LA IMPORTANCIA DE LAS ORGANIZACIONES.

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 older civilizations-Chinese, Greek, Indian-but only in modern industrialized societies do we find large numbers of organizations engaged in performing many highly diverse tasks. To the ancient organizational assignments ofsoldiering, public administration, and tax collection have been added such varied tasks as discovery (research organizations), child and adult socialization (schools and universities); resocialization (mental hospitals and prisons), production and distribution of goods (industrial firms. wholesale and retail establishments). provision of services (organizauons 'd isp e n sin g assistance ranging from laundry and shoe repair to medical care and investment counseling), protection of personaland financial security (police departments, insurance firms, banking and trust companies), preservation of culture (museums, art galleries, 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). Even such a partial Iistmg testifies to the truth of Parsons's statement that "the development of organizations is the principal mechanism by which, in a highly differentiated society, it is possible to 'ge t things done,' to achieve goals beyond the reach of the individual" (1960: 41). 3 4 An Introduction to Organizations Until very recently.ieven highly developed societies such as the United States did not keep accurate records on organizations. We kept close, watch of the numbers ofindividuals and the flow of dollars, but gave less scrutiny to organizations. It was not until the 1980s that the U.S. Bureau of the Census launched a Standard Statistical Establishment List for all businesses, distinguishing between an establishment-an economic unit at a single location-and a firm or company-a business organization consisting of one or more domestic establishments under common ownership. In 1997, the U.S. Census Bureau reported 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 1990s by a team of organizational researchers (Kalleberg et al., 1996). To conduct this "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 the United States who were asked to identify their principal employers. As a second step, data were gathered by telephone, from informants in the organizations named as employers, regarding selected features of each ofthese employment settings, in particular, human resources practices. This procedure resulted in a random sample of employment organizations (establishments), weighted by size 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 has been sufficiently gradual and uncontroversial that they have emerged during the past few centuries almost unnoticed. The spread of public bureaucracies into every arena and the displacement of the family business by the corporation "constitutes a revolution" in social structure, but one little remarked until recently. Never much agitated, never even much resisted, a revolution for which no flags were raised, it transformed our lives during those very decades in which, unmindful ofwhat was happening, Americans and Europeans debated instead such issues as socialism, populism, free silver, clericalism, chartism, and colonialism. It now 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 organizations rapidly increase in number and range of applications, but they also underwent a transformation of structure as formerly "communal" forms based on the bonds 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 ofsocial ills? The increasing prevalence oforganizations in every arena 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 besetting contemporary society. Thus, writing in 1956, C. Wright Mills pointed with alarm to 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 Marxist doctrine by insisting that the basis ofthe class structure was no longer the ownership ofthe means of production but the occupancy of positions that allowed the 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 the growth in number and size of organizations. A related criticism concerns the seemingly inexorable growth in the power of public-sector organizations. The two great German sociologists Max Weber (1968 trans.) and Robert Michels (1949 trans.) were among the first to insist that a central political issue confronting all modern societies was the enormous influence 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 an independent 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 the rationalization ofmodern life-in Weber's phrase, the "disenchantment ofthe world" (1946 trans.: 51). The essence of this view is graphically captured by Norman Mailer: "Civilization extracts its thousand fees from the best nights of man, but none so cruel as the replacement ofthe good fairy by the expert, the demon by the rational crisis, and the witch by the neurotic female" (1968: 83). Organizations are viewed as the primary vehicle by which, systematically, the areas ofour lives are rationalized-s-planned, articulated, scientized, made more efficient 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-food chains-the "Macdonaldization ofSociety" (Ritzer, 1993)-which have rationalized food preparation, depersonalized employee-eustomer relations, and stimulated the growth ofmass production techniques in agribusiness (Schlosser,2000) . A new generation of feminist critics reminds us that women as well as men are trapped within organizational cages. Glennon (1979: chap. 1) decries the 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 6 An Introduction to Organizations 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 to be more characteristic of women's values: equalitarian and personalized associations. And the criteria associated with achievement-aggressive competition and independence-are very different from the nurturing and relational virtues often associated with feminine styles (Gilligan, 1982; Calis and Smircich, 1996). Feminist critics assert that formal organizations are gender biased not only in their application of criteria for appointment and promotion but also more fundamentally, in their choice of criteria-in their conception ofwhat is entailed in creating a rational system for supporting collaborative action. The prototypic models around which organizations are constructed are armies and sports teams. These critics thus add their voices to others who have called attention to the ways in which organizational structures damage the personalities and psyches of their participants. Alienation, overconformity, and stunting of normal personality development are among the consequences attributed, not to such special 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 because they are alleged to be rule bound, cumbersome, and inefficient (Mises, 1944; Parkinson, 1957) or because they are believed to take advantage oftheir size and resulting power to exploit others. Perrow (1991) asserts that large organizations increasingly "absorb" society, internalizing functions better performed by communities and civic society. And critics such as Korten (2001) point with alarm to the increasing power ofthe multinational corporations as they search for cheap labor, despoil the environment, and disrupt the continuity ofstable communities. We attempt to evaluate such criticisms of organizations at appropriate points 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 a great variety of objectives and, perhaps as a necessary consequence, the source of many of our current difficulties, organizations have yet another important effect 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-century aphorism was coined by Marshall McLuhan to focus attention on the characteristics ofthe mass media themselves-print, radio, movies, television-in contrast to the content transmitted by these media. McLuhan defines media very The Subject Is Organizations 7 broadly as "any extension of ourselves"; elaborating his thesis, he notes, "The message 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 of communication. First, like media, organizations represent extensions of ourselves. Organizations can achieve goals 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 effects that occur because organizations are the mechanisms-the media-by which those goals are pursued. A few examples suggest some of these unanticipated and, often, unrecognized organizational effects: • In his crucial decision on how to react to the installation of Russian missiles in Cuba, 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 that had 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 can even be negative; more care can result in poorer health (Illich, 1976). • While most of us believe schools are designed to increase the knowledge and skills ofstudent participants, their major function may well be the indirect effects they have 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 offer an acceptable account of how resources were used and policies pursued (Meyer and Rowan, 1977). To suggest that our organizational tools shape the products and services they produce in unanticipated ways and, in some cases, substitute "accounts" for outcomes indicates the quite substantial impact that organizations have on individual 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 ofindividual actors. Organizations must also be viewed as actors in their own right, as collective actors. They can take actions, utilize resources, enter into contracts, and own property. Coleman (1974) describes how these rights have gradually developed since the Middle Ages to the point where now it is accurate to speak of two kinds of persons-natural persons (such as you and me) and collective orjuristic persons (such as the Red Cross and General Motors). The social structure ofthe modern society can no longer be described accurately as consisting only ofrelations 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- 8 An Introduction to Organizations tors.' In short, we must come to "the recognition that the society has changed over 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 of evidence and arguments to support the case that organizations merit attention. All of these claims relate to their social significance: their ubiquity, their impact on power and status, their effects on personality and performance. A different kind ofrationale forjustifying the study of organizations points to their sociological significance: the contribution their study can make to our understanding of the social world. George Homans points to the value for social science ofstudying organizations when he asserts: The fact is that the organization ofthe large formal enterprises, governmental or private, in modern society is modeled on, is a rationalization of, tendencies that exist in all human groups. (Homans, 1950: 186-87) To say that organizations exhibit "tendencies that exist in all human groups" is to suggest that organizations provide the setting for a wide variety of basic social processes, such as socialization, communication, ranking, the formation of norms, the exercise of power, and goal setting and attainment. Ifthese generic social processes operate in organizations, then we can add as much to our knowledge 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 tendencies that exist in all human groups" is to suggest that organizations are characterized by somewhat distinctive structural arrangements that affect the operation of the processes occurring within them. For example, social-control processes occur within all social groups, but there are some forms or mechanisms of control-for instance, a hierarchical authority structure-that are best studied in organizations, since it is within these systems that they appear in their most highly developed forrn.f In general, all processes-communication, socializaIThese 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 ofthe variation in current legal practice is 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 the more powerful, prosperous, and prestigious segment. 2This general argument has been elaborated elsewhere (Scott, 1970). The basic premise is that 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 of integration is effected in a small group differently than in an organization, and both differ from the same process occurring within a community, and so on. The Subject Is Organizations 9 tion, decision-making-are more highly formalized in organizations. It is our belief that the study of organizations can contribute to basic sociological knowledge by increasing our understanding of how generic social processes operate within distinctive social structures. ORGANIZATIONS AS AN AREA OFSTUDY Emergence of the Area The study of organizations is both a specialized field of inquiry within the discipline ofsociology and an increasingly recognized focus of multidisciplinary research and training. It is impossible to determine with precision the moment of its appearance, but it is safe to conclude that until the late 1940s, organizations did not exist as a distinct field ofsociological inquiry. Precursors may be identified, but each lacked some critical feature. Thus, there was some empirical 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 labor unions (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 the neighboring disciplines, political scientists were examining the functioning of legislative 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 did not 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 as Taylor (1911), Fayol (1949 trans.), and Gulick and Urwick (1937) did concentrate on the development of general principles concerning administrative arrangements, their approach was more often prescriptive than empirical. That is, they were interested in determining what the proper form "should be" in the interests of maximizing efficiency and effectiveness rather than in examining and explaining organizational arrangements as they existed. They also focused primary attention on managerial activities and functions rather than on the wider subjects of organizations and organizing (Guillen, 1994). Engineers played 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 be roughly dated from the translation into English ofWeber's (1946 trans.; 1947 trans.) 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 attempted to outline the boundaries of this new field of inquiry by compiling theoretical and empirical materials dealing with various aspects of organizations (Mer- 10 An Introduction to Organizations ton et al., 1952). Equally important, a series of pathbreaking and influential case studies of diverse types of organizations was launched under Merton's influence, including an examination ofa federal agency-the Tennessee Valley Authority (Selznick, 1949)-a gypsum mine and factory (Gouldner, 1954), a state 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 as organizations. At about the same time, an important interdisciplinary development was under 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 on building a behaviorally oriented science of administration. Following Simon's lead, 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 and March, 1963). Economic models of administrative behavior were modified and enriched by the insights of psychologists and political scientists. These central and other related efforts gave rise to the identification of a new area ofstudy-organizations; an area defined at a level of theoretical abstraction sufficiently general to call attention to similarities in form and function across different arenas of activity; and a subject matter that exhibited sufficient diversity and complexity to encourage and reward empirical investigation. The key elements for creating a new arena of scientific study were in place. As Alfred North Whitehead (1925: 3-4), the astute philosopher ofscience 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 have been men of a philosophical temperament who have been absorbed in the weaving of general principles. It is this union of passionate interest in the detailed facts with equal devotion to abstract generalization which form the novelty ofour present 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 recent forebears, such as Taylor, Barnard, and Mayo, were rediscovered and reprinted. Even a couple oftoken women contributors were identified, in the persons of Lillian M. Gilbreth-who collaborated with her husband in finding ways to improve work efficiency in factories (Gilbreth and Gilbreth, 1917), but also employed similar techniques at home, her feats celebrated in the book and movie, Cheaper by the Dozen-and Mary Parker Follett (1941), an early student of management and change working in the human relations tradition (see Green, 1995). The Subject Is Organizations 11 After about a decade of empirical research and theory development, three textbook treatises-by March and Simon (1958), Etzioni (1961), and Blau and Scott (1962)-provided needed integration and heightened interest in the field. 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 perceive among the great diversity ofspecific goals and structural arrangements? Most analysts have conceived of organizations as social structures created by individuals to support the collaborative pursuit ofspecified 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; all must control and coordinate these contributions; resources must be garnered from the environment and products or services dispensed; participants must be selected, trained, and replaced; and some sort ofworking accommodation with the neighbors must be achieved. In addition to these common operational requirements, some analysts have also emphasized that all organizations are beset by a common curse. All resources cannot be devoted directly to goal attainment; some-in some cases a high proportion-of the resources utilized by any organization must be expended to maintain the organization itself. Although organizations are viewed as 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 ofinterest around these common features, but we must not overlook the many bases of divergence. These include differences among the organizations themselves as objects of study, differences in the interests and backgrounds of those who study organizations, and differences in the level of analysis at which inquiry is pitched. Diverse organizations. Organizations come in a bewildering variety of sizes and shapes. The largest ofthem are immense. Although the exact numbers depend on how the boundaries are defined, the largest organizational units found in modern society are the military services. The U.S. Department of the Army in 1995 employed approximately 790,000 employees, 510,000 active commissioned officers and enlisted personnel, and 280,000 civilians. An additional 642,000 served in the reserve corps (Kaufman, 1996). Under the threat ofworld terrorism, the size of the military is again expanding. Large organizations also exist within the civilian world. In 2001, the largest corporate employer, Wal-Mart Stores, employed 1,244,000 employees. The largest manufacturing corporation, !lOther brief histories ofthe development of organizations as an identifiable field ofinquiry are offered by March (1965: ix-xvi) and Pfeffer (1982: 23-33). An entertaining, ifjaundiced, view of the evolution of organization theory is provided by Perrow (1973). Summaries of the contributions of major organizational theorists together with brief biographical information have been assembled by Pugh and Hickson (1996). 12 An Introduction to Organizations GM, was substantially smaller at 386,000. Ofthe ten largest U.S. corporations at the beginning of the twenty-first century, six were in sales and services, four in manufacturing (Fortune, 2001). Most workers in this country are employees ofsomeone else; less than 5 percent of the workforce is self-employed (Mishel, Bernstein, and Schmitt, 1999). And, more workers are employed by fewer and larger companies: by 1975, 3 percent ofthe employing organizations accounted for 55 percent ofthe employed, and about one-quarter ofthe total workforce was employed by firms with more than 1,000 employees. Size, however, should not be equated with success. Perhaps for a time in the 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 and downsize many of the corporate giants. Indeed, it is somewhat ironic that one of the largest corporate enterprises in the United States in the mid-1990s was Manpower Temporary Services, with over 800,000 workers. More generally, Carroll and Hannan (2000: 20) report that the average size of corporations in the United States has declined from about 60 employees per company in 1960 to 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 is important to emphasize that small organizations are actually in the majority: in 1990,90 percent of all employing organizations in the United States employed 19 or fewer individuals (Small Business Administration, 1994). And the predominant ownership form remains the sole proprietorship, with more than 12 million establishments, compared with about 2.8 million corporations and about 1.5 million partnerships. Of course, the corporation far outstrips the other 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, in the United States, over 19 million individuals-about one out of every six nonfarm workers-were employed in federal, state, and local governments. The number of units or agencies involved is difficult to determine because of the nested character of governmental forms. The United States Government Manual (U.S. Office of the Federal Register, 1992) provides organizational charts and brief descriptions of the principal agencies. It currently numbers almost 1,000 pages! Federal employees make up only about 18 percent of all governmental officials, the vast majority of whom are employed at the state (5 million) and local levels (11 million), where there exists great variation in organizational arrangements (Littman, 1998). The shift in type of employment settings has been dramatic. In 1960 roughly half as manyjobs were to be found in manufacturing as in services (including public sector employment). By 1990, the ratio had shifted to one out of 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 ofthe workforce. By 1996, The Subject Is Organizations 13 over 46 percent-nearly half-of all workers were women. And, women are not only employees of organizations. By the beginning ofthe 1990s, women owned about 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 alternative mode of organizing. In 1994 more than a half million public charities and 50,000 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 United States is a reduction in the attachment of workers to specific employers. The number 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 help agencies-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 absence of regularjob 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 ofsuch 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 380 specialty associations listed in the Directory of Medical Specialists. A horizontal slice, an attempt to compile a detailed list of all voluntary associations in Birmingham, 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 many voluntary associations stands in sharp contrast with the multilayer hierarchy of a military unit or a civil service bureaucracy. And both seem relatively clean and simple in comparison with the project team or matrix structures (discussed in 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 enable them to enjoy simultaneously the benefits associated with being small, such as rapid 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 resources in machinery and automated equipment. Others invest heavily in the "human capital" of their workforce, selecting highly qualified personnel, underwriting their further, specialized training, and then struggling to keep them from carrying 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 general management. j 14 An Introduction to Organizations 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 ofwork, because they function in different contexts. It matters considerably whether you operate to satisfy the demands ofmany decentralized customers or one centralized budget or oversight bureau. Much ofwhat we know about organizations is drawn from organizations operating in the second half ofthe twentieth century in capitalist, democratic societies-and in one such society in particular, the United States. Only recently have there been extensive efforts to examine the structure and operation of organizations in different times, using historical documents, and in different kinds ofsocieties. Large-scale organizations devoted to the pursuit ofspecialized goals developed in this country during the middle of the nineteenth century. Many of the characteristics we associate with modern organizations-the specialized equipment, the sizable administrative hierarchy, the collection ofspecialistsfirst appeared in association with the development of the railroads. The "managerial revolution" occurred in response to the problems ofscale and scope, of distance and tight scheduling posed by railroads (Chandler, 1977). Organizations developing at this time were different in structure from those arriving later. The unified structures soon gave way to diversified and conglomerate forms, 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 which they were created. Thus, at any given time, much of the diversity exhibited by a collection of organizations is due to the varying conditions present at the time 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 of context (Orru, Biggart, and Hamilton, 1997). For example, one cannot understand theJapanese corporation without attention to the distinctive belief systems governing employment, to the connections betweena company and its family offirms (the Zaibatsu), and to the relations between private firms and the state. Less dramatic but significant differences are associated with organizations operating on the European continent as well as in other areas ofthe world (see Hofstede, 1984, 1991; Chandler 1990; Whitley 1992a, 1992b, 1999). Among all of the other sources of variation, we must not overlook temporal, regional, and cultural factors. Diverse research interests and settings. Another basis for divergence in work on organizations resides not in the differences among organizations as objects ofstudy but in the interests, training, and employment settings of those who 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 administrative structures, economists on business firms, sociologists on voluntary associations and on agencies engaged in social welfare and social-control functions, and anthropologists on comparative administration in primitive, colonial, and developing societies. Disciplinary differences remain even when a single type of The Subject Is Organizations 15 organization is selected for study: specialists tend to look not only at different objects but also at different aspects of the same object. Thus, the political scientist will be likely to emphasize power processes and decision making within the organization; the economist will examine the acquisition and allocation of scarce resources within the organization and will attend to such issues as productivity and efficiency; the sociologist has quite varied interests but if there is a focus it will likely be on status orderings, on the effect ofnorms and sentiments on 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 cultural values 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 their interrelations 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 basis of 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 testing propositions about them to better understand their nature and operation. Applied studiesseek knowledge in order to solve specific problems or to bring about desired 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 to practical applications, and applied research often contributes importantly to general knowledge. Both rest on interests and values: neither is value-free, and the same investigators often conduct both basic and applied studies. Still, there are important differences in these orientations. Basic research is driven more by theory-in its choice both of problems and ofvariables. Particular concepts-authority, legitimacy, institutionalization-are ofinterest because of their place in theoretical arguments, not because of their practical significance. Basic research is more likely to focus on the independent variables-on understanding the effects of certain concepts of interest-than on the 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 incorporate any 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 be conducted by researchers located in nonacademic settings: in governmental bureaus, research units of corporations, consulting firms, or policy-research organizations. The results of these studies are less likely to be published in scholarlyjournals; often they result in no publications at all, only a report to the client 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 research productivity)-or is funded largely through research grants from government 16 An Introduction to Organizations sources or private foundations." These organizations support research primarily because of "public interest" arguments: it is better to know than not to know, and all benefit from the discovery of new knowledge. An intermediate group ofscholars "swings" both ways. These academics are faculty members in professional schools: business, educational administration, public administration and public policy, public health, engineering management, social work administration, and related programs. These faculty members are more likely to engage in consulting work for companies and agencies and to write cases illustrating particular problems or conditions than are those located in academic departments. And they are generally more likely to carry out applied studies, in part because ofpressures from theirstudents-past (alumni) and present-who are interested in usable practical information and in 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 ofthe 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 to contribute to basic knowledge-that is, to publish in scholarlyjournals. As faculty members of a university, they are subject to the academic culture and its requirements, although the strength of these pressures varies from campus to campus and school to school. Gibbons and colleagues (1994) describe the same distinction between basic 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 research developed in professional schools, in the organizational arena, this type ofwork is 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 may be expected to continue to make important contributions to our knowledge of organizations-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 ofresearch receive attention and support (see also Pfeffer, 1982: 23-40; Huff, 2000). Diverse levels of analysis. Apart from the variety of conceptual schemes and 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 nature of 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 Subject Is Organizations 17 • 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 processes that 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 subunits that 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 structural features or operational routines of organizations. Researchers working at this level include Udy (1959b) and Blau and Schoenherr (1971). • The ecologicallevel, focusing on the characteristics or actions of the organization viewed as a collective entity operating in a larger system ofrelations. 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; Pugh and Hickson, 1976) or to examine the relations that develop among a number of organizations 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-organizational relations." Nevertheless, if only to remind us of the complexity of the subject matter and the variety of aims and interests with which analysts approach it, the three levels are helpful in providing a rough gauge for distinguishing among broad categories ofstudies. Early research on organizations was conducted almost exclusively at the social psychological level. The structural level of analysis became prominent in 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 this level that much of the intellectual excitement and energy that characterizes the field during the past three decades has transpired. Yet another base of divergence among those who study organizations is the theoretical perspective employed by the analyst. However, this is, in our view, such a fundamental difference that it provides the basic themes around which we 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 these perspectives, while the subsequent chapters explicate the ways in which they have 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. 18 An Introduction to Organizations Because so much of our attention in succeeding chapters will be devoted to 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 with a simplifying model focusing on their central features. The proposed model shown in Figure 1-1 is adapted from Leavitt (1965). 7 Let us briefly consider each 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 three components. Davis (1949) identifies two and we add a third: Always in human society there is what may be called a double reality-on the one hand 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; this component includes values, norms, and role expectations. Briefly, values are the 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 a separate factor. As is obvious from our discussion, we regard the environment as an indispensable ingredient in the analysis of organizations, and one that reframes all the other elements. Environment -, I I I I I / Social Structure -. Technology Goals "partiCiPants/ I"Qrganf;8tion I I I I I __________ ..J FIGURE 1-1 Leavitt's Diamond: A Model of Organization. Source: Adapted from Leavitt (1965), Figure 1,p. 1145. The Subject Is Organizations 19 alized rules governing behavior that specify, in particular, appropriate means for pursuing goals; and roles are expectations for or evaluative standards employed in assessing the behavior of occupants ofspecific social positions. A social position is simply a location in a system ofsocial relationships. (For a basic formulation of positions and roles, see Gross, Mason, and McEachern, 1958.) In any social grouping, values, norms, and roles are not randomly arranged, but are 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 symbolic order provides a framework-of schemas, models, recipes for action-that helps participants to interpret and collectively make sense oftheir world (Berger and Luckmann, 1967; Weick, 1995). Davis's second (our third) component, which he refers to as "a factual order," we will call the behavioralstructure. This component focuses on actual behavior rather than on normative prescriptions or cognitive patterns guiding behavior. Homans's (1950: 33-40) well-known classification ofsocial behavior into activities, interactions, and sentiments suggests the types of elements that constitute the behavioral structure. Because our concern is with the analysis of behavioral 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 of individuals. Such actions, exhibiting some consistency and constancy in their general characteristics, are themselves arranged into larger patterns or networks of behavior. For example, we may observe in a group over a period oftime which individuals attempt to influence others and with what degree ofsuccess, and in this way obtain a description of the power structure within that group. Or by observing the patterning ofsentiments among group members-who is attracted to or rejected by whom-we can describe the sociometric structure of the 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 and channeling behavior through mutually held expectations and obligations. The cultural-eognitive structure provides a common interpretive framework that helps to account for much of the regularity and patterning that exists. Still, much behavior departs from these models and guidelines, and such departures are an essential source of additions to and changes in the structure. Behavior shapes norms and beliefsjust as norms and beliefs shape behavior. Groups vary in the extent to which these structures are aligned. In some situations precept corresponds closely to practice: this appears to be the case in many utopian communities or communes-at least in their early stages ofdevelopment (Kanter, 1972). In many prisons, on the other hand, there is a large gap between what the rules specify and how the guards and inmates actually behave. Nevertheless, in every existing social structure, the normative, cultural-cognitive, and be- 20 An Introduction to Organizations havioral structures are always in a state of dynamic tension-each existing and changing 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 sociological concept-are characterized by a normative structure applicable to the participants, cultural-cognitive frameworks supporting shared understandings, and a behavioral structure linking participants in a common network or pattern of activities, 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 their coworkers, in part because such matters draw their attention and require their energies. 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 in organizations 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 ofthe social structure of organizations does not commit us to the view that relations among participants are all sweetness and light: social structure does not connote social harmony. Conflict is always present and has helped to shape the social structure. An emphasis on social structure should enable us to see that much of whatever conflict is present in the organization is patterned, in the sense that it is built into the structure of relations between individuals and groups and is not due to innately aggressive individual 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. For this reason, Giddens (1979; 1984) argues that we should substitute the concept of structuration, a dynamic term emphasizing that social structure exists only to the 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 is formalized. A formal social structure is one in which the social positions and the relationships among them have been explicitly specified and are defined independently of the personal characteristics and relations of the participants occupying these positions. By contrast, in an informal social structure, it is impossible to distinguish between the characteristics ofthe positions and the prescribed relations and the characteristics and personal relations of the participants. In an informal structure, when specific participants leave or enter the system, their roles and relationships develop and change as a function of their 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 ofspecific individuals. Miner (1987) has labeled these positions idiosyncratic jobs and notes two subtypes: "evolvedjobs," created around current organizational members, and "opportunistic hires," created around people outside the organization. The Subject Is Organizations 21 Participants-Social Actors Organizational participants are those individuals who, in return for a variety ofinducements, 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 oftheir involvement may vary greatly; the decision as to who is to be regarded as a participant is thus often a difficult one and may legitimately vary with the issue at hand. For example, a single individual may simultaneously be an employee of an industrial firm, a member of 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 medical practice, 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. to many types of participants, all of whom have a different interest in and make different demands on and contributions to the organization. To emphasize this 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 have legitimate claims on an organization. The concept of stakeholder is much broader than that of employee. Analysts disagree, as we shall see, on the extent to which organizations do or should incorporate facets of participants. How much of the personalities and private lives ofindividual participants is relevant to the functioning of the 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 of organizational structure and functioning; we will explore these implications in Chapter 7. And the structural features oforganizations-the opportunities they create 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 and foremost, social actors. It is their energy, their ideas, their conformity and nonconformity that constitutes and shapes the structure of the organization and carries on its functions. Without the ongoing participation ofspecific individual actors, there is no social structure, no organization. Early sociological theories privileged social structure. More recent theorists remind us that social structures do not exist unless-and exist only to the extent that-social actors carry out the requisite activities. They also insist that social actors are the instruments of both continuity-the reproduction ofstructure-and changethe production of novelty and innovation (Bourdieu, 1977 trans.). The ability of 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: 22 An Introduction to Organizations Every process of action is a production ofsomething new, a fresh act; but at the same time all action exists in continuity with the past, which supplies the means of 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 of social 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 with a discounting of the importance ofindividual imagination and initiative. Sociological work on organizations too often carries an overly deterministic perspective. On the other hand, it also guards against the more common individualistic bias, particularly pervasive in American culture, that disembeds individuals from their social moorings and attributes all developments to individual interest and will. Goals The concept of organizational goals is among the most important-and most 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 to justify past actions. Then, too, behaviorists are fond of pointing out that only individuals have goals; collectivities, such as organizations, do not. We will not attempt to tackle these prickly issues here but promise not to duck them indefinitely. For most analysts, goals constitute a central point ofreference in the study of organizations. Goals are tentatively defined as conceptions ofdesired endsends that participants attempt to achieve through their performance oftask activities. So defined, goals clearly involve both cultural-cognitive and normative elements, but they are a sufficiently important aspect of organizations as to merit separate attention. Since goals figure prominently in some definitions of organizations, we consider them further in the following section and discuss the major issues and problems bearing on their analysis in Chapter 11. Technology To focus on the technology of an organization is to view the organization as 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 ofthe term technology are narrow and hard, but we will insist that every organization does work and possesses a technology for doing that work. Some organizations process material inputs and fabricate new 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 others process primarily symbolic materials, such as information or music. The technology of an organization is often partially embedded in machines and me- The Subject Is Organizations 23 chanical equipment but also comprises the technical knowledge and skills of participants. All organizations possess technologies, but organizations vary in the extent to which these techniques are understood, routinized, or efficacious. Some of the most interesting theoretical and empirical work has focused on the relation between the characteristics of technology and the structural features of organizations. 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 ofrelations 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 notjust another category of variables, but a pervasive 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 full responsibility for the socialization and training of their participants. Employees come to the organization with heavy cultural and social baggage obtained from interactions in other social contexts. With very few exceptions-such as inmates in "total institutions," for example, concentration camps or cloisters (Goffman, 1961)-participants are involved in more than one organization at 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 contained by the organization is to misperceive one of the fundamental characteristics of modern organizations: they are systems built on the partial involvement of their 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 trained workers. Any specific organization must also adapt to the larger occupational structure-for example, union rules or professional norms-in the selection and deployment of workers within the organization. Moreover, the environment is the source of the inputs to be processed by the organization, just as it is the "sink" to which all outputs are delivered-as products to be sold, clients restored to function, or waste materials to be eliminated. How do goals relate to environments? Parsons (1960) has called attention to the importance ofthis connection. He points out that what is termed a goal or objective by a specific organization is, from the point ofview ofthe larger society, its specialized function. An organization may thus expect societal support 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. 24 An Introduction to Organizations Finally, the social structure ofthe 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 from the environment. Such models or templates exist in the wider world apart from but available to any specific organization that wishes to copy them. Part Three of this volume explores the thesis that the environment is the source of much of 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 assume that the causal processes work in only one direction. Organizations not only are influenced by but also affect their environments. Although modern theorists differ in their views of the relative importance of these causal connections, as we will discuss in later chapters, they generally agree that the relations between organizations and environments are vital, complex, and interdependent. Each of the four organizational elements shape and is significantly shaped by the wider environment. To complete the diagram ofLeavitt's diamond depicted in Figure 1-1, we should add double-headed arrows linking the environment to each of the "internal" elements. As reframed, Leavitt's "diamond" might better be renamed the "thistle." Each ofthese organizational elements-social structure, participants, goals, technology, environment-represents an important component of all organizations. Indeed, each element has been regarded as of surpassing importance by one or another analyst of organizations. However, the chiefvalue ofLeavitt's model is as a graphic reminder that no one element is so dominant as to be safely 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 larger environment. We will miss the essence of organization if' we insist on focusing on any single feature to the exclusion of all others. THE CAPACITIES OF ORGANIZATIONS The foregoing discussion represents an opening attempt to identify some ofthe key elements or ingredients of organizations: to specify their building blocks. However, such an approach does not go far in explaining why organizations are so 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 to explain why organizations are much in demand as vehicles for conducting the myriad activities associated with modern social life. 1. More so that many other types ofsocial structures, organizations are durable. they are designed in such a way as to persist over time, routinely and continuously supporting efforts to carryon a set ofspecified activities. More so than other types of social structures, they are expected to operate as long-distance runners. Attaining stability over time and in spite ofshifting participants is one ofthe major The Subject Is Organizations 25 functions of formalization, as we emphasize in Chapter 2. Durability does not necessarily imply effectiveness; organizations often persist that are deemed by many to be inept (Meyer and Zucker, 1989). And durability should not to be equated with rigidity. Some of the newer forms of organizations are designed to combine 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 and over, and for many types of activities there are many advantages associated with this characteristic. In later chapters we will describe all the numerous mechanisms of control utilized in organizations, including formalization, authority structures, elaborate rules and routines, strong cultures, and the use ofspecialized machinery. All of these factors and more are designed in part to increase the reliability ofthe work activities being performed. Reliability of performance is not, of course, an unmixed blessing. To the extent that conditions change and new activities are called for, the very factors associated with effective performance may suddenly prevent an organization from changing its rules and procedures quickly enough to develop new ways of behaving. Still, for many types of activities and many situations, there are great advantages associated with the ability to produce goods and 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 of rules 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 define the 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 followed and 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 ofrationality involved-formal rationality-is itself a limited and flawed basis for ensuring reasonable, let alone moral, conduct. Nevertheless, in an imperfect world, a system in which individuals attempt to operate within an explicit framework ofrules 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 of organizations will be presented. These definitions pave the way for our description and evaluation, in Part Two, ofthree major perspectives employed in the analysis of organizations. We leave to later chapters the considerable task ofspelling out the implications ofthese differing definitions. Special attention is accorded here to the first definition because it continues to be the dominant perspective 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 to establish organizations as a distinctive field of study. The first definition underpins the rationalsystem perspective on organization. Two other definitions- 26 An Introduction to Organizations one associated with the natural system perspective and the other with the open system perspective-will be briefly described here and examined more fully in later chapters. A Rational System Definition Because a primary function of a definition is to help us to distinguish one phenomenon from another, most definitions of organizations emphasize the distinctive features oforganizations-those that distinguish them from related social forms. Many analysts have attempted to formulate such definitions, and their views appear to be similar, as illustrated by the following four influential definitions. 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 the largest 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 among organizations 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 constructed and 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 ofrelatively 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 as somewhat 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 certain goals. " The wording suggests that factors associated with the founding of the unit-in particular, the intent ofthe founders-are of critical importance. Such historical considerations now seemless important to me than the current state of the system-that is, the extent of goal specificity and of formalization. The Subject Is Organizations 27 they are explicit, are clearly defined, and provide unambiguous criteria for selecting among alternative activities. • Organizations are collectivities that exhibit a relatively high degree offormalization. The cooperation among participants is "conscious" and "deliberate"; the structure of relations is made explicit and can be "deliberately constructed and reconstructed." As previously defined, a structure is formalized to the extent that the rules governing behavior are precisely and explicitly formulated and to the extent 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 high formalization 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 specificity than are other types of collectivities, such as primary groups, families, communities, and social movements. In general-exceptions certainly exist-families and kinship structures tend to rank relatively high on formalization but low on goal specificity (Litwak and Meyer, 1966); social movements tend to exhibit low levels offormalization combined with higher levels ofgoal specificity.-? although the specificity ofgoals varies greatly from movement to movement and from time to time (Gusfield, 1968); and communities are characterized by low levels of both goal specificity and formalization (Hillery, 1968: 145-52). We arrive, then, at the first definition, associated with the rational system perspective: Organizations are collectivities oriented to the pursuit ofrelatively specific goals and exhibiting relatively highly formalized social structures. Note that this definition focuses not only on the distinctive characteristics of organizations but also on their normative structure. In Chapter 2 we consider the development and significance 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 behavior of participants is frequently not guided by them, nor can they be safely used to predict organizational actions. Similarly, formal role definitions and written rules may have been developed, but all too frequently they exhibit little or no influence 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 first definition 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 ofmovements have placed more emphasis on their organizational features-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). 28 An Introduction to Organizations to change; participants appear as motivated by their own interests and seek to impose these on the organization. It is recognized that the organization itself is a major asset, a valuable resource to be captured. Rather than being only a means, 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 and structure. And power is recognized as stemming from many sources other than occupancy of a formal position. Hence, a second definition of organizations, useful for viewing them as natural systems, is suggested: Organizations are collectivities whose participants are pursuing multiple interests, both disparate and common, but who recognize the value of perpetuating 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 not set apart from other social systems, they are viewed as subject to forces affecting all such systems. In particular, we find replicated in this perspective, the two contrasting versions of the bases ofsocial 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 as comprised of individuals sharing primarily common objectives. The assumption underlying this conception is that social order (of any type) is a reflection of underlying consensus among the participants; that organizational stability and continuity reflect the existence of cooperative behavior and shared norms and values. This widely held and influential view of the basis ofsocial order is generated in the writings ofDurkheim (1961 trans.) and Parsons (1951), among others, and reflected in the organizational theories of Barnard (1938) and Mayo (1945), among others. The contrasting, social conflict, version views social order as resulting from the suppression ofsome 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 instability and change. The sociological progenitors of this view include Marx (1954 trans.) and Coser (1956). Applications to organizations are provided by such theorists as Gouldner (1954), Bendix (1956), and Collins (1975). In Chapter 3 we review the development of the basic assumptions of the natural system perspective and examine the competing consensus and conflict models. An Open System Definition The previous definitions tend to view the organization as a closed system, separate from its environment and encompassing a set ofstable and easily identified participants. However, organizations are not closed systems, sealed off from their environments, but are open to and dependent on flows of personnel, resources, and information from outside. From an open system perspec- The Subject Is Organizations 29 tive, environments shape, support, and infiltrate organizations. Connections with "external" elements can be more critical than those among "internal" components; indeed, for many functions the distinction between organization and environment is revealed to be shifting, ambiguous, and arbitrary. All three perspectives agree that if an organization is to survive, it must induce a variety of participants to contribute their time and energy to it. However, open system theorists emphasize that individuals have multiple loyalties and identities. They join and leave or engage in ongoing exchanges with the organization 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 to routinely 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 form and re-form transitory coalitions. An open system perspective is less concerned with distinguishing formal from informal structures; instead, organizations are viewed as a system of interdependent activities. Some of these activities are tightly connected; others are loosely coupled. All must be continuously motivated-produced and reproduced-ifthe organization is to persist. The arrival of this perspective triggered the elaboration and elevation of levels of analysis. No longer was the single organization the privileged unit of analysis. Rather, analysts recognize that many organizational phenomena are better understood and explained by viewing individual organizations as representatives of a given type ofstructure, or by viewing organizations as components in larger systems of relations. The open system perspective is associated with the development ofstudies aimed at understanding organizational sets, populations, and fields-topics we pursue in 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 portable than ideas-conceptions, models, schemas, and scripts. Organizations swim in this cultural soup and continuously adopt and adapt these templates, intendedly and inadvertently. We arrive, then.rat a third definition, useful for viewing organizations as open systems: Organizations are congeries ofinterdependent 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 viewed as entities, or as processes? The former is termed by Emirbayer (1997) substantialist definitions; the latter, relational conceptions. Substantialist definitions stress organization; relational definitions, organizing. As we will see, rational and natural 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 diverse views of organizations. But better to know the worst at the outset! The defini- 30 An Introduction to Organizations tions are quite different in that they not only encompass somewhat divergent types of collectivities but also emphasize different facets of a given organization. But this is precisely why they are useful. Definitions are neither true nor false but are only more or less helpful in calling attention to certain aspects of the phenomenon under study. With the assistance ofthese definitions, and the more general perspectives with which they are associated, we can expect to see and learn more about organizations than would be possible were we to employ a single point of view. As we proceed, we will call attention to the remarkably varied portraits painted by theorists embracing each of the conceptions. Each has its own charms as well as its own blemishes; and each carries its own truth as 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 function as collective actors that independently possess certain rights and powers. Both as instruments and as actors, organizations are alleged to be the source ofsome of contemporary society's most serious problems. Organizations encompass generic social processes but carry them out by means of distinctive structural arrangements. Although an interest in organizational forms and processes may be traced far back in history, an institutionalized field ofscholarly inquiry focusing on the creation and empirical testing of generalized knowledge concerning organizations did not emerge until after 1950. This development was linked with and greatly stimulated by the translation into English of Max Weber's historical and comparative studies of administrative organizations, conducted during the first two decades ofthis century. The field of organizational studies has become increasingly interdisciplinary. Organizations are studied for many purposes and from many points of view. Important bases of divergence include variation among types of organizations, differences in disciplinary background of the investigators, whether research 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 associated with one ofthree perspectives on organizations: the rational, natural, and open system. 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 of participants with varying interests embedded in wider environments. The three definitions frame analytically useful, if partial, views of organizations based on differing ontological conceptions.

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