Dysfunctional Effects of Formal Planning: Two Theoretical Explanations Author(s): Rudi K. Bresser and Ronald C.

Bishop Reviewed work(s): Source: The Academy of Management Review, Vol. 8, No. 4 (Oct., 1983), pp. 588-599 Published by: Academy of Management Stable URL: http://www.jstor.org/stable/258260 . Accessed: 02/04/2012 09:42
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nAcademy of Management Review, 1983, Vol. 8, No. 4, 588-599.

Dysfunctional Effects Two Theoretical

of

Formal Planning Explanations

RUDI K. BRESSER RONALD C. BISHOP Baruch College, City University of New York
Kuhn 's (1970, 1974) concept of paradigm development and the concept of dialectical materialism are used to demonstrate how formal planning may cause intraorganizational contradictions and endanger an organization's viability. These concepts are integrated by a model of planning dysfunctionalities. Ways to resolve such contradictions are discussed, and questions are suggested for empirical investigation. A belief commonly expressed in the traditional management literature is that strategic and operational planning are positively related to an organization's success (Brown & Moberg, 1980; Donnelly, Gibson, & Ivancevich, 1981). However, it is unclear why such plans that are rationally derived should result in outcomes that are superior to organization activities that are guided by mere improvisation. Normative justification for formal planning can be found in such words as the following: "A business enterpriseguided by a clear sense of purpose rationally arrived at and emotionally ratified by commnitment is more likely to have a successful outcome... than a company whose future is left to guesswork and chance" (Christensen, Andrews, & Bower, 1978, p. 141). Other authors cite evidence supporting formal planning as a cause of success while disregardingnonsupportive results (Donnelly et al., 1981; Thompson & Strickland, 1980). Still others have conceded the possibility that formal planning may not lead to increased success, but nevertheless they conclude that research evidence to date indicates the superiority of planning (Higgins, 1979; Hodgetts, 1979). However, the empirical evidence relating formal planning to organizational performance is so inconclusive that a much more cautious evaluation of planning techniques and processes is called for (Hogarth & Makridakis, 1981). Several studies in fact could identify positive relationships between formal planning and performance (Ansoff, Avner, Brandenburg, Portner, & Radosevich, 1970; Herold, 1972; Malik & Karger, 1975; Thune & House, 1970; Wood 588 & LaForge, 1979). On the other hand, studies by Fulmer and Rue (1974), Grlnyerand Norburn (1975), Kallman and Shapiro (1978), Kudla (1980), Leontiades and Tezel (1980), Najjar (1966), Sheehan (1975), and Rue and Fulmer (1973) all indicated either a lack of or a negative relationship between planning and various measures of organizational performance. From this evidence it is apparent that many successful firms follow a practice of disregarding(or improvising in dealing with) such well honored notions of comprehensive planning as:
(1) selecting long range goals and intermediate term performance objectives; (2) designing strategic, time phased plans and action programs to achieve these objectives; (3) developing and allocating resources (physical, financial, institutional, human) to support the action programs; (4) designing administrative systems to monitor and control ongoing performance, and to revise goals, strategies, and resource commitments as appropriate;atnd(5) structuringinterpersonal and intergroup relationships within the organization to facilitate accomplishment of its purposes (Anshen & Guth, 1973, p. 500).

In reaction to the ideological stance taken in the traditional planning literature, two conflicting streams of thought have emerged. One has suggested a contingency theory of formal planning (Armstrong, 1982; Grinyer & Norburn, 1975; Hambrick, 1981; Paine & Anderson, 1977; Pennington, 1972; Saunders & Tuggle, 1977). Following this approach, the success of formal planning would be contingent on environmental, organizational, and managerial characteristics. A second group of authors has maintained that the cognitive limits to human rationality

make a more incremental approachto strategicand operational planning more realistic and also preferable (Lindblom,1959;Mintzberg, 1978;Quinn, 1980). However, when reviewingthe contemporary managementliterature,it is apparentthat the two concepts have been unable to influence the undifferentiatedviews held by the traditionalplanning theorists. In addressingthe questionof why planningmay not lead to organizational success,each of the three schools of thought has cited different causes. The traditionalplanningtheoristsusually have referred to basicassumptions thatproveto be erroneous, suddenchangesin the economy,or ineffective implementation. Contingencytheoiists have assumedthat a mismatch betweenthe generalorganizational context and the levelof planningspecificityaccountsfor unsuccessful planning outcomes. The incremental school suggeststhat comprehensive planscallingfor immediatefar reachingredirectioncannot be successful, becausethey fail to resolve value and goal conflicts in organizationsthat allow only slow incrementalchanges. In general, none of these three planningschools providesan integratedtheory explainingthe potential nonpayoffsfrom formalplanning.Suchtheorizing, however,is of crucial necessity to guideempirical studiesaboutthe effectiveness of planning.The purpose of this paperis to integrate existingexplanations of planningdysfunctionalities into a comprehensive model. Two social scienceconceptsare used to examinethe formalplanningprocessas conceptualized by the traditional planning literature. These are Kuhn's(1970, 1974)concept of paradigmdevelopment and the concept of dialectical materialism (Chanin& Shapiro,1973;Cornforth,1971).Both of these conceptualapproachescontributeuniquelyto the understandingof planning dysfunctionalities. Paradigm development helpsto explainhow and why activities derived fromformalplansmaydeviatefrom them. Dialecticalmaterialismhelps to explainwhy planning outcomes or results necessarilytend to deviatefrom previousformulation and implementation phases of the planningprocess.

The Concept of Paradigm Development

Kuhn'sdescription of the roleplayedby paradigms in the development of sciencehas beenappliedas an organizationvariablein several studies (Lodahl &
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Gordon, 1972;Pfeffer & Moore, 1980). Kuhnproposed a matrixthat could be usedto show comparative levelsof paradigmdevelopment amongthe major scientific disciplines. Onedimension of the matrix is used to representdifferent disciplines;the other includesfour basicdescriptive areasof consensusor agreementfor each discipline:values, beliefs, exemplars,and symbolicgeneralizations. A corresponding matrixappliedto organizations would contain, insteadof scientificdisciplines,differentorganizations or organization subunits andthe samedescriptive areasor components for consensus. Values in an organizationalsense relate to ethical aspectswith regardto sharedperceptions of society and social principles that applyto an organization's activities.For example,all chemicalplantmanagers in this countrymightagreethat riversshouldnot be polluted with toxic waste, but because each plant managermight disagreeon what constitutespollution, some organizationswill do more to prevent pollution than will others. Agreement on valueshelpsto stabilize an organization not only becausethere is agreement,but also becausea singleviolationis not considered a repudiation of a particular value. A chemicalcompanythat is foundto haveseverelypolluteda riverusuallywill not be judged as harshlyby a society as will be the individualresponsible,so long as society does not suspectthatsuchpollutionis condonedor carried out regularlyby the company. Beliefsreflectorganization members'rationalizations of cause and effect relationships.They help determinethe goals and the meansan organization should adopt to be effective, and they indicatethe importance of problems, evaluate solutions, and show the relativeusefulnessof information.Some typical beliefs in organizations are: considerate leadershipis superior to authoritativeleadership, financial ratios are the criteria of success, and strategic planning decreases uncertainty andincreases organizationalsuccess. Likevalues,beliefsthatarewidelysharedalso help to stabilize an organization.They do this by providingcertaintyand a senseof belongingand identity for organization members.Theythus fostercommitmentand providesocialcontrols(Ouchi& Price, 1978; Pfeffer, 1981). Exemplars areconcreteproblemsolutionsthat are generally accepted within an organizationas examples of finding and solving problems. The em-

phasisis not so much on theoryor rulesas on concreteexamples basedon the experience of those who havelearnedfrom earlierproblemsolutions. Exemplarshelporganization members to understand laws, theories,and techniquespreviouslylearned.In addition, they help in the acquisitionof the skill to see similaritiesamong different solutions. In most organizations,exemplarsare learnedby the development doing.Forexample,during of a new manufacturing process, engineersinvent, develop, test, improve, redesign,and reproduceequipment. Duringthis process,whichoften involvessimpletrial and errorlearning,the engineersacquireexemplary processknowledgethat includesinformationabout whatdesignstrategies will improvemanufacturing in that company.Someof this knowledge becomesformalizedin manualsand blueprints,but much of it does not. It is tacit. Yet it is availablefor use in confronting new tasks in which exemplaryknowledge can be used to identify similaritiesand differences comparedto previousproblemsand thus help to locate solutions. Exemplarsalso have a stabilizingeffect on organizations.Hands-on-knowledge of a company'sproductiontechnologies, customers, suppliers, andso on leadsto technical superiority, newproducts,andthus strong competitivepositions. Throughthis process of innovative changes,exemplars helpto obtainlong term stabilityand profitability(Imersheim,1977). Symbolic generalizations areshorthand expressions that facilitatecommunication by allowingthe formal or formalizablecomponents of an organizational matrixto be moreeasilydiscussed.Theyrangefrom informaland simple communication and coordination meansto highlysophisticatedformalizedsymbols. In the simplestforms, symbolicgeneralizations includelanguageand behavior(Peters, 1978;Pfeffer, 1981).Languageenablesmembersof particular culturesto communicate.Behaviorrepresents symbolic generalizations if individuals(e.g., executives) employ patternsof consistentbehaviorin order to shape the expectationsand beliefs of organization members.For example, a chief executivewho consistentlyraises or ignores particularthemes during meetingsshapesmanagers' beliefswith regardto the relativeimportanceof companyproblems.Business firmsalso makeuse of morespecialized and formalized languages. For example, communicationactivities can be formalized through performance reports, budget requests,requestsfor personnelor
590

equipment,financialratios, and so forth. Further, specializedlanguagesare used to standardize planning processes. Long range as well as short range plans and their integrationwith policies, programs, procedures, rules, and controlsystemsare symbolic generalizationsaiming at efficient and profitable operations. The highest level of abstraction is represented by specializedlanguagesthat are based on mathematical modelssuchas operations research or capital budgetingtechniques.By facilitatingthe communicationsprocess, symbolic generalizations reduceuncertaintyand, like other consensuscomponents, help to stabilizean organization.
Organizational Matrices and Formal Planning

Mostof whatis considered or operational strategic planning(budgets,control systems,marketingprograms, etc.) is representedby formal symbolic generalizations.Organizationalvalues and beliefs also are reflected in formal plans, but not all organization membersmay sharethe ones that have guidedthe development of a particular strategy.Exemplaryknowledgealso may be reflectedin official plans, if such knowledgehas become formalizedin symbolicgeneralizations. However,althoughexemplarsmay be reliedon heavilyin the implementation phasesof plans, they tend to play only a minorrole in the developmentof plans, because much exemplaryknowledge is tacitandthuscannotbe integrated systematically. Thus, the four basic componentsof an organizational matrixare represented in a strategicor operational plan, but such a matrixalso will exist in the absenceof planningconsiderations. Values,beliefs, exemplars,and symbolicgeneralizations frequently are sharedby an organization's members withoutsuperimposed conceptionof plannedorder.For many the unstructured organizations, sharing of thesecomponentsseemsto providesufficientorderfor success. How formalizedsymbolicgeneralizations interact with the otherthreeconsensuscomponentsappears as a trade-off (Normann, 1971;Wildavsky, 1973). If values, beliefs, and exemplarsare widelyshared, formal symbolic generalizationscan be parsimonious. In effect, a well developed organizational culturedirects andcoordinates actiities. By contrast, if an organization is characterized by manydifferent and conflictingvalues,beliefs, and exemplars, those whose authoritydominatesthe organization cannot expect that their preferencesfor action will be car-

and automatically. Instead,conriedout voluntarily will be required, and coordination siderable direction formalizedin resultingin symbolicgeneralizations programs, budgets,andso on. For plans,procedures, example,once a budgethas beenset up, an organizaor tion's dominantcoalitionexpectsthat individuals departmentssimply will keep their expenditures within this budget. Questionsas to why budgeting constraints aresensibleare not expectedto be asked. aid in enThus formalizedsymbolicgeneralizations dominant coalitions. beliefs of forcingthe valuesand Osborn, Hunt, and Jauch (1980) have related the to counteract lack of need for top-levelmanagement members'beliefsand consensusamongorganization valuesthroughformalplanningand controltechniques to differentiationprocesses. They have suggested that such techniqueswould be particularly salient if organizationalgrowth and technological change processes lead to high levels of vertical differentiation. Although the trade-off betweenformalizedsymand the other consensuscombolic generalizations several empirically, ponentshas not beeninvestigated authors have stressed the importanceof a shared for successful andorganizing. culture Quinn planning (1980) has predictedthat withouta wide sharingof major goals, organizationmemberswould tend to and concentrate on shorttermfinancial performance, thusjeopardizetheircompanies'long termviability. Bourgeois(1980a)has providedevidencethat agreement on the means used to enforce strategicplans successthan a is more importantfor organizational wide sharing of corporateobjectives. In contrast, DeWoot, Heyvaert, and Martou (1977-1978),in a studyof Belgiancorporations,found that the more on successful firms showed frequentdisagreement alternative meansto attainthe sharedgoals of technological innovation. The conceptof a trade-offbetweensymbolicgeneralizations and the three other consensus componentscan be usedto explainwhy formalplanning betweenintentionsand may generatecontradictions actions, with subsequentdysfunctionaleffects. In that use strategic planand operational organizations ning extensively,frequentcontradictionsare likely betweenplans (intentions) and theirimplementation (actions) for the following reasons: First, as the amount of planningis postulated,relativelyspeaking, to be higherin organizationsin which values, beliefs, and exemplarsare not widelyshared,an in59'

of plans can creaseof idiosyncratic interpretations be expected. Individualsrespond to policies, proand so on with theirown undergrams,procedures, standing of preferable values,beliefs,andexemplars. Therefore,the more the activityis preplanned,the higherthe likelihoodthat some action is taken that contradictsthe world view of those who originated the plans. Second, the more the activity is preplanned,the higherthe chancethatpartsof the plans a companythat Thisis because willbe inappropriate. its options to prescribes much activityis restricting of enrespondto environmental changes.Thevariety vironmental changes,however,remainsunaffected. areusedextensiveThus, if behavioral prescriptions ly, the likelihood increasesthat some of them will to deviate be ineffective.In thesecasesit is necessary from currentplans. Businessfirms in adherenceto suggestions of organizationaltheorists rationalize that they try to increasetheir response capacities throughcontingency planningand throughfrequent revisionsand adjustments of plans. However,contingencyplans often have failed to achieveplanned flexibility because they "became precapsuledproin precise gramsto respond waysto stimulithatnever quite occurredas expected"(Quinn, 1980, p. 122). Regardlessof the degree of comprehensiveness a planningprocess, all formal plancharacterizing ning processescan be expectedto cause contradictions of the types above to some degree. The incremental schoolof planningsuggeststhat suchcontradictions are normaland requirepoliticalnegotiations and adjustmentsof intentionsratherthan attemptsat their avoidance.Such adjustments,then, necessarily generateemergingor realizedplans that deviatefrom originalintentions(Mintzberg,1978). In contrast,followingthe traditional planning school, deviationsfrom intendedplansmust be regarded as dysfunctional. They raise uncertainty and thus threatenthe rationality of organizational operations intendedthroughformal planningand the existing powerdistribution withinan organization (Dunbar, Dutton, & Torbert, 1982; Harshbarger, 1973; Wildavsky,1973). A dominant organizational coalitionguidedby traditionalplanningconceptsis unlikelyto acceptsuch contradictions, and the probableoutcomestherefore are high turnoverratesand shorttermperspectives. To avoidcontradictions of the firstkind,a dominant coalition may tend to introducecloser supervision and control systems. Because organizationalpar-

ticipants can be expected to resist tighter controls, conflict is generated. The controlled have the options of complying or leaving, if the dominant coalition has the power to enforce its views. Contradictions of the second kind also can cause conflicts and subsequent turnover if suggested revisions are opposed by those who ideologically defend particular plans. Again, those in less powerful positions can either accept the dogmatic (or the revisionist) point of view shared by the dominant coalition or leave the organization. Short term perspectives are encouraged because tighter control systems imply more frequent performance evaluations. In addition, if plans are frequently adjusted and updated, the life cycle of operating plans will decrease. Much planning activity will be directed towards a short term improvement of symbolic generalizations. The likely results of frequent changes of personnel and plans is that the development of widely shared values, beliefs, and exemplars that would maintain an organization's long term viability is impeded. Because some degree of conflict is functional for an organization's ability to innovate (Bourgeois, 1980a; Deutsch, 1973), a policy concentrating on dismissing dissidents instead of negotiating plan adjustments is unlikely to improve long term performance. If new personnel are hired without concern for compatibility of their views with those of the dominant coalition, contradictions between intentions and actions will not be decreased, and the development of a shared culture will not be encouraged. This is because the new employees will continue to have varied individual values, beliefs, and exemplars. By contrast, if selection focuses on identifying "believers," a wider sharing of values and beliefs may result. However, it is unlikely that such a culture helps an organization in its long term success. The innovative potential of conflict is extinguished and replaced by an ideology of dangerous in-group thinking (Dunbar & Goldberg, 1978; Janis, 1972). In addition, it is questionable whether the hiring of believerscan do more than temporarily avoid conflicts in values, beliefs, and exemplars. Individuals always will differ in their values, beliefs, and exemplars to some extent, and in an organization in which blind followship is required and planned intentions are nonnegotiable, it seems only a matter of time until believers turn into heretics or dissidents (Dunbar et al., 1982). Thus, frequent changes of personnel, together with frequent ad592

justments of plans, lead to short term flexibility. However, this flexibility is achieved at the expense of long term stabilizing effects that are fostered by a wider sharing of values, beliefs, and exemplars between the dominant coalition and other organization members. There is some empirical evidence to support the above arguments. A shift by American corporations away from long term competitiveness in favor of short term financial goals has been described by Hayes and Abernathy (1980). By "devotion to short term returns," American corporations have relied on "analytical detachment" and "methodological elegance" in reaching strategic decisions instead of establishing technological superiority in the market and gaining competitive success through process and product innovation. Quinn (1980), using information from nine case studies, demonstrated that failure to negotiate planning specifications impeded major internal innovations. He described how comprehensive planning as proposed by the traditionalists created short term orientations and adherence to rigid financial control techniques. Bauer (1981) reported that top management turnover has doubled from 1976 to 1980. He suggested that political conflicts over strategic planning, the tendency of company leadership to change its mind and direction more and more frequently, a management mentality preoccupied with upward mobility, and the more active role played by boards of directors all have contributed. The trade-off between formal symbolic generalizations and the other components of agreement needs further elaboration. It should be viewed as extremes on a continuum. Figure 1 represents this assertion in a two-dimensional space. The dimensions range from little to much formal symbolic generalization and from parsimoniously to well developed values, beliefs, and exemplars. All potential trade-off lines have a negative slope and therefore move between quadrants I and III. In addition, they show that the trade-off between symbolic generalizations and the other consensus components is a continuum between two extremes. One extreme represents formal symbolic generalization parsimony and widely shared values, beliefs, and exemplars. The second extreme includes much formal symbolic generalization and few shared values, beliefs and exemplars. Intermediate levels on all four components are possible and likely, and both extremes are detrimental to an organization's viability. Overemphasisof the first ex-

trememay generatea rigid organizational ideology (Dunbar et al., 1982), which impedes successful of the second organizational change.Overemphasis extremetends to create the planningdysfunctionof the alitiesdescribed.Thus, optimalcombinations in the midlie somewhere fourconsensus components dle of the continuadescribed.However,the contemporaryplanningliteraturefocuses on formal planning techniquesand tempts organizationsto move toward the second extreme. It is argued here that much more attentionbe given to the role of values, beliefs, and exemplarsin determiningappropriate planningspecificity, interval, and scope. One reviewerof an earlierversion of this paper suggesteda possibleexceptionto the argumentthat formalplansaresubstitutes for shared values,beliefs, and exemplars. It is conceivable for organization membersto hold a widelysharedbelief in the effectivenessof formal planning. This may result from positive past experienceswith planningtools, such as budgets,or from a turnoverprocessthat replaced dissidentswith believers.In this situationan organizationwouldhaveboth formalsymbolicgeneralizations and agreementon the other consensus components. Whether this exception to the trade-off existsin realityrequires argument empirical investigation. Nevertheless,the relevanceof assumingsuch an exceptionmay be questioned.A sharedbelief in

the effectiveness of formalplanning as a tool enhancing organizational successdoes not excludedisagreement on specific goals and means of the planning process. In fact, it has been arguedthat some disagreement on the meansand ends of planningmay be more functionalthan unanimousconsent(Bourgeois, 1980a;DeWoot et al., 1977-1978).Thus, an exceptionto the trade-off argumentwill exist only in an organizational cultureincludingsharedbeliefs in the successof formalplanningand a widesharing of organizationalgoals and means. However, this situation is unlikely because, as described,formal planningprocessesalwayswill cause contradictions between intentions and activities to some extent. Therefore, a developed organizational culture revolving aroundbeliefsin the effectiveness of planning can be maintained in the long run only if emergingcontradictionsbetween intentions and actions are resolved in a mannerthat avoids disruptiveconflicts and high turnoverrates. As discussedearlier,this cannotbe assumedwhenadhering to the traditional planningliterature,becausetop level management will tend to prescriberatherthan negotiatethe intentions and means of a planningprocess.

The Concept of Dialectics

Mason (1969) and Mitroff and Emshoff (1979) suggestedthat a dialecticalapproachto organizationalplanning aids strategic decisionmaking.These authorsbelievethatthe processof systematically opstimulates and posingplansby counterplans creativity worldview. By increastendsto expanda manager's ing awarenessof implicitassumptionsthat underlie currentplans and counterplans, eventuallynew and improvedplans may be synthesized.Although the value of dialecticalinquiry is still subject to considerabledebate (Cosier, 1981; Mitroff & Mason, literature also can be criti1981),the contemporary cizedfor restricting itselfto Hegel'sconceptof dialectics as outlinedby Churchman (1971). Marx(1904) revisedHegel'sidealisticconceptionof dialecticsby relating it to historical processes. It will be demonstrated that the conceptof Marxiandialectics andits reflection in the lawsof dialectical materialsim (DM)canfurther elucidate planning dysfunctionality. An explanation of DM may be helpful.Threemajor principlesor laws are distinguished(Chanin& Shapiro, 1979;Cornforth, 1971). The law of unity and conflict of opposites explains the causeof change
593

Figure 1 Model of Consensus Components Trade-Offs

Values, Beliefs, Exemplars
High

Low
F

'" -%

---%%

High Formal Svmbolic Cieneralizations %%

Low{
- - - -? - -Hypothetical trade-off lines

and development.It assumesthat all characteristics, natureand social events,and relationships describing worldsexist in fundamental opposites. In organizations such opposites include the concepts of long rangeversusshortrangeobjectivesand plans, managerial or owner interestsversus worker interests, profits versus losses, and, in more general terms, humanpracticalactivityversusthe outcomesof that activity.On the one hand, suchoppositesarein conflict and contradictone anotherand thereforeprovide stimulifor activitiesaimedat strikinga balance amongopposites.On the otherhand, suchopposites also representa unity becausethey are mutuallyinand inseparably connectedto a single terdependent whole. In DM, the constantneed to work out contradictionsbetweenoppositesthat are mutuallyinis considered the causefor a continuous terdependent changeand developmentof naturaland social phenomena.The law of the transformation of quantity into quality and vice versa explains the mode of changeprocesses.Accumulated incremental changes in quantityeventually bringabouta newquality,and gradualchangesin qualityultimatelylead to a new quantity.For example,the continuousquantitative growth of a firm at some point will necessitatethe introduction of new product lines (a qualitative change).Similarly, consistent effortstowardproduct improvementeventually will lead to quantitative growthof sales and profits. Thus, the accumulation of gradualchangesin reactionto contradicting oppositeswill culminatein majorquantitative or qualitative changes. Finally, the law of the negation of the negationexplainsthe dialecticprocessof change. Any completedchangeprocessinheritssomecontradictionsfromthe pastand also containsanddevelops newcontradictions that will lead to furtherchanges. A conmpany negatingits labor intensivetechnology by introducing capitalintensivetechnologies maydo so in orderto solve productivity problems.The new (assemblyline) technology may generatenew contradictions,for example, those betweenproductivity and employeesatisfactiongoals, whichthen call for a furthertechnologicalmodificationand so on. Thus, the originalnegationof labor intensivetechnologiesis again negatedwhen the capitalintensive technologyis furthermodifiedto allow for highproductivityand employeejob satisfaction. The paradigmconceptdemonstrates why contradictions betweenformulatedplans (intentions)and implementation activitiesare likely;and DM can ex594

betweenactivities and outcomes. pose contradictions outcomes are all the end results of Organizational microeconomic activity-for example, products, The structures, procedures, methods,andtechniques. betweenforplanningliterature usuallydistinguishes but a sysmulationof a planand its implementation, outcomesas of organizational tematicconsideration a thirddimensionappearsto be neglected.Marxian the importance of this theoryhelpsin demonstrating third dimension. In Marxiantheory (Benson, 1977; Heydebrand, 1977;Marx, 1904),humanpracticalactivity(praxis) is separated fromthe outcomeof thatactivity.Praxis is seen as the drivingand everchanging force of production. It includesactivitiessuchas the production of the meansof subsistence, of language, production in creativework, and the reproduction engagement of human existence. This dynamic conception of praxis implies that all outcomes are historical because, at any given point in time, they are based on historicalactivities. "Outcomesmay be seen as more or less incomplete, more or less imperfect historicalobjectifications of conscious,practical activity" (Heydebrand,1977, p. 85). If all outcomesarehistorical andpraxisis an ongoing and everchangingprocess, then an historical tendencytowardscontradictionsbetweenactivities and outcomes can be assumed. This tendencyis a function of the extentto which objectiveoutcomes deviatefrom desiredoutcomesthat currently guide practicalactivitiesof social groups.As described by the first law of DM, activitiesand outcomesare oppositesthat tend to contradictone anotherand thus continuouslygeneratea unitaryprocessof change. Theimportance of Marxian dialectics for planning researchand practicelies in the historicalnatureof the describedcontradictions.Becauseall outcomes arehistorical andtendto contradict current activities, any activity thatintendsto correct outcomes(in order to minimizedeviationsfrom formal plans) will, in turn,generatehistoricoutcomesand new contradictions. This relationship is indicatedby the thirdlaw of DM, the law of negation of the negation. to compensate Attempts for previous deviantplanning outcomesmay verywell leadto a viciouscircle. Deviantoutcomesare followedby counteracting activities,whichin turnincrease the number of previous outcomes,andso on. If counteracting activities based on reformulated planscompensatedfor all the contradictionsof previousoutcomes, the level of contradictionscould be kept stable or could even de-

creaseas long as the new contradictions do not exceed the previousones. In this case, an organization would learnsuccessfully,and the imageof a vicious circlewouldbe incorrect.The assumptions of stable contradictions or contradiction decaythen wouldbe more accurate. However,basedon the secondlaw of DM (thelaw of the transformationof quantityinto quality and vice versa), a third alternativeleading to explosive developments is at leastas likelyas the firsttwo alternatives.As manyplanning activities haveto dealwith ill-structuredproblems or messes (Ackoff, 1974), neithercan the pastperformance of organizations be explainedunambiguously nor can the futuresuccess of currentplans be predictedclearly. Ill-structured planning problems plus the historical tendency toward contradictionsbetween activities and outcomes make it unlikelythat any new plan will both successfullycounteractall previous contradictions and generatefewer new contradictions than did the previous plans. Rather, it can be assumed that residualand new contradictions will tend to exceed the numberof previousones. Thus, increasing contradictionsbetweenactivitiesand outcomes related to formalplanning processes mayhinderan organization's attemptsat learningso that long termsurvival would be guaranteed(Hedberg, 1981). Thetraditional planning literature considers results as the most telling indicatorsof the soundnessof a plan. Wheneverresults are unsatisfactory,a reexaminationand reformulationof plans is advocated (Christensen et al., 1978). Thereis dangerthat this thinkingwill lead to an understanding of corporate planningthatcreatesviciouscircles.A reformulation of a plan that is supposedto generateactivitiesthat counteractpreviousdeviationsmay, in fact, tend to amplify deviations.

Summary and Conclusions

A commonly expressedbelief in the traditional management literatureis that planningis positively relatedto an organization's chancesof success.Consequently, one would assume that little planning decreases an organization's chances of success. However,in the two theoreticalconceptspresented, it can be seen that the dysfunctionalconsequences of too much planningmay be as problematic as the dysfunctionalconsequencesof too little planning. The discussion is summarized in a modelof planning
595

dysfunctionalities. As depicted in Figure2, the model representsa system of deviation-amplifying loops (Maruyama,1963; Weick, 1979). If, as a result of formalsymbolicgeneralizations emphasizing rather thantheothercomponents of an organization matrix, an increasein planningis initiated,this is followed by more implementationactivities. Increasingimplementationactivities will tend to generate contradictions betweenintentionsand activities,because more idiosyncratic of plans are likeinterpretations ly, as well as areplanningdeficiencies resulting from an adaptivecapacitythat has been limited.Expanding contradictions are met by new planningtechniques(e.g., controlsystems) andplanrevisions,which in turn initiate more implementation activitiesand so on. As can be seen, the relationships amongthese variables areexplosive.An increasein planning,implementation activities, or contradictions subsequently will lead to their furtherexpansion. Similarly, increasing implementation activities will lead to more organizational outcomes. Becauseall outcomesare historicaland thus tend to contradict ongoing activities, an expansion of outcomes is followed by more contradictions betweenactivities andoutcomes.An organization maytryto counteract suchcontradictions by directly the amount increasing of implementation activitieswithouta priorchange of formal plans, or it may first reviseits plans and subsequently increaseimplementation activities. In eithercase, the succeedingprocesseswould be selfreinforcing and lead to more and more contradictions. The self-reinforcing processesdepictedin Figure 2 underlinea core problemof contemporary understandingof formalplanning-that it is relatedto the assumptionthat plans should be revisedand reformulatedif resultsare unsatisfactory. It.is impliedin the traditionalliterature that new plans shouldprovide betterpolicies, programs,and regulations,and so on to direct future behavior. However,it is not impliedthat an adequatereactionto deviantresults may be a major reductionin formal planning. This raises the question of how an organization may recognizeand avoid the self-reinforcing processesdepictedin Figure2. As described, possibleindicators for contradictions between intentions andactions are disruptiveconflicts regarding planningintentionsand implementation activities,highturnover rates, and an emphasison short term planningand control techniques. If these symptomscan be ob-

Figure 2 A Model of Planning Dysfunctionalities

PARADIGM DEVELOPMENT Contradictions Between Intentions and Activities + MARXIAN DIALECTICS

Planned Intentions _ (Symbolic Generalizations)

_+

Implementation Activities
()+

Organizational Outcomes

Contradictions Between Activities and Outcomes

served consistently and if organizational performance is low, the adequacy of the existing planning system should be reassessed. Indications for contradictions between activities and outcomes especially will relate to the frequency and the overall organizational efforts devoted to readjusting plans. Again, if great effort to update planning specifications permanently is paired with poor performance, a revision of the existing planning system is called for. A stabilization of the feedback loops presented in Figure 2 is possible if increases in contradictions between intentions and activities and between activities and outcomes are followed by decreases in both formal planning and planned implementation activities. This is indicated by the negative signs shown in parentheses in Figure 2. The incidence of decreased formal planning subsequently leads to activities and outcomes causing less contradictions. To the extent that planning intentions and implementation programs are less well prescribed, idiosyncratic interpretations of plans will decrease. This is because more activities will be considered compatible with a more ambiguously and parsimoniously defined planning system. Similarly, excessive conflicts over planning specifications, high turnover rates, and the need for short term control techniques will decrease, as the planning system allows for more flexible interpretations. Contradictions between activities and outcomes will diminish for the same reasons. If fewer activities are prescribedand if plans need not be adjusted before activities are executed, 596

organization members may employ more discretion and more outcomes will tend to be in accordancewith plans. Thus, little formal planning or planning ambiguity may not be functional just for motivational reasons (Quinn, 1980) or increased flexibility (Mintzberg, 1978) but also for purposes of avoiding intraorganizational contradictions stemming from the planning system itself. The stabilized version of the loop system shown in Figure 2 indicates that an increase in formal planning should be attempted only if the level of contradictions is low. In this situation, more formal planning has greater chances of being widely accepted. Therefore it may be expected subsequently to cause less severe intraorganizational contradictions, as would be the case if formal planning is increased in order to suppress previous contradictions. In general, such increased formal planning may be necessary, because the negation of the negation law also is applicable to organizational processes based on parsimoniously defined plans. For example, after desired innovative solutions have been generated during a period of reduced planning, more formal planning again may be called for to solve emerging coordination and control problems. The emergence of coordination and control needs may result from the loss of formal control that accompanies a decrease in formal planning. In the discussion of the paradigm concept, it was suggested that organizational coalitions may wish to compensate for this loss of formal control by developing

moresocialcontrolthrougha widelysharedorganizationalculture.Sucha culturewouldhelpto minimize coordination and controlproblems duringperiodsof planningparsimony,and thus can be viewed as an to formalplanningreductions. essentialcomplement How, then, may an organizationmove away from too muchformalplanning to a situationin whichless formalplanningis matchedwith morewidelyshared values, beliefs, and exemplars? Two techniquesare possible. First, as suggested by the incremental school, dominantcoalitionsmay adoptthe policyof negotiating feasible planning specifications. This techniquewould reducecontradictionsbetweenintentions and activitiesand simultaneously lead to a more widely accepted planning system. Second, a widely sharedcultureis attainableby simply moving from the formalend of the symbolicgeneralizationscontinuuim to the informalend. As Peters(1978) the consistentuse of patternsof symdemonstrated, bolic behaviorcan shapeand reshapebeliefsand expectations of organizational members so that a sharedculturemay evolve. The appropriatedegree of formal planningmay be influenced not only by the degreeof intraorganizational contradictions;environmental and other organizationalfactorsalso may play a role. The most frequentlycited contingencyfactors include: (1) Environmentaluncertainty and complexity. The evidenceconcerningthis factor is inconclusive. In accordancewith the traditionalplanningschool, some authors have suggestedthat high uncertainty and complexitywould requiremore comprehensive formalplanning(Armstrong,1982;Lindsay& Rue, 1980;Saunders & Tuggle, 1977).In contrast,several organization theoristshaveassumedthatcomprehensive formalplanningprocessesare too inertto allow for effective learningin uncertainand complexenvironments (Frederickson & Mitchell,1982;Hedberg, 1981;Hedberg,Nystrom, & Starbuck,1976;Paine & Anderson,1977).In lightof the above discussion, comprehensive planningin uncertainand complex environments may be assumedto cause more intraorganizational contradictions. Therefore,in view of possibleplanningdysfunctionalities, formalplanning parsimony seemsto be the adequateresponseto this situation. (2) Marketinefficiencies.Armstrong(1982) considered marketinefficiencies as important reasonsfor increasingformal planning activities. Thus, comprehensive planningwould oe moreappropriate, for
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example, for regulated industries because it can help determine appropriate pricing strategies and rewards allocations. However, Kallman and Shapiro (1978) found no evidence relating formal planning to organizational performance in a regulated industry. They suggested that formal planning, in fact, may be less important in regulated industries, because strategic alternatives are more limited. (3) Level of change. Several studies have reported benefits arising from comprehensive planning when major organizational change processes had to be accomplished (Lindsay & Rue, 1980; Paine & Anderson, 1977; Thune & House, 1970). This contingency factor of formal planning appears uncontroversial, although the empirical evidence on this issue is weak (Armstrong, 1982). (4) Size. Because formal planning is expensive, a more comprehensive planning approach requires a large enough firm to make it feasible (Grinyer& Norburn, 1975; Sheehan, 1975; Wildavsky, 1973). (5) Organization structure. Organizational contingency theorists (Burns & Stalker, 1961; Lawrence & Lorsch, 1967) advocated the adoption of organic structures for organizations in unstable and uncertain environments and the adoption of mechanistic structures for stable environments. Clearly, this contradicts the stance taken by the traditional planning literature,which suggests comprehensivenessand formality to deal with complex and dynamic environmental situations (Christensen et al., 1978) Whereas several authors affirm the importance of matching organization structures with the planning system (Grinyer & Norburn, 1975; Saunders & Tuggle, 1977), empirical or theoretical evidence linking environments, structures, and planning systems is scarce (Bourgeois, 1980b). A well founded contingency theory of corporate planning has not yet been developed. In light of the apparent difficulties in identifying important contingencies and adequate planning programs in response to them, estimating future events and planning for those in detail may be the wrong approach toward contingency planning. Rather, the essence of successful contingency planning may lie "in anticipating what type and scale of resource buffers and organizational flexibility are needed to exploit likely futures effectively" (Quinn, 1980, p. 123). This paper suggests that in addition to traditional environmental and organizational contingencies, intraorganizational contradictions are important determinants of

formal planning efficacy. Several empirical research questions can be derived from the foregoing discussion. Among the major questions that need empirical clarification are: (1) the natureof the trade-offbetweenformalsymbolic and the otherconsensus components generalizations (2) the relationshipsbetween developed organization

culturesand performance as opposed to those between formal planningand performance (3) the manifestationof contradictions betweenintentions and activities and between activities and outcomes (4) the relationships of suchcontradictions to organizational performance.

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Rudi K. Bresser is Assistant Professor of Management at Baruch College, City University of New York. Ronald C. Bishop is Associate Professor of Management at Baruch College, City University of New York.

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