Scott 2003 - The Subject is Organizations

FIFTH EDITION

OrganizationsRational, Natural, and Open Systems

w. Richard ScottStanford University

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CHAPTER 1

The Subject Is Organizations

The recurrent problem in sociology is to conceive of corporate organization, andto study it, in ways that do not anthropomorphize it and do not reduce it to thebehavior of individuals or of human aggregates.

GUY E. SWANSON (1976)

THE IMPORTANCE OF ORGANIZATIONS

Ubiquity. There is no need to belabor the assertion that ours is an organizational society-that organizations are a promInent, ifnot the dominant, characteristic of modern societies. Organizations were present in oldercivilizations-Chinese, Greek, Indian-but only in modern industrialized societies do we find large numbers of organizations engaged in performing manyhighly diverse tasks. To the ancient organizational assignments of soldiering,public administration, and tax collection have been added such varied tasksas discovery (research organizations), child and adult socialization (schoolsand universities); resocialization (mental hospitals and prisons), productionand distribution of goods (industrial firms. wholesale and retail establishments). provision of services (organizauons 'd isp e n sin g assistance rangingfrom laundry and shoe repair to medical care and investment counseling),protection of personaland financial security (police departments, insurancefirms, banking and trust companies), preservation of culture (museums, artgalleries, universities, libraries) , communication (radio 31)_d television studios,telephone companies, the U.S. Postal Service), and re-creation (bowling alleys, pool halls. the National Park Service, professional football teams). Evensuch a partial Iistmg testifies to the truth of Parsons's statement that "the development of organizations is the principal mechanism by which, in a highlydifferentiated society, it is possible to 'ge t things done,' to achieve goals beyondthe reach of the individual" (1960: 41).

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4 An Introduction to Organizations

Until very recently.ieven highly developed societies such as the UnitedStates did not keep accurate records on organizations. We kept close, watch ofthe numbers of individuals and the flow of dollars, but gave less scrutiny to organizations. It was not until the 1980s that the U.S. Bureau of the Censuslaunched a Standard Statistical Establishment List for all businesses, distinguishing between an establishment-an economic unit at a single location-anda firm or company-a business organization consisting of one or more domestic establishments under common ownership. In 1997, the U.S. Census Bureaureported the existence of "more than 5.3 million single-establishment companies and about 210,000 multi-unit forms representing another 1.6 million establishments, for a total of 6.9 million establishments and 5.5 million firms"(Knoke, 2001: 77). Impressive as these numbers are, they do not include public agencies or voluntary associations, which may be almost as numerous.

The first attempt to create a representative national survey of all employment settings in the United States was carried out during the early 1990sby a team of organizational researchers (Kalleberg et al., 1996). To conductthis "national organizations study," Kalleberg and associates developed an ingenious design to generate their sample. Because no complete census of organizations existed, they began by drawing a random sample of adults in theUnited States who were asked to identify their principal employers. As a secondstep, data were gathered by telephone, from informants in the organizationsnamed as employers, regarding selected features of each of these employmentsettings, in particular, human resources practices. This procedure resulted ina random sample of employment organizations (establishments), weighted bysize of organization (Kalleberg et al., 1996; chap. 2). Their results indicate that,as of 1991, 61 percent of respondents were employed in private sector establishments, 27 percent in the public sector, and 7 percent in the nonprofit sector (1996: 47).

Even though organizations are now ubiquitous, their development hasbeen sufficiently gradual and uncontroversial that they have emerged duringthe past few centuries almost unnoticed. The spread of public bureaucraciesinto every arena and the displacement of the family business by the corporation "constitutes a revolution" in social structure, but one little remarked untilrecently.

Never much agitated, never even much resisted, a revolution for which no flagswere raised, it transformed our lives during those very decades in which, unmindful ofwhat was happening, Americans and Europeans debated instead suchissues as socialism, populism, free silver, clericalism, chartism, and colonialism. Itnow stands as a monument to discrepancy between what men think they are designing and the world they are in fact building. (Lindblom, 1977: 95)

Organizations in the form that we know them emerged during the nineteenth century in Europe and America, during the period of economic expansion occasioned by the industrial revolution. Not only did organizationsrapidly increase in number and range of applications, but they also underwenta transformation of structure as formerly "communal" forms based on thebonds of kinship and personal ties gave way to "associative" forms based on

The Subject Is Organizations 5

contractual arrangements among individuals having no ties other than a willingness to pursue shared interests or ends (Starr, 1982: 148).

Source of social ills? The increasing prevalence oforganizations in everyarena of social life is one indicator of their importance. Another, rather different index of their significance is the increasing frequency with which organizations are singled out as the source of many of the ills besettingcontemporary society. Thus, writing in 1956, C. Wright Mills pointed with alarmto the emergence of a "power elite" whose members occupied the top positions in three overlapping organizational hierarchies: the state bureaucracy,the military, and the larger corporations. At about the same time, Ralf Dahrendorf (1959 trans.) in Germany was engaged in revising and updating Marxistdoctrine by insisting that the basis of the class structure was no longer the ownership of the means of production but the occupancy of positions that allowedthe wielding of organizational authority. Such views, which remain controversial, focus on the effects of organizations on societal stratification systems, taking account of the changing bases of power and prestige occasioned by thegrowth in number and size of organizations.

A related criticism concerns the seemingly inexorable growth in the powerof public-sector organizations. The two great German sociologists Max Weber(1968 trans.) and Robert Michels (1949 trans.) were among the first to insistthat a central political issue confronting all modern societies was the enormousinfluence exercised by the (nonelected) public officials-. the bureaucracyover the ostensible political leaders. An administrative staff presumably designed to assist leaders in their governance functions too often becomes anindependent branch with its own distinctive interests (Skocpol, 1985) .

Other criticisms point to the negative consequences of the growth of organizations in virtually every area of social existence. Borrowing from and enlarging on a theme pervading the thought of Weber, these critics decry therationalization of modern life-in Weber's phrase, the "disenchantment of theworld" (1946 trans.: 51). The essence of this view is graphically captured byNorman Mailer: "Civilization extracts its thousand fees from the best nights ofman, but none so cruel as the replacement of the good fairy by the expert, thedemon by the rational crisis, and the witch by the neurotic female" (1968: 83).Organizations are viewed as the primary vehicle by which, systematically, theareas ofour lives are rationalized-s-planned, articulated, scientized, made moreefficient and orderly, and managed by "experts." (See, for example, Mannheim,1950 trans.; Ellul, 1964 trans.; Goodman, 1968; and Galbraith, 1967.) A prosaic but powerful example is provided by the worldwide success of fast-foodchains-the "Macdonaldization of Society" (Ritzer, 1993)-which have rationalized food preparation, depersonalized employee-eustomer relations, andstimulated the growth of mass production techniques in agribusiness (Schlosser,2000) .

A new generation of feminist critics reminds us that women as well asmen are trapped within organizational cages. Glennon (1979: chap. 1) decriesthe growth of bureaucracy, but on the feminist grounds that it feeds the "dualism of private-expressive and public-instrumental selves and worlds" and engenders a ruthless rationality that extends instrumental and administrative


orientations into everyday-including private-life. Ferguson is even more direct in her criticism:

The organizational forms and discourse of bureaucratic capitalism institutionalize modes of domination that recreate the very patterns of oppression that feminism arose to combat. (1984: 203)

Bureaucratic structures are argued to give priority to masculine virtues and values. The principles by which organizations are structured-inequality, hierarchy, impersonality--devalue alternative modes of organizing that are alleged tobe more characteristic of women's values: equalitarian and personalized associations. And the criteria associated with achievement-aggressive competitionand independence-are very different from the nurturing and relational virtuesoften associated with feminine styles (Gilligan, 1982; Calis and Smircich, 1996).Feminist critics assert that formal organizations are gender biased not only intheir application of criteria for appointment and promotion but also more fundamentally, in their choice of criteria-in their conception ofwhat is entailedin creating a rational system for supporting collaborative action. The prototypic models around which organizations are constructed are armies and sportsteams.

These critics thus add their voices to others who have called attention tothe ways in which organizational structures damage the personalities and psyches of their participants. Alienation, overconformity, and stunting of normalpersonality development are among the consequences attributed, not to suchspecial cases as prisons and concentration camps, but to everyday, garden-variety organizations (see Argyris, 1957; Maslow, 1954; Whyte, 1956).

Large organizations have long been subject to criticism, either becausethey are alleged to be rule bound, cumbersome, and inefficient (Mises, 1944;Parkinson, 1957) or because they are believed to take advantage of their size andresulting power to exploit others. Perrow (1991) asserts that large organizations increasingly "absorb" society, internalizing functions better performedby communities and civic society. And critics such as Korten (2001) point withalarm to the increasing power of the multinational corporations as they searchfor cheap labor, despoil the environment, and disrupt the continuity of stablecommunities.

We attempt to evaluate such criticisms of organizations at appropriatepoints throughout this volume. Here we simply note that these wide-ranging accusations and concerns regarding the pervasive negative consequences of organizations provide further testimony to their importance in the modern world.

As media. In addition to their being mechanisms for accomplishing agreat variety of objectives and, perhaps as a necessary consequence, the sourceof many of our current difficulties, organizations have yet another importanteffect on our collective lives. This effect is more subtle and less widely recognized, but it may be the most profound in its implications. It is perhaps best introduced by an analogy: "The medium is the message." This twentieth-centuryaphorism was coined by Marshall McLuhan to focus attention on the characteristics of the mass media themselves-print, radio, movies, television-in contrast to the content transmitted by these media. McLuhan defines media very


broadly as "any extension of ourselves"; elaborating his thesis, he notes, "Themessage of any medium is the change in scale or pace or pattern that it introduces into human affairs" (1964: 23, 24).

McLuhan's thesis appears to be more clearly applicable to our subjectorganizations-than to any specific media ofcommunication. First, like media,organizations represent extensions of ourselves. Organizations can achievegoals that are quite beyond the reach of any individual-from building skyscrapers and dams to putting a person on the moon. But to focus on what organizations do may conceal from us the more basic and far-reaching effectsthat occur because organizations are the mechanisms-the media-by whichthose goals are pursued. A few examples suggest some of these unanticipatedand, often, unrecognized organizational effects:

• In his crucial decision on how to react to the installation of Russian missiles inCuba, President Kennedy had to select from among a naval blockade, a "surgical"air strike, and a massive land invasion, not because these were the only conceivable responses, but because these were the principal organizational routines thathad been worked out by the Pentagon (Allison, 1971).

• Although we seek "health" when we visit the clinic or the hospital, what we get is"medical care." Clients are encouraged to view these outputs as synonymous, although there may be no relation between them. In some cases, the relation caneven be negative; more care can result in poorer health (Illich, 1976).

• While most of us believe schools are designed to increase the knowledge and skillsof student participants, their major function may well be the indirect effects theyhave in preparing students to assume a compliant role in the organizational society: to learn how to be dependable employees (Bowles and Gintis, 1977).

• Organizations may exert only weak effects on the activities of their participants,but still exert influence in situations because they embody and exemplify purposeful and responsible action. They depict rationality, enabling providers to offeran acceptable account of how resources were used and policies pursued (Meyerand Rowan, 1977).

To suggest that our organizational tools shape the products and servicesthey produce in unanticipated ways and, in some cases, substitute "accounts"for outcomes indicates the quite substantial impact that organizations have onindividual activity. However, even this expanded view does not reveal the full significance of these forms.

As collective actors. We will fail to perceive the importance of organizations for our lives if we view them only as contexts-as arrangements influencing the activities of individual actors. Organizations must also be viewed asactors in their own right, as collective actors. They can take actions, utilize resources, enter into contracts, and own property. Coleman (1974) describeshow these rights have gradually developed since the Middle Ages to the pointwhere now it is accurate to speak of two kinds of persons-natural persons(such as you and me) and collective or juristic persons (such as the Red Crossand General Motors). The social structure of the modern society can no longerbe described accurately as consisting only of relations among natural persons;our understanding must be stretched to include as well those relations between natural and collective actors, and between two or more collective ac-


tors.' In short, we must come to "the recognition that the society has changedover the past few centuries in the very structural elements of which it is composed" (Coleman, 1974: 13).

Theoretical significance. To this point, we have assembled a variety ofevidence and arguments to support the case that organizations merit attention. All of these claims relate to their social significance: their ubiquity, theirimpact on power and status, their effects on personality and performance. A different kind of rationale for justifying the study of organizations points to theirsociological significance: the contribution their study can make to our understanding of the social world.

George Homans points to the value for social science of studying organizations when he asserts:

The fact is that the organization of the large formal enterprises, governmental orprivate, in modern society is modeled on, is a rationalization of, tendencies thatexist in all human groups. (Homans, 1950: 186-87)

To say that organizations exhibit "tendencies that exist in all human groups" isto suggest that organizations provide the setting for a wide variety of basic social processes, such as socialization, communication, ranking, the formationof norms, the exercise of power, and goal setting and attainment. If these generic social processes operate in organizations, then we can add as much to ourknowledge of the principles that govern their behavior by studying organizations as by studying any other specific type of social system. But Homans asserts something more.

To say that we observe in organizations "a rationalization of tendenciesthat exist in all human groups" is to suggest that organizations are characterized by somewhat distinctive structural arrangements that affect the operationof the processes occurring within them. For example, social-control processesoccur within all social groups, but there are some forms or mechanisms of control-for instance, a hierarchical authority structure-that are best studied inorganizations, since it is within these systems that they appear in their mosthighly developed forrn.f In general, all processes-communication, socializa-

IThese developments were associated with and facilitated by changes in legal codes, as described in Chapter 7. Lawyers' practices also reflect the distinction in an interesting way, as described by Heinz and Laumann. They point out that much of the variation in current legal practiceis accounted for by:

one fundamental distinction-the distinction between lawyers who represent large organizations (corporations, labor unions, or government) and those who represent individuals.The two kinds of law practice are the two hemispheres of the profession. Most lawyers reside exclusively in one hemisphere or the other and seldom, if ever, cross over the equator.(Heinz and Laumann, 1982: 379)

It is also instructive that lawyers who represent collective actors rather than natural persons are themore powerful, prosperous, and prestigious segment.

2This general argument has been elaborated elsewhere (Scott, 1970). The basic premise isthat a set ofgeneric social processes-such as socialization, integration, status, power, adaptationis characteristic of all social structures. However, each of these processes operates differently depending on the structural context in which it is acting, so that, for example, the process ofintegration is effected in a small group differently than in an organization, and both differ fromthe same process occurring within a community, and so on.


tion, decision-making-are more highly formalized in organizations. It is ourbelief that the study of organizations can contribute to basic sociological knowledge by increasing our understanding of how generic social processes operatewithin distinctive social structures.

ORGANIZATIONS AS AN AREA OF STUDY

Emergence of the Area

The study of organizations is both a specialized field of inquiry withinthe discipline of sociology and an increasingly recognized focus of multidisciplinary research and training. It is impossible to determine with precision themoment of its appearance, but it is safe to conclude that until the late 1940s,organizations did not exist as a distinct field of sociological inquiry. Precursorsmay be identified, but each lacked some critical feature. Thus, there was someempirical research on organizations by, for example, criminologists who studied prisons (Clemmer, 1940), political analysts who examined party structures(Gosnell, 1937), and industrial sociologists who studied factories and laborunions (Whyte, 1946). But these investigators rarely attempted to generalize beyond the specific organizational forms they were studying. The subject was prisons or parties or factories or unions-not organizations. Similarly, in theneighboring disciplines, political scientists were examining the functioning oflegislative bodies or public agencies, and economists were developing their theory of the firm, but they were not attempting to generalize beyond these specific forms.

Industrial psychologists did pursue such general problems as low morale,fatigue, and turnover within several types of organizational settings, but they didnot attempt to determine systematically how the varying characteristics of different organizational contexts influenced these worker reactions. And although,from early in this century, administrative and management theorists such asTaylor (1911), Fayol (1949 trans.), and Gulick and Urwick (1937) did concentrate on the development of general principles concerning administrativearrangements, their approach was more often prescriptive than empirical. Thatis, they were interested in determining what the proper form "should be" in theinterests of maximizing efficiency and effectiveness rather than in examiningand explaining organizational arrangements as they existed. They also focusedprimary attention on managerial activities and functions rather than on thewider subjects of organizations and organizing (Guillen, 1994). Engineersplayed a central role early in attempting to rationalize approaches to work, attending to the design of both technical and administrative systems (Shenhav,1999).

Within sociology, the emergence of the field of organizations may beroughly dated from the translation into English ofWeber's (1946 trans.; 1947trans.) and, to a lesser extent, Michels's (1949 trans.) analyses of bureaucracy. Shortly after these classic statements became accessible to American sociologists, Robert K. Merton and his students at Columbia University attemptedto outline the boundaries of this new field of inquiry by compiling theoretical and empirical materials dealing with various aspects of organizations (Mer-


ton et al., 1952). Equally important, a series of pathbreaking and influentialcase studies of diverse types of organizations was launched under Merton's influence, including an examination ofa federal agency-the Tennessee ValleyAuthority (Selznick, 1949)-a gypsum mine and factory (Gouldner, 1954), astate employment agency and a federal law-enforcement agency (Blau, 1955),and a union (Lipset, Trow, and Coleman, 1956). For the first time, sociologists were engaged in the development and empirical testing of generalizations dealing with the structure and functioning of organizations viewed asorganizations.

At about the same time, an important interdisciplinary development wasunder way at the Carnegie Institute ofTechnology (now Carnegie-Mellon University). Herbert Simon became head of the Department of Industrial Management in 1949; assembled an eclectic group of political scientists, economists,engineers, and psychologists; and encouraged them to focus their energies onbuilding a behaviorally oriented science of administration. Following Simon'slead, emphasis was placed on decision making and choice within organizations(Simon, 1997). The unrealistic assumption of a single, towering entrepreneur,rational and all-knowing, that dominated economic models of the firm was replaced first by the view of intendedly rational but cognitively limited actors(March and Simon, 1958), and subsequently by models emphasizing the multiple and competing objectives of participants in organizations (Cyert andMarch, 1963). Economic models of administrative behavior were modified andenriched by the insights of psychologists and political scientists.

These central and other related efforts gave rise to the identification ofa new area of study-organizations; an area defined at a level of theoretical abstraction sufficiently general to call attention to similarities in form and functionacross different arenas of activity; and a subject matter that exhibited sufficientdiversity and complexity to encourage and reward empirical investigation. The keyelements for creating a new arena of scientific study were in place. As AlfredNorth Whitehead (1925: 3-4), the astute philosopher of science observes:

All the world over and at all times there have been practical men, absorbed in"irreducible and stubborn facts": all the world over and at all times there havebeen men of a philosophical temperament who have been absorbed in the weaving of general principles. It is this union of passionate interest in the detailedfacts with equal devotion to abstract generalization which form the novelty ofourpresent society.

Accompanying the creation of the new subject area was a search for appropriate intellectual ancestors to provide respectability and legitimacy-Machiavelli, St. Simon, Marx, and Weber were obvious candidates. And more recentforebears, such as Taylor, Barnard, and Mayo, were rediscovered and reprinted. Even a couple of token women contributors were identified, in the personsof Lillian M. Gilbreth-who collaborated with her husband in finding ways toimprove work efficiency in factories (Gilbreth and Gilbreth, 1917), but alsoemployed similar techniques at home, her feats celebrated in the book andmovie, Cheaper by the Dozen-and Mary Parker Follett (1941), an early studentof management and change working in the human relations tradition (seeGreen, 1995).


After about a decade of empirical research and theory development, threetextbook treatises-by March and Simon (1958), E tzioni (1961), and Blau andScott (1962)-provided needed integration and heightened interest in thefield. Also, a new journal, Administrative Science Quarterly, beginning publication in 1956 under the editorship ofJames D. Thompson, emphasized the interdisciplinary character of the field.P

Common and Divergent Interests

Common features. What features do all organizations exhibit in common? What are the general organizational issues analysts began to perceiveamong the great diversity of specific goals and structural arrangements? Mostanalysts have conceived of organizations as social structures created by individualsto support the collaborative pursuit of specified goals. Given this conception, all organizations confront a number of common problems: all must define (and redefine) their objectives; all must induce participants to contribute services; allmust control and coordinate these contributions; resources must be garneredfrom the environment and products or services dispensed; participants must beselected, trained, and replaced; and some sort ofworking accommodation withthe neighbors must be achieved.

In addition to these common operational requirements, some analystshave also emphasized that all organizations are beset by a common curse. Allresources cannot be devoted directly to goal attainment; some-in some casesa high proportion-of the resources utilized by any organization must be expended to maintain the organization itself. Although organizations are viewedas means to accomplish ends, the means themselves absorb much energy and,in the extreme (but perhaps not rare) case, become ends in themselves.

There is a convergence of interest around these common features, but wemust not overlook the many bases of divergence. These include differencesamong the organizations themselves as objects of study, differences in the interests and backgrounds of those who study organizations, and differences inthe level of analysis at which inquiry is pitched.

Diverse organizations. Organizations come in a bewildering variety ofsizes and shapes. The largest of them are immense. Although the exact numbersdepend on how the boundaries are defined, the largest organizational unitsfound in modern society are the military services. The U.S. Department of theArmy in 1995 employed approximately 790,000 employees, 510,000 active commissioned officers and enlisted personnel, and 280,000 civilians. An additional642,000 served in the reserve corps (Kaufman, 1996). Under the threat ofworldterrorism, the size of the military is again expanding. Large organizations alsoexist within the civilian world. In 2001, the largest corporate employer, Wal-MartStores, employed 1,244,000 employees. The largest manufacturing corporation,

!lOther brief histories of the development of organizations as an identifiable field of inquiryare offered by March (1965: ix-xvi) and Pfeffer (1982: 23-33). An entertaining, ifjaundiced, viewof the evolution of organization theory is provided by Perrow (1973). Summaries of the contributions of major organizational theorists together with brief biographical information have beenassembled by Pugh and Hickson (1996).


GM, was substantially smaller at 386,000. Of the ten largest U.S. corporations atthe beginning of the twenty-first century, six were in sales and services, four inmanufacturing (Fortune, 2001).

Most workers in this country are employees of someone else; less than 5percent of the workforce is self-employed (Mishel, Bernstein, and Schmitt,1999). And, more workers are employed by fewer and larger companies: by1975, 3 percent of the employing organizations accounted for 55 percent of theemployed, and about one-quarter of the total workforce was employed by firmswith more than 1,000 employees.

Size, however, should not be equated with success. Perhaps for a time inthe industrial age size, as measured by employees or productive capacity, was instrumental to success (survival, profitability), but such an association is ill-suited to the postindustrial era. Recent years have seen efforts to restructure anddownsize many of the corporate giants. Indeed, it is somewhat ironic that oneof the largest corporate enterprises in the United States in the mid-1990s wasManpower Temporary Services, with over 800,000 workers. More generally,Carroll and Hannan (2000: 20) report that the average size of corporations inthe United States has declined from about 60 employees per company in 1960to about 34 employees in 1990. The most productive and innovative businesses are often small or intermediate in size.

In an age when giant organizations seem to dominate the landscape, it isimportant to emphasize that small organizations are actually in the majority: in1990,90 percent of all employing organizations in the United States employed19 or fewer individuals (Small Business Administration, 1994). And the predominant ownership form remains the sole proprietorship, with more than 12million establishments, compared with about 2.8 million corporations andabout 1.5 million partnerships. Of course, the corporation far outstrips theother forms in assets, employees, and earnings. These employment organizations also vary greatly in the types ofgoods and services provided: from coal mining to computers, from fortune-telling to futures forecasting.

Large numbers of people are employed in the public sector. In 1995, inthe United States, over 19 million individuals-about one out of every six nonfarm workers-were employed in federal, state, and local governments. Thenumber of units or agencies involved is difficult to determine because of thenested character of governmental forms. The United States Government Manual(U.S. Office of the Federal Register, 1992) provides organizational charts andbrief descriptions of the principal agencies. It currently numbers almost 1,000pages! Federal employees make up only about 18 percent of all governmentalofficials, the vast majority of whom are employed at the state (5 million) andlocal levels (11 million), where there exists great variation in organizationalarrangements (Littman, 1998).

The shift in type of employment settings has been dramatic. In 1960roughly half as manyjobs were to be found in manufacturing as in services (including public sector employment). By 1990, the ratio had shifted to one outof five, in favor of the services sector. Indeed, more Americans are now employed in government service than in all of manufacturing. The gender composition of the workforce has also changed greatly in a relatively short period.In the 1940s women made up only about 20 percent of the workforce. By 1996,


over 46 percent-nearly half-of all workers were women. And, women are notonly employees of organizations. By the beginning of the 1990s, women ownedabout 30 percent of U.S. firms, accounting for about 14 percent of all sales.

While for-profit forms provide the lion's share of employment in the United States, nonprofit charitable organizations provide an important alternativemode of organizing. In 1994 more than a half million public charities and50,000 private foundations were in existence, providing employment for almost 7 percent of all full- and part-time employees (Galaskiewicz and Bielefeld, 1998).

An important trend visible during the past three decades in the UnitedStates is a reduction in the attachment of workers to specific employers. Thenumber of workers employed in the same job for more than ten years has declined, and the proportion of workers in "nonstandard" work arrangementsfor example, independent contractors, part-time, temporary helpagencies-now approaches 25 percent of the workforce (Mishel, Bernstein,and Schmitt 1999). While many workers appreciate the new flexibility afforded by these changes, others suffer from increased insecurity and the absenceof regular job benefits.

Employing organizations do not exhaust the list of organizational forms.Verba and Nie (1972) estimate that about two-thirds of adult Americans belong to one or more voluntary associations, not counting churches. The number and variety of such forms is large and includes labor unions, political parties,professional societies, business and trade associations, fraternities and sororities, civic service associations, reform and activist groups, and neighborhood organizations. Two "slices" into this world suggest how diverse it is. A vertical slice,extracting only one occupational group, doctors of medicine, reveals over 380specialty associations listed in the Directory of Medical Specialists. A horizontal slice, an attempt to compile a detailed list of all voluntary associations inBirmingham, England, reported 4,264 such organizations (Newton, 1975).

In addition to size and sector, organizations vary greatly in structural characteristics. The relatively flat authority and control structure found in manyvoluntary associations stands in sharp contrast with the multilayer hierarchy ofa military unit or a civil service bureaucracy. And both seem relatively cleanand simple in comparison with the project team or matrix structures (discussedin Chapter 9) found in research and development units of high-tech companies.Much attention has recently been directed to "network" or alliance forms: cooperative connections among formally independent organizations that enablethem to enjoy simultaneously the benefits associated with being small, such asrapid response, and with those of being large, such as economies of scale.(These forms are discussed in Chapter 10.)

Some organizations are capital intensive, placing most of their resourcesin machinery and automated equipment. Others invest heavily in the "humancapital" of their workforce, selecting highly qualified personnel, underwriting their further, specialized training, and then struggling to keep them fromcarrying off their expertise to some other company. Some organizations directly employ most of the personnel that carryon the activities of the enterprise; others contract out much of their work, even the functions of generalmanagement.

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Organizations also vary greatly because they relate to and draw on different surrounding environments. Public agencies differ from private firms,even when they carryon the same kinds of work, because they function in different contexts. It matters considerably whether you operate to satisfy the demands of many decentralized customers or one centralized budget or oversightbureau. Much ofwhat we know about organizations is drawn from organizationsoperating in the second half of the twentieth century in capitalist, democraticsocieties-and in one such society in particular, the United States. Only recently have there been extensive efforts to examine the structure and operationof organizations in different times, using historical documents, and in different kinds of societies.

Large-scale organizations devoted to the pursuit of specialized goals developed in this country during the middle of the nineteenth century. Many ofthe characteristics we associate with modern organizations-the specializedequipment, the sizable administrative hierarchy, the collection of specialistsfirst appeared in association with the development of the railroads. The "managerial revolution" occurred in response to the problems of scale and scope, ofdistance and tight scheduling posed by railroads (Chandler, 1977). Organizations developing at this time were different in structure from those arrivinglater. The unified structures soon gave way to diversified and conglomerateforms, which in turn are being replaced by more flexible, network arrangements (see Chapter 10). More generally, as Stinchcombe (1965) first observed,organizational forms exhibit distinctive structures that reflect the times in whichthey were created. Thus, at any given time, much of the diversity exhibited bya collection of organizations is due to the varying conditions present at thetime of their birth.

The remarkable recent economic performance of the East Asian"tigers"-especiallyJapanese, South Korean, and Indonesian firms-has stimulated great interest in these organizations, and investigations of their operations have confirmed the importance ofcontext (Orru, Biggart, and Hamilton,1997). For example, one cannot understand theJapanese corporation withoutattention to the distinctive belief systems governing employment, to the connections betweena company and its family of firms (the Zaibatsu), and to therelations between private firms and the state. Less dramatic but significant differences are associated with organizations operating on the European continentas well as in other areas of the world (see Hofstede, 1984, 1991; Chandler 1990;Whitley 1992a, 1992b, 1999). Among all of the other sources of variation, wemust not overlook temporal, regional, and cultural factors.

Diverse research interests and settings. Another basis for divergence inwork on organizations resides not in the differences among organizations as objects of study but in the interests, training, and employment settings of thosewho study organizations. As already noted, researchers from different disciplines vary to some extent in the kinds of organizations they choose to study.Political scientists primarily focus on political parties and state administrativestructures, economists on business firms, sociologists on voluntary associationsand on agencies engaged in social welfare and social-control functions, andanthropologists on comparative administration in primitive, colonial, and developing societies. Disciplinary differences remain even when a single type of


organization is selected for study: specialists tend to look not only at differentobjects but also at different aspects of the same object. Thus, the political scientist will be likely to emphasize power processes and decision making withinthe organization; the economist will examine the acquisition and allocation ofscarce resources within the organization and will attend to such issues as productivity and efficiency; the sociologist has quite varied interests but if there isa focus it will likely be on status orderings, on the effect ofnorms and sentimentson behavior, and on organizational legitimacy; the psychologist will be interested in variations in perception, cognition, and motivation among participants; and the anthropologist will call attention to the effects of diverse culturalvalues on the functioning of the system and its members. The study of organizations embraces all these interests, and students of organizations work to develop conceptual frameworks within which all of these topics and theirinterrelations may be examined. And, increasingly, organizational analysts attempt to specify what is distinctive about power or status or motivation or cultural processes because they occur within the context of organizations.

Cutting across these disciplinary divisions is another, more general basisof divergence among those who study organizations: the adoption of a basic versus an applied research orientation. Basic research is aimed primarily at accurately describing existing features and relations of organizations and testingpropositions about them to better understand their nature and operation. Applied studies seek knowledge in order to solve specific problems or to bring aboutdesired changes in these systems. Of course, there is not a hard-and-fast line between these interests. Basic research, particularly in the long run, can lead topractical applications, and applied research often contributes importantly togeneral knowledge. Both rest on interests and values: neither is value-free, andthe same investigators often conduct both basic and applied studies.

Still, there are important differences in these orientations. Basic researchis driven more by theory-in its choice both of problems and ofvariables. Particular concepts-authority, legitimacy, institutionalization-are of interest because of their place in theoretical arguments, not because of their practicalsignificance. Basic research is more likely to focus on the independent variables-on understanding the effects of certain concepts of interest-than onthe dependent variables and to be aimed at testing particular arguments. Conversely, applied research is driven by an interest in solving some identified problem-low morale or productivity, high turnover-and is willing to incorporateany and all kinds of variables, whether economic, psychological, or cultural,that may shed light on it. Thus, applied studies are much more likely to be interdisciplinary: practical problems do not respect disciplinary boundaries.

Although there are many exceptions, applied research is more likely to beconducted by researchers located in nonacademic settings: in governmentalbureaus, research units of corporations, consulting firms, or policy-researchorganizations. The results of these studies are less likely to be published inscholarlyjournals; often they result in no publications at all, only a report to theclient group and/or chief executive officer. Basic research is conducted largely within the academic departments of colleges and universities. This work is either unfunded-and hence subsidized by the academic institution (which may,for example, permit low teaching loads and reward faculty for their researchproductivity)-or is funded largely through research grants from government


sources or private foundations." These organizations support research primarily because of "public interest" arguments: it is better to know than not toknow, and all benefit from the discovery of new knowledge.

An intermediate group of scholars "swings" both ways. These academicsare faculty members in professional schools: business, educational administration, public administration and public policy, public health, engineering management, social work administration, and related programs. These facultymembers are more likely to engage in consulting work for companies and agencies and to write cases illustrating particular problems or conditions than arethose located in academic departments. And they are generally more likely tocarry out applied studies, in part because ofpressures from their students-past(alumni) and present-who are interested in usable practical information andin acquiring skills that will affect the "bottom line," such as profits. Such academics are also more likely to found or participate in a for-profit company operating either in collaboration with or independent of the employing university.Such entrepreneurial activities used to be frowned on by academic programs,but are rapidly becoming important new loci of research, research training,and funding (Slaughter and Leslie, 1997). At the same time, faculty in professional schools are confronted by demands from their school and university tocontribute to basic knowledge-that is, to publish in scholarlyjournals. As faculty members of a university, they are subject to the academic culture and itsrequirements, although the strength of these pressures varies from campus tocampus and school to school.

Gibbons and colleagues (1994) describe the same distinction betweenbasic and applied research as representing two modes of knowledge production.Basic research, Mode 1, is discipline based, university centered, and dominated by highly trained individual scientists. Mode 2 is transdisciplinary, less hierarchical, and group based. They point out that while Mode 2 researchdeveloped in professional schools, in the organizational arena, this type ofworkis increasingly carried out by consulting companies. These companies also produce the type of knowledge most valued by organizational managers.

Both the basic and the applied science orientations have made and maybe expected to continue to make important contributions to our knowledge oforganizations-what they are and how they work. In the long run, each orientation depends on and complements the other, and a healthy scientific enterprise requires that both types of research receive attention and support (see alsoPfeffer, 1982: 23-40; Huff, 2000).

Diverse levels of analysis. Apart from the variety of conceptual schemesand orientations that guide inquiry and differences in research settings, investigators differ in the level of analysis at which they choose to work (Blau,1957). For present purposes, the level of analysis is determined by the natureof the dependent variable-that is, by whether the phenomenon to be explained is the behavior of individuals, of organizations, or of systems of organizations. Thus, the basic levels are:

4Increasingly, however, scholars within academic departments also affiliate with other organizational units-laboratories, centers, institutes-within the university and outside. These organizations serve as a research base for studies that are often applied in character.


• The social psychological level, focusing on the behavior of individuals or interpersonal relations involving individual participants within organizations. At this level,organizational characteristics are viewed as context or environment, and the investigator attempts to explore their impact on the attitudes or behavior of individuals. Such a perspective is exemplified by the work of Katz and Kahn (1978)and of Porter, Lawler, and Hackman (1975).

• The organizational structure level, focusing on the structural features or processesthat characterize organizations. Here, the major concern is to explain the structural features and social processes that characterize organizations and their subdivisions. The investigator working at this level may focus on the various subunitsthat make up the organization (for example, work groups, departments, authority ranks) or may examine various analytical components (for example, specialization, communication networks, hierarchy) that characterize the structuralfeatures or operational routines of organizations. Researchers working at thislevel include Udy (1959b) and Blau and Schoenherr (1971).

• The ecologicallevel, focusing on the characteristics or actions of the organizationviewed as a collective entity operating in a larger system of relations. At this level,the analyst may choose either to examine the relation between a specific organization or class of organizations and the environment (e.g., Selznick, 1949; Pughand Hickson, 1976) or to examine the relations that develop among a number oforganizations viewed as an interdependent system (e.g., Laumann and Knoke,1987; Miles, 1982).

Admittedly, distinguishing among these three levels of analysis is somewhat arbitrary." Many more refined levels of analytical complexity can be identified as one moves from organizational-individual to societal-organizationalrelations." Nevertheless, if only to remind us of the complexity of the subjectmatter and the variety of aims and interests with which analysts approach it,the three levels are helpful in providing a rough gauge for distinguishing amongbroad categories of studies.

Early research on organizations was conducted almost exclusively at thesocial psychological level. The structural level of analysis became prominentin the early 1960s and continues to be heavily utilized by sociologists. The ecological level was the last to develop, emerging in the late 1960s, but it is at thislevel that much of the intellectual excitement and energy that characterizesthe field during the past three decades has transpired.

Yet another base of divergence among those who study organizations isthe theoretical perspective employed by the analyst. However, this is, in our view,such a fundamental difference that it provides the basic themes around whichwe have organized this volume. Whether the analyst employs a rational, natural, or open system perspective, or some combination, is viewed as central to interpreting the work. Chapters 2, 3, and 4 are devoted to reviewing theseperspectives, while the subsequent chapters explicate the ways in which theyhave been developed and combined.

5The most commonly employed levels distinction is that between "micro" and "macro" organizational studies. The former is equivalent to the social psychological level; the latter encompasses both the structural and the ecological levels.

6In Chapter 6 we introduce and define several additional levels of analysis, all of which introduce distinctions within the ecological level.


Because so much of our attention in succeeding chapters will be devotedto emphasizing divergent perspectives, it is prudent in the next section to return to explicate the theme that all organizations share some basic characteristics.

THE ELEMENTS OF ORGANIZATIONS

Organizations are diverse and complex, and so it may be helpful to begin witha simplifying model focusing on their central features. The proposed modelshown in Figure 1-1 is adapted from Leavitt (1965).7 Let us briefly considereach element.

Social Structure

Social structure refers to the patterned or regularized aspects of the relationships existing among participants in an organization. The social structure of any human grouping can be analytically separated into threecomponents. Davis (1949) identifies two and we add a third:

Always in human society there is what may be called a double reality-on the onehand a normative system embodying what ought to be, and on the other a factual order embodying what is.... These two orders cannot be completely identical,nor can they be completely disparate. (Davis, 1949: 52)

We shall refer to Davis's first component as the normative structure; thiscomponent includes values, norms, and role expectations. Briefly, values arethe criteria employed in selecting the goals of behavior; norms are the gener-

'Leavitt identifies the four "internal" elements but does not include the environment as aseparate factor. As is obvious from our discussion, we regard the environment as an indispensableingredient in the analysis of organizations, and one that reframes all the other elements.

Environment -,IIIII

/Social

Structure -.Technology Goals

"partiCiPants /

I"Qrganf;8tion

IIIII

__________ ..J

FIGURE 1-1 Leavitt's Diamond: A Model of Organization.Source: Adapted from Leavitt (1965), Figure 1,p. 1145.


alized rules governing behavior that specify, in particular, appropriate meansfor pursuing goals; and roles are expectations for or evaluative standards employed in assessing the behavior of occupants of specific social positions. A social position is simply a location in a system of social relationships. (For a basicformulation of positions and roles, see Gross, Mason, and McEachern, 1958.)In any social grouping, values, norms, and roles are not randomly arranged, butare organized so as to constitute a relatively coherent and consistent set of beliefs and prescriptions governing the behavior of participants. It is for this reason that we speak of a normative structure.

In addition to the normative structure, it is useful to recognize the presence of a cultural-cognitive structure: the beliefs and understandings that participants share about the nature of their situation and interests. This symbolicorder provides a framework-of schemas, models, recipes for action-thathelps participants to interpret and collectively make sense of their world (Berger and Luckmann, 1967; Weick, 1995).

Davis's second (our third) component, which he refers to as "a factualorder," we will call the behavioral structure. This component focuses on actual behavior rather than on normative prescriptions or cognitive patterns guidingbehavior. Homans's (1950: 33-40) well-known classification of social behaviorinto activities, interactions, and sentiments suggests the types of elements thatconstitute the behavioral structure. Because our concern is with the analysis ofbehavioral structure, rather than simply behavior, we focus on those activities, interactions, and sentiments that exhibit some degree of regularity-the recurrent behavior of a given individual or similarities in the behavior of a class ofindividuals. Such actions, exhibiting some consistency and constancy in theirgeneral characteristics, are themselves arranged into larger patterns or networks of behavior. For example, we may observe in a group over a period of timewhich individuals attempt to influence others and with what degree of success,and in this way obtain a description of the power structure within that group.Or by observing the patterning of sentiments among group members-who isattracted to or rejected by whom-we can describe the sociometric structure ofthe group. Both the power structure and the sociometric structure are specific instances of behavioral structures.

As the passage from Davis reminds us, the normative, cultural-cognitive,and behavioral structures of a social group are neither independent nor identical, but are to varying degrees interrelated. The normative structure imposes an important set of constraints on the behavioral structure, shaping andchanneling behavior through mutually held expectations and obligations. Thecultural-eognitive structure provides a common interpretive framework thathelps to account for much of the regularity and patterning that exists. Still,much behavior departs from these models and guidelines, and such departuresare an essential source of additions to and changes in the structure. Behaviorshapes norms and beliefsjust as norms and beliefs shape behavior. Groups varyin the extent to which these structures are aligned. In some situations preceptcorresponds closely to practice: this appears to be the case in many utopiancommunities or communes-at least in their early stages ofdevelopment (Kanter, 1972). In many prisons, on the other hand, there is a large gap between whatthe rules specify and how the guards and inmates actually behave. Nevertheless,in every existing social structure, the normative, cultural-cognitive, and be-


havioral structures are always in a state of dynamic tension-each existing andchanging somewhat independently of the other while at the same time exerting continuing influence on the others.

All social groups-or collectivities, to use the more general sociologicalconcept-are characterized by a normative structure applicable to the participants, cultural-cognitive frameworks supporting shared understandings, anda behavioral structure linking participants in a common network or pattern ofactivities, interactions, and sentiments. These three interrelated structures constitute the social structure of a collectivity.

Organizational participants are likely to emphasize the amount of confusion, the indeterminacy, and the unpredictability of the actions of theircoworkers, in part because such matters draw their attention and require theirenergies. However, to focus on the social structure of organizations is to emphasize the impressive amount of order exhibited by the behavior of participants in organizations. Every day hundreds or thousands of persons inorganizations perform millions of individual acts, yet the outcome is not bedlam, not total confusion or chaos, but a reasonable approximation of order.This remarkable achievement merits our attention.

Emphasizing the importance of the social structure of organizations doesnot commit us to the view that relations among participants are all sweetnessand light: social structure does not connote social harmony. Conflict is alwayspresent and has helped to shape the social structure. An emphasis on socialstructure should enable us to see that much of whatever conflict is present inthe organization is patterned, in the sense that it is built into the structure ofrelations between individuals and groups and is not due to innately aggressiveindividual participants. Not only stability and order, but tension and stress, disagreements and misunderstandings, deviance and change can often be attributed to structural factors (Merton, 1957: 131-60).

The concept ofstructure carries a static connotation that we must resist. Forthis reason, Giddens (1979; 1984) argues that we should substitute the conceptof structuration, a dynamic term emphasizing that social structure exists only tothe extent that participants continue to produce and reproduce the patterns observed. Structures operate only in specific spatial locations and over time.

The social structure of an organization varies in the extent to which it isformalized. A formal social structure is one in which the social positions andthe relationships among them have been explicitly specified and are definedindependently of the personal characteristics and relations of the participantsoccupying these positions. By contrast, in an informal social structure, it is impossible to distinguish between the characteristics of the positions and the prescribed relations and the characteristics and personal relations of theparticipants. In an informal structure, when specific participants leave or enterthe system, their roles and relationships develop and change as a function oftheir personal characteristics and the interpersonal relations they develop.f

BOf course, at any given point in the history of a particular structure, newjobs (formal positions) are being created around the particular skills and interests of specific individuals. Miner(1987) has labeled these positions idiosyncratic jobs and notes two subtypes: "evolvedjobs," createdaround current organizational members, and "opportunistic hires," created around people outsidethe organization.


Participants-Social Actors

Organizational participants are those individuals who, in return for a variety of inducements, make contributions to the organization, as Barnard (1938)and Simon (1997) emphasize. All individuals participate in more than one organization (recall that, by definition, organizations are specialized in their purposes), and the extent and intensiveness of their involvement may vary greatly;the decision as to who is to be regarded as a participant is thus often a difficultone and may legitimately vary with the issue at hand. For example, a single individual may simultaneously be an employee of an industrial firm, a memberof a union, a church member, a member of a fraternal lodge or sorority, a"member" of a political party, a citizen of the state, a client of a group medicalpractice, a stockholder in one or more companies, and a customer in numerous retail and service organizations.

From the perspective of the organization, it simultaneously relates. tomany types of participants, all of whom have a different interest in and makedifferent demands on and contributions to the organization. To emphasizethis broader collection of persons, some analysts employ the term stakeholders-a concept emphasizing that many persons, including stockholders, community members, regulators, and exchange partners, are affected by and havelegitimate claims on an organization. The concept of stakeholder is muchbroader than that of employee.

Analysts disagree, as we shall see, on the extent to which organizationsdo or should incorporate facets of participants. How much of the personalities and private lives of individual participants is relevant to the functioning ofthe organization also varies from one type of organization and role to another: consider the situation of a novice in a religious order versus that of an occasional customer in a supermarket.

The demographic characteristics of participants-for example, their age,gender, ethnic distributions-have important consequences for many aspects oforganizational structure and functioning; we will explore these implications inChapter 7. And the structural features oforganizations-the opportunities theycreate and the sorting rules they use for selection, retention, and promotionhave equally fateful cQnsequences for participants, as we discuss in Chapter 8.

It is essential to recognize from the outset that participants are, first andforemost, social actors. It is their energy, their ideas, their conformity and nonconformity that constitutes and shapes the structure of the organization andcarries on its functions. Without the ongoing participation of specific individual actors, there is no social structure, no organization. Early sociological theories privileged social structure. More recent theorists remind us that socialstructures do not exist unless-and exist only to the extent that-social actorscarry out the requisite activities. They also insist that social actors are the instruments of both continuity-the reproduction of structure-and changethe production of novelty and innovation (Bourdieu, 1977 trans.). The abilityof an actor to have some effect on the world, to alter the rules or the distribution of resources, is referred to as agency (Giddens, 1984: 9).

Giddens usefully explicates a conception of the "duality" of social structure: it is, at one and the same time, both medium and outcome. Structure influences ongoing actions and it is constituted by-made up of-such actions:


Every process of action is a production of something new, a fresh act; but at thesame time all action exists in continuity with the past, which supplies the meansof its initiation. Structure thus is not to be conceptualized as a barrier to action,but as essentially involved in its production, even in the most radical processes ofsocial change. (Giddens, 1979: 70)

This conception helps to correct for an all-too-common sociological bias: an emphasis on the power and weight of existing social arrangements coupled witha discounting of the importance of individual imagination and initiative. Sociological work on organizations too often carries an overly deterministic perspective. On the other hand, it also guards against the more commonindividualistic bias, particularly pervasive in American culture, that disembedsindividuals from their social moorings and attributes all developments to individual interest and will.

Goals

The concept of organizational goals is among the most important-andmost controversial-concepts to be confronted in the study of organizations.Some analysts insist that goals are indispensable to the understanding of organizations; others question whether goals perform any function other than tojustify past actions. Then, too, behaviorists are fond of pointing out that onlyindividuals have goals; collectivities, such as organizations, do not. We will notattempt to tackle these prickly issues here but promise not to duck them indefinitely.

For most analysts, goals constitute a central point of reference in the studyof organizations. Goals are tentatively defined as conceptions ofdesired endsends that participants attempt to achieve through their performance of task activities. So defined, goals clearly involve both cultural-cognitive and normativeelements, but they are a sufficiently important aspect of organizations as tomerit separate attention.

Since goals figure prominently in some definitions of organizations, weconsider them further in the following section and discuss the major issues andproblems bearing on their analysis in Chapter 11.

Technology

To focus on the technology ofan organization is to view the organizationas a place where some type of work is done, as a location where energy is applied to the transformation of materials, as a mechanism for transforming inputs into outputs. The connotations of the term technology are narrow and hard,but we will insist that every organization does work and possesses a technologyfor doing that work. Some organizations process material inputs and fabricatenew equipment and hardware. Others "process" people, their products consisting of more knowledgeable individuals, in the case of effective school systems, or healthier individuals, in the case of effective medical clinics. Still othersprocess primarily symbolic materials, such as information or music. The technology of an organization is often partially embedded in machines and me-


chanical equipment but also comprises the technical knowledge and skills ofparticipants.

All organizations possess technologies, but organizations vary in the extent to which these techniques are understood, routinized, or efficacious. Someof the most interesting theoretical and empirical work has focused on the relation between the characteristics of technology and the structural features oforganizations. This work is described and evaluated in Chapter 9.

Environment

Every organization exists in a specific physical, technological, cultural,and social environment to which it must adapt. No organization is self-sufficient; all depend for survival on the types of relations they establish with the larger systems ofwhich they are a part. Early analysts of organizations, as we will see,tended to overlook or underestimate the importance of organization-environmentallinkages, but recent work places great emphasis on these connections. Indeed, the environment is not just another category of variables, but apervasive influence, affecting every organizational actor and structural feature.To drive home this truth, we briefly reconsider each of the four organizational components in this light.

Consider organizational participants. Very few organizations assume fullresponsibility for the socialization and training of their participants. Employees come to the organization with heavy cultural and social baggage obtainedfrom interactions in other social contexts. With very few exceptions-such asinmates in "total institutions," for example, concentration camps or cloisters(Goffman, 1961)-participants are involved in more than one organizationat any given time. These outside interests and commitments inevitably constrain the behavior of participants in any given organization and, in some instances, strongly influence it. To regard participants as completely containedby the organization is to misperceive one of the fundamental characteristicsof modern organizations: they are systems built on the partial involvement oftheir members.

What about technologies? Few organizations create their own technologies; rather, they import them from the environment in the form of mechanical equipment, packaged programs and sets of instructions, and trainedworkers. Any specific organization must also adapt to the larger occupationalstructure-for example, union rules or professional norms-in the selectionand deployment of workers within the organization. Moreover, the environment is the source of the inputs to be processed by the organization, just as itis the "sink" to which all outputs are delivered-as products to be sold, clientsrestored to function, or waste materials to be eliminated.

How do goals relate to environments? Parsons (1960) has called attention to the importance of this connection. He points out that what is termed agoal or objective by a specific organization is, from the point ofview of the larger society, its specialized function. An organization may thus expect societalsupport for its activities to reflect the relative value society places on those functions. If health represents a strong positive value for a society, for example,then those organizations that supply health care may expect to receive a disproportional share of resources to support their work.


Finally, the social structure of the organization will reflect important features borrowed from or impressed on it by the environment. Structural forms,no less than technologies, are rarely invented and are usually borrowed fromthe environment. Such models or templates exist in the wider world apart frombut available to any specific organization that wishes to copy them. Part Threeof this volume explores the thesis that the environment is the source of muchof the order as well as the disorder, as reflected by the structural features of organizations.

While insisting on the pervasive and critical importance of environmental influences on organizational forms and operations, we must not assumethat the causal processes work in only one direction. Organizations not only areinfluenced by but also affect their environments. Although modern theoristsdiffer in their views of the relative importance of these causal connections, aswe will discuss in later chapters, they generally agree that the relations betweenorganizations and environments are vital, complex, and interdependent. Eachof the four organizational elements shape and is significantly shaped by thewider environment. To complete the diagram of Leavitt's diamond depicted inFigure 1-1, we should add double-headed arrows linking the environment toeach of the "internal" elements. As reframed, Leavitt's "diamond" might better be renamed the "thistle."

Each of these organizational elements-social structure, participants, goals,technology, environment-represents an important component of all organizations. Indeed, each element has been regarded as of surpassing importanceby one or another analyst of organizations. However, the chiefvalue of Leavitt'smodel is as a graphic reminder that no one element is so dominant as to besafely considered in isolation from the others. Organizations are, first and foremost, systems of elements, each of which affects and is affected by the others.Goals are not the key to understanding the nature and functioning of organizations, no more than are the participants, the technology, or the social structure. And no organization can be understood in isolation from the largerenvironment. We will miss the essence of organization if' we insist on focusingon any single feature to the exclusion of all others.

THE CAPACITIES OF ORGANIZATIONS

The foregoing discussion represents an opening attempt to identify some of thekey elements or ingredients of organizations: to specify their building blocks.However, such an approach does not go far in explaining why organizations areso prevalent. What are their distinctive capacities? We briefly address this question here but will return to it again throughout the volume.

Hannan and Carroll (1995) identify a number of features that help toexplain why organizations are much in demand as vehicles for conducting themyriad activities associated with modern social life.

1. More so that many other types of social structures, organizations are durable. theyare designed in such a way as to persist over time, routinely and continuously supporting efforts to carryon a set of specified activities. More so than other typesof social structures, they are expected to operate as long-distance runners. Attaining stability over time and in spite of shifting participants is one of the major


functions of formalization, as we emphasize in Chapter 2. Durability does notnecessarily imply effectiveness; organizations often persist that are deemed bymany to be inept (Meyer and Zucker, 1989). And durability should not to beequated with rigidity. Some of the newer forms of organizations are designed tocombine great flexibility with the maintenance of an organizational core that persists across changing combinations of personnel, structure, and even goals.

2. Another capacity of organizations is their reliability (Hannan and Carroll, 1995:20). Organizations are good at doing the same things in the same way, over andover, and for many types of activities there are many advantages associated withthis characteristic. In later chapters we will describe all the numerous mechanismsof control utilized in organizations, including formalization, authority structures,elaborate rules and routines, strong cultures, and the use of specialized machinery. All of these factors and more are designed in part to increase the reliabilityof the work activities being performed. Reliability of performance is not, of course,an unmixed blessing. To the extent that conditions change and new activities arecalled for, the very factors associated with effective performance may suddenlyprevent an organization from changing its rules and procedures quickly enoughto develop new ways of behaving. Still, for many types of activities and many situations, there are great advantages associated with the ability to produce goodsand services reliably.

3. Organizations exhibit the trait of being accountable (Hannan and Carroll, 1995:21; see also Meyer and Rowan, 1977). Behavior takes place within a framework ofrules that provides both guidelines and justifications for decisions and activities.They establish a scaffolding of rationality that allows participants to give an accounting of their past behaviors (Scott and Lyman, 1968). In most industrial societies, this framework is connected to and supported by legal codes that definethe powers and limits of organizations. Records are kept and a "paper trail" created so that, if necessary, the bases for past actions can be reviewed. The hierarchy of authority is expected, at least in part, to ensure that rules are being followedand work is performed in accordance with agreed-on standards and procedures.Of course, not all organizations measure up to these standards: there is much evidence of both incompetence and corruption. More important, as we will learn,the type of rationality involved-formal rationality-is itself a limited and flawedbasis for ensuring reasonable, let alone moral, conduct. Nevertheless, in an imperfect world, a system in which individuals attempt to operate within an explicit framework of rules nested in wider legal systems to which they are accountable,has much to recommend it.

DEFINING THE CONCEPT OF ORGANIZATION

Consistent with the objectives of this volume, not one but three definitions oforganizations will be presented. These definitions pave the way for our description and evaluation, in Part Two, of three major perspectives employed inthe analysis of organizations. We leave to later chapters the considerable taskof spelling out the implications of these differing definitions. Special attentionis accorded here to the first definition because it continues to be the dominantperspective in the field, not only in guiding the work of the majority of organizational scholars but also by being embraced at least implicitly by most realworld managers and other practitioners. Moreover, this definition served toestablish organizations as a distinctive field of study. The first definition underpins the rational system perspective on organization. Two other definitions-


one associated with the natural system perspective and the other with the opensystem perspective-will be briefly described here and examined more fully inlater chapters.

A Rational System Definition

Because a primary function of a definition is to help us to distinguish onephenomenon from another, most definitions of organizations emphasize thedistinctive features oforganizations-those that distinguish them from relatedsocial forms. Many analysts have attempted to formulate such definitions, andtheir views appear to be similar, as illustrated by the following four influentialdefinitions.

According to Barnard:

formal organization is that kind of cooperation among men that is conscious, deliberate, purposeful. (1938: 4)

According to March and Simon:

Organizations are assemblages of interacting human beings and they are thelargest assemblages in our society that have anything resembling a central coordinative system.... The high specificity of structure and coordination within organizations-as contrasted with the diffuse and variable relations amongorganizations and among unorganized individuals-marks off the individual organization as a sociological unit comparable in significance to the individual organism in biology. (1958: 4)

According to Blau and Scott:

Since the distinctive characteristic of ... organizations is that they have been formally established for the explicit purpose of achieving certain goals, the term"formal organizations" is used to designate thern.? (1962: 5)

And, according to Etzioni:

Organizations are social units (or human groupings) deliberately constructedand reconstructed to seek specific goals. (1964: 3)

All of these early definitions point to the existence of two structural features that distinguish organizations from other types of collectivities.

• Organizations are collectivities oriented to the pursuit of relatively specific goals.They are "purposeful" in the sense that the activities and interactions of participants are coordinated to achieve specified goals. Goals are specificto the extent that

9This definition, which I developed with Blau a good many years ago, now strikes me assomewhat misleading. It places emphasis on the conditions present at the founding of the organization: on whether the unit was "formally established for the explicit purpose of achieving certaingoals. " The wording suggests that factors associated with the founding of the unit-in particular,the intent of the founders-are ofcritical importance. Such historical considerations now seemlessimportant to me than the current state of the system-that is, the extent of goal specificity and offormalization.


they are explicit, are clearly defined, and provide unambiguous criteria for selecting among alternative activities.

• Organizations are collectivities that exhibit a relatively high degree of formalization. The cooperation among participants is "conscious" and "deliberate"; thestructure of relations is made explicit and can be "deliberately constructed andreconstructed." As previously defined, a structure is formalized to the extent thatthe rules governing behavior are precisely and explicitly formulated and to theextent that roles and role relations are prescribed independently of the personal attributes and relations of individuals occupying positions in the structure.

It is the combination of relatively high goal specificity and relatively highformalization that distinguishes organizations from other types of collectivities.Note that both goal specificity and formalization are viewed as variables: organizations vary along both dimensions. Nevertheless, as a structural type, organizations are expected to exhibit higher levels offormalization and goal specificitythan are other types of collectivities, such as primary groups, families, communities, and social movements. In general-exceptions certainly exist-familiesand kinship structures tend to rank relatively high on formalization but low ongoal specificity (Litwak and Meyer, 1966); social movements tend to exhibit lowlevels offormalization combined with higher levels ofgoal specificity.-? althoughthe specificity ofgoals varies greatly from movement to movement and from timeto time (Gusfield, 1968); and communities are characterized by low levels of bothgoal specificity and formalization (Hillery, 1968: 145-52).

We arrive, then, at the first definition, associated with the rational systemperspective: Organizations are collectivities oriented to the pursuit ofrelatively specificgoals and exhibiting relatively highly formalized social structures. Note that this definition focuses not only on the distinctive characteristics of organizations but alsoon their normative structure. In Chapter 2 we consider the development andsignificance of this perspective on organizations.

A Natural System Definition

Gouldner (1959) reminds us that the distinguishing features of a phenomenon are not its only characteristics and, indeed, may not be the most important ones. Although organizations often espouse specific goals, the behaviorof participants is frequently not guided by them, nor can they be safely used topredict organizational actions. Similarly, formal role definitions and writtenrules may have been developed, but all too frequently they exhibit little or noinfluence on the behavior of members. Thus, if the behavioral structure is attended to, rather than the normative structure-if we focus on what participants actually do rather than on what they are supposed to do-the firstdefinition of organizations can be quite misleading.

Focusing attention on the behavioral structure produces a view of organizations quite different from that proffered by the rational system theorists.The goals pursued become more complex, diffuse, differentiated, and subject

lOIn recent years, analysts of movements have placed more emphasis on their organizationalfeatures-for example, the extent to which they are guided by a full-time, paid staff and have regularized mechanisms for obtaining resources and recruits and for setting goals (Zald and MeCarthy, 1987).


to change; participants appear as motivated by their own interests and seek toimpose these on the organization. It is recognized that the organization itselfis a major asset, a valuable resource to be captured. Rather than being only ameans, an instrument to pursuing other ends, the maintenance and strengthening of the organization becomes an end in itself. Informal and interpersonal structures are seen to be of greater importance than are formal structures,which often serve only as a decorative facade concealing the "real" agenda andstructure. And power is recognized as stemming from many sources other thanoccupancy of a formal position.

Hence, a second definition of organizations, useful for viewing them asnatural systems, is suggested: Organizations are collectivities whose participants arepursuing multiple interests, both disparate and common, but who recognize the value ofperpetuating the organization as an important resource. The informal structure ofrelations that develops amongparticipants is more influential in guiding the behavior ofparticipants than is the formal structure.

The natural system view emphasizes the common attributes that organizations share with all social collectivities. And because organizations are notset apart from other social systems, they are viewed as subject to forces affecting all such systems. In particular, we find replicated in this perspective, thetwo contrasting versions of the bases of social order in the sociological literature at large: one emphasizing social consensus, the other, social conflict.

The first, social consensus, version emphasizes a view of collectivities ascomprised of individuals sharing primarily common objectives. The assumption underlying this conception is that social order (of any type) is a reflectionof underlying consensus among the participants; that organizational stabilityand continuity reflect the existence ofcooperative behavior and shared normsand values. This widely held and influential view of the basis of social order isgenerated in the writings ofDurkheim (1961 trans.) and Parsons (1951), amongothers, and reflected in the organizational theories of Barnard (1938) andMayo (1945), among others.

The contrasting, social conflict, version views social order as resulting fromthe suppression of some interests by others. Order results not from consensus,but from coercion, the dominance ofweaker by more powerful groups. And analytic attention is devoted not to the appearance of consensus, but to the reality of underlying conflicts, which provide a basis for understanding instabilityand change. The sociological progenitors of this view include Marx (1954trans.) and Coser (1956). Applications to organizations are provided by suchtheorists as Gouldner (1954), Bendix (1956), and Collins (1975).

In Chapter 3 we review the development of the basic assumptions of thenatural system perspective and examine the competing consensus and conflictmodels.

An Open System Definition

The previous definitions tend to view the organization as a closed system,separate from its environment and encompassing a set of stable and easily identified participants. However, organizations are not closed systems, sealed offfrom their environments, but are open to and dependent on flows of personnel, resources, and information from outside. From an open system perspec-


tive, environments shape, support, and infiltrate organizations. Connectionswith "external" elements can be more critical than those among "internal" components; indeed, for many functions the distinction between organization andenvironment is revealed to be shifting, ambiguous, and arbitrary.

All three perspectives agree that if an organization is to survive, it mustinduce a variety of participants to contribute their time and energy to it. However, open system theorists emphasize that individuals have multiple loyaltiesand identities. They join and leave or engage in ongoing exchanges with theorganization depending on the bargains they can strike-the relative advantage to be had from maintaining or ending the relation. Viewed from this perspective, participants cannot be assumed to hold common goals or even toroutinely seek the survival of the organization. Thus, much of the work of organizing entails hard bargaining and "horse training"-as well as creating affective ties and common interpretive systems-as participants attempt to formand re-form transitory coalitions.

An open system perspective is less concerned with distinguishing formalfrom informal structures; instead, organizations are viewed as a system of interdependent activities. Some of these activities are tightly connected; othersare loosely coupled. All must be continuously motivated-produced and reproduced-if the organization is to persist. The arrival of this perspective triggered the elaboration and elevation of levels of analysis. No longer was thesingle organization the privileged unit of analysis. Rather, analysts recognizethat many organizational phenomena are better understood and explained byviewing individual organizations as representatives of a given type of structure,or by viewing organizations as components in larger systems of relations. Theopen system perspective is associated with the development of studies aimed atunderstanding organizational sets, populations, and fields-topics we pursuein Chapters 6,7, and 8.

Also, the open system perspective stresses the importance of cultural-cognitive elements in the construction of organizations. Nothing is more portablethan ideas-conceptions, models, schemas, and scripts. Organizations swim inthis cultural soup and continuously adopt and adapt these templates, intendedly and inadvertently.

We arrive, then.rat a third definition, useful for viewing organizations asopen systems: Organizations are congeries of interdependent flows and activities linking shifting coalitions ofparticipants embedded in wider material-resource and institutional environments.

The open system perspective is explicated in Chapter 4.

The foregoing three definitions vary in terms of theoretical perspective,differing in ways to be examined in the following three chapters. They also differ in their underlying ontological assumptions. Are organizations to be viewedas entities, or as processes? The former is termed by Emirbayer (1997) substantialist definitions; the latter, relational conceptions. Substantialist definitionsstress organization; relational definitions, organizing. As we will see, rational andnatural system theorists are more likely to employ substantialist definitions;open system theorists, relational conceptions.

It is no doubt unsettling to be confronted so early with three such diverseviews of organizations. But better to know the worst at the outset! The defini-


tions are quite different in that they not only encompass somewhat divergenttypes of collectivities but also emphasize different facets of a given organization. But this is precisely why they are useful. Definitions are neither true norfalse but are only more or less helpful in calling attention to certain aspects ofthe phenomenon under study. With the assistance of these definitions, and themore general perspectives with which they are associated, we can expect to seeand learn more about organizations than would be possible were we to employa single point of view. As we proceed, we will call attention to the remarkablyvaried portraits painted by theorists embracing each of the conceptions. Eachhas its own charms as well as its own blemishes; and each carries its own truthas well as its own biases.

SUMMARY

Organizations are important objects of study and concern for many reasons.They are vital mechanisms for pursuing collective goals in modern societies.They are not neutral tools because they affect what they produce; they functionas collective actors that independently possess certain rights and powers. Bothas instruments and as actors, organizations are alleged to be the source of someof contemporary society's most serious problems. Organizations encompassgeneric social processes but carry them out by means of distinctive structuralarrangements.

Although an interest in organizational forms and processes may be tracedfar back in history, an institutionalized field of scholarly inquiry focusing on thecreation and empirical testing of generalized knowledge concerning organizations did not emerge until after 1950. This development was linked with andgreatly stimulated by the translation into English of Max Weber's historical andcomparative studies of administrative organizations, conducted during the firsttwo decades of this century. The field of organizational studies has become increasingly interdisciplinary.

Organizations are studied for many purposes and from many points ofview. Important bases of divergence include variation among types of organizations, differences in disciplinary background of the investigators, whetherresearch is addressed to more immediate and applied problems or seeks longerterm basic understanding, and level of analysis selected. Three levels of analysis are identified: social psychological, organizational structural, and ecological.

Three contrasting definitions of organizations have arisen, each associatedwith one of three perspectives on organizations: the rational, natural, and opensystem. The first definition views organizations as highly formalized collectivities oriented to the pursuit of specific goals. The second definition views organizations as social systems, forged by consensus or conflict, seeking to survive.And the third definition views organizations as activities involving coalitions ofparticipants with varying interests embedded in wider environments. The threedefinitions frame analytically useful, if partial, views of organizations based ondiffering ontological conceptions.

Documents

Scott 2003 - The Subject is Organizations