Theories of Organizations and Environments
Theories of Organizations and Environments
Theories of Organizations and Environments
The major misconception is the failure to recognize fully that the organization is
continually dependent upon inputs from the environment and that the inflow of
materials and human energy is not a constant.
The fact that organizations have built in protective devices to maintain stability
and that they are notoriously difficult to change in the direction of some
reformer’s desires should not obscure the realities of the dynamic
interrelationships of any social structure with its social and natural environment.
The very efforts of the organization to maintain a constant external environment
produce changes in organizational structure.
The reaction to changed inputs to mute their possible revolutionary implications
also results in changes.
The typical models in organizational theorizing concentrate upon principles of
internal functioning as if these problems were independent of changes in the
environment and as if they did not affect the maintenance inputs of motivation
and morale.
One error which stems from this kind of misconception is the failure to recognize
the equifinality of the open system, namely that there are more ways than one of
producing a given outcome.
The general principle, which characterizes all open systems, is that there does
not have to be a single method for achieving an objective.
A second error lies in the notion that irregularities in the functioning of a system
due to environmental influences are error variances and should be treated
accordingly
Open system theory, on the other hand, would maintain that environmental
influences are not sources of error variance but are integrally related to the
functioning of a social system, and that we cannot understand a system without a
constant study of the forces that impinge upon it.
Thinking of the organization as a closed system, moreover, results in a failure to
develop the intelligence or feedback function of obtaining adequate information
about the changes in environmental forces.
SUMMARY
The open-system approach to organizations is contrasted with common-sense
approaches, which tend to accept popular names and stereotypes as basic
organizational properties and to identify the purpose of an organization in terms of the
goals of its founders and leaders.
The open-system approach, on the other hand, begins by identifying and
mapping the repeated cycles of input, transformation, output, and renewed input which
comprise the organizational pattern. This approach to organizations represents the
adaptation of work in biology and in the physical sciences by von Bertalanffy and
others.
Organizations as a special class of open systems have properties of their own,
but they share other properties in common with all open systems. These include the
importation of energy from the environment, the through-put or transformation of the
imported energy into some product form which is characteristic of the system, the
exporting of that product into the environment, and the reenergizing of the system from
sources in the environment.
Open systems also share the characteristics of negative entropy, feedback,
homeostasis, differentiation, and equifinality. The law of negative entropy states that
systems survive and maintain their characteristic internal order only so long as they
import from the environment more energy than they expend in the process of
transformation and exportation. The feedback principle has to do with information input,
which is a special kind of energic importation, a kind of signal to the system about
environmental conditions and about the functioning of the system in relation to its
environment. The feedback of such information enables the system to correct for its
own malfunctioning or for changes in the environment, and thus to maintain a steady
state or homeostasis. This is a dynamic rather than a static balance, however. Open
systems are not at rest but tend toward differentiation and elaboration, both because of
subsystem dynamics and because of the relationship between growth and survival.
Finally, open systems are characterized by the principle of equifinality, which asserts
that systems can reach the same final state from different initial conditions and by
different paths of development.
Traditional organizational theories have tended to view the human organization
as a closed system. This tendency has led to a disregard of differing organizational
environments and the nature of organizational dependency on environment. It has led
also to an overconcentration on principles of internal organizational functioning, with
consequent failure to develop and understand the processes of feedback which are
essential to survival.
Organizations in Action
James D. Thompson
STRATEGIES FOR STUDYING ORGANIZATIONS
follows the pattern noted above, focusing on staffing and structure as means of
handling clients and disposing of cases.
Bureaucratic theory also employs the closed system of logic.
Weber saw three holes through which empirical reality might penetrate the logic,
but in outlining his “pure type” he quickly plugged these holes.
Policymakers, somewhere above the bureaucracy, could alter the
goals, but the implications of this are set aside.
Human components—the expert office-holders—might be more
complicated than the model describes, but bureaucratic theory handles
this by divorcing the individual’s private life from his life as an officeholder
through the use of rules, salary, and career.
Finally, bureaucratic theory takes note of outsiders—clientele—but
nullifies their effects by depersonalizing and categorizing clients.
It seems clear that the rational-model approach uses a closed-system strategy.
Open-System Strategy
The Expectation of Uncertainty.
Part of the answer to that question undoubtedly lies in the fact that supporters of
each strategy have had different purposes in mind, with open-system strategists
attempting to understand organizations per se, and closed-system strategists
interested in organizations mainly as vehicles for rational achievements.
The newer tradition with its focus on organizational coping with uncertainty is
indeed a major advance.
The Location of Problems
As a starting point, we will suggest that the phenomena associated with open-
and closed-system strategies are not randomly distributed through complex
organizations, but instead tend to be specialized by location.
To introduce this notion we will start with Parsons’ suggestion that organizations
exhibit three distinct levels of responsibility and control—technical, managerial,
and institutional.
In this view, every formal organization contains a suborganization whose
“problems” are focused around effective performance of the technical function
The primary exigencies to which the technical suborganization is oriented are
those imposed by the nature of the technical task, such as the materials, which
must be processed and the kinds of cooperation of different people required to
get the job done effectively.
The second level, the managerial, services the technical suborganization by (1)
mediating between the technical suborganization and those who use its products
—the customers, pupils, and so on—and (2) procuring the resources necessary
for carrying out the technical functions.
Finally, in the Parsons formulation, the organization which consists of both
technical and managerial suborganizations is also part of a wider social system
which is the source of the “meaning,” or higher-level support which makes the
implementation of the organization’s goals possible.
Possible Sources of Variation.
Most of our beliefs about complex organizations follow from one or the other of
two distinct strategies.
The closed-system strategy seeks certainty by incorporating only those variables
positively associated with goal achievement and subjecting them to a monolithic
control network.
The open system strategy shifts attention from goal achievement to survival, and
incorporates uncertainty by recognizing organizational interdependence with
environment.
A newer tradition enables us to conceive of the organization as an open system,
indeterminate and faced with uncertainty, but subject to criteria of rationality and
hence needing certainty.
With this conception the central problem for complex organizations is one of
coping with uncertainty.
As a point of departure, we suggest that organizations cope with uncertainty by
creating certain parts specifically to deal with it, specializing other parts in
operating under conditions of certainty or near certainty. In this case, articulation
of these specialized parts becomes significant.
We also suggest that technologies and environments are major sources of
uncertainty for organizations, and that differences in those dimensions will result
in differences in organizations.
To proceed, we now turn to a closer examination of the meaning of “rationality,”
in the context of complex organizations.
RATIONALITY IN ORGANIZATIONS
Instrumental action is rooted on the one hand in desired outcomes and on the
other hand in beliefs about cause/effect relationships.
Technical rationality
Organizational Rationality
When organizations seek to translate the abstractions called technologies into
action, they immediately face problems for which the core technologies do not
provide solutions.
Mass production manufacturing technologies are quite specific, but mass
production technologies do not include variables which provide solutions to either
the input-or output disposal problems.
One or more technologies constitute the core of all purposive organizations. But
this technical core is always an incomplete representation of what the
organization must do to accomplish desired results.
Technical rationality is a necessary component but never alone sufficient to
provide organizational rationality, which involves acquiring the inputs which are
taken for granted by the technology, and dispensing outputs which again are
outside the scope of the core technology.
organizational rationality involves three major component activities, (1) input
activities, (2) technological activities, and (3) output activities. Since these are
interdependent, organizational rationality requires that they be appropriately
geared to one another.
The inputs acquired must be within the scope of the technology, and it must be
within the capacity of the organization to dispose of the technological production.
input and output activities are interdependent with environmental elements.
Organizational rationality, therefore, never conforms to closed-system logic but
demands the logic of an open system.
Recapitulation
These are maneuvering devices which provide the organization with some self
control despite interdependence with the environment. But if we are to gain
understanding of such maneuvering, we must consider both the direction toward
which maneuvering is designed and the nature of the environment in which
maneuvering takes place.
Institutionalized Organizations: Formal Structure as Myth and Ceremony
John W. Meyer & Brian Rowan
Institutionalized products, services, techniques, policies, and programs function
as powerful myths, and many organizations adopt them ceremonially.
To maintain ceremonial conformity, organizations that reflect institutional rules
tend to buffer their formal structures from the uncertainties of technical activities
by becoming loosely coupled, building gaps between their formal structures and
actual work activities.
Institutions inevitably involve normative obligations but often enter into social life
primarily as facts which must be taken into account by actors.
Institutionalization involves the processes by which social processes, obligations,
or actualities come to take on a rule-like status in social thought and action.
PREVAILING THEORIES OF FORMAL STRUCTURE
Formal structures are not only creatures of their relational networks in the social
organization. In modern societies, the elements of rationalized formal structure
are deeply ingrained in, and reflect, widespread understandings of social reality.
Many of the positions, policies, programs, and procedures of modern
organizations are enforced by public opinion, by the views of important
constituents, by knowledge legitimated through the educational system, by social
prestige, by the laws, and by the definitions of negligence and prudence used by
the courts.
In modern societies, the myths generating formal organizational structure have
two key properties.
First, they are rationalized and impersonal prescriptions that identify
various social purposes as technical ones and specify in a rule-like way
the appropriate means to pursue these technical purposes rationally (Ellul
1964).
Our position is that organizations survive to the extent that they are effective.
Their effectiveness derives from the management of demands, particularly the
demands of interest groups upon which the organizations depend for resources
and support.
The key to organizational survival is the ability to acquire and maintain resources.
This problem would be simplified if organizations were in complete control of all
the components necessary for their operation.
However, no organization is completely self-contained. Organizations are
embedded in an environment comprised of other organizations. They depend on
those other organizations for the many resources they themselves require.
Organizations must transact with other elements in their environment to acquire
needed resources, and this is true whether we are talking about public
organizations, private organizations, small or large organizations, or
organizations which are bureaucratic or organic (Burns and Stalker, 1961). …
Problems arise not merely because organizations are dependent on their
environment, but because this environment is not dependable.
The social sciences, even if not frequently examining the context of behavior,
have long recognized its importance. The demography of a city has been found
to affect the particular form of city government used, and particularly the use of a
city manager (Kessel, 1962; Schnore and Alford, 1963).
Economists were even more explicit in giving critical importance to the context of
organizations, but they tended to take the environment as a given. Competition is
a critical variable distinguishing between the applicability of models of monopoly,
oligopoly, imperfect competition, or perfectly competitive behavior.
INTERNAL VERSUS EXTERNAL PERSPECTIVES ON ORGANIZATIONS
Finally, it is simply the case that many of the things that affected
organizational results are not controlled by organizational participants but
through persuasion among majority of the members.
BASIC CONCEPTS FOR A CONTEXTUAL PERSPECTIVE
These concepts will assist in bringing coherence to the large body of work on
organization and environment and will provide us with the tools for systematically
understanding the effect of environments on organizations and the effect of
organizations on environments.
Organizational Effectiveness
The external basis for judging organizational effectiveness makes the concept of
environment important. The concept of environment, however, is elusive. In one
sense, the environment includes every event in the world which has any effect on
the activities or outcomes of the organization.
Loose-coupling is an important safety device for organizational survival. If
organizational actions were completely determined by every changing event,
organizations would constantly confront potential disaster and need to monitor
every change while continually modifying themselves.
Constraints
one function of the leader or manager is to serve as a symbol, as a focal point for
the organization’s successes and failures—in other words, to personify the
organization, its activities, and its outcomes.
Such personification of social causation enhances the feeling of predictability and
control, giving observers an identifiable, concrete target for emotion and action.…
The symbolic role of administrators is, occasionally, constructed with elaborate
ritual and ceremony.
The ritual, however, is necessary. Why organizations vary in the ritual they
associate with their offices of power is little understood.
One of the reasons for having a manager is to have someone who is responsible,
accountable for the organization’s activities and outcomes. If the manager has
little influence over these activities or outcomes, it is still useful to hold him
responsible.
The Network Organization in Theory and Practice
Wayne E. Baker
1. THE NETWORK ORGANIZATION IN THEORY
The concept of a “network organization” suffers from semantic ambiguity,
multiple interpretations, and imprecise definitions. Therefore, the term must be
clarified before we use it further.