Organization Theory: Strategy Implementation

ProcessPower, Psychic Prisons,

Domination, Flux

Steven E. Phelan

Organizations as

Political Systems

Organizations as political systems

Power – the ability to get what you want, when you want

Politics – the process of acquiring and using powerAs no-one can get everything they want when they want it, politics inevitably involves coalitions, compromises, and conflict management.According to Morgan, many organizations have strong autocratic tendencies – does that mean CEOs always get what they want?

Would democracy be better for organizations?

Types of Power (Lukes)

Type I

Power is decision makingWhoever makes the decisions has “power”

Exercised in formal institutionsMeasured by the outcomes of decisions

Type II

Decision making PLUS agenda-settingNeed to consider extent of informal influenceDo lobbyists in Washington have power?

Sources of power

Coercive power

Use or threats of violence

Use of organizational rules and regulations,The ability to reward or punish (or threaten to do so)Is threatening someone’s income stream a form of

economic violence?

Formal authority What does this mean given Lukes critique?Ultimately, based in law (e.g. ‘at will’ employment)

Resource Dependency

Control of: scarce resources, decision making – premises, processes, objectivesknowledge/information, boundaries, technology, uncertainty,informal networks, counter-organizations

Power and ethics

Are these tactics from the 48 laws of power ethical? Necessary?

#2 Never put too much trust in friends#3 Conceal your intentions#7 Get others to do the work but take the credit#10 Avoid the unhappy and unlucky#11 Learn to keep people dependent on you#14 Pose as a friend, work as a spy#15 Crush your enemy totally#32 Play to people’s fantasies#38 Think as you like but behave like others#45 Preach the need for change but never reform too much

Thoughts

Is lack of power a major constraint?

How important should power considerations be in management action?

Should I strive to increase my power (perhaps by creating resource dependencies or coalitions)

Does being in a coalition constrain me?

Can I make my organization less political?The bigger the prize, the more self-interest, and the

more politics – do you agree?Politicking can also lead to gridlock

Strengths of the political metaphor

We see how all organizational activity is interest-based

Conflict management becomes a key activity

The myth of organizational rationality is debunked – rational for whom?

Organizational integration becomes problematic

Politics is a natural feature of organization

It raises fundamental questions about power and control in society

Limitations of the political metaphor

Politics can breed more politics

It underplays gross inequalities in power and influence

Organizations as

Instruments of Domination

Lukes’ Third Type of Power

Shapes preferences via values, norms, ideologies

All social interaction involves power because ideas operate behind all language and action

Not obviously measurable: we must infer its existence (how?)

These become routine…

we don’t consciously ‘think’ of them

We see them as natural or normal

Examples?

Wall street bailout is an interesting example

Teenagers went from ‘adults’ to ‘children’ during depression

Critical Theory

Structural factors

Class

Gender

Race

Symbolism and the management of meaning

Hegemony and ‘false consciousness’ (Gramsci)

Self-censorship and propaganda model (Chomsky)

Ideal speech situations

Postmodernism

Since truth cannot be verified then no idea is more privileged than another

The very development and use of the rhetoric of objectivity …represents a mere play for power, a way of silencing … ‘other ways of knowing’ ”

Weaker forms seek to unmask the social and political processes that create privileged and elitist ways of knowing – this is the power behind culture

More radical forms seek to alter the social structure to admit other ways of knowing and thereby share (or destroy) power.

Deconstruction

Deconstruct the narrative that…

CEOs are entitled to high salaries

The American dream is within everyone’s reach

There is a pay gap between men and women

Cutting taxes on the wealthy creates a trickle down effect

The Iraq war is being fought for freedom

Share the wealth

Is there generally a dominant discourse or competing discourses in an organization?

Issues

Primary and secondary labor markets

Stress and workaholism

Occupational Disease

Exploitation of people and resources

Class, race, gender, world regions

Green (environmental) issues

Poor working conditions in developing countries and responsibilities of MNCs

Thoughts

Do you have constraints if the dominant discourse does not favor your group?

Are rich white men more privileged in America? If so, how?

What can be done to remove constraints created by language and beliefs?

How does this affect a CEOs ability to act?Can corporations been seen as too dominant?What are the implications of this? Does this create

its own constraints on the powerful?

ORGANIZATIONS AS PSYCHIC PRISONS

Groupthink

InvulnerabilityWe cannot fail

MoralityWe are right and just, God is with us

Stereotypes the enemy are evil monsters

Pressure on group members to conformSelf-censorshipUnanimity

acting as though silence equals agreementRationalization of conflicting evidence

Cognitive biases

Distorted perceptions (Rumelt)

Myopia

Hubris (pride in past accomplishments)

Denial/defensive behavior

Superstitious learning

Faulty analogies

Cognitive biasesAvailability

Easily recalled events are judged as having higher frequencies Crime, earthquakes, plane crashes, tech company bankruptcies

RepresentativenessWe make decisions based on representative probabilitiesIn families we six children, which sequence of boys and girls is least likely:

GBGBBG BGBBBB

HindsightWe are not surprised by what happened in the past – we tend to focus on single factor explanationsWhy did Enron fail?

Cognitive biases

Escalation of commitmentIf a bet or investment goes poorly we tend to increase our efforts next time instead of walking away

Illusion of controle.g. tossing dice, playing slots

OverconfidenceManagers are overconfident in their judgmentsSet 98% confidence limits on the population of the US and Las VegasManagers also tend to dismiss or minimize the level of risk

Unconscious processes (Freud)

TensionThe demands of the id ('I want it, I want it now') and the demands of the superego ('no it's wrong') frequently conflict. The ego deals with this conflict by operating unconscious defense mechanisms.

Defense mechanisms

Displacement: This is the transfer of desires or impulses onto a substitute person or object. For example, if we are reprimanded by our boss, we may 'take it out' on a less dangerous substitute (e.g. shouting at our children, slamming a door or stamping our feet.)

Projection: This is where characteristics or desires that are unacceptable to a person's ego are externalized or projected onto someone else.

Reaction formation: Behavior that is the exact opposite of an impulse that they dare not express or acknowledgeDealing with homosexual feelings by beating up gay people

Defense mechanisms

Regression: an individual attempts to avoid current anxiety by withdrawing to the behavior patterns of an earlier age.

Repression: the expulsion of thoughts and memories that might provoke anxiety from the conscious mind they continue to affect a person's behavior later in adulthood in disguised or symbolic forms (such as dreams or neurotic behavior).

Rationalization: This is an attempt to explain our behavior to ourselves and others, in ways that are seen as rational and socially acceptable, instead of irrational and unacceptable.

Defense mechanisms

Denial: This is where a person may deny some aspect of reality. For example, someone who cannot come to terms with the death of a loved one may still talk to them, lay the table for them and even wash and iron their clothes.

Identification: this is incorporating an external object (usually another person) into one's own personality, making them part of one's self. You come to think, act and feel as if you were that person.

Psychoanalysis in the organization

Ingroup/outgroup

Idealizing the group or the leader

Demonizing the other

Organizational practices/processes as transitional objects

Change = threat to personal identity

Strategic plans as defenses against anxiety about an uncertain future

Thoughts

Do what degree to psychic processes constrain the process of free choice?

How prevalent are these issues in organizations and management?

Organizations as

Flux and Transformation

Chaos Theory

Chaos theory can be compactly defined as "the qualitative study of unstable aperiodic behaviour in deterministic nonlinear dynamical systems" Famous for the butterfly effect (or sensitivity to initial conditions) and the concept of strange attractors

Logistic Equation

Chaos in the Real World

If the economy is a chaotic system then planning is doomed

Better learn to react and learn quickly rather than prepare

It feels chaotic, but there is little evidence that the economy is a chaotic system

What is complexity theory?

Based on an agent…an ant in a colony, an electron in an atom, a worker in a company...A complex system is defined as any network of interacting agents (or processes or elements) that exhibits a dynamic aggregate behavior as a result of the individual activities of its agents.

An agent in such a system is adaptive if its actions can be given a value (performance, utility, payoff, fitness etc.) and the agent behaves so as to increase this value over time.

Complex Adaptive System

A complex adaptive system is one in which agents adapt to higher levels of fitness over time

A fitness landscape is simply a visual representation of the payoffs from taking different strategies

Fitness landscapes can be rugged (with many peaks or troughs) or smooth

Co-evolution creates a ‘dancing fitness landscape’

Modeling Methods

The development of complexity theory is a direct result of new computer technology.

Increased computing power has given us the ability to model the idiosyncratic behavior of thousands of individual agents:

artificial intelligence, parallel processing, high level programming languages.

In the past, aggregated models were used (e.g. system dynamics)

Key Result Areas

Some key results in complexity theory have proved important for management

Emergence

Agent-Based Search

Patches

Self-Organized Criticality

Emergence

Emergence“Order for free” – no central control!Simple/local interactions produce “interesting” (unanticipated) outcomes at the macro-level (e.g. boids) ExamplesCraig Reynold’s Boids Program

Separation: steer to avoid crowding local flockmates Alignment: steer towards the average heading of local

flockmates Cohesion: steer to move toward the average position of

local flockmates.

Agent-Based Search

A rugged fitness landscape can be produced by an NK model (also known as a Boolean network or spin glass model)

Imagine N nodes in a lattice with each node randomly connected to K other nodesThe energy of any given node is a function of its state (on/off) and the states of the K other nodesHow should the energy of the lattice be minimized?

Brute trial-and-error takes a long timeUsing a pack of agents to explore the landscape and zero in on promising regions may be faster

Patches

Stu Kauffman found that dividing an NK lattice into several patches and minimizing the energy in each patch without reference to the global energy level gave better solutions than global search on very rugged (i.e. complex) landscapes

Relaxing some constraints may work well in complicated problems

Complexity as Metaphor

Complexity theory has been extended from biology and physics into other arenas

Undoubtedly, societies, economies, and organizations are complex adaptive systems, too.

If an organization is like an NK model then…

Interpretation

Adaptation (biology) rather than efficiency (machine) should be promoted

A variety of small experiments should be undertaken to explore the “fitness landscape”

Rely less on central controls, use simple rules

Eisenhardt “Strategy as simple rules”

Recognize that change can yield big (or small) results and solutions can emerge from the interaction of agents (workers)

Strengths and limitations of flux metaphor

StrengthsWe think of the limits of forecasting, prediction, and controlWe think about adaptation rather than optimization

LimitationIs there really an analogy between the results of computer simulations of physical systems and business?

Thoughts

If small seemingly unimportant events can trigger large consequences then how much are we “in control” of events

Similarly, by putting rules in place we can direct the organization to evolve in novel directions without direct control

Do these workers have free will or are they constrained? Are these constraints better than traditional rules?

Disclosure (1994)

Why the title “Disclosure”?

Why did Meredith come on the Tom?

Why was everyone so ready to believe that Tom was guilty?

How did chaos theory undo Meredith numerous times in the movie?

Is this realistic or a “deus ex machina”?

Was Stephanie Kaplan a better politician than Meredith?

Why did they want to set Tom up a second time?

Why use Meredith?

Disclosure Quotes

"Sexual harassment is not about sex, it's about power. She has it, you don't”

“You must pounce because we don't have the harassment. It must be that Sanders is incompetent. It'll be in public. With reporters. Bob's counting on you.”

“Did it ever occur to you, Meredith, that maybe I set you up? “