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1967 Organizations in Action
Organizational Analysis (Sociology 224) February 23, 2010
Copyright © President & Fellows of Harvard College.
Key Points – From Preface
Uncertainties pose major challenges to rationality, and Thompson argues that technologies and environments are the basic sources of uncertainty for organizations. How these facts of organizational life lead organizations to design and structure themselves is explored. Those organizations with similar technological and environmental problems should exhibit similar behavior; patterns should appear...we should also find that patterned variations in problems posed by technologies and environments result in systematic differences in organizational action
Chapter 1 Strategies for Studying Organizations
Rational and natural systems (Gouldner, 1959) • Rational results from closed-system strategy and natural-system model flows from an open-system strategy. Closed System Strategy • Structures of organization designed to gain highest efficiency • e.g. Taylor’s Scientific Management, Gulick and Urwick’s Administrative Management or Weber’s Bureaucracy • This literature focuses on planning or controlling Open Systems Strategy • Organizations as a set of interdependent parts which together make up a whole. This whole is also interdependent with the environment. • Examples of this type of research are studies of informal organizations, or studies of organizations and their interface with the environment Choice or compromise • While efficiency is the goal in the closed systems perspective, survival is the goal in the open systems perspective. • Thompson claims that responsibility for future performance leads to a preference for closed systems view Most research falls in one of those two categories, but bounded rationality evades the closed v. open systems dilemma – but the Simon-March-Cyert work has not eliminated the dichotomy Responsibilities and control are layered in qualitatively different roles in an organization (drawing on Parsons): technical, managerial, and institutional. The technical systems (where inputs are transformed into outputs) operate on closed-system logic of rational efficiency and are buffered form environmental uncertainty.
Chapter 3 Domains of Organized Action
External responses to environmental uncertainty (resource dependence) Complex organizations are unable to produce everything (i.e. vertically integrate) on which they depend for their products. So, organizations define a domain, i.e. an arena in which they will be subject to environmental dependencies. The domain needs to be legitimate to be sustainable. If the organization faces too many constraints in a domain, it will try to move out of it. The organization's dependence on some element of the task environment depends on two factors: criticality, substitutability Building on Emerson (Power and Dependence): an organization is dependent on an element of its task environment in proportion to the organizations need for resources for which that element can provide Dependence is the obverse of power This perspective is useful because it operationalizes power and lets the organization be measured Power-Dependence provides an escape from the “zero-sum” concept of power Competitive Strategy: Firms use the following strategies: • Minimize power of task-environment elements over them by maintaining alternative sources, • Seek prestige, as this is the cheapest way of acquiring power • Seek power over those on which they are dependent Acquisition of Power: • Cooperation – Power gained by exchanging commitments, the reduction of potential uncertainty for both parties • Contracting - negotiation of an agreement for the exchange of performances in the future • Coopting - (Selznick 1949) process of absorbing new elements into the leadership or policy determining structure of an organization. • Coalescing – combination or joint venture with another organization
Chapter 4 Organization Design
Internal responses to environmental uncertainty Organizations seek to reduce contingencies (=uncertainties) by organization design largely by shifting boundaries. 3 components of organizational domain: technology included, population served and services rendered. Changes in design involve modifications of the mix of these three elements Organizations employing long linked seek to expand their domains by vertical integration – combination of successive stages of production (e.g. oil) Organizations employing mediating technologies seek to expand their domains by increasing the populations served (e.g. railroad, telephone) Organizations employing intensive technologies seek to expand their domains by incorporating the object worked on (e.g. hospitals, universities) Balancing of Components Multi component organizations will seek to grow until the least reducible component is fully occupied Organizations with capacity in excess of what the task environment supports will seek to enlarge their domains (esp industrial concerns – diversification as a response to excess capacity, e.g. oil refining companies expanding into heating oil) Limits to expansion include government constraint
Chapter 5 Technology and Structure
Structure occurs in an organization when the major components are further segmented or departmentalized, and connections are established within and between departments. It is a socio-technical system containing both human and non human resources or facilities. Internal interdependence :To say that an organization is composed of interdependent parts is not to say that each part is dependent on and supports every other part in any direct way. Yet they may be interdependent in the sense that unless each performs adequately, the total organization is jeopardized. Types of interdependence: • Pooled interdependence: each part renders a discrete contribution to the whole and each is supported by the whole. • Sequential interdependence. X must act properly before Y can act. • Reciprocal interdependence: outputs of each become inputs for the others. Each unit poses contingency for the other. All organizations have pooled interdependence, more complicated organizations have sequential as well as pooled, and the most complex have reciprocal, sequential, and pooled. Each type of interdependence contains increasing degrees of contingency. Coordination: In a situation of interdependence, concerted action comes about through coordination. Ways to achieve coordination: • Standardization (pooled): establishment of routines/rules that constrain action of each unit into paths consistent with those taken by others in the interdependent relationship. • Coordination by plan (sequential): establishment of schedules for the interdependent units by which their actions may then be governed. More appropriate than standardization for dynamic situations. • Coordination by mutual adjustment (reciprocal): transmission of new info during the process of action. Coordination by feedback.