level, strategic managers—public or private—account-able for their actions (Hershman, 1977). Other forms of elite invisibilityshielding include their expertise, which ordinary members of organizationsdo not understand (Scott and Hart, 1989), and instrumental rationality andefficiency criteria (Farazmand, 1994), but perhaps the most importantmethod of elite shielding is that “the value system of modern organizationshas developed behind closed doors, so to speak. . . . Ordinary people arenot privy to the intricacies of the value system,” leading to a “wideninggap between the popular beliefs about organizations and the actual prac-tices of managers in modern organizations” (Scott and Hart, 1989: 37).Secrecy prevails in almost all modern organizations (Michels, 1984; Weber,1984).

Finally, the environmental and strategic decisions made by the elite inorganizing and reorganizing activities have consequential outcomes for theordinary people, inside and outside of organizations. This especially is truewith regard to organizations with low-skilled personnel, but even high-skilled members of organizations “cannot afford to rock the boat. Simi-larly, ambitious careerists may play a role of perfection, intentionally orunintentionally, for sociopolitical and economic advancement, but willeventually find that doors at the top are usually closed” (Farazmand, 1994:39). The result is increasing alienation on the part of the masses, who havelost confidence not only in the modern organizational elite but also in thepolitical and economic elites that tolerate and promote it. Hence, there isa problem of legitimacy in corporate and governmental sectors, includingin the administrative state (Denhardt, 1981; Habermas, 1975; Lipset, 1987;O’Connor, 1973; Ostrom, 1974; Thayer, 1981). Massive downsizing, elim-


ination of employee benefits, and other unilateral decisions by organ-izational elites to create a “leaner and meaner” workforce only exacerbatethis legitimacy problem, which tends to spill over to other areas of society,economy, and politics. But, modern organizations and people remainindispensable to governance, politics, and administration of society andeconomy.

Organizational Imperative

Many nonelite theorists emphasize the role of organizations in society(Harmon and Mayer, 1986; Kaufman, 1989; Perrow, 1986; Presthus,1962; Waldo, 1978, 1980). But all elite theorists emphasize the centralityof modern organizations in the exercise of power and control by the elites.Specifically, Higley et al. (1990: 422) stress the necessity of organiza-tion for the elites to channel their wills into action and for the nonelitemasses to channel their demands and pressures on the elites. Mass mobi-lizations are not possible unless they are organized (Dogan and Higley,1996).

The emphasis on organizational necessity in elite theory also is providedby Robert Michels (1984) and Max Weber (1946). To Michels and Weber,modern organizations are major institutional structures for the exercise ofpower by elites. In his analysis of oligarchy, Michels states: “Democracy isinconceivable without organization. Be the claims economic or be they po-litical, organization appears the only means for the creation of a collectivewill” (in Fischer and Sirianni, 1984: 48).

Organization implies the tendency to oligarchy. In every organization,whether it be a political party, a professional union, or any association ofthe kind, the aristocratic tendency manifests itself very clearly. The mech-anism of the organization, while conferring the solidity of structure, inducesserious changes in the organized mass, completely inverting the respectiveposition of the leaders and the led. As a result of organization, every partyor professional union becomes divided into a minority of directors and amajority of directed (Michels, 1984: 51–52).

Similarly, Weber’s (1946) position on the concepts of power and organ-izational elite is emphasized (implicitly on the elite).

Everywhere the modern state is undergoing bureaucratization. But whether thepower of bureaucracy within the polity is universally increasing must remain anopen question. . . .

The fact that bureaucratic organization is technically the most highly developedmeans of power in the hands of the man who controls it does not determine theweight that bureaucracy as such is capable of having in a particular social structure.(Weber, 1984: 37)


This statement indicates clearly that bureaucratic organizations, howeverindispensable they may be to society and the power elite, are only meansor channels for exercise of power by those who hold it. Weber (1984)further explains that, under normal conditions, the power position of afully developed bureaucracy is always “over-towering” (37). The politicalmaster finds himself in the position of the dilettante, who stands oppositethe expert, facing the trained official who stands within the managementof administration. This holds whether the master whom the burcauracyserves is a “people,” or a parliament. It holds whether the master is anaristocratic, collegiate body, legally or actually based on self-recruitment,whether he is a popularly elected president, a hereditary and “absolute” or“constitutional” monarch (Weber, 1946, 1984: 38).

Finally, Weber (1984) asserts emphatically, “Therefore, as an instrumentfor ‘socializing’ relations of power, bureaucracy has been and is a powerfulinstrument of the first order for the one who controls the bureaucraticapparatus” (35).

Immediately, four fundamental inferences can be drawn from these state-ments by Weber: First, once established, bureaucracies are the hardest todestroy. It also holds that bureaucracy is a power instrument of the firstorder for the one who controls the bureaucratic apparatus, meaning a com-plex of bureaucratic organizations either together forming the state or in aseemingly dispersed fashion forming the pluralist notion of competing en-terprises. Second, bureaucracy tends to overtower under normal conditions,yet its power position can be checked no matter how indispensable it maybe to society or to the political master. “Bureaucratic administration alwaystends to be an administration of ‘secret sessions’ ” (Weber, 1984: 38), andsecrecy is a major reinforcer of power structures, whether organizationalor political.

Third, the masters (elites) and bureaucratic organization and administra-tion are mutually interdependent. It is through organizations that the ex-ercise of external power is practiced, and it is with the power of the elitethat bureaucratic organizations are created, legitimated, and controlled.And it is through the organizational elites that the societal relations andthe power position of the master/elite are maintained and enhanced. Bu-reaucratization of society and culture (Hall, 1984) facilitates “the legiti-mation of bureaucratic elites,” whose positions and decisions are rarelychallenged effectively. With regard to structural deficiencies or political ir-rationality in the design and structuring of public organizations to serveelite interests, Terry Moe (1989) states, “A bureaucracy that is structurallyunsuited for effective action is precisely the kind of bureaucracy that inter-est groups and politicians routinely and deliberately create” (269).Therefore, organizational effectiveness is “repeatedly sacrificed on the altarof interest protection and representation” (Wise, 1994: 85). Fourth, centralto elite-organization and elite-mass relations is the term control to maintain


the power elite position. Without masses, there would be no elite, andwithout elites, there would be no masses. Almost all people would enjoyequality and consensual relationship would flourish. Otherwise, chaoswould prevail, as in the case of major crises and revolutions followed byorder and appearance of new elites (for a detailed discussion of this issue,see Farazmand, 1996, 1997; Knight, 1996).

Applying the Weberian-Michelsian concept of elites, some contemporaryelite theorists (Higley et al., 1990: 422) stress the central role of organi-zations in their analysis of elites and draw attention to the organizationalconstraints on elite behavior. Such an organizational constraint on influ-encing elite behavior also is established by neo-institutionalists (see Peters,1994; Peters and Pierre, 1997; Scott, 1995). The need to maintain controlof the organization that gives the elites power shapes their actions andoutlooks in many ways, frequently overriding substantive interests andvague ideological principles and often impeding elites’ ability to enter thesettlements and other transformations from disunity.

Both Weber and Higley and associates concede that organizations as wellas masses can influence elites by putting pressures on some segments of anelite against other segments or on a combination of various elite configu-rations. This mass pressure can sometimes reshape and even alter elite con-figurations, as in the case of the Great Depression in the United States, orin postrevolutionary situations. Crises play a fundamental role in elite re-configuration, power position, and even elite replacement.1

Organizational elites in particular operate with high secrecy, concen-trated interorganizational interaction, and cohesion. Explaining all theseterms fully is beyond the scope of this chapter. Briefly stated, however,organizational secrecy is explained by Weber (1946), Michels (1959, 1984),and others, including Marx, of course. Interorganizational networks or or-ganizational interlocks are the focus of other recent literature with a grow-ing body of knowledge (see, for example, Allen, 1974; DiTomaso, 1980;Kadushin, 1979; Lauman and Pappi, 1973; Mintz and Schwartz, 1981b;Presthus, 1973; Sonquist and Koenig, 1975; Useem 1984). A brief discus-sion of organizational elite cohesion is given below.

Levels of Organizational Elite Analysis

Conceptually, organizational elites may be analyzed at three differentorganizational levels: macro/strategic, macro-micro/leadership elite, andmicro/operational elite.

Macro/Strategic Elite

First is the macro level, which includes the members of the small inner-circle elite groups in control of the giant and most powerful organizationsof governmental and corporate sectors in society. These are the key inter-


locks, or interorganizational network elites. “This group of strategic or-ganizational elite sets the boundaries and parameters for organizations,large and small, public and private and nonprofit” (Farazmand, 1994: 37).These organizations occupy and dominate the field of organizationalecology to which other organizations must adapt for their survival. Withthe ever-increasing concentration of power among this core of giant orga-nizations—mostly globalized transnational corporations—the inner circlestrategic elites tend to centralize core-peripheral relationship and producea much higher degree of organizational complexity. They also tend to “can-nibalize” other organizations, including the traditional community-basedorganizations of public and private sectors, “leaving no place for people”(Korten, 1995).

I call this group of organizational elite the “most strategic or organiza-tional apex elite,” whereas other elite theorists of corporate interlocks(Mintz and Schwartz, 1981b) call it a “hub.”

Financial institutions, it appears, are the organizing units of the interlock networkand the most powerful sources of intercorporate power and unity; they are “highlycentral” because they are the center of all other interlocking institutions, and theyinteract with other “central institutions.” (93)

In the governmental sector, key executive organizations appear to occupythis position of high centrality and small circle, strategic apex. The strategicor apex organizational elites, therefore, are the driving forces of organi-zational elite configurations and reconfigurations, and they provide andgenerate sources of cohesion and unity. In times of crisis, their membersstick together in harmony with the national power elite, which is a part ofthe inner-circle elite.

The strategic or apex organizational elites within a specific organizationor agency include the uppermost leaders or most powerful people, who byvirtue of their positions, sources of connection, and shared values in ide-ology, politics, and socioeconomic status in society fall in this category.They also may be called the “strategic administrative or bureaucraticelites.” They are indispensable to the inner-circle elites they represent. Notall these strategic bureaucratic/organizational elites are members of the up-permost or inner-circle elites; only some belong to those apex interlockswith which they interact frequently.

Macro-Micro/Leadership Elites

The macro-micro level includes the leading members of significant or-ganizations in society, but their location is immediately below the first stra-tegic elites. The organizations belonging to this level of elites include allthose central but not most central to the ecology of organizations. Mintzand Schwartz (1981a: 37) call this group of organizations the bridge that


unites the hubs. I call it the linking elites because it is key to the interactionof the interlocking networks or strategic organizational elite groups. It alsois key to interactions between the first strategic elite and the operationalelite at the middle of the organizational hierarchy. High political appoint-ees, agency deputy directors, executives, undersecretaries, public enterprisemanagers and directors, and occupiers of similar positions in public andnonprofit organizations belong to this group of organizational elites.

Micro/Operational Elites

The micro-operational elite group includes both the owning and the ap-pointed managerial elites of individual organizations and owners of somesmaller organizations. Although it forms a class of its own, the former alsois part of the elite because it serves the interests of the strategic elite andtends to act and behave like an elite.

The managerial elite also is separated from the rank and file in terms ofits lifestyle, its compensations and reward systems, and the ideology it per-petuates and serves, consciously or unconsciously. Therefore, instrumentalrationality is employed as a means, in the analysis of organizational elitetheory, to signify the importance of political rationality in elite-mass rela-tions (Farazmand, 1994: 37).

The concept of managerialism as an ideology has found a warm cushionin modern organizations of the corporate sector, but its application as aself-proclaimed market-based management system also has been pervasivein governmental organizations and public administration around the world.As a reinforcement of the plural elite model, managerialism

argues that the modern firm has little incentive to create interorganizational tiesand is unlikely to be dramatically influenced by outside forces. It implies a corporatestructure characterized by fragmentation. On a societal level, this implies that cor-porate power is dispersed and the danger of corporate domination is minimal.(Mintz and Schwartz, 1981a: 853)

Kanter (1987) and Block (1987) have argued that middle managersshould be further empowered by higher level managers or elites. Middlemanagers, department heads, division directors, and others at this leveloccupy the transformational rank and provide continuity and enhancementof organizational values, norms, and culture, assuring the steady flow oftask performance toward its established goals and objectives set by strategicelites (Morgan, 1986; Ott, 1989; Perrow, 1986; Scott and Hart, 1989).

Middle managers as “operational organizational elites” promote con-formity and stability at the mass level of organizations. To maintain andenhance the system’s power structure, leadership elites at the higher levelfeed this organizational stability and culture into a cohesive interorgani-zational elite. However, it is the uppermost strategic organizational elites


who maintain elite cohesion by building consensus (Korten, 1995; Lind-blom, 1990).

ORGANIZATIONAL ELITE COHESION

Immediately, a key question is raised: How does a small group of pow-erful individuals control an organization, and how does a small number ofstrategic elites control the entire system of power structure outside orga-nizations? Answering the second part of the question is beyond the scopeof this chapter. According to some studies, however, the answer appearsto be the degree of cohesion and consensus that is achieved through inter-locking networks (see Mintz and Schwartz, 1981b, for a discussion of thesources of elite cohesion) and the requirements that organizational elitesput on organizational members through recruitment, socialization, and re-tention (see DiTomaso, 1980; Farazmand, 1994, 1996). Although researchon interorganizational networks or interlocks is recent and growing, thereis ample room for more theoretical and empirical studies on these ques-tions. These questions beg serious examination both theoretically and em-pirically.

Organizational cohesion and control are achieved through a multitudeof managerial, supervisory, and structural mechanisms as reflected in theextensive body of literature on modern organizations from classical to con-temporary theories. First, the linking elites and the operational elites withinorganizations have a primary task of assuring stability, compliance withorganizational rules, and cohesion and control among members of theirorganizations. They are the agents of the strategic elites located at the apexof modern organizations in government, corporations, nonprofit institu-tions, and political parties.

Second, organizational cohesion also is achieved through other internaland external channels of control. For example, Rosenbloom (1993b) iden-tifies three broad approaches to hold administrators accountable in modernorganizations:

1. The political approach uses various legislative mechanisms such as sunshine andsunset laws, oversight investigation and control of administration, confirmationapproval, and annual budgetary processes.

2. The legal approach uses judicial and semijudicial means of reviewing and con-trolling administrative action through court intervention in matters of regula-tion, protection of individual rights, and constitutionality of administrativebehavior.

3. The managerial approach uses a variety of organizational mechanisms, includinginstitutional loyalty through hierarchy, promotion and reward system, sociali-zation, sanctions, recruitment, and placement. (Rosenbloom, 1993b, ch. 12)

Third, organizational and interorganizational cohesion also is achievedthrough another, and perhaps more powerful, means in modern society:


socialization into the social and political systems and the culture. This isthe most pervasive and most solidifying mechanism of social control usedby the elites to achieve organizational cohesion. Elites and all the institu-tions of society—including the market, the church, the family, the schoolingand educational systems, the media, sports, and the government—socializeindividuals into the system of culture from childhood to adulthood, moldtheir attitudes, belief systems, perceptions of self and others. The elites alsomold the behaviors about what is desirable and what is not, what behavioris subject to sociopolitical sanctions and what leads to rewards, what ispatriotic and praiseworthy, and what is punishable. It is this cultural struc-turing of individuals that elites rely on most heavily to achieve organiza-tional and interorganizational cohesion and control (Korten, 1995; Lowi,1995; Triandis, 1995). People are conditioned to believe that elites in pri-vate corporations and governmental institutions are legitimate and what-ever they do or say is acceptable and is good for the country and its people.Elites understand this and capitalize on it. For example, “What is good forGM is good for America.” A phenomenon of dependable autonomy alongwith possessive individualism (Macpherson, 1985) promotes a false senseof freedom through the bureaucratized society. Bellah, Madson, Sullivan,Swidler, and Tipton (1985) warn of a cult of dependable autonomy andinternal control that is so pervasive in the bureaucratized American societythat it gives expression to the bureaucratic individualism that is conduciveto the bureaucratic elites (see Johnson, 1988, especially 592–596).

Common goals serve as another major source of cohesion among elitesin general and organizational elites in particular. Common goals and in-terests among government agencies often promote cooperation and collab-oration in the face of common external challenges. This is done in spite ofthe competition that may be carried out among them on different grounds.Airline agencies lobby for protection, favors, and regulatory schemes thatwill help them. City mayors’ or governors’ associations meet and adoptpolicy recommendations. Oil companies may compete for a few centsacross the street, but all work more or less cohesively in the relation toforeign competition or governmental policies. They also act together whenfaced with nationalization challenges from foreign governments (e.g., theoil boycott of Iran during the 1953 nationalization crisis produced by theBritish Oil Co.; the 1974 copper nationalization crisis in Chile producedby ITT and GM; both popular governments were overthrown in coordi-nation with the U.S.-CIA led military coup d’etats).

Finally, the financial leverage of the elites is one of the most, if not themost, effective means of achieving organizational and interorganizationalcohesion. This especially is true with regard to the business elites, who areable to lead or dominantly influence the political and policy processes thataffect public and private sector organizations (Hall, 1984; Jones, 1987;Lindblom, 1990).


SIGNIFICANCE AND IMPLICATIONS

Significance

The explanatory power of organizational elite theory is significant inseveral ways. First, the theory is descriptive in that it not only explains theorganizational power structure as is, it also explains the external powerstructure that more or less sets the parameters for organizational powerand functions. Second, the theory is prescriptive in that it also focuses at-tention on what ought to be done by making suggestions regarding eliteconfiguration and reconfiguration, elite recruitment from masses, elite be-nevolence, and elite decisions on strategic choices that affect both the elitesand nonelites. The prescriptive dimension of the elite theory also is signif-icant in that it may espouse alternative models of governance, policychoices, and administrative structures.

Therefore, the elite theory of organization contributes to the normativetheory of organization not only by building on descriptive aspects of or-ganizational power, politics, and administration (e.g., how organizationsfunction and who is in charge). It also considers alternative modes of powerstructure in organizations (what ought to be done or who can or shouldtake power, or how power should be distributed). Furthermore, by analyz-ing the existing situation, the elite theory attempts to predict possible out-comes of policy choices and to recommend corrective actions at strategiclevels both inside and outside of organizations. Because the organizationalelite is an integral part of the overall strategic apex of elites—both innercircle and general elites—it must be studied in that context.

The suggestive theory of organizational elites employs institutional, sys-tems, ecological, and other theories of organization because they all arerelevant to both descriptive dimensions of the organizational elite. It alsoemploys the rational choice model as a way of explaining how elites getwhat they intend; this is an integral part of institutional and systems the-ories to the extent that organizations try to control their environment tomaintain their equilibrium. Such employment does not, however, automat-ically imply acceptance of or justification for these theories.

Furthermore, organizational elite theory uses a dialectical approach as amethod of analyzing organizations, the relationship between the leadersand the led, management and labor, and the elites and the masses, becausewithout one the other is inconceivable (Knight, 1996). The dialectal processis a method of analysis of interaction between masses and elites, and be-tween elites and counterelites at all levels of organization and society. Suchdialectical interactions are key ingredients of the elite theory in general andof the organizational elite in particular. As long as the relationship betweenorganizational members and elites is not antagonistic and hostile, elites areable to manipulate smoothly the environment under their control or influ-


ence. Once the relationship becomes irreconcilable, the elites will have littleto offer and whatever they do offer may be too late and may not satisfythe nonelites, who then have little to lose in their attempt to take over theposition of the power elites.

Unfortunately, as in many revolutions, the replacement or reconfigura-tion of the old elite with the new elite has a tendency to circularize, that isto say an elite circularity almost inevitably will develop (see Farazmand,1994). The survival and thriving of the elite will then depend on how itbehaves in society and organizations. If it is benevolent, sincere, and eq-uitable to the masses, its power position will likely increase. Conversely,the position of the elites weakens or is eroded when the elites become au-thoritarian, self-serving, and oppressive. In such situations, the institutionsof government tend to focus their attention, resources, and policy choicesmore on the coercive and repressive functions to control the masses andorganizational members and less on the service and welfare functions ofgovernance and administration (Eisenstadt, 1963; Farazmand, 1997; Lind-blom, 1990). The elites become obsessed with system maintenance andregime enhancement. Organizational and administrative elites then becomemore an instrument of domination and control for repression than an agentof positive change, service delivery, and promotion of equity and fairnessin society. Empirical studies of authoritarian, repressive regimes supportthis relationship (Eisenstadt, 1963; Farazmand, 1982, 1989; Lutjens, 1991;Rehren, 1991; Riposa, 1996).

Implications

Implications of the organizational elite theory are many and universal.First, elites can be identified in all societies, in government, business, andpolitics. Elites are easily found at community, local, and state/subnationallevels as well; they form the power structure. Members of the power struc-ture tend to develop a network of interlocks, which affects public policyand administration at all levels. Third, there is almost everywhere a trendof counterelite development, which tends to either replace the elite and itspower structure or at least to influence the public policy decisions andoutcomes. The nonelite masses almost everywhere try as much as they canto influence public policy and administrative behavior as well. Citizen pro-tests, labor union actions, and other forms of mass reaction counteractingelites’ power position and behavior are universal around the globe. This isa dialectical process that produces changes in the relationship between elitesand nonelite masses, and within the power structure of the elites.

This also is manifest in organizational settings everywhere in the world.The applicability of organizational elite theory in almost all organizationsof public, nonprofit, and private sectors is clear, in that power is exercisedthrough organizations and organizations are institutional settings or ar-


rangements through which policy decisions are made and carried out (Pres-thus, 1962, 1973; Simon, 1945, 1957 and 1991). Organizational elitetheory, therefore, not only explains how organizations operate within thepower structure and what they contribute to and, in so doing, who benefitsmost, it also purports to predict and prescribe corrective behaviors or policyrecommendations for elites to be effective in society. The effectiveness ofelites will then depend on their ability to adapt to the dialectically producedchanges in society. The dynamics of elite continuity, legitimacy, and per-formance are determined by the ability to adapt. Adaptable elites surviveand continue, whereas nonadaptable elites who resist change face declineand severe competition from dynamic adaptable elites who are aggressiveenough to monopolize power. Alternatively, the unadaptable elites face theultimate challenge of overthrow by counterelites by a spontaneous massuprising. Modern revolutions have produced enough evidence in supportof this phenomenon. The French and Iranian revolutions are two examples(Cottam, 1979; Halliday, 1979; Skocpol, 1979).

The study of organizational elites needs to be taken seriously, both con-ceptually and empirically. Such studies will shed further light on differentaspects of organizational elites and will help build a sound normative the-ory of organizational elites. They also are needed to deal with various di-mensions of organizations, both internally and externally. Internally, forexample, mechanisms and dynamics of decision making and implementa-tion need to be examined closely and carefully. Externally, the linkage oforganizational elites to the power structure or power elite, whether generalor inner-circle elites, is extremely important, because all organizations op-erate in an environment of power structure that defines the general para-meters for society, organizations, and individuals. More studies on theorganizational elite will result in a major contribution to the body ofknowledge in organization theory and behavior. Aside from the justifica-tions and rationales noted earlier, building and application of organiza-tional elite theory provide many advantages in the study of modernorganizations and of the administrative behavior in society. It provides aconceptual framework for analyzing and understanding such top-down or-ganizational behaviors as downsizing, reform and reorganization, andpublic-private sectors’ redefinition and reconfiguration, globalization, andprivatization. It also provides public administrators and organizational re-searchers with a way to broaden their outlooks and perspectives, enhancetheir knowledge of democratic values, and play more progressive roles insociety by transforming those democratic values into organizational andadministrative behaviors in service of the broad public interests. Finally,not all elites and their behaviors are bad for society. There are benevolentelites—both in the power structure and organizational elite systems—whose actions and decision outcomes benefit all in society, whereas the


self-serving and exploitative elites’ behaviors are repressive and enhanceonly the ruling power structure at the expense of society and mass citizenry.Studies of organizational elites help illuminate differences between thesetwo groups and provide frameworks for appropriate social action.

CONCLUSION: IMPLICATIONS FOR ORGANIZATIONTHEORY

Studies of organizations have systematically ignored or overlooked thenormative aspects or dimensions of organizational theory. They have fo-cused and refocused on the instrumental rationality driving organizationalaction and inaction. This oversight may be the result of many factors, in-cluding preoccupation by organization theorists with issues of manage-ment, control, efficiency, and technology; however, political and normativefactors shaping modern organizations cannot and should not be over-looked. No organization operates in a vacuum. Organizations operate un-der elites, small groups of individuals whose decisions and nondecisionsaffect organizations and the people and environments around them. Simi-larly, the environment and the power structure outside organizations affectthe structure, decisions, and operations of organizations (Pfeffer, 1981;Pfeffer and Salankick, 1978).

Organizational elites constitute those powerful individuals who, eitherby institutional structure and norms or requirements or by higher inter-locking power sources, determine organizational goals and lead them stra-tegically in harmony with the broader macro-level elite interests, missions,and goals. Research on organizational elites is needed in this age of massiveorganizational restructuring, reform, and reconfiguration. These changesare both strategic and global, and they affect almost all organizations inpublic, private, and nonprofit sectors. Building a normative theory of or-ganization is both important and needed, as political factors are as impor-tant as instrumental rationality factors in determining organizational goals,operations, and processes. The rank and file in organizations do not makesuch significant decisions as downsizing; strategic elites do, and strategicelites make such decisions in harmony with the goals of the power elite,who shape the environment of organizations (Korten, 1995). However, thepower of the people in social changes and the reshaping of the power struc-ture should not be underestimated. This is a reality that both elites andnonelites are aware of, and only appropriate time and conditions determinethe outcome of the dialectical relationship between the powerful elites andthe powerless nonelite people both inside and outside organizations. Thisis an important consideration that all studies of power structure, organi-zational elites, and democratic participation must take into account (Bach-rach and Botwinick, 1992; Waldo, 1980).


APPENDIX: SUGGESTED READING LIST

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Arrow, K. J. (1974). The limits of organization. New York: Norton.Barton, A. H. (1974). Consensus and conflict among American leaders. Public

Opinion Quarterly 38: 507–530.Beetham, D. (1997). From socialism to fascism: The relation of theory to practice

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University of California Press.Bensman, J., and V. R. Jakal (1984). The moral ethos of bureaucracy. State, Cul-

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ideology to political power. New York: Times Books.Bottomore, T. (1964). Elites and society. New York: Basic Books.Brenner, R. (1977). The origins of capitalist development: A critique of neo-

Smithian Marxism. New Left Review 104: 25–92.Brown, B. E. (1969). Elite attitudes and political legitimacy in France. Journal of

Politics 31: 420–442.Bunting, D., and J. Barbour (1971). Interlocking directorates in large American

corporations, 1862–1962. Business History Review 45: 317–335.Chevalier, J. M. (1971). The problem of control in large American corporations.

Antitrust Bulletin 14: 163–180.Duval, R., and J. Freeman (1983). The techno-bureaucratic elite and the entrepre-

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Fitch, R., and M. Openheimer (1970). Who rules the corporations? Socialist Rev-olution Part I–III 4: 73–108; 6: 33–94.

Fletcher, J. (1989). Mass and elite attitudes about wiretapping in Canada: Impli-cations for democratic theory and politics. Public Opinion Quarterly 53:222–245.

Giddens, A. (1975). The class structure of the advanced societies. New York: Har-per Torchbooks.

——— (1984). The nation-state and violence. Berkeley: University of CaliforniaPress.

Hoffman, J. (1986). The problem of ruling class in classical Marxist theory: Someconceptual preliminaries. Science and Society 1(3): 342–363.

Huntington, S. (1968). Political order in changing societies. New Haven, CT: YaleUniversity Press.

Keller, S. (1963). Beyond the ruling class: Strategic elites in modern society. NewYork: Random House.

Levine, J. (1972). The sphere of influence. American Sociological Review 37: 14–27.

Lindberg, L. et al. (1975). Stress and contradiction in modern capitalism: Publicpolicy and the theory of the state. Lexington, MA: Lexington Books.

Lundberg, F. (1938). America’s 60 families. New York: The Citadel Press.


Lypsky, M. (1980). Street-level bureaucracy. New York: Russell Sage Foundation.Mann, M. (1986). The sources of social power: A history of power from the be-

ginning to A.D. 1760. Cambridge: Cambridge University Press.Marcus, G. E. (1983). “Elite” as a concept, theory, and research tradition. In Elites:

Ethnographic issues, edited by G. E. Marcus. Albuquerque: University ofNew Mexico Press.

McQuaid, K. (1982). Big business and presidential power: From FDR to Reagan.New York: William Morrow.

Mintzberg, H. (1983). Power in and around organizations. Englewood Cliffs, NJ:Prentice Hall.

Page, E. C. (1985). Political authority and bureaucratic power: A comparative anal-ysis. Knoxville: University of Tennessee Press.

Parenti, M. (1978). Power and the powerless. New York: St. Martin’s Press.Pareto, V. (1935). The mind and society: A treatise on general sociology. New

York: Dover.Prewitt, K., and A. Stone (1973). The ruling elites: Elite theory, power, and Amer-

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Irwin.Smith, A. D. Howden (1936). Men who run America. New York: Bobbs-Merrill.Vroom, V. H. (1984). A normative model of managerial decision making. In Or-

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CA: Sage.Welsh, W. (1979). Leaders and elites. New York: Holt, Rinehart & Winston.Whitt, J. A. (1979–1980). Can capitalists organize themselves? Insurgent Sociolo-

gist 2(3): 51–59.

NOTE

1. For details on the role of crisis in elite restructuring and reconfiguration, seethe papers presented at an international conference on Regime Change and EliteChange, held in El Paular, Spain, May 30–June 1, 1996, and the forthcoming book,Political Elites, Crises, and the Origins of Regime Change, edited by Mattei Doganand John Higley. Also see the author’s forthcoming book, Regime Change, EliteChange, and the Bureaucracy.

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Part II

Public Organization Design andReorganization of Administration

Chapter 5

The Public Service ConfigurationProblem: Designing Public Organizations

in a Pluralistic Public Service

Charles R. Wise

Public administration has evolved from an almost exclusive concern withinstitutional management (management within a single organization) tocoverage of transorganizational management (management across organi-zational boundaries). At this point in the development of the public service,implementation of changes in public policy effectively means altering thebehavior of public service configurations that dominate a particular publicpolicy area. Such public service configurations consisting of public, privatefor-profit, and private nonprofit organizations operating within interorgan-izational fields have become exceedingly complex as a result of three pri-mary phenomena that have characterized U.S. public policy: (1) horizontalfragmentation of policy responsibility within governments; (2) decentrali-zation of programs and devolution of authority to organizations at otherlevels of government; and (3) privatization. Together these developmentshave accelerated pluralization within public service configurations.

The task of designing public organizations must take into considerationthe implications of the aforementioned developments for altered states ofpublic service configurations. It is now, more than ever, obsolete to con-ceive of public organizations as delivering public services. Public serviceconfigurations deliver public services and heavily impact public policy out-comes. Designing public organizations today inevitably means confrontingthe public service configuration problem. This chapter discusses the evolv-ing nature of developments affecting public service configurations and de-lineates the implications for designing public organizations in the newenvironment.

136 Public Organization Design and Reorganization of Administration

THE NATURE OF PLURALIZATION PHENOMENA

With regard to the first, horizontal fragmentation at the federal level,various Congresses have succumbed to pressures from sectional, economic,and interest group interests and have continually translated their entreatiesinto the creation of new federal organizations.1 Presidents, too, have giveninto pressures for immediate, tangible answers to highly complex problems,and often the response is to create a new organization.2 In addition, bothCongress and presidents, as a part of new policy initiatives, often prefer toassign new policy responsibilities to new organizations rather than to ex-isting ones under the supposition that new organizations will pursue themwith greater vigor. They are supported in this supposition by the front endof life cycle theory, which holds that new responsibilities will be pursuedwith energy and power provided by zealous administrators, supportive in-terest groups, and attentive politicians in a position to protect their “newbaby.” Proponents often claim that “independence” is the essential designingredient to give the new organization room to solve problems existingorganizations cannot. For example, bills to put the new consumer safetyprogram in the Food and Drug Administration or the Department ofHealth, Education, and Welfare were rejected by Congress in favor of oneestablishing the Consumer Product Safety Commission as an independentbody. The House Committee report stated the oft-found rationale Congressuses in creating new agencies that “Independent status, and bipartisan com-missioners with staggered and fixed terms, will tend to provide greaterinsulation from political and economic pressures than is possible . . . in acabinet-level department.”3

Unfortunately, such hopes for new agencies are soon eclipsed by therealities of organizational life in real government. Start-up times and costsare very often greater than proponents foresee, and the lack of experience,expertise, and learning leads to struggle rather than aggressive pursuit ofpolicy priorities.4 Also, constituency support does not follow the creationof a new agency as a matter of course but is subject to the shifting allianceswithin subsystem politics that pertain in various policy areas. As CharlesGoodsell discusses, the diversity of bureaucracies and the scarcity of re-sources available to them almost inevitably combine to create interagencyconflict, which takes the form of sustained institutional rivalry.5 The op-eration of such subsystem politics can substantially transform the programof the organization.6 In addition, proponents seldom foresee that separate-ness or independence in itself does not secure a powerful position withinthe interorganizational field already occupying the policy area. For exam-ple, in the early 1970s, Congress designated the Drug Enforcement Agencyas the lead federal agency to bring together federal law enforcement effortsin controlling illegal drugs. However, by 1986, after many years of findingsthat drug enforcement among several federal agencies was uncoordinated,

The Public Service Configuration Problem 137

Congress created still another new agency, the Office of National DrugControl Policy (the Drug Czar) to coordinate federal drug efforts. Twodirectors of the office during the Bush administration made some attemptat the coordination objective mandated by Congress. In the attempt, a siz-able staff was created within the office to assist in the task. Nonetheless,at the beginning of the Clinton administration, the new president and hisinner staff decided to reduce the drug office’s staff to just a few people,which constitutes an assessment that meaningful agency coordination inthe drug area, even from the White House, was unlikely to succeed.

Decentralization in the United States has led to greater vertical fragmen-tation of operations and authority. The earlier period of national govern-ment leadership in domestic initiatives characterized by multiplegrant-in-aid programs controlled through extensive regulation by federaldepartments and agencies gave way to block grants and then to a periodof program elimination. Brought on by fiscal austerity at the national level,the United States has moved increasingly in domestic programming to whatsome have called de facto7 or “fend-for-yourself”8 federalism. This devo-tion of authority to state and local governments in the federal programsthat do remain, and the greater assumption by; state and local governmentsof various other domestic responsibilities, has profoundly changed the pat-terns of influence and role relationships among and within U.S. politicaljurisdictions. Authority patterns are not monotonic but vary between andwithin public service configurations.

The term “decentralization” hardly captures what has happened becauseit implies a hierarchy in which authority is devolved downward from thenational government. As the analysis by Vincent L. Marando and PatriciaFlorestano demonstrates, “Notions of administrative hierarchy, althoughdifficult to dispel, have never provided accurate assessments of how Amer-ican federalism functions and are inappropriate for explaining how prob-lems are defined and managed.”9 Concomitantly, hierarchy is becoming aneven less useful point of departure in designing public organizations. Fed-eral policy makers cannot assume that a federal organization will in anysense dominate policy direction or program operations in any area of pol-icy. Deil Wright observes: “The nature of authority relations in IGM (in-tergovernmental management) is preponderantly nonhierarchical. Thepresence and pervasiveness of networks create the presumption of widelyif not evenly shared power distribution patterns. There may be varyingdependency—autonomy power patterns among specific entities in a net-work, but across the complete network there is no prime, single, or centralsource of guidance.”10 Catherine H. Lovell argues that coordination orconcerted action may occur in a variety of ways, sometimes more by ac-cident and by informal links than by force or by central direction.11 Thus,the complexity of public service configurations within which federal organ-


izations interact has been greatly increased by the proliferation of inter-governmental authority patterns.

Privatization is often advocated as a simplifying strategy for government,but unless government vacates a given policy area totally in favor of com-plete private service provision and production, then the responsibilities ofpublic organizations do not disappear; they are just altered. In fact, it takesconsiderable time for public organizations receiving altered responsibilitiesto adjust to fulfill these altered responsibilities adequately. For example,airline deregulation and the elimination of the Civil Aeronautics Board re-sulted in shifts of certain responsibilities in consumer protection to the De-partment of Transportation and an expanded role in airline safety to theFederal Aviation Administration, resulting in profound effects on systemcapacity. The expansion of air travel and the formation, bankruptcy, andreformation of airline companies have raised severe capacity and policyproblems for both organizations, and both are still working out their newroles after a decade of deregulation. Congress became so concerned aboutthe impact on airline safety and capacity that it enacted legislation estab-lishing a commission to investigate the situation and evaluate organiza-tional alternatives.12

Privatization is not a single policy but is an umbrella concept that hascome to mean a variety of policies. These include transfer of ownership(sales of state-owned assets and enterprises); deemphasizing monopoly pro-duction of public services by introducing or increasing competition or re-ducing obstacles to it in the hope of increasing efficiency in the productionof public services (contracting out portions of public activity; encouragingprivate options along with public ones for service); and encouraging privateproduction of services that are currently provided by government (loadshedding). Even when government reduces its role in the actual productionof a service or even in seeing to it that a service is provided, governmentorganizations often take on an increased regulatory role. The upshot of allthis activity has been that public service configurations have been increas-ingly crowded with a variety of both nonprofit and profit-seeking organi-zations. The implications for federal management could not be more stark.As Lester Salamon has documented, a significant transformation has takenplace in the way the federal government goes about its business—a shiftfrom direct to indirect or “third-party” government. This is a sea changefrom the situation in which the federal government ran its own programsto one in which it increasingly relies on a wide variety of third parties.13

CAUSES AND CONSEQUENCES OF PLURALIZATION

The two primary causes of horizontal fragmentation are interest repre-sentation and policy frustration. In the first place, as Terry Moe puts it,“Structural politics is interest group politics.”14 Moe argues that because


interest groups are intensely focused and well informed on the issues ofstructuring government agencies that affect their interests and the widerpublic is neither, interest groups are in a position to pressure congresspeo-ple who have strong incentives to do what such groups want. Bureaucraticstructure emerges from the battle of interests with features determined bythe powers, priorities, and strategies of the various designers. Policy effect-iveness is not the primary criterion on the minds of the designers. Not evenproponents of the agency demand an effectively designed organization first,but one that will protect their hard-won accomplishment in creating theorganization and its initial priorities from being captured or destroyed.Opponents exact concessions designed to create structural features that willlimit the organization’s effectiveness and limit its reach. In the politics ofstructure, as the group system becomes more competitive and political un-certainty and political compromise increase, a proliferation of structuralforms ill-suited to effective organization results. According to Moe, thecumulative result stems directly from the political system: “A bureaucracythat is structurally unsuited for effective action is precisely the kind of bu-reaucracy that interest groups and politicians routinely and deliberatelycreate.”15 Organizational effectiveness is repeatedly sacrificed on the altarof interest protection and representation.

The charge against interest group intentions is perhaps overstated. Thereis good reason to believe that proponents at least “believe” that some struc-tural components they advocate will lead to greater organizational effect-iveness. For example, when proponents of the reformed savings-and-loanregulatory system removed regulations allowing savings and loans to paymarket rates and invest in more profitable businesses, they did so believinggreater financial resources would be made available and ultimately morefinancing for housing would result. However, they insisted on the continuedseparation of their own weakened regulatory agency Federal Savings andLoan Insurance Corporation (FSLIC), rather than merging with the moreexperienced and tighter regulation of the Federal Deposit Insurance Cor-poration (FDIC).

The roots of policy frustration are often found in organizational ineffec-tiveness. Congress and presidents have created organizations that have in-effective structures, and in separate actions over the years have also layeredon governmentwide budget, personnel, and purchasing restrictions thathave had the unintended cumulative effect of stifling management adap-tation of public organizations. Congress passes these controls such as theGramm-Rudman-Hollings budget control process or personnel regulations.However, when the cumulative effect of these is to stymie the effectiveattainment of some policy goals that are also prized, then interest groupand congressional advocates clamor to create still other organizations ex-empt from these very same management controls. For example, Congress


created the Resolution Trust Corporation to clean up part of FSLIC’ssavings-and-loan mess but exempted it from Gramm-Rudman-Hollings.

Creating organizations that operate off-budget is a time-honoredcongressional device16 and one that is finding increasing popularity as Con-gress tries to find ways to have more activist government in an era of budgetstringency. Government-sponsored enterprises that operate off-budget, en-joy lines of credit at the Treasury, are governed by boards of directors witha majority of private-sector members, and are exempt from standard Gov-ernment Accounting Office (GAO) auditing requirements are increasinglythe organization structure of congressional choice. If anything, the federalgovernment is likely to see the creation of more of these.17 The financialmagnitude of federal guarantees for such enterprises is over $800 billionand growing.18

The practice of creating new structures of ever-increasing variety seemsto feed on itself. James D. Barber argues that, in fact, it does. He pointsout that the process of creating new organizations—a pluralization proc-ess—is self-reinforcing. The establishment of a new unit serves as an ex-ample for others to follow. It sets a precedent, and pluralizationprogressively becomes the norm, both in the sense of something expectedto happen and something reasonable to do.19 James G. March and JohanP. Olsen agree that institutional forms tend to diffuse through a populationof institutions in much the way other fashions diffuse.20 Barber argues thecosts of operating the system in aggregate rise radically as pluralizationproceeds; enhance the relative power of large, permanent, highly organizedinterests in society; and decrease the number of policy proposals adoptedin the aggregate system.21

Barber’s self-reinforcing pluralization process finds empirical support inrecent federal government experience. The 1993/1994 U.S. governmentmanual lists sixty-two independent establishments and government corpo-rations outside the executive departments. In addition, during the period1960–1980, Congress created approximately twenty-six governmentcorporations. In 1988, Congress created three government-sponsored en-terprises for the farm credit system and one to guarantee and insure loansand bonds issued to build and renovate college facilities.22 This preferenceto create multiple hybrid organizations with varying legal statuses, author-ities, structures, and financing mechanisms even if the same policy area isrepresented by the actions taken to create multiple organizations in the“S&L bailout bill,” the Financial Institutions Reform, Recovery, and En-forcement Act of 1989,23 which created four organizations.24

Pluralization is not exclusively a legislative branch disease. Presidentshave joined in as well. President Richard Nixon created the EnvironmentalProtection Agency by Executive Order. In 1976, the National EducationAssociation supplied then candidate Jimmy Carter with a disciplined blockof 172 votes at the Democratic convention, and its support was believed


to have been crucial to his election victory of 1976. President Carter movedquickly to pay the debt and saw to it that the NEA’s top priority, thecreation of the Department of Education, was brought to fruition.25 Car-ter’s first domestic policy crisis brought an organizational rather than apolicy response with the creation of the Department of Energy. CandidateRonald Reagan campaigned on a “less bureaucracy is better” platform,promising to dissolve Carter’s departmental creations, but he quickly aban-doned the proposals when Congress resisted. He then went on to proposetransforming the Veterans Administration into the Department of VeteransAffairs. The multiorganizational structural scheme that was adopted to ad-minister the S&L bailout was proposed by President George Bush. Presi-dent Clinton’s health reform bill called for the creation of several neworganizations including Health Alliance Organizations at the state level anda new National Health Board at the national level.

Since the failures of Nixon and Carter in attempting comprehensive re-organizations of the executive branch, presidents may be more likely tolook to other management tools such as the budget and regulatory controlsas Reagan and Bush did, join the organizational incrementalists as Bushdid in the S&L bailout bill, or a series of proposed incremental manage-ment reforms pursuant to the National Performance Review as Clinton did.According to some, this runs the risk of removing the only counterforce tohorizontal fragmentation. Ron Moe argues, “Congress tends toward dis-aggregation and relies upon the President to provide the necessary coun-terforce, so that the end result provides a sound internal managementstructure and clear lines of political accountability to both the Presidentand Congress.”26

Decentralization, too, has been profoundly affected by budgetary auster-ity. Reagan’s formal New Federalism proposals to divide national and statedomestic responsibilities did not pass, but fiscal and political realities de-livered a “fend-for-yourself” federalism that has resulted in a “sorting outof sorts.”27 As the federal government consolidated some fifty-four cate-gorical grant programs in the early 1980s into more flexible block grantsin the areas of social services, low-income energy assistance, substanceabuse, and mental health, the states also ended up with 30 percent lessmoney. Categorical grant-in-aid programs hardly disappeared, going from539 at the peak in 1981 to 405 in 1984,28 to 492 in 1991 to 600 spendingan estimated $221.1 billion in fiscal 1994.29 The new block grants to thestates and the retention of the other grant programs did not necessarilyresult in an even pattern of less regulation or more flexibility for state andlocal governments, however. One study demonstrates that for the blockgrant programs, state regulations replaced federal regulations on local gov-ernments except in education. In addition, in the categorical grant pro-grams that remained, more complex and restrictive federal requirementshave been applied.30 In addition, Congress has created 100 new grant pro-


grams since 1981, fifty-six between 1987 and 1989, predominantly fordrugs, the homeless, AIDS, and education. Many of these, however, carrywith them very small dollar amounts (median of $3.8 million for the 1987–1989 programs) and have larger nonfederal matching requirements.

What Congress has been doing recently is mandating more action by thestates and localities and making them pay for more of it. For example,when the block grant for alcohol, drug abuse, and mental health came upfor renewal in 1988, Congress added a requirement that half of the moneyhad to be used for services to intravenous drug users. In 1989, when gov-ernors found out that expanded Medicaid coverage required by Congressalone was taking up one-third of increases in state revenues, the NationalGovernors Association passed a resolution calling for a two-year morato-rium on further mandates. Congress responded with a new mandate re-quiring extension of Medicaid coverage to pregnant women and infants upto 133 percent of the federal poverty line.31 A state of Michigan analysisof its increased state costs as a result of changing federal policies concludedthat of $125 million in increased costs, 73 percent were due to mandates,12 percent from changing federal requirements, and only 10 percent fromcuts in federal aid.32

Another way Congress and the president have been decentralizing do-mestic policy implementation is through decentralizing regulatory activityto the state level, sometimes on a mandatory basis and sometimes on avoluntary basis. This has come about for three reasons. First, budgetarystringency has made it less likely that Congress will appropriate large sumsto entice state and local governments to deliver programs to achieve federalpolicy goals. Continuing a trend that began in the late 1970s, federal aidas a percentage of state outlays dropped from 25 percent in 1981 to 19percent in 1987.33 As a result, Congress has turned more to enacting stat-utes requiring states to impose regulations to achieve policy goals. As areport of the Advisory Commission on Intergovernmental Relations put it,“Washington turned increasingly to programs based on the ‘stick’ of reg-ulation rather than the ‘carrot’ of financial subsidy in its dealings with stateand local governments.”34 The Clean Air Act requirements are one exampleof attempts to achieve policy goals through regulatory decentralization.Second, budgetary stringency has made Congress reluctant to appropriatefunding directly to federal regulatory agencies so that they can administerprograms on their own. In fact, many federal regulatory agency staffs havebeen cut in the past ten years. For example, the staff of the Federal TradeCommission has 900 work years in 1990, down from 1,800 in 1980. Thisalmost forces understaffed federal agencies to seek ways to join forces withstate agencies, which is what the Federal Trade Commission (FTC) hasbegun doing in anti-trust enforcement.35 Third, a concerted effort was madeby the Reagan administration to devolve regulatory authority to the states.


Through reduced federal oversight, acceleration of formal delegation, andmore flexible standards, the states’ regulatory role was strengthened.36

The result of these decentralizing changes means that, more than ever,domestic policy management is intergovernmental management. Thismeans that not only are elected political officials of approximately 80,000governmental units involved, but also multiple organizations within thesejurisdictions must act in a concerted fashion for any implementation of afederal program or regulation to take place. “Most domestic sectors relyon complex intergovernmental patterns, often including several organiza-tional actors linked together in complicated fashions for policy success.”37

Obtaining the right intergovernmental pattern—that is, the appropriatematch of responsibilities, authorities, and resources between the involvedfederal and state organizations—has an important impact on implemen-tation success. In addition, interorganizational problems are caused by thelack of attention to, and incentives for, coordination among the involvedorganizations.38

Privatization policies also have contributed to pluralization. In itsbroader connotation, privatization occupies a range of relationships on agovernment organization–private organization continuum, with govern-ment-funded and-produced services at one end, privately funded and pro-duced services at the other, and a wide array of combinations in between.39

As policy makers have introduced privatization measures, not only aremore organizations from the private sector involved in various ways in theconduct of public activities at federal, state, and local levels, but morecomplex interactions among public and private organizations have devel-oped in each sector of public activity. Privatization proponents argue thatthis provides more ways in which citizens as public service consumers canexpress their preferences, and the increased variety of organizations oper-ating in the public service configuration facilitates a more efficient and eq-uitable way to aggregate choices from individuals with disparate tastes.40

This can be true under certain circumstances, but there are some significantexternalities and tradeoffs,41 and the creation of choices leaves or createsmultiple public-sector organizations in the public service configuration withaltered roles and relationships. Thus, the configuration of organizationsinvolved in delivering particular public services shifts, producing changesin all the organizations constituting the configuration.

Even if many actual service production activities are contracted out orare made available through voucher systems, government retains a serviceprovision and/or regulatory role that is the responsibility of one or morepublic organizations. Privatization policies are not necessarily simplifyingstrategies. They often mean public organizations will be operating in analtered interorganizational field that requires considerable organizationaladaptation.


THE PUBLIC SERVICE CONFIGURATION PROBLEM ANDORGANIZATION DESIGN

Taken together, the above developments have had pronounced effects onthe environment of public organizations and have contributed to the publicservice configuration problem in several ways:

1. An emphasis on aggregation of interests has led to an integration gap.

2. Institutions are less capable of pursuing long-term national interests.

3. The tasks of coordinating multiorganizational efforts have become more com-plex.

4. While formal accountability efforts have proliferated, less accountability hasbeen achieved.

With respect to the first, as March and Olsen discuss, public institutionsinvolve both aggregative and integrative processes. Aggregative processesare fundamentally processes of interests, power, and exchange and involvesuch questions as: are preferences precise, suitable, and tolerable enough tobe aggregated, and do institutions provide for all the mutually satisfactoryexchanges that exist.42 Integrative processes seek the creation, identifica-tion, and implementation of shared preferences and involve such questionsas: do the processes develop and use genuine expertise of relevance to theproblem, and do they strengthen the capabilities of citizens to understandand act on issues of public policy and to select competent representativesand advisors? The idea is that political institutions ought to be evaluatedin terms of their contribution to the integration of society, as well as theircontribution to the aggregation of diverse interests.43 Of course, these arenot separable but affect one another.

March and Olsen assert that the increase in the number of nondepart-mental bodies at the margin of the state and the interpenetration of govern-mental agencies and organized interests (subgovernments or policy networksin the United States) have led to a segmentation of the state in many Westernsocieties and have fragmented the political community into small constitu-encies.44 The emphasis in designing institutions in this current cycle ofchange is on aggregative processes to the neglect of integrative ones.45 Theconcern is that the present aggregative phase has weakened the integrativeaspects of public policy making. What is diminished is the institutional ca-pability to transform political interests to mold political community and asense of common identity within which decisions are made.46 Functions ofpublic organizations, then, extend beyond the concerns of delivering a givenservice to those who currently demand it to furthering the development of abroader citizenship that builds greater democracy in the community.47

With respect to the second problem mentioned above, John E. Chubb


and Paul Peterson maintain that the United States needs institutions thathave the responsibility and the authority, the incentives and the power topursue long-run national interests.48 A key role of public organizations ex-tends beyond the service they deliver in the immediate term to the encour-agement they give to policy makers to give greater consideration to thenational interest. One implication of this perspective is that certain publicorganizations are those in the public service configuration that possess aresponsibility as a trustee for the nation’s long-term interests, and they mustact as a counterweight to the more parochial and immediate interests ad-vanced within the day-to-day workings of the public service configuration.

The third problem—the increasing complexity of coordinating—compli-cates the achievement of service delivery and makes adaptation of publicorganizations to the new requirements of the public service configurationmore difficult. For instance, contracting does not necessarily mean moreflexibility, but it can mean less. Oliver Williamson maintains that the choicebetween contracting or hierarchy as an organizing mode turns on whichmode has superior adaptive properties in a particular environment. Envi-ronmental uncertainty combines with bounded rationality of human deci-sion making to limit reliance on long-term contracting because it wouldrequire specification of complex future contingencies. Instead, decisionmakers may rationally choose internal organizational production of serv-ices where, through vertical integration, adaptation can be made in asequential way without the need to consult, complete, or revise interorgan-izational agreements.49 Further, Donald E. Kettl points out that governmentthrough third parties frequently undercuts the prevailing allegiance to hi-erarchy and control, and tempts politicians and managers to respond toproblems by writing rules, recentralizing program administration, or un-leashing auditors, thus adding a new layer to the already difficult task ofmanaging programs indirectly.50 Relatedly, Laurence J. O’Toole and Rob-ert S. Montjoy detail the high coordination costs that could be expected toaccompany successful interorganizational implementation.51

The fourth problem—increasing methods of accountability but achievingless system accountability—is exacerbated by organizational proliferationand complexity. As just discussed, the response to complexity is often totry to increase control. Politicians and managers seeking to do this have awide range of methods from which to choose, and different groups of themoften impose several controls concurrently.52 As Goodsell discusses, ana-lysts of accountability mechanisms typically emphasize how each kind ofcontrol is plagued with inadequacies but do not look at the multiple re-strictions placed on a public organization and its managers. From the stand-point of the manager, these constraints are collectively cumulative.Managers face the controls all at once and are expected to also build acredible record of achievement.53 The net effect stifles managerial adapta-tion. A National Academy of Public Administration panel or examining


federal management systems observes “that Federal management systemsare now overregulated in the sense that by accretion, each has acquired anoverburden of controls, limitations and constraints, reviews, approvals,data requirements, and other mandates, which in total, significantly reducevalue and effectiveness.”54 In short, by attempting to regulate so many ofthe processes, management is prevented from adapting the organization toachieve its primary objectives. The emphasis needs to be on achieving or-ganization goal accountability, which often means determining how wellthe organization influenced the public service configuration to produce de-sired policy impacts. The proliferation of segmented control measures isunlikely, in and of itself, to achieve that.

DESIGNING PUBLIC ORGANIZATIONS TO ADDRESS THEPUBLIC SERVICE CONFIGURATION PROBLEM

The perspective provided above argues that policy makers controllingdecisions over public organization designs need to focus on more than theorganization at issue. They need to focus first on the public service config-uration that operates in the policy area of interest. They need to consider:

1. where the existing public organization(s) fits within the public service configu-ration—that is, how it interacts with other organizations and how its structureaffects that interaction;

2. what the policy maker wants the public service configuration to produce;

3. what configuration of the interorganizational network is most likely to producethe outputs; and

4. what configuration of public organizations within the jurisdiction is most likelyto facilitate the desired change in the public service configuration—that is, howshould the relevant public organizations be structured and interact.

Elsewhere I discuss three dimensions that can be applied in the analysis ofalternative organizational structures—public interest, economic, and man-agement.55 Elements of these dimensions need to be examined in order toaddress the public service configuration problem. While a full discussion ofthe application of these dimensions is not workable in the space availablehere, some idea of the relevant considerations can be provided.

THE PUBLIC INTEREST DIMENSION

The public interest dimension contains factors that are consequential forthe ability of the organization to function within the governmental frame-work in such a way that it advances the public interest. In the United States,the public interest contains notions of popular control, leadership, and as-sumptions about the appropriate use of sovereign power. As such, it hasboth substantive and procedural aspects.


The substantive aspects have to do with producing policy outputs that asubstantial proportion of the public wants and those that are in the longerterm national interest. Public organizations need to act to construct a bal-ance between meeting immediate needs and longer term requirements. Assuch, public organizations have to be designed so that they seek out thearticulation of public needs, influence other organizations in the publicservice configuration to help meet them, and also help policy makers un-derstand what the alternatives are for meeting the longer run needs of thecountry for the future.

Other substantive aspects include advancing the goals of equity, liberty,due process, and community. By having representatives of various segmentsof society working in public organizations, various publics indirectly par-ticipate through their bureaucratic representatives.56 Equity has several var-iations in public organizations,57 and organizational policies can furthersome types at the expense of others.58 Liberty is always a highly prizedvalue in democracy. David Rosenbloom asserts that in the United States,the conflict between bureaucratic power and democratic constitutionalismis highly pronounced because bureaucracy promotes uniformity and theConstitution promotes diversity.59 The rights found in the main body ofthe Constitution and the Bill of Rights, such as freedom of speech, or press,of religion, and against unreasonable searches and seizures, are dedicatedto protecting individual liberty, and organizations need to operate in suchways that these values are protected.

Organizations are also to be judged by the degree to which they helpbuild the community. As March and Olsen discuss, “One of the oldestclaims for democratic political processes is that they help develop an ethosof preferences that encourage cooperation and a sense of community.”60

March and Olsen point out that the choice of institutions is a choice ofvalues and cannot simply be treated as an implementation of them.61 Thus,public organization design involves choices between structures that en-courage community and cooperation but may also encourage passivity anddiscourage individual initiative and those that emphasize individual free-dom and choice but may also encourage greed, envy, and competitiveness.

The procedural aspects of the public interest have to do with issues ofrepresenting citizen voices, providing an open and participatory policy-making process, avoiding abuse of power, and instilling integrity in publicservice. Douglas Yates enumerates the following desired features that re-inforce democracy: representation, responsiveness, openness, participation,control of experts and competition, and balance among interest groups.62

Thus, in the United States, the public interest is very much rooted in notionsof popular control and accountability, the appropriate exercise of sovereignpower, and public leadership responsibility to balance competing interestsin developing solutions and building public support for them.

Public organization designers then need to consider how the powers be-


ing assigned to public organizations will impact public service configura-tions. Just as important, they need to consider how the powers will beconstrained and how oversight will be exercised to ensure conformancewith democratic norms. A basic point of departure in the United States isto examine how structures are to respond to the three branches of govern-ment and operate within the system of checks and balances. Policy makersneed to be careful to delineate the linkages to officials and organizationswithin the three branches of government and demonstrate how democraticdirection, popular accountability, and protection of individual liberty willbe preserved and enhanced. Too often certain organizational designs, thosethat advocate independent agencies, government corporations, government“instrumentalities,” or other government-sponsored enterprises, are advo-cated by their proponents as good because they remove the organizationfrom politics. This is a misnomer. The design may make the operations ofthe organization more removed from the three branches of government andthe operation of democratic politics inherent in the actions of our threebranches of government, only to make the organization more responsiveto a narrower interest group politics defined by those groups given the mostpower by the organization’s charter and the development of the subsequentsubsystem politics. The question that must be asked is not only what pol-itics is being escaped from, but what politics is the operation of the organ-ization being subjected to.

This does not mean that all organizations at the federal government levelmust be uniformly subjected to all governmentwide regulations. Today, thefederal code contains between 100 and 150 generic management laws de-pending on the definition employed. Ronald C. Moe and Thomas H. Stan-ton assert, “Generic laws, properly written, provide a means to implementa comprehensive managerial strategy.”63 However, “properly written” isthe critical qualifier. The fact is that these generic management laws havebeen written incrementally, and their cumulative effectiveness on variouslysituated organizations has never been systematically assessed. Just as it isnot appropriate to advance organization designs that provide blanket ex-clusion from all such management laws, it is similarly inappropriate toendorse blanket inclusion.64 Rather, organization designers need to exam-ine these laws anew in the context of creating and altering public organi-zations. Perhaps, in this way the key democratic responsiveness questionswill be addressed, and also the governmentwide laws and regulations re-quiring reform will be examined.

THE ECONOMIC DIMENSION

The economic dimension includes factors that are important to insurethat the organization functions effectively within the political economy ofthe jurisdiction. It includes incentives for the production of public goods,


for the contribution of public organizations to furthering activities of pri-vate organizations, and for economic development of the jurisdiction as awhole.

When public policy makers make decisions structuring public programs,they are making decisions that affect the nature of the relationships betweenpublic, private nonprofit, and private for-profit organizations in the publicservice configuration. Policy makers can emphasize marketlike mechanismsor lean more toward integrated delivery and control by public agencies.Actual configurations seldom represent pure types, but rather embodymixed modes, so that it is more accurate to conceive of a market–directservice continuum. Policy makers actually have a variety of policy toolsfrom which to choose that can influence the relationships of organizationswithin the public service configuration and, thus, where on the continuumthe organizations within the public service configuration can be found. Ex-amples of such tools include grants, loan guarantees, tax expenditures,loans, regulation, and direct government.65

However, policy makers need to be careful that the public service con-figuration will respond in the ways desired to the policy tool of choice.Public decision makers have been legitimately chastised in the past for au-tomatically assuming direct service by a centralized bureaucracy was nec-essary to respond to an identified public problem without considering thenature of the tasks, the social and economic environment within which theywould be undertaken, and the degree of control the public organizationwould need to impact the other organizations in the interorganizationalfield. By the same token, today, policy makers are cautioned against “as-suming a market.” A relevant first question is, what in the environment ofexisting or potential organizations suggests that a market can exist, and, ifit can, what kind of market? The argument of market advocates is that thepublic service configuration is adequately populated with organizationswith the capabilities to provide services to publics with diverse interests insuch a way that they all receive desired services at lowest cost.66 This as-sumes that the nature of the service fosters multiple providers on a contin-uing basis and that the nature of the relationship among the organizationsprecludes monopoly capture. This is possible, but it is not certain. Forexample, Ruth DeHoog finds that with respect to social services and em-ployment and training services in the state of Michigan, only infrequentlywere there sufficient suppliers to achieve the desired level of competition.67

Some studies do show cost savings of privatization,68 but other studiesshow cases where privatization has been implemented and no cost savingshave resulted!69

The economic dimensions also involves the role for public organizationsin the economic system of the nation. While the United States is not goingto adopt a formal comprehensive industrial policy, the government stilltakes actions the sum of which shape business actions and affect economic


growth. The government will continue to make economic development de-cisions on a sector-by-sector basis that will inevitably involve the role ofpublic organizations in supporting the efforts of private for-profit organi-zations in fostering economic growth. These are not tangential effects. AsRobert A. Leone and Stephen Bradley put it, “The effect of federal policiesoften go to the heart of strategic decision making in the private sector. Notonly do they influence key corporate decisions on product mix, verticalintegration, and competitive emphasis, they also encourage or discourageR&D programs, diversification into multiple product lines, reliance on pat-ent protection, and pricing strategies.”70

For example, it is quite apparent that one of the long-term purposesof the Federal Aviation Administration and the National Aeronauticsand Space Administration is to foster the growth of both the domesticaircraft manufacturing and air transport industries, and through theirresearch and development, regulatory, and infrastructure programs, theseorganizations along with the Department of Defense have contributedand continue to contribute to a significant U.S. dominance in world mar-kets. The decision to build the “space plane” is clearly directed at main-taining such dominance and will expand the promotional role of suchorganizations.

Renewed recognition exists of the role of public organizations in con-tributing to the competitiveness of private for-profit organizations in theglobal marketplace. Public policy debates are focusing on the criticality ofpublic infrastructure, education, and publicly funded research in restoringthe U.S. position as a leading edge economy. There is an awareness thatpublic expenditure is not all directed at public consumption but also atpublic investment, which has an important impact on the capabilities ofdomestic enterprises to compete in the global marketplace, and which isnot a drain on, but a support for, the economy.71 In 1987, the Office ofManagement and Budget (OMB) reported $126.9 billion in investment inthe defense area and $82 billion in nondefense areas. These investmentsare channeled through and directed by public organizations, and how theyare structured to do the investment job is a central element in today’s publicpolicy debates.72

Public organizations must be designed in such a way that they play pos-itive roles in setting the stage for other organizations in the public serviceconfiguration to do well in advancing economic growth. There must beelements that insure that public organizations act not merely in the short-run interests of certain companies, but also in the longer run national in-terest. The task of coordinating multiorganizational efforts in pursuit ofsuch an objective has become increasingly complex, especially with stateand local organizations taking on more ambitious regulatory and economicdevelopment roles.


THE MANAGEMENT DIMENSION

The management dimension involves the capacity of public organizationsto adapt to changes in the public service configuration and produce desir-able quantities and qualities of public and private outputs. It concerns howvarious tools and systems enhance or constrain public organization man-agers in guiding their organizations to effectively adapt to needed changes.As stated at the start of this chapter, there is a dual management respon-sibility in public organizations—institutional management and transorgan-izational management. The focus of transorganizational management is onimpacting the public service configuration—that is, managing interdepen-dencies among the extant array of different types of organizations. Thefocus of institutional management is on developing the capacity to fulfillinstitutional maintenance requirements but also to make available thewherewithal to perform transorganizational management functions.

Public organizations differ in their capacity to manage public functions.Public administration has long been concerned not just with individualmanagement situations and techniques but with building capacity in publicorganizations that will perform multiple functions over time in the publicinterest while maintaining individual freedom and integrating various in-terests into the national interest.73 The capacity of public organizations isdirectly linked to their relationships with other organizations in the config-uration. Beth Walter Honadle’s model for capacity is compatible with thisperspective. She proposes that the organizational requirements of capacityin the public sector include: the ability to forge effective links with otherorganizations; processes for solving problems; coordination among dispa-rate functions; and mechanisms for institutional learning.74 The model is adynamic one with the capacity of public organizations determined by theirability to adjust and coordinate with other organizations to produce desiredpublic policy outcomes.

The design of public organizations can have a significant impact on theircapacity to manage the implementation of public policies successfully. Mal-colm L. Goggins and associates argue, on the basis of research on state-level implementation, that integrated structures should be easier to induceinto action because there are fewer veto points and prospects for delay, butfor policies requiring an adaptive implementation style, organizations withmore complex and variegated implementation structures should be moresuccessful in the long run in achieving actual satisfactory outputs and out-comes. In addition, the congruence of goals among implementing units andthe fit of such goals with the purposes articulated in official policy messagesare important for successful implementation.75 They also find that in ad-dition to the appropriate administrative structure, plentiful, skillful, andmotivated administrators and also sufficient financial resources that arewell targeted can influence implementation success.76 Thus, complex struc-


tures can be made workable for long-run performance, provided that theother key elements are in place to provide the capacity necessary for goalachievement. Unfortunately, far too often the other elements are neglected.

Inadequate management capacity in public organizations is, and will re-main, a problem in many public organizations. For example, at the federallevel, the Report of the National Commission on the Public Service (VolkerCommission) observed about federal management systems: “Essential man-agement and regulatory decisions, for example, are now engulfed in redtapeand paperwork to the point that the process often drives the decisions, andnot vice versa.”77 Relatedly, Comptroller General Charles Bowsher warnsabout an emerging crisis in federal organizations resulting from a disin-vestment in capacity. 78 Pluralization is not in and of itself a solution tothis problem. In fact, it can be a complicating factor. William F. West findsthat federal regulatory administration agencies’ environments tend to bemore pluralistic today, and thus the task of regulation has become bothmore complex and more characterized by internal conflict.79 Adding awhole new set of actors increases the coordination problem.

Policy makers need to be aware that both policy tools and managementsystems, which are key components of public organization design, will sig-nificantly determine the capacity of the public organization to affect thepublic service configuration to achieve desired policy outputs and out-comes. As Salamon points out with respect to policy tools, the choice of apolicy tool not only embodies a particular type of activity, but it also in-volves a delivery mechanism. “The nature of the delivery system is impor-tant because it affects the complexity of the implementation process, thedegree of control that can be exercised over program operations, and thenature of the pressures built into the program administration by the in-volvement of different types of organizations with different outlooks andpurposes.”80 Management systems, too, whether prescribed on an individ-ual or government wide basis, will either provide the assistance and flexi-bility to adjust to changes in the public service configuration or willconstrain such adjustment. Too often, the effect has been unintended con-straint. The Volker Commission found for the federal government that,“Demands for administrative consistency, in the name of equity or WhiteHouse control, have made it virtually impossible to adjust to changingcircumstances.”81 Policy makers need to examine the cumulative effect ofmanagement constraints they place on public organization in order to un-derstand whether the organization will be enabled to play a meaningfulrole in the public service configuration.

CONCLUSION

The public service configuration problem means that, more than ever,policy makers interested in program performance must design public or-


ganizations with a view to how the public organization will be enabled toimpact and influence the relevant public service configuration. This per-spective implies an analysis of how the public organization can best bestructured to interact with other organizations to arrive at a configurationthat is most likely to produce desired policy outcomes.

If the effects of recent trends are to be corrected, public organizationdesigners need to focus on design elements that will provide for integrationas well as aggregation of interests. In addition, designers need to considerwhat elements will permit pursuit of longer term national interests. Also,designers should be aware that organizational pluralization has proceededto make the coordination of multiorganizational efforts more complex andthat concerted attention to coordination mechanisms and administrativecapabilities to make them work is even more critical to implementationsuccess. Finally, policy makers need to understand that layering additionalaccountability and control requirements will not necessarily provide moreaccountability, but in order to address these concerns, public organizationdesigners need to skillfully blend three dimensions—public interest, econ-omy, and management. This perspective implies not one way to design apublic organization, but it does mean that an analysis of how design ele-ments combine to make tradeoffs among these dimensions is essential.

NOTES

1. Harold Seidman and Robert Gilmour, Politics position, and power, 4th ed.(New York: Oxford University Press, 1986), 28.

2. Ibid., 25.3. Quoted in Gary C. Bryner, Bureaucratic discretion (Elmsford, NY: Perga-

mon, 1987), 150.4. Cathy Marie Johnson, New wine in new bottles: The case of the consumer

product safety commission, Public Administration Review 50 (January/February1990): 74–81.

5. Charles Goodsell, The case for bureaucracy (Chatham, NJ: Chatham House,1985), 131–132.

6. Kenneth J. Meier, Regulation Politics bureaucracy, and economics (NewYork: St. Martin’s Press, 1985), 10–14; Cornelius M. Kerwin, Transforming reg-ulation: A case study of hydropower licensing, Public Administration Review 50(January/February 1990): 91–100.

7. S. Kenneth Howard, De facto new federalism, Intergovernmental Perspective10 (Winter 1984): 4.

8. John Shannon, The faces of fiscal federalism, Intergovernmental Perspective14 (Winter 1988): 17.

9. Vincent L. Marando and Patricia Florestano, Intergovernmental manage-ment, in Public administration, edited by Naomi Lynn and Aaron Wildavsky (Cha-tham, NJ: Chatham House, 1990), 295.

10. Deil Wright, Federalism, intergovernmental relations, and intergovernmental


management: Historical reflections and conceptual comparisons, Public Adminis-tration Review 50 (March/April 1990): 172.

11. Catherine H. Lovell, Where we are in intergovernmental relations and someimplications, Southern Review of Public Administration 3 (June 1980): 6–20.

12. See Charles Wise, Whither federal organizations: The air travel challengeand federal management’s response, Public Administration Review 49 (January/February 1989): 17–28.

13. Lester Salamon, Rethinking public management: Third-party governmentand the changing forms of government action, Public Policy 29 (Summer 1981):258.

14. Terry Moe, The politics of bureaucratic structure, in Can the governmentgovern? edited by John Chubb and Paul Peterson, 269 (Washington, DC: BrookingsInstitution, 1989).

15. Ibid., 328.16. Examples include Federal National Mortgage Association, Federal Home

Loan Mortgage Corporation, Federal Home Loan Bank System, Student Loan Mar-keting Association, College Construction Loan Insurance Association, Federal AssetDisposition Association, Federal Agriculture Mortgage Corporation, and the Fi-nancial Corporation and the Resolution Funding Corporation of the Federal HomeLoan Bank System.

17. Former Congressional Budget Office (CBO) Director Rudolph Penner ob-serves, “You do have a swing away from the radical conservatism to one that looksmore benignly toward spending that heads straight into constraints. So you lookat other ways of doing things. And government-sponsored enterprises are a veryconvenient way.” Quoted in Lawrence J. Haas, Dodging the budget bullet, NationalJournal (October 1, 1988): 2465.

18. Thomas Stanton and Ronald Moe, Using generic law to manage third-partygovernment: The case of government-sponsored enterprise, speech delivered at theNational Conference of the American Society for Public Administration, Los An-geles, April 1990, 4.

19. James D. Barber, Some consequences of pluralism in government, in Thefuture of the United States government, edited by Harvey S. Perloff, 243 (NewYork: George Braziller, 1971).

20. James G. March and Johan P. Olsen, Rediscovering institutions (New York:The Free Press, 1989), 137.

21. Barber, Some consequences, 246–253.22. Farm Credit Assistance Corporation, Federal Agriculture Mortgage Corpo-

ration, Farm Credit System Insurance Corporation, and College Construction LoanInsurance Corporation.

23. P.L. 101-73, 103 Stat. 183; 12 U.S.C. 1800.24. Resolution Trust Corporation (RTC), Resolution Funding Corporation

(REFCORP), Office of Thrift Supervision (OTS), and Federal Housing FinanceBoard.

25. Beryl A. Radin and Willis D. Hawley, The politics of federal organization:Creating the US Department of Education (Elmsford, NY: Pergamon, 1988).

26. Ron Moe, Traditional organizational principles and the managerial presi-dency: From phoenix to ash, Public Administration Review 50 (March/April 1990):135.


27. John Shannon, The return to fend-for-yourself federalism, Intergovernmentalperspective (Summer/Fall 1987): 36.

28. David Nice, Federalism (New York: St. Martin’s Press, 1987), 56.29. Advisory Commission on Intergovernmental Relations, Cataloging of federal

grants-in-aid to state and local governments: Grants funded in FY 1989, M-167(Washington, DC: Advisory Commission on Intergovernmental Relations, October1989); National Performance Review, Strengthening the partnership in in intergov-ernmental service delivery (Washington, DC: Office of the Vice President, 1993).

30. Catherine H. Lovell, Deregulation of state and local governments: The Rea-gan years, in Intergovernmental relations and public policy, edited by J. EdwinBenton and David R. Morgan, 150 (Westport, CT: Greenwood Press, 1986).

31. David S. Cloud, Rhetoric confronts reality as the 1991 budget battle getsunder way, Governing (May 1990): 22.

32. John Kamensky, Federal grants increase, but no one is complaining thesedays, SIAM Intergovernmental News (Summer 1990): 3.

33. Shannon, The return to fend-for-yourself federalism, 36.34. Advisory Commission on Intergovernmental Relations, Regulatory federal-

ism: Policy, process, impact, and reform (Washington, DC: Advisory Commissionon Intergovernmental Relations, 1984), 146.

35. Randall Bloomquist, FIC mirrors style of its new head, begins cooperatingwith states, Governing (August 1990): 19–24.

36. Michael Fix, Transferring regulatory authority to the states, in The Reaganregulatory strategy: An assessment, edited by George C. Eads and Michael Fix(Washington, DC: The Urban Institute Press, 1984).

37. Laurence J. O’Toole, Strategies for intergovernmental management: Imple-menting programs in intergovernmental networks, International Journal of PublicAdministration 11 (4, 1988): 418.

38. Laurence J. O’Toole and Robert S. Montjoy, Interorganizational policy im-plementation, Public Administration Review 44 (November/December 1984): 491–500.

39. See National Academy of Public Administration (NAPA), Privatization: Thechallenge to public management (Washington, DC: NAPA, 1989), 7–8; and TedKolderie, Two different concepts of privatization, Public Administration Review 46(July/August 1986): 285.

40. President’s Commission on Privatization, Privatization: Toward more effec-tive government (Washington, DC: President’s Commission on Privatization, 1988),248.

41. For a discussion of these, see Charles Wise, Public service configurations andpublic organizations: Public organization design in the post-privatization era, PublicAdministration Review 50: 143–147.

42. March and Olsen, Rediscovering institutions, 120.43. Ibid., 120–129.44. Ibid., 97, 166.45. Ibid., 135.46. Ibid., 165.47. See Steven Kelman, Public choice and the public spirit, The Public Interest

87 (Spring 1987): 80–94; and Curtis Ventris, Two critical issues of American publicadministration, Administration and Society 19 (January 1987): 37.


48. John E. Chubb and Paul Peterson, American political institutions and theproblem of governance, in Can the government govern? edited by John E. Chubband Paul Peterson, 116 (Washington, DC: The Brookings Institution, 1989).

49. Oliver Williamson, Transaction cost economics: The governance of contrac-tual relations, in Organizational economics, edited by Jay Barney and WilliamOuchi, 116 (San Francisco: Jossey-Bass, 1986).

50. Donald E. Kettl, Government by proxy (Washington, DC: CQ Press, 1988),154.

51. O’Toole and Montjoy, Interorganizational policy, 499.52. See Bernard Rosen, Holding federal bureaucrats accountable, 2nd ed. (New

York: Praeger, 1989).53. Goodwell, The case for bureaucracy, 129.54. National Academy of Public Administration (NAPA), Revitalizing federal

management: Managers and their overburdened systems (Washington, DC: NAPA,1983), 4.

55. See Wise, Whither federal organizations, 17–28; and Wise, Public serviceconfigurations, 141–155.

56. Stephen Maynard-Moody, Beyond implementation: Developing an institu-tional theory of administrative policy making, Public Administration Review 49(March/April 1989): 139.

57. H. George Frederickson, Public administration and social equity, Public Ad-ministration Review 50 (March/April 1990): 228–237.

58. Lois Recascino Wise, Social equity in civil service systems, Public Adminis-tration Review 50 (September/October 1990): 567–575.

59. David Rosenbloom, Public administration and law (New York: Marcel Dek-ker, 1983), 20.

60. March and Olsen, Rediscovering institutions, 140.61. Ibid., 141.62. Douglas Yates, Bureaucratic democracy (Cambridge, MA: Harvard Univer-

sity Press, 1982), 182.63. Ronald C. Moe and Thomas H. Stanton, Government-sponsored enterprise

as federal instrumentalism, Public Administration Review 49 (July/August 1989):324.

64. A panel of the National Academy of Public Administration concludes:“Thus, a careful formal structuring of authority and responsibility through a legallymandated framework of statute and regulation has become one of the fundamentalcharacteristics of our government. This principle has been carried through into thefurther implementation of federal management systems, but in this context for-mality and structure come into conflict with the reality of what is needed to achieveexcellent and cost efficient management.” National Academy of Public Administra-tion, Revitalizing, 2.

65. See Lester M. Salamon and Michael Lund, eds., Beyond privatization: Thetools of government action (Washington, DC: Urban Institute Press, 1989).

66. Robert Bish and Vincent Ostrom, Understanding urban government: Met-ropolitan reform reconsidered (Washington, DC: American Enterprise Institute,1979), 27–30.

67. Ruth DeHoog, Human services contracting: Environmental, behavioral, and


organizational conditions, Administration and Society 16 (February 1985): 427–454.

68. Stephen Morse, Contracting out: A painless alternative to the budget cutter’sknife, in Prospects for privatization, edited by Steve H. Hanke, 60–73 (New York:Proceedings of the Academy of Political Science, 1987).

69. Robert W. Bailey, Uses and misuses of privatization, in Prospects for pri-vatization, edited by Steve Hanke, 138–152 (New York: Proceedings of the Acad-emy of Political Science, 1987).

70. Robert A. Leone and Stephen Bradley, Toward an effective industrial policy,Harvard Business Review (November/December 1981): 92.

71. See Robert Heilbroner and Peter Bernstein, The debt and the deficit (NewYork: W. W. Norton, 1989), 76–85.

72. See, for example, John E. Chubb and Terry Moe, Politics, markets, and theorganization of schools, American Political Science Review 82 (December 1988):1065–1087.

73. See George A. Graham, America’s capacity to govern (University: Universityof Alabama Press, 1960), 74.

74. Beth Walter Honadle, A capacity-building framework: A search for conceptand purpose, Public Administration Review 41 (September/October 1981): 579.

75. Malcolm L. Goggin et al., Implementation theory and practice (Glenview,IL: Scott, Foresman, 1990), 119–133.

76. Ibid., 128–133.77. Report of the National Commission on the Public Service, Leadership for

America: Rebuilding the public service (Washington, DC: The National Commis-sion, 1989), 19.

78. Charles Bowsher, The emerging crisis: The disinvestment of government,Webb Lecture, National Academy of Public Administration, Washington, DC, De-cember 2, 1988.

79. William F. West, The growth of internal conflict in administrative regulation,Public Administration Review 48 (July/August 1988): 773–782.

80. Lester Salamon, The changing tools of government action: An overview, inBeyond privatization: The tools of government action, edited by Lester M. Salamonand Michael Lund, 35–36 (Washington, DC: Urban Institute Press, 1989).

81. Report of the National Commission on the Public Service, 19.

Chapter 6

Government Reorganization:Theory and Practice

Guy Peters

Contemporary governments invest a great deal of effort in the reform andreorganization of their administrative structures. This practice is a contin-uation of a long history of reorganization. This continued investment oftime and energy must appear paradoxical to the disinterested observer.Most of the literature on reform—whether written by practitioners or ac-ademics or whether historical and contemporary—argues that reform andreorganization are largely wasteful and produce few tangible results. Fur-ther, the same reform may be considered a success by some observers anda failure by others—the standards for judging success at reforming areidiosyncratic and ambiguous, and often influenced by the political ambi-tions of the observer.

A second notable element that would lead the objective observer to ques-tion the utility of administrative reforms is the dominance of fad and fash-ion in these reforms. In recent years examples of fads have includedprivatization, deregulation, and the devolution of authority within govern-ment, e.g. creation of the “Next Steps” agencies in the United Kingdom.Once initiated, the same reform may be implemented in one country afteranother. Some of this dissemination of reforms is autonomous, with gov-ernments attempting to make themselves more efficient, or at least makethemselves appear more modern (Olsen and Peters, 1996). Some govern-ments have these fashionable reforms forced upon them as conditions ofgrants and loans, whether the reforms are suitable for the needs of thatcountry or not.

Still, in the triumph of hope over experience, governments continue toreform and to reorganize themselves. They often do so with only the vagu-est and fuzziest ideas about what makes governments function and what


the effects of particular attempts at initiating change might be (Peters,1998). Although the use of social science theory is often denigrated bypractitioners in government, there is good reason to think about some fun-damental approaches to organizations and how these theories can guidereform. This chapter will be a discussion of three important approaches toorganizations and their potential impacts on administrative reform. Thesethree approaches are themselves composed of a number of alternatives, sothat there are multiple sources of explanation or guidance available to thewould-be reformer, and to the would-be analyst.

THEORETICAL APPROACHES TO REFORM

There are at least three alternative theoretical positions useful for under-standing reform and reorganization efforts in the public sector. For oneapproach discussed below, it may be stretching the claims of the positionitself to refer to it as being theoretical, but even that more descriptive andcommon-sense approach does appear to have an implicit theory lurkingsomewhere at its core. We will describe briefly these three fundamentalpositions, along with the various subsets contained within each. We willalso discuss how each of the approaches might be applied in the publicsector and how we might decide among them as ways of understandingwhat has been happening in public administration.

There may even be a case to be made for the ability of several of theapproaches to predict what might transpire in any prospective administra-tive reforms. One major weakness in most public administration literature,and indeed the political science literature taken more broadly, is the in-ability to predict the logical outcomes of emerging situations and oppor-tunities in the public sector. As a consequence, most administrative analystspostdict rather than predict, outcomes in the public sector; these ex postanalyses will always be correct, but not particularly useful for the practicalpolicymaker. The approaches which will be discussed here are by no meansfull-blown predictive models, but there are at least some inklings of move-ment in that direction.

As we discuss theories in reorganization, we will need to be extremelycareful to distinguish the theories (implicit or explicit) that have guidedpractitioners who constructed the reorganizations from those theories thatpolitical scientists and other organizational analysts have utilized in theirattempts to understand, ex post, the changes imposed. In some instancesthe two bodies of theory may be synonymous, while in other cases thereare marked differences. Several of the more abstract theories of the analystsmay in fact be useful for informing practical reform efforts, but few appearto be consulted as governments cycle through their progression of reformand then reform again. We should point out here that we will be lookingat changes that could be considered either as reorganizations—structural

Government Reorganization 161

changes—or as reforms—procedural or relational changes (Ingraham andPeters, 1988). These two categories are at times difficult to separate inpractice, and the motivations underlying them tend to be very similar.Therefore, we will deal with the two types of change as synonymous forthe purposes of this chapter.

Purposive Models of Reform

The first major category of approaches to reform are broadly purposivein their perspective on the process. That is, these analyses assume that oneor more actors in the process have a particular end state in mind whenthey propose the reform or reorganization. These approaches further as-sume that the actor(s) involved are sufficiently powerful or skillful to havethe reform adopted and implemented. These purposive models consider theperceived problems and motivations of political actors—including the or-ganizations within the public sector themselves—and seek to comprehendwhy reorganization decisions are taken, given those motivations. Many ofthese approaches focus more on the implicit theories of the reformers them-selves rather than supplying independent analytical frameworks of theirown to help understand the process. At least one purposive approach (theeconomic approach), however, is capable of providing a powerful (if some-what simplistic for most purposes) theoretical analysis of bureaucratic pol-icy making. There are several different approaches to reform containedwithin this broader category.

Administration as Usual

The first alternative approach to understanding reorganization in gov-ernment is the one most commonly used in the real world and, to someextent, also most commonly used (at least over time) in academic studiesof public administration. In this approach, reorganizations occur becauseof the perceived political need to produce a change in the administrativestructure and from the perceived inadequacies of existing arrangements.Christopher Pollitt (1984) refers to these studies as the “traditional, prag-matic” approaches to the machinery of government, and therefore tochanging that machinery. Dealing specifically with the British literature(Chester and Wilson, 1968; Chapman and Greenaway, 1980), Pollitt pointsto the tendency of writers in this tradition to ascribe reform to a “need”for change without ever specifying whose need or the operational definitionof such a need. In reality the need is usually the one perceived by a politicalleader (a prime minister) who wants to achieve a set of goals (includingperhaps greater efficiency) through the public sector. That leader may seethe existing administrative structures as impediments to achieving thosegoals and therefore attempt to restructure government. This tendency to-ward attributing vague political causes for reform is not confined to Britain,


and a good deal of writing on administrative reform in the United Statesand elsewhere has the same characteristics (Seidman and Gilmour, 1986;Caiden, 1970, 1984; Savoie, 1996). Stephen Skowronek (1982) refers tothis pattern of pragmatic and ad hoc analysis of administrative reorgani-zation as a “patchwork” in the context of the United States.

This traditional mode of analysis is not, however, without substantialvalue. In the first place, it is often descriptively much richer than is moretheoretically motivated research on organizational change, and a reader canunderstand the logic in action justifying the changes in government. Fur-ther, this writing generally approaches more closely the understandings ofpractitioners actually involved in government about what happened in areorganization and why it happened. The politicians and administratorsinvolved in reform rarely think about their activities in the theoretical termsthat fill the political science literature. Finally, although there may not bea theory explicitly stated in the work, there is often one underlying thedescription of change, and that theory generally is one based on a detailedand nuanced understanding of organization politics. The difficulty is thatthe theory may not be comprehensible to anyone who has not lived throughthe same set of experiences as the formulator of the “theory.”

Political Science

Pollitt (1984: 170–172) discusses a second category of reform literature(again largely British) under the category of “political science.” This ap-proach to reform emphasizes the impacts of overall governmental changeon public administration, and especially those changes produced by a senseof “overload” and “ungovernability” that began in the late 1970s (Rose,1978; Rose and Peters, 1978) and has persisted (Snellen, 1985; Chubb andPeterson, 1989). In administrative terms, these diagnoses of the conditionof modern governments have produced numerous reform efforts. At per-haps the simplest level, some of these have been called “cutback manage-ment” and have been concerned with the need of some managers ingovernment to reduce the size of their own departments or agencies in orderto meet externally imposed budgetary ceilings (Levine, 1978; Dunsire andHood, 1989). The “cutback management” approach has emphasized themanagerial need to produce reductions in programs and personnel withoutexcessive disruption to the services provided clients. Some disruption isinevitable, but the managerial question is how to reduce the human andorganizational impacts of change.

The cutback approach in some ways presaged subsequent events in thepublic sector that, in turn, have required even greater managerial changesand greater adaptation to fiscal reductions (Caiden, 1997). Most of thesechanges have been associated with the conservative governments elected inthe aftermath of economic slowdowns and apparent mushrooming of thepublic sector; Reagan, Thatcher, and former Canadian Prime Minister


Brian Mulroney are well-known examples of the breed (Savoie, 1996). As-sociated with these political regimes were a host of reforms and reorgani-zations, most directed toward reducing the size and influence ofgovernment and having more public services implemented privately. Pri-vatization and deregulation have been one of the dominant themes in thesereforms (Wright, 1994), as has the decentralization of administrative au-thority to autonomous or quasi-autonomous organizations (Peters, 1990).Even less conservative political leaders have found it fiscally advantageousto reduce direct public employment and to utilize privatization, deregula-tion and contracting (Peters, 1996a) as means of reducing their levels ofexpenditure in the face of rising costs and increasing taxpayer resistance tobig government. In fact some of the most extreme versions of administrativereform have occurred under the leadership of Labor governments.

As with the “traditional” approach, there is a theory implicit in thisapproach to governmental reform. The theory is more evident in the re-forms themselves than in most of the scholarship that has been applied tothem. One strand of this thinking has been rather simplistic bureaucracybashing, based upon a naive belief that the problems of modern govern-ment are largely a function of the inefficiencies of large complex publicbureaucracies (Goodsell, 1985; Milward and Rainey, 1983). This approachhas produced a number of attempts to make the public sector look like theprivate sector, and some have used private-sector executives to implementthose ideas (Metcalfe and Richards, 1984; Kelman, 1985; Wilson, 1988).These hymns of praise to private-sector management have been sung whilegovernment has been called in to save a number of failing steel mills, au-tomobile factories, and financial institutions in the private sector.

A more complex version of the same idea about reform parades underthe banner of manageralism (Aucoin, 1990; Hood, 1991). The idea putforward here is that the civil service has been much too concerned withpolicy advice and insufficient attention has been directed toward managingorganizations within government. The second part of the thesis is that most,if not all, of the perceived inefficiencies of government are a function ofpoor management rather than more fundamental problems of policy design.Therefore, it argues that the formulation of policy ideas should be left topolitical leaders, and civil servants should be directed simply to managetheir organizations or to oversee the management of the newly created,decentralized quasi-private organizations. This approach to the public sec-tor can be justified as good democratic practice, with the publicly electedpoliticians responsible for policy and program ideas and the unelected civilservants responsible for their administration.

In a peculiar way, much of the academic literature on policy implemen-tation (Pressman and Wildavsky, 1973; Mazmanian and Sabatier, 1983)shares the view of the politicians responsible for pushing manageralismonto the public sector. It could be argued (Linder and Peters, 1987) that


the implementation literature works from the underlying premise that mostof what malfunctions in government is largely a function of faulty admin-istration. Therefore, if the systems of implementation are designed properly,there will be fewer policy failures and better government. Little blame forfailure is placed at the doorstep of the designers of programs, other thantheir failure at times to consider the implications for implementation of theprograms they have formulated. The implementation literature does notshare the manifest ideological distaste for, and suspicion of, the career bu-reaucracy. Its diagnosis of the policy problems of government, however, isin many ways similar to the more ideological strand of thought about thepublic sector.

Even more recently the emerging “governance” literature (Rhodes, 1997;Kooiman, 1993) has argued that the capacity of government to controlsociety effectively is even weaker than was argued by earlier, more conser-vative critics. This literature argues that the changing nature of the inter-national environment at one level, and the increasing empowerment ofsocial actors in domestic politics, have limited the capacity of governmentsat the center to exert effective social control. Therefore, arguing from verydifferent premises, the conclusions of the governability literature in the1990s are remarkably similar to those of the ungovernability literature ofthe 1970s—the mixed-economy, welfare state in Western countries is nolonger capable of providing the benefits of governance that it once was ableto do for society.

Economics

It may appear internally contradictory to lump economic models of ad-ministrative change into a larger section containing primarily political ap-proaches to change, but there is a close theoretical connection if the twoclasses are considered from the appropriate vantage point. Just as the po-litical models tend to look at the motivations of political (largely elective)actors to make things work properly in government and thereby to meetcampaign promises and satisfy ideological supporters, the economic modelslook at the motivations of officials (largely nonelective although often thetwo types are conflated in economic analyses) to maximize their own util-ities. These models then assume the impacts of those motivations on thestructure and performance of administrative institutions. All of these mod-els, therefore, assume individual purposive actions to generate structuraland procedural changes, and all assume that the institutions themselves arelargely responsive to those internally generated and rationalistic (withindifferent frameworks of rationality) assumptions about the appropriateshape of the organizations.

Economic models of public administration (Niskanen, 1971; Breton andWintrobe, 1975; Bendor, 1989) all assume that the individual bureaucratis a rational actor attempting to maximize his or her personal utility


through involvement in the administrative process. In most of these models,the utility of the individual bureau chief is linked with the size of the bu-reau’s budget and/or personnel allocation. In another variant of the model,Anthony Downs (1967) has the bureau chief identify more with the collec-tive goals of the organization so that maximizing the size of the organi-zation is a means of protecting it against possible future cuts imposed bypoliticians. Expanding the size of the bureau by adding new functions—one of several possible strategies—in the Downs model becomes a meansof protecting the “heartland” of the organization from cuts. Therefore, inany of these models, the bureau chief has an interest in making the organ-ization as large as possible, and reform would be seen as a means of im-proving the competitive position of the organization in the budgetaryprocess.

The fundamental problems with these economic models of bureaucracyhave been discussed a number of times (Jackson, 1982; Blais and Dion,1994), and we will not repeat that exercise here. Rather, we will point toa few specific problems for the models that arise in the context of exam-ining contemporary reform efforts in the public sector. The most obviousproblem is that most contemporary reform efforts involve attempts to re-duce the size of the bureaucracy. This strategy is intended to counteractthe traditional means through which an aggressive bureaucratic entrepre-neur as able to maximize the size of his or her organization. Given thegenerally tautological nature of these economic models, it is almost impos-sible to prove that a bureau chief did not act rationally in a reform; we donot know what sort of damage might have been done without the use ofa rational economic strategy. Unless one is willing to accept a highly con-voluted version of the model, these models simply do not appear applicablein decremental times (Tarschys, 1985).

Following from the above, most economic models of bureaucracy arelargely silent about structural change, although structure is a crucial featureof any bureaucracy. In fact, these economic models are largely silent aboutstrategies other than simply that organizations should disguise their trueproduction functions and that communications patterns have an effect onthe ability of organizations to achieve their goals through the policy process(Tullock, 1965). In many ways one set of reforms that has been introducedtends to make budget maximization more likely, given that granting or-ganizations enhanced independence may increase their opportunities to usebudget-maximizing strategies.

Another problem with the economics literature as it relates to the reformand reorganization of government is that it is ill-suited to predict for thescholar, or to advise the practitioner, what types of reforms might be mostefficacious. The concentration on the size of the budget and the personnelallocation as the (posited) sole concern of the bureau chief does not permitany nuanced or subtle discussions of strategies. Indeed, the major help in


that regard comes from other political scientists who have commented onthese economic models and sought to elaborate their meaning in the realworld of government (Dunleavy, 1985; Goodin, 1982). This latter discus-sion has included a discussion of the types of expenditures that would bemost beneficial to a bureaucratic entrepreneur, and the right types of per-sonnel and programs to pursue if indeed the goals are to grow as large aspossible. In this analysis, “bureau-shaping,” rather than sheer size of theorganization, is the goal for the rational administrative politician. Unfor-tunately, the advice rendered by those scholars has little or nothing to dowith the type of models that most scholars using the economic approachhave developed.

Assessment

The above models of public sector change all assume a particular purposeto a reform advocated by one or a few influential actors. These reforms aregenerally rationalistic, with a clear means-ends connection assumed be-tween the diagnosis of a problem and the remedy. Both the diagnoses ofproblems and the remedies proposed are related to a common collection ofideological and/or professional beliefs about good government and goodadministration, but there is a basic belief that the actors in governmentthemselves are central to the identification, selection, and implementationof administrative changes.

It is easy to criticize these approaches to administrative reform. All theapproaches involve placing at times a very simplistic template over organ-izations and attempting to force them all into something like a commonpattern. Diversity tends to be endemic, and important, within the publicsector, and the promoters of simple volitional models tend to press towarduniformity. Further, they often make unrealistic assumptions about the ca-pacity of public organization, or organizations in general, to change inresponse to hierarchial directives. These approaches apparently fail to un-derstand the informal aspects of organizations and the need to modify notonly formal structures but operating patterns if a reform is to be successful.Finally, most are based on assumptions about efficiency in organizationsthat, as R. Miles (1977), Lester M. Salamon (1981), and others have ar-gued, is often a very fleeting value in the study of public organizations.These problems are perhaps exaggerated in the economic models of bu-reaucracy, but they exist to some degree in all the approaches identified inthis section.

Despite the readily apparent weaknesses of the economic models of bu-reaucracy, they have been implemented through many of the administrativereforms of the past several decades. Mrs. Thatcher in particular was en-amored of the Niskanen analysis of public organizations, and many of herreforms were intended to break the monopoly powers of public organiza-tions. In can be argued, however, that in creating a number of more au-


tonomous organizations to replace the “monopolies,” she actually createdgreater opportunities for bureaucratic aggrandizement.

Environmental Dependency

The second major grouping of approaches to administrative change tendsto be the reverse of the first in that the changes that do occur are positedto be a function of the relationship of the structures to the environment.Again, that environment may be political or economic, but the underlyinglogic of the approaches is very similar. That is, over time structures adapt,or perhaps whole groups of structures adapt, to the environment and con-struct patterns of organizations that are functional for the fulfillment oftheir collective goals. This pattern of adaptation is in large part a functionof the resources and challenges posed by the environment rather than moreconscious choices by organizational leaders. While the first group of modelsdepends upon the volition of individual political actors, these models ap-pear to work more automatically, and any individuals involved appear tobe in the role of transmitting environmental forces rather than necessarilymaking independent decisions of their own.

Political Science Approaches

The first models of this type are again derived from political science/public administration and are based on the assumption that responses toenvironmental change will create new organizations designed to exploit theemergent opportunity, or control the potentially destructive anomaly in theenvironment. In this model reactions to changes in the environment tendto be more in the creation of new organizations rather than in the reor-ganization of existing organizations.

The major work in this area has been done by C. Grafton (1984) whoargues that reorganization and the creation of new organizations withinthe federal government could be explained by the occurrence of changes inthe environment. In particular, he argues for the importance of “SET”anomalies requiring governmental innovations. This term refers to social,economic, or technological changes that may occur in the environment andthat may require new organizations or the reorganizations of existing onesto manage them. A social change might be the civil rights movement of the1950s and 1960s requiring a variety of changes in the public sector. Theeconomic changes of the Depression created a huge variety of new orchanged government organizations. Finally, the increased technical de-mands on government could be seen in the creation of the National Aer-onautics and Space Administration (NASA) and in a variety of energy andenvironmental organizations.

The difficulty with using these types of models is that it is not clearlystated when an innovation is an innovation. That is, the environment of


the public sector is changing constantly. When is the change significantlylarge enough to trigger a change in the organizational structures of gov-ernment to compensate for it or to take advantage of it (Dempster andWildavsky, 1980)? These models appear to provide no answer to that ques-tion but can only say, ex post facto, that the change must have been suf-ficiently large since something did happen with the organizationalstructures.

Contingency Approaches

The most familiar of the environmentally driven approaches to organi-zation and reorganization is contingency theory (Lawrence and Lorsch,1969). The logic of this approach is that the internal structuring of organ-izations will, over time, come to reflect the characteristics of the task en-vironment of the organization. There are a number of different versions ofthis approach. The Aston group and related British researchers (Pugh andHickson, 1976) sought to relate the structure of organizations to charac-teristics such as task specialization and technological intensity of the envi-ronment. Charles Perrow (1986) relates the structure and functioning oforganizations to the nature of the raw material being processed and thedegree of certainty about causal processes within the organizational do-main. A variety of other models also have been developed to attempt todemonstrate that internal organizational features depend upon the environ-ment, and this is even more true for the public sector. For example, severalBritish studies have applied contingency theory to both subnational gov-ernments and to the departments of central government (Greenwood, Hin-ings, and Ranson, 1975a, 1975b; Pitt and Smith, 1981). The results forboth applications were disappointing, to say the least.

It appears rather that, much as was pointed out when discussing thenumerous public sector reforms of the 1980s and 1990s, fad and fashionmay have as much to do with organizational formats as does the nature ofthe task environments. Governments adopt either the organizational formatwith which they are most familiar (hierarchial, ministry forms) or fashion-able formats (decentralized “agencies” in the 1990s) rather than planningsome systematic connection with the environment and the tasks of thenewly formed or reformed organization. As in other settings, there appearsto be an “iron cage” (DiMaggio and Powell, 1983) that drives organiza-tions toward a single structural format, or at most a limited range of or-ganizational formats, rather than the highly differentiated structuresdependent upon tasks or resources posited in contingency theories.

Another problem with contingency theory as a means of understandingthe structures of public administration is measurement. That is, public ad-ministration as yet does not have a very good vocabulary for describingthe structure of formal organizations in the public sector (see Hood andDunsire, 1981). Also, we lack an effective vocabulary for describing policy


problems and the characteristics of policy problems that might be relatedto the need for alternative structural forms in the public bureaucracy. Somescholars have attempted to provide instruments for categorizing public bu-reaucracies and their structures (Hood and Dunsire, 1981; Darbel andSchnapper, 1969), and of categorizing organizational forms more generally(McKelvey, 1982), but as yet this analysis remains rudimentary. The workstill does not appear capable of bearing the load that contingency theoriesimposes on it for elaborate structural categories to be associated with dif-ferentiated environmental factors. The work on categorizing policy areasappears if anything even more rudimentary and to have progressed littlebeyond Theodore Lowi’s (1972) familiar four types of policy. That cate-gorization has been seminal in many ways but as yet also lacks the abilityto confront the needs of a fully developed contingency theory.

Population Ecology Approaches

A third family of models attempting to explain the nature of organiza-tions in relationship with the environment are population ecology models(Aldrich, 1979; Carroll, 1984; Peters and Hogwood, 1991). The basicpremise of this family of models is that analysts should look less at theexistence, performance, and structure of individual organizations than atthe characteristics existing within whole populations of organizations. Justas with biological organisms, this approach argues that the best way tounderstand the birth, death, and survival of organizations is to understandthem as whole “ecosystems” and to look at the evolution of populationsof organizations. The population ecology approach is environmentally de-terministic to the extent that it assumes that the success (measured largelyin terms of survival) of individual organizations is a function of both theirrelationships with other organizations in the environment and their rela-tionships with the environment. In this case, the environment of the organ-izations is conceptualized in terms of the available niches within which itcan survive, including the availability of funding sufficient for its survivalin the case of a public-sector organization.

Given the volitional character of most descriptions and analyses of de-cision making in the public sector, it is not surprising that ecological modelshave been applied relatively infrequently in public administration (but seePeters and Hogwood, 1991; Casstevens, 1980; Kaufman, 1976, 1985; andBrudney and Herbert, 1987). Further, the tendency of ecological models toreify organizations, for example to assume that they react as would bio-logical entities to the availability of niches, also causes scholars concernsabout the utility and desirability of this approach in the public sector.Despite these concerns, the ecological approach does appear to have sub-stantial utility for understanding observed changes within groups of organ-izations, including organizations within the public sector. This utility isespecially evident when we consider the evolution of larger, inclusive


structures over time, and the generation of niches for different types oforganizations within those larger systems. So, for example, reorganizationefforts within governments can be analyzed as the exploitation of newniches created by social and/or technological change, or as responses to thecreation of new niches through a changing ideological conception of howthe public sector should be structured or managed. Likewise, the modelsof Grafton (1984) with public organizations exploiting SET changes in theenvironment can be reconceptualized as governments simply responding tothe appearance of the new environmental niches by creating new organi-zations. The organizations occupying those niches need not be entirely newthemselves, but rather may simply be reconstructions (Hogwood and Pe-ters, 1983) of previously existing organizations, redesigned to better exploita changed environment.

One of the more interesting applications of this family of models involveslinking ecology models with some concepts emerging from strategy in man-agement theory (Hrebiniak and Joyce, 1985; Zammuto, 1988). The ideaof blending ecological and strategic choice approaches is that organizationsusually are unable to find niches on their own, as biological organismsmight. Rather, organizations must be led to find those niches, and the or-ganization’s managers are the strategists and entrepreneurs within the or-ganization charged with exercising leadership in searching out new orunderutilized niches. These organizations’ leaders have several alternativestrategies available to them. These strategies are to some degree based onthe nature of the niches that appear to exist within the environment.

Theorists working with ecological models describe niches in terms oftheir width. A narrow niche is one in which only a limited type of organ-ization can survive, while wide niches are hospitable to a wide range oforganizational types. At the broadest possible level, the distinction is madebetween generalist and specialist organizations that might fit into thoseniches. This is a familiar distinction in reference to individual civil servants,but some of the same logic can be applied to organizations. Do organiza-tions choose to allocate resources toward a narrow range of goals and witha narrow repertoire of policies, or do they attempt to meet a wider rangeof policy goals with a more extensive repertoire of policies? One set ofstrategies might be successful if the niches are relatively wide and varied,while the other might be successful in more tightly defined environmentalsituations.

Another characteristic of the environment important for understandinggovernmental reorganization is the grain of the environment (Freeman andHannan, 1983). By grain we mean the existence of different types of niches,and hence the opportunities for different types of organizations to survivesimultaneously. A fine-grained environment would have most niches of thesame type, while a coarse-grained environment might have a variety ofdifferent niches existing simultaneously. We have already noted that the


public sector tends toward relatively common forms (e.g., agencies in theUnited States or ministries in most other democracies). Some attempts atreorganization and reform tend toward making that grain even finer (e.g.,“quango-bashing” in Thatcher’s Britain to eliminate a number of nonde-partmental bodies [Hood, 1981]). Other reforms tend toward increasingdiversity, as the Gore Commission’s strategy of “reinvention” has allowedorganizations to create their own structures and procedures (Peters andSavoie, 1994). Perhaps especially for the public sector, we need to look atthe grain of the environment over time as well as at any single point intime. As different organizational fashions sweep through the public sector,different vestigial structures may remain and continue functioning for years,with the result that the grain may actually appear coarser than it is at anyone time. In particular, the process of forming new organizations may func-tion as if the grain were very fine, and limited structural options may beconsidered for new organizations.

A final factor to be considered in the relationship of organizations totheir niches is the role of the density of the population of existing organi-zations (Brittain and Freeman, 1980). When a niche is opened initially,there is little necessity of competition among the entities involved (whetherorganizations or biological organisms) for resources, and efficiency is notparticularly valuable given the comparatively easy access to resources. Asmore entities begin to crowd into that niche, competition for resourcesincreases and efficiency in the use of available resources becomes importantfor survival. These factors led to the idea of two types of organizationalstrategies for dealing with the environment, labelled r and k strategies. Anr strategy involves rapid exploitation of new niches and rapid reproductionof new organizations or organisms to fill the available space. A k strategy,on the other hand, involves generating the staying power for an organi-zation to occupy the niche and hold off competitors over the long run,usually through relative efficiency in the use of resources.

In terms of organizations within the public sector, the formation of rorganizations may be seen in the rush to create new organizations whenthere is some sort of perceived crisis in government, or the identification ofa new opportunity. These may be Grafton’s (1984) SET opportunities. Thecreation by Franklin Roosevelt of so many new organizations during thefirst year of his administration is a classic example of adopting the r strat-egy. Likewise, the rapid creation of social service and poverty agenciesduring the Johnson administration, and the apparent inefficiency of manyof them, is an indication of rapid exploitation of new niches. In some in-stances, however, the nature of the policy itself may dictate that a single,large-scale organization be vested with responsibility for the policy(Schulman, 1977), as has been the case for NASA with space travel, ratherthan integrating that function in other, larger existing organizations.

On the other hand, the numerous attempts of governments to produce


greater efficiency and coordination by consolidating apparently similar or-ganizations in a single, large organization may be implicit recognitions ofthe need for k strategies for coping with survival in the long run. For ex-ample, the Canadian cabinet reforms of 1993 moved from over fifty cabinetlevel departments to just over twenty. This tendency is more than coun-tered, however, by the creation of a large number of specialized agencies,formed out of previously existing cabinet departments. The most obviousexample is the creation of “Next Steps” agencies in the United Kingdom(Greer, 1994).

These various approaches to reorganization do not imply that such large-scale reorganizations of government are always, or even usually, successfulbut rather that those reforms do recognize the need to match the spaceavailable within a niche with a number of organizations, and the grain ofthe environment with the number and types of organizations being created.Of course, the practically minded advocates of these reforms rarely, if ever,discuss concepts such as density-dependent selection models of public or-ganizations.

Institutional Models of Organizational Change

The final family of models of organizational change is a product of anincreased interest in the “new institutionalism” in political science (Marchand Olsen, 1989, 1994; Smith, 1988) and to some extent the other socialsciences (DiMaggio, 1988; Bromley, 1989). There is now a variety of in-stitutional models in political science (Peters, 1996b) but we will concen-trate on the normative version associated with by March and Olsen. Thisinstitutional model begins with rather different assumptions about the be-havior of organizations and about their ability to absorb necessary changesin their structures and operations. The most fundamental differences arebetween these models and the volitional models discussed first. In volitionalmodels, individuals within organizations are purposive and thus tend toalter organizations to fit their own goals, whether those goals are political(e.g., Chapman and Greenaway, 1980) or personal (e.g., Niskanen, 1971).In institutional models, however, the goals pursued by an organization aremore collective than individual and do not necessarily represent purposive,maximizing behavior. Rather, the behavior of an organization is under-stood better as the attempt to match organizational behavior with stan-dards of “appropriateness” derived from the history and collective valuesof the organization.

Organizational reform from an institutionalist perspective is less me-chanical than it might appear from other perspectives. Rather than requir-ing only the wishes of an organizational leader, or significant changes inthe environment, to occur, reform in this mode of analysis requires alteringto some extent the values of the organization. It therefore requires modi-


fying the operative values of organizational members as well. Thus, aninstitutional approach to reorganization and reform is somewhat similar toan approach relying on the concept of organizational culture (Ott, 1989).One significant difference might be the extent to which the organizationalculture literature, given its roots in business management, assumes thatthose cultures are highly mutable and can be manipulated by managers toproduce greater efficiency (but see Peters, 1990). The institutionalist liter-ature, on the other hand, tends to stress the durability of organizationalvalues, or cultures, and therefore the extreme difficulty that may be en-countered in attempting to produce any rapid or significant changes inperformance through reorganization. This viewpoint therefore is not dis-similar from much of the traditional literature in public administrationpointing to difficulties in producing efficiency through reorganization(Miles, 1977; Salamon, 1981).

The institutional approach is also capable of providing a more differ-entiated viewpoint of the nature of an organization and, therefore, of or-ganizational change. Most of the approaches we have discussed tend totreat an organization as an integrated entity, speaking with a single voice.Further, the presumed integration of values within an organization tendsto be a “top-down” conception rather than a “bottom-up” conception, andthere is little possibility for discussion or conflict over the nature of theorganization or of its mission. From an institutionalist perspective, theredoes not have to be such an integration of values. Internal conflicts overthe definition of organizational mission, and even over the deeper meaningof the organization itself, are more an integral part of organizational lifethan in other approaches. A goal of development within the organizationmay be an integrated perspective, but that perspective cannot be assumeda priori as it is in, for example, economic models of organizations. Thisrecognition of internal differences, in turn, means that organizational re-form can be more internally generated, if there is agreement on the needand nature of reform. Further, the existence of alternative viewpointswithin the organization may mean that reform pressures arise naturallyfrom inside the structure itself. The existence of alternative visions alsomeans that attempting to implement a reorganization or reform plan fromabove that is not acceptable to most members of the organization wouldnot be judged to be very likely to succeed by an analyst operating fromthis perspective.

Although we can think of the internal differentiation of institutions as asource of innovation, institutions can also be extremely conservative andattempt (knowingly or not) to preserve routines and structures (March,1981a, 1981b). Institutions develop routines and defenses that make theimposition of change difficult and permit the perpetuation of routines andprocedures, the utility of which have long been exhausted. Further, anyapparent innovations in an institution may be adapted to look as much as


possible like old routines as they are being implemented (Browning, 1968).Another of the more important of these defenses for organizations is thecontemporary trap, in which an organization appears to be competent atwhat it does and institutionalizes certain means of achieving its ends. Bydoing so, however, it also ignores the possibilities to respond in other waysthat might be more efficient or effective. Thus, a public-sector organizationthat has always relied on economic instruments for policy intervention willtend to staff itself with economists who will, in turn, also see economicinstruments as the best means of intervening (Linder and Peters, 1989).Once a successful pattern of functioning is established, it becomes difficultfor an organization or institution to reform itself.

Another of the virtues of the institutional approach is that the essentiallyrandom and ad hoc aspects of much of organizational change present nomystery. Changes may be initiated by a rational process, but once in trainthe process becomes largely unpredictable. If there is an assumption thathistory is efficient and teleological, then this randomness creates a severeproblem (see March and Olsen, 1989: 54–56). On the other hand, if it isassumed that individuals and institutions respond poorly to many effortsto induce change and that the outcomes are therefore unpredictable, anynotion of the efficiency of history and of the positive developmental aspectsof organizational responses becomes untenable. Therefore, much of organ-izational change becomes a “garbage can” model of choice. The outcomesthat emerge are not really planned or perhaps even explicable by rationalprocesses, but rather represent the confluence of a number of streams ofthought and action within the organization.

Finally, it must be pointed out that as much as they represent the searchfor efficient administration, the administrative institutions of a governmentrepresent important social values. Groups want organizations to providebenefits but also serve as symbols of their social significance and their po-litical muscle. As a consequence, reform and reorganization efforts may beunderstood as more significant political events than their advocates some-times perceive when they initiate the change process. The rationalistic ad-vocates of reform assume that its effects can be contained within the narroworganizational or policy area bounds within which the organization ap-pears to apply, but the effects of even seemingly minor reforms can beprofound. Institutionalist models may not enable us to predict the natureof those consequences very well, but they do at least alert the practitioner(and the analyst) that they are likely to occur. By so doing, they interjecta healthy skepticism into any attempts to generate organizational change.

CONCLUSION

This chapter demonstrates the impact that several alterative conceptionsof reform and reorganization have on the analysis of organizational change


in the public sector. None of these alternative views is necessarily com-pletely right or wrong, but each adds a different dimension to the analyst’sunderstanding. The purposive models discussed as the first alternative addsubstantial realism and detail to the discussion, but many depend uponpremises about organizational change that appear untenable in the realworld of government. Models positing dependence of organizations ontheir environment collectively make an important point about such de-pendence but lack a clear explanation of the dynamics of organizationaladaptation. In essence, the first group of models depends too much on thewill of individual political and administrative actors, while the secondgroup tends to rely excessively on invisible hands to force change. Neitherextreme appears particularly viable.

If I were forced to make a choice among these alternatives, I wouldcertainly place my money on the institutional models discussed here as thethird approach. This approach in many ways combines the explanatorybenefits of the other two approaches. Because of its fundamental concernwith the interpretive meaning expressed through organizations, the insti-tutional approach places great value on understanding the detailed (andlargely unpredictable) impact of proposed changes on the organization.Also, by virtue of its recognizing the cultural and ideational aspects oforganizations, the institutional approach can propel the discussion of gov-ernment reorganization and reform beyond a strictly mechanical or politicallevel to a more cultural level of understanding organizations and the in-volvement of their members.

In the institutional approach the preferences of the individuals are notexogenous to the administrative process but are in large part a function ofthe values of the organization itself. This linkage of the individual andthe organization makes change at once more understandable and more dif-ficult to implement. The institutional approach also acknowledges the re-lationship of an organization to its environment; an organization is notconceptualized as capable of being effective if it is incompatible with itsenvironment. In this approach, the environment may be conceptualizedsubstantially more broadly than in the ecological approaches, but much ofthe same logic of fitting organizations into available niches operates. Thedifference is that the dynamics of change in institutional analysis is withinthe organization rather than in the environment.

In summary, government reorganization is one of the most enduring ac-tivities in the public sector. It continues to represent the hope that thingscan be made better through structural and procedural change. Even if thatpractical aspiration cannot be achieved, the scholarly exercise of under-standing the causes and consequences can succeed. We have outlined threealternative ways to interpret the changes and have pointed out the strengthsand weaknesses of each. Further, we have argued that the institutionalapproach appears to offer the best hope of an effective interpretation. There


is still a long way to go before that effective interpretation is achieved, butgovernments kindly do continue to provide case after case from which tobuild our theories.

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Part III

Organizations, Individuals, andAdministration: Issues and Perspectives

Chapter 7

Diversity in Public Organizations:Moving toward a Multicultural Model

Sally Coleman Selden and A. Frank Selden

America’s workforce is changing and rapidly growing more diverse. Dem-ographics are being reshaped by three decades of increasing immigration,primarily from Asia and Latin America, by increased representation of per-sons with disabilities, and by the maturation of the baby boomer genera-tion. These trends changed the composition of the workforce (Booth,1998). By 2020, women and minorities will comprise more than two-thirdsof the net workforce entrants (Judy and D’Amico, 1997). The percentageof African-American workers is expected to remain constant over the nexttwo decades, while the percentage of Asian-American and Hispanic work-ers is anticipated to grow during this period. By 2050, Hispanics are ex-pected to comprise approximately 25 percent of the population, AfricanAmericans 14 percent, and Asian Americans 8 percent (Booth, 1998).

Public agencies have already witnessed considerable demographicchanges over the past two decades. At the end of fiscal year 1996, thefederal government workforce consisted of more than 29 percent minorities(OPM, 1998a). As shown in Table 7.1, the percentage of minorities holdingpositions within the executive branch increased between 1984 and 1996,but the percentage of women decreased during this same period. When thefigures are broken down by specific racial and ethnic group, the resultsindicate that all four minority groups have increased their share of execu-tive branch positions between 1984 and 1996.

Diversity within public agencies has also changed with respect to age anddisabilities. The average age of the American worker is expected to continueto rise in the next two decades, with the number of workers between sixteenand twenty-four falling by approximately 8 percent. The average age forfull-time permanent federal civilian employees was 45.2 years in 1997, up

184 Organizations, Individuals, and Administration

Table 7.1Executive Branch Employment by Race, Ethnicity, and Gender (percent)

Source: OPM, 1998a.

from 44.3 years the previous year (OPM, 1998a). While an aging work-force can have positive effects, such as greater experience-based workknowledge, older workers may be less responsive to organizational changes,less mobile, less interested in training, and more prone to frustration bytheir lack of advancement (Lambs, 1996; MSPB, 1993). Out of thirty-twofederal agencies surveyed by the Merit Systems Protection Board (MSPB)in 1991 and 1992, twenty-five agencies indicated that the average age oftheir workforces was increasing. However, most agencies had not yet en-countered problems associated with an older workforce (MSPB, 1993).

According to recent census data, more than 15 percent of individualsentering the labor market have a disability. Disabilities include both cog-nitive and physical impairments, such as blindness, epilepsy, human im-munodeficiency virus (HIV), and acquired immunodeficiency syndrome(AIDS) (Slack, 1997a). As shown in Table 7.2, the percentage of personsemployed in the executive branch with disabilities increased after the pas-sage of the Americans with Disabilities Act in 1990, which heightenedawareness of the rights of persons with disabilities; however, the share ofpositions held by persons with disabilities declined slightly between 1994and 1997.1 In March of 1998, President Clinton issued an executive order“to increase the employment of adults with disabilities to a rate that is asclose as possible to the employment rate of the general adult population.”Because of the increased attention toward workers with disabilities, agen-cies are being challenged to reevaluate their job descriptions, to determinetheir capacity to provide reasonable accommodations, and to reduce em-ployment barriers.

Workplace environments will change as the demographic characteristics

Diversity in Public Organizations 185

Table 7.2Executive Branch Employees with Disabilities (percent)

Source: OPM, 1998b.

of the labor pool evolve. These changes, according to Loden and Loeser(1991: 21), “have far reaching implications for the ways that public . . .institutions are to be led and managed in the future.” Because of con-strained budgets and growing demands for more efficient government, pub-lic organizations have not invested as heavily in diversity programs as theirprivate-sector counterparts even though many public-sector organizationsare committed to diversity efforts (Chambers and Riccucci, 1997). How-ever, in light of the challenges posed by the projected demographic changesand the legal erosion of affirmative action programs, scholars and practi-tioners must understand the diversity research and consider the future di-rection of diversity efforts within public organizations.

This chapter reviews policies and research on the representation and di-versity of public organizations. The chapter first briefly reviews the evolu-tion of equal employment opportunity (EEO) and affirmative actionpolicies in the federal government and then highlights the tenets and per-ceived benefits of representative bureaucracy, a theory often cited as a ra-tionale for diversity. The third section considers the application of threeparadigms, based on the practices of private organizations, for understand-ing diversity efforts in public agencies. Finally, the chapter proposes anapproach for managing diversity that facilitates the development of a mul-ticultural organization.

EVOLUTION OF EQUAL EMPLOYMENT OPPORTUNITYPOLICIES2

As we enter the new millennium, some public organizations are begin-ning to implement diversity initiatives in an effort to move beyond equalemployment opportunity and affirmative action efforts by taking advantageof the expected demographic changes of the labor force and changing legalenvironment.

The origins of current affirmative action programs date back to EEOefforts aimed at eliminating discrimination (Kellough, Selden, and Legge,1997). Examples of policies prohibiting discrimination in federal employ-ment and contracting are found in provisions of the Ramspect Act of 1940and Executive Order 8587 issued by President Roosevelt that year. The


following year, Executive Order 8802 established the first meaningful ad-ministrative mechanism to enforce the law. The Fair Employment PracticesCommittee (FEPC) was tasked with hearing complaints of discriminationfrom individuals working for, or applying for, positions with federal gov-ernment contractors or agencies. The FEPC investigated complaints andhad the authority to make recommendations but lacked the power to en-force its recommendations. Although subsequent presidents reorganizedand renamed the federal program, the investigation of discrimination re-mained the primary focus of the effort to overcome discriminatory em-ployment practices.

In the 1960s, the political climate changed and programs targeting dis-crimination took new shape. Programs introduced during the Kennedy andJohnson administrations were confined primarily to three activities: review-ing patterns of minority and female employment; examining the relation-ship between job qualifications and actual job requirements; and recruitingefforts to attract women and minority applicants (Kellough, Selden, andLegge, 1997). Also, during this time, significant legislative action sought toimprove equal opportunity to minorities. For example, Title VI of the CivilRights Act of 1964 declared that “no person in the United States shall, onthe grounds of race, color or national origin, be excluded from participa-tion in, be denied the benefits of, or be subjected to discrimination underany program or activity receiving federal financial assistance.”

In a 1965 commencement address at Howard University, President Lyn-don B. Johnson argued that fairness required more than a commitment toimpartial treatment.

You do not take a person who for years has been hobbled by chains and liberatehim, bring him up to the starting line of a race and then say, you’re free to competewith all the others, and justly believe that you have been completely fair. . . . It isnot enough just to open the gates of opportunity. All our citizens must have theability to walk through those gates. (in Eastland, 1996: 39–40)

By the 1970s, it was apparent that the existing executive and legislativeactions were not sufficient to overcome long-entrenched discrimination. Inresponse to the discontent that persisted, the federal government, underNixon’s leadership, adopted a policy that permitted consideration of raceand gender in selection decisions. This approach was also accompanied bythe development of numerical goals and timetables for the inclusion ofminorities and women. The ultimate goal was to bring the level of repre-sentation for minorities and women within an agency into parity with therelevant labor pool. Goals and timetables often required that race, ethnicity,and gender be taken into account in employment, college admissions, andcontract awards (Kellough, Selden, and Legge, 1997). These race-, ethnic-,


and gender-conscious remedies, or affirmative action programs, have en-countered criticism to one degree or another since being introduced.

In the past decade, the split between the two major political parties onthis issue has widened, with Democrats typically supportive of such pro-grams and Republicans more often opposed to the use of such measures.The division has led to considerable debate in the media, state legislatures,and classrooms about the future of affirmative action (Kellough, Selden,and Legge, 1997). In 1996, California voters approved Proposition 209which declared that “neither the State of California nor any of its politicalsubdivisions or agents shall use race, gender, color, ethnicity, or nationalorigin as a criterion for either discrimination against, or granting preferenceto, any individual or group in the operation of the State’s public employ-ment, public education, or public contracting.” In 1997, the Supreme Courtrefused to hear an appeal of the case on Proposition 209, upholding theprohibition on affirmative action in California. In 1997, similar initiativeswere introduced in nine state legislatures, but none were signed into law(Kellough, Selden, and Legge, 1997). Given that the Supreme Court didnot deem Proposition 209 unconstitutional, similar efforts will likely re-emerge in state legislatures during future sessions. Riccucci (1997b: 69)predicts that the legal status of affirmative action is “likely to continue toerode as we move into the twenty-first century.”

REPRESENTATIVE BUREAUCRACY: DIVERSITY INAGENCY COMPOSITION, PROCESSES, AND OUTCOMES

An original intent of affirmative action in public organizations was toestablish a bureaucracy representative of the general population; that is,groups would be represented in government in the same proportion as theircomposition in the general population. Some scholars have argued that abureaucracy will be more responsive to public interests (and will thereforebetter serve democratic principles) if the personnel in the bureaucracy re-flect the public served, in characteristics such as race, ethnicity, and gender(Rourke, 1978: 396; Meier, 1993b; Selden, 1997). This idea forms therationale for the theory of “representative bureaucracy.” Mosher (1968)introduced the key distinction in the definition of representation: he dividedrepresentation into two spheres, passive and active. Passive representationpertains to the similarity in demographic backgrounds of bureaucrats andthe public. Representativeness is active when individuals, or civil servants,advocate the interests and the desires of groups sharing their demographicorigins. The central tenet of the theory of representative bureaucracy is thatpassive representation, or the extent to which a bureaucracy employs peo-ple of diverse demographic backgrounds, leads to active representation, orthe pursuit of policies reflecting the interests and desires of those people(Meier and Stewart, 1992; Meier, 1993a).


The argument is premised on the belief that such attributes lead to certainearly socialization experiences that in turn give rise to attitudes, values, andbeliefs that ultimately help to shape the behavior and decisions of individualbureaucrats (Kranz, 1976; Krislov, 1974; Saltzstein, 1979; Selden, 1997).Proponents contend that a bureaucracy that reflects the diversity of thegeneral population implies a symbolic commitment to equal access topower (Gallas, 1985; Meier, 1993b; Mosher, 1968; Wise, 1990). The sym-bolic role results from both the personal characteristics of distinctive groupmembers and the assumption that because of these characteristics, the bu-reaucracy has prior experiences in common with other members of thatgroup (Guinier, 1994). When members of distinctive groups become publicofficials, they become legitimate actors in the political process with theability to shape public policy. Representative bureaucracy provides a meansof fostering equity in the policy process by helping to ensure that all inter-ests are represented in the formulation and implementation of policies andprograms (Saltzstein, 1979).

As stated earlier, representative bureaucracy offers a means of reconcilingbureaucratic government with democratic values by ensuring that publicorganizations are responsive to the public through employee representation.EEO and affirmative action programs have been means by which agenciesattempt to achieve a representative bureaucracy. Because of the changinglabor force demographics and legal challenges to EEO and affirmative ac-tion, scholars and practitioners are shifting their focus to workplace diver-sity, a voluntary, proactive program aimed at improving organizationaleffectiveness as opposed to democratizing the workplace (Chambers andRiccucci, 1997; Riccucci, 1997a, 1997b). In order for this shift to be suc-cessful, Slack (1997b: 75) argues that “an accompanying shift in organi-zational paradigm must also occur.”

PARADIGMS OF DIVERSITY

Based on their research in private sector organizations, Thomas and Ely(1996) identify three paradigms for understanding diversity: discrimination-and-fairness, access-and-legitimacy, and learning-and-effectiveness (see Fig-ure 7.1). These models are also useful for understanding public agencies’approaches to diversity, as well as provide the basis for developing strate-gies to benefit from a diverse workforce.

Paradigm 1: Discrimination-and-Fairness

The discrimination-and-fairness paradigm focuses on whether minoritiesand women are given an equal chance of obtaining employment in publicorganizations. According to this paradigm, public organizations pursue di-versity under the guise of equality and fairness and are concerned primarily


Figure 7.1Paradigms of Diversity within Public Organizations

with compliance with equal employment opportunity and affirmative ac-tion legal requirements (Thomas and Ely, 1996). The primary goals of or-ganizations adhering to this paradigm are to provide both access and equalopportunity in the recruiting and hiring processes. Success is determined bythe number of minorities and women holding positions within the agency.According to Thomas and Ely (1996), organizations operating under thispremise often adopt a “color-blind, gender-blind” ideal, encouraging mi-norities and women to blend into the culture of the organization.

Since this model focuses on descriptive representation and assimilation


of persons into the organizational cultures, agencies adhering to this modelare not likely to explore how employees’ differences can improve organi-zational processes and outcomes. Moreover, the discrimination-and-fairness model often puts pressure on employees “to make sure thatimportant differences among them do not count” (Thomas and Ely, 1996:81). This may serve to undermine potential benefits that an organizationmay experience through improved agency processes and practices. More-over, it may preclude individuals from identifying with their work andagency which, in turn, has been shown to be an important determinant ofmotivation and satisfaction (Thomas and Ely, 1996).

Relevant Empirical Research

The central question of interest to agencies adopting this model is theextent to which the agency reflects the demographic origins of society. Aprimary concern, of course, is the determination of which demographiccharacteristics are most important to public organizations. Kingsley (1944)suggested that socioeconomic class should be the basis for comparing bu-reaucrats and citizens in England. Krislov (1974) argued, however, thatrace, ethnicity, and gender were more relevant than class for comparingthe composition of the bureaucracy and society in the United States. Over-all, the literature has reached a consensus that race and ethnicity are per-haps the most important demographic characteristics for comparingbureaucratic and public representation in the United States (Cayer and Sig-elman, 1980; Dye and Renick, 1981; Herbert, 1974; Krislov, 1974; Kranz,1976; Meier, 1975, 1993b; Nachmias and Rosenbloom, 1973; Rosenbloomand Featherstonhaugh, 1977; Rosenbloom and Kinnard, 1977; Smith,1980; Thompson, 1976, 1978).

Scholars also maintain that gender is a critical demographic variable inthe American bureaucratic setting (Cayer and Sigelman, 1980; Daley, 1984;Davis and West, 1985; Dye and Renick, 1981; Hale and Kelly, 1989;Kranz, 1976; Krislov, 1974; Meier, 1975, 1993b; Rosenbloom and Kin-nard, 1977; Smith, 1980; Thompson, 1978). The movement in the 1980sto make public bureaucracies more gender-representative resulted fromchanging relations between men and women, the changing nature of theeconomy, and the increased participation of women in the labor force(Duerst-Lahti and Johnson, 1992; Guy and Duerst-Lahti, 1992; Guy andDuke, 1992; Hale and Kelly, 1989).

Researchers have examined a number of other demographic factors, suchas age, disabilities, and father’s occupation (Daley, 1984; Davis and West,1985; Meier, 1975; Meier and Nigro, 1976; Smith, 1980). However, in theAmerican context, race, ethnicity, and gender have been considered themost salient characteristics because numerous politically relevant attitudesand values are defined along these two dimensions (Meier, 1993b).

Typically, scholars have employed one of the following methods to eval-


uate the racial, ethnic, and gender representativeness of public bureaucra-cies.3

• Percentage comparison

• Representative index

• Stratified ratio

• Measure of variation (MV)

Each of these advances a somewhat different perspective on representationof minorities and women in public organizations. Table 7.3 presents a de-scription of each approach and cites some studies that have employed thetechnique. Although different techniques have been used to measure femaleand minority representation, the findings have been relatively consistent.While minorities and women are broadly represented in local, state, andfederal agencies, they are concentrated in lower-level positions and havenot advanced as successfully into top-level decision-making positions. Oneargument often presented is that minorities and women are in the pipelinefor promotions. However, many women and minorities have been in thesystem long enough to advance but have not. This may be due to the factthat “many agencies appeared to be concentrating more on increasing theintake of minorities than on strong programs for advancement of minoritieswho already are members of the Federal workforce” (MSPB, 1993: 24).

Paradigm 2: Access-and-Legitimacy

The second lens through which organizations have viewed diversity isaccess-and-legitimacy (Thomas and Ely, 1996). According to this per-spective, agencies value diversity because it enables them to provide betteraccess and services to their constituents. This paradigm organizes itselfaround differentiation. Under this framework, the virtue of diversity isbased on the fact that each group can offer knowledge about group mem-bers and can better serve their needs because of such knowledge and sharedgroup experiences. For example, in the mid-1950s, the Farmers HomeAdministration (FmHA) responded to allegations that the agency was dis-criminating against African-American borrowers. The FmHA placedAfrican-American professionals in several Southern states to serve as“ ‘supervisors-at-large’ to initiate loan applications for blacks in officeswhere local supervisors were unwilling to do so” (Hadwiger, 1973: 51).Agencies with increasing diversity expect that previously underrepresentedclients will feel more comfortable accessing agency resources and serviceswhen they are represented (Thielemann and Stewart, 1996). One reasonfor this phenomenon is that individuals who share similar individual char-acteristics may also hold similar values and attitudes, have common ex-

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periences, and therefore, find the experience of interacting with each othermore positive. Thielemann and Stewart (1996: 171) found evidence thatclients of HIV service delivery agencies have a demand for a representativebureaucracy, particularly among personnel delivering the service directly.

Students of representative bureaucracy also suggest that bureaucraciesbroadly representative of the general public should produce policy outputsthat meet the needs of all citizens (Meier, 1993b). Agencies adhering tothis view of diversity tend to emphasize the role of cultural differences inthe agency, but they pay little attention to how these differences impact thework that is actually done (Thomas and Ely, 1996). For example, an agencymay be concerned with Hispanic representation because it perceives thatHispanic clients will be better served by someone from a similar back-ground. As long as the clients and constituents are represented substantivelyand allegations about service and program inequalities are being reduced,agencies are satisfied.

One potential downside of this perspective, according to Thomas andEly (1996), is that employees working in organizations operating with thisphilosophy may sometimes feel exploited and devalued. Because employeeswere hired with the expectation of meeting the needs of clients in particularareas, they may perceive that opportunities in other parts of the agency areclosed to them or that they face dual and conflicting role expectations (Sel-den, 1997; Thomas and Ely, 1996).


Most of the inquiry under this paradigm is concerned with the relation-ship between employment of minorities and women and agency outputsand outcomes affecting these groups. Specifically, research has examinedthe relationship between demographic representation and disciplinary ac-tions and ability groupings in school systems, charges or complaints ofdiscrimination filed by a regulatory agency, and housing loan eligibilitydeterminations made by a federal agency (Meier and Stewart, 1992; Meier,1993a; Hindera, 1993a, 1993b; Selden, 1997).

In the first study linking demographic representation and policy out-comes, Meier and Stewart (1992) found that the increased presence ofAfrican-American street-level bureaucrats (e.g., school teachers) had asignificant effect on policy outcomes favoring African-American students.In a similar approach, Hindera (1993b) focused on African Americans andwomen in the Equal Employment Opportunity Commission (EEOC). Hefound that as the employment of African Americans increased, discrimi-nation charges filed on behalf of that group also increased. Selden (1997)found that as the employment of African Americans, Hispanics, and AsianAmericans increased in the Farmers Home Administration, the percentageof rural housing loan eligibility determinations favoring each group in-creased.


Paradigm 3: Learning-and-Effectiveness

In effect, the third paradigm, learning-and-effectiveness, bridges the twoaforementioned paradigms. Agencies adopting this perspective value diver-sity because it improves internal processes by incorporating the varied per-spectives and approaches to work that different group members offer anorganization (Milliken and Martins, 1996). Agencies operating under thisframe seek to integrate, as opposed to assimilate or differentiate, diverseindividuals within the agency. This model is founded upon both under-standing and valuing the notion that cultural differences exist. Diversitymay affect work groups’ abilities to “process information, perceive andinterpret stimuli, and make decisions” (Milliken and Martins, 1996: 416).Nemeth (1986) contended that the logic underlying majority decisions issuperior when consistent counterarguments are made by minority groups.Studies of undergraduate and graduate workgroups have shown that di-versity affects the number of alternative scenarios considered, quality andcreativity of ideas, and the extent of cooperation among group members(Cox, Lobel, and McLeod, 1991; McLeod and Lobel, 1992; Watson, Ku-mar, and Michaelsen, 1993). According to Thomas and Ely (1996: 85),agencies adopting this approach are “tapping diversity’s true benefits”which will increase agency effectiveness, lift employee morale, and enhanceproductivity.


Scholars suggest that workgroup diversity promotes creativity and in-novativeness in the quality of ideas, problem solving, and decision making(McLeod and Lobel, 1992). McLeod and Lobel (1992) found more ethni-cally diverse groups produced higher quality and more unique ideas in abrainstorming task than did less diverse groups. Despite a growing needfor knowledge about the effects of diversity in the daily operations of publicorganizations, relatively little systematic research has been done to explorehow race, ethnicity, and gender have influenced specific internal work proc-esses. One process that has been examined is performance appraisals, butthe findings are mixed (Lewis, 1997; Pulakos, Oppler, White, and Borman,1989; Sackett and DuBois, 1991). Some research has illustrated that ratersgenerally give higher performance ratings to members of their own race,even after controlling for other factors that influence ratings (Sackett andDuBois, 1991). Other scholars have found that race and gender have min-imal influence over ratings (Pulakos et al., 1989). A 1996 MSPB study offederal employees found that Caucasians in professional and administrativejobs received higher performance ratings than minorities, whereas womenreceived higher ratings, on average, than men. The report suggested, butdid not empirically examine, that the differences were attributable to su-pervisory biases. This proposition was later challenged by Lewis (1997).


Although little research has explored the impact of diversity on internalpublic sector operations, a number of agencies have adopted diversity train-ing in an effort to take advantage of the perceived benefits. In 1993, theMerit Systems Protection Board found that twenty of the thirty-two agen-cies in its sample indicated that they provide “valuing diversity” trainingprograms. The typical program focused on sensitivity to cultural differ-ences, emphasizing that such differences contribute to the organization(MSPB, 1993). Despite efforts to promote diversity, minority employeeswere as likely to perceive they had been discriminated against in 1996 asthey had been in 1992 (MSPB, 1998: 37). Based on data from a survey of9,710 federal employees in 1996, the MSPB (1998: 37) found the follow-ing:

When asked whether they had been denied a job, promotion, or other job benefitbecause of their race, 34 percent of the African Americans, 35 percent of the AsianPacific Americans, 23 percent of Hispanics, and 18 percent of the Native Americansthought they had been. About 9 percent of the White employees thought they hadbeen discriminated against because of their race.

Moreover, the survey results reveal that a large percentage of minoritiesperceived that “people of their race or national origin were not treatedwith respect” (MSBP, 1998: 38). Although 88 percent of federal supervisorssurveyed received diversity training and 59 percent of those individualsperceived that diversity training had improved their leadership, some mi-nority federal employees still believed they were not valued and treatedequitably.

Paradigm 4: Valuing-and-Integrating: Creating a MulticulturalOrganization

The fourth paradigm, valuing-and-integrating, seeks to build directlyupon the learning-and-effectiveness paradigm, as well as incorporate as-pects of the other two paradigms. This approach encompasses the goalsdiscussed in the three aforementioned paradigms: democratization, access,effectiveness, and service to stakeholders. Although diversity is often dis-cussed at the organizational level, the valuing-and-integrating model pro-poses that one needs to understand diversity from an individualisticperspective before viewing the aggregate organization. As Simon (1957:110) noted, “an organization is, after all, a collection of people, and whatthe organization does is done by people.” A diversified organization isfounded, by its very nature, upon the fabric of cultures that each personoffers and adds to the collective working environment.

Culture consists of “all those things that people have learned to do, be-lieve, value, and enjoy in their history. It is the totality of ideals, beliefs,


skills, tools, customs, and institutions into which each member of societyis born” (Sue and Sue, 1990: 35). The value of multiculturalism to publicorganizations highlights the importance of viewing culture and cultural dif-ferences not simply as demographic representation within an organization.Rather, an individual’s cultural foundation is a complex, dynamic devel-opment of sensibilities that impact and refine the ways in which an indi-vidual views, perceives, and interacts with his or her environment. Theaforementioned paradigms approach multiculturalism with different levelsof acknowledgment of individual diversity. For example, the fairness-and-equality paradigm proposes that individuals assume the agency’s culturalidentity. Viewing diversity from this perspective presents a paradox. Anorganization’s treatment of cultural differences reflects the extent to whichnondominant cultures remain intact and, subsequently, may contribute tothe organization’s mission, policies, and programs.

Under paradigm 1, fairness-and-equality, a fundamental tension existswhen individuals with ethnic, racial, gender, and cultural backgrounds dif-ferent from the dominant culture attempt to interface, or coexist, withinthe dominant culture’s environment. In essence, these individuals are oftenfaced with the polarity between assimilation and acculturation. Assimila-tion is the process of integrating oneself within the agency’s culture and,subsequently, assuming the values, beliefs, and attitudes attributed to theagency’s culture. Through assimilation, the individual’s culture of origin isoften subordinated and, thus, compromised in an effort to blend in withthe prevailing culture. While the process of assimilation does not explicitlymandate that an individual lose his or her culture, in reality, as one com-promises intrinsic cultural sensibilities, the environment’s majority cultureassumes precedent. As a result, the individual’s culture of origin is dilutedand homogenized through the process of organizational socialization.

Alternatively, the process of acculturation challenges the conforming na-ture of assimilation and the negative consequences of differentiation. Ac-culturation is the process of maintaining one’s cultural background whileimmersed in an agency’s cultural environment. In spite of emersion in adifferent culture, an individual is expected to maintain his or her values,beliefs, and attitudes that may run counter to the prevailing agency culture.The process of acculturation postulates that nondominant cultures can co-exist within an environment of a dominant culture. Furthermore, individ-uals from nondominant cultures do not tend to experience the overridingpressure, whether overt or covert, to integrate into the dominant agencyculture. In the process of acculturation, cultural backgrounds, experiences,and sensibilities are not checked at the doorstep upon entrance into thedominant culture’s environment.

Assimilation and acculturation are processes that individuals experiencein ranging degrees as they move from their culture of origin into theirworking environment. With agreement that assimilation compromises and


thus dilutes an individual’s personal values, attitudes, and beliefs, organi-zations with explicit pretense of valuing cultural diversity should elect tosupport and foster acculturated environments. The postulations underlyingacculturation support cultural coexistence and, in turn, present a more ac-cepting approach to diversity and represent a clear movement toward mul-ticultural understanding and learning. The objective of this paradigm is notto politicize agencies; rather, it is to create public organizations that aremore effective, innovative, communicative, and fluid. Through the processof creating a multicultural organization, agencies will encounter numerousbarriers, some of which are discussed below, that require attention in orderto create an agency environment that values and benefits from individualdifferences.

First, non-Western cultures place differing importance and value on ex-pressiveness. That is, the degree to which a person expresses himself orherself verbally, emotionally, and behaviorally is often a critical elementdefining cultural and ethnic experiences. Whether promoting or attemptingto limit expressiveness, agencies must consider not only cultural and ethnicvalues but also contextual factors. Second, the notion of expressivenessbrings forth a larger, related issue regarding potential barriers to culturalunderstanding: patterns of communication. The importance placed on ver-bal communication in Western culture cannot be overestimated. Non-Western cultures differ in their styles of verbal and nonverbal communi-cation as well as the relative import attributed to each (Wise and Miller,1983).

Additionally, language is often embedded in cultural experiences andbackground. Agreement on a common English vocabulary, for example,does not necessarily suggest that clear communication between individualswill result. Rather, the complexity of understanding language and thusculturally grounded communication style must include the symbolic,metaphoric, and cultural implications that arise during interpersonal inter-actions. Thus, agencies must develop greater sophistication in their notionsof language and nonverbal communication to more fully comprehend in-dividual backgrounds. Common ground between cultures will be realizedwhen agencies consider the historical, sociological, and political implica-tions and influences that underlie communication.

Another critical dimension of understanding diversity is the notion ofmistrust. American history bears witness to the tangible and enduring ex-periences of racial and ethnic discrimination, maltreatment, and violencethat, in turn, have developed and solidified a pervasive feeling of distrustamong minority groups within the majority culture. In order to survive inthis country, many minority groups have developed, out of necessity, be-haviors that allow them to gauge potential threats (Stanback and Pearce,1985). The mistrust experienced by minority groups has a documentedhistorical antecedent (Jones, 1985; Mays, 1985). This distrust of the dom-


inant culture is not necessarily insurmountable. Rather, organizations mustunderstand and, more directly, must respect the authentic foundations ofmistrust before they are able to establish trust with individuals from dif-ferent cultural backgrounds.

In addition, locus of control and locus of responsibility are two criticalcomponents that will assist organizations in further understanding the per-spectives of minorities and women. Rotter (1966) posited that locus ofcontrol has two dimensions. Internal locus of control suggests that peoplebelieve reinforcements are dependent on their actions; consequently, peopleare able to shape their existence and futures. External locus of controlsuggests that people believe reinforcements are independent of their actions;thus, their futures are determined more by chance than direct personalintervention. Jones, Kanouse, Kelley, Nisbett, Valins, and Weiner (1972)discussed the notion of locus of responsibility, that is, the degree of re-sponsibility or blame placed on an individual or system. Internal locus ofresponsibility places emphasis on the individual’s contribution or degree ofblame; alternatively, an external locus of responsibility tends to place blameon a system for outcomes. The notions of control and responsibility interactwith one another and, in turn, impact an individual’s world view—theways in which a person perceives the impact of both self and environmenton his or her life.

Minority groups tend to adhere to the external locus of control that theyare not active participants in shaping their futures (Sue and Sue, 1990).Public organizations have the social and political opportunity to utilize thediversity of their employees to foster the active participation and contri-bution of individuals from nondominant cultural backgrounds. A funda-mental element of this process of minority and gender empowerment withinorganizations is the critical systemic movement from viewing diversity asseparate and compartmentalized to a context in which diversity is valued,utilized, and institutionalized.

Public organizations are faced with the challenge to preserve cultural,racial, ethnic, and gender identities in order to foster multicultural expres-sion. The process of assimilation may simply lead to a context in whichcultural diversity is measured by skin pigmentation, geographic origin, andother extrinsic differentiations from the dominant culture. Instead, the es-sence of cultural diversity is the array of worldviews developed throughindividuals’ degree of identification with their background. The “meltingpot theory” of diversity is tragically flawed. Inherent in this approach isthe “myth of color blindness” which overlooks an individual’s group mem-bership, thus denying an intimate, critical aspect of his or her identity (Sueand Sue, 1990). This model suggests that public organizations should en-gage in the process of recognizing and promoting the external measures ofdiversity as secondary to the internally developed social vision that eachindividual offers an organization.


The potential barriers to and dynamics of multicultural understandingare not mysterious. Public organizations will realize their capacities to com-prehend, value, and benefit from cultural diversity through their movementtoward creating a climate of genuine acceptance of and sincere respect forethnicity, gender, and other characteristics that define an individual’s cul-tural background. Fostering a multicultural environment suggests that anindividual’s ethnicity, race, or gender, for example, is not experienced as a“necessary evil” but rather cherished as an asset to the organization’s di-versified culture. In turn, individuals from nondominant cultures will bewelcomed and encouraged developers and participants in the organization’smission, policies, programs, and decision-making processes. Under this par-adigm, agencies will position themselves to learn. Previous externally drivenstrategies to diversify public organizations may have changed the demo-graphic composition of public organizations, but the extent to which theyhave altered organizational norms and practices is less clear. As agenciesand their members learn and evolve through multiculturalism, they willinstitutionalize new rules, standards, procedures, and norms in the organ-ization’s culture and collective memory. Individuals of all races, ethnicities,and cultures will be welcomed into multicultural organizations by the sig-nals and symbols of the rules.4

CONCLUSION

Managing multiculturalism is a process, not a program, that encouragesagencies to examine themselves critically and move forward as they learn.As illustrated by the recent Merit Systems Protection Board (1998) surveyof federal employees, diversity programs have not eliminated perceptionsof discrimination and mistreatment of minorities. Moreover, as the laborforce changes and the public work force becomes more diverse, the prev-alence of these perceptions may continue to grow. Diversity training is notenough to eliminate the feelings of mistrust that nondominant groups havecontinued to experience. Agencies need to embrace a paradigm of multi-culturalism that cultivates a climate in which individuals from dominantand nondominant cultures coexist and thrive. Consequently, agencies willthen attain the expected benefits of higher levels of diversity.

When agencies value diversity and appreciate differences associated withthe heritage, characteristics, and values of members of different groups, aswell as respecting the uniqueness of each individual, they will make a se-rious commitment to workforce diversification. Creating a multiculturalorganization is about changing the mix of employees to reflect trends inthe labor market and democratization, but not politicization, of public serv-ice. It is about satisfying constituent demands and meeting the needs of allcitizens without making employees from nondominant cultures or groupsfeel like their primary role in the agency is to serve constituents with ap-


parently similar backgrounds. It is about changing work processes to reflectthe diversity and creativity of unique perspectives that exist within an or-ganization and creating a culture that encourages diverse workers to stayand contribute over time (Coleman 1994).

NOTES

1. Persons with disabilities employed by federal agencies are protected by the1973 Rehabilitation Act. The 1990 ADA covered persons employed in state andlocal governments and most private organizations that employ fifteen or more per-sons (Slack, 1997b).

2. The description of equal employment opportunity and affirmation actionhighlights only some of the major shifts. For a more comprehensive discussion, seeKellough (1990).

3. This study reviews the four most used measures of passive representation.However, other approaches have been used to explore representation. For exampleMeier (1975) used the Lorenz Curve and Gini index of concentration to explorerepresentational equality between federal government employment and the generalpopulation.

4. This statement builds on a comment made by Johnny Yinger on March 27,1998.

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Chapter 8

Organizational Socialization

Michael Klausner and Mary Ann Groves

The speed and effectiveness of socialization determine employee loyalty,commitment, productivity, and turnover. (Schein, 1968: 2)

INTRODUCTION: THE IMPORTANCE OFORGANIZATIONAL SOCIALIZATION

Organizational socialization is defined as the process through which per-sons become familiar with an organization and learn the norms, values,and role behaviors which are expected of organizational members in par-ticular positions. The process also may involve unlearning certain attitudes,beliefs, and behaviors that were functional when the person occupied cer-tain positions in other organizations, or even in the same organization, butare no longer appropriate or desirable.

In addition to learning their own roles, it is also essential that organi-zational members learn the norms and behaviors associated with roles thatare related to theirs. Doing so will facilitate their own role performance,and just as important, will enable the person to perceive how his or herrole and contributions relate to the organization as a whole.

Socialization is an ongoing, dynamic process. Every time an individualenters or exits a position, socialization processes become operative. Indeed,even when a person is performing an organizational role, socialization con-tinues, as changes in personnel, products, services, roles, norms, and valuesoccur. While organizational socialization is most intense and relevant whena person first becomes a member of an organization, it continues as longas the person is associated with the organization. As organizational per-


sonnel respond to varying internal and external conditions and as mana-gerial changes occur, employees must be socialized anew.

As is the case with socialization in all contexts, organizational sociali-zation is always a matter of degree. Thus the organizational socializationprocess should be viewed as a continuum. At one extreme would be total(complete) socialization of the organization’s values, norms, philosophy,and perspective. At the other extreme would be no organizational sociali-zation occurring at all. Viewing the organizational socialization process asa continuum provides us with an analytical tool which enables us to seeorganizational issues and problems in terms of the degree to which suchsocialization has taken place. This does not imply, of course, that all or-ganizational problems involve faulty socialization.

Also, we should note that organizational socialization is never total, sincethe individual brings to the organization many attributes that may be in-compatible with elements of the content of his or her organizational so-cialization. Among those would be certain personality traits, valueorientations, philosophies, and attitudes (especially those toward author-ity). Indeed it would not be in in the best interests of the organization ifsocialization were total, since that would preclude positive changes andinnovations within the organization.

Organizational socialization is a vital topic since socialization experiencescan affect the degrees of cohesion and cooperation within an organization,job satisfaction, commitment, the degree of anxiety and uncertainty amongnew members, the productivity and morale of members, interaction pat-terns, and job turnover rates. In this chapter we shall discuss the contentof organizational socialization, socialization mechanisms, the processes oforganizational socialization, the factors which influence the effectiveness ofsocialization techniques, individual responses to socialization efforts, therole of anticipatory socialization in the organizational socialization process,and the relationship between a person’s affective dimension of self andorganizational role demands.

CONTENT OF ORGANIZATIONAL SOCIALIZATION

There are two major aspects to any kind of socialization: mechanismsand content. Mechanisms refers to the means by which people learn andinternalize the content of socialization. Examples of such mechanismswould be formal training and orientation sessions, informal interactionswith seasoned members, and on another level, the primary means by whichpeople learn, such as classical conditioning, reinforcement, observation, andinsight.

Content refers to what is being learned or internalized. The content ofsocialization, whether it be organizational or other kinds, will vary greatly,while the mechanisms and techniques are apt to be relatively invariant. The

Organizational Socialization 209

content of organizational socialization is organizational culture. FollowingJ. Steven Ott (1989: 50), we posit organizational culture as having thefollowing features:

• It is comprised of such things as values, norms, assumptions, beliefs, expectations,and philosophies.

• It is a socially constructed, unseen, unobservable force behind organizational ac-tivities.

• It functions as a control mechanism, informally approving or prohibiting behav-iors.

The overriding significance of the organizational culture concept is encap-sulated in the following observations made by several authorities on or-ganizational behavior:

• “Culture is to the organization what personality is to the individual—a hidden,yet unifying theme that provides meaning, direction, and mobilization” (Kilmannet al., 1985: 11).

• “Organizational culture is not just another piece of the puzzle, it is the puzzle.From one point of view, a culture is not something an organization has; a cultureis something an organization is” (Pacanowsky and O’Donnel-Trujillo, 1983:126).

Ott (1989) lists almost eighty elements of organizational culture, whichinclude anecdotes, assumptions guiding behavior, ceremonies, organiza-tional “climate,” communication patterns, customs, historical vestiges, ide-ologies, jargon, knowledge, management practices, meanings, myths,informal rules, symbols, and tacit understandings.

MECHANISMS OF OCCUPATIONAL SOCIALIZATION

Selection

Organizational managers use a variety of techniques to increase thechances that the people they hire will be successful in their organizationalroles. They may recruit people from certain colleges, regions of the country,or other organizations which they believe will increase the probability ofsuccessful role performance. In addition, a preferred psychological profilemay be developed for potential employees on the basis that individualshaving such a profile will fit in well into the organizational culture. Inter-views, background checks, testing, and simulations are some of the specificways that can be utilized in the selection phase of the recruitment process.The preselection process, if done well, will greatly facilitate the upcomingsocialization process and help perpetuate the organization’s culture (Ott,1989). For example, if a department store chain’s culture emphasizes serv-


ice to customers and a philosophy that “the customer is always right,”potential employees already having such an orientation will be more easilysocialized and more likely to fit in well with the culture than those notpossessing such an orientation. Employees at a community center studiedby Ott (1989) were the parents of children with developmental disabilitieswho were served by the center’s programs. Ott notes that “They are knownto have the right attitudes before they are hired” (1989: 89).

Socialization Techniques

Once they are hired, how do new members of an organization learn thenorms, values, and expected behaviors within an organization? MerylLewis, Barry Posner, and Gary Powell (1983: 859) list the following ways:

formal on-site orientation sessions, off-site residential training, other new recruits(employees), a buddy relationship with more senior coworkers, mentor and/orsponsor relationships, your first supervisor, secretary or other support staff, dailyinteractions with peers . . . , social/recreational activities with people from work,and business trips with others from work.

The ways include both direct and indirect socialization procedures. In theirempirical study of 217 undergraduate business school alumni who weresurveyed six to nine months after graduation, Lewis, Posner, and Powell(1983: 861) found that the socialization strategy that was judged by therespondents as most helpful to them as new employees was the daily in-teraction with other new recruits (peers) while working, followed by per-ceived importance of relationship with a senior coworker and relationshipwith first supervisor. However, when the socialization came from the sec-retary/support staff, the perceived helpfulness of the process was not sopositive. “Lower levels of job satisfaction, commitment, and tenure reten-tion were reported by newcomers when the secretary/support staff wasavailable as a source of socialization” (Lewis et al., 1983: 861).

John Van Maanen (1978) noted that occupational socialization strategiesvary in the extent to which they are formal or informal, individual or col-lective, sequential or nonsequential, fixed or variable, tournament-orientedor contest-oriented, serial or disjunctive, or investiture- or divestiture-oriented. These seven dimensions of organizational socialization are de-scribed below.

1. Formal or Informal: the use of direct socialization in a formal training sessioncontrasted with the new employee’s “learning the ropes” during informal inter-action in the work setting (Van Maanen, 1978: 23). Formal training sessionsutilizing manuals, books, and audio-visual material might be used in the processof formal organizational socialization, during which the philosophy and values


of the organization, as well as specific behaviors and skills linked to the newemployee’s role, may be covered.

2. Individual or Collective: the extent to which persons are socialized singly orcollectively (Van Maanen, 1978: 24). Collective strategies, of course, can be lessexpensive and more efficient and may lead to more conformity.

3. Sequential or Nonsequential: whether the socialization process involves a seriesof specific stages through which the individual must pass when moving to a newrole or status, contrasted with a person’s moving to a higher status within theorganization in one transitional stage (Van Maanen, 1978: 26).

4. Fixed or Variable: whether or not there is a precise time for each step or tran-sition during occupational socialization. Van Maanen (1978: 28) suggests thatfixed strategies may result in more worker loyalty and more cohesion amongworkers.

5. Tournament or Contest: whether clusters of new employees are separated intodifferent programs or tracks based upon their differences in background, abilitiesor motivation (tournament strategy), contrasted with the situation in which thereare no sharp distinctions or clusters of superiors and inferiors of the same rank,and the channels of movement through socialization programs are more open(the contest strategy). According to Van Maanen (1978: 30), the tournamentstrategy is more efficient and may encourage lower risk taking than the conteststrategy.

6. Serial or Disjunctive: whether or not experienced individuals train newcomersto assume their roles in the organization (serial socialization strategy). Serialstrategies may result in less change in the organization, while disjunctive strat-egies encourage more innovation (Van Maanen, 1978: 32).

7. Investiture or Divestiture: the extent to which socialization procedures are de-signed either to confirm (i.e., investiture) or to dismantle (i.e., divestiture) theincoming identity and characteristics of the newcomer.

Van Maanen (1978: 35) summarizes the likely consequences of varioussocialization strategy combinations:

If we are interested in strategies that promote a relatively high degree of similarityin the thoughts and actions of recruits and their agents, a combination of the for-mal, serial, and divestiture strategies would probably be most effective. If dissimi-larity is desired, informal, disjunctive, and investiture strategies would be preferable.To produce a relatively passive group of hard-working but undifferentiated recruits,the combination of formal, collective, sequential, tournament, and divestiture strat-egies should be used.

Organizations, of course, vary regarding the emphasis that they place onthe socialization of new members. This variation includes differences inboth the range of content that they believe members need to be socializedinto and the intensity and duration of the socialization process itself. Mor-gan Guaranty Bank is a good example of an organization that places much


emphasis on all aspects of the socialization process (Pascale, 1985: 27). Thebank has specific socialization outcomes that the socialization process is toproduce. Prominent among them is a “collegial style” which is character-ized by a stress on teamwork and cooperation as methods to attain organ-izational goals. Morgan Guaranty recruits are tested not so much forintellectual ability but for their willingness and capacity to cooperativelyinteract with colleagues in pursuit of organizational objectives.

Social psychologists have noted that social character—the personalityand behavioral characteristics of individuals—can be traditional or adap-tive in origin. Traditional social character is the result of direct socializationefforts such as being directly taught the norms or values or behaviors con-sidered important by the socializers. Adaptive social character results notfrom direct teaching but from experiences—for example, learning normsor values or behaviors through the observation of others or through indi-vidual experiences. The first organizational socialization choice describedby John Van Maanen (i.e. formal or informal) relates to the distinctionbetween traditional or adaptive social character, while the remaining sixstrategy choices focus primarily upon traditional social character and directteaching.

Much of the socialization that occurs within organizations is very infor-mal, indirect, and implicit. Observational learning is a major mechanismby which indirect socialization takes place; the new employee observes thedress, behavior, actions, interactions, and reactions of veteran employeesand makes inferences based upon those observations. Even though an em-ployee may be told during the job interview that she is entitled to an hourfor lunch, if she observes that most of the other employees take half anhour or eat their lunches at their desks, she may do likewise.

Tierney (1997), in his study of faculty socialization, argues that collegeemployees are socialized primarily during the ordinary daily activities thattake place on the job. He contends that the view of organizational social-ization that posits it as a clear-cut and direct process where new memberslearn and internalize an already existing organizational culture is mislead-ing and overly simplistic. Instead he argues that socialization is a negotiatedprocess during which the employees interpret the organization throughtheir own idiosyncratic backgrounds and the context in which the organi-zation exists (Tierney, 1997). He sees organizational socialization as a dy-namic, interpretive process fraught with ambiguities, where new membersare continuously modifying their perception of the organization.

Tierney’s research on faculty socialization indicates that most partici-pants did not view formal socialization events, such as employee trainingsessions, speeches by administrators, or convocations, as the primary waysin which they learned about the organizations (Tierney, 1997). Instead theyreceived messages, often contradictory and ambiguous, about what wasexpected of them and what was important and what was not, by being


involved in the everyday organizational culture. Thus the rites, rituals, andother types of practices that have been viewed as important elements oforganizational socialization may not be as effective as previously assumed.Rather, intense micro-interaction with veteran organizational members maybe more significant.

Equally important is Tierney’s (1997) contention that the organizationalcultures are not static, unchanging entities but are dynamic ones, and thatwhen a person is being socialized into an organization, the organizationalculture is re-created and modified.

Some organizations have found that a combination of formal and infor-mal socialization processes are most effective in producing the desired re-sults. A case in point is Siemens, a large multinational manufacturingcompany based in Germany (National Public Radio, 1998). At first thestaff emphasized informal socialization as the means to train new employ-ees. Experienced personnel would show new employees how to perform aparticular task. Problems developed, however, when it became evident thatdifferent employees would perform the same task in a different fashion.While the end result could be satisfactory, the company staff believed thatselecting the method that was most efficient and teaching it to new em-ployees would result in productivity improvements. Consequently, the staffdeveloped videos that depicted what were believed to be the best methodsfor performing specific tasks. This formal socialization process, however,worked best when combined with informal interaction between veteranemployees and new ones. No matter how detailed the video depicting thepreferred method to be used to accomplish the task, invariably questionsemerged that were not dealt with in the video. Many times these issues andquestions did not arise until the employee was attempting to perform thetask. Such questions were best answered by experienced workers while theywere interacting with the new workers. Interviews with those being trainedindicated that they preferred a combination of formal and informal social-ization procedures.

A major feature of indirect socialization is that its content may contradictthe content of formal modes of socialization, as illustrated in the followingdiscussion of the socialization of police officers. The importance of theorganization’s informal structures and processes cannot be overemphasized.

Socialization of Police Officers

As we have discussed, organizations use specific, formal, and structuredmethods to socialize their members. Examples of such methods are usinglectures, tapes, simulations, printed materials, and training sessions whichmay be on site or at some “retreat.” In many cases the formal socializationprocess is relatively long and intense, as in the training of police recruits inthe police academy. Other times formal socialization may be of a short


duration but still be intense and focused. The famous McDonald’s “uni-versity” where selected employees learn the ins and outs of making ham-burgers and french fries “the McDonald’s way” is an example of a shortbut focused and intense formal socialization method.

Formal methods of organizational socialization convey the values,norms, procedures, and policies that the organization’s leaders want em-ployees to learn. The content of the formal socialization of police recruitsincludes criminal law training, crowd control, investigative techniques, self-defense, firearms training, and community relations. These are relativelyobjective and straightforward matters. However, once the formal sociali-zation process is finished, employees will then work with people who havebeen on the job for some time, and they, in turn, will commence to socializethe new organizational members. Unlike the formal process of organiza-tional socialization, however, this informal process will be relatively indi-rect, informal, unstructured, and sporadic.

Moreover, in many instances the content being conveyed to the newmembers may be different from, indeed sometimes in direct opposition to,the content conveyed during their formal socialization experience. Whenthe differences are relatively small and over relatively minor matters, theyare inconsequential. However, when they are big differences, over issuesthat are fundamental, they will affect the organization, the new members,and the clients served by the organization.

We shall discuss the informal socialization experiences of police officersto illustrate what happens when there are significant contradictions be-tween the content of formal and informal socialization. In addition, ourillustration also will show the effects of acts of commission or omission bythe police department’s upper echelon on creating a particular type of “or-ganizational climate” that affects the police officers.

The informal socialization of police consists of a set of values, norms,and attitudes that are so tightly knit and interrelated that they comprise an“occupational subculture.” Among its key elements are the following: “cyn-icism, alienation from conventional society, strong in-group loyalty andsolidarity, an occupational code of secrecy and contempt for constitutionalprinciples of due process of law” (Voigt, Thornton, Barrile, and Seamon1994: 474).

A great deal of the cynicism created in cops can be seen in the time-hallowed advicegiven to the rookie . . . by the senior cop, whose first words are usually “Forget allthe bullshit they gave you at the police academy, kid; I’m gonna show you howthings really work here on the street.” (Bouza, 1990: 76)

These norms and the accompanying mind-set are not conveyed to newmembers of the department during their training at the police academy;


rather they are conveyed when the recruits graduate from the academy andare assigned to a precinct.

Police recruits soon learn that the price for acceptance is to consistentlyand conscientiously abide by the norms constituting the police subculture.“They learn very quickly that loyalty—the obligation to support a fellowofficer—is the first priority. Respect for police authority, honor, individu-alism, and group solidarity also rank high among esteemed values” (West-ley, 1970: 226).

Many police officers do not enter the profession with such a mind-set,but they learn it as they become involved in police activities and interactwith established members of the force. The role demands and nature ofpolice work, more than anything else, are responsible for police subcultures’values and norms as well as for the highly negative sanctions directed to-ward those persons violating the norms.

For example, police officers may find themselves at times in dangerous,life-threatening situations; they must trust their partners and other membersof the department to be loyal to them and risk their lives for them. Indeed,one of the reasons that police officers are reluctant to testify against fellowpolice officers accused of wrongdoing is the fear (a realistic one) that doingso would make their partners reluctant to provide them with assistancewhen they need it.

A police department is a paramilitary organization where the use of forceto achieve certain ends is condoned. Police are equipped with firearms,nightsticks, mace, and other items which are instruments of physical force.These items reinforce the officers’ view of themselves as “crime controlagents.” Thus they are oriented, via the socialization process, to “operatemore according to a crime control standard than to a ‘due process’ one”(Voigt et al., 1994: 274). Consequently, police officers tend to assume thatsuspects are guilty and see nothing wrong with practices that contraveneconstitutional due process procedures (Voigt et al., 1994: 274). This mind-set is reinforced on a daily basis due to the very nature of the job andworking environment. The police are called to deal with troublesome anddangerous matters. They see the worst aspects of the human condition, andthis breeds cynicism and a suspicious perspective.

Also crucial in the informal socialization process are the latent messagescommunicated by acts of commission or omission by mid-level and upper-level police department officials. Anthony V. Bouza, who has occupiednearly every position during his career with the New York City and Min-neapolis police departments, puts it well when he states

Virtually all agencies have written procedures calling for truth, beauty and justice,yet the internal daily reality of agencies may be out of sync with their noble ideals.The mere existence of explicit rules doesn’t mean that they will be followed orenforced by the administration. Written guidelines may not even reflect the admin-


istration’s true thinking. The employees tend to respond to the value system trans-mitted in the daily actions of the hierarchy rather than to written policy. (Bouza,1990: 49) (emphasis added)

Bouza also notes that even when the most qualified people are hired andtheir formal socialization emphasizes fairness, justice, and ethical practices,if “the CEO’s policies reflect favoritism, racism or any other counterpro-ductive ‘ism,’ these negative practices are going to surface on the street invarious forms” (Bouza, 1990: 49). The organization’s social climate, whoseultimate source stems from the upper echelon’s practices, plays a key partin shaping members’ attitudes and behavior. Moreover, new members’ be-havioral tendencies will either be intensified or mitigated, depending uponthe implicit messages sent and explicit practices that occur. As Bouza as-tutely observes, “An organization that condones or subtly encourages bru-tal messages will take normal employees and strengthen their aggressiveinstincts to the point where someone eventually goes over the line. Somemay have had proclivities in that direction . . . but these tendencies couldeasily have been channeled into productive and positive pursuits by a moresalubrious organizational climate” (Bouza, 1990: 70). Since the incidentinvolving Abner Louima, the Haitian immigrant allegedly tortured by po-lice in a Brooklyn station house in August 1997, there have been manyarticles in newspapers and magazines (e.g., “Cases Expose Problems,”1997; “Police Beating Case,” 1997) suggesting that a “culture of brutality”has been created in some police settings.

The powerful effects of the informal socialization process experienced byrookie police officers is due, in part, to the intense and continuous inter-action they have with each other and with veterans. Rookie cops are “ad-mitted into a secret society where a code of loyalty, silence, secretivenessand isolation reign. They work around the clock and begin to socializemostly with other cops, usually members of their own squad” (Bouza,1990: 71).

Police officers soon develop the feeling that “outsiders” cannot under-stand the dangers and assorted problems that confront them daily. Onlythose who are on the force can understand. This perception of “us” versus“them” emerges and “helps to forge a bond between cops. . . . It is calledthe brotherhood in blue and it inspires a fierce and unquestioning loyaltyto all cops everywhere” (Bouza, 1990: 74). Once rookies graduate fromthe police academy and become involved with the everyday minutiae ofpolice work, they experience a “clash between expectations and reality asthey begin to see that their preconceptions of ‘the job’ were well off themark” (Bouza, 1990: 78).

In an article in the New York Times on August 30, 1997, Frank Serpico,who testified twenty-five years ago before the Knapp Commission on policecorruption in New York City, discusses the Louima case and concludes


that police culture has not changed much since he left the NYPD in 1972.He notes that the police officer who broke the “blue wall of silence” byidentifying the precinct’s rogue officers in the Louima case found himselfneeding police protection from other police officers. Serpico states that hon-est police officers cannot reveal negative information about their colleagueswithout fear of reprisal from their fellow officers.

Many of the points made regarding the informal socialization processoccurring within police departments also apply to other types of organi-zations. Workers learn the rules of the organizations through informal in-teraction and observation, and there can be social pressure on workers notto be “whistle blowers.” However, the content of the organizational sub-culture and intensity of the process (pressure to conform to the subculture,for example) differ considerably from one organization to the other.

PROCESSES AND STAGES OF OCCUPATIONALSOCIALIZATION

Much of the literature on organizational socialization focuses upon threechanges among newcomers to the organization: (1) changes in role behav-iors, (2) changes in work skills and abilities, and (3) learning the normsand values of the organization (Feldman, 1981: 309). The literature (Porter,Lawler, and Hackman, 1975; Feldman, 1981; Sanders and Yanouzas,1983) discusses three phases or stages through which newcomers learnthese role behaviors, work skills, and norms and values: (1) prearrival stageof anticipatory socialization, (2) encounter stage, and (3) change and ac-quisition stage.

Prearrival Stage

Daniel Charles Feldman (1981: 310), in his theoretical model, delineatesfour factors which affect the results of organizational socialization: (1) thedegree to which the newcomer has a realistic picture of the goals and cli-mate of the organization, (2) the degree of realism of the newcomer’sknowledge of the new job duties, (3) the degree of congruence between theskills and abilities of the newcomer and the needs of the organization, and(4) the extent of congruence between the needs and values of the newcomerand the values of the organization.

The Role of Anticipatory Socialization

Regardless of the context, socialization for any role begins before theperson actually occupies the relevant position. The process by which some-one learns about and commences to develop perceptions about a given roleis called anticipatory socialization. Thus, even before an individual actuallyis hired by an organization to perform a particular role, he or she has


formed expectations and images regarding it. Among others, the media isa major source of anticipatory socialization. Children and adults watchtelevision programs and receive information as to the nature of a widevariety of occupational roles. The basic principle regarding anticipatorysocialization’s relation to on-site socialization is that to the extent that thecontent of the anticipatory socialization is accurate and truly reflects thetarget role, it will facilitate on-site socialization. To the degree that it isinaccurate and distorts the true nature of the role, it will impede sociali-zation into that role.

In many instances, formal socialization agents, such as training schools,business schools, police academies, and so forth, have given inaccurate im-ages of the role their clients are being prepared for. Thus, when the student-teacher or police rookie or business student graduates and begins toactually occupy and perform the role, he or she may face what is called“reality shock.”

In addition to the media, schools, and academies as sources of inaccurateinformation about organizational roles, sometimes company recruiters giveunrealistic information about the roles prospective employees will perform(Dunnette, Avery, and Banas, 1973). When the unrealistic expectations gen-erated by the recruiters are not met, the socialization process is made moredifficult. Employee dissatisfaction, if strong enough, may result in the de-parture of the employee. Both the organization and the employee lose inthis case.

The retail industry provides a good example of problems caused by in-accurate anticipatory socialization. The industry has had a relatively highrate of attrition among management trainees recruited directly from col-leges and universities (Salzmann, 1985: 43). Management entry-level po-sitions require long hours, rapid pace, and, at times, arduous physicalactivities. According to Salzmann, these aspects of the job were evidentlyquite distasteful to many of the trainees since 40 percent quit during theirfirst five years. To deal with the problem, the industry began to have com-pany recruiters give highly realistic accounts of the pros and cons of aretailing job to potential employees. They initiated informational programsto give both sides of the retailing story. Potential employees were told thatthe initial years of their career in retailing would be mentally, emotionally,and physically demanding and that many aspects of their duties would befar from glamorous. They were also told that if they had what it took toendure the initial discomforts, in the long run, the rewards they would gainfrom their jobs would more than make up for the costs incurred.

Encounter Stage

During this initial stage of interaction, “breaking in” in an organization,the newcomer begins to learn new tasks, establish new interpersonal rela-


tionships, and define his or her role within the work group, while at thesame time facing intergroup role conflicts and conflicts between personallife and work life. Arnon E. Reichers (1987: 279) argues that the primarytasks which a newcomer meets during the encounter stage are to (1) estab-lish a situational identity and (2) understand organizational policies andprocedures. Van Maanen (1978) suggests that this encounter stage is themost influential period of organizational socialization, since socialization ismore intense at this period (Frese, 1982: 216).

Change and Acquisition Stage

The mastery of these tasks faced during the encounter stage occurs inthe change and acquisition stage, the “settling in” stage (Feldman, 1976).If the newcomer masters these tasks, the behavioral and affective outcomeswill be “positive”—that is, the newcomer will perform successfully and besatisfied with the job. Feldman’s model suggests that the factor determininginternal work motivation is “task mastery.”

Feldman (1976) describes four outcomes of organizational socializationprograms: general job satisfaction, mutual influence (power and controlover work), internal work motivation (self-motivation), and job involve-ment. He finds that the first two variables (general job satisfaction andmutual influence) are correlated with the variables associated with the so-cialization process, while the remaining two variables (internal work mo-tivation and job involvement) are not significantly correlated with thesocialization variables. Feldman concludes that the “nature of the workitself” (rather than socialization or the way an employee is recruited ortrained) is the most important factor influencing the last two variables(1976: 74).

What five factors affect the motivating potential of particular jobs? Ac-cording to Feldman, they are “(1) variety of skills required to do a job, (2)task identity (the degree to which the job requires completion of a ‘wholepiece of work’), (3) the significance of the job to other people, (4) theamount of freedom and discretion the employee has at work, and (5) theamount of feedback the employee gets from the job itself” (Feldman, 1976:74).

Symbolic Interactionism Process

A symbolic interactionist view of the socialization process reveals theimportance of verbal and social interaction between newcomers and vet-erans, the process through which newcomers begin to understand organi-zational realities and establish “situational identities.” Reichers (1987: 284)notes three classes of variables that promote interaction within organiza-tions: (1) certain newcomer characteristics, (2) certain insider characteris-tics, and (3) situational characteristics within the organization. Field


dependence (reliance upon the field as a referent and having the interper-sonal skills to initiate interactions), tolerance of ambiguity, and the needfor affiliation are the three variables which enable newcomers and insidersto initiate the interaction necessary for organizational socialization to oc-cur. These characteristics of newcomers and insiders, combined with situ-ational characteristics promoting interaction, lead to social interactionand the subsequent establishment of situational identity, development ofappropriate role behaviors, work skills and abilities, and adjustment to theorganization’s norms and values by the newcomers. This symbolic inter-actionist model emphasizes the importance of personal characteristics ofboth newcomers and insiders, the situational context, and the social inter-action processes occurring within organizations during the socializationprocess.

Reichers (1987: 283) discusses these individual-difference variables thataffect the degree of “proaction” (“any behavior that involves actively seek-ing out interaction opportunities”) and thus the speed of socialization;therefore these three factors motivate people (both newcomers and insiders)to seek out interactions with others during the organizational socializationprocess:

1. Tolerance of Ambiguity: “The intolerance for ambiguity may inhibit the social-ization process. These inhibiting effects occur when the individual reaches clo-sure on the meaning of events before closure is warranted. In interactionistterms, such an individual may rely too heavily on the attitudes and values heldby one or two significant others, rather than coming to appreciate and influencethe meanings of the whole group of which the individual is a member” (Reichers,1987: 283).

2. Need for Affiliation: “Newcomers with high, unmet relatedness needs would bemotivated to seek out interpersonal interactions in the workplace that mightgratify these needs” (Reichers, 1987: 283).

3. Field Dependence: Having both motivation and ability to initiate interactionsthat help speed the adaptation of newcomers to new situations (Reichers, 1987:283).

FACTORS INFLUENCING THE EFFECTIVENESS OFSOCIALIZATION EFFORTS

The Newcomer

As G. R. Jones (1983: 464) argues, in order to fully understand factorsaffecting the results of organizational socialization efforts, we must notfocus upon only the techniques and processes of the socialization. We mustalso take into consideration the persons toward whom the socializationefforts are targeted. As previously discussed, symbolic interactionists em-


phasize that newcomers play an active role in mediating personal and roleoutcomes and in interpreting socialization efforts. Organizational plus in-dividual factors should be considered. The newcomer’s orientation towardthe organization, psychological attributes, and attributional processes allaffect the outcome of socialization efforts. Patricia Sanders and John Yan-ouzas (1983), for example, note that one of the factors affecting the resultsof socialization efforts during the encounter stage is the level of motivationof the newcomer. If the level of motivation of the new member to join theorganization is high, “the new member will be very tolerant of uncom-fortable socializing experiences. If the level of motivation is low, however,socializing efforts will not succeed” (Sanders and Yanouzas, 1983: 16).

Howard Weiss (1978: 717) finds that levels of self-esteem among newemployees affect the degree to which role models are important. The higherthe esteem, the less important the role models and the more likely the in-dividual is to rely on internal, self-generated information.

As previously discussed, field dependence, tolerance of ambiguity, andneed for affiliation are suggested by Reichers (1987) as personal character-istics of both newcomers and insiders which affect the organizational so-cialization process.

Features of the Socialization Techniques

Speed of the socialization process: Some suggest that a rapid socializationprocess is beneficial in that it reduces more quickly the anxiety associatedwith a lack of situational identity in the “encounter stage” (Wanous, 1980;Reichers, 1987: 278).

Realism of the presentation of the new organization and the likely prob-lems the recruits will face: The more realistic the picture presented duringorganizational socialization, the less likely the newcomer will quickly leavethe organization.

Situational factors: As Reichers (1987: 285) notes, “interdependent tasktechnology” (that is, task technology that forces interactions between new-comers and insiders), as well as orientation and training programs, aresituational factors that affect the organizational socialization process. The“climate” within the organization and the degree to which organizationalleaders consider socialization to be important also affect the outcomes ofthe socialization processes.

The amount and content of exposure to information supporting organ-izational beliefs: Feldman (1980: 18) states that the greater the exposureto information supporting organizational beliefs, the more likely those val-ues are to be accepted, and selective exposure of information (i.e., omittinginformation that contradicts dominant organizational values) will lead tomore acceptance of organizational values by newcomers.

The credibility of the information presented during the socializationprocess: Not surprisingly, the more credible the information presented to


the recruits, the more likely the recruits will accept the information and themore effective the socialization process (Feldman, 1980: 18). Feldmanstates that the credibility of the information is evaluated primarily on thebasis of the expertise of the communicator and the similarity of the com-municator to the newcomer.

The intensity of the socialization effort: On the basis of his studies oforganizational socialization (primarily involving graduate management stu-dents and hospital workers), Feldman (1980: 18) concludes that when so-cialization attempts are too strong, they are ineffective; that is, whencorporate recruiters threaten recruits’ senses of self-control, and their pres-entations are perceived as self-serving and overbearing, they are likely tobe rejected by the potential recruits.

Consequences of Organizational Socialization

Lewis et al. (1983) identify three dependent variables: job satisfaction,commitment, and tenure intention (i.e., how long the new employee ex-pected to stay). Business students were surveyed six to nine months aftergraduation and asked about their early job experiences. They reported ten“socialization aids”—that is, ten sources of organizational socializationwhich they had experienced: formal on-site training; off-site residentialtraining; socialization from new recruits, senior co-workers, mentors, peers,supervisors, secretaries and other support staff; social/recreational activities;and business trips. How important were these socialization aids in explain-ing variation in these three dependent variables? For job satisfaction, 10percent of the explained variance was the result of the availability of var-ious socialization aids, while for commitment and job intention, 20 percentof the variance was explained by the availability of socialization aids (Lewiset al., 1983: 861).

ORGANIZATIONAL SOCIALIZATION FROM THEPERSPECTIVES OF THE INDIVIDUAL AND THEORGANIZATION

Our understanding of organizational socialization is enhanced when weview it from the perspectives of both the individual and the organization.Individuals who have become organizational members bring with them aset of varying attitudes, personalities, goals, needs, expectations, and mo-tivations from past histories. They are concerned with having the organi-zation fulfill their goals and other elements of their personal agendas.Moreover, they want to maintain their individuality, autonomy, and self-respect by retaining and even building upon their idiosyncratic features(Johns, 1988: 289). However, they also realize that they will have to con-form to organizational values, norms, and expectations in order to be ac-cepted and rewarded within the organization.


Organizational leaders realize the necessity of socializing new membersinto the organization’s culture, expectations, and way of doing things. Ifthis does not occur to a certain minimum degree, “organizational goals willbe impossible to achieve because the firm or institution simply won’t beorganized” (Johns, 1988: 289). Wise organizational leaders will also ac-knowledge that the oversocialization of members into organizational cul-ture, policies, and practices is counterproductive. As Gary Johns puts it,“Complete and total allegiance to existing norms and role requirementswill render the organization dinosaur-like, unable to adapt to a changingenvironment” (Johns, 1988: 289). When this happens, “creative and in-novative behaviors on the part of individual members are stifled and exist-ing norms and roles take on a life of their own” (289). A trained incapacitywould occur whereby organizational members would not be able to reactquickly and effectively to changing conditions, whether they be withinor outside of the organization. Many organizations have gone agroundbecause of their oversocializing members which resulted in inflexiblemind-sets unable to make appropriate changes in response to changingtechnological, market, economic, or political conditions. Thus, organiza-tional leaders should socialize members enough to produce effective, fruit-ful, and integrated role performers but not so much that the newcomersbecome mindless automatons unable to effectively deal with changing con-ditions and environments.

The incompatibility apt to exist between organizational and individualgoals and agendas must be constructively addressed by organizational lead-ers. Fine tuning of the selection and recruitment practices to ensure theattraction of appropriate people is needed. Another way to increase the“fit” between the newcomers and the veteran employees would be to re-design certain organizational roles to better fit the expectations and desiresof certain members. Doing so does not have to be at the expense of effectiveorganizational functions. Indeed, it may result in innovations that havepositive effects for the goal attainment function of the organization. Thekey to effectively dealing with the problem of the match between the new-comer’s goals and needs and the organization’s goals and needs is recog-nition of the problem by organizational members and a willingness toresolve it via flexibility and compromise.

Organizational socialization can be usefully viewed as the means bywhich organizational integration occurs (Gibson, Ivancevich, and Donnelly,1988). It is a process which aims to achieve a “congruence of organiza-tional and individual goals” (Gibson, Ivancevich, and Donnelly, 1988:674). This objective can never, of course, be totally achieved; the extent towhich organizational and individual goals become congruent varies and isalways a matter of degree. Socialization processes bring about greater con-gruity between individual and organizational goals, in part, “by undoingthe individual’s previously held goals and creating new ones that come


closer to those valued by the organization” (Gibson et al. 1988: 674).Whether or not the employees really substitute organizational goals fortheir own is an empirical question that is not easily answered. Employeesmay, on the surface, appear to internalize organizational goals, but thismay not really be the case. They may only act as if they have done so inorder to obtain desired rewards from the organization.

As Gibson and colleagues point out, the integration of individual andorganizational goals and interests may involve ethical issues. “These ethicalissues are most evident when the two parties do not share the same infor-mation or hold the same legitimate power” (1988: 675). These issues andthe dilemma faced by employees who are asked (required) by managementto behave in ways that are not congruent with their own attitudes andfeelings is clearly exemplified by Arlie Hochschild’s (1988) account of thesocialization of flight attendants. Hochschild’s description and analysis ofthe socialization of flight attendants also nicely illustrates other aspects ofthe occupational socialization process.

Socialization of Flight Attendants

The socialization of flight attendants, according to Hochschild, beginseven before an applicant is interviewed. Applicants are asked to study apre-interview pamphlet, which is designed to teach them how to projectparticular emotions during the interview. For example, the booklet tellsinterviewees that during the interview their social expressions should be“sincere” and “unaffected.” Their smiles should be “modest but friendly.”The applicants should project a sense of alert attentiveness and be neitherreticent nor overly aggressive. Balance of emotional orientation is stressedand extremes of affect are discouraged. The booklet states that “a success-ful candidate must be ‘outgoing but not effusive,’ ‘enthusiastic with calmand poise,’ and ‘vivacious but not effervescent’ ” (Hochschild, 1988: 457).The pamphlet goes on to say that “maintaining eye contact with the inter-viewer demonstrates sincerity and confidence, but don’t overdo it. Avoidcold or continuous staring” (457). The probability that applicants wouldbe hired depends upon how successful they are in projecting the types ofaffect and mannerisms suggested by the preinterview manual.

Psychological and social prerequisites for the position of flight attendantare “a capacity to work with a team, interest in people, sensitivity, andemotional stamina” (457). Most important, however, is the trainees’ ca-pacity to “take stage directions about how to ‘project’ an image. They wereselected for being able to act well—that is, without showing the effortinvolved” (458).

According to Hochschild, once applicants were hired by the airline, theyunderwent a rather arduous training program which was mentally, emo-tionally, and physically demanding. Trainees attended lectures from 8:30


A.M. to 4:30 P.M., prepared for daily examinations during the evenings,and went on practice flights during weekends.

The airline used a variety of social psychological techniques designedboth to make the employees feel dependent on the airline and to emotion-ally identify with it. Several of these techniques have also been used bycertain religious cults, branches of the armed forces, and other organiza-tions whose aim is to foster among its members a sense of dependency andidentification. Among these socialization tactics are separating the traineesfrom family members and other significant others, the use of the peer groupto develop a strong sense of solidarity, and using trainers as role models.

Regarding the first tactic, the airline trainees were kept at the airportduring the month-long socialization period and were not permitted to gohome. This facilitated the internalization of airline values, norms, and phi-losophy. Second, to establish solidarity among peers, trainees were dividedand subdivided into small groups, which greatly facilitated feelings of at-tachment. Third, as role models, the trainers consistently manifested thekinds of affect, traits, mannerisms, and behavior that they wanted the stu-dents to develop. In spite of long hours and other demanding aspects oftheir work, the trainers were consistently pleasant, enthusiastic, and pa-tient. As a result they were well liked by the students. The mechanism ofobservational learning was operative here since “through their continuouscheer they kept a high morale for those whose job it would soon be to dothe same for passengers” (Hochschild, 1988: 459).

While the trainees had to master much informational material (numerousrules, the location and usage of safety equipment on four different planes,and what to do in a variety of emergencies), the emphasis in their sociali-zation for the role of flight attendant was on projecting a pleasant de-meanor, even under the most trying conditions. Hochschild states that“There were many direct appeals to smile—trainees were continuouslytold—‘Really work on your smiles,’ ‘Your smile is your biggest asset—useit’ ” (Hochschild, 1988: 460).

Since the socialization agents knew that during the course of their workthe flight attendants would be subjected to many situations in which itwould be difficult to smile and that they might not be in the mood to smile,the trainees were given psychological aids that would help them to conveythat upbeat, happy tone. They were to act as if the airplane cabin werehome and to think of passengers as guests in their living rooms. One recentgraduate of the airline training program described the process this way:You think how the new person resembles someone you know. You see your sister’seyes in someone sitting at that seat. That makes you want to put out for them. Ilike to think of the cabin as the living room of my own home. When someone dropsin [at home], you may not know them, but you get something for them. You putthat on a grand scale—thirty-six passengers per flight attendant—but it’s the samefeeling. (Hochschild, 1988: 460)


In addition, the trainees were told to empathize with the passengers, tosee things from their perspective, just as they have seen things from theperspectives of their friends and family members. So crucial was affectivedemeanor to the role of flight attendant that trainees were provided with“back-up analogies” to assist them in projecting the role-required affectunder difficult circumstances (for example, when passengers are obnoxious,planes are congested, and departures are delayed). One of these “back-upanalogies” was the “passenger as child” analogy. Trainees were told toperceive the irate passenger as a child. Doing so would increase the patienceand inhibit the anger of the flight attendants toward rude passengers.

While it is true that the cognitive redefining of situations can lead toeffective “deep acting” (i.e., acting that convinces oneself, that begins as anartificial act but later transforms one’s own feelings), and thus be veryuseful in projecting role-required feelings, there are situations that by theirvery nature are extremely difficult to redefine in the desired manner. Forsuch cases, “surface-acting strategies” (i.e., involving behaviors that onefeels to be false) were taught to the trainees. They were told to “work” thepassengers’ names into their responses as much as possible and to use em-pathetic phrases such as “I know just how you feel” whenever the passen-gers were angry. Such communications of empathy were intended to showthe irate passengers that they had misplaced their blame and anger, ac-cording to Hochschild.

Throughout the flight attendants’ socialization, the exclusive emphasis,Hochschild says, was on the ways by which they could manage their neg-ative feelings, never on the real causes of those feelings. Hochschild’s ac-count of the gap that existed between the flight attendants’ actual feelingsand the behavior they were urged to project as they performed their roleis an excellent example of Erving Goffman’s (1961) concept of role dis-tance. Role distance “represents a wedge between the individual and hisrole, between doing and being” (Goffman, 1961:108). Role distance be-haviors are the mechanisms by which role performers convey to themselvesand to others that certain elements of the role that they are enacting arenot representative of their true selves. Examples of such behaviors on thepart of the flight attendants abound: wearing low-heeled shoes, putting onan extra piece of jewelry, spitting in a passenger’s coffee, and mutteringobscenities under one’s breath. Role distance behaviors are most apt tooccur when there is great incongruency between how the person enactinga role actually feels and is predisposed to act and how her superiors wanther to feel and act. These behaviors are expressions indicating that the roleperformer “is not capitulating completely to the work arrangement inwhich he finds himself” (Goffman, 1961: 114). When a person manifestsrole distance actions, it is his or her way of saying “I do not dispute thedirection in which things are going and I will go along with them, but at


the same time I want you to know that you haven’t fully contained me inthe state of affairs” (Goffman, 1961: 133).

Face-to-face interactions that transpire between alienated role performersand their audiences provide a fertile context for the expressions of roledistance behaviors, of what Goffman calls a “double stance.” Here, “theindividual’s task actions unrebelliously adhere to the official definition ofthe situation, while gestural activity that can be sustained simultaneouslyand yet non-interferingly shows that he has not agreed to having all ofhimself defined by what is officially in progress” (Goffman, 1961: 133). Agood example of this type of “non-interfering” role distance behavior iswhen, contrary to the wishes of the airline, flight attendants smile lessbroadly and release their smiles more quickly than they have been socializedto do. Role distance behaviors are especially likely to occur in the presenceof one’s coworkers, according to Goffman. When this happens, it resultsin a delicious feeling of both emotional release and sweet revenge for boththe person eliciting such behavior and the coworkers who observe it. In-deed, many times particularly poignant instances of role distance behaviorsbecome part of the flight attendants’ subculture and are conveyed to new-comers by veterans. The following is such an instance.

A young businessman said to a flight attendant, “Why aren’t you smiling?” Sheput her tray back on the food cart, looked him in the eye, and said, “I’ll tell youwhat. You smile first, then I’ll smile.” The businessman smiled at her. “Good,” shereplied, “Now freeze and hold that for fifteen hours.” Then she walked away.

In one stroke the heroine not only asserted a personal right to her facial expres-sions but she also reversed the roles in the company script. (Hochschild, 1988: 465)

While we have focused on the manifestation of role distance behaviorsby flight attendants, they are by no means restricted to personnel in thatoccupation. While role distance behaviors may occur among members ofany occupation or profession, they are most likely to occur among membersof service occupations. Those in sales as well as those who deal with thepublic in bureaucratic organizations are very prone to exhibit role distancebehaviors. Such behaviors are the role performer’s means by which he orshe manifests aspects of the authentic self while still going along with theorganization’s and client’s definitions of the situation. Such behaviors en-able the person to maintain self-respect in the course of performing behav-iors that are not congruent with his or her feelings or inclinations. Roledistance behaviors may also be seen as chronic resistance to certain facetsof the occupational socialization process, specifically those facets that areincompatible with the organizational member’s self-concept. They can beviewed as safety valve mechanisms which usually only minimally interferewith a person’s occupational role performance yet allow her/him to main-tain a degree of personal authenticity while enacting an organizational role.


INDIVIDUALS’ RESPONSES TO ORGANIZATIONALSOCIALIZATION

As Hochschild’s account of the socialization of flight attendants shows,organizational members are not passive entities who automatically behavein ways that their socializing agents desire. The person’s personality, pastexperiences in organizations, social status, and values are some of the fac-tors that influence how he or she will respond to the process of organiza-tional socialization. Edgar Schein (1968) categorized three types ofreactions to socialization attempts:

1. Conformity is when the recruit accepts the values, norms, and philosophy thathe/she is being socialized into. The notion of the “organization man” depictsthis type of response to organizational socialization.

2. Rebellion constitutes an extremely negative response to the organizational so-cialization process. Here the person openly rejects the attempt to socialize himinto the organizational culture.

3. Creative individualism is a response whereby the individual accepts the funda-mental values and norms of the organization but substitutes peripheral ones withhis or her own. This does not constitute a major threat to the organization;indeed, it may be the source of positive changes. A person may not conform tothe organization’s dress codes or may make creative changes in the hours he orshe is assigned to work. If the person is viewed as a valuable resource by thecompany, the company leaders are apt to allow him or her to violate these andother kinds of marginal norms. There is a chance that in time the new modesof behavior may diffuse and become the norms. These categories should be seenas existing along a continuum. In most cases, complete conformity or total re-bellion do not occur. These categories are useful in classifying an organizationalmember’s response to socialization.

The relationship between the person who is in the process of being so-cialized into the organization and the organization itself should be viewedas dynamic and reciprocal. R. M. Steers (1984: 461) puts it well when heobserves:

Organizations typically attempt to exert—overtly or covertly—subtle pressures onemployees to shape them into the kinds of employees desired. This process is calledsocialization. Simultaneously, individuals continue to attempt to shape the workenvironment so it meets their own needs. This process is called individualism. Theinteraction of these two processes, operating continuously, creates the work placein which everyone works and lives.

While the major focus of this chapter is on how new members are so-cialized into organizations, we should be aware that by resisting certainfacets of the socialization process and by creatively modifying established


norms, structures, procedures, policies, and practices, individuals can re-socialize veteran organizational members and produce organizationalchange.

REFERENCES

Bouza, Anthony V. (1990). The police mystique. New York: Plenum Press.Cases expose problems with police culture (1997). USA Today, August 26, A13.Dunnette, M. D., R. D. Avery, and P. A. Banas (1973). Why do they leave? Per-

sonnel 50: 25–39.Feldman, Daniel Charles (1976). A contingency theory of socialization. Adminis-

trative Science Quarterly 21: 443–450.——— (1980). A socialization process that helps new recruits succeed. Personnel

57(2) (March–April): 11–23.——— (1981). The multiple socialization of organization members. Academy of

Management Review 6(2): 309–318.Frese, Michael (1982). Occupational socialization and psychological development:

An underemphasized research perspective in industrial psychology. Journalof Occupational Psychology 55: 209–224.

Gibson, J. L., J. M. Ivancevich, and J. H. Donnelly, Jr. (1988). Organizations.Plano, TX: Business Publications.

Goffman, Erving (1961). Encounters. Indianapolis, IN: Bobbs-Merrill.Hochschild, Arlie (1988). The managed heart: The commercialization of human

feeling. In Social Interaction, edited by Candace Clark and Howard Robboy,456–467. New York: St. Martin’s Press.

Johns, Gary (1988). Organizational behavior. Glenview, IL: Scott, Foresman.Jones, Gareth R. (1983). Psychological orientation and the process of organiza-

tional socialization: An interactionist perspective. Academy of ManagementReview 8(3): 464–474.

Kilmann, R. H., T. J. Covin et al. (eds.) (1985). Corporate transformation. SanFrancisco: Jossey-Bass.

Lewis, Meryl, Barry Z. Posner, and Gary N. Powell (1983). The availability andhelpfulness of socialization practices. Personnel Psychology 36: 857–866.

National Public Radio (NPR) (1998). Segment Broadcast, January 20.Ott, J. Steven (1989). The organizational culture perspective. Chicago: Dorsey

Press.Pacanowsky, M. E., and N. O’Donnel-Trujillo (1983). Organizational communi-

cations as cultural performances. Communications Monograph (June): 126–147.

Pascale, R. (1985). The paradox of corporate culture. California Management Re-view 27(2) (Winter): 26–41.

Police beating case reveals culture of brutality (1997). New York Times, August27, A22.

Porter, L. W., E. E. Lawler, and J. R. Hackman (1975). Behavior in organizations.New York: McGraw-Hill.

Reichers, Arnon E. (1987). An interactionist perspective on newcomer socializationrates. Academy of Management Review 12(2): 278–287.


Salzmann, M. L. (1985). In search of tomorrow’s excellent managers. ManagementReview 43 (April).

Sanders, Patricia, and John N. Yanouzas (1983). Socialization to learning. Trainingand Development Journal (July): 14–21.

Schein, Edgar (1968). Organizational psychology. Englewood Cliffs, NJ: PrenticeHall.

Serpico, Frank (1997). Setting the tone for police reform. New York Times, August30, 23.

Steers, R. M. (1984). Introduction to organizational behavior. Glenview, IL: Scott,Foresman.

Tierney, W. G. (1997). Organizational socialization in higher education. Journal ofHigher Education 68 (January–February): 1–13.

Van Maanen, John (1978). People processing: Strategies of organizational sociali-zation. Organizational Dynamics (Summer): 19–36.

Voigt, L., T. Thornton, L. Barrile, and J. Seamon (1994). Criminology and justice.New York: McGraw-Hill.

Wanous, J. P. (1980). Organizational entry: Recruitment, selection, and socializa-tion of newcomers. Reading, MA: Addison-Wesley.

Weiss, Howard M. (1978). Social learning of work values in organizations. Journalof Applied Psychology 63(6): 711–718.

Westley, W. (1970). Violence and the police. Cambridge, MA: MIT Press.

Chapter 9

Is Organizational Membership Bad for YourHealth? Phases of Burnout as Covariants of

Mental and Physical Well-Being

Robert T. Golembiewski

A long history of commentary urges that organizational life bends peopleout of shape, and may even make them crazy, in the vernacular. This lit-erature has roots deep in early industrialization, as in detailing the mo-mentous alleged movement from a comfy gemeinschaft to an often heartlessgesellschaft (e.g., Tonnies, 1887). The genre also contains warnings aboutcookie-cutter “organization men” emerging from the presses of personalitytesting and behavioral science (e.g., Whyte, 1956; Baritz, 1960). Otherthoughtful observers worry that our increasingly collective lives suck mostof the true meaning and value out of the only life worth living, so muchso that “our most successful social invention” has become an “organiza-tional imperative” that leaves little room for individuals directed by theirown needs and consciences (Scott and Hart, 1979).

In the pessimistic view, organizations increasingly put people into re-pressive service, while the ideal proposes that people create organizationsto increase individual freedom. This essay stands in the latter tradition,after turning attention to a long-standing question: Is organizational mem-bership bad for one’s health? Not wishing to feign suspense, the workinganswer here is: Well, yes and no.

To explain, many organizations apparently do much mischief to theirmembers; but some organizations and especially their sub-units seem to dovery much better than others in the central particular of member mentaland physical well-being. Since organizations seem destined to play a largerole in all of our futures, native cunning encourages learning a bit moreabout both the bad as well as the more tolerable effects. Only in this waywill we learn about organizational antecedents that will help us accentuate


the positives and eliminate the negatives in the organizational lives thatvirtually all of us live.

This much having been said, I hasten to retreat a bit. The present per-spective on organization life squints at complex realities through a keyhole,as it were, if apparently a strategic keyhole. The focus here is on psycho-logical burnout in organizations and, while it permits seeing some thingsclearly, it certainly narrows the field of vision. But so be it. The tradeoffshave their attractions as well as limitations.

This chapter moves through three emphases in illustrating what the pres-ent conceptual keyhole facilitates seeing. Initially, attention goes to describ-ing the phase model of burnout. Later, the focus shifts to several of thehealth-related covariants of the phases. In short, what features tend to co-exist with burnout? Then, this chapter reviews what we know about thespecific organization features that are associated with low levels of burnout,and also what we know about other features that seem to propel largeproportions of organization members into advanced phases of burnout.

An important bit of value-added characterizes this chapter which con-stituted research-in-progress when the first edition of Modern Organiza-tions was being produced. It is now possible to report with some confidencethat a growing panel of studies basically extends the scope of the general-izations below to a worldwide perspective. The original version of the chap-ter concentrated on North American studies.

SKETCHING THE PHASE MODEL OF BURNOUT

About a decade of intensive work permits substantial if bounded con-fidence about the usefulness of a “phase model of burnout” (e.g., Golem-biewski, Munzenrider, and Stevenson, 1986; Golembiewski and Munzen-rider, 1988; Golembiewski, Boudreau, Munzenrider, and Luo, 1996).Three major emphases develop aspects of the model and sketch several ofits major features. In turn, discussion introduces the operational definitionof the phase model, provides a summary of numerous tests of its validity,and, finally, emphasizes the incidence as well as the persistence of phasesassigned to individuals. All of this provides necessary perspective for mov-ing toward a working answer to the question: Is organizational membershipdangerous to your health?

Operational Definition of Phases

The present way of estimating experienced stress differs from most usedto estimate stress or strain, for the latter focus on the number and severityof stressors at work. In sharp opposition, the phase model focuses on theways individuals experience whatever stressors they encounter.

This approach builds on two common observations. Individuals differ

Phases of Burnout 233

widely—not only among themselves at any one time, but also at differentpoints in time within an individual’s life—as to the level of stressors ac-ceptable to them. Moreover, some level of stressors can be energizing andmotivating, while a higher level may be herniating. How to take these twoobservations into account? Since an incidence and intensity of stressorscomfortable for one person may be distressing for another individual, thephase model focuses on the question: Are the stressors one now experiencestoo much, whatever their number and severity?

More specifically, the phase model rests upon the three sub-domains ofthe Maslach Burnout Inventory, or MBI (Maslach and Jackson, 1982,1986), and in several significant particulars the model also transcends thosesub-domains and the items used to estimate them. Some details will help.Basically, in effect, a simple paper-and-pencil instrument asks respondents:How are things at work, relative to your comfortable coping attitudes andskills? And the responses, provided in perhaps five to ten minutes, permitcharacterizing each individual on three sub-domains of burnout. These sub-domains include:

• Depersonalization, where high scores indicate a marked tendency to think ofothers as things or objects, a tendency to distance self from others;

• Personal Accomplishment (Reversed), where low scores indicate a person whoreports doing well on a worthwhile job; and

• Emotional Exhaustion, where high scores indicate people who are at or beyondtheir comfortable coping limits, who are near the “end of the rope.”

The phase model builds on these three sub-domains, and assumes theyare progressively virulent in the order given. Hi or Low assignments foreach individual on each sub-domain are made in terms of norms derivedfrom a large population of employees under considerable stress (Golem-biewski and Munzenrider, 1988: 27–28). The point is significant becauseother users of the phase model have relied on other cutting-points, such asthe various medians on the three MBI sub-domains from their own popu-lations (e.g., Burke, Shearer, and Deszca, 1984). This may prove the correctconvention, but it differs markedly from the present reliance on three normsthat remain constant in our phase research.

Interpretively, high Emotional Exhaustion contributes more to burnoutthan high Personal Accomplishment (Reversed). Moreover, both are morevirulent than high Depersonalization.

These simple operations permit developing an eight-phase of progres-sively-virulent burnout which takes the form in Figure 9.1.

Validity of the Phases

The phase model does not propose that any individual will proceed inorder through each phase to highest burnout—that is, from Phase I to VIII.


Figure 9.1Phase Model of Burnout

Indeed, that is psychologically awkward, as consideration of Figure 9.1 anda possible II → III movement illustrates. Rather, the model proposes onlythat the phases are differentially virulent in the order given, however andwhenever one arrives at a particular phase. Directly, those in Phase I shouldexhibit fewer deficits or deficiencies than those in Phase II, who in turnshould be better off than those in Phase III, and so on.

Beyond this important elemental stage, onset in the phase model can beeither chronic or acute, following conventional usage. The single chronicflightpath through the phases is I → II → IV → VIII, which reflects anaccumulation of three sets of stressors experienced in a specific order. Thus,High Depersonalization deprives an individual of important information,which over time can impede performance on task, and these two then caneventuate in a level of strain beyond the individual’s comfortable copingcapabilities reasonably labelled emotional exhaustion.

In contrast, acute onset can take several flightpaths. Thus the suddendeath of a loved one might precipitate a I or a II into a V or VI, and asevere grieving process might then result in VII and VIII status. These acuteflightpaths can vary substantially, however, depending upon the stimulatingtrauma (e.g., a new boss, a corporate merger, a poor performance ap-praisal, and so on).

Extensive analyses support the view that the phases are associated withworsening degrees of many covariants. Overall, as the phases progress I →VIII, numerous populations report such convariants, and many similar ones(Golembiewski et al., 1996):

• less satisfaction with work

• higher turnover

• lower self-esteem

• greater physical symptoms

• lower performance appraisals

• greater negative affects such as hostility, anxiety, and depression

• greater charges against medical insurance


Typically, such variables show a distinct stepladder effect, phase byphase. That is, nonrandom variation does exist somewhere in the distri-bution of scores on each variable arrayed by the phases. In addition, mostof the paired-comparisons on each variable fall in a consistent and expecteddirection—that is, job satisfaction is greater for Is than IIs, greater for IIsthan IIIs, and so on. This often happens in 80 to 90 percent of all cases,or more. Paramountly, the paired-comparisons not only usually are in theexpected direction, but the differences also often are large enough to attainstatistical significance. The observed proportion of pairs showing statisti-cally significant differences in the expected direction approximates 20 to60 percent of all comparisons, whereas 5 percent might be expected bychance.

So the stepladder effect dominates. Virtually all variables studied so farworsen as the phases progress. This sounds bold, but it merely describeswhat exists. Only the exceptional variable in the 300-plus studied thus farfails to reflect such a pattern, in fact. The research catalog contains a fewarchival or “hard” variables, but self-reports dominate.

As noted in the earliest parts of this chapter, the generalizations aboveapply substantially to both North American and worldwide settings. Table9.1 presents a very important set of comparative particulars. To explain,the basic research strategy to test the validity/reliability of phase assign-ments relies on concurrent validity. Numerous “marker variables” (i.e.,job involvement, job tension, job satisfaction, and so on) should covarywith the phases for theoretical and practical reasons. Well, do thesemarker variables covary with the phases in expected ways? Table 9.1 im-plies a robust answer: Overall, almost always. In thirteen U.S. workset-tings, to interpret Table 9.1, marker variables isolate statisticallysignificant variance in the cases of over nine of every ten marker variablesrun against the phases. In addition, over 82 percent of all paired-comparisons are in the expected direction, and over 40 percent of thosepairs also achieve statistical significance as well as fall in the expected di-rection. A bit over 17 percent of the paired-comparisons fall in a contrarydirection, but less than one-half percent of them achieve significance. Theresults are quite comparable for fifteen global worksettings, as Row B inTable 9.1 shows.

Incidence and Persistence of the Phases

The consistent pattern of covariation of the phases implies enough badnews, but the optimist might hope that one or both of two conditions typifyburnout:

• not very many people find themselves in advanced phases at any point in time;and/or

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• even if substantial numbers of people do find themselves in advanced phases ofburnout at any point in time, they do not stay there very long.

These hopeful conditions do not seem to characterize burnout, however.The news seems bad on both counts. The presently available data are notideal, however. So one can entertain some hope that better data will changeone or both estimates, but not much hope seems appropriate.

INCIDENCE OF THE PHASES

Ideally, an estimate of how many people fall in which phase assignmentswould come from a scientific survey of the working population of eachnation or other large subdivision. That costly estimate does not exist, andwhat follows reflects studies of convenience populations that might not berepresentative.

However, data come from about 100 public-sector and business organ-izations, with over 31,000 individual respondents worldwide, and thosedata support several significant conclusions. First, as Table 9.2 shows, theoverall distribution of phase assignments is bimodal and, on average, con-tains a substantial proportion of cases in the two clusters of extreme phases.The distribution in Table 9.2, Row A reflects many convenience popula-tions from North America, and “better” organizations may be over-represented. In any case, the North American proportions have remainedbasically stable as the total tested population has grown—from 5,000 casesto nearly 9,000 cases (Golembiewski et al., 1986: 132–133), then to over12,000 cases (Golembiewski and Munzenrider, 1988: 115–118), and nowto over 24,000 cases (Golembiewski et al., 1996).

Second, this time with reference to Row B in Table 2, the news aboutincidence is even worse for about a score of global worksites (Japan, China,Taiwan, Belarus, Poland, Ghana, Romania, and so on). For technical rea-sons beyond this chapter, burnout phases measure much the same domainscross-culturally (Golembiewski et al., 1996: 42–48) but it appears that theaverage incidence of advanced phases is greater in global than North Amer-ican settings.

Third, again with reference to Table 9.2, but now to Row C, the mini-mum proportion of employees in a large organization ever observed inPhases VI–VIII is higher than most observers will find comfortable, or evenbearable. Twenty-two percent represents the smallest proportion of casesfrom any substantial organization classified in the three most advancedphases, with “substantial” here meaning 100 or more employees. This“lowest” distribution seems “high” enough, given the sorry catalog of co-variants associated with the advanced phases. The largest proportion inPhases VI–VIII approximates 80 percent (Golembiewski and Boudreau,1989)! No doubt that can be considered unacceptably “high.”

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Fourth, since the best distribution is pretty bad, it is not easy to labelthe worst case depicted in Row D, Table 9.2. The setting is a global one—acomprehensive healthcare center in a physically demanding location. Torisk a sardonic pun, there is plenty of healing to do in that hospital! Butwhether the label is “best” or “worst,” these incidence of the phases, alongwith the dour covariants of advanced phases, combine to imply the highcosts of burnout, both to individuals and their employing organizations.

What accounts for the extreme distribution Row D shows? No doubt,much remains to be learned. But the hospital population in Row D comesfrom a culture that most observers see as encouraging substantial degreesof “politeness” and social distancing from others. In short, depersonaliza-tion is high at this site and, hence, there are few people in Phase I. More-over, chronic onset seems to have propelled employees to outlying phases—I → II → IV → VIII, for readers who recall the earlier discussion. In ad-dition, the Row D worksite seems to reflect an orientation to working veryhard and (especially) very long hours. To suggest the point, the hospital isin a country whose culture has five specific words to describe how one cankill oneself by working unwisely (Golembiewski et al., 1990).

Overall, to make explicit a useful generalization, organizations are notmonolithic when it comes to burnout phases. Typically, they contain sub-stantial representations of both those classified as least burned-out as wellas most burned-out. The key factor seems to be the dynamics in the severalgroups of first-reports of which organizations are comprised. A presidentand her/his gaggle of vice-presidents constitutes a group of first-reports,and so does the collection encompassing a first-line supervisor and the op-erators reporting to that person. Organizations may be viewed as collec-tions of such groups of first-reports, following Likert’s “linking pin”notion.

In short, groups of first-reports seem to have a strong affinity for extremescorers on burnout—either I–IIIs or VI–VIIIs, but not both, cluster ingroups of first-reports. Mixed collections of phases are not common (e.g.,Golembiewski, 1983; Rountree, 1984).

PERSISTENCE OF THE PHASES

Most available data about the phases come from snapshot research de-signs or, to put the same point in another way, longitudinal designs arerelatively rare. This limits the confidence that can be placed in interpreta-tions of existing studies.

However, the persistence of burnout seems substantial, even given thisnoteworthy warning. Table 9.3 summarizes the findings from several stud-ies which gathered data at intervals of up to one or two years (Golem-biewski et al., 1996: 173–177).

Overall, the results provide little support for the proposition that burnout


Table 9.3Summary, Persistence of Phases, in 11 Worksettings (N � 1,411)

tends to come and go. Quite the opposite, in fact. The persistence is markedon measures A through D in Table 9.3, and little stability is expected onmeasure E, consistent with earlier research (e.g., Golembiewski and Mun-zenrider, 1988: 126), as well as with theoretical features that see phases IVand V as brief transitional ones in chronic and acute onset, respectively(Golembiewski et al., 1996: esp. 173–177).

The overall findings in Table 9.3 no doubt understate persistence, if any-thing, as three points imply. At the very least, Table 9.3 estimates certainlycontain some measurement error, with the consequence that some individ-uals who really had the same or similar phase assignments in T1 and T2

appear to have changed. In addition, especially over longer periods, some“natural change” should be expected—not only in the case of acute onset,but also when conscious change is planned. Recall that Table 9.3 encom-passes observational intervals up to two years. Finally, if only for presentpurposes, Table 9.3 does not discount estimates A through D for the greaterinstabilities of Phases IV and V. So these four estimates of persistence seemconservative.

HEALTH-RELATED COVARIANTS OF THE PHASES

Let us get more specific about how organizations can affect the healthof their members, for good or ill. Two foci provide illustration of a strongregularity in burnout research: health tends to go down as burnout in-creases (e.g., Burke et al. 1988; Cherniss, 1980: 15–16; Freudenberger,1980; Maslach and Jackson, 1981: 99–101). The present illustrations ofthis pervasive general conclusion relate to a batch of physical symptoms,and then to a measure of mental health.

Physical Symptoms and the Phases

Does a widely used set of nineteen symptoms covary with the phases?Both simple and bivariate analysis, as well as factor analysis, suggest direct


and consistent associations (e.g., Golembiewski et al., 1986). The results ofone analysis illustrate support for the point, and they relate to a TotalSymptoms score as well as to scores on four factors generated by factoranalysis. The four scores include the following symptoms, which come froma standard list (Quinn and Shepard, 1979):

• Factor I: General Enervation and Agitation

—pains in stomach

—headaches

—coughing or heavy chest colds

—becoming very tired in a short period of time (fatigued)

—finding it difficult to get up in the morning

—hands sweating or they feel damp and clammy

—feeling nervous or fidgety and tense

—being completely worn out at the end of the day

—poor appetite

• Factor II: Cardio-Vascular Complaints

—pains in heart

—tightness or heaviness in chest

—trouble breathing or shortness of breath

—feeling heart pounding or racing

• Factor III: Non-Cardiac Pains

—cramps in legs

—stiffness, swelling, or aching in leg muscles and joints

—swollen ankles

—pains in back or spine

• Factor IV: Sleeplessness

—having trouble getting to sleep

—having trouble staying asleep

It would be tedious to provide data about the association of all estimatesof physical symptoms as arrayed by the phases. However, Table 9.4 illus-trates the pattern for Total Symptoms only. Higher scores on Total Symp-toms reflect poorer health, and the present distribution is almost certainlynot random. Table 9.5 provides a convenient summary of the results of thefull tests of the association of the five measures of physical symptoms andthe phases in a large population (N � 1,535). The summary supports thestepladder effect described earlier, as three points establish. First, exceptfor Factor IV, over 90 percent of the cases show average symptoms increas-

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243


ing, phase by phase, as is expected. For the single exception, over 70 per-cent of the paired-comparisons fall in the expected direction.

Second, large proportions of the paired-comparisons are statistically sig-nificant while they also meet expectations about directionality. In two cases,these proportions surpass 60 percent; the overall average is 42.9 percent;and in no case is the estimate lower than 17.9 percent. Chance wouldgenerate differences in paired-comparisons that attain statistical significancein 5 percent of the cases.

Third, except in one case, less than 10 percent of the paired-comparisonsfall in a direction contrary to expectations. Even in that one case, less thana third of the comparisons violate expectations. The overall average doesnot quite reach 10 percent of the paired-comparisons falling in a contrarydirection.

Fourth, not even a single paired-comparison in a contrary directionachieves p � .05.

In sum, the phases of burnout covary regularly and robustly with thephases, but the conclusion must be tempered by an elemental fact. As inthe present case, most research uses self-reports of physical health and, sofar, physiological and objective measures show inconsistent and usuallysmaller associations of stress or burnout with health-related estimates(Steffy and Jones, 1988). However, early efforts to relate the phase modelto physiologic measures show consistent but modest associations (e.g., Go-lembiewski et al., 1996: 108–128).

Details will differ (e.g., the marker variables estimating health) but muchthe same picture holds for North American as well as global worksettings(e.g., Golembiewski et al., 1996: 88–92). Globally, that is, health estimatesworsen as the phases progress I → VIII.

Mental Health and the Phases

Evidence for the association of mental health and the phases is less solidthan for physical health, though the presumptive case seems strong. Con-sistently, for example, Deckard (1985) discovers substantial covariation be-tween the phases and several affective states relevant to mental health—depression, anxiety, and so on. Relatedly, clinically oriented observers (e.g.,Freudenberger, 1980) agree on the essential point that overloads of expe-rienced stressors at work “can make you crazy” in a variety of ways.

So far, the direct linkage between mental status and the phases has notbeen established definitively, but early work is consistent with burnout the-ory as well as the phase model (Golembiewski et al., 1996: 91–104). Thiswork relies on the General Health Questionnaire, or GHQ (Goldberg,1972), which permits a judgment about which respondents have mentalhealth symptoms that, if diagnosed, would attract clinical notice. As Gold-berg explains (1972: 1), setting aside those persons “with qualitative de-


Table 9.6“Cases” and “Normals” by Phases, in Percent (N � 47)

* chi-square � 50.87, p � .0000.** chi-square � 27.87, p � .001.

viations, such as organic mental disorders and the functional psychoses,”he sought to “devise a self-administered questionnaire that would identifyrespondents with a nonpsychotic psychiatric illness, by assessing the sever-ity of their psychiatric disturbance.” Goldberg’s definition clearly includesthe various neuroses and phobias. Conceptually, the GHQ’s focus is on thecurrent mental state, “the way the respondent has felt, thought and behavedin the time leading up to the occasion on which [the questionnaire] is com-pleted” (Goldberg, 1972: 2). Looked at negatively, then, the GHQ attemptsneither to measure “long-standing attributes of the personality,” nor doesit propose to assess the “liability to fall ill in the future” (Goldberg, 1972:3).

The GHQ has several noteworthy features, both practical and concep-tual. Most relevant for present purposes, the GHQ’s major attraction is theclaim that scores above a cutting-point identify individuals presentingsymptoms that on individual diagnosis would merit clinical interventions.For the thirty-item version, the GHQ’s developer estimates that the mostserviceable cutting-point is between 3 and 4, when (0, 1) scoring is utilizedon each item to indicate the absence/presence of a presenting symptom.Those with GHQ scores of 4 or greater are considered “cases,” and othersare “normals.” Goldberg estimates less than a 20 percent rate of misclas-sification.

Table 9.6 reflects the expected pattern between GHQ and the phases,and its two examples characterize numerous other studies. Overall, the per-centages of “cases” in different populations can differ, but the slope oftheir occurrence when charted by the phases seems general, if not universal.As the phases advance I → VIII, so do the proportions of respondentsclassified as “cases.”

Again, much the same pattern holds for mental health and the phases,in North America as well as globally (Golembiewski et al., 1996: 103–108).


ORGANIZATIONAL FEATURES AND THE PHASES

Now, let us attempt to close the loop, and not tentatively at that. Theevidence illustrated above suggests that advanced phases of burnout seemdefinitely bad for the health of organization members. But do specific clus-ters of organization features induce the phases? If this is the case in sub-stantial degree, one can then propose that organizational membership canbe good or bad for one’s health, depending upon whether or not a specificorganization’s features tend to induce more-advanced or less-advancedphases of burnout.

So are organization features directly linked to the phases?No definitive answer is appropriate today, but the growing balance of

evidence increasingly supports an affirmative answer. Thus, the phasemodel is conceptually imbedded in an environmental context (Golem-biewski and Munzenrider, 1988: esp. 103–113), and the items used tomake phase assignments are rooted in relationships at work. Moreover, asnoted, the phases clearly covary with many organizational features—jobsatisfaction, tension at work, job involvement, participation in decisions atwork, and so on. See also Figure 9.2. Perhaps, paramountly, changes inthe distribution of the phases have been made by consciously changingspecific organizational relationships and policies (Golembiewski, Hilles,and Daly, 1987).

On the other hand, significant issues remain only partially explored, orneglected altogether. For example, it seems that personality factors accountfor little of what the phase model measures (e.g., Golembiewski et al., 1986;Golembiewski and Kim, 1989), but much more clinically oriented and lon-gitudinal investigations are required to test this prevailing impression,which derives largely from opinion surveys that are administered at a singlepoint in time only. Moreover, the heavy work of establishing the causaldirection of the associations between worksite features and burnout re-mains largely undone (e.g., Rountree, Golembiewski, and Deckard, 1989).

However, if one were to make the most educated estimate possible to-day—and all managers have to strive to make just such estimates—sub-stantial confidence seems appropriate when responding to the key question:What organizational features seem to induce advance levels of burnout?

Figure 9.2 provides a convenient summary of some of the things weknow with relative certainty about answering this key question. The focusthere is on those organizational features that are substantially within thepower of managements and employees to change, as well as on those fea-tures having a reasonable degree of support from the literature on the phasemodel (e.g., Golembiewski and Munzenrider, 1988; Golembiewski, 1990:esp. 156–201).

This summary of concurrent validation of the phase model reinforcesearlier work, but it is hardly complete. That is, the covariants of both high


Figure 9.2Organizational Features and the Phase Model

Organizational Features Associatedwith Less Advanced Phases

Organizational Features Associatedwith More Advanced Phases

and low burnout in Figure 9.2 have a familiar ring, consistent as they arewith the bulk of work of the past several decades in Organization Behaviorand Organization Development, or OD (e.g., Golembiewski, 1979; 1990).For example, readers of Likert (e.g., 1977) as well as of numerous othersof his genre, will recognize the multiple reinforcement of this earlier workreflected in Figure 9.2. Similarly, the emphasis above on groups of first-reports as the critical context for burnout also coincides with the decades-long emphasis in training and development on the “intact work group” ascritical in both theory and practice (e.g., Golembiewski, 1983; Rountree,1984).

At the same time, the existing research on the phase model of burnoutis limited in some ways. All research derives from convenience populations,to begin, which implies a basic question about representativeness of results,despite mounting evidence of concurrent validity. In addition, research with“objective data” is not common. Specifically, designs involving the phaseswith objectively related performance or productivity are rare in the litera-


ture because opportunities to do a full analysis are so limited in practice(e.g., Golembiewski et al., 1986: 93–103). Finally, research on the phasemodel shows a weak emphasis on macro-organization as well as contextualfeatures—structural patterns, technologies, markets, economic conditions,and so on. A fuller-scale theory of burnout must fill such gaps.

DISCUSSION

Given qualifications and indeterminacies, then, the managerial marinernavigating the seas of stress and employee health need not proceed by-guess-and-by-golly. Certainly, the situation is no analog of the interconti-nental ballistic missile, which can be targeted to some small bull’s eyethousands of miles down range. On the other hand, neither is today’s man-ager a white-knuckled explorer worrying about dropping off the edge ofthe organizational earth.

Less fancifully, real progress has been made by research on the phasemodel in three basic senses. Thus, we have available a relatively reliableand valid tool for assessing the degree of burnout in systems of all sizes—quickly and economically.

Moreover, the phase model and its covariants seem to apply broadly,not only in different organizations but in all global settings so far investi-gated. Of course, this applicability reinforces the phase model, and so dothe broad attempts to replicate our present understandings.

Significantly, also, we are some piece down the road in learning whatcan be done to ameliorate burnout, and even to prevent it. The case forsubstantial success rates in preventing burnout has been made elsewhere,in detail (e.g., Golembiewski et al., 1996: esp. 222–228). The ameliorationof burnout, once advanced, presents more difficult challenges—in principle,and for detailed reasons developed elsewhere which are beyond the presentscope (Golembiewski and Munzenrider, 1988: esp. 108–221). But a realstart has been made even on the difficult task of ameliorating advancedburnout.

These features reflect the optimistic news concerning organizations andemployee health.

At the same the time, the news has a dour character. Directly, specificmanagerial orientations seem directly related to the physical and emotionalhealth of employees, for good or ill. This dramatically raises the ante forconstructive action-taking, in short, by those who determine or powerfullyinfluence these managerial orientations. Hence the question now becomes:Will organizations do more to decrease the probability that membership inthem will be bad for your health?

REFERENCES

Baritz, L. (1960). The servants of power. Middletown, CT: Wesleyan UniversityPress.


Burke, R., and E. Greenglass (1988). A longitudinal study of progressive burnout.Working paper.

Burke, R., J. Shearer and G. Deszca (1984). Burnout among men and women inpolice work. Journal of Health and Human Resources Administration 7:249–263.

Cherniss, G. (1980). Staff burnout: Job stress in the human services. Beverly Hills,CA: Sage.

Deckard, G. J. (1985). Work, stress, mood and ecological dysfunction in health andsocial services settings. Unpublished doctoral dissertation, University of Mis-souri, Columbia.

Freudenberger, H. J. (1980). Burn-out: The high cost of high achievement. GardenCity, NY: Anchor Press.

Goldberg, D. P. (1972). The detection of psychiatric illness by questionnaire. Lon-don: Oxford University Press.

Golembiewski, R. T. (1979). Approaches to planned change. 2 vols. New York:Marcel Dekker.

——— (1983). The distribution of burnout among work groups. In Proceedings,edited by D. D. Van Fleet, 158–163. Annual Meeting of the SouthwesternDivision, Academy of Management, Houston, TX.

——— (1984). Organizational and policy implications of a phase model of burn-out. In Organizational policy and development, edited by L. R. Moise, 135–147. Louisville, KY: Center for Continuing Studies, University of Louisville.

——— (1990). Ironies in organizational development. New Brunswick, NJ: Trans-action Books.

Golembiewski, R. T., and R. Boudreau (1989). Burnout and stress in American,Canadian, and Japanese work settings: Nomothetic and ideographic per-spectives. Kaihatsu Ronshu: A Journal of Development Policy Studies 44:53–77.

Golembiewski, R. T., R. Boudreau, R. F. Munzenrider, and H. Luo (1996). Phasesof burnout. Greenwich, CT: JAI Press.

Golembiewski, R. T., R. Hilles, and R. Daly (1987). Some effects of multiple ODinterventions on burnout and worksite features. Journal of Applied Behav-ioral Science 23: 295–314.

Golembiewski, R. T., and B-S. Kim (1989). Self-esteem and phases of burnout.Organization Development Journal 7: 51–58.

Golembiewski, R. T., and R. F. Munzenrider (1984a). Active and passive reactionsto psychological burnout. Journal of Health and Human Resources Admin-istration, 7: 264–289.

——— (1984b). Phases of psychological burnout and organizational covariants: Areplication using norms from a large population. Journal of Health and Hu-man Resources Administration 8: 290–323.

——— (1988). Phases of burnout. New York: Praeger.Golembiewski, R. T., R. F. Munzenrider, and J. G. Stevenson (1986). Stress in or-

ganizations. New York: Praeger.Golembiewski, R. T. et al. (1990). Two aspects of burnout in cross-cultural settings:

Are the phase model and its underlying sub-domains generic? Paper preparedfor delivery at the Annual Meeting, International Association of AppliedPsychologists, Kyoto, Japan, August 22–26.


Likert, R. (1977). Past and future perspectives on system 4. Paper presented at theAnnual Meeting of the Academy of Management, Orlando, FL.

Maslach, C., and S. E. Jackson (1981). The measurement of experienced burnout.Journal of Occupational Behavior 2: 99–113.

——— (1982, 1986). Maslach burnout inventory. Palo Alto, CA: Consulting Psy-chologists Press.

Quinn, R. P., and L. J. Shepard (1979). The 1972–73 quality of employment survey.Ann Arbor: Survey Research Center, University of Michigan.

Rountree, B. H. (1984). Psychological burnout in task groups. Journal of Healthand Human Resources Administration 7: 235–248.

Rountree, B. H., R. T. Golembiewski, and G. J. Deckard (1989). A causal pathanalysis of burnout and agitation. Journal of Health and Human ResourcesAdministration 12: 95–111.

Russell, J. A. (1980). A circumplex model of affect. Journal of Personality andSocial Psychology 39: 1161–1178.

Scott, W. G., and D. K. Hart (1979). Organizational America. Boston: HoughtonMifflin.

Steffy, B. D., and J. W. Jones (1988). Workplace stress and indicators of coronary-disease risk. Academy of Management Journal 31: 688–698.

Tonnies, F. (1887) Gemeinschaft und gesellschaft. Leipzig: Fues’ Verlag.White, J. K., and R. A. Ruh (1973). Effects of personal values on the relationships

between participation and job attitudes. Administrative Science Quarterly18: 506–514.

Whyte, W. H., Jr. (1956). The organization man. Garden City, NY: Anchor Books.

Chapter 10

God, Science, and AdministrativeTheory: An Unfinished Revolution

Frederick C. Thayer

The pronouncements of a Supreme Being or Her equivalent (“God’sWord”) and, in modern times, Science (“Scientific Law”), sometimes sep-arately and sometimes together, are the two sources of knowledge that havelong been used to legitimize the authority of priests, rulers, and managers.In principle, these authority figures know what their subordinates do notknow, what those subordinates should do, how well or how poorly thosesubordinates have performed, and how those subordinates should be re-warded or punished for their performance. If Mohammed, Jesus, Buddha,and Confucius have acquired long-term acceptance as the originators ortransmitters of legitimate knowledge, countless Scientists have contributedto the body of “Scientific law” that has become the basis for secular au-thority. Especially in the Modern West, Science mounted an intellectualchallenge to the legitimacy of “God’s Word” and top-down authority ingeneral, but has been unable to make its arguments powerful enough toreplace the authority structures that remain the basic design of the era ofCivilization.

As a philosophy of knowledge, and action as well, Science has inventedand expanded what is arguably the greatest contribution of the modernWest—the principle that all knowledge is uncertain. Nobody can know forsure, that is to say, if any decision will achieve its desired objective, theeveryday managerial version of the classic cause-effect chain of the Scientificenterprise. The Scientist, and the manager, can only assess “possibilities”and “probabilities” that their experiments and decisions will “work.” NoScientist and no manager, in other words, can know enough to exerciseunilateral authority over those who are the subjects of experimental Sci-ence, or the subordinates of designated managers. Scientific principles also


provide that no Scientist should accept the truth claims of any other Sci-entist without carefully studying or, if at all possible, testing those truthclaims.

Even though Science did not and does not now claim that “Scientificlaw” justifies top-down authority, the uncertain knowledge that Scienceproduces is in fact widely used to justify such authority. “Competent” man-agers feel they must pretend they know what they are doing when theyroutinely reward and punish underlings. Yet, according to Science itself,they cannot possibly know. This fundamental contradiction is given littleattention in the contemporary literature streams of philosophy, administra-tion, and politics, from writers who declare their allegiance to Scientificmethod, but blame government and nongovernment “leaders” for nothaving known what they could not possibly have known.

The principle of uncertainty is not sufficient of itself to distinguish Sci-entific law from God’s Word and its guiding principle of absolute certainty.Initial appearances to the contrary, the principle does not at all assume thata decision maker who obeys God’s instructions and imposes them uponsubordinates can know what will happen. The decision maker need onlybelieve that if God’s instructions are faithfully obeyed, any outcome willbe God’s decision. Only God, that is to say, can know in advance theoutcome of any decision. To the ordinary mortals who make and obeydecisions, outcomes remain uncertain. The principle of certainty, therefore,applies only to the requirement to obey God’s Word and to the twin as-sumptions that God’s Word must be correct and that no “new knowledge”has been produced since God’s Word first appeared on Earth. By definition,the principle relieves those in authority from trying to assess in advancethe probability that a decision will “work,” because God, not decisionmakers, is in control. Understandably, the principle encourages rigid au-thoritarianism because those who question any decision can be consideredblasphemous.

As one of several major “revolutions” that originated in the West, Sci-ence quickly learned that it could not implement its basic principle thattop-down authority is illegitimate. The other “revolutions” did notquestion the principle of authority, even though the explanations for those“revolutions” still give the appearances of rejecting authority. The Protes-tant Reformation appeared to reject the authority of priests, but not thedirect authority of God over male heads of families. “Democracy” providedfor the election of leaders, but granted them authority to make laws, issuecommands, and imprison or kill those who disobey. The “free market”appeared to provide for the dominance of “consumers” over producers,but not for the dominance of “workers” over producers, nor even for thedecent treatment of those “workers.” To this day, “workers” and “con-sumers” are considered as different groups, even if most individuals must“work” before they can afford to “consume.”

God, Science, and Administrative Theory 253

The use of Science’s uncertain knowledge to legitimize top-down au-thority, of course, thoroughly corrupts the principles of Science. Leadersfind it much easier to rely upon God’s Word when using the products ofScience. It is comforting to surrender responsibility to a Supreme Being,especially one who authorizes the use of weapons of mass destruction (re-ligions often preach “love,” but only for loyal followers, not for membersof other religions). Science, moreover, cannot offer “paradise” for thosekilled in wars, “reincarnation,” or “eternal life,” promises that politicianscannot match. To those comforted by faith, the absence of solid evidenceto support such promises is meaningless. The contrasts between God’sWord and Scientific Laws can be highlighted by examples from everydayobservation and contemporary intellectual discourse.

In recent years, self-designated “religious” broadcasters have come tooccupy increasing numbers of cable television channels. These broadcastersconstantly “preach” their versions of God’s Word, but give no indicationat all that their pronouncements can, should, or will be opened to questionsabout the legitimacy of those pronouncements, just as religious sermonsare not followed by question periods. Scientists, conversely, generally ac-knowledge that knowledge creation must, by definition, be an endless proc-ess of intense discussion, debate, and conflict resolution. A second exampleis the current attack by “postmodernists” on what they regard as the fail-ures of “modernism,” an attack that I see as aimed at the wrong target.There is no question, as I suggested above, that the Religious, Scientific,Democratic, and Economic Revolutions of recent centuries have not broughtthe “freedoms” that those revolutions seemed to promise; but if, as I alsosuggest, God’s Word is historically associated with the origins of top-downauthority structures, it must be the case that those structures cannot bereplaced unless the basic principle of God’s Word—certainty—is rejected.

The purpose of this chapter, therefore, is not to outline in detail how theworld might respond to the challenge Science has presented to design newforms of decision making because top-down authority cannot be justified.Rather, the purpose is to highlight and clarify the contradictions, to suggestrevisions in the ways that organizational literature has looked at conceptsor categories of “legitimate authority,” and to indicate how Western con-cepts of “individualism,” “freedom,” and “human rights” are much nar-rower in scope than claims made in their behalf would indicate. Put moresimply, all such claims appear to be only false fronts for top-down au-thority rather than substitutes for it. A central point to keep in mind is thatany theory of knowledge must simultaneously serve as a theory of admin-istration because the theory must specify how humans should decide whatis true or what should become true by virtue of social action.

The following three sections of this chapter seek to flesh out three prop-ositions in support of the basic argument that the four Revolutions of theModern West, especially the Scientific Revolution, can be viewed as intel-


lectually valid but operationally inadequate attacks upon top-down au-thority and its religious and quasi-religious origins. The first of threesections argues that Scientists in laboratories and managers in their officesperform precisely the same functions. Ironically, the recognition that Sci-entists can perform experiments that affect human subjects has led to morestringent restrictions on the Scientific enterprise than are imposed uponordinary managers whose every decision amounts to an experiment thataffects their subordinates and many others as well.

The second section revisits Max Weber’s widely known “categories” ofauthority, which he labeled as “charismatic,” “traditional,” and “legal-rational.” It seems obvious in retrospect that the first two of these cate-gories, the “charismatic” and the “traditional,” really are a single categorythat Weber mistakenly divided. With a more valid recombination, the tworemaining categories—“charismatic-traditional” and legal-rational”—cor-respond to the categories of “God’s Word” and “Science” used herein. Ithen point out that such Western concepts as “freedom” and “individual-ism” are not attacks upon top-down authority but are more in the natureof disguised reinforcements of authoritarianism. The larger argument, ofcourse, is that top-down authority is the basic organizational design of allsocieties, regardless of alleged differences in culture and ideology.

ADMINISTRATION AND SCIENCE: IDENTICAL TWINS

The late Sir Kenneth Clark introduced the eighth program of his pow-erful television series “Civilisation” by referring to the “revolutionarychange in thought” that began in Holland in the mid-seventeenth century,“the revolution that replaced Divine Authority [with] experience, experi-ment and observation.”1 Using “The Light of Experience” as the title ofboth the program and the chapter in the book based on his series, he elab-orated as follows:

When one begins to ask the question “does it work?” or even “does it pay?” insteadof “Is it God’s will?” one gets a new set of answers . . . the practical social appli-cation of the philosophy that things must be made to work. . . . This could be doneeither by the accumulation of observed evidence or by mathematics; and of the two,mathematics offered to the men of the seventeenth century the more attractive so-lution. Mathematics became, in fact, the religion of the finest minds of the time . . .the means of expressing a belief that experience could be united with reason . . .[that] reality lay . . . in the realm of measurement and observation. And so beganthat division between scientific truth and the imagination. Between Descartes andNewton, western man created those instruments of thought that set him apart fromother peoples of the world . . . a belief in cause and effect. . . . Carried into thenineteenth century this new religion had behind it a body of doctrine without whichit could never have maintained its authority over the serious-minded. . . . The sacredbooks of Malthus and Ricardo were taken as gospels by the most serious and even


pious men who used them to justify actions they would never have thought ofdefending on human grounds.2

In the intellectually fragmented world of today, Sir Kenneth’s designatedfield might be Fine Arts or Western Culture. Indeed, he traced developmentsin Western European civilization from the Dark Ages to the present bylooking at their artistic and cultural manifestations. He did not explicitlyfocus on administration, organization, or management, but he could notavoid linking his observations with the concept of authority. To elaborateon a revolution in thought, he had to refer to the Divine, to the synonymousmeanings of “religion” and “authority,” and to Science and its new meth-ods of legitimizing knowledge. He declared, in effect, that every decisionwas an experiment to determine the validity of the hypothesis that thedecision would “work,” that Scientific observers could then record theirobservations of experimental results, and that the sum total of those ob-servations would become the record of experience, or knowledge. Evenunder presumably identical circumstances, the same experiment might notproduce identical outcomes. It probably did not occur to him that in men-tioning “cause and effect,” he was citing a concept that is central to bothScience and day-to-day administration. Any managerial decision (cause)seeks to achieve an effect (goal, end, objective, value), just as the Scientisthopes that an experiment will achieve hoped-for results, whether in a lab-oratory or as a bomb is dropped over Japan.

To be sure, Sir Kenneth did not specifically endorse Scientific law as alegitimate basis for administrative authority and, indeed, the subject is sel-dom discussed in the modern literature on organizations. Since he did notwholly reject the concept of authority itself, however, my translation of hisviews seems reasonable. The granting of authority, to repeat, must inevi-tably depend upon the belief or hope (especially in the case of parents) thatthose who legitimately exercise that authority possess the requisite knowl-edge to do so. The opposite view (those in authority do not need to knowanything at all) remains indefensible.

In order to understand why Science, even in its failed or incomplete state,remains a threat to the concept of legitimate authority, it is necessary tograsp the essentials of the shift in thinking from the certainty of God’sWord to the uncertainty of Science. In the premodern view, God was “thesource of all authority, the maker and master of all that there is, the authorof the world and its laws, both physical and moral. The authority of par-ents, or priests and kings, of teachers, and of executives [came] from God.Each [played] a role in the divine scheme of things.”3 The idea that Godis both “master” (executive) and “maker of laws” (legislator), not to men-tion final judge of human worth, remains powerful today, even in thosesocieties that claim to have separated church from state. A respected com-


mentator on ethics and morality in public life not only begins her majorwork with a passage from the Bible, but declares:

Issues such as whether to perjure oneself to protect a political relationship, orwhether to feign worship of a hated deity in order to escape persecution, were oncehotly debated among the theologians and philosophers. What remains of their de-bate may be fragmentary, at times unsystematic. But their writings are alive to usstill. . . . Some now look back with derision or impatience at the Stoics, the Muslimmystics, the Early Christian fathers, or the rabbis for their passionate pursuit ofminute distinctions. Nevertheless, we have much to learn from these traditions.Without such groundwork, larger distinctions often blur, as they now have.4

It has long been common for the leaders of both “religious” and “sec-ular” societies, especially the United States, to use God or moral standardsattributed to God to justify their decisions. President William McKinley,after much agonizing about entering into war with Spain, experienced arevelation that “there was nothing left to do but to . . . educate the Filipi-nos, and uplift and civilize them, and by God’s grace do the very best wecould by them, as our fellow-men for whom Christ also died.”5 PresidentFranklin D. Roosevelt vowed to defeat Japan in World War II with Divinehelp (“so help us God!”). When Filipino President Ferdinand Marcos de-clared martial law in 1972, he announced that God had used “signs” toinstruct him to do so.6 And when President Jimmy Carter met with anauditorium full of government employees in Washington, D.C., in 1977,he instructed them to “get married, if you are living in sin, and [if] youhave left your spouses, go back home. . . . I’m very serious about this.”7

The revolutionary change in thinking from certainty to uncertainty is lesswidely appreciated than it should be because Science is generally consideredapplicable only to those labeled “Scientists,” the experimenters who laborin obscurity except for occasional “breakthroughs.” The decision rules ofScience, however, are administrative principles, in that they prescribe howScientific communities should decide what is true: These principles include:

the requirement that the knowledge-claims of science be in principle capable of test(confirmation or disconfirmation, at the least indirectly and to some degree) on thepart of any person properly equipped with intelligence and the technical devices ofobservation and experimentation. The term intersubjective stresses the social natureof the scientific enterprise. If there be any “truths” that are accessible only to priv-ileged individuals, such as mystics or visionaries—that is, knowledge-claims whichby their very nature cannot independently be checked by anyone else—then such“truths” are not of the kind that we seek in science. The criterion of intersubjectivetestability thus delimits the scientific from the nonscientific activities of man. (em-phasis in original)8


Together with the widely accepted contemporary view that a knowledge-claim never can be proved beyond question, only disproved,9 the principleis that Scientists should accept only the evidence they have collected them-selves or have studied and accepted of their own volition. Superior-subordinate relationships among members of the Scientific community areinappropriate, and so are the “truths” proclaimed by religious figures. Theexisting knowledge is whatever has been agreed to by Scientists concerned.Research Scientists, of course, cannot adhere to their own basic principlesbecause some Scientists (“professors”) hold authority over those of lesserrank (“instructors” and, of course, “students”), but the Scientists at leastgive lip service to those principles.

Managers who exercise authority over other humans are also Scientists,and universities often offer programs in “Management Science.” Any man-agerial decision begins an experiment to test the hypothesis that the deci-sion will achieve the desired objective, the most standard “if-then”hypothesis imaginable.10 Managers, therefore, also are experimental Sci-entists whose laboratories include the organizations they manage, the mem-bers of those organizations, and anyone and anything else affected by theirdecisions. To whatever extent possible, these managers are expected to relyupon the accumulated observations of past experiments conducted undersimilar conditions, a body of judgments and experience about previouscause-effect relationships.11 Decisions reflect the hopes of managers thattheir assessments of “probabilities” will give a favorable answer to Sir Ken-neth’s question, “does it work?” No matter how “sophisticated” their anal-yses, managers can do no more than hope.

We are not accustomed to having political leaders and other managersannounce that their decisions are experiments, that those affected by thedecisions are experimental subjects, and that success is wholly problematic.Were they to do so, they might be accused of weakness, vacillation, andindecision. Yet the concept of strong and decisive leadership is out of stepwith the great contribution of Western Civilization—uncertainty. No lead-ers can possibly know they will win the wars they choose to enter, but theymust pretend that they do indeed know. This fundamental contradictionposes a problem for contemporary philosophers who are expected to de-fend the cultures within which they live but who must then wrestle withsuch intellectually intractable problems.

One oft-repeated solution is to distinguish between a form of authoritybased solely upon assigned position, and a second form of authority basedupon mastery of knowledge, but the explanations of how these forms ofauthority should function can become very twisted. It can be argued, forexample, that the “epistemic” authority of college professors is indeedbased upon knowledge, but that any teacher really “has authority only tothe extent that . . . students grant it . . . by acknowledging him as an au-thority for them.” Those with “performatory” authority, on the other


hand, should have the ability to command obedience by virtue of theirpositions.12 This seems invalid in both directions. Students whose gradesmay determine their futures, and who must take prescribed courses, are inno position to reject the authority of their teachers. “Performatory” au-thority, or authority without knowledge, is as empty a justification as ever.

In the premodern view, those in authority were assumed to know God’sWord. Yet the oft-repeated question, “Does God exist?” never has madesense. The appropriate question always has been, “Who speaks for God?”The answer to that question is a by-product of organizational design inwhich one human is considered a legitimate spokesperson for the SupremeBeing. As unsuitable as the answer might be, that premodern view wasmore internally consistent than the modern version that endorses the issuingof orders by those who know nothing at all.

The knowledge issue remains largely unexplored because it would bemuch too uncomfortable to confront. In addition to the untenable positionoutlined above, there is often a vague allusion to the alleged benefits of“democracy.” Sir Kenneth, for example, used a popular version of demo-cratic political theory in asserting that “to try to suppress opinion [knowl-edge claims] which one doesn’t share is much less profitable than to toleratethem.”13 This assertion ignores the fact that all versions of “democracy”have assumed from the beginning that citizens do not reach decisionsthrough voluntary agreement, and that political interaction is limited tomale heads of households, a belief resoundingly endorsed today by manyreligious leaders. Sir Kenneth also implies that individuals can be left to doas they please, despite laws or norms to the contrary. As I will later show,the reliance upon “individualism” is of little help.

Ironically, the modern view of uncertainty is not all that startling on acommon-sense basis. Who expects a president of the United States to knowwhat every member of the Cabinet is doing, let alone what every federalemployee does and should do? This is not enough, unfortunately, to cometo grips with the problem. If nobody in a position of authority can knowenough to exercise that authority, why does the authority exist at all? Thepremodern concept of certainty has been abrogated by Science, which is tosay that “know-nothing,” a label of political derision,14 has become theunpublicized operational principle that undergirds authority in the modernworld. The problem cannot be solved by an endless search for “competent”managers who are wholly up-to-date on “Scientific” approaches to decisionmaking.

This accounts, I think, for Sir Kenneth’s rather dour, but very incomplete,analysis of what has happened since the change in thinking. “In its firstglorious century,” he noted, “the appeal to reason and experience was atriumph for the human intelligence.” Few philosophers and historians no-ticed “that the triumph of rational philosophy had resulted [by the mid-nineteenth century] in a new form of barbarism.”15 The same outcomes


obviously have persisted in this century, the most destructive wars in his-tory having originated in the West, the region presumably most dedicatedto that “triumph for the human intelligence.” Slavery, of course, is an oldform of barbarism that became worse in the modern world.

SIMPLIFYING THE CATEGORIES

Max Weber’s writings became widely available in the United States onlywhen translations arrived after World War II, but he remains the bestknown analyst of the modern “ideal-type” bureaucracy. I suggest here thatWeber’s famous typology of authority should be drastically revised. Twoof his categories (“charismatic” and “traditional”) should be combined, histhird category (“legal-rational”) should be acknowledged but expanded,and, above all, we should end the practice of dealing with such categorieson a superficial basis. Perhaps without conscious intention, Weber’s ap-proach made it easy to condemn bureaucracy as a form of excessive au-thority without challenging the concept of authority itself. Indeed,bureaucracy is supposed to be a form of knowledge-based authority, sothat it is slightly more defensible than the “democratic” forms of ignorance-based authority that presumably protect us from oppressive bureaucrats.

Weber borrowed “charisma” from a church historian’s use of a quotefrom St. Paul who, in turn, had used the word to refer to gifts or powersthat were direct manifestations of God’s grace.16 Jesus was the primaryexample for St. Paul, but Weber also had Mohammed in mind,17 and itmay be inferred that such historic figures as Moses have similar status inother cultures. Such leaders often articulated “the promise of a new Truth,which is absolute, unshakeable and solid, but previously unknown.”18 Byvaguely referring to such mundane characteristics as “specifically excep-tional powers or qualities,” Weber opened the door to long-running de-bates about the “charisma” (or lack of it) displayed by George Washington,Abraham Lincoln, Franklin Roosevelt, Clark Gable, General George Pat-ton, Martin Luther King, John Kennedy, General Colin Powell, HenryFord, Ronald Reagan, and Lee Iacocca, not to mention Adolf Hitler andSaddam Hussein. Clearly, the contemporary use of “charisma” is at oddswith the original intention, now broadened to include “speakers who holdtheir audiences spellbound, show business celebrities who leave their fansweak-kneed, and almost any variety of magniloquent blowhard. . . . St.Paul would find it all quite puzzling.”19

The present day usage of “charisma” not only violates the premodernconcept but is equally offensive to Science because it “has failed to meetthe standards [of] usefulness to succeeding investigators in their furtherresearch and writing.”20 Modern Social Science cannot cope with a conceptbased upon the premodern concept, but neither can it provide valid meth-ods for measuring “charisma.” The failure and/or unwillingness of Science


to deal forthrightly with the issue of authority contributes mightily to theconfusion.

The original “charismatic” authority figures appear to be the earthlyoriginators of “traditional” authority. The charismatics left behind them,often in social commands inscribed in the holy books of various religions,the “established beliefs in immemorial traditions”21 and beliefs “in therightness and appropriateness of the traditional way of doing things.”22

More concretely:

Not only hereditary bureaucracies but such practices as Jewish and Islamic foodprohibitions fall under the scope of traditional authority. Their meaning dependsnot on the actual pollutedness of pigs or alcohol, but on the fact that once verylong ago people rejected them. The sense of authority, or stability, comes from thevery length of time this memory has endured; it is what we mean when we speakof a custom as hallowed by tradition . . . they make sense only in terms of mythsand legends, rather than in terms of practical and immediate life.23

Because the traditions are attributed to the original charismatics, thoseearthly originators or transmitters of religious doctrines, “traditional” au-thority is more reasonably defined as a continuation of “charismatic” au-thority, thereby combining the two forms of authority into “charismatic/traditional,” a single category. Significantly, the authority of those charis-matics, Jesus being only one prominent example, becomes much greaterafter their deaths than when they walked the Earth. Indeed, the charis-matics of history may often have been social inventions badly needed toshow how Supreme Beings transmitted their instructions to ordinary mor-tals. In many cases, charismatics have not been described as the originalauthors of the instructions they disseminated (Moses), but, in other cases(Confucius), they are considered the authors.

Weber’s third category, “legal-rational,” is the one associated with mod-ern impersonal organizations, but it also reflects the incompatibility of Sci-ence and authority. “Legal” authority is a constitutional grant and, even if“democratically” legitimized, has nothing to say about knowledge. TheU.S. Constitution and “democratic” political theory, are totally silent onthe presumably necessary connection of authority and knowledge,24 withpolitical theorists often relying upon such vague concepts as “social con-tract,” “servants of the people,” and “general will.” “Rational” authorityrefers to conscious efforts to devise the best available means of imple-menting and achieving social and organizational ends, a vague and unack-nowledged bow in the direction of the classical cause-effect sequence ofScience. In a sense, even the “know-nothing” political executive is expectedto use Scientific knowledge in making “legal-rational” decisions. Weberacknowledged as much when he observed that “bureaucratic administationmeans fundamentally the exercise of control on the basis of knowledge”(emphasis added).25


All too often, organizational and political analysts play down the im-portance of authority and its contradictory premises. It is often assumedthat in modern “democratic societies,” for example, authority cannot existin the pure forms of idealized hierarchies, and that managers have no choicebut to act in nonauthoritarian ways.26 A “generalist” manager, some argue,cannot supervise in detail the activities of “skilled specialists.” Others assertthat organizations can in general be viewed as collections of individualswho “freely” choose to “cooperate” in the pursuit of common objectives.Those in command, moreover, may be quite limited by law or custom inthe punishments they can visit upon subordinates. If legitimized authorityis all that insignificant, however, why grant it at all? Why reward the hold-ers of supposedly meaningless authority with much larger salaries than arepaid their subordinates? Does it make sense to assume that assembly-lineworkers, coal miners, and garbage haulers, to cite only three obvious ex-amples, report to work every day out of sheer love for the job, and thatmore challenging and more lucrative employment is instantly available tothem? Authority and subordination are not empty of meaning.

The vague connection between the Protestant Reformation and Scienceaccounts for the impersonal aspects of modern organization. The principleof the Reformation was that individuals constitute a “universal priesthoodof all believers” and should rely upon direct communication with God formoral guidance and instruction. A church, corporation, or governmentagency, therefore, should not seek to control the inner conscience of mem-bers but only those aspects of behavior of immediate relevance to basicmembership and task performance. In this sense, organizations do not con-trol whole persons, and it is easy to visualize them at work as parts, or“cogs,” of machines. Notably, however, the Reformation denied only theauthority of the church and its priests, not authority itself.

Given the simplification outlined here, “charismatic-traditional” and“legal-rational” are the only two approaches to authority that have beenused since the invention of Civilization and the great religions between twoand five thousand years ago. The shift from God’s Word to Scientific Lawis incomplete and unworkable because Science and authority remain whollyincompatible. Indeed, Science becomes more and more dangerous to theworld as it becomes more and more the instrument of the authority struc-tures its philosophy deplores. The Western world has obscured the dangersby inventing social doctrines that appear to challenge or eradicate top-down authority but actually reinforce it.

THE FALSE PROMISES OF “INDIVIDUALISM” AND“FREEDOM”

To whatever extent modern democratic governments and other organi-zations in such societies have displayed authoritarian tendencies, the ten-dencies often are viewed as temporary or unusual departures from


otherwise accepted norms. To some observers, the modern bureaucraticorganization has become almost a permanent transgressor of democraticnorms, having produced a “major [and ugly] transformation” in Americanvalues “since the years of our national founding.”27 Among these “found-ing values” were individualism, indispensability, community, spontaneity,and voluntarism, along with the “traditional American conceptions of le-gitimacy [in which] the flow of approval was upward” from the rank andfile to the governors and “the belief that each person could know andachieve his or her interests better than any collectivity.” All decisions by acollectivity or community should, in this view, be wholly voluntary on thepart of the individuals involved. If the governing parties are granted au-thority, it is only with accountability to those who relinquish that power,28

a concept of popular sovereignty that hides authority by pretending thatordinary citizens have delegated that authority to elite governors.

Any stirring advocacy of democracy and the American values developedby the owners of slaves cannot survive or bear close analysis. To begin withthe value of “individualism,” the idea that each person knows what he orshe wants and should be left free to seek it is absurd. Suppose, for example,that an individual is granted authority to make decisions in pursuit of hisor her interests. To be of social significance, the decision of that individual(A) must affect at least one other individual (B). If B must accept A’s de-cision because A has legitimate authority to make it, then B must obey A,a relationship of top-down authority. If, on the other hand, A must secureB’s wholly voluntary agreement, the decision becomes collective or jointand is no longer an individual decision. Individualism, therefore, is merelya restatement of authoritarianism that uses the doctrine of “freedom” tohide authoritarianism. In this example, the freedom and individualism ofA leave nothing for B.

The notion of “voluntarism” was a very limited one from the beginning,and, while its operational meaning is slightly different now, the changesare relatively insignificant. Women, of course, were expected to carry outtheir traditional roles of full-time subservience to their husbands. Childrenwere and are restricted to activities directed or approved by parents andsociety. The only function of slaves was to obey, and the same is now thecase for employees; the unskilled boss can fire the skilled subordinate. Tobe fired for incompetence is indistinguishable from being fired for disobe-dience.

Reduced to essentials, individualism originally applied only to the activ-ities of rich, white males, and only then during their leisure time. If andwhen these males assembled to make decisions about public or communityaffairs, they met as the unelected representatives and spokespersons fortheir individual households and plantations. What we now label sexismand racism were (and are) only exclusions from positions of authority incommunity, organizational, and family decision making.


If the United States and other societies gradually have been moving to-ward the inclusion of those previously excluded, whether as voters or work-ers, this has little to do with decision making at the workplace. Freedomand other human and civil rights are as incompatible as ever with legitimateauthority. As a managerial concept, individualism is only a concept thatexpands authoritarianism and centralization in organizational settings. Thewidespread condemnation of committees and groups, for example, is usu-ally accompanied by arguments that individualist decision making is fullyin accord with democratic traditions, an argument that is precisely correct.The “democratic” tradition of individualism is indeed authoritarian. Toquestion the claims made for the “founding values” of this country andothers, however, is not to suggest that any other society has solved theuniversal problems outlined in this chapter, but only to argue that individ-ualism and freedom are less than they often appear to be and, indeed,virtually the opposite of what they appear to be.

SUMMARY

The partial “separation” of Church and State in the Modern West hasencouraged Social Scientists to study politics and administration with littlereference at all to the importance of God’s Word as a continuing source of“knowledge” that guides elected leaders in their decision making. Withdedicated religionists increasingly attacking anything and everything thatcan be labeled “secular,” there is no reason for those Social Scientists toignore religious influence out of fear they will be labeled “anti-religion.”The most secular and democratic societies retain all of the premodern de-cision structures that were the original targets of modernism. This society,along with others, still searches for “charismatic,” “strong,” and “decisive”leaders who do not make mistakes, a search that should long ago havebeen abandoned as fruitless. The only distinctive theory of the ModernWest—uncertainty—has yet to be put to use.

As it stands, there is one religion and one organizational design through-out the civilized world, the religion and design of top-down authority. Par-adoxically, this offers a slight ray of hope; if all societies are basicallyidentical, or are much more alike than different, universal change and in-novation may be less of a chore than we have been led to believe by notionsof “cultural differences.” Given the significance of the contradictions out-lined herein, the world might well take up the challenge of Science to rejecttop-down authority and the religious principle of certainty. Intellectualstrained in the traditions of secularism and church-state separation are notas alert as they should be to the ever-increasing merger of politics andreligion.

Protestant ministers, once the most dedicated advocates of church-stateseparation, now routinely step forward as presidential candidates. One,


Jesse Jackson, has defined himself as “liberal,” while another, Pat Robert-son, is considered a “conservative.” During the 1988 campaign, the latterwas a serious Republican candidate for some time. He went so far as todeclare that God had commanded him to seek the presidency.29 As notedearlier, presidents often have referred to God or the Bible when makingimportant decisions, especially those involving war and peace. It is some-thing else again for a preacher to declare that God has selected him tobecome President of the United States, presumably after carefully consid-ering the qualifications of all other eligible citizens.

NOTES

1. Kenneth Clark, Civilization: A personal view (New York: Harper & Row,1969), 193.

2. Ibid., 195, 197, 208, 218–220, 326–327.3. Richard Sennett, Authority (New York: Knopf, 1980), 93.4. Sissela Bok, Lying: Moral choice in public and private life (New York: Vin-

tage Books, 1979), xx–xxi.5. Julius W. Pratt, A history of United States foreign policy (Englewood Cliffs,

NJ: Prentice-Hall, 1955), 386.6. New York Times, December 4, 1972.7. Washington Post, February 11, 1977.8. Herbert Feigl, The scientific outlook: Naturalism and humanism, in Readings

in the philosophy of science, edited by Herbert Feigl and May Brodbeck, 9–11 (NewYork: Appleton-Century-Crofts, 1953).

9. Karl R. Popper, The logic of scientific discovery (New York: Harper Torch-books, 1968).

10. Martin Landau, On the concept of a self-correcting organization, Public Ad-ministration Review 33(6) (November/December 1972): 533–542.

11. Herbert A. Simon, Administrative behavior, 2nd ed. (New York: Free Press,1957), 49.

12. Richard T. DeGeorge, The nature and function of epistemic authority, inAuthority: A philosophical analysis, edited by R. Baine Harris, 76–93 (University:The University of Alabama Press, 1976).

13. Clark, Civilization, 195.14. For a brief description of the history of the term in U.S. politics, see Jay M.

Shafritz, The Dorsey dictionary of American government and politics (Chicago:Dorsey Press, 1988), 312.

15. Clark, Civilization, 220.16. John W. Gardner, The heart of the matter: Leader-constituent interaction

(Washington, DC: Independent Sector, 1986), 20.17. Sennett, Authority, 21.18. Ibid.19. Gardner, The heart of the matter, 21–22.20. Ibid., p. 22: John Gardner, On leadership (New York: Free Press, 1990), 35.21. Sennett, Authority, 21.


22. Nicos P. Mouzelis, Organization and bureaucracy: An analysis of moderntheories (Chicago: Aldine, 1967), 16.

23. Sennett, Authority, 267.24. Dwight Waldo, The enterprise of public administration: A summary view

(Novato, CA: Chandler & Sharp, 1980), 79.25. Max Weber, The theory of social and economic organization (London: Ox-

ford University Press, 1947), 311, quoted in Mouzelis, Organization and bureauc-racy, 189 n.2.

26. Michael M. Harmon and Richard T. Mayer, Organization theory for publicadministration (Boston: Little, Brown, 1986), 380.

27. William G. Scott and David K. Hart, Organizational values in America (NewBrunswick, NJ: Transaction Publishers, 1989), 27.

28. Ibid., 28, 31, 46.29. Washington Post, February 15, 1988.

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Index

Accountability: and elitist invisibilityshielding, 112; mechanisms of, 118

Administrative reform. See Govern-ment reorganization; Organizationalchange

Administrative state, 102; centralizedstructure of, xxiv; elite power struc-ture in, 111; facilitative versus domi-nating nature of, xii–xviii;security-policing orientation of, xxiv–xxv

Affirmative action policies, 185; legalactions against, 187; origins and ev-olution of, 185–87

African-American workers, 183, 191,194, 196

Agency theory, 39–42; flaws in, 41–42;public-sector application of, 40

Airline deregulation, 138Alchian, Armen A., 39–40Aldrich, Howard E., 32Americans with Disabilities Act, 184Ancient civilizations, organization in,

xvi–xviiArgyris, Chris, 28, 42, 46, 73Aristotle, 68Asian-American workers, 183, 194,

196

Barnard, Chester, 28Behavioral theory of organization, 30Bentham, Jeremy, 35Block grants, 137, 141Bodin, Jean, 68, 76Bounded rationality, in decision-

making models, 29, 65British Oil Company, xix–xxBureaucracies: aristocratic tendency in,

113; capitalism and, 20; categoriza-tion of, 169; classical/formal theoriesof, 25–26, 27; hierarchy and, 10–11;large-scale corporate, 27; Marx’sview of, 23–24; organizational elitein, 110, 114–18; and policy imple-mentation, xxi–xxii; rational, 44;representative, 187–88; Weber’s viewof, 113–15, 259

Bureaucratization of society, 25, 27Burnout, phase model of, 231–48;

health-related covariants of phasesin, 240–45; incidence and persistenceof phases in, 235–40; mental statusin, 244–45; operational definition ofphases in, 232–33; physical symp-toms in, 240–44; and prevention/amelioration of burnout, 248; relia-bility and validity of, 248; usefulness

274 Index

and applicability of, 232, 248; valid-ity of phases in, 232–35; worksitefeatures associated with burnout in,246–47

Bush, George H. W., 137, 141Butterfly effect, in chaos theory, 81

California Proposition 209, 187Canadian cabinet reforms, 172Capitalism: bureaucratic, 20; corpo-

rate, xxii–xxiii, 27, 39, 41; and dy-namics of chaotic change, 85; global,xxv–xxvi, 84–86, 87–89; and instru-mental reasoning, 45; Marxist cri-tique of, 21–22, 44–45; and modernorganization theory, 47; andstructural-functional theory, 25

Capra, F., 77, 83Carroll, Glenn R., 32Carter, Jimmy, 140–41, 256Chaos and transformation theories, 73–

89; ancient origins of, 76, 82; con-temporary, 83–84; dialectical natureof, 77–78, 80, 81, 82; ethics and, 88;functional/practical implications of,64; and global/world-systems design,84–86; key concepts of, 80; limita-tions of, 87; macrocosmic- andmicrocosmic-level events in, 78–82;modern origin of, 76, 82–83; naturalscience tradition in, 75, 77–81; non-equilibria orientations in, 81–82, 83;and organization theory, 86–87; rel-evance and utility of, 74; self-organization concept in, 81; socialscience tradition in, 77–78, 81–82;and systems theory, 80; as tool formanipulation and control, 87–88;transformation and evolution in, 82–84

Civil Aeronautics Board, eliminationof, 138

“Civilisation” (television series), 254–55, 258

Clark, Kenneth, 254–55, 258Class exploitation, organizations as in-

struments of, xxii–xxiiiClassical/formal theories of organiza-

tion, 24–27; instrumental and tech-nical rationality in, 24, 25–26, 49,98, 103–4; and scientific manage-ment theory, 26; and theories of bu-reaucracy, 25–26

Clean Air Act, 142Clinton, Bill, 137, 141, 184Club of Rome, 78Cohen, Michael D., 64Congress: airline deregulation of, 138;

creation of new federal agencies/pro-grams by, 136–37, 139–41; and reg-ulatory decentralization, 142–43;and state/local mandates, 142

Consumer Product Safety Commission,136

Contingency theory, 168Contracting out, 37, 40, 138, 143,

145, 163Corporate capitalism, xxii–xxiii; and

agency theory, 41; rise of, 27; andtransaction-cost analysis, 39

Corporations: large-scale, 27, 71–72;power elite in, 99; problem of legiti-macy in, 112. See also Globalizingcorporations; Multinational/transnational corporations

Critical reasoning, 45Critical theory, 44–49, 65, 66; and

creation of social reality, 19; andelite theory, 64; and Habermas’modes of reasoning, 44–45; Marxist/neo-Marxist, 44–45; non-Marxist,45–49; origination of, 20; politicaldemocracy in, 46–47; principles of,48

Cultural norms and values, organiza-tional influence on, xx–xxi

Cutback management, 162

Decentralization: and “fend-for-yourself” federalism, 137, 159; andintergovernmental management, 153;and market theory, 35–36; politicsand, 163; regulatory, 142–43; andtransaction-cost analysis, 38–39

Decision making: behavioral organiza-tion theory of, 30; bounded rational-

Index 275

ity model of, 29; incrementalapproach to, 64; of public versusprivate managers, 6–7; role of con-flict in, 7; vortex-sporadic style of, 7

Decision theory (Simon), 29–30Deconstructionist movement: and gar-

bage can theory, 64–66; and naturalselection theory, 66

Democracy: “corpocracy” and, xxv–xxvi; and humanistic organizationtheory, 42–44; and organizationalnecessity, 113; political, in criticaltheory, 46–47

Democratic Party, affirmative actionand, 187

Demsetz, Harold, 39–40Denhardt, Robert, 24, 44, 45–46Department of Education, creation of,

141Department of Energy, creation of,

141Department of Transportation, 138Department of Veterans Affairs, 141Deregulation, 159, 163; airline, 138; of

savings-and-loan system, 139Developmental policies/programs, xxiiDewey, John, 68Dialectical polarities, research on, 83–

84. See also Marxist/neo-Marxisttheory

Dialectics of Nature, 21DiMaggio, Paul J., 70Downsizing: and organizational elite

theory, 101, 112–13; and social/eco-nomic displacement, 97

Drucker, Peter, 74, 78, 79, 85Drug Enforcement Agency (DEA), 136–

37Durkheim, Emile, 69, 77, 83

Economic models of bureaucracy, 164–66

Ecosystem, global, and corporate elites,79

Elite theory of organization, 97–123;assumptions and foundations of, 110–13; centrality of organizational ne-cessity in, 109, 113–15; concept of

organizational elite in, 110; consen-sually integrated model in, 107; andcorporate and governmental legiti-macy, 112–13; criteria of inclusive-ness in, 106–7; defining elite in, 104–6; dialectical process in, 120–21; andelitist democratic politics, 104; hier-archy in, 115–18; implications of,121–23; instrumental and politicalrationality in, 110–12; membershipof the masses in, 111–12; models of,106–9; and normative theory of or-ganizations, 120; organizational co-hesion and social controlmechanisms in, 118–19; organiza-tional elite model in, 109; pluralelite model in, 107–8; power elitemodel in, 108–9; prescriptive dimen-sion of, 120; and rational choicemodel, 120; ruling class model in,109; secrecy and elitist invisibility in,101, 112, 114; significance and ra-tionale of, 100–102, 120–23; theo-retical background of, 102–4; utilityof, 64

End to Hierarchy and Competition,An, 23

Engels, Frederick, 21; dialectical law ofnature of, 77–78, 80, 81, 82

Environment: and institutional theory,70, 71–73, 103; multinational/trans-national corporations and, 19–20,31–32; and natural selection model,66; and population-ecology model,32–33; and resource-dependencemodel, 32–33; and SET (social/eco-nomic/technological) changes, 167,170, 171

Environmental dependency reformmodels, 167–72, 175

Environmental Protection Agency, 140Equal employment opportunity (EEO)

policies, 185–87, 188Evolutionary theory, concept of self-

organization in, 81

Fair Employment Practices Committee(FEPC), 186

276 Index

Farabi (Persian philosopher), 68Farmers Home Administration

(FmHA), 191Fayol, Henri, 24, 27Federal agencies: characteristics of ad-

ministration in, 5–6, 13; creation of,136–37, 167. See also Governmentreorganization; Public organizations

Federal Aviation Administration, 138,150

Federal Deposit Insurance Corporation(FDIC), 139, 140

Federal employment: anti-discrimination policies in, 185;women and minorities in, 183–84

Federal Savings and Loan InsuranceCorporation (FSLIC), 139, 140

Federal Trade Commission (FTC), 142Female workers: in federal govern-

ment, 183; and workplace discrimi-nation, 186

Financial Institutions Reform, Recov-ery, and Enforcement Act, 140

Fischer, Frank, 24, 42–43, 45, 47Follett, Mary Parker, 42, 84Forester, John, 44Freeman, John H., 32

Galbraith, John Kenneth, 68Garbage can theory, 174; criticism of,

65, 66–67; incremental decision-making approach in, 64

General Health Questionnaire (Gold-berg), 244–45

General Motors, xix–xxGlobal capitalism, chaos/transforma-

tion theories and, 84–86, 87–89Global organization theories/behaviors,

xxx–xxviGlobalizing corporations: agency the-

ory and, 41; “corpocracy” of, xxv–xxvi; and designed forces of chaos,85; negative impacts of, xi, 79;organizational elite of, 115–16; andtransaction-cost theory, 39

Golembiewski, Robert T., 36, 42, 231

Gore Commission, reinvention strategyof, 171

Government Accounting Office (GAO),140

Government reorganization, 159–76;bureau-shaping versus size of organi-zation in, 165–66; contingencyapproaches to, 168–69; and creationof new organizations, 136–37, 140–41, 167; cultural/ideational aspectsof organization in, 175; cutbackmanagement approach in, 162; de-centralization/devolution of author-ity, 35–36, 137, 142–43, 159, 163;deregulation, 159, 163; dissemina-tion of, 159; dominance of fad andfashion in, 159, 168; economic mod-els of, 164–66; environmental de-pendency models of, 167–72, 175;environment-organization linkage in,175; individual political/administra-tive actors’ motivations in, 161–62,164–65; individual-organizationallinkage in, 175; institutional modelsof, 172–74, 175; and managementtheory, 170; manageralism and, 163–64; nature of task environment in,168; political science models of, 160,161–64, 167–68, 172–74; popula-tion ecology approaches to, 169–72;pragmatic/ad hoc analysis of, 161–62, 174; and private-sector manage-ment, 163; purposive models of, 161–67, 172, 175; r and k strategies in,171–72; and “SET” anomalies, 167,170, 171; theoretical approaches to,160–74; and ungovernability thesis,164; utility/efficacy of, 159, 165

Government-corporate partnerships,interest-based arrangement networksin, xxiv

Gramm-Rudman-Hollings budget con-trol process, 139, 140

Grand Evolutionary Synthesis Theories(GESTs), 83

Grant-in-aid programs, 137, 141–42

Index 277

Great Depression, 115, 167Gulick, Luther, 24, 26–27, 69

Habermas, Jurgen, 44–46Hall, Peter Dobkin, 102Hannan, Michael T., 24, 32Harmon, Michael M., 48Health Alliance Organization, 141Health reform bill (Clinton), 141Hegel, Georg, 24, 25–26, 68, 69, 76,

77Heraclitus, 82Herzberg, Frederick, 42Hierarchy: administrative, 137; in

agency theory, 41; in critical theory,46–47; in design of public organiza-tions, 137; Down’s law of, 11; andindividual alienation, xxiii; in inter-pretive theory, 48; in organizationaltheory, 22–23; as organizing mode,145; in public organizations, 10–11

Hispanic workers, statistics on, 183,194, 196

Hobbes, Thomas, 35Human relations theory of organiza-

tions, 27–29; and worker exploita-tion, 42–43

Humanistic organization theory. SeeOrganizational humanism theory

Hume, David, 35Hummel, R., 44, 45, 46, 48

Ibn Khaldun (father of sociology), 68Individual rights, organizations as

threat to, xxiii–xxivInnovation, in private versus public

sector, 8. See also Organizationalchange

Institutional economics, transaction-cost analysis in, 37

Institutional state: organizational elitein, 110–11; and transnational corpo-rations, 102

Institutional theories of organization,67–73; ancient and medieval rootsof, 67, 68; change and environment

as key bases of, 73; classical/tradi-tional, 69–70; criticisms of, 67, 71–72; of early institutionalists, 68–69;environmental role in, 70, 71–73;functional/practical implications of,64; learning organizations and, 87;and Marx’s dialectical evolutionarytheory, 68–69; modern structural-functional foundation of, 69; multi-nationals and, 70–71, 73; andneo-institutionalism, 70–73; politicalscience models of, 172–74, 175

Instrumental rationality: in critical the-ory, 44–45; in organizational elitetheory, 110–12, 117; and organiza-tional goals, 98; in structural/func-tional theory, 26, 65; in traditionalorganization theory, 49, 98, 103–4

Intergovernmental management (IGM):decentralization and, 143; nonhierar-chal authority relations in, 137

International Telephone and Telegraph(ITT), xix–xx

Interorganizational coordination, inpublic versus private sector, 12–13

Interpretive theory, 47–49; basic prem-ise and principles of, 47–48; andcreation of social reality, 19; elitetheory and, 64; garbage can theoryand, 65; natural selection theoryand, 66

Jackson, Jesse, 264Jensen, Michael C., 40Job satisfaction, of public versus pri-

vate managers, 4–6Johnson, Lyndon B., 171, 186

Kant, Immanuel, 20, 47, 68Kennedy, John F., 186

Labor government reforms, 162–63Lawrence, Paul R., 32Lazlo, E., 83Learning organization, chaos theory

and, 86–87

278 Index

Legitimacy, of elite power structure,111, 112–113

Legitimate authority: and charismatic-traditional authority figures, 259–60;and false promises of individualismand freedom, 261–63; God as sourceof, 251–52, 255–56, 258; andknowledge-claims of science, 251–53, 257; and legal-rational decisions,260; and managerial decisions, 257;and modern view of uncertainty,258; and performatory authority,257–58; and scientific principle ofuncertainty, 251–52, 257; and West-ern concepts of freedom and humanrights, 253

Lewin, Kurt, 72, 77–78, 83Life cycle theory, 136Lorsch, Jay W., 32Louima, Abner, 216–17

Machiavelli, Niccolo, 68Macro analysis, xi, 20Management: and ideology of mana-

gerialism, 117; intergovernmental,137; style, public versus private, 8–9;Taylorized system of, 26

Management-worker conflict, organiza-tional management of, xxiii

Managerial bias, in organization the-ory, 20, 47, 49

Managers: in elite power structure,111, 112; as experimental scientists,257; legitimate authority of, 257;job satisfaction of, 4–6; as micro/op-erational elites, 117–18; motivationsof, 3–4; public, crisis managementof, 10

Mandatory Arrest Law of DomesticViolence (U.S.), 74–75

March, James G., 64Marcos, Ferdinand, 256Market theory, 34–42, 103–4; admin-

istrative model of, 35–36; andtransaction-cost theory, 37–39;utilitarianism and, 35

Marx, Karl, 21Marxist/neo-marxist theory, xxii, 20,

21–24, 25, 72, 103; of alienation,23–24; of complementary dialectics,84; of dialectical nature of socialdevelopment, 68–69; of dialectics ofnature of, 77–78, 80, 81, 82; histori-cal materialist school of, 69

Maslach Burnout Inventory (MBI), 233Maslow, Abraham, 77; hierarchy of

needs theory, 42Maxwell School of Syracuse Univer-

sity, 43Mayo, Elton, 28, 29McGregor, Douglas, 28, 42McKelvey, Bill, 32McKinley, William, 256Meckling, William, 40Medicaid coverage, 142Mental and physical well-being, pessi-

mistic view of, 231. See also Burn-out, phase model of

Mentoring, in private versus publicsector, 9

Meso analysis, xi, 20Meyer, John W., 70Michels, Robert, 20Micro analysis, xi, 20Mill, John Stuart, 20, 35, 68Minorities, and workplace discrimina-

tion, 186Montesquieu, Charles de Secondat, 68Morgan, Gareth, 24Morgan Guaranty Bank, 211–12Mosca, Gaetano, 20Mulroney, Brian, 163Multinational/transnational corpora-

tions: dominating role of, 71–72; en-vironmental impact of, 19–20, 31–32; foreign relations/internationalpolitics role of, xix–xx; institutionalstate and, 102; institutional theoryand, 70–71, 73; and resource-dependence model, 32–33

Myrdal, Gunnar, 68, 77

National Aeronautics and Space Ad-ministration (NASA), 150, 167, 171

National Education Association, 140–41

Index 279

National Governors Association, 142National Health Board, 141Native American workers, 196Natural selection theory, 32–33; over-

view of, 66–67Neo-institutionalism, 70–73, 172New Federalism proposals (Reagan),

141New public administration movement,

48; and transaction-cost theory, 37Nietzsche, Friedrich, 65Niskanen, William A., Jr., 35Nixon, Richard M., 140Nizam-ul-Mulk (eleventh-century phi-

losopher), 68Nonprofit sector, state functions of,

xxivNorth, Douglas, 67

Office of Management and Budget(OMB), 150

Office of National Drug Control Policy(Drug Czar), 137

Oligarchy, organizational tendency to,113

Olsen, Johan P., 64Open systems: chaos theory and, 86;

versus closed systems, 31Organization(s): as change agents, xx–

xxi; destructive aspects of, xxii;functions, overview of, xvii–xxvi;nature of, xi–xvii; open system in,31, 86; repressive, xxiii–xxiv; systemmaintenance activities of, xx. Seealso Bureaucracies; Federal agencies;Public organizations

Organization development (OD), 42Organization of American Culture,

1700–1900, The, 102Organization theory: agency, 39–42;

classical/formal, 24–27; contempo-rary, common factors in, 29;contingency, 32; critical and inter-pretive, 44–49; decision and behav-ioral, 29–30; informal, 27–29;interdisciplinary approach to, 50;managerial bias/ideology in, 20, 47,49; market, 34–42; Marxist/neo-

marxist, xxii, 21–24, 25;organizational humanism, 42–44;overview of, 19–50; and politicaltheory, 98–99; population-ecology,32–33; public/private distinction in,3–14; resource-dependence, 32–33;and social creation of reality, 19;and systems theory, 30–32;transaction-cost, 37–39. See alsoElite theory of organization

Organizational change: consequencesand implications of, 97; deregulationand, 138, 159, 163; downsizing and,97, 101, 112–13; in Marxist theory,21–23; and normative issues ofpower and politics, 97–98; and or-ganization mission, 173; and organi-zational elite theory, 101; andpopular culture, xxi; in private ver-sus public sector, 8, 10–13. See alsoGovernment reorganization

Organizational culture: and adminis-trative change, 172–74; concept, 209;and popular culture, xxi

Organizational elite: concept of, 110;hierarchy of, 115–18; Weber’s posi-tion on, 113–15. See also Elite the-ory of organization

Organizational humanism theory, 42–44; foundations of, 42; and newpublic administration theory, 43–44

Organizational socialization, 207–29;change and acquisition stage of, 219;congruity between individual and or-ganizational goals in, 222–24; conse-quences of, 222; content of, 208–9;and contradictions between formal/informal and formal process of, 210–11, 212–17; effectiveness, influencingfactors in, 220–22; encounter stageof, 218–219; ethics in, 224; of flightattendants, 224–27; individual reac-tions to, 228; informal/indirect, 210–11, 212–13, 214–17; and latent mes-sages, 215–16; mechanisms andtechniques, 208, 209–17; media rolein, 218; of newcomer, 218–19, 220–22; observational learning in, 212–

280 Index

13, 225; organization culture im-pacted by, 213; organizational em-phasis on, 211–12; and personalcharacteristics, 220–21; of police of-ficers, 213–17; and prearrival stageof anticipatory socialization, 217–18;processes and stages of, 217–22; andreality shock, 218; in retail industry,218; and role distance behaviors,226–27; situational factors in, 221;symbolic interactionist view of, 219–20; task mastery in, 219; and tradi-tional versus adaptive socialcharacter, 212

Organizational society, concept of,xviii

Ostrom, Vincent, 35–36

Pareto, Vilfredo, 28, 83Parsons, Talcott, 30, 69, 70, 72Participative management, 43Performance appraisals, 195Persian philosophers, as systems theo-

rists, 76, 82Peters, Guy, 72Pfeffer, Jeffrey, 32Phenomenology, 48Plato, 76Plural elite model, 107–8Pluralist/group theory, 103, 104Political democracy, in critical theory,

46–47Political economy model, 32–33Political elite, 108; defined, 105Political institutional theory, 40–41Political science: models of institutional

change in, 160, 161–64, 167–68,172–74; new institutionalism in, 172

Political theory, and organization the-ory, 98–99

Politics: interest group, 138–39; andmultinational corporations, xix–xx,xxii–xxiii, 102; organizational, xix–xx; and organizational structure andprocess, 102–3; in public manage-ment, 8–9

Population ecology models, 169

POSDCORB theory (Gulick and Ur-wick), 26–27

Powell, Walter W., 70Power elite: concept of, 99–100, 106;

model, 108–9; as neglected area oforganization theory, 98–100. Seealso Elite theory of organization

Practical reasoning, in critical theory,45

President: creation of new federalagencies by, 136–37, 140–41; andregulatory decentralization, 142

Prigogine, Ilya, 77, 80, 81–82, 83, 84,85–86

Priority setting, in public sector, 9Private-sector organizations: and

corporate-government partnerships,xxiv; decision making of, 6–7; andindividual rights, xxiii–xxiv; job sat-isfaction in, 4–6; management stylein, 8–9; manager motivation in, 3–4;organizational change in, 11, 12

Privatization, 135, 136, 143, 159; andbureaucracy bashing, 163; as global-ization strategy, xi, xxvi; and organi-zational elites, 101; and publicchoice model, 36–37; variety of pro-grams in, 138

Public administration theory: predictiveshortcoming of, 160; social changeand democratic values in, 43–44

Public choice theory. See Market the-ory

Public organizations: agency theoryand, 40; bureaucratization in, 10–11;capacity of, 151–52; de facto (fend-for-yourself) federalism in, 137, 141;decision making in, 6–7; demo-graphic changes in, 183–84; diminu-tion and crisis in, xxiv; globalizationand, xi; institutional management of,135, 151; and interagency conflict,136; interorganizational coordina-tion in, 12–13; job satisfaction in, 4–6; legitimacy of, 112; managementstyle/problems in, 8–9; managermotivation in, 3–4; organizationalchange in, 10–13; and public choice/

Index 281

market theory, 35; transorganiza-tional management of, 135, 151. Seealso Government reorganization

Public service configurations, 135–53;accountability and regulation in, 145–46, 148; aggregative processes em-phasized in, 144; and de facto feder-alism, 137; decentralization anddevolution of authority in, 136, 137,141–43; and delivery systems, 152;economic dimension in, 148–50; andglobal marketplace competition, 150;horizontal fragmentation in, 135,136–43; interagency conflict in, 136;and interest group politics, 138–39;and intergovernmental authority pat-terns, 137–38; management dimen-sion in, 151–52; multiorganizationalcoordination of, 145; nonhierarchi-cal organization design in, 144–46;pluralization in, 135, 136–37, 139–41; policy frustration/organizationalineffectiveness in, 139–40; privatiza-tion in, 136, 138, 149; public inter-est and democratic responsiveness in,146–48; and pursuit of long-run na-tional interests, 145; and self-reinforcing pluralization, 140

Public workforce diversity, 183–201;and access-and-legitimacy model,191–94; and affirmative action/equalemployment opportunity policies,185–87, 188–89; and aging of work-ers, 184; and assimilation/acculturation, 197–98, 199; and de-mocratization goals, 188–91; anddemographic changes/characteristics,183–84, 190–91; and disability, 184;and disciplinary actions, 194; diver-sity and representation in, 183–201;and fairness-and-equality model, 188–91, 197; and language/nonverbalcommunication, 198; and learning-and-effectiveness model, 195–96;and locus of control/locus of respon-sibility, 199; and mistrust of domi-nant culture, 198–99; programs, 188;and representative bureaucracy, 187–

88; and value of expressiveness, 198;and valuing-and-integrating model,196–99

Quality-of-work-life issues, 71

Ramos, Alberto Guerreiro, 45, 46Ramspect Act of 1940, 185Reagan, Ronald, 141, 142–43, 162–63Recruitment: and fit between new-

comer and veteran employes, 223;occupation socialization and, 209–10

Regulations: decentralization of, 142–43; and deregulation, 138, 139, 159,163; generic management laws in,148; implementation of, 143

Representative bureaucracy theory, 187–88

Republican Party, affirmative actionand, 187

Resolution Trust Corporation, 140Resource-dependence model, 32–33Robertson, Pat, 264Roosevelt, Franklin D., 171, 185–86,

256Rozbeh (Persian philosopher), 68Russell, Bertrand, 100

Salk, J., 83Sartre, Jean-Paul, 20, 47Savings-and-loan industry: bailout of,

140, 141; regulation of, 139Schumpeter, James J., 68Schutz, Alfred, 47, 65Science: criterion of intersubjective test-

ability in, 256; principle of uncer-tainty in, 251–52, 257; andtop-down authority, 251–53

Scientific management theory (Taylor),26

Scott, Richard, 70Selznick, Philip, 71–72Serpico, Frank, 216–17SET (social/economic/technological)

changes, and government reorganiza-tion, 167, 170, 171

Silverman, David, 47, 48

282 Index

Simon, Herbert, 29–30, 65Sina, Abu-Ali, 76Social science theory: in administrative

reform, 160; and chaos theory, 77–78, 81–82

Soviet-U.S. relations, and chaos theory,84–85

Spiritual organizations, multifacetednature of, xviii

SRI International, 83State/local government: and devolution

of authority, 137; and grant pro-grams, 141–42; regulatory role of,142–43

Stenger, I., 77, 80, 81–82Structural-functional theory, 25–27;

capitalism and bureaucracy in, 25;organizational control and rational-ity in, 24–26, 48, 65; and Weber’sideal-type bureaucracy, 25

Supreme Court, affirmative action rul-ings of, 187

Systems theory, 29, 30–32, 48; ancientroots of, 76, 82; and chaos theory,80, 86; foundation for, 30

Task environment, public organiza-tion’s reaction to, 10–13

Taylor, Frederick W., 24, 26Technical rationality: in classical/for-

mal and systems theories, 24–26;and organizational behavior, 98

Thatcher, Margaret, 162–63, 166–67Thayer, Frederick, 23, 24, 44, 46–47,

48, 251Time management, 10Transaction-cost theory, 34, 36, 37–

39. See also Agency theoryTransnational corporations. See Multi-

national/transnational corporations

United Kingdom, “Next Steps” agen-cies in, 159, 172

United States, global hegemony of, 84–85, 89

Urwick, L., 24, 69

Value systems: cultural, organizationalinfluence on, xx–xxi; and organiza-tional secrecy, 112

Veblen, Thorstein, 68, 72Veterans Administration, transforma-

tion of, 141Volker Commission (Report of the Na-

tional Commission on the PublicService), 152

Voucher systems, 143

Weber, Max, xxi, 20, 25–26, 44, 69,72, 77, 83; concepts of power/organ-izational elite, 113–15; typology ofauthority, 254, 259–61

Weick, Karl, 66Western Electric Company, 27–28Western hegemony, chaos/transforma-

tion theories and, 84–85, 89Williamson, Oliver E., 34Wilson, Woodrow, 69Winter, Gibson, 48Wittgenstein, Ludwig, 65Work behaviors, in private versus pub-

lic sector, 10Worker exploitation: and humanistic

organization theory, 42–44; organi-zations as instruments of, xxii–xxiii

Workforce, American, demographicchanges in, 183. See also Publicworkforce diversity

World-systems design, chaos theoryand, 84–86

Zucker, Lynne G., 70

About the Editor and Contributors

ALI FARAZMAND is Professor of Public Administration at Florida Atlan-tic University, where he teaches MPA and Ph.D. courses in OrganizationTheory and Behavior, Personnel, Bureaucratic Politics and AdministrativeTheory, Ethics, and Conceptual Foundations of Public Administration. Far-azmand holds a Ph.D. in Public Administration from the Maxwell Schoolat Syracuse University. His research and publications include more thansixty journal articles and book chapters, and seventeen authored or editedbooks and handbooks, including The State, Bureaucracy, and Revolutionin Modern Iran (Praeger, 1989), Public Enterprise Management (Green-wood, 1996), Privatization or Public Enterprise Reform? InternationalCase Studies with Implications for Public Management (Greenwood,2001), and Administrative Reform in Developing Nations (Praeger, 2001).He is an active member of numerous professional organizations, includingthe American Political Science Association, the American Society for PublicAdministration, and the International Political Science Association. He hasserved on the editorial boards of several national and international refereedjournals, and is the Founding Editor of Public Organization Review: AGlobal Journal.

ROBERT T. GOLEMBIEWSKI is Research Professor of Political Scienceand Management at the University of Georgia and has a special interest inchange within large organizations, both public and business. Golembiewskiis the author/editor of over sixty books, including Managing Diversity inOrganizations (1995), Practical Public Management (1995), and GlobalBurnout (1996). He is the recipient of the four top awards in businessschools and in business administration: the Irwin Award for Scholarly Con-

284 About the Editor and Contributors

tributions to Management from the Academy of Management, the DwightWaldo Award of the American Society for Public Administration, the Na-tional Association of Schools of Public Affairs and Administration Awardas a Distinguished Researcher, and the National Academy of Public Ad-ministration Award as a lifetime Fellow.

MARY ANN GROVES is Professor of Sociology at Manhattan College inRiverdale, New York. She received her Ph.D. in Sociology from the Uni-versity of Illinois. Her areas of expertise are work and occupations, soci-ology of the family, and gender roles. She has published articles onorganizational conflict, organizational socialization, and multiculturalismin higher education.

NICHOLAS HENRY is Professor of Political Science at Georgia SouthernUniversity. He served as President of Georgia Southern University for elevenyears, and is a Fellow of the National Academy of Public Administration.He served as President of Pi Alpha Alpha, the national public administra-tion honorary society, and his text, Public Administration and Public Af-fairs, is now in its 8th edition.

MICHAEL KLAUSNER is Associate Professor of Sociology at the Univer-sity of Pittsburgh–Bradford. He has previously taught at Hunter College inNew York City. Professor Klausner earned his B.A. in Sociology and Psy-chology at Herbert Lehman College in New York City and his M.A. andPh.D. in Sociology at the University of Illinois at Urbana–Champaign.Among his interests are organizational behavior, social psychology, andsociological theory.

GUY PETERS is the Maurice Falk Professor of American Government andformer chair of the Department of Political Science at the University ofPittsburgh. He received his Ph.D. from Michigan State University in 1970.He is the author of a number of books on comparative public policy andadministration.

A. FRANK SELDEN is with Chapel Hill Pediatric Psychology in ChapelHill, North Carolina. His major areas of research interest include multi-cultural psychotherapy and sports psychology.

SALLY COLEMAN SELDEN is Associate Professor of Public Administra-tion in the School of Government at the University of North Carolina atChapel Hill. Her major areas of research interest include human resourcemanagement and public management. Her recent work has appeared inPublic Administration Review, Journal of Public Administration Research

About the Editor and Contributors 285

and Theory, and American Journal of Political Science. She is the authorof The Promise of Representative Bureaucracy (1997).

FREDERICK C. THAYER is Professor of Public Administration at TroyState University, European Division Graduate Program, and also SeniorFellow for Education Policy at the Phelps-Stokes Fund, New York. Since1990, he has been Professor Emeritus of Public and International Affairsin the Graduate School of Public and International Affairs at the Universityof Pittsburgh, where he taught Organization and Administrative Theory,Personnel, and Public Management. He is the author of numerous articlesand several books, including Rebuilding America (Praeger, 1984).

CHARLES R. WISE is Professor of Public Affairs in the School of Publicand Environmental Affairs at Indiana University, Bloomington. He is theformer managing editor of Public Administration Review. He has twicebeen awarded the William Mosher Award (1985 and 1991) and is the onlyrecipient of the award to have received it twice. In addition to his currentposition, he has served in the Department of Justice, was elected to theNational Council of the American Society of Public Administration, andworked as project director for the Conference on U.S. Public Policy De-velopment. His research is in the areas of public organization design andanalysis, public law and administration, and public program evaluation.

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ModernOrganizationsTeoria y Practica