CHAPTER TWO
UNDERSTANDING THE STUDY OF
ORGANIZATIONS
A Historical Review
L
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arge, complex organizations and literature about them have existed
for many centuries, but within the past two centuries in particular they
have proliferated tremendously. Most of the large body of research and
writing available today appeared fairly recently. This chapter reviews major
developments in the research, theory, and thinking about organizations
and management over the past century. Exhibit 2.1 (at the end of the
chapter) provides a summary of the developments reviewed in this chapter.
This book’s analysis of public organizations begins with this review for
a number of reasons. It illustrates the generic theme mentioned in the
previous chapter. It shows that the major contributors to this field have
usually treated organizations and management as generally similar in all
contexts, not drawing much of a distinction between the public and private sectors. The generic emphasis has much value, and this book draws
upon it. It also sets the stage for exploring the controversy over whether
public organizations can be treated as a reasonably distinct category. Later
chapters present evidence supporting the claim that they are distinctive
in important ways.
Managers need to be aware of the historical developments summarized in
this chapter. The review covers terms, ideas, and names that serve as part of the
vocabulary of management; well-prepared managers need to develop a sound
16
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Understanding the Study of Organizations
17
understanding of these. For example, managers regularly refer to Theory X
and Theory Y, span of control, and other concepts that the review covers.
In addition, this historical overview illustrates a central theme in the
study and practice of management: the important role of theory and
expert opinion. The review provided here shows that the different bodies
of theory about how to organize and manage have strongly influenced, and
been influenced by, the way managers and organizations behave. Some of
the general trends involve profoundly important beliefs about the nature
of human motivation and of successful organizations. The review shows
that management theory and practice have evolved over the past century.
Theories about the motives, values, and capacities of people in organizations have evolved, and this evolution has in turn prompted additional
theories about how organizations must look and behave in response to the
increasing complexity of—and rapid changes in—the contexts in which
they operate. Theories and expert opinion have moved away from emphasis on highly bureaucratized organizations with strong chains of command,
very specific and unchanging job responsibilities, and strong controls over
the people in them, and toward more flexible, “organic” organizations;
horizontal communications; and a virtual crescendo of calls for participation, empowerment, teamwork, and other versions of more decentralized,
adaptive organizations. The description in Chapter One of presidents and
governors calling for more flexibility in managing people in government
reflects this general trend in some ways, but it also raises the question of
how government organizations can respond to this trend.
The review thus shows that theories are not impractical abstractions
but frameworks of ideas that often play a major role in management practice. It illustrates why the framework in Figures 1.1 and 1.2 looks as it does,
and it shows that the framework actually reflects many of the major developments in the field over the century.
The Systems Metaphor
Figures 1.1 and 1.2 and the accompanying definition of organization in
Chapter One implicitly reflect one major organizing theme for the past
century’s major developments in the field: how the field has moved from
early approaches (now considered “classical” views) that emphasized a single appropriate form of organization and management, toward more recent
approaches that reject this “one best way” concept. Recent perspectives
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Understanding and Managing Public Organizations
emphasize the variety of organizational forms that can be effective under
the different contingencies, or conditions, that organizations face.
This trend in organization theory borrows from the literature on
general systems theory. This body of theory has developed the idea that
there are various types of systems in nature that have much in common.
Analyzing these systems, according to systems theorists, provides insights
about diverse entities and a common language for specialists in different
fields (Daft, 2013, p. 33; Kast and Rosenzweig, 1973, pp. 37–56; Katz and
Kahn, 1966, pp. 19–29).
A system is an ongoing process that transforms certain specified inputs
into outputs; these in turn influence subsequent inputs into the system in
a way that supports the continuing operation of the process. One can think
of an organization as a system that takes in various resources and transforms them in ways that lead to attaining additional supplies of resources
(the definition in Chapter One includes this idea). Systems have subsystems, such as communications systems or production systems within organizations, and throughput processes, which are sets of internal linkages
and processes that make up the transformation process. The outputs of the
system lead to feedback—that is, the influences that the outputs have on
subsequent inputs. The systems theorists, then, deserve credit (or blame)
for making terms such as input and feedback part of our everyday jargon.
Management analysts have used systems concepts—usually elaborated far
beyond the simple description given here—to examine management systems and problems.
A major trend among organizational theorists in the past century has
been to distinguish between closed systems and open or adaptive systems.
Some systems are closed to their environment; the internal processes
remain the same regardless of environmental changes. A thermostat is part
of a closed system that transforms inputs, in the form of room temperature,
into outputs, in the form of responses from heating or air conditioning
units. These outputs feed back into the system by changing the room temperature. The system’s processes are stable and machinelike. They respond
consistently in a programmed pattern.
One can think of a human being as an open or adaptive system.
Humans transform their behaviors to adapt to their environment when
there are environmental changes for which the system is not programmed.
Thus the human being’s internal processes are open to the environment
and able to adapt to shifts in it.
Some organization theorists have expressed skepticism about the usefulness of the systems approach (Meyer, 1979), but others have found it
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Understanding the Study of Organizations
19
helpful as a metaphor for describing how organization theory has evolved
during the past century. These theorists say that the earliest, “classical”
theories treated organizations and employees as if they were closed systems.
Classical Approaches to Understanding Organizations
The earliest classical theories, and the advice they gave to managers,
emphasized stable, clearly defined structures and processes, as if organizational goals were always clear and managers’ main challenge was to design
the most efficient, repetitive, machinelike procedures to maximize attainment of the organization’s goals. Some organization theorists also characterize this view as the “one best way” approach to organization.
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Frederick Taylor and Scientific Management
In a New Yorker cartoon published in 1990, a woman has walked into an
office where a man is kneeling on top of filing cabinets and reaching
down into the drawers of the cabinet and filing papers. The woman says,
“According to our time-and-motion studies, you handle your time very well,
but a lot of your motion is wasted.” The cartoon assumes that at the end of
the twentieth century any intelligent person would know the meaning of a
time-and-motion study. This technique became well-known because of the
scientific management school.
Frederick Taylor (1919) is usually cited as one of the pioneers of managerial analysis. He was the major figure in the scientific management
school, which in Taylor’s own words involved the systematic analysis of
“every little act” in tasks to be performed by workers. Taylor asserted that
scientific management involved a division of labor that was relatively new
in historical terms. Whereas for centuries work processes had been left to
the discretion of skilled craftspeople and artisans, scientific management
recognized a division of responsibility between a managerial group and a
group that performed the work. The role of management was to gather
detailed information on work processes, analyze it, and derive rules and
guidelines for the most efficient way to perform the required tasks. Workers
were then to be selected and trained in these procedures so they could
maximize their output, the quality of their work, and their own earnings.
The procedures that Taylor and others developed for analyzing and
designing tasks are still in use today. They conducted time-motion studies, which involved the detailed measurement and analysis of physical
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characteristics of the workplace, such as the placement of tools and machinery in relation to the worker and the movements and time that the worker
had to devote to using them. The objective was to achieve the most efficient
physical layout for the performance of a specified task. Analytical procedures of this sort are still widely used in government and industry.
Taylor’s determination to find the “one best way” to perform a task was
such that he even devoted himself to finding the best way to design golf
greens and golf clubs. He designed a putter that the golfer stabilized by
cradling the club in his or her elbows. The putter proved so accurate that
the U.S. Golf Association banned it (Hansen, 1999).
Taylor’s emphasis on the efficient programming of tasks and workers
provoked controversy even in its heyday. In later years critics attacked his
work for its apparent inhumanity and its underestimation of psychological and social influences on worker morale and productivity. Some of this
criticism is overdrawn and fails to give Taylor credit for the positive aspects
of his pioneering work. Taylor actually felt that his methods would benefit
workers by allowing them to increase their earnings and the quality of their
work. In his own accounts of his work he said that he originally became
interested in ways of encouraging workers without supervisors’ having to
place pressure on them. As a manager, he had been involved in a very
unpleasant dispute with workers, which he attributed to the obligation to
put them under pressure (Burrell and Morgan, 1980, p. 126). He wanted
to find alternatives to such situations.
Yet Taylor did emphasize pay as the primary reward for work. He
stressed minute specialization of worker activities, as if the worker were a
rather mindless component of a mechanistic process. He did not improve
his image with later organizational analysts when he used as an illustration
of his techniques a description of his efforts to train a Scandinavian worker,
whom he said was as dumb as an ox, in the most efficient procedures for
shoveling pig iron. Though the value of his contribution is undeniable,
as a guiding conception of organizational analysis scientific management
severely oversimplified the complexity of the needs of humans in the
workplace.
Max Weber: Bureaucracy as an Ideal Construct
Also in the early decades of the past century, Max Weber’s writings became
influential, in a related but distinct way. Organization theorists often treat
Weber as the founder of organizational sociology—the analysis of complex
organizations. His investigations of bureaucracy as a social phenomenon
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provided the most influential early analysis of the topic (Gerth and Mills,
1946).
The proliferation of organizations with authority formally distributed among bureaus or subunits is actually a fairly recent development in
human history. Weber undertook to specify the defining characteristics of
the bureaucratic form of organization, which he saw as a relatively new and
desirable form in society. He saw the spread of such organizations as part
of a movement toward more legal and rational forms of authority and away
from authority based on tradition (such as monarchical power) or charisma
(such as that possessed by a ruler like Napoleon). The bureaucratic form
was distinct even from the administrative systems of the ancient Orient
(such as in Mandarin China) and from other systems regarded as similar
to modern systems. In traditional feudal or aristocratic systems, Weber said,
people’s functions were assigned by personal trustees or appointees of the
ruler. Further, their offices were more like avocations than modern-day
jobs; authority was discharged as a matter of privilege and the bestowing
of a favor.
The bureaucratic form was distinct in its legalistic specification of the
authorities and obligations of office. Weber wrote that the fully developed
version of bureaucracy had the following characteristics:
1. Fixed, official jurisdictional areas are established by means of rules.
The rules distribute the regular activities required by the organization
among these fixed positions or offices, prescribing official duties for
each. The rules distribute and fix the authority to discharge the duties,
and they also establish specified qualifications required for each office.
2. There is a hierarchy of authority, involving supervision of lower offices
by higher ones.
3. Administrative positions in the bureaucracy usually require expert
training and the full working capacity of the official.
4. Management of subunits follows relatively stable and exhaustive rules,
and knowledge of these rules and procedures is the special expertise
of the official.
5. The management position serves as a full-time vocation, or career, for
the official.
Weber regarded this bureaucratic form of organization as having technical advantages compared with administrative systems in which the officials regarded their service as an avocation, often gained by birthright or
through the favor of a ruler, to be discharged at the official’s personal
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Understanding and Managing Public Organizations
discretion. In Weber’s view, the existence of qualified career officials, a
structured hierarchy, and clear, rule-based specifications of duties and procedures made for precision, speed, clarity, consistency, and reduction of
costs. In addition, the strict delimiting of the duties and authority of career
officials and the specification of organizational procedures in rules supported the principle of the objective performance of duties. Duties were
performed consistently, and clients were treated without favoritism; the
organization was freed from the effect of purely personal motives. With
officials placed in positions on the basis of merit rather than birthright or
political favoritism, constrained by rules defining their duties, and serving
as career experts, bureaucracies represented the most efficient organizational form yet developed, from Weber’s perspective.
Weber did express concern that bureaucratic routines could oppress
individual freedom (Fry, 1989) and that problems could arise from placing
bureaucratic experts in control of major societal functions. Nevertheless,
he described bureaucracy as a desirable form of organization, especially for
efficiency and the fair and equitable treatment of clients and employees.
He thus emphasized a model of organization involving clear and consistent
rules, a hierarchy of authority, and role descriptions. For this reason, Weber
is often grouped with the other classic figures as a proponent of what would
later be characterized as the closed-system view of organizations.
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The Administrative Management School: Principles of Administration
Also in the first half of the twentieth century, a number of writers began to
develop the first management theories that encompassed a broad range of
administrative functions that we now include under the topic of management, and the proper means of discharging those functions. They sought to
develop principles of administration to guide managers in such functions
as planning, organizing, supervising, controlling, and delegating authority. This group became known as the administrative management school
(March and Simon, 1958).
The members of the administrative management school emphatically espoused one proper mode of organizing. They either implied or
directly stated that their principles would provide effective organization.
The flavor of their work and their principles are illustrated in prominent papers by two of the leading figures in this group, Luther Gulick
and James Mooney. In “Notes on the Theory of Organization,”
Gulick (1937) discussed two fundamental functions of management: the
division of work and the coordination of work. Concerning the division
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Understanding the Study of Organizations
23
of work, he discussed the need to create clearly defined specializations.
Specialization, he said, allows the matching of skills to tasks and the clear,
consistent delineation of tasks. He noted certain limits on specialization.
No job should be so narrowly specialized that it does not take up a full work
day, leaving the worker idle. Certain technological conditions, or traditions
or customs, may constrain the assignment of tasks; and there are certain
tasks, such as licking an envelope, that involve steps so organically interrelated that they cannot be divided.
Once a task has been properly divided, coordinating the work then
becomes imperative. On this matter, Gulick proposed principles that were
much clearer than his general points about specialization. Work can be
coordinated through organization or through a dominant idea or purpose that unites efforts. Coordination through organization should be
guided by several principles. First is the span of control—the number of
subordinates reporting to one supervisor. The span of control should be
kept narrow, limited to between six and ten subordinates per supervisor.
Effective supervision requires that the supervisor’s attention not be divided
among too many subordinates. Gulick also proposed the principle of one
master—each subordinate should have only one superior. There should
be no confusion as to who the supervisor is. A third principle is technical
efficiency through the principle of homogeneity—tasks must be grouped
into units on the basis of their homogeneity. Dissimilar tasks should not
be grouped together. In addition, a specialized unit must be supervised
by a homogeneous specialist. Gulick gave examples of problems resulting
from violation of this principle in government agencies: in an agricultural
agency, for instance, the supervisor of the pest control division must not be
given supervisory responsibility over the agricultural development division.
In the same paper, Gulick sought to define the job of management
and administration through what became one of the most widely cited and
influential acronyms in general management and public administration:
POSDCORB. The letters stand for planning, organizing, staffing, directing,
coordinating, reporting, and budgeting. These are the functions, he said,
for which principles needed to be developed in subsequent work.
In “The Scalar Principle,” Mooney (1930) presented a generally similar
picture of the effort to develop principles. He said that an organization
must be like a scale, a graded series of steps, in terms of levels of authority
and corresponding responsibilities. The principle involved several component principles. The first of these was leadership. Under this principle,
Mooney said, a “supreme coordinating authority” at the top must project
itself through the entire “scalar chain” to coordinate the entire structure.
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This was to be accomplished through the principle of delegation, under
which higher levels assign authority and responsibility to lower levels.
These processes accomplished the third principle of functional definition,
under which each person is assigned a specific task.
These two papers reflect the characteristics of the administrative management school. If certain of the principles seem vague, that was typical, as
critics would later point out. In addition, these two authors clearly emphasize formal structure in the organization and the hierarchical authority of
administrators. Although some of the principles are only vaguely discussed,
others are quite clear. Tasks should be highly specialized. Lines of hierarchical authority must be very clear, with clear delegation down from the top
and clear accountability and supervisory relations. Span of control should
be narrow. There should be unity of command; a subordinate should be
directly accountable to one superior. Like Weber and Taylor, these authors
tended to emphasize consistency, rationality, and machinelike efficiency.
They wrote about organizations as if they could operate most effectively as
closed systems, designed according to the one proper form of organization.
The historical contribution of this group is undeniable; the tables of
contents of many contemporary management texts reflect the influence
of these theorists’ early efforts to conceive the role of management and
administration. In some highly successful corporations, top executives have
made this literature required reading for subordinates (Perrow, 1970b).
Gulick identified very strongly with public administration. He and
other members of the administrative management school played important roles in the work of various committees and commissions on reorganizing the federal government, such as the Brownlow Committee in 1937
and the Hoover Commission in 1947. The reforms these groups proposed
reflected the views of the administrative management school; they were
aimed at such objectives as grouping federal agencies according to similar
functions, strengthening the hierarchical authority of the chief executive,
and narrowing the executive’s span of control.
The immediate influence of these proposals on the structure of the
federal government was complicated by political conflicts between the president and Congress (Arnold, 1995). They had a strong influence, however,
especially on the development of an orthodox view of how administrative
management should be designed in government. Some scholars argued
that the influence has continued across the years. They contended that
structural developments in public agencies and the attitudes of government officials about such issues still reflect an orthodox administrative
management school perspective (Golembiewski, 1962; Knott and Miller,
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Understanding the Study of Organizations
25
1987; Warwick, 1975, pp. 69–71). The influence of the administrative management school on these reform efforts can be considered the most significant direct influence on practical events in government that organization
theorists have ever had. Nevertheless, critics later attacked the views of
the administrative management theorists as too limited for organizational
analysis. As described later, researchers began to find that many successful
contemporary organizations violate the school’s principles drastically and
enthusiastically.
Before turning to the reaction against the administrative management perspective, however, we should note the context in which the
administrative management theorists as well as the preceding early theorists worked. The administrative management theorists’ work was related
to the broad progressive reform movement earlier in that century (Knott
and Miller, 1987). Those reformers sought to eradicate corruption in
government, especially on the part of urban political machines and their
leaders. They sought to institute more professional forms of administration through such means as establishing the role of the city manager. In
addition, the growth of government over the earlier part of the century
had led to a great deal of sprawling disorganization among the agencies
and programs of government; there was a need for better organization.
In this context, the administrative management theorists’ emphasis on
basic organizational principles appears not only well justified but absolutely necessary.
It is also important to acknowledge that these early theorists did not
advance their ideas as simple mindedly as some later critics depict it.
Although Luther Gulick came to be characterized in many organization
theory texts as one of the foremost proponents of highly bureaucratized
organizations, he wrote a reflection on administrative issues from World
War II in which he drew conclusions about the efficiency of democracy.
He argued that the democratic system of the United States actually gave
it advantages over the seemingly more authoritarian and hierarchical
axis powers. The more democratic process required more participation
and cooperation in problem solving and thus led to better planning and
implementation of plans than in the authoritarian regimes (Van Riper,
1998). Gulick thus suggested that more democratic processes may look
less efficient than more authoritarian ones, even though they can produce
more efficient and effective results. It will be evident in later sections that
Gulick’s thinking thus foreshadowed much of contemporary management
theory. (Gulick also played an important role in the development of park
and recreational programs, and reportedly suggested to James Naismith
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that he invent an indoor game to keep young people in condition during
cold weather. Naismith then invented basketball.)
Another very original thinker, Mary Parker Follett, wrote very approvingly of the effort to develop administrative principles, and scholars sometimes classify her as a member of this school. She wrote, however, a classic
essay on “the giving of orders” (Follett, [1926] 1989) that had very original
and forward-looking implications. In the essay, she proposed a cooperative,
participative process for giving orders, in which superiors and subordinates
develop a shared understanding of the particular situation and what it
requires. They then follow the “law” of the situation rather than having
a superior impose an order on a subordinate. Follett’s perspective both
foreshadowed later movements and influenced them in the direction of
the kind of participatory and egalitarian management described later. It
also foreshadowed contemporary developments in feminist organization
theory (Guy, 1995; Hult, 1995; Morton and Lindquist, 1997).
Still, the several contributions covered so far concentrated on a relatively limited portion of the framework for organizational analysis given
in Figures 1.1 and 1.2 and the definition of organization in Chapter One.
They emphasized the middle and lower parts of the framework, particularly organizational structure. They paid some attention to tasks and to
incentives and motivation, but they were quite limited in comparison with
the work of later authors. Additional developments would rapidly begin to
expand the analysis of organizations, with increasing attention paid to the
other components in Figures 1.1 and 1.2.
Reactions, Critiques, and New Developments
Developments in the emerging field of industrial psychology led to a sharp
reaction against Taylor’s ideas about scientific management and the principles of the administrative management school. These developments also
led to a dramatic change in the way organizational and managerial analysts
viewed the people in organizations. Researchers studying behavior and
psychology in industry began to develop more insight into psychological
factors in work settings. They analyzed the relationships between such factors as fatigue, monotony, and worker productivity. They studied working
conditions, analyzing variables such as rest periods, hours of work, methods
of payment, routineness of work, and the influence of social groups in the
workplace (Burrell and Morgan, 1980, p. 129).
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27
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The Hawthorne Studies: The Discovery of Human Beings in the Workplace
A series of experiments beginning in the mid-1920s at the Hawthorne
plant of the Western Electric Company provided a more subtle view of
the psychology of the workplace than previous theorists had produced. The
Hawthorne studies involved a complex series of experiments and academic
and popular reports of their results over a number of years. Controversy
continues over the interpretation and value of these studies (Burrell and
Morgan, 1980, pp. 120–143); however, most organization theorists describe
them as pathbreaking illustrations of the influence of social and psychological factors on work behavior—conditions that often have stronger
effects than factors such as pay or the physical conditions of the workplace.
An employee’s work-group experiences, a sense of the importance of the
employee’s work, and attention and concern on the part of supervisors
are among a number of important social and psychological influences on
workers.
The leaders of the project identified several major experiments and
observations as the most significant in the study (Roethlisberger and
Dickson, 1939). In one experiment, the researchers lowered the level of
illumination in the workplace and found that productivity nevertheless
increased, because the workers responded to the attention of the researchers. In another study, they improved the working conditions in a small unit
through numerous alterations in rest periods and working hours. Increases
in output were at first taken as evidence that the changes were influencing
productivity. When the researchers tested that conclusion by withdrawing
the improved conditions, however, they found that, rather than falling off,
output remained high. In the course of the experiment, the researchers
had consulted the workers about their opinions and reactions, questioned
them sympathetically, and displayed concern for their physical well-being.
Their experiment on the physical conditions of the workplace had actually
altered the social situation in the workplace, and that appeared to account
for the continued high output.
In observing another work group, the researchers found that it enforced
strict norms regarding group members’ productivity. To be a socially
accepted member of the group, a worker had to avoid being a “rate buster,”
who turns out too much work; a “chiseler,” who turns out too little; or a
“squealer,” who says something to a supervisor that could be detrimental to
another worker. This suggested to the researchers a distinction between
the formal organization, as it is officially presented in organization charts
and rules, and the informal organization. The informal organization
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develops through unofficial social processes within the organization, but it
can involve norms and standards that are equally as forceful an influence
on the worker as formal requirements.
The Hawthorne studies were widely regarded as the most significant
demonstration of the importance of social and psychological factors in the
workplace up to that time, and they contributed to a major shift in research
on management and organizations. The emphasis on social influences,
informal processes, and the motivating power of attention from others
and a sense of significance for one’s work constituted a major counterpoint against the principles of administrative management and scientific
management.
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Chester Barnard and Herbert Simon: The Inducements-Contributions
Equilibrium and the Limits of Rationality
A successful business executive turned organization theorist and an academic who would become a Nobel laureate provided additional major contributions that weighed against the administrative management school and
moved research in new directions. These contributions added substantially
to the attention that organization theorists paid to organizational processes
(especially decision making), people, environments, leadership, and goals
and values.
Encouraged by the members of the Harvard group who were responsible for the Hawthorne studies and related work (Burrell and Morgan,
1980, p. 148), Chester Barnard wrote The Functions of the Executive (1938).
It became one of the most influential books in the history of the field.
Barnard’s definition of an organization—“a system of consciously
coordinated activities or forces of two or more persons” (1938, p. 73)—
illustrates the sharp difference between his perspective and that of the
classical theorists. Barnard focused on how leaders induce and coordinate
the cooperative activities fundamental to an organization. He characterized an organization as an “economy of incentives,” in which individuals
contribute their participation and effort in exchange for incentives that
the organization provides. The executive cadre in an organization must
ensure the smooth operation of this economy. The executive must keep
the economy in equilibrium by ensuring the availability of the incentives
to induce the contributions from members that earn the resources for
continuing incentives, and so on. (Notice that the definition of organization in Chapter One speaks of leaders and organizations seeking to gain
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29
resources from the environment to translate into incentives. This reflects
the influence of Barnard’s perspective.)
Barnard offered a rich typology of incentives, including not just money
and physical and social factors but also power, prestige, fulfillment of ideals
and altruistic motives, participation in effective or useful organizations, and
many others. (Table 10.2 in Chapter Ten provides a complete listing of the
possible incentives he named.)
Barnard also saw the economy of incentives as being interrelated with
other key functions of the executive—specifically, communication and persuasion. The executive must use communication and persuasion to influence workers’ subjective valuations of various incentives. The executive
can, for example, raise the salience of major organizational values. The
persuasion process requires a communication process, and Barnard discussed both at length. He also distinguished between formal and informal
organizations, but he saw them as interrelated and necessary to each other’s success. He thought of the informal organization as the embodiment
of the communication, persuasion, and inducement processes that were
essential to the cooperative activity he saw as the essence of organization.
Some authors now cite Barnard’s ideas on these topics as an early recognition of the importance of organizational culture, a topic that has received
a lot of attention in management in recent years (see, for example, Peters
and Waterman, 1982).
Barnard’s divergence from the classical approaches is obvious. Rather
than stating prescriptive principles, he sought to describe the empirical
reality of organizations. He treated the role of the executive as central, but
he deemphasized formal authority and formal organizational structures,
suggesting that those factors are not particularly important to understanding how organizations really operate. Compared with other authors up to
that time, Barnard offered a more comprehensive analysis of the organization as an operating system, to be analyzed as such rather than bound by
a set of artificial principles. His approach was apparently exhilarating to
many researchers, including one of the preeminent social scientists of the
century, Herbert Simon.
Simon attacked the administrative management school much
more directly than Barnard had. In an article titled “The Proverbs of
Administration” in Public Administration Review (1946), he criticized the
administrative management school’s principles of administration as vague
and contradictory. He compared them to proverbs because he saw them
as prescriptive platitudes, such as “Look before you leap,” that are useless because they are unclear and are often countered by a contradictory
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Understanding and Managing Public Organizations
proverb: “He who hesitates is lost.” The principle of specialization, for
example, never specified whether one should specialize by function, clientele, or place. Specialization also contradicts the principle of unity of
command, which requires that a subordinate report to a superior within his
or her specialization. But if a school has an accountant, who is obviously a
specialist, that accountant must report to an educator. The two principles
conflict.
Similarly, the principle of span of control also conflicts with unity of
command. In a large organization, narrow spans of control require many
hierarchical levels. There must be many small work units, with a supervisor for each. Then there must be many supervisors above those supervisors to keep the span of control narrow at that level, and so on up. This
makes communication up, down, and across the organization very cumbersome, and it makes it difficult to maintain clear, direct hierarchical lines
of authority.
Simon called for a more systematic examination of administrative processes to develop concepts and study their relationships. Researchers, he
said, should determine when individuals in administrative settings should
choose one or the other of the alternatives represented by the principles.
As indicated by his critique, such choices are seldom clear. Such limits
on the ability of organizational members to perform well and to be completely rational are major determinants of organizational processes and
their effects. Simon argued that these limits on rationality and ability must
be more carefully analyzed. In sum, he argued for a more empirical and
analytical approach to organizational analysis, with decision making as the
primary focus.
Hammond (1990) contends that Simon’s critique of Gulick and others in the administrative management school overlooked major strengths
of that approach. As mentioned earlier, the administrative management
school did seek to analyze challenges that managers constantly face—
challenges that later researchers have not really found answers for and
that have a continuing influence on organizational structures in government. Still, most organization theorists agree that Simon’s rejection of
the school’s principles had the stronger influence on subsequent work
in the field and changed its direction.
Simon pursued his ideas further in Administrative Behavior (1948). As
the title indicates, he emphasized analysis of actual behavior rather than
stating formal prescriptions or principles. He drew on Barnard’s idea of
an equilibrium of inducements and contributions and extended it into a
more elaborate discussion of an organization’s need to provide sufficient
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31
inducements to members, external constituencies, and supporters for it
to survive. (The definition and framework in Chapter One also reflect the
influence of Simon’s perspective.)
Like Barnard, Simon was concerned with the complex process of inducement and persuasion and with abstract incentives such as prestige, power,
and altruistic service in addition to material incentives. He emphasized the
uncertainties and contradictions posed by the classical principles purporting to guide administrative decisions. He displayed a continuing interest
in a fundamental question: Amid such uncertainty and complexity, how
are administrative choices and decisions made? The classical principles
of administration were based on the assumption that administrators could
and would be rational in their choice of the most efficient mode of organization. Much of economic theory assumed the existence of “economic man”—
an assumption that firms and individuals are strictly rational in maximizing
profits and personal gain. Simon observed that in administrative settings,
there are usually uncertainties. “Administrative man” is subject to cognitive
limits on rationality. Strictly rational decisions and choices are impossible in
complex situations, because information and time for making decisions are
limited, and human cognitive capacity is too limited to process all the information and consider all the alternatives. Whereas most economic theory
assumed maximizing behavior in decision making, Simon coined a new concept. Rather than maximize, administrators “satisfice.” Satisficing involves
choosing the best of a limited set of alternatives so as to optimize the decision
within the constraints of limited information and time. Thus an administrator does not make maximally rational decisions, because that is essentially
impossible. The administrator makes the best possible decision within the
constraints imposed by the available time, resources, and cognitive capacity.
This conception of the decision-making process challenged a fundamental tenet of economic theory. It influenced subsequent research on
decision making in business firms, as amplified by A Behavioral Theory of
the Firm by Richard Cyert and James March (1963; see Exhibit 2.1). It provided a major step toward more recent approaches to organizational decision making, as we will see later. With James March, Simon later published
another influential book, Organizations (March and Simon, 1958), in which
they further elaborated the theory of an equilibrium between inducements
and worker contributions. They presented an extensive set of propositions
about factors influencing the decision by an employee to join and stay with
an organization and, once in it, to produce. However, Simon’s conception
of decision making in administrative settings appears to be the foremost
reason that he was later awarded the Nobel Prize in economics.
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Social Psychology, Group Dynamics, and Human Relationships
Another important development began in the 1930s when Kurt Lewin, a
psychological theorist, arrived in the United States as a refugee from Nazism.
An immensely energetic intellectual, Lewin become one of the most influential social scientists of the century. He developed field theory and topological psychology, which sought to explain human actions as functions of both
the characteristics of the individual and the conditions impinging on the
individual at a given time. This may not sound original now, but it differed
from other prominent approaches of the time, such as Freudian psychology,
which emphasized unconscious motives and past experiences.
Lewin’s emphasis on the field of forces influencing an individual’s
actions drew on his interest in group behaviors and change processes in
groups and individuals (Back, 1972, p. 98). He studied power, communication, influence, and “cohesion” within groups, and he developed a
conception of change that has been valuable to analysts of groups and
organizational change for years.
Lewin argued that groups and individuals maintain a “quasi-stationary
equilibrium” in their attitudes and behaviors. This equilibrium results from
a balance between forces pressing for change and those pressing against
change. To change people, you must change these forces. Groups exert
pressures and influences on the individuals within them. If a person is
removed from a group and persuaded to change an attitude but is then
returned to the same field of group pressures, the change is unlikely to last.
One must alter the total field of group pressures, through a three-phase
process. The first phase is “unfreezing,” or weakening, the forces against
change and strengthening the forces for change. Next, the “changing”
phase moves the group to a new equilibrium point. Finally, the “refreezing”
phase firmly sets the new equilibrium through such processes as expressions of group consensus.
One of Lewin’s better-known experiments in group dynamics illustrates
his meaning. Lewin conducted “action research,” which involved analysis and sometimes manipulation of ongoing social processes of practical
importance, such as race relations and group leadership. During World
War II, Lewin sought to aid the war effort by conducting research on methods of encouraging consumption of underutilized foods as a way of conserving resources. He conducted an experiment in which he attempted to
convince housewives that they should use more beef hearts in preparing
meals. He assembled the housewives in groups and presented them with
information favoring the change. They then discussed the matter, aired
and resolved their concerns about the change (“unfreezing”), and came
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33
to a consensus that they should use more beef hearts. In groups in which the
housewives made a public commitment to do so, more of them adopted
the new behavior than in groups in which the members made no such public commitment. The group commitment is an example of “refreezing,” or
setting group forces at a new equilibrium point.
As the intellectual leader of a group of social scientists interested
in research on group processes, Lewin was instrumental in establishing
the Research Center for Group Dynamics at Massachusetts Institute of
Technology and the first National Training Laboratory, which served for
years as a leading center for training in group processes. These activities
produced an interesting set of diverse, sometimes opposing influences on
later work in the field.
Lewin’s efforts were among the first to apply experimental methods
(such as using control groups) to the analysis of human behavior. The work
of Lewin and his colleagues set in motion the development of experimental social psychology, which led to elaborate experimentation on group
processes. Some of the important experiments on groups were relevant to
organizational behavior. In another classic experiment conducted by members of this group, Lester Coch and John R. P. French (1948) compared different factory work groups faced with a change in their work procedures.
One group participated fully in the decision to make the change, another
group had limited participation, and a third group was simply instructed
to make the change. The participative groups made the change more readily and more effectively, with the most participative group doing the best.
These sorts of projects were instrumental in making participative decision
making (PDM) a widely discussed and utilized technique in management
theory and practice. Numerous experiments of this sort contributed to the
growing literature on industrial psychology and organizational behavior.
Interestingly, Lewin ’s influence also led to an opposing trend in
applied group dynamics. The National Training Laboratory conducted
training in group processes for governmental and industrial organizations.
After Lewin’s death, the group dynamics movement split into two movements. In addition to the researchers who emphasized rigorous experimental research on group concepts, a large group continued to emphasize
industrial applications and training in group processes. They tended to
reject experimental procedures in favor of learning through experience in
group sessions. Their work contributed to the development of the field of
organization development (described in Chapter Thirteen). It also led to
the widespread use of T-groups, sensitivity sessions, and encounter-group
techniques during the 1960s and 1970s (Back, 1972, p. 99). The work of
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Lewin and his colleagues (Lewin, 1947, 1948; Lewin and Lippitt, 1938;
Lewin, Lippitt, and White, 1939) substantially influenced analysts’ conceptions of the components of Figures 1.1 and 1.2, especially those concerned
with processes of change and decision making and those concerned with
people, especially groups.
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The Human Relations School
The Hawthorne experiments and related work and the research on group
dynamics were producing insights about the importance of social and psychological factors in the workplace. They emphasized the potential value of
participative management, enhancing employee self-esteem, and improving human relations in organizations. Numerous authors began to emphasize such factors.
The psychologist Abraham Maslow developed a theory of human needs
that became one of the most influential theories ever developed by a social
scientist. Maslow argued that human needs fall into a set of major categories, arranged in a “hierarchy of prepotency.” The needs in the lowest category dominate a person’s motives until they are sufficiently fulfilled, then
those in the next-highest category dominate, and so on. The categories,
in order of prepotency, were physiological needs, safety needs, love needs,
self-esteem needs, and self-actualization needs. The self-actualization category referred to the need for self-fulfillment, for reaching one’s potential
and becoming all that one is capable of becoming. Thus, once a person
fulfills his or her basic physiological needs, such as the need for food, and
then fulfills the needs at the higher levels on the hierarchy, he or she ultimately becomes concerned with self-actualization. This idea of making a
distinction between lower- and higher-order needs was particularly attractive to writers emphasizing human relations in organizations (for more
detail on Maslow’s formulation, see Chapters Nine and Ten).
Douglas McGregor, for example, published a book whose title foretells its message: The Human Side of Enterprise (1960). McGregor had been
instrumental in bringing Kurt Lewin to MIT, and the influence of both
Lewin and Maslow was apparent in his conceptions of “Theory X” and
“Theory Y.” He argued that management practices in American industry
were dominated by a view of human behavior that he labeled Theory X.
This theory held that employees were basically lazy, passive, resistant to
change and responsibility, and indifferent to organizational needs. Hence
management must take complete responsibility for directing and controlling the organization. Managers must closely direct, control, and motivate
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35
employees. McGregor felt that Theory X guided organizational practices
in most industrial organizations and was at the heart of classic approaches
to management, such as scientific management.
Theory Y involved a diametrically different view of employees. Drawing
on Maslow’s conception of higher-level needs for self-esteem and selfactualization, McGregor defined Theory Y as the view that employees are
fully capable of self-direction and self-motivation. Underutilized though
this theory was, management based on this approach would be more effective, because individual self-discipline is a more effective form of control
than authoritarian direction and supervision. McGregor advocated management approaches that would allow more worker participation and selfcontrol, such as decentralization of authority, management by objectives,
and job enlargement.
Theory Y clearly rejected the classical approach to organization; that
rejection was emphatic in other major works of the time that placed a similar value on releasing human potential in the workplace. Argyris (1957),
for example, argued that there were inherent conflicts between the needs
of the mature human personality and the needs of organizations. When
management applies the classical principles of administration, healthy individuals will experience frustration, failure, and conflict. Healthy individuals
desire relative independence, activeness, and use of their abilities. These
motives clash with the classical principles, such as those that call for narrow
spans of control, a clear chain of command, unity of direction, and narrow
specialization. These principles foster dependence on superiors and organizational rules, promote passiveness due to reduced individual discretion,
and limit workers’ opportunities to use their abilities. Argyris, too, called
for further development of such techniques as participative leadership and
job enlargement to counter this problem.
Like the classical theorists before them, the proponents of human
relations theories in turn became the targets of scathing criticism. Critics
complained that they concentrated too narrowly on one dimension of
organizations—the human dimension—and were relatively inattentive
to other major dimensions, such as organizational structure, labor union
objectives, and environmental pressures. They argued that the human
relations types were repeating the mistake of proposing one best way of
approaching organizational and managerial analysis, that they always
treated interpersonal and psychological factors as the central, crucial
issues. Some critics also grumbled about the tendency of these theories
to always serve the ends of management, as if the real objective were to
get workers to acquiesce in the roles management imposed on them.
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Even when the motives were pure, some critics asserted, the approach was
often naive.
Probably the most damaging critique of the human relations approach
was concerned with its lack of empirical support; that is, the lack of evidence that improved human relations would lead to improved organizational performance (Perrow, 1970b). The upsurge in empirical research
that occurred in the 1950s and 1960s produced evidence of considerable
conflict in some very successful organizations. Research also produced little
evidence of a strong relationship between individual job satisfaction and
productivity.
Like the criticisms of the classical approaches, these criticisms tended
to be overblown and a bit unfair. They often overlooked the historical perspective of the writers, underestimating the significance of what they were
trying to do at the time. The insights that these organizational analysts provided remain valuable—and dangerous to ignore. Examples still abound
of management practices that cause damage because of inattention to the
factors emphasized by the human relations theorists. When improperly
implemented, scientific management techniques have created ludicrous
situations in which workers slow down or disguise their normal behaviors
when management analysts try to observe them.
For example, a consulting firm once tried to implement a management improvement system in a large state agency in Florida. The system
involved a detailed analysis of work procedures through a process similar
to time-motion methods. The process involved having observers spot-check
employees at random intervals to note their activities. If an employee was
idle, the observer would record that fact. A university professor went to
the office of a mid-level administrator in the agency to discuss a research
project. Finding the administrator on the phone, the professor began to
back out of his office, in case the administrator wanted privacy for the
phone call. The administrator beckoned her back in, explaining that he
was not on the phone; he was sitting there trying to think. He was holding
the phone to his ear to be sure that the observer would not happen by and
record him as being idle. Another administrator was not so careful. After
working late into the night on a project and coming in early to complete it,
he finally finished and sat back to take a break, without thinking. Too late!
The observer happened by and checked his record sheet. Idle!
Another example involved a management trainee in a large manufacturing firm who was assigned to work with the firm’s systems engineers
on the design of the assembly line. One step in the production process
involved having an employee sit and watch two glass water tanks, through
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37
which refrigerator compressors would be dragged by a wire. If there
was a leak in the compressor, an air bubble would be released, and the
employee would remove the compressor as defective. The management
trainee expressed disgust at the incompetence of the employees, who were
constantly failing at this simple task: all they had to do was sit and watch
two tanks of water for eight hours. As a solution, the systems designers
changed the procedure so that an employee would sit directly facing a
tank and would have to watch only one tank. The management trainee
expressed even more disgust to find that the employees were so stupid that
they could not handle even this simple task! Later, representatives from this
company contacted a university, looking for consultants to help them deal
with the problems of absenteeism and vandalism on the assembly line. As
these examples illustrate, even several decades after the human relations
material began to appear, there are still plenty of instances of unenlightened management attitudes that could be improved by some reading in
the human relations literature.
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Open-Systems Approaches and Contingency Theory
Criticism of the human relations approach, increasing attention to general-systems theory, and new research findings forced a more elaborate
view of organizations. Researchers found that organizations successfully
adopt different forms under different circumstances or contingencies.
Organizational analysts became convinced that different forms of organization can be effective under certain contingencies of tasks and technology,
organizational size, environment, and other factors. The effort to specify
these contingencies and the organizational forms matched to them made
contingency theory the dominant approach in organizational analysis in
the 1960s and 1970s. The contingency perspective still provides a guiding
framework, although researchers have either moved beyond the earlier
versions of it or moved in different directions (Daft, 2013, pp. 28–34).
Around the middle of the twentieth century, researchers associated
with the Tavistock Institute in Great Britain began conducting research on
sociotechnical systems, emphasizing the interrelationships between technical factors and social dimensions in the workplace (Burrell and Morgan,
1980, pp. 146–147). For example, Trist and Bamforth (1951) published an
analysis of a change in work processes in a coal-mining operation that is
now regarded as a classic study. They found that the technical changes in
the work process changed the social relationships within the work group.
They depicted the organization as a system with interdependent social and
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technical subsystems that tend to maintain an equilibrium. In response to
disturbances, the system moves to a new point of equilibrium—a new ongoing pattern of interrelated social and technical processes. Additional studies
by the Tavistock researchers further developed this view that organizations
are systems that respond to social, economic, and technological imperatives that have to be satisfied for effective operation of the system—that is,
that there are group and individual characteristics, task requirements, and
interrelations among them that must be properly accommodated in the
design of the organization.
With their consistent emphasis on organizations as ongoing systems
that seek to maintain equilibrium in response to disturbances, Tavistock
researchers also began to devote attention to the external environments of
organizations. In a widely influential article titled “The Causal Texture of
Organizational Environments,” Emery and Trist (1965) noted the increasing flux and uncertainty in the political, social, economic, and technological settings in which organizations operate, and they discussed the
influence on the internal operations of organizations of the degree of “turbulence” in their environment. Thus the emphasis moved toward analysis
of organizations as open systems facing the need to adapt to environmental
variations.
In the United States, the most explicit systems approach to organizational analysis appeared in a very prominent text by Daniel Katz and
Robert L. Kahn (1966), The Social Psychology of Organizations. They showed
how the systems language of inputs, throughputs, outputs, and feedback
could be usefully applied to organizations. In analyzing throughput processes, for example, they differentiated various major subsystems, including
maintenance subsystems, adaptive subsystems, and managerial subsystems.
Scholars regard Katz and Kahn’s effort as a classic in the organizational literature (Burrell and Morgan, 1980, p. 158), but it also provides an example
of the very general, heuristic nature of the systems approach. Because of
its very general concepts, organizational researchers increasingly treated
systems theory as a broad framework for organizing information, as a “macroparadigm” (Kast and Rosenzweig, 1973, p. 16), but not as a clearly articulated theory. The metaphor of organizations as open, adaptive systems
remained powerful, however, as an expression of the view of organizations
as social entities that adapt to a variety of influences and imperatives.
Besides the efforts to apply systems concepts to organizations, research
results supported the view that organizations adopt different forms
in response to contingencies. (Chapter Eight provides further discussion
on contingency theories.) In England, Joan Woodward (1965) conducted
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39
a pathbreaking study of British industrial firms. She found that the firms
fell into three categories on the basis of the production process or “technology” they employed: small-batch or unit production systems were used
by such organizations as shipbuilding and aircraft manufacturing firms,
large-batch or mass-production systems were operated by typical massmanufacturing firms, and continuous production systems were used by
petroleum refiners and chemical producers. Most important, she concluded that the successful firms within each category showed similar management-structure profiles, but those profiles differed among the three
categories. The successful firms within a category were similar on such
dimensions as the number of managerial levels, the spans of control, and
the ratio of managerial personnel to other personnel, yet they differed
on these measures from the successful firms in the other two categories.
This indicated that the firms within a category had achieved a successful fit
between their structure and the requirements of the particular production
process or technology with which they had to deal. The firms appeared to
be effectively adapting structure to technology.
Another very influential study, reported by Burns and Stalker (1961) in
The Management of Innovation, further contributed to the view that effective
organizations adapt their structures to contingencies. Burns and Stalker
analyzed a set of firms in the electronics industry in Great Britain. The
industry was undergoing rapid change, with new products being developed, markets for the products shifting, and new information and technology becoming available. The firms faced considerable flux and uncertainty
in their operating environments. Burns and Stalker classified the firms into
two categories on the basis of their managerial structures and practices:
organic and mechanistic organizations. Their descriptions of the characteristics of these two groups depict mechanistic organizations as bureaucratic
organizations designed along the lines of the classical approaches. The
name of the category also has obvious implications: these were organizations designed to operate in machinelike fashion. Burns and Stalker
argued that the organic type, so named to underscore the analogy with living, flexible organisms, performed more successfully in the rapidly changing electronics industry. In these organizations there was less emphasis
on communicating up and down the chain of command, on the superior
controlling subordinates’ behavior, and on strict adherence to job descriptions and organizational charts. There was more emphasis on networking and
lateral communication, on the supervisor as facilitator, and on flexible
and changing work assignments. Such organizations adapted and innovated more effectively under changing and uncertain conditions because
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they had more flexible structures and emphasized flexibility in communication, supervision, and role definition. The mechanistic form can be
more successful under stable environmental and technological conditions,
however, where its emphasis on consistency and specificity makes it more
efficient than a more loosely structured organization. Thus, Burns and
Stalker also emphasized the need for a proper adaptation of the organization to contingencies.
Another important research project heavily emphasized organizations’ environment as a determinant of effective structure. Paul Lawrence
and Jay Lorsch (1967) studied U.S. firms in three separate industries that
confronted varying degrees of uncertainty, complexity, and change. The
researchers concluded that the firms that were successfully operating in
uncertain, complex, changing environments had more highly differentiated internal structures. By differentiated structures, they meant that
the subunits differed a great deal among themselves, in their goals, time
frames, and internal work climates. Yet these highly differentiated firms
also had elaborate structures and procedures for integrating the diverse
units in the organization. The integrating structures included task forces,
liaison officers and committees, and other ways to integrate the diverse
units. Successful firms in more stable, certain environments, on the other
hand, showed less differentiation and integration. Lawrence and Lorsch
concluded that successful firms must have internal structures as complex
as the environments in which they operate.
Other researchers continued to develop the general contingency perspective and to analyze specific contingencies. Perrow (1973) published
an important analysis of organizational technology. He proposed two basic
dimensions for the concepts of technology: the predictability of the task
(the number of exceptions and variations encountered) and the analyzability of the problems encountered (the degree to which, when one
encounters a new problem or exception, one can follow a clear program
for solving it). Routine tasks are more predictable (there are fewer exceptions or variations) and more analyzable (exceptions or variations can be
resolved through an established program or procedures). Organizations
with routine tasks have more formal, centralized structures. They use more
rules, formal procedures, and plans. Organizations with nonroutine tasks,
where tasks have more exceptions and are harder to predict and where
exceptions are harder to analyze and resolve, must have more flexible
structures. They use more formal and informal meetings than rules and
plans. (Chapter Eight describes a study confirming these relationships in
public organizations.)
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Understanding the Study of Organizations
41
At about the same time, James Thompson (1967) published
Organizations in Action, a very influential book that further developed
the contingency perspective. Drawing on Herbert Simon’s ideas about
bounded rationality and satisficing, Thompson depicted organizations as
reflecting their members’ striving for rationality and consistency in the
face of pressures against those qualities. He advanced numerous propositions about how organizations use hierarchy, structure, units designed
to buffer the environment, and other arrangements to try to “isolate the
technical core”—that is, to create stable conditions for the units doing the
basic work of the organization. Thompson suggested that organizations
will try to group subunits on the basis of their technological interdependence—that is, their needs for information and exchange with each other
in the work process (see Chapter Eight). Organizations, he proposed, will
also adapt their structures to their environment. Where environments are
shifting and unstable, organizations will adopt decentralized structures,
with few formal rules and procedures, to provide flexibility for adapting
to the environment (Chapter Four provides further description). One of
Thompson’s important achievements was to provide a driving logic for
contingency and open-systems perspectives by drawing on Simon’s ideas.
Organizations respond to complexity and uncertainty in their technologies and their environments by adopting more complex and flexible structures. They do so because the greater demands for information processing
strain the bounded rationality of managers and the information processing
capacity of more formal bureaucratic structures. Clear chains of command
and vertical communication up and down them and strict specialization
of tasks and strict rules and procedures can be too slow and inflexible in
processing complex information and adapting to it.
Through the 1960s and 1970s, an upsurge in empirical research on
organizations extended and tested the open-systems and contingencytheory approaches and added new contingencies to the set. Many of these
studies took place in public and nonprofit organizations. Peter Blau and
his colleagues (Blau and Schoenherr, 1971) reported a series of studies—of
government agencies, actually—showing relationships between organizational size and structure. These and other studies added size to the standard set of contingencies. Hage and Aiken (1969) reported on a series
of studies of social welfare agencies that provided evidence that routineness of tasks, joint programs among organizations, and other factors were
related to organizational structure and change. In England, a team of
researchers (Pugh, Hickson, and Hinings, 1969) conducted what became
known as the Aston studies—a major effort at empirical measurement of
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Understanding and Managing Public Organizations
organizations—and developed an empirical taxonomy, grouping organizations into types based on the measured characteristics. They interpreted
differences in their taxonomic categories as the results of differences in
age, size, technology, and external auspices and control. (Chapter Eight
discusses important implications of these studies for theories about public organizations.) Child (1972) pointed out that in addition to the other
contingencies that contingency theorists emphasized, managers’ strategic
choices play an important role in adapting organizational structure. These
and numerous other efforts had by the mid-1970s established the contingency approach—the argument that organizational structures and processes are shaped by contingencies of technology, size, environment, and
strategic choice—as the central school or movement in organization theory. Authors began to translate the contingency observations into prescriptive statements for use in “organizational design” (Daft, 2013; Galbraith,
1977; Mintzberg, 1989; Starbuck and Nystrom, 1981).
Like the other theories covered in this review and in later chapters, contingency theory soon encountered criticisms and controversies.
Researchers disputed how the key concepts should be defined and measured. Different studies produced conflicting findings. Some studies found
a relationship between technology and structure, some did not (Hall and
Tolbert, 2004, pp. 87–91). The basic idea that organizations must adapt to
conditions they face, through such responses as adopting more flexible
structures as they contend with more environmental uncertainty, still serves
as a central theme in organization theory (Daft, 2013; Donaldson, 2001;
Scott, 2003) and management practice (Peters, 1987).
The developments in organizational research reviewed here have produced an elaborate field, with numerous professional journals carrying
articles reporting analyses of a wide array of organizational topics. These
journals and a profusion of books cover organizational structure, environment, effectiveness, change, conflict, communication, strategy, technology,
interorganizational relations, and related variables.
In the past two decades, the field has moved in new directions, many of
which represent extensions of contingency and open-systems theories, with
increased or redirected emphasis on organizational environments (compare Scott, 2003). Later chapters describe how organization theorists have
developed natural selection and population ecology models for analysis
of how certain organizational forms survive and prosper in certain environmental settings while others do not (Aldrich, 1979; Hall and Tolbert,
2004; Hannan and Freeman, 1989; Scott, 2003). Other theorists have analyzed external controls on organizations, with emphasis on organizations’
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Understanding the Study of Organizations
43
dependence on their environments for crucial resources (Pfeffer and
Salancik, 1978).
The research and theory on people and groups in work settings
described earlier have similarly led to a proliferation of closely related
work in organizational behavior and organizational psychology, including
a similar trend toward elaborate empirical studies and conceptual development during the 1960s and 1970s. Thousands of articles and books have
reported work on employee motivation and satisfaction, work involvement,
role conflict and ambiguity, organizational identification and commitment,
professionalism, leadership behavior and effectiveness, task design, and
managerial procedures such as management by objectives and flextime.
As the different fields have progressed, relatively new topics have
emerged. In the past decade a major trend toward adopting Total Quality
Management programs in industry and government has swept the United
States. This wave developed out of writings earlier in the past century by some
key American authors, such as W. Edwards Deming and Joseph Juran, that
had been embraced by the Japanese but virtually ignored in the United States
until later (note that the historical overview in this chapter has said nothing about these authors). The topic of organizational culture has received
a lot of attention and is featured in Figures 1.1 and 1.2. Some important earlier authors such as Barnard and Philip Selznick (see Exhibit 2.1) had devoted
attention to related themes; in the 1980s organizational culture surged to
prominence in the management literature. Advances in technology—
especially computer, information, and communications technology—have
presented organizations and managers with dramatic new challenges and
opportunities, and researchers have been pressing to develop the theoretical
and research grounding needed to understand and manage these developments. The increasing presence in the workforce of women and racial and
ethnic groups that were severely underrepresented in the past has given rise
to a body of literature focusing on diversity in organizations (Golembiewski,
1995; Ospina, 1996) and feminist organization theory (Hult, 1995). Later
chapters give more attention to many of these recent topics.
The Quiet Controversy Over the Distinctiveness of Public
Organizations and Management in Organization Theory
The rich field of organization theory provides many valuable concepts and
insights on which this book draws. It also raises an important issue for
those interested in public organizations and public management: Have the
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Understanding and Managing Public Organizations
characteristics of public organizations and their members been adequately
covered in this voluminous literature? Has it paid sufficient attention to
the governmental and political environments of organizations, which
seem so important for understanding public organizations? As mentioned
in Chapter One and further described in later chapters, there has been
a literature on public bureaucracies for many years, but the historical
review provided here illustrates how little attention has been devoted to
this literature by most of the organization theorists. In fact, many organization theorists have paid so little attention to a distinction between public
and private organizations that any controversy over the matter remains
quiet in most major journals on organization theory and outside of public administration journals. Implicitly, many organization theorists convey
the message that we need no real debate, because the distinction lacks
importance.
The analysts discussed in the preceding historical review have either
concentrated on industrial organizations or sought to develop generic concepts and theories that apply across all types of organizations. For example,
even though Peter Blau, a prominent organization theorist, published an
organizational typology that included a category of “commonweal organizations” very similar to what this book calls public organizations, he published
empirical studies that downplayed such distinctiveness of organizational
categories (Blau and Scott, 1962). Blau and Schoenherr (1971) examined
government agencies for his studies of organizational size, but he drew his
conclusions as if they applied to all organizations. So have replications of
Blau’s study (Beyer and Trice, 1979), even though Argyris (1972, p. 10) suggested that Blau may have found the particular relationship he discovered
because he was studying organizations governed by civil service systems.
Such organizations might respond to differences in size in different ways
than do other organizations, such as business firms. When the contingency
theorists analyzed environments, they typically concentrated on environmental uncertainty, especially as a characteristic of business firms’ market
environments, and showed very little interest in political or governmental
dynamics in organizational environments.
Providing a more classical example of this tendency, Weber argued that
his conception of bureaucracy applied to government agencies and private businesses alike (Meyer, 1979). Major figures such as James Thompson
(1962) and Herbert Simon (Simon, Smithburg, and Thompson, 1950)
have stressed the commonalities among organizations and have suggested
that public agencies and private firms are more alike than different. The
contributions to organization theory and behavior described in this review
were aimed at the worthy objective of developing theory that would apply
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Understanding the Study of Organizations
45
generally to all organizations. With some clear exceptions (Blau and Scott,
1962; Scott, 2003, pp. 341–344), the theorists repeatedly implied or aggressively asserted that distinctions such as public and private, market and nonmarket, and governmental and nongovernmental offered little value for
developing theory or understanding practice. Herbert Simon continued to
offer such observations until the end of his life. He contended that public,
private, and nonprofit organizations are essentially identical on the dimension that receives more attention than virtually any other in discussions of
the unique aspects of public organizations—the capacities of leaders to
reward employees (Simon, 1995, p. 283, n. 3). He also bluntly asserted that
it is false to claim “that public and nonprofit organizations cannot, and on
average do not, operate as efficiently as private businesses” (Simon, 1998,
p. 11). So one of the foremost social scientists of the twentieth century showed
little sympathy for the distinction we have to develop in the next chapter.
Even so, research and writing about public bureaucracies had been
appearing for many decades when many of these studies were published,
and they were related to organizational sociology and psychology in various ways. They developed separately from organizational sociology and
psychology, however. Political scientists or economists did the writing on
public bureaucracies. They usually emphasized the relationship between
the bureaucracy and other elements of the political system. The economists
concerned themselves with the effects of the absence of economic markets
for the outputs of public bureaucracies (Downs, 1967; Niskanen, 1971).
The organizational sociologists and psychologists described in this chapter, although interested in environments, paid relatively little attention to
these political and economic market issues. As noted, they worked much
more intensively on internal and managerial dimensions—organizational
structure, tasks and technology, motivation, and leadership.
Authors interested in the management of public organizations began
to point to this gap between the two literatures (Rainey, 1983). As mentioned in Chapter One and described in more detail in Chapter Three,
various authors cited in this book mounted a critique of the literature on
organization theory, saying that it offered an incomplete analysis of public
organizations and the influences of their political and institutional environments (Hood and Dunsire, 1981; Meyer, 1979; Perry and Kraemer, 1983;
Pitt and Smith, 1981; Wamsley and Zald, 1973; Warwick, 1975). Yet they
also complained that the writings on public bureaucracy were too anecdotal and too discursively descriptive, lacking the systematic empirical and
conceptual analyses common in organization theory. Also, the literature
on public bureaucracies showed too little concern with internal structures,
behavior, and management, topics that had received extensive attention
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46
Understanding and Managing Public Organizations
from researchers in organizational sociology and psychology and from
general management analysts. Researchers began to provide more explicit
organizational analyses of the public bureaucracy, of the sort described in
this book. As Chapter One mentioned, recently a profusion of books and
articles have provided many additional contributions. But all of this activity
has actually dramatized, rather than fully resolved, the question of whether
we can clarify the meaning of public organizations and public management
and show evidence that such categories have significance for theory and
practice. Thus the next chapter turns to the challenge of formulating a
definition and drawing distinctions.
EXHIBIT 2.1
Major Developments in Organization
and Management Theory in the Twentieth Century
I. CLASSIC THEORIES
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The classic theories implied a “one best way” to organize and a “closed-system” view of
organizations and the people in them.
A. Max Weber (Rational-Legal)
• Weber provided one of the early influential analyses of bureaucracy. He defined
its basic characteristics, such as hierarchies of authority, career service, selection
and promotion on merit, and rules and regulations that define procedures and
responsibilities of offices.
• Weber argued that these characteristics grounded bureaucracy in a rational-legal
form of authority and made it superior to organizational forms based on traditional
authority (such as aristocracy) or charismatic authority. Of these alternatives,
bureaucracy provides superior efficiency, effectiveness, and protection of clients’
rights.
• He also argued that bureaucracies are subject to problems in external accountability,
as they are very specialized and expert in their areas of responsibility and may be
subject to self-serving and secretive behaviors.
B. Frederick Taylor (Scientific Management)
• Taylor was the most prominent figure in the Scientific Management movement.
• He advocated the use of systematic analyses, such as “time-motion” studies, to
design the most efficient procedures for work tasks (usually consisting of high
levels of specialization and task simplification).
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Understanding the Study of Organizations
47
• Taylor also argued that management must reward workers with fair pay for efficient
production so that workers can increase their well-being through productivity. This
implies that simplified, specialized tasks and monetary rewards are primary motivators.
C. Administrative Management School
• The Administrative Management School sought to develop “principles of
administration” that would provide guidelines for effective organization in all
types of organizations. The principles tended to emphasize specialization and
hierarchical control:
• Division of Work. Work must be divided among units on the basis of task
requirements, geographic location, or interdependency in the work process.
• Coordination of Work. Work units must be coordinated back together, through
other principles:
Span of Control. A supervisor’s “span of control” should be limited to five to ten
subordinates.
One Master. Each subordinate (and subunit) should report directly to only one
superior.
Technical Efficiency. Units should be grouped together for maximum technical
efficiency on the basis of work requirements, technological interdependence,
or purpose.
• The Scalar Principle. Authority must be distributed in an organization like
locations on a scale; as you move higher in the hierarchy, each position must
have successively more authority, with ultimate authority at the top.
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II. REDIRECTIONS, NEW DIRECTIONS, AND NEW INSIGHTS
Toward the middle of the century, new authors challenged the previous perspectives and
moved the field in new directions.
A. Human Relations and Psychological Theories
1. Hawthorne Studies: Motivating Factors
While studying physical conditions in the workplace, researchers found that weaker
lighting in the workplace did not reduce productivity as predicted. They concluded
that the attention they paid to the workers during the study increased the workers’
sense of importance, the attention they paid to their duties, and their communication, and this raised their productivity. Other phases of the research indicated that
the work group played an important role in influencing workers to attend to their
job and be productive. The studies have come to be regarded as a classic illustration of the importance of social and psychological factors in motivating workers.
2. Maslow: The Needs Hierarchy
Maslow held that human needs and motives fall into a hierarchy, ranging
from lower-order to higher-order needs—from physiological needs (food,
(continued )
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Understanding and Managing Public Organizations
EXHIBIT 2.1 (Continued )
freedom from extremes of temperature) to needs for safety and security, love and
belonging, self-esteem, and finally self-actualization. The needs at each level dominate an individual’s motivation and behavior until they are adequately fulfilled, and
then the next level of needs will dominate. The highest level, self-actualization,
refers to the need to fulfill one’s own potential. The theory influenced many other
theories, largely due to its emphasis on the motivating potential of higher-order
needs.
3. McGregor: Theories X and Y
Drawing on Maslow’s theory, McGregor argued that management in industry
was guided by “Theory X,” which saw workers as passive and without motivation and dictated that management must therefore direct and motivate
them. Rejecting the emphasis on specialization, task simplification, and hierarchical authority in the scientific and administrative management movements,
McGregor argued that management in industry must adopt new structures and
procedures based on “Theory Y,” which would take advantage of higher-order
motives and workers’ capacity for self-motivation and self-direction. These new
approaches would include such structures and procedures as job enrichment,
management by objectives, participative decision making, and improved performance evaluations.
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4. Lewin: Social Psychology and Group Dynamics
Driven out of Europe by Nazism, Kurt Lewin came to the United States and led a
group of researchers in studies of group processes. They conducted pathbreaking
experiments on the influence of different types of leaders in groups and the influence of groups on group members’ attitudes and behaviors (for example, they
documented that a group member is more likely to maintain a commitment if it
is made in front of the group).
This work influenced the development of the field of social psychology and of the
group dynamics movement. The group dynamics movement actually developed in
two directions. One involved a wave of experimental research on groups in laboratories and organizational settings. For example, a classic study by Coch and French
(1948) found that work groups in factories carried out changes more readily if they
had participated in the decision to make the change; this study contributed to the
growing interest in participative decision making in management. The second
direction involved the widespread use of group processes for personal and organizational development, using such methods as encounter groups, “T-groups,” and
“sensitivity groups.”
Lewin developed ideas about attitude and behavi...
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