The relevance of historical perspectives
Rocky J. Dwyer, Centre of Innovative Management, Athabasca University, Alberta, Canada
Purpose – The paper examines the importance and pervasiveness of formal organizations in contemporary society.
Design/methodology/approach – An examination of the historical, classic, and modern theorists' perspectives was undertaken to determine the relevancy of the theories in dealing with the changing social, technological and cultural values of today's organization and society.
Findings – Understanding the importance and pervasiveness of formal organizations in contemporary society would enable individuals to influence better factors associated with changing values.
Practical implications – The findings suggest that an intrinsic understanding of the various dimensions, which help, create and shape an organization, can be influenced at both the micro and macro levels.
Originality/value – This paper presents an overview of the literature which both enhances personal knowledge and understanding at the theoretical and practical levels so as to enable individuals to gain insight on the inherent factors that may be influenced to advance organizational goals and objectives.
Management; Organizational theory; Bureaucracy.
Emerald Group Publishing Limited
Driven by changes in technology, culture and societal values, the study of organizations has established itself as an increasingly significant area of social research. The study of organizations is complex, dynamic and fascinating. Everyday of our lives we are touched and influenced by organizations. Indeed, as working individuals most of our day is dedicated to dealing with one or more organizations. Thus, the more we understand organizations, the more successful we will likely be in our dealings with them.
This paper examines and defines the concept of social organizations including a historical perspective, reviews and discusses classical/theoretical perspectives such as Durkheim's division of labor; Marx's state and alienated work; Weber's theory of bureaucracy, and Taylor's work regarding scientific management. Additionally, the perspectives of modern theories such as the structuralist approach, negotiated order theory and new industrial sociology are reviewed and discussed. Finally, the paper concludes with a discussion on the relevancy of classical theories in dealing with the changing social, technological, and cultural values of today's society.
Defining the term “Organization”
Central to our understanding of social organizations is the implicit need to clarify and define the term “organization”. The purpose of defining the term “organization” is not to limit or restrict our thoughts but rather to enhance and induce an appreciation of the diverse meanings various scholars have postulated to define the term “organization”. A review of literature (Barnard, 1938; Cohen et al., 1972; Katz and Kahn, 1978; Silverman, 1971; Selznick, 1948; Waldo, 1955; Weber, 1947; Weick, 1979) illustrates the diversity of opinion about what organizations are and how they may be viewed. For example, Barnard (1938) suggests an organization is a system of coordinated activities or forces of more than one person. While Cohen et al. (1972) define an organization as associations of persons grouped together around the pursuit of specific goals. In comparison, scholars Katz and Kahn's (1978) theoretical model for the understanding of organizations is that of “an energetic input-output system in which the energetic return from the output reactivates the system”. Additionally, they suggest social organizations are flagrantly open systems and consist of transactions between organizations and their environments. Furthermore, these scholars postulate all social systems, including organizations, consist of patterned activities from a number of individuals and that these activities are complementary or interdependent with respect to some common outcome. As well, the activities are relatively enduring, and bounded by space and time. Silverman (1971) advocates organizations are social institutions with certain special characteristics:
[…] consciously created at an ascertainable point in time; their founders have given them goals which are usually important chiefly as legitimating symbols; the relationship between their members and the source of legitimate authority is relatively defined, although frequently the subject of discussion and planned change.Selznick (1948) simply defines organization as a “structural expression of rational action”.
[…] a circle of people who are accustomed to obedience to the orders of leaders who have a personal interest in the continuance of the domination by virtue of their own participation and the resulting benefits, have divided among themselves the exercise of those functions which will serve ready for their exercise.Weick (1979) in contrast to other scholars, uses the term organizing which he defines as “[…] a consensually validated grammar for reducing equivocally by means of sensible interlocked behaviours”.
Each of the aforementioned definitions emphasizes certain aspects to the exclusion of others. Certainly, it is possible to integrate all of these definitions into a single description; however, such an effort may restrict one's ability to comprehend different viewpoints. However, what can be derived from these definitions is that organizations are both objective and subjective. To the extent that they have the power to shape behavior, they are like objects. However, to the extent that organizations could not exist without the conscious human activity that constitutes them, they are subjective creations.
Additionally, organizations can be categorized as either formal or informal. For the purposes of this paper, a formal organization is defined as those entities which are deliberately and consciously created to achieve specified goals, while an informal organization is characterized as an entity which emerges to handle issues and crises which are left unresolved by a formal organization. Although these two aspects of organization are closely related, this paper will deal specifically with the formal organization concept. Central to any discussion on the formal organization concept is the term bureaucracy. Consequently, throughout this paper a bureaucracy is defined as a formal organization characterized by centralized, hierarchically organized authority that emphasizes impersonal work relationships, technical knowledge, and rationality.
Historical development – organizations
While it is impossible to know exactly when and how someone discovered that tasks could be accomplished more effectively using formal organizations, there is historical evidence to suggest it was fashionable and convenient for man to organize and establish organizations to achieve certain goals. For example, in ancient Egypt and China the great rulers formed organizations to construct pyramids, create impressive irrigation systems and to build great walls and monuments –all evidence of engineering feats that would have required highly developed formal organizational structures (Berger and Luckman, 1966).
In many cases the thrust to develop larger and more refined organizations developed as a result of military needs – the Greek civilization is a prime example (Marchak, 1988). As Greece City State extended its influence further and further, a highly sophisticated military organization was created to make possible the control necessary for one of the most massive accumulations of power ever achieved. Plato in describing why organizations developed noted: “A State, I said, arises, as I conceive, out of the needs of mankind; no one is self-sufficing, but all of us have many wants. Can any other origin of a State be imagined?”. However, the Greeks were not the only creators of highly sophisticated organizations. The growth of the animist and ancestral worship required organizations as communities gathered for celebration, rituals and other festivals. Since its inception, more than 450 years ago, the Roman Catholic Church continues to be one of the most influential, recognized, widespread, and enduring bureaucracies ever created. For example, in comparison to the US, the Roman Catholic Church has missions in 147 countries funded by a mere budget of 300 million dollars, while the USA has missions in 146 countries funded with billions of dollars.
Certainly, other structural developments contributed to the historical emergence of the formal organization and our dependency on it. For example, the simple increase in population and subsequent shift from rural to urban centers necessitated growth in formal organizations to coordinate the larger numbers of people more efficiently. Similarly, the invention of a money economy, the growth and centralization of capital, and the creation of increasingly larger global corporations have gone hand-in-hand with the development of formal organizations (Marchak, 1988).
The organization of labor and the growth of the labor movement provided another impetus for the spread of the formal organization. Many unions are not only bureaucratically organized, but are also multinational. A 1993 survey (Neill, 1993) found that about 4.5 million workers in Canada, or about 41 percent of all paid workers, are unionized. About 45 percent of unionized Canadians, however, belong to international unions with headquarters in the USA (Chen and Regan, 1993).
The governments of contemporary societies represent a final area through which the formal organization has come to affect our lives. The concept of the nation-state emerged in the late middle ages and early days of industrialization. Today, in all developed countries, whether in Cuba or the USA, government has become a fact of life. For example, in Sweden government consumption of gross domestic product (GDP) is over 28 percent. Over time, government absorbed many of the functions once performed by religious groups and private charitable organizations. These factors and others have led to governments of massive scope, which require extensive formal organization (Campbell and Szablowski, 1987).
Classical theoretical perspectives
Formal organization is an aspect of the societal process that sociologists call the division of labor and since Durkheim popularized this term, he is most often associated with its use. Similarly to other noted scholars, Durkheim was interested in how society was possible. Earlier social philosophers such as Hobbes, Locke, and Rousseau postulated people simply came together and made a rational agreement to cooperate. Durkheim (1947) however, rejected this argument. He made a distinction between different types of societies and believed that societies prior to the more advanced industrial society were much simpler. Furthermore, Durkheim postulated these smaller societies possessed a higher degree of moral consensus or shared sentiments and values. Additionally, most individuals did the same work and economies were relatively undifferentiated. For example, if the economy of a community was based on farming, most people farmed and shared in basically similar activities and interests. In other words, the division of labor was not highly differentiated.
Such a society, Durkheim felt, was characterized by mechanical solidarity. Almost all people were, by virtue of their membership in the community, automatically integrated into a common morality. As in all societies, some deviances did occur but they were met with harsh punishment. The punitive, repressive nature of the laws that such societies enacted, for what today would be considered minor forms of deviance, reveals the strength of the common morality or collective conscience.
In modern societies that are very large and complex, however, the division of labor is much more differentiated. Instead of each worker or family producing all its own necessities, specialization develops. The diversity created by such specialization may lead to strong divisions among different segments of society. In such situations, the high moral consensus of simpler societies would break down. However, a complex society would not simply be reduced to warring factions. Rather, it would produce its own type of integrity or solidarity based on the mutual interdependence of the various groups involved. For example, a capitalist needs the laborer, and both the capitalist and laborer need the services of a farmer, a doctor, and mechanic. As in human or other living cells, the various parts work together to form the whole. Durkheim (1947) called this kind of integration organic solidarity. The collective conscience in this more complex society is weaker, however, because the many groups, only loosely united, have only a few common interests and moral sentiments. Evidence of these weaker bonds can be seen in the laws enacted under organic solidarity that are geared toward civil-administrative ends. Deviance from them does not evoke the same harsh punitive response evident in a society highly integrated by mechanical solidarity.
Although he could see the survival of certain remnants of mechanical solidarity in modern society, Durkheim advocated a return to a society based on a common moral code. Consequently, due to the potential for a strong moral and political conservatism in Durkheim's thought, he has frequently been criticized for such bias.
American sociologist Cooley contributed an analysis of group life similar to that of Durkheim. Cooley (1956) distinguished between primary and secondary groups as embodying different qualities of human relationships. According to Cooley, primary groups are characterized by emotion, warmth, cooperation, and face-to-face interaction. Families and friendship groups are examples. Additionally, primary groups are very important for forming and maintaining an integrated self. Cooley felt that primary groups are ideal social forms, but like mechanical solidarity, they were threatened in contemporary urban societies. Instead, more and more human associations are carried out in secondary groups.
Secondary groups are characterized by relationships that are goal-oriented, impersonal, rational, and efficient. As a group, shoppers in a large urban centre relate to each other and to the sales staff in this way. Similarly, commuters on buses and trains typically maintain a cool, distant, and truncated relationship with each other and with the bus driver. Bureaucracies are also excellent examples of such secondary group relationships. Just as Durkheim was concerned with the increased dependence on organic forms of solidarity, Cooley was concerned about the growth of bureaucratic forms of organization.
This brief and succinct examination of the work of Durkheim and Cooley amplifies the major driving forces underlying all forms of social organization in contemporary society, namely, the division of labor and the trend toward increased complexity and rational organization. As industrialization developed and the occupational and social world become more specialized, bureaucratic formal organizations became more and more the tool to manage, organize, and integrate modern society. Consequently, the theme of bureaucracy emerges again and again. In addition to the work of Durkheim and Cooley, previously discussed, Weberian and Marxian traditions have also attempted, but more directly, to come to terms with the growth and influence of bureaucracies.
In the Marxian tradition, the analysis of bureaucracy has two main concerns. First, it focuses on the state as a bureaucratic structure. Second, it is concerned with the implications of the formal organization for work as a human activity.
With respect to the first concern, in Marx's broad formulation, bureaucracy is identified with the state. Marxists see the state as a creation and tool of the capitalist class through which its interests are served. According to Marx the state should never be seen as independent entity acting on its own behalf, and certainly not one acting impartially on behalf of all constituents. Even in democracies like the USA, orthodox Marxists would argue that the US government and the state governments do not represent the interests of all the people, but reflect and defend capitalist principles, the principles of big business. Free trade legislation would be only one example of this bias. With the coming of communist society, however, it was predicted that the state would wither away and, presumably, the problem of bureaucratization along with it.
Lenin and Trotsky continued this tradition of Marxist analysis of bureaucracy. It remains an area of concern between modern Marxist and neo-Marxist writers (Glassman et al., 1987). By and large, the task for both Lenin and Trotsky was to explain why the bureaucratic state did not wither away following the Russian Revolution of 1917, as expected. Lenin and Trotsky resolved this contradiction in Marxist theory by arguing that the communist state had not yet arrived in Russia. Rather, the society that had emerged out of the revolution was socialist, with socialism a transitional stage between capitalism and communism. In this period a bureaucratic state still persists because conditions are not developed to the point where its elimination is possible. For example, the education of the masses, necessary for the further development of the productive forces, both requires a bureaucratic structure and must be accomplished before the people themselves can assume administration. Thus, until the coming of the fully developed communist state, a measure of bureaucracy has to be tolerated and, along with it, career bureaucrats who often serve their own needs and those of the bureaucracy before those of the people.
The series of political revolutions in the communist bloc that began at the close of the last decade and continued into the nineties has renewed and intensified this debate. First, in Poland the workers' movement Solidarity clashed with the bureaucratic state, making transparent the lack of identification between the interests of the labor movement and those of the state. In country after country, as the winds of change transformed communist governments, it has become increasingly apparent how tightly Stalinist oligarchies have for decades suppressed the people's urge to be free. For example, in Romania a vast bureaucracy supported rule by Ceausescu and his family – who lived in luxury while the majority of Romanians suffered poor living conditions and shortages of vital necessities.
Marx would have been the first to condemn the blatant distortions of his vision embodied in the regimes of Eastern Europe. For Marx, socialism would usher in the liberation of the human spirit, not see it crushed by the heavy hand of the bureaucratic state. It is clear that the debate set in motion by his argument that state bureaucracy would wither away under communism has not ended – perhaps the only exceptions are in China and Cuba, and that remains to be seen. The unfolding of these recent historical events, however, has placed a heavy burden of proof on the Marxist camp and lends weight to Weber's argument.
The second concern of the Marxist tradition is the organization of work in a capitalist society. This concern grows out of Marx's (1932) conviction that alienation of the worker is endemic in capitalist relations of production. For Marx, alienation of the worker represented an objective distortion of human nature, a distortion built into the structure of capitalism. The principle features of this structure is that the owner of the means of production by the capitalists; and the ownership by the workers of nothing but their labor power. This two-class structure gives rise to four main forms of alienation.
First, workers under capitalism are alienated from the productive process. The capitalists purchase the labor of workers and decide how to use it. The workers work for wages, not to fulfill their own creative human needs. Second, workers are alienated from the product of their labor. They have no control over the objects they produce. The capitalists who sell them for a profit own these. A third form of alienation under capitalism is the worker' alienation under capitalism is the workers' alienation from others. Workers are alienated from capitalists, who they see as hostile masters of the products of their labor. However, they are also alienated from their fellow workers, with whom they frequently find themselves in conflict and in competition for survival. Finally, the structure of capitalism forces workers into an alienated relationship with their essential human nature. The distinctive ability to act freely, spontaneously, and creatively is what most clearly marks humans off from other animal species. When loss of control over the process and products of their work cuts workers off from fellow colleagues they are also robbed of the relationships that develop between people. Thus, the very organization of work in capitalism results in a situation of objective alienation.
For humans, to be without control of the creative capacity in work is to be alienated. This loss of control by workers is aggravated by capitalism's increasing tendency to fragment, specialize, and allocate tasks that once were all performed by the same worker to several workers on an assembly line. Marx was very aware of this tendency, which had already widely established itself in his time. Smith (1977) used the manufacture of pins as an example of how specialization can increase production. Smith's research confirmed that if tasks were broken down into stages, with each worker performing only one stage, production was increased. Marx (1977) illustrated the same point using the manufacture of glass bottles as an example.
Although Smith (1977) was aware of effects of specialization on the employee, he accepted it as inevitable in every “… improved and civilized society”. Marx (1977) condemned it as a specific mode of alienated labour in a capitalist production; he declared it turns every worker into a “crippled monstrosity”.
Significant research has been devoted to the existence of alienation in modern organizations. However, Rinehart (1987) suggests a significant amount of the research has distorted Marx's conception of alienation which has been turned into a social-psychological category and in a review of such studies, Rinehart (1977) pointed out that attitude questionnaires capture neither the complexities of worker alienation nor the attempts of workers to humanize the workplace. According to Rinehart, feelings of alienation unexpressed in response to questionnaires or interviews are often expressed in behaviors such as strikes, restriction of product output, industrial sabotage, and humorous horseplay on the job. Alienation at work can also result in physical or mental pathology for workers, including “… death, disease, disability, dissatisfaction, anxiety, stress and unease” (Navarro, 1982). Lowe and Northcott (1986) in a study of Canadian postal workers found highly automated, repetitive, and monotonous jobs take an especially high toll on workers' health.
Thus, alienation has been the subject of extensive scholarship in either the distorted subjective understanding discussed above, or as the objective position of the worker resulting from the organization of work under capitalism. The same cannot be said, however, for the labor process.
This concept has only recently received sustained attention from Marxist scholars. Braverman (1974) asserted:
Neither the changes in the productive processes throughout the centuries of capitalism and monopoly capitalism, nor the changes in the occupational and industrial structure of the working population have been subjected to any comprehensive Marxist analysis since Marx's death.
Braverman's challenge served as the catalyst in creating a new field of study known as the New Industrial Sociology. Although the Marxian concept of alienation remains central to this work, the analysis goes further. New Industrial Sociology revives Marx's concern with the organization of the labor process itself. It sees the history of formal organization as the history of capitalist control of workers and looks at how the alienation of workers has taken the concrete form of increasing specialization, and subjugation to the machine, technological innovation, and hierarchical bureaucratic management.
In contrast to the Marxian tradition, Weber ascribed a more pronounced and independent role to bureaucracies (Girth and Mills, 1947). Weber did not view bureaucracies as being identified with the capitalistic state, nor as being destined to wither away with its demise. Rather, Weber (1947) considered bureaucracies to be even more necessary in a socialist than in a capitalist state and argued that the Communist Manifesto, which predicated dictatorship of the proletariat, was wrong. Instead of control passing to the workers, Weber envisioned power being assumed by a class of bureaucratic administrators unsympathetic to workers' interests.
In order to appreciate Weber's understanding of bureaucracy, it is necessary to understand that Weber viewed bureaucracy as only one manifestation of the much broader historical process of rationalization. Additionally, Weber saw bureaucracy as an ideal type and a particular form of authority.
Bureaucracy for Weber was associated with a particular form of authority. To be effective, any form of authority must be made believable and acceptable to the relevant public through a process Weber called legitimation. According to Weber (1947) there are three principal ways of legitimating authority:
- traditional; and
According to Girth and Mills (1947) bureaucracy took on a specific meaning for Weber and consisted of six principal characteristics:
- laws or administrative regulations govern fixed or jurisdictional areas;
- authority levels exist in an office hierarchy whereby subordinates are supervised by higher level employees;
- written documents provide the foundation for modern office management;
- office management usually presupposes thorough and expert training;
- in a fully developed office environment, officials are required to perform at the working level; and
- office management, is more stable thus permitting office rules to be learned through technical learning.
Morgan (1986) more briefly summarized Weber's definition of bureaucracy as:
[…] a form of organization that emphasizes precision, speed, clarity, regularity, reliability, and efficiency achieved through the creation of a fixed division of tasks, hierarchical supervision, and detailed rules and regulations.
While the efficiency of the rational bureaucratic structure is admired, it is well recognized that bureaucracies have negative features. There is a tendency for the bureaucracy, once established, to perpetuate itself and to begin to serve its own survival goals rather than the goals to which it owes its existence. Thus, individuals become standardized, programmed, powerless victims of a new kind of tyranny. Even Weber (1947) called bureaucracy “[…] the iron cage of the future”. Weber's ambivalence toward bureaucracies is shared by Merton (1957) who argued that aspects of bureaucratic procedure might be dysfunctional to the organization. In particular, bureaucrats who are trained to comply strictly with the rules have difficulty when situations arise which are not covered by the rules, which leads to inflexibility and timidity. The bureaucrat has not been taught to improvise and innovate and, in addition, may have no desire to do so. Generally, organizational incentives such as promotion have been designed to reward what Merton (1957) calls “disciplined action and conformity to official regulations”. Consequently, it may not be in the bureaucrat's interest to bend the rules even when such action might further the realization of organizational goals. Therefore, according to Merton, the devotion to the rules encouraged in bureaucratic organizations may lead to a displacement of goals. The tendency for conformity to official regulations becomes an end in itself rather then a means to an end. The bureaucrat may lose sight of the goals of the organization, which therefore reduces its effectiveness. In other words, red tape may stand in the way of providing an efficient service for the clients of the organization. Finally, Merton believes the emphasis on impersonality in bureaucratic procedures may lead to friction between officials and the public. For example, clients seeking explanations or information regarding taxes from the Internal Revenue Service (IRS) may expect concern and empathy for their particular problems. The businesslike and impartial treatment they might receive from the IRS can lead to bureaucrats being seen as cold, unsympathetic, abrupt, and even arrogant. As a result, clients sometimes feel that they have been badly served by bureaucracies.
While agreeing that the various elements of bureaucracy outlined by Weber serve to further organizational efficiency, Merton maintains that they inevitably produce dysfunctional consequences. Merton (1957) suggests that “[…] the very elements which are conducive towards efficiency in general produce inefficiency in specific instances”.
Another historical development that helps bridge the gap between the present and classical, which attempts to understand the growth of formal organizations, is the Scientific Management School. Developed shortly after the turn of the century by Frederick Taylor, the Scientific Management School outlined how to achieve maximum productivity and impacted the division of labor in organizations, especially in factories and industrial production.
On the one hand, scientific management promoted a particular conception of human motivation. On the other hand, it contained a theory of organizations. The motivational theory advanced by Taylor (1911) sees workers as primarily economic individuals, most successfully motivated by monetary rewards. The task for scientific management, therefore, becomes one of matching the work task, through a consciously organized division of labor as closely as possible to the economic incentive.
Scientific management gave rise to the infamous time and motion studies in which every action needed to perform a task is carefully scrutinized and broken down into its component parts. All non-essential motions are eliminated. Those remaining are timed using a stopwatch, and the minimum time needed to perform the task is carefully documented. These time and motion studies formed the basis of a production process based on piecework and the assembly line.
Workers are paid, at least partially, on the basis of how many pieces are produced in a given period of time. The object of a production process organized this way is to combine the most effective reward system with the most efficient division of labor to extract the maximum output physically possible from each worker.
Scientific management attracted many followers during the initial stages, and similar to other theories, it has been criticized for faulty data and on the grounds of inhumanity. It continues to exert its influence today in a variety of forms. Its advantages to employers and administrators are obvious, even though some workers can be convinced that this type of incentive system is worth the costs it exacts in terms of monotony and boredom on their part.
The distinctive feature of Scientific Management Theory and policies based on it is the concentration almost solely on what was earlier defined as formal organization – individuals who apply the theory wish to establish rules and regulations to cover all possible work situations. The underlying assumption is that human nature is machine-like and thoroughly rational, motivated by simple, uncomplicated economic needs. In fact, human nature is much more complex, and people are capable of exercising much more control over their environment, even under oppressive conditions, than they are sometimes given credit for. Consequently, this observation is the basis for my next point of discussion - the human relations school of thought.
The human relations approach began an attempt to test certain propositions derived from the scientific management theory. However, when Mayo's (1975) research contradicted central assumptions of scientific management, the human relations school of thought began to develop. As studies inspired by the human relations perspective accumulated, more and more insights were gained concerning the informal aspects of organizations. Briefly, researchers discovered that workgroups develop social norms concerning acceptable conditions of work. These norms dictate production levels and can override economic and other psychological incentives. Second, a democratic style of leadership that gives workers a say in production decisions, rather than the authoritarian style of supervision advocated by scientific management, results in a higher quality product and more independent and contented workers. Finally, human relations studies concluded that communication between ranks, especially in matters that affect workers, is a great management practice.
In general, the human relations school contradicted many fundamental assumptions of scientific management. Also, the principal contributions made by the human relations school rest on their discovery and appreciation of the informal structure of formal organizations. Consequently, even within the limits imposed by a rule-governed, hierarchical, and bureaucratic organization, individuals seem to be able to assert themselves and pursue their needs through a variety of informal adaptations. The Human Relations School merely recognizes that individuals need to control their destinies. Individuals need to assert their subjectivity in the face of the constraints of bureaucracy. In comparison to scientific management, human relations is seen as an advance over the unrefined methods of scientific management, although it remains as Rinehart (1987) points out “a science for managers”.
Just as the human relations school developed as a reaction to scientific management theories, the structuralist approach developed from a series of criticisms of the human relations school. The structuralist approach claims to synthesize and further develops the previously discussed approaches and encompasses a broad range of contemporary developments in organizational theory. Many of the scientific management theories have been criticized for being biased in favor of employers and administrators; for being excessively concerned with economic factors and for simply being inhuman in their application of rules and procedures intended to maximize production regardless of human costs. The structuralist approach also sees the human relations school as biased in favor of management, though in a less coarse and obvious way than scientific management. The chief objective of those who advocate the human relations approach to management, the structuralist argue, is the same as scientific management advocates – increased production! However, the human relations supporters stress open communication between managers and employees. The objective is to give employees a feeling that their opinions count and that employees are a part of the decision-making process. Structuralists feel that this attempt to create the impression of the organization as one big happy family is misleading. In fact, it glosses over certain real conflicts of interest among different groups within the organization, particularly between managers and employees.
In addition to this general criticism of the human relations school, the structuralist approach is different from the scientific management and human relations schools of thought in several other important ways. Etzioni (1964) has suggested that there are five additional differences in emphasis.
First, the structuralist approach feels that the human relations school gives almost exclusive attention to informal structures at the expense of formally organized structures. Each level is important in its own right and more should be done to study the relationship between the two levels of organization. Second, the structuralist believes that the human relations school overemphasizes the importance of informal work groups in meeting the emotional needs of workers. They point to evidence that families remain very important in this respect. Third, while both earlier schools studied the internal structures of isolated organizations, structuralists feel that important factors in the environment affect what happens inside the organization. Fourth, structuralist think that the human relations school gives too much emphasis to social incentives such as prestigious titles, office size, and the type and style of office furniture. On the other hand, structuralists feel that the scientific management school overemphasizes economic incentives. The structuralist approach tends to recognize both social and economic rewards as important motivational factors for employees of organizations.
Finally, structuralist broadens the scope of organizational analysis. Both scientific management and human relations schools focused primarily on the study of industrial organizations, insurance companies, and banks. Structuralist theorists have extended their research to include organizations such as hospitals, schools, prisons, churches, colleges, mental institutions, and many other types of organizations.
The structuralist approach is a diverse set of theories that encompasses much of the work being done today in the field of organizational analysis. Consequently, the body of research and theory has progressed far beyond the generalizations concerning the nature of bureaucracies implicit in the work of Weber. Negotiated order theory concentrates upon the explicit activity of conflict, bargaining, and the tentative agreements that characterize organizational life. The theoretical foundation of negotiated order theory is found in symbolic interactionism. For the purposes of this paper, one fundamental assumption of the symbolic interactionism is critical. Specifically, in attempting to explain social order and the maintenance of stability in society, negotiated order theorists simply accept that social order is an emergent product and apply it to the study of organizations.
Negotiated order theorists point out that organizational actors rely on informal understandings and tentative agreements to get on with their work, rather than turning to a fixed set of rules to solve internal conflicts and tensions, as Weber's model of bureaucracy, for example, would predict. In fact, negotiated order theorists would argue that the formal rules found in organizations are not very extensive or explicit, and that organizational personnel frequently do not know all the rules, or how and in what situations to apply them. Consequently, the rules are treated as general understandings, the specific meaning of which must be worked out in concrete situations. This is the principal task of the negotiation process.
For example, Strauss (1963) showed how the wide variety of personnel who work in a psychiatric setting leads to disagreement concerning patient care and organizational goals. Given that many individuals who work in the hospital often have different understandings of the same illness, patient care is not predetermined by a set of formal rules. Rather, patient care is accomplished through a continuing process of conflict and negotiation.
New industrial sociology, unlike negotiated order theory, does locate organizational analysis in the broader matrix of social and historical change. Consistent with its Marxist roots, it is mindful of the alienated character of work under capitalism. Using Braverman (1974) as inspiration, it focuses on the occupational structure and the development of organizational and administrative devices designed to control workers and the labor process. Consequently, new industrial sociology is broader in scope than the study of formal organizations.
Through agreeing with Braverman that capitalists should see formal organizations as arenas for the control of workers, proponents of new industrial sociology are also critical of Braverman. According to Hill (1981) Braverman's work depicts workers as too passive in the face of the degrading techniques of control devised by owners and managers. As well, Edwards (1979) saw control in the firm as more of a contest between employers and managers on the one hand, and workers on the other. Furthermore, Edwards (1979) saw systems of control in the firm as having changed since the nineteenth century, partly as a consequence of changes in firms' size, operations, and environment but also as “[…] a consequence of workers' success in imposing their own goals at the workplace”.
Edwards (1979) saw the emergence of three distinct types of control. The first type, which characterized the nineteenth century, he labeled as simple control. Simple control was defined as a single entrepreneur, alone or with a small group of supervisors and managers, who ruled the firm. These managers exercised absolute power and had the option of firing insubordinate employees thus leaving employees virtually powerless.
As firms grew in size and complexity, additional levels of supervisors and managers expanded the hierarchy. This gave rise, Edwards argued, to a second type of control based on technological development. Technical control found its classical form in the assembly line, piecework and from Taylor. Since mechanization reduced jobs and reduced employees to machine attendants, employers had the advantage over workers. However, this advantage did not last long, employees increased unionization. Thus, the contest for control of the labor process continued.
Edward's, third form of control is bureaucratic control, which is based on the principle of hierarchical power. Hierarchy is a well-established principal of bureaucracy. According to Edwards (1979) employers have “[…] turned the principle of hierarchy into a further form of control by linking it to a stratification of work”. For example, in many organizations each job is given a distinct description, title, and level of pay – and the employee is offered the promise of a career in exchange for accepting this organizational policy. Edwards (1979) sees this principle as increasing in both production and non-production jobs in large organizations and accordingly it has been successful in forestalling unionism among employees. It therefore, represents, what Edwards (1979) calls “… another manifestation of the employer's control of the work process”.
Edwards saw these three techniques of control as developing in a historical sequence. Since capitalist development has progressed unevenly and some sectors have advanced further than others, all three methods are evident in today's modern factories and organizations.
The struggle in the workplace continues because it reflects the fundamental contradiction of capitalism – the class struggle between owners and non-owners of capital. It also reflects the struggle of employees against the objective alienation implied in that structure. Thus, in this struggle it is the employees who are at a distinct disadvantage:
Even apparent successes, such as when employers voluntarily grant employees a measure of responsible autonomy, it often represents a thinly disguised effort to increase production and profit (Rinehart, 1987).
Over the last few years, there have been a plethora of concepts such as total quality management (TQM), organizational culture shifting, competency profiling, organizational de-layering, benchmarking comparisons, rightsizing, outsourcing, downsizing and empowerment initiatives which have all been touted as the one size fits all miracle cure for corporate ills. In many respects, these efforts are modern day applications of the human relations school discussed earlier, and consequently share many of their liabilities. In particular, they hold the promise of sharing control with employees, but fail to deliver the goods. Indeed, they act as mechanisms to motivate employees to raise production, lower costs, and increase profits, while retaining control over significant decisions in corporate management. These techniques are often held up as models to be copied by industry. Hillmer and Donaldson (1997) argue that every fad leads managers down one or more of several “… false trails”, including the belief that ready made techniques can solve any problem. Although, Hillmer and Donaldson (1997) concede that these trails lead to some useful ideas, the snag, however, is that managers tend to take their usefulness on trust. This has spawned what Hillmer and Donaldson (1997) call “… instant coffee management: just open the jar and add water, no effort required”. Clearly, this implies that control over the labor process is a constant struggle in which employees remain at a disadvantage. Improvements in technology and automation pose increasing challenges to control the labor process, as do innovative management styles that seem to offer employees participation in democratic decision-making but retain all real control in the hands of management. It is the position of the new industrial sociology, in keeping with its Marxist vision, that the ultimate battle for control between employers and employees will not be won on the shop floor or in the bureaucratic and automated organization. Rather, it will be won in the broader historical struggle in which capitalist relations of production are modified to give a realistic measure of control to the employee in the form of ownership of the means of production. The larger political and economic context is not encouraging for employees or the union movement. In fact, the North American free trade countries have already created major shifts in certain industries with jobs lost to Mexico. Continuing expansion of the agreements would open North American industry to an even greater supply of inexpensive labor. Hence, union executives must be increasingly worried about the impending loss of jobs that foreign labor poses to previous gains.
Organizational impact – the future
According to Drucker (1988) future organizations are going to be flatter, less hierarchical, and more decentralized. In structural terminology, organizations will be less complex, less formalized, and more decentralized. Organizations of the future will not resemble a pyramid, which has been the traditional metaphor for organization structure. Instead, the organization of the future will resemble the New York symphony orchestra. Drucker (1988) suggests there are at least four reasons why the pyramid is doomed, including:
- Rapid and unexpected change – the pyramid's strength is its capacity to manage efficiently the routine and predictable events that an organization confronts. With its nicely defined chain of command, its rules, and its rigidities – it is ill adapted to face rapid changes.
- Increasing diversity – today's organizational activities require employees with very diverse and highly specialized levels of competence. The narrow departmental boxes of the pyramid are inappropriate for handling diversity.
- Change in managerial behavior – managers no longer rule by dictum. Managerial philosophy has changed. Consequently, managers are expected to increasingly project humanistic - democratic values. Moreover, managers increasingly rely on collaboration and reason rather than coercion and threats to lead their employees.
- Adoption of computer technology – computers have changed and continue to change the way work in done within organizations. Information-based technology demands a higher degree of flexibility.
Drucker's first three points are rather straightforward, however elaboration of the fourth point is necessary. Knowledge-based organizations are composed largely of specialists who direct and discipline their own performance through organized feedback and review from colleagues, internal and external customers, and corporate headquarters. Generally, this requires a structure that resembles or is similar to an orchestra. Instead of completing tasks sequentially - research, development, manufacturing, and marketing, tasks will be completed in synchrony. Clear, simple, common objectives will allow the CEO to conduct the masses of employees directly. As such, the CEO will be able to have a wide span of control because each employee will be a specialist who is competent and capable. Similarly, since employees will be skilled professionals who have their standards of performance and expectations indoctrinated, rules and regulations will be minimal. Managers, having provided the employees with the overall plan, will give subtle overall direction. Hoerr (1990) concurs with Drucker's (1988) assessment that organizations are changing. However, Hoerr does not support Drucker's' contention that these changes will leave the pyramid-shaped structure behind. According to Hoerr (1990), the “[…] pyramid is alive, well, and flourishing”. Hoerr delineates four points to support his contention:
- Large size demands the efficiency that division of labor, high formalization, and other pyramid-creating devices use to maintain control. Globalization of markets favors large size and global competition in major industries requires resource and managerial skills not available to small organizations. Consequently, only large organizations will be able to compete aggressively in markets throughout the world.
- Employees like the predictability and security that pyramid-shaped organizations offer and these organizations tend to minimize ambiguity. For example, employees know what tasks must be performed, the reporting relationship, etc.
- Similar to employees, managers too like pyramids, since pyramids provide tight controls. Humanistic – democratic values sound good, and many managers prefer to use collaboration and reason, however when the pressure is on and managers must perform, managers often revert to coercion and threats to accomplish tasks.
- American business has and continues to move toward deskilling jobs. That is, downgrading skills, in order to cut wages and increase productivity. Recent studies have found that less than 10 percent of employers are creating jobs that call for employees who have multiple skills and competencies as well as the ability to shift or adjust to compelling priorities or conditions brought about by internal and external environmental factors.
Hoerr (1990) agrees that the orchestra metaphor might be appropriate for managing groups of “[…] PhD research scientists” but the deskilling of jobs such as machine operator, retail clerk, and assembly line worker is more compatible with the tight control provided by the pyramid-shaped organization.
The facts put forth by Hoerr argue for a very different scenario than that predicted by Drucker. Indeed, the organizations of the future may not resemble orchestras – a few might, but they are likely to be quite small in size. It has been said, you can predict the future, by looking at the past. In that case, the organizations of the future will look like the organizations of yesterday – a tightly controlled structure shaped like a pyramid. Perhaps, this is the reason why the Great Pyramids exist today!
This paper began with a brief statement on defining the concept of organizations and the importance and pervasiveness of formal organizations in contemporary society. Next, a review of the historical development, including the role of military, religious, economic and demographic factors in their origins and growth was discussed and reviewed including the emergence of labor unions and governments as examples of formal organizations.
The paper then discussed the classical theoretical perspectives through the eyes of Durkheim, Cooley, Marx, and Weber – the early theorists. Subsequently, the paper discussed three major schools of thought on organizations – scientific management, human relations and the structural approach. Finally, two modern approaches to the study of formal organizations – negotiated order theory and new industrial sociology were singled out for review and discussion. Finally, a brief discussion on the future of organizations as seen by Drucker and Hoerr was featured.
In conclusion, the path to our future is wide open. It is clear that the choices available to an organization and its management are extremely diverse. This short journey through the formal organization concept has given but a glimpse of its complexity and diversity. It has become clear, there are many avenues for future exploration.
Barnard, C. (1938), The Functions of the Executive, Harvard University Press, Cambridge, MA, .
Berger, P., Luckman, T. (1966), The Social Construction of Reality, Doubleday, New York, NY, .
Braverman, H. (1974), Labour and Monopoly Capital: The Degradation of Work in the Twentieth Century, Monthly Review Press, New York, NY, pp.1-134.
Campbell, C., Szablowski, G. (1987), The Bureaucrats: Structure and Behaviour in Government, Macmillan, Toronto, .
Chen, M., Regan, T. (1993), Work in the Changing Canadian Society, Butterworths, Toronto, .
Cohen, M., March, J., Olsen, J. (1972), "A garbage can model of organizational choice", Administrative Science Quarterly, Vol. 17 No.1, pp.2.
Cooley, C. (1956), Social Organization, Scribner, New York, NY, .
Drucker, P. (1988), "The coming of the new organization", Harvard Business Review, Vol. 66 No.1, pp.45-53.
Durkheim, E. (1947), The Division of Labour in Society, Free Press, New York, NY, .
Edwards, R. (1979), Contested Terrain: The Transformation of the Workplace in the Twentieth Century, Basic Books, New York, NY, .
Etzioni, A. (1964), Modern Organizations, Prentice-Hall, Englewood Cliffs, NJ, .
Girth, H., Mills, C. (1947), From Max Weber: Essays in Sociology, Oxford University Press, New York, NY, .
Glassman, R., Swatos, W., Rosen, P. (1987), Bureaucracy against Democracy and Socialism, Greenwood, New York, NY, .
Hill, S. (1981), Competition and Control at Work: The New Industrial Sociology, Heinemann Educational Books, London, .
Hillmer, F., Donaldson, L. (1997), Management Redeemed: Debunking the Fads that Undermine Our Corporations, Free Press, New York, NY, .
Hoerr, J. (1990), "Business shares the blame for workers low skills", Business Week, No.June 25, pp.71.
Katz, D., Kahn, R. (1978), The Social Psychology of Organizations, 2nd ed., Wiley & Sons, New York, NY, .
Lowe, G., Northcott, H. (1986), Under Pressure: A Study, Garamond Press, Toronto, .
Marchak, P. (1988), Ideological Perspectives on Canada, McGraw-Hill Ryerson, Toronto, .
Marx, K. (1932), in Struik, D. (Eds),Economic and Philosophic Manuscripts of 1844, International Publishers, New York, NY, .
Marx, K. (1977), Capital, Vintage Books, New York, NY, Vol. Vol. 1.
Mayo, E. (1975), "The Hawthorne studies: a synopsis", in Class, E.L., Zimmer, F.G. (Eds),Man and Work in Society, Van Nostrand Reinhold, New York, NY, .
Merton, R.K. (1957), Social Theory and Social Structure, Free Press, Glencoe, IL, .
Morgan, G. (1986), Images of Organizations, Sage, Newbury Park, CA, .
Navarro, V. (1982), "The labour process and health: an historical materialist interpretation", International Journal of Health Services, Vol. 12 No.1, pp.5-29.
Neill, S.M. (1993), Canadian Social Trends, Thompson, Educational Publishing, Toronto, .
Rinehart, J.W. (1977), State Control, McGraw-Hill Ryerson, Toronto, .
Rinehart, J.W. (1987), The Tyranny of Work, Longman, Toronto, .
Selznick, P. (1948), "Foundations of the theory of organizations", American Sociological Review, Vol. 13 No.1, pp.25.
Silverman, D. (1971), The Theory of Organizations, Basic Books, New York, NY, .
Smith, A. (1977), The Wealth of Nations, University of Chicago Press, Chicago, IL, .
Strauss, A. (1963), In Modern Society: Negotiated Order, Free Press, New York, NY, .
Taylor, F.W. (1911), Scientific Management, Harper, New York, NY, .
Waldo, D. (1955), The Study of Public Administration, Random House, New York, NY, .
Weber, M. (1947), The Theory of Social and Economic Organizations, Free Press, New York, NY, .
Weick, K. (1979), The Social Psychology of Organizing, 2nd ed., Addison-Wesley Publishing, Reading, MA, .
Grube, G.M.A. (1980), Plato's Republic, Bk 4, Hackett Publishing, London, .
Marx, K. (1964), in Bottomore, T., Rubel, M. (Eds),Selected Writings in Sociology and Social Philosophy, Penguin, Baltimore, MD, .