kast y rsenzweing. chapter 1.pdf

7/28/2019 kast y rsenzweing. chapter 1.pdf

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CHAPTER1

THE SETTING OFORGANIZATION AND

MANAGEMENT

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We are social animals with a propensity for organizing and managing our affairs.

Wedo so inan increasingly complex and dynamic environment. Many disciplinesare contributing to an eclectic body of knowledge----rganizationheory-which,coupled wi th exper ience, i s the foundat ion for management p ract ice. In thi schapter the set ting of organizat ion and management wil l be introduced via thefollowing topics:

Our Organizational SocietyRelevant Research and KnowledgeIncreasing Complexity of OrganizationsMajor Themes and ConceptsSystems Appro3ch-UnderstandingContingency View-ActingPerformance and' SatisfactionProductivity and Quali ty of Work LifeOutline of Beok

O UR O RG AN IZ AT IO NA L S OC IE TY

People are social by nature, The tendency to organize and cooperate ininterdependent relat ionships isinherent, The history ofthe human race could betraced through the development of social organizat ions, The first were familiesand small nomadic tribes; then came permanent villages and tribal communities.The feudal system and nation states were further developments. This evolutionof organizations has accelera ted in recent yea rs, Dramatic changes have

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occurred over the past century We have been transformed from a predominant-ly agrarian socicty'witk.umphasis on the family, informal groups, and smallcommuni ties to a complex indus tr ia l soc ie ty character ized by the emergence oflarge, formal organizations:

Groups and organizations are a pervasive part of our current existence.Typically, we are born into a family with [he aid of it me di cal o rg an iz at ion , t hehospital. We spend a great deal of time in educational institutions. Informal

groups develop spontaneously when several peop~ have common i nt erests anda gre e ( oft en i mp li ci tl y) t o p ursu e c ommo n g oal s-s- a p ic ni c o r a fi sh in g t ri p. Wor korganizations account for a large part of OUT time, wit h formal or informalr el at io nsh ip s o ft en c arry in g o ver i nt o t he l ei su re - t ime a ct iv it ie s su ch a s b owl ingor softball teams. It IS easy to see that all of LIS, e xce pt fo r h ermi ts , ar e i nv ol ve di n a va ri et y o f g rou ps a nd o rg an iz at io ns .

Oreaniz~tions are not distant, impersonal phenomena; they are inexorablyinterwoven into our daily lives. They are everywhere and they affect all of us.The informal social or athletic group, Howard Johnson restaurants, the SierraClub, Toyota M( tor Company, General Electric, the Teamsters, and the UnitedNations are all organizations. They provi de gnods and services that people use.We are all members of an organizational society-people cooperating in groupst o ac co mp li sh a v ari et y o f p urp os es .

Humans are activists. We have created and destroyed ci vil izations. We havedeveloped vas t technological complexes , We have utilized natural resources iningenious ways and in the process have wreaked havoc with the ecosystem. Wehave even broken the umbilical cord holding US to mother earth; we have beento the 1I100n and returned. Future generations may see us go 10 the planets andbeyond. We arc all ama-ed at (and probably fail to comprehend fully) thcenormity of modern scientific and technological achievements. But a secondt ho ug ht c au se s u s t o re co gni ze a ma jo r fa ct or u nd crl yi ng t hes e ac hi ev eme nt s-c .our ability to develop social organizations f or a cc omp li sh in g o ur p urp os es . T hedevelopment of these organizations and effective management of them is trulyone of our greates t achievements.

It is worth reminding ourselves that management does nor.really exist. It is a word anidea. Likescience, likegovernment, like engineering, management is an abstraction.nut managers exist . And managers arc not abs trac tions; . .. they are human beings.Par ticu lar and special kmds of human beings. Indiv iduals with a special funct ion: tolead aod move and bring out the latent capabilities-c-and drearns-i-of other human

b ei ng s . . _. . T hi s I b el ie ve , a nd t hi s my w ho le l ife 's e xp eri en ce h as t au gh t me : t hen:'anagenal life IS the broadest, the most demanding, by all odds the most cornprehen-srve and the most subtle of a ll human act iv it ies. And the most crucial .'

T~is book is about organizations and their management. It is an attempt tofaclht~te ,underst~ndmg of the man~geri~l .role in a complex and dynamico rg an iz at io nal so ci et y. Al th ou gh c on fl ic t w it hi n f ami li es a nd c la ns i s e vi den t, t he

'David E. Lilienthal. M an ag em en t: A H um an is t A n, Columbia University Press, Ne w Yor k ,1967. p. 18.

r:H AP TE R 1: T HE S ET TI NG O F O RG AN IZAT,O N A N!) M ANA GE ME NT 5

group provides a means of protection and hence survival. Organized activitytoday ranges on a continuum from informal, ad hoc groups to formal, highly' st ru ct ure d o rg an iza ti on s, Mi li tar y a nd r cl ig ic us ac ti vi ti es w ere amo ng t he fi rst t ob ec ome fo rma ll y o rg an ize d. E lab ora te s yst ems w ere d eve lo pe d a nd b y an d l argehave persisted, with modifications, to the present. Business, government, anded uc at ion ar e ot he r s ph er es o f a ct iv it y t ha t ha ve d ev el op ed fo rmal o rg an iz at io nsgeared to task accomplishment. We engage in many voluntary organizations in

our leisure time-some recreational, some philanthropic, and some of acrusading nature.Many different definitions of organization have been set forth, but they have

certain fundamental or essential elements. Organization behavior is directedtoward objectives that are more or less understood by members of the group.The organization uses knowledge and techniques in the accomplishment of itstasks. Qrg.Qnization i mp li es s tru ct ur in g an d i nt eg rat in g a ct iv it ies , t ha t i s, p eo pl eworking or cooperating together in interdependent relationships. The not ion ofinterrelatedness suggests a social system. Therefore we can say that organiza-tions consist of (1) goal-oriented arrangements, people with a purpose; (2)psychosocial systems, people interacting in groups; (3) technological systems,people using knowledge and techniques; and (4) an integration of structuredactivities, p eo pl e w ork in g t og et her i n p at tern ed re la ti ons hi ps,

The lrnportance of Management

Management i nv ol ve s t he c oo rd in at io n o f h uman an J mat eri al re so urc es t owa rdo bj ec ti ve a cco mp li sh men t. We o ft en s pea k o f i nd iv id ual s ma nag in g t ne ir af fa irs,but the usual connotation suggests group effort. Four basic elements can beident if ied: (1) toward objectives, (2) through people, (3) via techniques, and (4) inan organization. Typical definitions suggest that management is a process ofplanning, organizing, and controlling activities. Some increase the number 01 -su bp ro ces se s t o i nc lu de a ss emb li ng re so urc es an d mo ti vat in g; o th ers re du ce t hescheme to include only planning and implementation. Still others cover theen ti re p ro ce ss w it h t he co nc ept o f d eci si on ma ki ng , s ug ges ti ng t hat d ec is io ns a rethe key output of managers. .

Ra th er t han t ry t o p ro vi de a si mp li fi ed , s in gl e- se nt en ce d ef in it io n o f ma na ge -ment, we prefer t o use a more comprehensive description that integrates variousvi ew s i n a sy st ems co nt ex t. Ma na geme nt i s men ta l ( th in ki ng, i nt ui ti ng , f cJ ,el in g)work performed by people in an organizat ional context. Management is the keysu bsy st em i n t he o rg an iza ti on al s yst em. It spans the entire organization and isthe vital force that links all other subsystems. Management involves thefollowing:

. Coordinating the huruan, material, and financial resources toward accomplishingorganiz.ational goals effectively and efficiently

Relat ing the organizat ion to the externa l environment and responding to socie ta lneeds

Developing an organizational cliinate where people can accomplish their individ-

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6 PART 1: CONCEPTUAL FOUNDAilONSCHAPTER I: TKE SETTING OF ORGAN,ZATION AND M ANAGEM ENT7

ual and collective goals ;'

Performing ceflaia.~ef).nable functions such as goal setting, planning, assembling Ifresources, organizing, implementing, and controllino

Carrying out various interpersonal', informationa], and decisional roles r

fih e s tu dy o f ma ~ag emen t i s r el at ive ly n ew i n o ur so ci et y, st emmi ng p ri ma ri ly

from the growth In SIZC and complexity of business and other largp.-sc'Ileorganizat ions s ince the indus tr ia l revolution.

remain in a dynamic equilibrium with their environment. Information flow ises se nt ia l f or t he d eci si on -ma ki ng p ro ce ss. It involves knowledge of the past,estimates of the future, and timely feedback concerning current activity .Ma nag eme nt 's t ask i s i mpl eme nt in g t hi s i nfo rma ti on -d ec is io n sy st em t o co or di -n at e e ffo rt a nd ma in ta in a d yn ami c e qu il ib ri um.

With organization and management as pervasive as they are, we mightnaturally assume a well-defined body of knowledge that provi des a frameworkfor research, reaching, and practice. There is a body of knowledge, but it is notparticularly 'veil defined, and currently it appears to be evolving rapidly. Anumber of condit ions have hampered the development of a well-defined body ofk now le dg e- par ti cu la rl y t he i ncr ea si ng c omp le xi ty w it hi n o rg an iz at io ns an d t hedynamic nature of their environment. Theories developed to fi t organizations inthe early 1900s arc not likely to be appropriate for many organizations in the19805.

The emergence ofmanagement asan essential , a d is tinc t, and a leading ins ti tu tion isapivotal event in socia l h is tory. Rarely, i f ever, has a new basic institution, a newl ead in g g rou p, e merg ed a s f as t a s h as ma na geme nt si nc e t he t urn o f t hi s c en tu ry.Rarely 10 human his tory has a new institution prover. indispensable so quickly; andevep less often has a n ew i nst it ut ion a rri ve d wi th s o l it tl e o pp os itio n, s o littled is t~rbance , so l it tle controversy . .. . Management, which is the organ of socie tyspecifically charged with making resources productive, that is, w.rh the respvnsibilityfo~ organized e~onomlc advance, therefore reflect; the basic spiri 1 of the modern age .It IS 10 fact indispensable-c-and this explains why, once begot ten, i t grew so fas t nndwith so little opposition."

RELEVANT RESEARCH AND KNOWLF. :DGE

Sci en ti fi c d is ci pl in es h av e e merged as se ra ra te a nd d is ti nct b od ie s o f k no wl ed geas our search for enlightenment has continued. However, the entire socialsc ien ce fi el d, b eh av io ra l sc ien ce in particular, ha s been relatively slow indeveloping.' Anthropology, socio logy, and psychology are products of the last

1 00 y ea rs . Ec on omi cs a nd p ol it ic al s ci en ce ' e me rg ed so me wha t e arl ier a s sp eci fi cdisciplines, Organizati on theory and/or management practice di d not receiveconcerted at te nt io n un ti l t he t wen ti et h ce nt ury.

Within this h is torica l context , a wel l-developed body of knowledge may betoo much to ask of this fledgling discipline. Yet significant strides have beenmade, and a body of knowledge has been developing which in (urn has beenu se fu l i n ma nag in g o rg an iz at io ns o f d iv ers e c har ac te ri st ics a nd ob je ct iv es .

We think it is helpful to distinguish organization theory from management inorder to provide a useful framework for research, t ea ch in g, an d practice. Wes ug ges t t ha t organ iz at io n t he or y i s t he b od y o f k no wl ed g~ , In cl ud in g h ~t he se sa nd p ro po si ti on s, s temmi ng fr om re se ar ch i n a d efi na bl e field of s tu dy w hi ch c anbe termed organization scienceJ.jbe s tu dy o f o rga ni zat io ns i s a n ap pl ie d s ci en cebecause the resulting knowledge is relevant' to problem solving or decisionmaking in ongoing enterpr ises or ins ti tu tions.~

Because of the pervasiveness of organizations, the related theory andscientific study are extremely broad-based. It i s a n ec le ct ic t heo ry, a t ot al sy st emc omp ri sed o f ma ny s ub sy st ems o f re le va nt d is ci pl in es s uch as p art s o f s oci ol og y,p sy cho lo gy, an th ro po lo gy, ec on omi cs , p ol it ic al s ci en ce , ph il os op hy, an d mat he -mat ics (see Figure 1.1). Not all these above-mentioned discipl ines are applicablet o the same degree; only a small subpart of a particular subject-matter area maybe relevant. During the twentieth cent ury, however, society's organizations

. Managers convert diverse resources of people: machines, material, money,

l ime , a nd s pac eIOtO

a u sef ul e nt erp ri se. Es se nt ia ll y, mam: .g emc nt i s t he p ro ce ssw he re by t hes e u nr el at ed r es ou rc es a re .i nt eg rat ed i nt o a t ot al system for objectiveaccomplishment. Managers get ;hings done by working with people and physicalresources in order to accomplish the object ives of the system. They coordinateand integrate the activities and work of others.

A recurring question is the distinction between the terms management andadministration. "A dmi ni st ra ti on " o ft en h as h ad t he connotation of governmentalor o ther nonpro~t ~ 'rganiza tions, whereas "management" has been relegated tobusiness enterprises. However, there is considerable overlap in usage. YMCAshave boards of managers, for example. The military has program managers withoverall responsibility for mission accomplishment. On the other hand, manyc ol leg es o f b us in es s ad mi ni st ra ti on h av e man ag eme nt d ep ar tmen ts . We wi ll u sethe terms interchangeably and tend toward the use of the term managementregardless of whether t he specific example involves business organizations,hospitals, philanthropic institutions. or government bureaus. On this basis

management is a most pervasive activity. According to Hertz, "the singleubiquitous mind-driven acti vit y of manki nd is managemeut. a We are alli nv ol ved i n management-cor ourselves, of our economic and social activitiesand of society as a whole. '

In di vi du al s an d o rg ani za ti on s ma ke a da pt iv e d ec isi on s c on ti nu al ly i n o rd er t o

'Perer F. Drucker, The Pract ice of Managemen), Harper & Row, Publishers. Inc., New York,1954, pp, 3-4. .

'David B. Hertz, "The Unuy of Science and Management" Management Scitnu Apn'Il96SB-89. '. -, p. 'Ke nneth E . Bou ld ing, The Impaa of 'he Socia l Sciences, Rutgers University PleSS, New

Brunswick, N.J., 1966.


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8 PART 1: CON:EPTUAL FOUNDATIONS

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CHAPTER 1 THE SoTTING OF ORGANIZATION AND MANAGEMENT 9

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have received increasing attention, and the study oforganizations has evolved asan important, visible, and definable field.

As indicated in Figure 1.1 contr ibutions to organizat ion theory come frommany SOUI ,; es .Deduct ive and induct ive research in a var ie ty o f d isciplinesprovides it theoret ical base of propositions that arc useful for understandingorgan izat ions and for manag ing them. Experience gained in managementpract ice is also an important input to organizat ion theory. In short , Figure 1.1illustr ate s how the art el f management is based on a body of knowledgegenerated by practical experience and scientific research concerning organiza-tions.

Organizat ion theory itself stems from an applied science that draws on thebas ic d isc ip lines and the ir r el at ively marc abs tr ac t theor ie s on ly as they a rerelevant to organizations found in society. Management technology stems fromorganizat ion theory and is even more applied inthe sense that i t focuses on theprac tice of manageme nt in ongoing orga nizations. With this view of therelat ionship between organizat ion theory and management in mind, let us turnto a more specific discussion of the requirements of an organizat ion science.

Foundations of Organization Theory

The pervasiveness of organizat ions and management argues for considerable

latitude with regard to the organizations studied and the scientific methods used.Moreover, the value systems of researcher" teachers, and practitioners are quitediverse, and hence the determination of what isrelevant and scientific may varyconsiderably. On the other hand, the concerted effort toward the developmentof organizat ion theory during the mid-twentieth century has resulted in usefuldialogue, cross-ferti lization, and mutual understanding among participants . .While no well-defined consensus has yet appeared, there are consistent threadsof inqu iry and agreement with regard to the genera l scope of organiza tiontheory. Although not exhaustive, Figure 1.1 indicates many of the key conceptsand areas of interest.

Early management concepts came from practit ioners. Texts were often thedistillation of experience in ongoing enterprises. Such contributions are impor-tant and valuable addit ions to the body of knowledge comprising organizat iontheory. We need cont inued observa tion and concep tual ization f rom astu tepracticing managers. Meanwhile, scientist-scholars have become more and more

involved in resea rch rel ated to organiza tions bu t car ried on in the contex t o fbasic disciplines. Other scholars have been engaged in integrating findings frombasic disciplines and translating the results inte meaningful concepts or proposi-tions.

Int eg ra tion of the body of knowledge comes f rom two direc tions. Trioseprimari ly engaged in s tudying organ izations and management have lookedtoward the basic discipl ines for new insight . Simultaneously, those engaged inthe work of basic discipl ines have become increasingly aware of the pervasive-ness of o rgan izations in society and have begun to concent ra te a tt en tion on


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10 PART 1: CONCEPTUAL FOUNDATIONS

relevant problems. In(Justriaj- psychology and industrial sociology are twos ub fi el ds t ha t g iv e ev id en ce o f ~h is t re nd .

An E'T1erging Di!>cipline

T he st ud y o f o rg an iz at io ns a nd t he ir ma nag emen t i s a n i nt el lec tu al ly r es pec ta bl e

d is ci pl in e, Orga ni zat ion t he ory se ts fo rt h p rop os it io ns . .t ha t ar e t es tab le . It i s a lsoc on du ct ed as a p ub li c e nt er pr ise w it h man y co nt ri bu to rs . Ev ery on e h as t he ori esconcerning individl1a: and organizational behavior-at least implicit if note xp li ci t. Re se arc h a nd t he r es ul ti ng l it era tu re h av e i nc re ase d a t a n a cc el er at in grate and will continue to do so. Research is conducted by scholars from manyd is ci pl in es ; i nd eed , t he sa me o rg an iz at ion i s o ft en st ud ie d f ro m se ve ra l p oi nt s o fview. The results arc compared at separate points in time, for organizat ions inva ri ou s c ul tu re s, an d fo r d if fer en t t yp es of i nst it ut io ns w it hi n a gi ve n c ul tu re . A llthis activity has made the study of organizations one of the most visible andpublic enterpr ises in socie ty.

Organization science has questions of its own that set it apart as a relativelyautonomous discipline. That is, it is concerned with questions that otherdisciplines are not. Obviously many questi ons cross discipline boundaries wi thperhaps some variation in emphasis. Some of the t opics of particular interest ..toorgan iz at io n st ud en ts a re a s f ol lo ws :

Go al s an d v al ue sy st ems2 The use of technology and knowl edge in organizations3 The s truc turing of organizat ions4 Formal and informal relat ionships5 Di ffe re nt iat io n a nd i nt eg ra ti on o f a ct iv it ies6 Mot ivat ion of organizat ional par ticipants7 Group dynamics in organizat ions8 St at us an d ro le s yst ems i n o rg an iz at io ns9 Organizat ional pol it ics

J 0 Po wer, a ut ho ri ty, a nd i nfl uen ce i n o rg an iz at io ns11 Managerial processes in organizations12 Organizat ion s trategy and tac tics13 Information-decis ion sys tems in organizat ions

14 Stabi li ty and innovat ion in organizat ions1 5 Organ iz at io nal b ou nd ar ies an d d omai ns16 Inter face between organizations1 7 Pl ann ed ch an ge an d i mp ro veme nt18 Performance and product iv ity19 Satisfaction and quality of work life2 0 Ma nag eri al p hi lo so ph y a nd o rg an iz at io n c ul tu re

There is a danger at times that a scient ific discipline may begin to exist for itsown sake and emphasize esoteric concepts. It is true that there is a gradationfro m a pp li ed t o p ure re se ar ch . H ow ev er, t he re i s n o ab so lu tel y "p ure " r es ear ch .

INCREASING COMPLEXITY OF ORGANIZATIONS

Organi zations have beccrne increasingly compl ex over time. The trend beginswith the evolution of organisms, of which human beings are the most complex

example.

T he re i s a c har ac te ri st ic t ren d i n t hi s d ev el op me nt -t he u ni ts a re b ou nd t o b eco memore and more compl icated . They lose the s imple fea tures they had at the beginningof life's history. Most changes are steps toward higher differentiation, toward changeof nucleic acids which produce more proteins with more specialized tasks. Hence fromthe moment w he n u ni ts e xi st t hat c an fo rm replicas of themselves. a development

t ow ard mo re an d mo re c omp li cat ed u ni ts is bound to start. Bet ter adaptat ion toexternal conditions leads almost always to more complicated units."

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C HA PT ER , ~ T HE S ET TI NG O F O RG ANI ZATI ON A ND M AN AG EME NT 11

In t he l on g r un e ve ry th in g is ap pl ie d; h en ce , a d is ci pl in e mu st k ee p i n t ou ch w it hthe real world. In an evolving body of knowl edge such as organization theory,t her e ar e ma ny t en ta ti ve c onc lu si on s and p ro po si ti on s. Ho we ver, t he r ea l w orl dcannot wait for the ultimate body of knowledge (there is none!). Practicingmanagers in business firms, hospitals, and government agencies continue tooperate on a day-to-day basis. Therefore, they must use whatever theory isavailable. Practitioners must be included in the search for new knowledgebecause they control access 10 a n es se nt ia l i ng red ie nl --o rg an iz at ion al d at aMu tu al u nde rs ta ndi ng amo ng ma na gers , t ea ch ers , a nd r es ea rc he rs -v il l fa ci li ta tethe development of a relevant body of knowledge.

Haskins describes this phenomenon by saying: "Paleontological research hasy ie ld ed d ra mat ic e vi de nc e t ha t i n t he e vo lut io na ry de ve lo pmen t c f l iv in g ma tt erthere has been an unmistakable broad trend from the simple to the complex.Both the variety of life on eart h and the intricacy of i ts organization reflect andemphasize this t rend. "6 The essential element in this trend is that of specializa-tion. It allows organisms a means of dividing up the work in performing eachs ub pa rt mo re e ffe ct iv el y a nd eff ici en tl y. H owe ve r, s pec ia li za ti on re qu ire s i nt e-gration of activities in pursuit of identified goals. It is a process of analysis and

. synthesis; that is, breaking up the task into parts according to specializeda ct iv it ie s an d i nt eg rat in g t ho se a ct iv it ies t owa rd o bj ec ti ve a cc omp li sh me nt . T het en den cy t o i nt eg ra te i s a "c omp an io n fe at ure " o f sp ec ial iz at io n.

T hes e sa me t ren ds ar e ev id en t i n o rg an iz at io ns. Mo re sp eci al iz at io n re qu ir es

i nc re as in gl y s oph is ti cat ed met ho ds o f co ord in at io n a nd i nt eg ra ti on . Te nd en ci est ow ard b ot h c oo per at io n an d co nfl ic t a re e vi de nt a mo ng o rg an iza ti on al p art ic i-p an ts. T he q ues ti on o f i ndi vi du al is m v ers us conformism i s re lev an t a nd i mp or-tant. In short, many forces are at work in organizations=-some divisive, somecohesive, all somewhat confounding. These factors have led to increasingc omp lex it y wi thi n o rg an iz at io ns a nd h en ce have made the job of managementmo re a nd mo re d iff icu lt .

'Victor F. Weisskopf. Knowledg and Wond." Doubleday & Company, Inc.,Garden City, N.Y.,1966, p. 251.

'Caryl P. Haskins, O f S oc ie ti es a nd M en , The Viking Press, Inc., New York, 1960,p, 15.

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12 PART t: CONCEPTUAL FOUNDATIONS

Size of Organizaton

For small face-to-face groups in a rather stable environment, the job ofmanagement is relatively strai ghtforward. Once a particular approach is foundeffective, it can be applied indefinitely with likely success. As groups grow ins ize, face- to-face relat ionships become impossible; the number of inter re la tion-sh ip s a mo ng o rg an iza ti on al p art ic ip ant s i nc re ase s d ra ma ti ca ll y; a nd ma nag ers

ca nn ot h op e t o ma in ta in p er so na l c on tac t t hro ug hq ,u t t il e o rg an iz at io n.The trend toward increased organizational size is not likel y to taper off. The

population continues to grow. Thus sheer numbers of people will provide acomplex environment for societ y and its subunits. The t rend from a sparse, ruralp op ul at io n t o u rb an c on ce nt ra ti on s h as b ee n i n e ffe ct fo r ma ny ce nt uri es. Cr ise sof many kinds-housing, crime, transit, air pollution-are evident in largemetropolitan areas. What if the earth were one giant megalopolis? Howeveru nl ik el y s uch a fu tu re co nd it io n may b e, t he p os si bi li ty i nd ica te s t he a cc el er at in gn at ure o f e nv iro nmen ta l d ev el op me nt s t ha t po se o rg an iza ti on al a nd ma na ge ri alproblems.

Science and Technology

Scientific knowledge and technological devel opments are also accelerating.Again, we might gain perspective by refer.ing to developments throughout theevolu tion of humanity. If our time on earth is taken as 240,000 years and if weimagine that those years take p.ace in one hour, we spent fifty-five minutes oft ha t t ime in Pa le ol it hi c (O ld St on e A ge ) c ul tu re .

F ', , minutes ago, he embarked upon the neoli th ic cul ture , the cul tiva tion of plants,the domestication of animals. the making of pottery. weaving, and t he u se (If the bowand arrow; 3 ' 1 2 minutes ago hebegan the working of copper; 2'/' minutes ago be beganto mold bronze; 2minutes ago he learned tosmelt i ron; I ;' o fa minute ago helearnedprinting; 5 seconds ago the Industrial Revolution began; 3'1> seconds ago helearned toa pp lv e lec tri ci ty ; a nd t he t ime h e h as ha d t he a ut omo bi le i s l ess t han t he i nt er valbetween the t icks of a watch , i.e., less than one second.'

Wit h t he i nd ust ri al rev ol ut io n re pre se nt in g o nl y fi ve se co nd s o f a n i ma gi na ryhourglass, the accelerating nature of technology is apparent. And a concertedeffort toward organization theory and principles of management is a post-i nd ust ri al re vol ut ion p hen ome no n. Th in k o f t he d ev el op me nt si nc e t he a ut omo -b il e w as i nt ro du cec t-" les s t han o ne s ec on d" a go . Te lev is io n, j et ai rp lan e t ra vel ,b irt h c on tro l p il ls , co mp ut ers , a nd s pac e e xp lo ra ti on a re ex amp le s o f sc ien ce a ndtechnology proceeding at an accelerat ing pace. One recalls t he phrase, "If itworks, it is obsolete."

Developments in science and technology have magnified treads towardspecial izat ion. Scienti st s, researchers , technic ians , and other knowledge workers

' Wils all D. Wall is, a s cited in Charles R. Walker, Modem TechfID/ogy and Civii it tuion,McGraw-Hi li Boo k Compa ny, New Yor k, 1 962, p . 1 0.

C'~APTER 1: THE SETTING OF ORGANIZATION AND MANAGEM~NT 13

arc b ec omi ng i nc re asi ng ly p re va len t i n o rga ni zat io ns . ! nt eg rat io n o f t h ei r ef fo rt stoward organizat ional accompl ishment can be difficu lt . There may be differencesi n v al ue s yst ems b et wee n sc ie nt ist s a nd ma na gers . T he fo rme r ma y be c on ce rn edw it h t he ef fec ti ve nes s o f a p ro du ct o r p ro ce ss (i .e ., st ri vi ng fo r p erfe ct io n), w hi lethe manager may be more interested in efficiency (i.e., cost as related toeffecti veness).

Other Considerations

Science and technology are only a part o f t h e p ic tu re. Th e g en era l i ncr ea se i n t heeducation, knowledge, and diversity of human participants provides a mores op hi st ic at ed a tmo sp he re i n o rga ni zat io ns . Peo pl e a re b eco mi ng l es s t rac ta bl eand more prone to think for themselves. This trend is also accelerating andp ro vi de s an ot he r co nf oun di ng v ari ab le fo r ma na ge me nt .

An increasing governmental role is another consideration. Organi zationsmust keep tuned to governmental pn pcnsities for regulatory action in manyareas. The most obvious are economic ind defense matters, but the spectrum ofinfluence widens over time. Trends in all the areas of governmental concern-federal, state, and local-provide meaningful background for managerial deci-sion making in organizations.

C ou pl ed w it h d ev el op me nt s i n t he s ci en ces (n at ura l, so ci al , a nd b eh av io ra l) i sprogress in the phi losophy of management . ln a sense all of us are phi losophersbecause we hold views concerning what is or happens in the world as well aswhat we ought to do or seck. Some development can proceed prescriptively viac ommo n se nse , e xp er ien ce, a nd r ef lec ti on . It is more likely, however, that ac ombi na ti on o f t he e xp eri ent ial a pp ro ach a nd i np ut s f ro m s ci en ti fi c res ear ch wi llro un d o ut a n i nd iv id ual 's p hi lo so ph y o f rra na geme nt .

The r""mark of management is change-c-swift. incessant, fundamentalchange. The only thing that is constant is change. The dynamic interplay offo rc es i n t he e nv iro nme nt o f o rg an iza ti on s i s ev id en t. Si mi la rl y, WI th in o rg an iza -tions the situation is becoming much more complex from the point of view ofmanagement. Thus it becomes increasingly important t o understand the trendsand developments taking place. The pace of change is likely. to increase;therefore, managers must better understand the behavior of individuals andorganizations in order to be able to predict and ultimately coordinate effort

toward objectives. The aim of this book is to contribute to this understanding.

MAJOR THEMES AND CONCEPTS

One approach to solving complex problems is to assume away much of thecompl exity and then solve a mu ch s imp ler p ro bl em. Th eo re ti cal ly, t he i nt eri mstep provides insight into how t he more complex problem might be solved, Manyi nt ro du ct ory t ex ts t re at p ro bl em s ol vi ng in t hi s w ay. H owe ve r, u nl ess s tu de nt spursue the subject in later courses, t hey are left with an oversimplified view of


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14 PART 1: CONCEPTUAL FOUNDATIONS

the real world, one waich.mav be more dysfunctional than functional . "A littlek no wl ed ge i s a d an ge ro us thi~g." We hope to avoid that in this book.

Our general purpose will be to understand the increasingly complex nature oforganizations in a dynamic environment and the attendant difficult problem-solving task of managers. We may use abst ractions end models from time to timebut in all cases hope to link them adequately to the real world. Our primarypurpose is to recognize and understand the dynamic complexity rather than tos impl ify t he re al w orl d i n o rd er t o d ev el op st rai g, ht fo~ war d co ok bo ok ap pr oac h-es.

We arc concerned in this book with a wide variety of organizations ori nst it ut io ns an d ar e i nt er es ted i n t ho se p ro po si ti on s t hat h av e b ro ad ap pl ic ab il it y-in business, governmental, medical, educational, religious, military, philan-t hro pi c, v ol un ta ry, a nd o th er t yp es o f o rga ni zat io ns . A ls o o f i nt ere st i s d iv ersi ty,uot only in type of institution but in size as well, For the most part, organizationtheory and management principles have been developed within the context ofl arg e o rg an iza ti on s. Co ns id er at io n w il l b e g iv en t o t he a pp li ca bi li ty o f fi nd in gs t osma ll - a nd me di um-s ize d o rg an iz at io ns a s we ll .

We will be interested in management and organization theory as it appliesacross cultures. Which findings hold true in Japan or Yugoslavia as well as in theU ni ted St at es o r G re at B ri ta in ? U nl ess o th erw ise s tat ed , t he ma te ri al p re se nt edwill refer primarily to developmenrs in the United States; however, O'lT

d isc uss io ns wi th ma nag ers a nd a ca de mi ci an s i n n umer ou s c ou nt ri es su gg est [h atthere arc many common threads in research endeavors, organization theory,and management pract ice.

We a rc i nt ere st ed i n bo th d csrr ip ti vc fi nd in gs an d n orma ti ve c on si de ra ti on s,There is a great need for empirical research concerning organizations andmanagement At times there seems to be a tendency in the behavioral sciencestoward conducting experimental research in unrealistic settings as a way ofemulating the physical sciences. It might be more useful to emulate thezo ol og is ts a nd b io lo gi st s, w ho se o bse rv at io n o f w hat is and happens in the realworld has occupied a considerable amount of time and attention. There is a needto understand clearly how individuals and organizations behave in a vari ety ofci rcumstances. Once we have a more complete understanding of what is, we canb eg in t o c on si de r n or mat iv e p ro po si ti on s o f w ha t man ag ers ought fa do or seek.Such an approach facilitates the development of conceptual schemes that willp ro vi de u se fu l fr ame s o f re fe re nce fo r man ag ers i n o rg an iza ti on s.

Major changes in all fields of science occur with the development of newconcept ual schemes, or paradigms. These paradigms do not just represent ast ep -b y-s tep a dv an ceme nt i n "n orma l" s ci en ce (t he s ci en ce g en er al ly a cc ep tedand practi ced) but rather a revolutionary change i n the way the scientific field isperceived by the practitioners. New paradigms frequently are rejected by thescient ific community. (At first they may seem crude and limit ed-offering veryl it ti e mo re t ha n o ld er p ara di grn s. ) T hey fr eq ue nt ly l ac k t he a pp are nt s oph is ti ca-tion of the older paradigms, which they ultimately replace. They do not displaythe clarity and certainty of older paradigms that have been refined through years

CHAPTER 1: THE SETTING OF ORGANIZATION AND MANAGEMENT 15

of research and writing. But a new paradigm does provide for a new start andopens up new directions that were not possible under the old. "We mustrecogni ze how very limited i n both scope and precision a paradigm can be at thetime of its first appearance. Paradigms gain their status because they are moresuccessful than their competitors in solving a few problems that the group ofp ra ct it io ner s h as c ome t o r ea li ze as a cu te . To b e m ore su cce ssfu l i s n ot , h ow ev er,to be either completely successful with a single problem or notably successfulw it h an y l arge

nurnber.?" . ..Sy st ems t heo ry p ro vi de s a n ew p ara di gm f or t he st ud y o f SO Ci al o rg amza no nsand their management. In some ways it may not be much better than olderparadigms that have been accepted and used for a long t.ime (such as themanagement process approach). As in other fields of scientific endeavor, ~henew paradigm must be appli ed, clarified, elaborated, and made more precise.But it does provide a fundamentally different view of the reality of socialorganizations and can serve as the basis of progress. ..

The systems approach facilitates analysis and synthesis III a complex andd yn ami c en vi ro nme nt . It co ns id er s i nt err el at io nsh ip s a mo ng su bsy st ems ~ s . vel !as interactions between the system and its suprasystern and also provide s ame an s of u nd er st an di ng s yn erg is ti c a sp ec ts. " Th is co nc ept ua l s ch eme a ll ows u s t oc un si de r o rg an iza ti on s-i nd iv id ual s, sma ll -g ro up d yn ami cs , an d l arg e- gro upphenomena-all within the constraints of an external environmental system.

SYSTEMS APPROACH-Uf~OERSTANOING

The svsterns view of organization' and their management serves as the basicconceptual framework for this book. A system is an organized, unitary wholecomposed of two or more interdependent parts, components, or subsystems anddelineated by identifiable boundaries from its environmental suprasystem. .

Systems of various types are all around us. For example, we have rnountams yst ems, ri ve r s yst ems, an d t he s ol ar sy st em a s pa rt o f o u r p hy si cal su rro un di ng s.The body itself is a complex organism including the skele~al system, t~ecirculatory system, and the nervous system. We come into daily contact WIthsuch phenomena as, transpor ta tion sys tems, communica tion sys tems ( te lephone,telegraph), and economic systems. We obviously c~n't consider all th


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I

I

I.

I

1'0 PAm 1: CONCEPTUAL FOUNDATIONS

I A subsystem ' if its broader environment with2 A goal-oriented arrangement-people with a purpose; including3 A technical subsystem-s-people u si ng k no wl ed ge , t ech ni qu es, e qu ip me nt

and facilities4 A structural subsystem-people working together on integrated activities5 A p sy ch os oci al s ub sy st em- peo pl e i n s oci al r el at io ns hi ps ;

a nd c oo rd in at ed b y

6 A managerial subsystem-planning and controlling the overall endeavor

A s i ll ust rat ed b y F ig ur e 1.2 a bas ic premise is that tile organization, as asubsystem of the society, must accomplish its goals within constraints that are anintegra l par t of the environmental suprasysrern. The organization performs afu nct io n fo r s oci et y; i f i t i s t o b e su cce ssfu l i n re ce iv in g i np ut s, i t m ust c on fo rm t oso ci ~l co ns tra in ts a nd re qu ire men ts . C on ve rs el y, t he o rg an iz at io n i nf lu en ce s i tsenvironmental suprasyste m.

The internal organization can be viewed as co.nposed of several majorsubsystems. Organizational goals and values represent one of the more impor-tant subsyster is .W hi le t he o rg an iz at io n t ak es ma ny o f i ts v al ue s fro m i ts b ro ad ers oci oc ul tu ra l en vi ro nme nt , i t al so i nfl ue nce s so ci et al v al ues .

The technical subsystem re fe rs t o t he k no wl ed ge re qu ir ed fo r t he p erf or man ceof tasks. By organizational technology we mean the techniques, equipment,processes, and facilities used in the transformation of inputs into outputs. The

technical subsystem is determined by the purposes of the organizati on and wi llvary according [0 t he t ask r eq ui re me nt s. T he t ec bn ol og y f re que nt ly p res cri be st he t yp e of organization sn u ct ure a nd a ffe ct s t he p sy ch os oci al sy st em.

Ev ery o rg an iza ti on h as a psychosocial subsystem, which consist s of indiv idualbehavior and mot ivat ion, status and role relationships, group dynamics, andi nf lu en ce n et wo rk s. Th is s ub sy st em i s, o f c ou rs e, a ffe ct ed by e xt er nal e nv iro n-mental forces as well as by the t echnology, tasks, and structure of the internalorganization.

Intermeshed with the technical and the psychosocial subsystems is theorganization structure. Structure is concerned with the ways in which the tasks oft he o rg an iz at io n a re d iv id ed (d iff er en ti at io n) an d w it h t he c oo rd in at io n o f t hes eactivities [integration), In a formal sense, structure can be set forth byo rg an iz at io n c ha rt s, j ob d es cri pt io ns, a nd r ul es a nd p ro ce du res .Tt i s c on ce rn edwith patterns of authority, communication, and work flow.

The manageria! subsystem plays a central role in goal setting, planning,designing organizations, and controlli ng activities, as well as in relating theo rg an iz at io n t o i ts e nv iro nmen t. Ma na ge ri al fu nct io ns a nd pr ac ti ces a re v it al t ot he i nt eg ra ti on o f ac ti vi ti es i n al l t he o th er su bs yst ems.

CONTINGENCY VIEW-ACTING

Throughout the book we will stress the relationship of organization theory andmanagement practice in specific situations. The contingency view depends on a

CHAPTER 1: THE S ETT ING OF OR GANIZATION AND MANAGE ME NT 17

I \I \

I 1I Ii I

----t\.-_ _+-----_- - I

\ ....y.... I

\ /", I

\ ' Ma na ge ri a! I

) \,u b 'Y S IO m X \I ',// \

I _/x < \

---~-- --~-----I 11 I\ I\ I\ I

Psvcbosccialsubsystem

oc> lop.... -cutput f lo w o fm. . te(ta~s, tnt'rqy. endi nf o rm : lt i on

Figure 1.2 The ocganizationsystem.

body of knowledge and research tasks that focus on interre~ationships amongkey variables and subsystems in organizations. It also emphasizes the role of thema nag er as a d iag no st ici an , p rag ma ti st , a nd a rt is t. In t erms o f t h e sy st ems mo de l

set forth above, we can say that:

Th e c on ti ng en cy v iew o f o rg an iz at io ns a nd t li ei r ma na ge men t' s \l gg ~t s t h. at anorganization is a sys tem composed of subsystems and del il?eater l by. indenti fiab leboundaries from its environmental suprasystern. The contingency Vlew seeks to


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I

I,1a ' PART 1: CONCE PTUAL FOUNDATIONS

under~t a~d the in~er I; .e ra ~L ~n sh ip s w ir h in a nd among s ub sy st ems as wcl l as between t heorgani zati on and I ts e nvir onment and t o de fine pat ter ns of r elat ions hips or co nfir urs ,nons of var iabl es. I t e mphas izes the m ult ivar iat e natur e of organ izat ions and att em ptsto understand how organizations operate under varying condi ti ons and in specificc l[ c~ms tances . Con ti ngency v iews a re ultimately d ir ec te d toward suggest in g o rgan iza-t io na l des ig ns a nd manager ia l a ct ions m os t app ropr ia te for specific situations."

The essence of this vi~w is that there is no one bes lway and that there is a middlegroun~ between "umv~rsal principles" and "it all" d epends." This approachrc co gru ze s t he c omp lex it y i nv ol ved i n man ag in g' mo de rn o rg an iz at io ns bu t u sesthe existing body of knowle~ge to relate environment and design, to matchstructure and technology, to integrate strategy and tactics, or to determine theappropriate ~egree of subordinate participation in decision making, given aspecific situation. Success in the art of management depends on a reasonablesu cc es s- ra te fo r ac ti on s t ak en i n a p ro ba bi li st ic e nv iro nmen t.

PERFORMANCE AND SATISFACTION

Why study organization. and management" We nave indicated that they are apervasive part of our existence. We are affected by a wide variety of organiza-tions and their mana~ement. It seems obvious that we would be better off withIn cre as ed u n?c rs tan dmg o f a ny thi ng t ha t af fec ts u s. Be yo nd t hi s, h ow ev er, t her e

IS an .,mpJiclt notion tha t increased knowledge will somehow lead to betterorgaruzaucn and management. But what do we mean by better? An overallconcept IS:

Performance = j (ability, effort, opportunity)

This equation _highlights the basic factors or variables that lead to perfor-mance. They are ITIj/uts t ha t, t ak en t og et he r, d et ermi ne t he r es ul ts o f i nd iv id ua land ~~~ur endeavors. The phrase "taken t ogether" is an important idea becauseno a~lh.ty 0; no e ff ort o r no opportunity can negate the other two factors. It is amultiplicative relationship.

. Ability i s ~ i un at i~n o f h uman k no wl ed ge an d sk il l a nd t ech no lo gi ca l ca pa bi li -t ies . ~ t p ro vi de s an i nd ic at ion o f t he ran ge o f p oss ib le p erfo rma nc e. Effort is afunctl?~ o~ nee~s, goals, expectations, and rewards. How much latent humancapability IS realized depends on the deg~ee to which i ndividuals and/or groupsare motivated to expend mental and physical effort. But not hing happens unlessmanagers provide an opportunity for individual ability and effort to be used in~e~~ingful ways. Organizational performance results from the success ofi nd iv id ua ls a nd g ro up s i n a ch ie vi ng re le van t g oa ls,

Me as uri ng a nd e va lu at in g re su lt s i s i mpo rt an t i n d et ermi ni ng p erfo rman ce.Output per work-hour, share of the market, and net profits are relatively

J


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20 PART 1 CCNCEPTUAL FOUNDATIONS

recognizing that this proc.fss can only go so far and that more attention must bepa id t o i mp rov in g pr od uc ti vi ty t hro ug h mo re eff ec ti ve u se o f h uma n re so urc es

There is evidence that the perceived quality of work life has not met theaspirations of many people-they are becoming less satisfied with their workexperiences. This is not necessarily because the situation is worse; rather it isbecause of increasing human aspi rat ions for a better existence in general and fora mo re r ew ard in g w ork l ife , i n p ar ti cu la r.

Recent. studies of ?igh ~erforming organizatjons"suggest that the one thingthey have in common IS a h ig h re gar d fo r, a nd c on ti nu in g cl os e a tt en ti on t o, t he irh uma n. re so ur ce s. ~ e se e t hes e t wo n at i~ nal i ss ues o f p ro du ct iv it y and q ua li ty o fwork life as very Important and highly Interdependent and will focus on themthroughout this book. They are not mutually exclusive and managers musta lways _recognize the ir impor tance and interd~pendence . Increas ing product iv itvmeans the pursuit of excellence at all levels-the individual, the group, theorganization, and the society. A key element is doing every job better->-becoming more productive-by working smarter rather than harder. Success isnot achieved by j~st doing one thing best; it is dependent on a whole system ofactions that contribute to excellence. The primary function of management is todevelop congruence among the various subsystems and to create a climate thatleads to excel lence-effec: tiveness , e ff ic iency, and par ticipant sat is fact ion.

Our study of organization and management will be concerned with better

un.derstanding of organiz~tional phenomena so that appropriate managerialacuons C1n be taken. Tne systems approach is a way of thinking aboutorganizational variables and relationships. A continocncv view '"lr;vides afTalnewo~:( for d oi ng t heright thing at [ he r ig ht time in tl:c right \\:{Jy':dercndingon the situation. Hopefully, better understanding and improved practice c a ;result l! improved organizational performance as measured by a variety ofrelevant dimensions. '

OUTLINE OF BOOK

Part 1 pres~nts conceptual foundations for studying organizat ion and manage-ment In this chapter we have emphasized the pervasiveness of organization andma na ge t_ TIe ?t , sh ow n t he re la ti on sh ip o f man ag emen t p rac ti ce t o o rg an iz at io ntheory, l~du;~ted t h~ newness and evolving nature of organization science, andstressed its .mcreasmgly ~omp[ex and dynamic environment. Chapter 2 isconcerned WIth t he e~olutto~ ~f value systems over time and with their impacto n ma na ge me nt t hi nk in g. Th is [5 a k ey s tep i n t he d ev el op me nt o f l a te r ma te ri al sb ec au se v al ue sy st ems an d i deo lo gi es u nd er li e o rg an iz at io n d es ig n an d man ag e-rial behavior.

. Part 2 :races the evolution of organization theory and management practice~'lth part~cula~ re~erence to the twentieth century. The traditional conceptsinvolved ill sc ien ti fi c ma na 3e ~en t, b ure au cr ac y, a ~d a dmi ni st rat iv e man ag


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22 PART 1: C ON CE PT UA L F OU NDATI ON S

trends and developments.Jn organizations and the role of management in thefuture. .

QUE ST IONS AND P ROBLE MS

Define organization. Why arc organizations so pervasive?2 Define management. Do you agree that managcmont is the "single ubiquitous

mi nd -d ri ve n ac ti vi ty o f h uma ni ty "? Wh y o r w hy no t? 3 Illustrate the continuum of organizations ranging frorn small , informal groups to

l~rge, complex tnsututrons (such as General Motors. a university, a large hospital, orac ity) . What common character is tics can you cite?

4 Compare and contras t organizat ion science , organizat ion theory, and managementpractice.

5 Is management an art or a science? WhyG Discuss (a) the eclec tic nature of organizat ion theory and (b) the relat ive newness of

some of the relevant underlyiilg disciplines.7 Scr ee n c urre nt p er io di ca ls i n t he b eh av io ra l an d so ci al sc ien ce s ( su ch a s American

Socio logica l Review, American Economic Review, Journal of Applied Psychology,Journal oJ Amhropology, and B...havioral SCIence) and l is t the var ious art ic les tha trelate to organizat ion theory and management pract ice.

8 Discuss the tentativeness of knowledge about organizations.9 What bas ic t rends have led to increas ing complexity within organizat ions as wel l as in

the ir externa l environment? What impact does this increas ing complexity have onorgamzaucn theory and management practice?

IU Consider ~ particular organizational type, such as a business corporation, 'lniversitj,hospital , or CIty, and discuss the forces that have led .0 g re at er i nt ern at a ndenvironmental complexity for the institution.

11 For the same organizational type (question 10), list and discuss criteria for measuringand evaluating performance.

C H A P T E . 2

SOCIETY'S VALUES ANDMANAGEMENT

The modern manager operates in a dynamic system with rapidly changingtechnologies and in an increasingly complex environment. The development oforganization theory and management practice is strongly influenced by thesefo rc es . C on ce pt s a nd a ct io ns a re a ffe ct ed by va lu e s yst ems d et ermi ne d n ot o nl yfrom within the organization but by the sociocultural norms of the society aswell. It is necessary to understand the evolution of values in order to compre- -hend some of the underlying forces that have affected the development ofmanagement thought. This chapter considers the influences of socioculturalv al ue s o n ma na ger ial c on ce pt s an d pr ac ti ces , be gi nn in g w it h a b ri ef d is cu ssi on o ft he hi st ori ca l e vo lu ti on o f t h e c ap it al is ti c e th ic a nd t he t ra nsfo rmat io n t o mo de rni nd ust ri al is m. Th e fo ll ow in g t op ics p ro vi de t he fr ame wo rk fo r t he c ha pt er.

Ev ol ut io n o f so Ci ocu lt ura l Val uesH ist or ica l E vo lu ti on o f Ca pi tal ist ic E th icTr an sfo rma ti on o f C api tal is ti c Et hi c

Current Business IdeologiesNat ional Indus tr ia l Pol icyInfluence of Changing Values on Management Concepts

E VOLUT ION OF S OC IOC ULT UR AL VALUE S

An organization can be t hought of as a subsystem of the sociocultural environ-ment in which it operates. "It seemed appropriate to define an organization as asocial system which i s o rganized for the attainment of a particular type of goal;

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