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Modern Organizations
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Modern Organizations
THEORY AND PRACTICE
Second Edition
EDITED BY
Ali Farazmand
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Library of Congress CataloginginPublication Data
Modern organizations : theory and practice / edited by Ali Farazmand.—2nd ed.
p. cm.
Includes bibliographical references (p. ) and index.
ISBN 0–275–96140–0 (alk. paper)
1. Public administration. 2. Organizational sociology. I. Farazmand, Ali.
JF1351.M57 2002
351—dc21 2001133083
British Library Cataloguing in Publication Data is available.
Copyright © 2002 by Ali Farazmand
All rights reserved. No portion of this book may be
reproduced, by any process or technique, without the
express written consent of the publisher.
Library of Congress Catalog Card Number: 2001133083
ISBN: 0275961400
First published in 2002
Praeger Publishers, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
www.praeger.com
Printed in the United States of America
The paper used in this book complies with the
Permanent Paper Standard issued by the National
Information Standards Organization (Z39.48–1984).
10 9 8 7 6 5 4 3 2 1
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To My Son, Cyrus
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Contents
Preface to the Second Edition ix
Preface to the First Edition xiii
Introduction: The Multifaceted Nature of Modern Organizations
Ali Farazmand xv
I.
Society and Modern Organizations 1
1. Public, Nonprofit, and Private Organizations: Similarities and Differences
Nicholas Henry 3
2. Organization Theory: From PreClassical to Contemporary and Critical Theories—An Overview and Appraisal
Ali Farazmand 19
3. Emergent Theories of Organization: An Overview and Analysis
Ali Farazmand 63
4. Elite Theory of Organization: Building a Normative Foundation
Ali Farazmand 97
II.
Public Organization Design and Reorganization of Administration 133
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5. The Public Service Configuration Problem: Designing Public Organizations in a Pluralistic Public Service
Charles R. Wise 135
6. Government Reorganization: Theory and Practice
Guy Peters 159
III.
Organizations, Individuals, and Administration: Issues and Perspectives 181
7. Diversity in Public Organizations: Moving toward a Multicultural Model
Sally Coleman Selden and A. Frank Selden 183
8. Organizational Socialization
Michael Klausner and Mary Ann Groves 207
9. Is Organizational Membership Bad for Your Health? Phases of Burnout as Covariants of Mental and Physical WellBeing
Robert T. Golembiewski 231
10. God, Science, and Administrative Theory: An Unfinished Revolution
Frederick C. Thayer 251
For Further Reading 267
Index 273
About the Editor and Contributors 283
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Preface to the Second Edition
Publication of the first edition of Modern Organizations was an overwhelming success, as the book was well received by scholars, students, and instructors around
the world. The book was reprinted twice, and it was adopted widely as the primary textbook in graduate and undergraduate courses in organization theory and
administrative behavior. Actually, the book became a classic, as many scholars commented in recent years. I am honored to have had the cooperation of the
contributing authors to the first edition.
The second edition of the book is significantly revised and updated. Several chapters have been deleted and an equal number of chapters added to update the
materials reflecting the latest perspectives on organization theory and behavior. The subtitle of the book is also changed to emphasize theory and practice of modern
organizations. The themes of the book remain the same, reflecting the integrity and aims of the materials covered. The book is devoted to presenting materials that
balance the interests of management or organization on the one hand, and those of the individuals and citizens on the other. As noted in the Introduction and in the
Preface to the first edition, it is this balance of interests that has been neglected in most of the literature on modern organization theory and behavior, from classical to
contemporary. Today most of the knowledge on modern organizations has been developed with a managerial bias and in favor of organizational interests, subordinating
or neglecting the interests of individual members working in organizations as well as of citizens outside organizations in interaction with them. This imbalance has
created, over a long time, a huge gulf between what organizations try to achieve and what the human side
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of organizations—organizational members and citizens outside—expect to receive or accomplish.
The changes in the second edition are as follows: The Introduction is slightly expanded to include the latest changes and developments in modern organizations,
including the phenomenon of globalization and its implications for organization theory at global levels. Significant revision and expansion have been incorporated in the
theoretical part of the first few chapters. First, there is a new chapter on public, private, and nonprofit organizations and their differences and similarities. Second, the
original long and exhaustive chapter on organization theory with an assessment has been broken into two separate chapters, with significant expansion on some theories.
For example, in Chapter 2, the section on agency theory has been elaborated extensively while a new major section, devoted to the analysis of transactioncost theory,
has been added, bringing market theory up to date.
Chapter 3 now has a focus on critical and emergent theories of organization. Here institutional theory has been significantly elaborated and expanded, and an entirely
new theory of organization, chaos and transformation theories has been presented and analyzed extensively with implications for world systems theory, organization
theory, and public management. Chapter 4 is also an entirely new and long chapter with the sole focus on the new, normative organizational elite theory. Together, these
three theoretical chapters present, with assessment and analysis, the latest knowledge and perspectives on organization theory. Some of these theories, such as chaos
and transformation theories and elite theory, are original contributions of the editor, while other chapters also provide significant, uptodate information on various
issues and themes of modern organizations.
The deleted chapters include the chapter on Talcott Parsons by Harry Johnson, who is no longer with us in this world, the two chapters on the administrative state,
and the chapter on public policy. An entirely rewritten chapter with theoretical analysis on government reorganization, reform, and change, and a new chapter in the
latter part of the book on diversity and public organizations, are presented. Finally, the rest of the chapters on organizational socialization, burnout, and the debate on
God, science, and administrative theory have been revised significantly. These changes, revisions, and alterations have made the second edition a much more lively, up
todate, and reliable book that is intended as a primary textbook in organization theory and behavior at graduate and undergraduate levels. While the presentation of
sophisticated analysis of the latest research in the theoretical chapters meets the highly demanding needs of doctoral and Ph.D. courses, the systematic discussions and
easy reading of all chapters is intended to suit the graduate MPA, MBA, and other masters level, as well as undergraduate, courses in organization theory and behavior.
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We live in an organizational society, a society that is being increasingly globalized by corporate organizations of advance capitalism and the dominant governments
that support them. These globalizing organizations are expanding worldwide and centralizing through mergers and megamergers, concentrating an ever greater amount
of power in the hands of the few corporate organizational elites who can dictate public policy and administration and use supranational organizations to enforce their
dictates to nationstates and peoples worldwide. This phenomenon has had significant negative implications for the democratic theory of selfdetermination, as well as
caused major gaps in distribution of resources, wealth, and opportunities around the globe.
In this world environment of globalization, almost all governments and their public organizations have been pressured to privatize public spheres and publicservice
organizational functions. Privatization has become a central ideological, as well as economic, strategy of promoting globalization. Consequently, with the drastic
shrinkage of publicsector and governmental functions, public organizations have become transformed with a multitude of characteristics featuring corporateoriented
institutions that enhance the managerial interests of the elites, often at the expense of the interests of individuals and citizens. This book reflects, in part, much of this
process, a phenomenon that is transforming the world at the turn of the new century.
This book attempts to shed light on the growing complexity of modern organizations with implications for public, private, and nonprofit sectors and for individuals
and society around the world. Both macro and micro levels of analysis are used in presenting perspectives on organizations, with implications for individuals, groups,
government, administration, and society. The view used in the book raises the concepts of organization and administration to the highest level of macro analysis: the
organization of a particular society, say a nationstate, or even of a global society, into sectors; institutional frameworks; and the administration of society or globe.
Therefore, the concepts of organization and administration used here broaden the scope and perspectives of our understanding and explain how societies are organized
and administered. These broad concepts embody even the subset concepts of policy, management, legislation, and judicial process for conflict resolution. The micro
and meso levels of analysis are also employed to explain how organizations operate—what theoretical and conceptual approaches are most suitable under what
conditions—for management and individuals.
The purpose of the book, therefore, is to present original chapters on the nature, structure, process, and values of organizations in modern society with implications
for both management and individuals. It is hoped that students, instructors, and scholars will find the book another original contribution to the field. The book is
primarily suggested for students of public
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administration, nonprofit organization management, political science, and business management. But since the relationship between individuals and society is discussed in
connection with organizations, students of sociology and social psychology will also find the book useful.
This book could not have been completed without the cooperation of its contributors. I am particularly grateful to all of them, who despite their heavy research and
teaching agenda, always responded promptly to my inquiries and demands. I am sure they all are pleased to see the book published. The publisher has been very
patient and cooperative in extending the deadlines to allow the acquisition and updating of new manuscripts. I am particularly thankful to the senior editor, Dr. James
Sabin, for his patience, cooperation, and editorial support. This book was overdue, but I am pleased to see it finally out. I also appreciate the valuable work of people
in the production department at Greenwood and Rainsford Type, especially John Donohue.
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Preface to the First Edition
Modern organizations—public, private, and nonprofit—perform many functions in societies. We live in an organizational society in which almost every aspect of life is
affected by organizations. It is almost impossible to escape them. Organizations may be studied from different perspectives and with different levels of analysis. While
studies on privatesector organizations are monumental, studies about public organizations are still in the developmental stage with significant contributions being made
to the field. Research on nonprofit organizations has just begun, but good progress is being made.
It is ironic that much of the literature produced on the socalled generic organization theory is indeed biased toward business management with little or no reflection
of realities about the distinct nature of public and nonprofit organizations. This business management bias of organizational studies has been deeply rooted in the
instrumental rationality of the early days and still tends to dominate the field of organization theory. However, new studies from public and nonprofit sector perspectives
appear to be changing this imbalance and are producing a realistic picture of modern organizations.
This book is an attempt to shed light on the complex nature of modern organizations with implications for public, private, and nonprofit sectors and for individuals
and society. The approaches used in this book include micro, macro, and meso or micromacro levels of analysis. Individuals, groups, government and administration,
and society in general are treated in connection with modern organizations. The purpose of the book is to present original chapters on the nature, structure, functions,
and processes of organizations in modern society with implications for both management
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and individuals. It is hoped that students of organization theory will find this book another original contribution to the field. The work is primarily suggested for students
of public administration, political science, nonprofitorganization management, and business management. But the book also addresses fundamental issues that concern
individuals and society in relation to organizations. Therefore, students of sociology and social psychology may also find the book useful. It presents a balanced view of
organizational and individual perspectives in contemporary society.
This book could not have been completed without the cooperation of the contributors. I am particularly grateful to all of them, who despite their heavy research and
teaching agenda, always responded promptly to my inquiries and demands. I am sure they all are pleased to see that the book is finally out. Regrettably, however, one
of our contributors, Harry Johnson, could not see the outcome of his labor; he passed away while the book was in print. Professors Dwight Waldo of Syracuse
University, Robert Denhardt of the University of Central Florida, and Fred Thayer of the University of Pittsburgh read the original draft of my manuscript of Chapter 1
and made encouraging comments, remarks, and suggestions. I am most grateful to them. I would also like to acknowledge the assistance of my former graduate
assistant Mike Marshall, at Northern Kentucky University, who was instrumental in getting this project completed. The publisher has been very cooperative in
extending the deadlines for submitting the manuscript, which enabled me to complete the book without rushing. I am particularly thankful to the editors, Jim Dunton and
Lynne Goetz, for their cooperation and editorial suggestions.
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Introduction: The Multifaceted Nature of Modern Organizations
Ali Farazmand
Modern organizations play a pervasive role in societies. Indeed, we live in an organized society in which almost everything is accomplished in an organizational context.
From birth to death we deal with organizations, small or large, public or private. Organizations are formed by human beings, but the former often act independent from
the latter; organizations even control us, dominate society, stifle development or progress, promote growth and change, alter our environmental conditions, and at the
same time fulfill our human and societal needs. Their role is multidimensional and dual in nature: they can make possible the progress and fulfillment of human needs, but
at the same time they can be a major obstacle to our achieving those same goals. They are a powerful instrument in governance and the promotion of democratic
values, therefore enhancing human values. But, ironically, they may serve at the same time as a formidable instrument of repression.
Organizations are indispensable to human and civilizational progress and in meeting societal needs, but they can also be a force of destruction. Organization and
civilization are interdependent twins; one could not develop without the other. From their birth, organizations were simple in structure and management, but as they
grew larger they became sophisticated and complex in structure and function, requiring managerial skills and techniques beyond the comprehension of many people.
Today, in modern societies, organizations shape values, set structural roles and norms in civilizational directions, change and determine human destinies, and perform a
wide range of functions from integration and human fulfillment to disintegration and individual alienation. In a sense, there are few things in modern society that either are
accomplished without organizations or,
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to say the least, are not affected by organizations, public, private or nonprofit.
Is organization or bureaucracy an exclusively human phenomenon? Absolutely not. A host of other species, small and large, organize and live through organizations.
Perhaps the only major advantage we human creatures have over other species is our intelligent ability to advance in technology and strategies to both develop and
destroy.
By instinct and by learning, animals have for millions of years lived in an organized manner. Their organizations pursue purposes and have specialized roles and a
hierarchy of authority, and one of their purposes is selfprotection. Many find safety in numbers while others ‘‘divide guard duties and authority among specific
individuals” (Steinberg, 1975:10). One of the most highly developed organizations with specialized role playing is found in the ant colony. In an intricate bureaucracy,
each ant in a colony performs functions that set its rank from the queen ant at the top, which bears young to the thousands of soldiers, foragers, and nurses. The system
has existed for some “40 million years, suggesting that ant organizations are more successful than man’s” (Steinberg, 1975:10).
Similar observations can be made of bulls, disciplined to serve as guards in migratory bands of hundreds of thousands seeking better grazing, or of large bands of
zebras moving in concentrated herds deliberately strengthening their defense against such predators as lions that can only succeed when the prey is isolated from the
herd. Other creatures like penguins congregate in organized groups not only for safety but for warmth, or the fasciolar fish that finds safety from attack by swimming in a
school that moves with precision but is leaderless (Steinberg, 1975:10–11). Other examples include beavers that show their organization through teamwork in
engineering and skill precision in building and repairing dams in order to maintain and improve their living environment.
Human civilization from the earliest time was also formed around organizations arranged in different forms and for different purposes. These organizations grew in
size as a form of collective action from serving limited group interests—namely hunting and food gathering of the primitive commune system—to large organizations of
governance. The best example of the latter is ancient empires performing massive public works projects through huge organizations made up of various functionaries
and slaves. Egyptians, Assyrians, Chinese, Persians, Romans, and Greeks all undertook gigantic public works that were accomplished by large organizations
bureaucratically set up with functional specializations, role specifications, and chainofcommand systems with a clear line of authority from top to bottom.
These ancient empires—along with India, the city state of Sumer, Babylonia, and Elam in modern Iran—established and advanced the ancient civilization that has
served as the foundation of modern world civilization.
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It is beyond the scope of this study to elaborate on the significance of these ancient civilizations, their achievements, and their legacies for the modern world. Suffice it to
emphasize here that modern organizations have evolved from these ancient civilizations with an impressive record of organization/ institution building, forming the
foundations of empire states with enormous socioeconomic, cultural, political, and administrative achievements. Their legacies and contributions to modern
organization, administration, and civilization are too many to cite here. (For some of these legacies and contributions, see Farazmand, 1998.)
What is the extent of our conceptual knowledge about modern organizations and the real world in which they operate? What functions do organizations perform in
society, and what behavioral characteristics can we discern about organizations? And what is the role of public organizations in modern governance? While volumes of
books may be needed to answer each of these questions, for the literature on organization theory and behavior is monumental, the following attempts to touch on some
of the basic elements of modern organizations. An overview of some of the major theories of organization is given in Chapters 2 and 3, but what follows is a resumé of
some of the major functions of modern organizations. This includes a short discussion of the modern administrative state and bureaucracy and the role they play in
governance and administration. Finally, a plan of the book is given with a brief introduction of the chapters presented in this volume.
ORGANIZATIONAL FUNCTIONS
Modern organizations perform a variety of functions, from maintaining law and order to providing services to taking care of the dead. A list of the major functions of
organizations requires an exhaustive analysis. The following is a brief outline of what the various types and sizes of organizations do in modern society.
Organizations as Human Facilitators
From the dawn of civilization to the present day, human beings have engaged in various organizing activities to get things done and to serve their social, political,
economic, and cultural needs. Organizations have been used to facilitate human activities and to make achievement of individual and community goals possible.
Collective organizational arrangements have proven superior to individual actions for different reasons: speed, accuracy, collegiality, gratification of social needs, public
works, community interests, and so on. Today, many nonprofit organizations and a host of other organizations strictly serve that purpose. But like the giant
corporations, the administrative state of contemporary societies has been
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transformed from a facilitating state in providing harmony and making life easier for citizens to a more dominating, coercive corporate state. Citizens and societies have
become captives of this dominating state and are affected by numerous organizational actions about which they have little say (Scott and Hart, 1989).
Organizations as Society
The concept of organizational society has been established as a fact of life (Presthus, 1962). In modern times, we live in an organizational society in which almost every
aspect of life is organized and almost everything is done in an organizational setting, whether small or large, private or public or nonprofit in nature. There is no escape
from organizations. From small communities to large nations to the global community, the reality of organizational pervasiveness is present; even in remote areas of deep
forest or uninhabitable parts, earth organizations enforce their identity. And, of course, even outer space is invaded by human organization.
Organizations as Spiritual Institutions
Spiritual organization is one of the oldest kinds of organizations. Human beings have always found ways to institutionalize and externalize their ways of serving their
spirituality or healing spiritual wounds. There are as many types of spiritual organizations as there are religions and beliefs. Temples, houses of God, churches, mosques,
and so on perform this function. What is significant about organizations as spiritual institutions is that they regulate the lives of their members, provide them with comfort,
calm them in stressful stages of life, and mediate between them and God or their supreme being, often providing hope of life beyond this world. Spiritual organizations
come in a variety of forms, structures, missions, norms of operation, role specifications, and cultural indoctrinations. Some promote a passive and peaceful existence
while others promote an active life of aggressive pursuit of material and spiritual needs, all in the name of serving God or one’s spiritual needs. But these organizations
have also separated people from each other, caused wars as well as peace, hatred as well as love.
Spiritual institutions or organizations are present everywhere in the world, in each neighborhood or community. But these organizations also play other significant
roles in politics, economics, social welfare, and cultural development. The multifaceted nature of spiritual organizations encompasses all spheres of life and society.
Since ancient times, temples were the centers of economic and social activities; modern spiritual organizations are also involved in heavy business enterprises, many
operating with their
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own sophisticated telecommunications systems around the globe and with their own shares in stock markets.
Organizations as Political Institutions
All organizations—public, private, and nonprofit—are involved in politics and political processes and activities. Indeed, all organizations may be considered political
institutions, for they all perform political functions in one way or another. Internal politics, group politics, interorganizational politics, bureaucratic politics, interest group
politics, policy politics, personal politics, and partisan politics are common to most organizations. Contrary to the view of the traditional, purely rational theories of
organizations (Taylor, 1911, 1947; Weber, 1947; Gulick and Urwick, 1937; Simon, 1976; and others), organizations of modern society are not apolitical, and their
political nature is explained by many activities that directly or indirectly relate to the political processes, domestically or internationally. Among the public, governmental
organizations, variations may be found from militarysecurity and foreignrelations organizations to the presidential offices and the legislature to social services and
similar organizations; all are political institutions. Similarly, privatesector organizations, particularly giant corporations, are involved in various forms of local, national,
and international politics. Local politics is heavily influenced and shaped by the business community. Similar, but perhaps a stronger, influence is exercised by large
organizations at the national and international level. The same may also be said about the forprofit business and nonprofit organizations. Barry Bozeman (1987) argues
that “all organizations are public” because they all perform public functions and use public funds. Robert Miles (1980:157) argues that organizational politics and power
compose one of the two major realities of the “dual organizational life.” As he put it, “purely rational conditions rarely obtain’’ (157).
Indeed, all organizations are involved in one way or another in political socialization, in ideological promotion of the political system in which they operate, in political
mobilization for governmental actions, and in the promotion of political symbols serving system maintenance. In cases of hostility with another nation, they play a
mobilization role. Organizations also collect individual taxes for the government, gather intelligence and information about individual members, and report undesirable
citizens to authorities. Multinational and transnational organizations also play a formidable role in foreign relations and in international politics; they become virtual
extensions of their own governments, and, when faced with a challenge from the indigenous forces of a country in which they operate, they play a formidable role in
suppressing or eliminating those forces. Chile under Salvador Allende in the 1970s and Iran under the Premier Mosaddegh in the 1950s—both legitimate and
democratically elected govern
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ments—are but two examples (for more on this, see Morgan, 1986). In these cases, General Motors, International Telephone and Telegraph (ITT), and the British Oil
Company played fundamental roles in bringing down, through military coups d’état, the legitimate, democratically elected governments and replaced them with absolute
dictatorships of Augusto Pinochet and the Shah. The first was removed in 1991, while the second ruled for over two decades until his removal by a bloody revolution in
1978.
Organizations as Instruments of System Maintenance and Enhancement
Following the above discussion, all organizations are also involved in some way in activities of not only maintaining but also enhancing the political, economic, and social
systems in which they operate. This is done in many ways, including member socialization, promotion of nationalistic or patriotic ideas, propaganda activities, social and
political mobilization in support of government policy, and usage of political symbols like flags showing support for those systems (e.g., “Support Our Troops” bumper
stickers). Even purely rational organizations may also engage in antiforeign political activities by firing and discriminating against their employees of foreign origin. The
Japanbashing activities of many business organizations in the United States during 1991–1992 are a recent example, not to mention the privatesector organizations’
full cooperation with the government in detention of the JapaneseAmerican citizens during World War II.
The system maintenance and enhancement activities of organizations, including religious organizations, are common to almost all organizations. Organizations that are
not involved in such activities either never get licensed or, once in existence, may face termination. Any system is concerned with its survival and maintenance and,
therefore, is likely to use any measure to enhance itself. Modern organizations of all types are involved in such functional activities. Churches and schools play a major
role in citizens’ socialization and political indoctrination in the neighborhood and perform a watchdog function for the authorities, but larger organizations in public,
private, and nonprofit sectors also provide jobs and opportunities for social mobility, keep people busy, and promote the system of which they are a part. Obviously,
systemchallenging organizations are outlawed and illegal to operate in most societies, and in cases of some democracies where tolerance is exercised, their activities
are closely monitored. Even organizations involving sports, entertainment, academia, and the media are involved in the political processes of every nation; they are as
political as they are businesslike. Political neutrality is rare among organizations.
Organizations as Change Agents
The role organizations play in social, economic, cultural, and political changes is significant, though some bureaucratic organizations act more as
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conservers or preservers than as promoters of change. But many also resist change. Nevertheless, the organizational role in implementing reforms and changes in
various societies is fundamental, for organizations possess mass capacity and expertise that make them indispensable. Large corporations change our daily life habits
and present us with new ways of living, but many people have almost no say in these changes. For example, media networks change people’s attitudes, Hollywood’s
entertainment organizations inject new cultural values into society, and universities promote the extent of our knowledge about phenomena with deliberately organized
functional orientations.
Organizations as Culture and Counterculture
Art, music, and other cultureoriented organizations are not the only organizations that promote, change, and reshape specific cultural norms and values in society.
Indeed, all organizations produce and promote two types of culture. One is the general cultural values that are shared by the society, whose citizens acquire them
through family and school socialization processes; these values are reinforced by all types of organizations. The second type of culture is the purely organizational or
bureaucratic culture that generally contradicts the popular culture of the society.
The organizational or bureaucratic culture is different and separate from the popular culture in that it produces an entirely different system of norms, values, and rules
that may alienate the general populace. They are not reflective of the popular culture, contrary to the claims made by some theorists (Ott, 1989). And a truly
representative bureaucracy may be more an illusion than a reality, for bureaucracies, once established, have a tendency to develop their own identities with distinct
cultural values and norms that are different from those of the general public and society. Their elite orientations create a gap between the mass culture and bureaucratic
culture. Indeed, the general public is generally suspicious of the bureaucratic culture, and in some societies it is considered an instrument of political rule and is,
therefore, resented by citizens (Farazmand, 1989, 1991; Rosenbloom, 1989). Therefore, the organizational or bureaucratic culture may be considered a
“counterculture” working against and gradually changing the popular culture (Farazmand, 1989). This seems to be already happening around the globe (Scott and Hart,
1989; Shaiken, 1986).
Organizations as Tools of Policy Implementation
Organizations are the best tools for policy implementation, and to Max Weber (1947), bureaucracy is the most efficient type of organization for decision
implementation. Organizations are rational while individuals are not or are significantly less so (Simon, 1976). People in organizations are locked into roles that are more
or less defined from an instrumentally ra
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tional perspective. Individual personality is expected to be left behind when entering an organizational role (Barnard, 1968). Organizations also provide stability and
predictability, and they can be dependable for their actions; individuals may not (see Chapters 2 and 3 for more details on this).
Organizations as Tools of Development
Organizational functions in implementing developmental policies and programs are imperative everywhere. In developing countries, public and private organizations are
heavily involved in massive developmental projects and programs. Similarly, in advanced, developed societies the continuing role that private and public organizations
play together in advancing science, technology, and other aspects of life is highly significant. Through organizational processes, new progress is made every day that
benefits humanity. But organizations may also be antidevelopmental.
Organizations as Destructive Forces
Organizations may be considered destructive. In their processes of development and progress, many of them may also inflict heavy costs on societies and human lives.
Environmental pollution, workrelated casualties, and other healthrelated problems are but a few examples. The military and civilian organizations that are involved in
the business of national defense are potentially destructive to other nations; weapons are produced to be used, not to play with. Generally, military organizations are in
the business of destruction, not construction, though they may also provide jobs and contribute to statebuilding and the economic growth of a nation.
Organizations as Instruments of Repression and Domination
Organizations, particularly security and military ones, are dominant in many societies considered repressive. As instruments of repressive rule in a dictatorship, or even
in some democracies, the role these organizations play in controlling and dominating people and violating their individual rights and liberties is common around the
world. Every political system is concerned with its maintenance and has, therefore, at its disposal organizations to deal with opposition and challengers of the system. In
some societies, however, organizations play more repressive and dominating roles than that of service delivery. Most developing and underdeveloped societies
experience this bitter trend as a rule.
Organizations may also be viewed as instruments of class rule and exploitation. The radical view of class exploitation under capitalism is not exclusive to Marxism.
The idea that organizations enrich the upper, ruling
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class of capitalists who own, control, and dominate modern organizations is shared by many nonMarxists.
Organizations as Alienators
By virtue of their hierarchical nature and their power orientations, modern organizations may also be considered alienating and as generating inequality. Individuals are
increasingly becoming cogs in the system that, because of increasing bureaucratization, is not conducive to individual growth and fulfillment of personal life (Denhardt,
1981; Hummel, 1976). Hierarchy generates inequality, as major work decisions are made not by workers and employees who implement them but by those at higher
levels to which the ordinary organizational members do not have access (Thayer, 1981; Harmon, 1981).
Organizations as TensionManagement Systems
The tensions that arise as a result of the major gaps that exist between individual goals and expectations and organizational goals are fundamental concerns in the
management of modern society in which the conflict between worker and organization is inevitable. Chris Argyris (1962) calls this an incompatibility gap that is
permanent but should be closed by integrating the two. But the radical view of Marxists also tends to relate this problem to capitalism in which organizations are,
according to their view, both alienating and repressive.
Organizations, therefore, play a major role in managing tensions between management and workers. Cooperation is constrained by the fundamental differences and
conflicts that naturally develop between management seeking maximum efficiency and productivity, on the one hand, and labor seeking job satisfaction, individual
development, and personal growth, on the other (Argyris, 1962; Tausky, 1970). Organizations also manage the social class tensions that arise between the rich and the
poor and between the working class and the capitalist and managerial classes (Fischer, 1984; Clawson, 1980).
Organizations as Threats to Individual Rights
Organizations, particularly large ones, have a tendency to dominate societies. People working in organizations are forced to give up some of their individual rights of
freedom of speech, personal appearance (in the public sector), associations, and so on. While members of public organizations in some democratic societies enjoy
greater individual rights than in most other societies, the private sector corporate organizations actually hinder such rights, except for freedom of association. In fact, by
merely joining an
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organization, an individual’s rights are limited and controlled by the new organizational rules, values, and norms that govern organizational life and must be observed by
the members. Once in organizations, people are no longer free individuals, for organizational role expectations lock them into impersonal positions of “office” governed
by hierarchy, formal rules, regulations, and procedures (Weber, 1947; Hummel, 1976; Rosenbloom, 1989).
Organizations as the Administrative State of Governance
Organizational societies are administered by a professional, managerial class as well as being ruled by the more affluent elite. The modern state has become increasingly
administrative in terms of structure, functions, and processes. The structure integrates the web system consisting of the public, private, and nonprofit sectors. Despite its
seeming decentralization, the structure is centralized and concentrated. The corporate sector and the government work together in a partnership. They have little
incongruencies at the top where strategic alliance is achieved through ‘‘iron triangles” and other interestbased arrangement networks. The functions and processes are
carried out in relative harmony, although the state sector may at times intrude into corporatesector organizations’ operations.
Not only are the public, governmental organizations or public bureaucracies a major part of the administrative state, but private, corporate organizations and many
nonprofit organizations may also be considered an integral part of it. The administrative state of modern governance administers societal affairs—economics, finance,
politics, business, industries, commerce, and so on—and regulates human lives; it is also in the business of managing and controlling people. While public organizations
of the administrative state are directly involved in such functions, the corporatesector organizations and many nonprofit organizations—like universities and hospitals—
perform similar functions for the state; they also receive protection from the administrative state.
The administrative state grew large everywhere, and its power and politics affected every aspect of life and society for decades in the twentieth century. However,
the recent bureaucracybashing and antiadministrative state by an array of forces from conservative politicians to academics has resulted in a significant diminution and
crisis in the administrative state and publicsector institutions worldwide. Today, the changed—in structure and process—administrative state has become an aggressive
instrument of the corporate welfare state, and its new militaristic and policing characters have become more intrusive and repressive to individual citizens and
organizational members alike. With the growth of sweeping privatization around the world, the shrunken administrative state has changed from its former broad public
interest service orientation to a noncivil, security
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policing orientation, reducing its primary role to system maintenance and the maintenance of social control.
Organizations as Instruments of Globalization
Globalization is a phenomenon that is not new; it has been around for many decades, even a century. However, what is new is the rapidity and accelerated rate of
surplus accumulation of capital in the globalizing world of capitalism, aided by leaping advancement in technological innovations. Globalization is a process through
which worldwide integration and transcendence take place. Globalization is the hallmark of the rapturing changes that are affecting lives, systems, and organizations
worldwide and causing chaotic consequences for society and people locally, nationally, and globally. These rapturing changes are qualitative and produce
megaparadigmatic patterns with a high qualitative power. Globalization is producing numerous quantitative changes around the world with massive uncertainty,
unpredictability, and instability in and out of organizations. However, as discussed in Chapter 3, many of these quantitative as well as qualitative changes associated with
globalization of capital are deliberate human designs of the globalizing corporate elites (Farazmand, 2002a, 2002b).
Elsewhere (Farazmand, 1999), I have discussed in detail the causes and consequences of globalization with implications for public administration, accountability, and
organizations (see also Farazmand, 1994). Globalization of capitalism has changed the structure, processes, and values of modern organizations, hence ushering in new
institutional mechanisms for rapid accumulation of capital worldwide. Some of these global organizational theories and behaviors include global centralization of
economic, political, and administrative powers concentrated in the hands of a few globalizing corporate elites; centralization of globalizing organizations’ structures and
values while diversifying and decentralizing the processes of organizational actions to facilitate global surplus accumulation; overcentralization of political and
administrative powers under the new hegemonic world order dominated by the United States and its European allies; standardization of globally directed and controlled
operational procedures; convergence of ethnic and national cultures of nations and peoples around the world into the Western globalizing culture of selfinterested
corporate capitalism; disempowerment of people and members of organizations around the world while at the same time raising the slogans of empowerment and
decentralization; and conformity to global corporate organizational rules in the midst of rhetorical organizational diversity.
In this global environment, organizations of modern society are transformed into instruments of surplus accumulation of capital, worldwide integration of cultures,
nationstates, and value systems into a global “corpocracy” instead of promoting democracy. Under the global corpocracy, a
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few superwealthy corporate elites hold and manipulate economic and political powers and dictate organizational, administrative, and policy choices to citizens, groups,
and nationstates. Corpocracy is rule by the few powerful rich over mass citizens (Parenti, 1995) while democracy is rule by the majority of ordinary people with
respect for the minority rights (Waldo, 1980). Corpocracy is plutocracy, or rule of the rich.
Under globalization, corpocracy has replaced democracy, and privatization has replaced or shrunk the “public sphere” in favor of corpocratic surplus accumulation
of capital and is paving the road to global serfdom. It is also producing the epic of a new global totalitarianism in the name of marketoriented reform, freedom of
choice, and organizational flexibility. While this may be true for the few monied elites, the reality speaks of the opposite for billions of people as well as most nation
states around the globe. Modern organizations have become powerful instruments of globalization, and they have to be watched closely and carefully, locally and
globally. Under globalization, many if not most privatesector organizations are no longer independent or local/national organizations; they may be viewed as global and
globally motivated, directed, and managed for rapid profit accumulation.
Similarly, public, and many nonprofit, organizations may be viewed as powerful instruments of globalization facilitating the process of capital accumulation. They are
in the service of global elites who are organizing, reorganizing, downsizing, and transforming public and nonprofit organizations into profitmaximizing machines and
ordermaintenance institutions. Modern organizations have entered a new age of historical development.
PLAN OF THE BOOK
This book is divided into three parts and ten chapters. Part I deals with some of the major theoretical and conceptual perspectives on modern organizations. It presents
chapters on the diverse and interdisciplinary nature of the field of organization theory. In Chapter 1, Nicholas Henry presents a discussion of public, nonprofit, and
private organizations, their differences and similarities. This is a new chapter that was missing in the first edition. In Chapter 2, Ali Farazmand presents a long overview
of many of the theories on organization with appraisals and with implications for society, management, and individuals. Discussions include organization theory from pre
classical Marxist theory to classical to contemporary theories of market to critical and interpretive theories.
Chapter 3, by Ali Farazmand, is an analysis of some emergent theories of organization, including, especially, an extensive analysis of institutional theories and the
brand new, chaos and transformation theories with implications for world systems and organization theories. Chapter 4, by Ali
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Farazmand, is a full presentation of the new, original theory of organizational elite. Both this chapter and the chaos and transformation theories, as well as a major part
of the institutional theories of the previous chapter are original contributions of the contributing author and editor to modern organization theory; they are new materials
in the second edition. Together, these four chapters, plus the introductory chapter present the full range of theoretical perspectives on modern organizations.
Part II deals with some major issues of organizational design, reorganization of governance, change, and administrative reforms currently in process around the
world. Chapter 5, by Charles Wise, is an analysis of the organizational configuration of public organizations into a pluralistic public service delivery system. Guy Peters
presents a theoretical analysis of government reorganization, reform, and change in Chapter 6.
Part III presents some central issues and critical perspectives on organizational theory and practice, on the relationships between organizations and individuals with
implications for administrative theory and fulfillment of human life. Chapter 7, by Sally Coleman Selden and Frank Selden, presents a discussion of diversity in public
organizations, followed by an interesting presentation by Michael Klausner and Mary Ann Groves on organizational socialization and culture in Chapter 8. In Chapter 9,
Robert Golembiewski analyzes the negative sideeffects of organizational membership in terms of phases of burnout that individuals may experience in modern
organizations; we need to be aware of what organizations can do to our health. It is followed by the concluding chapter, Chapter 10, on the “unfinished revolution”
about God, Science, and administrative theory. Here, Frederick Thayer presents a thought provoking, critical analysis of the analogies that may be found among those
practicing management, those involved in the discovery and application of scientific knowledge, and those exercising God’s authority on earth.
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Farazmand, Ali (1989). The state, bureaucracy, and revolution in modern Iran: Agrarian reforms and regime politics. New York: Praeger.
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Ott, J. Steven (1989). The organizational culture perspective. Chicago: Dorsey Press.
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Taylor, Frederick W. (1911). The principles of scientific management. New York: Harper & Row.
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Part I
Society and Modern Organizations
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Chapter 1
Public, Nonprofit, and Private Organizations: Similarities and Differences
Nicholas Henry
To paraphrase Wallace Sayre’s immortal line, public organizations are similar to private organizations in all unimportant respects. Increasingly, organization theorists are
writing empirical, and even useful, analyses of the differences between organizations found in the public sphere (that is, government agencies, public authorities, and
nonprofit organizations) and those in the private one (that is, forprofit organizations). To a degree larger than we public administrationists may be comfortable with, this
is new.
In this chapter, we highlight some of the more intriguing findings lurking in the literature on public versus private organizations. This review is potentially helpful to
those who find themselves in organizations (that is, almost everyone), whether public or private, because it can yield the reader at least some limited predictability about
one’s organizational lot. To know what is likely to happen in a public organization or a private one—because they are public or private—can render an administrator
more savvy and effective in either.
Our review begins with the individual organizational member—or, more precisely, premember—and accretes to the point of largescale organizational change.
Specifically, we shall discuss the differences between public and private organizations in terms of the motivations of people to join them, the kinds of satisfaction that
people derive from them, the ways decisions are made in them, the ways they are managed, and the ways organizations in each sector change.
MOTIVATING MANAGERS: PUBLIC VERSUS PRIVATE
Public administrators have a quite different set of motivations than do their commercial counterparts. One of the earliest students of these differ
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ences contrasted federal managers with those in business and concluded that middle managers in the federal service had higher needs for achievement than did their
privatesector colleagues (a finding that runs directly counter to the popular stereotype of lethargic government bureaucrats), about the same needs for power as
business managers, and lower affiliation needs (that is, their concern with acceptance or rejection by their colleagues) (Guyot, 1962). Later research largely supports
these findings (Rawls, Ulrich, and Nelson, 1975; Schmidt and Posner, 1987); one study of graduating college students found that those students entering the nonprofit
sector had a stronger motivation to dominate, were less rigid, and had a higher need for status and lower needs for wealth than students entering the forprofit sector
(Rawls and Nelson, 1975). In fact, a study of local employees found ‘‘evidence to question the use of monetary incentive systems as the primary way to motivate
public employees, especially at the senior level” (Lion and Nyhan, 1994:112).
Most of this chapter concurs that public managers, as compared to comparable groups in business, give lower ratings to the importance of high financial rewards as
career goals and higher ratings to the importance of worthwhile social or public service (Rainey, 1982; Wittmer, 1991). These are the most consistent conclusions of
this research.
Most of the studies also agree that “public employees have greater securityseeking tendencies than private employees” (Baldwin, 1990–1991:7). There are a
couple of significant exceptions to this generalization, however. For one, the higher that one rises in the governmental hierarchy the less security seems to be a concern
(Hartman and Weber, 1980). For another, whereas a high need for security might apply to government employees, it does not seem to pertain to the employees of
other publicsector organizations, notably those in nongovernmental, notforprofit organizations. When these workers are taken into account, the “stereotype that
public employees are preoccupied with job security is not supported.... On the contrary, the data indicates that private managers, to a statistically significant degree,
rate job security as more important” (Wittmer, 1991). Despite these differences in motivation among administrators in the two sectors, however, both groups work
equally hard (Rainey, 1983; U.S. Office of Personnel Management, 1979). “The findings...donotindicate a terrible malaise in the public sector if the private sector is
used as a baseline” (Rainey, Traut, and Blunt, 1985:9).
SATISFYING ADMINISTRATORS: PUBLIC VERSUS PRIVATE
Just as differing motivations account for a person’s decision to enter the public sector or private one, so it is that, once employed in one sector or the other, people
derive satisfaction from their work for differing reasons.
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Research has found that, although employees in both sectors emphasized intrinsic, or motivator, factors in deriving satisfaction from their work (such as opportunities
for growth and attaining goals), public employees “tended to value the extrinsic, or hygienic, factors [such as relations with coworkers, working conditions, and
organizational policies] significantly higher than those in the private sector” (Maidani, 1991:441). More focused study supports the idea that public administrators gain
considerably higher levels of satisfaction from a “sense of being able to make a difference in what gets done in their organizations” than do private managers (Falcone,
1991:394).
Most research, however, suggests that, although the gap may be narrowing over time (Schneider and Vaught, 1993), public administrators are dissatisfied compared
to private managers. Polls taken of public administrators and private managers indicate that public administrators are much less likely to feel that pay in their
organizations depends upon performance, and that their own pay represents a reward for good performance. Public managers generally express feelings that they have
less security, less autonomy, and are less “selfactualized” than are managers in the private sector (Buchanan, 1975a, 1975b; Paine, Carroll, and Leete, 1966; Porter
and Lawler, 1968; Rainey, Traut, and Blunt, 1985, 1986; Rinehart et al., 1969).
Although much of the research indicates that many public administrators experience less satisfaction with work than do most private administrators, there are some
significant exceptions to this generalization. For example, it has been found that, while college graduates and certain kinds of publicsector professionals were less
satisfied with their work than were their counterparts in the private sector, federal executives were quite comparable to business executives in terms of job satisfaction
(Kilpatrick, Cummings, and Jennings, 1964). Blue collar workers in the public sector appear to be more satisfied with most of their work than are blue collar workers
in the private sector. White collar publicsector workers are much less satisfied with coworkers and supervision and show less interest in their work than do their
counterparts in business (Smith and Nock, 1980).
Level of American government may also make a difference. State workers, for example, may be more satisfied with their work than are both their corporate and
federal counterparts (Rainey, 1979). But perhaps the most intriguing finding is that local administrators seem to defy most consistently the despondency found among
federal managers when compared with executives in the corporate sector. In a study of three different surveys taken of private sector managers, federal career
executives, and city managers in California, the differences among the three sets of respondents were stunning. Nearly threefourths (72 percent) of the federal
executives stated that they did not feel that they would ever fulfill their life’s ambition, compared to only 17 percent of the city managers and 18 percent of the private
sector administrators. City managers and privatesector executives were upbeat
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about economic, social, and political trends, and their own futures; both city managers and privatesector executives were consistently more optimistic on all these
variables than were federal administrators. Twothirds of the city managers would advise bright young people to seek careers in local government, but less than a fourth
of federal executives would counsel bright young people to seek careers in the federal government (Schmidt and Posner, 1987).
Before closing this discussion, we should note that “job satisfaction” is a hugely studied topic in organizational research, but one that is notably illdefined. One
review (Locke, 1983) of some 3,500 analyses of job satisfaction concluded that researchers had not come to any clear agreement about what job satisfaction even
meant! So any generalizations about how satisfied employees in the public sector are with their jobs should be made with caution.
In sum, public administrators seem to be more frustrated in their work than are their colleagues in private companies. Their dissatisfaction may be a consequence of
uniquely high psychological needs among public administrators for achievement and status, as the research indicates, relative to private managers, or their dissatisfaction
may be attributable to objective reality: the low levels of their satisfaction, which seem to concentrate in the areas of promotions and rewards for work well done,
“could simply reflect more stringent norms or expectations among government managers’’ of their colleagues than are held by corporate executives (Perry and Porter,
1982:96).
DECISION MAKING IN ORGANIZATIONS: PUBLIC VERSUS PRIVATE
An important component of one’s satisfaction in an organization often is one’s sense of (to employ a modish word) “empowerment,” and the essential expression of
anyone’s empowerment is making decisions. Unsurprisingly, perhaps, knowledge of financial performance is more important to decision makers in the private sector
than in the public sector (Solomon, 1986; Schwenk, 1990), but deeper differences exist, too. Decision making is less autonomous than in the private sector (Buchanan,
1975a; Gawthrop, 1971; Mainzer, 1973), and procedures are more constricting (Holdaway et al., 1975; Mainzer, 1973; Millett, 1966). Professionals who have
served in both the public and private sectors at high levels note that legislators (who are the equivalent of board directors in the business world) are less likely to concur
with public administrators on organizational objectives, are less informed on issues, and are less consistent in dealing with public executives and constituents than are
board members (Rumsfeld, 1979; Weiss, 1974). Such phenomena have a distinct impact on the decisionmaking process of public organizations and require that
decision makers be more aware of
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their “image management,” deal with vastly more complexities and participants, and have a broader scope of decision; as a consequence, decision making in the public
sector is slower than in the private sector (Dahl and Lindblom, 1953; Golembiewski, 1985).
In one of the larger empirical studies of public and private decision making, it was found that decision makers in public organizations did not necessarily make
decisions slowly as a conscious act, but there seemed to be a clear tendency toward a “vortexsporadic” style of decision, by which was meant that decision makers in
public organizations tended to intermittently swirl through a series of intense meetings and conversations with each other when making decisions. This study of thirty
British public and private service and manufacturing organizations also found that decision makers in public organizations were much more likely than those in private
organizations to engage in more interaction with other members of the organization when making decisions (Hickson, Butler, Cray, and Wilson, 1986).
A survey of over 200 ‘‘upper managers” in thirtynine public and private organizations in Syracuse, New York, substantiated the findings of other studies that
decision making is more participative and sporadic in the public sector than in the private sector: “publicness is associated with greater decision participation but not
smoothness” (Coursey and Bozeman, 1990:525). Another study found a much greater tendency among notforprofit organizations to “recycle” decisions back to
earlier stages in the process, supporting the observation that decision making in the public sector involves far more “steps” than in the private sector (Schwenk, 1990).
Another analysis based on the Syracuse data was more explicit: “The image of public organizations that emerges is one of little organizational coherence in the
identification of strategic decisions. In addition, the ability of toplevel managers to control the decisions and actions of their organizations is called into question.”
Whether the sector is public or private “creates substantive differences” in decisionmaking (Kingsley and Reed, 1991:409).
One difference is the role of conflict. Research on forty executives in forprofit and notforprofit organizations (Schwenk, 1990) found that executives in both types
of organizations found conflict to be unpleasant, but the forprofit executives found conflict to be more unpleasant than their notforprofit counterparts. Forprofit
executives were more likely to believe that conflict resulted in decisions of poorer quality, whereas notforprofit executives thought just the opposite—that conflict
defined issues more sharply and therefore produced better decisions! In addition, conflict emerged earlier in the decisionmaking process in notforprofit organizations
than it did in forprofit ones.
In the public sector, organizational decision making is rougher, broader, and slower than it is in the private sector.
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MANAGING ORGANIZATIONS: PUBLIC VERSUS PRIVATE
These unique characteristics of publicsector decision making translate into a unique style of management. Administration, of course, involves people and forces
“outside” the organization (that is, in the organization’s task environment), as well as “inside” the organization, and we consider these in turn.
The Heavy Hand of Constituents
Public managers are faced with “accomplishing” enormously complex but illdefined objectives. Goals are vague, and public organizations are appropriately sprawling
as structures meant to achieve the vagaries of large organizational missions; judging organizational effectiveness, as a result, is difficult. These unique problems of
management in public organizations are attributable to forces in their highly politicized task environments, such as legislatures, pressure groups, and elected chief
executives, that constantly try to use public organizations for political as well as programmatic, economic, and social purposes (Eling, 1983; Kaufman, 1981; Lynn,
1981; Ripley and Franklin, 1975).
As a result, caution prevails, and innovation is less likely (Schultze, 1970; Golembiewski, 1985). Studies have found that public executives spend considerably more
time in contact with outside groups than do top administrators in the private sector. Moreover, the style of interaction that the public manager has with external interest
groups is far more formal, as well as more frequent, than is the style of privatesector managers (Kurke and Aldrich, 1983; Mintzberg, 1979).
There is also a greater sensitivity to clientele groups displayed by public managers relative to private managers. One review of the findings on this topic concluded
that, “the ‘insensitive’ stereotype [of public administrators] typically evokes images of public employees who are uncaring, inflexible . . . and generally inept in dealing
with the public. Although the numerous findings related to this image are generally mixed, the modal finding indicates that public employees are more sensitive than
private employees. [Overall, this research shows that] public employees value qualities associated with sensitivity, empathy, broad mindedness, good interpersonal
relations, forgiveness, politeness, helpfulness—more than or equal to private employees” (Baldwin, 1990–1991:9).
The Slippery Slope of Stakeholders
Just as administration that is oriented to ‘‘external” clienteles in public organizations differs from that of private organizations, so it is that administration which is directed
to “internal” organizational affairs is differ
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ent in public organizations. For example, delegating authority to subordinates and controlling the behavior of subordinates are more difficult in the public sector than in
the private one, (Golembiewski, 1969; Macy, 1972; Meyer, 1972; Rumsfeld, 1979), in part because public executives are allowed to select significantly fewer of their
own subordinates than are corporate business executives, but also because subordinates often can develop allies to assist them in undermining their superiors in the
highly politicized task environment outside in which agencies function.
One kind of organizational ally, and one who, in contrast to the type just described, is wholly positive is the mentor, or an experienced member of the organization
who takes a younger member under his or her wing. In a comparison of mentoring in public and private organizations (Henderson, 1985), it was found that public
administrators were more likely than were their counterparts in the private sector to find a mentor outside of the organization in which they worked; often, the mentor of
a young public administrator is a former professor. Public administrators also are less likely than their private counterparts to find mentors at the top rungs of the
organization, a condition that may reflect the relatively frequent turnover of top political executives. Both public and private administrators, however, found the influence
of mentors on their career development to be “substantial,” and one study of Senior Executive Service of the U.S. government concluded that these top federal
administrators believed their early mentors to have been central to their professional success (Little, 1991). Research on mentoring in county government found that
“emotional support, access, and feedback are critical dimensions” of mentoring in public administration (Altmeyer, Prather, and Thombs, 1994:387). Women and men
seem to be equally talented at mentoring and mentor at roughly the same rates (Ragins and Scandura, 1994).
On a wider scale, it also appears that priority setting and planning—basic tasks of administration—differ dramatically in the public sector. Planning and setting
priorities are considerably harder because of unfocused organizational goals and higher turnover among top executives (Buchanan, 1975a; Gawthrop, 1969).
These difficulties are compounded by a more complex work situation that is unique to public organizations. A study of toplevel data managers concluded that data
managers in the public sector had to deal with “greater levels of interdependence across organizational boundaries...higher levels of redtape...[and] more procedural
steps for a specific management action’’ than did those in the private sector (Bretschneider, 1990:537).
These complexities of working life in the public sphere, and the relatively straightforward realities of working in the private one, seem to result in polar opposites in
defining just what effective administration is in each sector! One study of executive work behavior compared managers in city governments with managers in industry
and concluded that the public man
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agers had little control over how they used their time and thus accorded scant effort to “time management,” relative to the corporate managers. Urban managers were
considerably more beset by forces in their organizations’ task environments than were private ones; they spent less time alone in their offices, less time on planning,
were more “rushed” to get things done, and spent nearly twice as much time on the telephone than did corporate managers (Porter and Van Maanen, 1970). Similar
research has found that public managers devote far more time to crisis management than do the private managers (Lau, Pavett, and Newman, 1980).
More significantly, effective managers display quite different work behaviors depending on whether they work in the public or private sectors. More effective public
administrators are more flexible, planned less, and have less control over their time than do industrial managers. Less effective public administrators spend more time on
planning their time than do the more effective public managers, but quite the reverse holds true in the private sector: less effective private managers spend less time
planning their time than do more effective private managers (Porter and Van Maanen, 1970).
Because public administrators must deal with a more intrusive and politicized environment than private managers, both the nature of their work and the evaluation of
their performance differ. One study concluded that private managers outperformed public administrators when it came to expressing and achieving organizational goals,
in large part due to an absence of clear measures of performance (e.g., profits) for public administrators. Because private managers were able to define organizational
objectives more concretely than were public administrators, and because internal procedures in the companies studied were less subject to influence by outside interests
than in the government agencies, more strategic planning was made possible and used more frequently by corporate managers (Boyatzis, 1982).
CHANGING ORGANIZATIONS: PUBLIC VERSUS PRIVATE
Finally, we consider that largest of organizational phenomena: change itself. And even here, being in the public or private sphere makes a big difference.
Organizations change either because the people in them perceive that change is needed or because the environment objectively induces change. The latter
phenomenon is more common among public organizations.
Anthony Downs was among the first theoreticians to assess the impact of the public organization’s task environment on its structure. Downs suggested that
organizations deprived of free market conditions in their environments (such as public organizations) were more pressured to create additional layers of hierarchy than
were organizations that functioned in
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the marketplace. Because it was so much more difficult for public organizations to measure output than it was for private organizations (which had an “automatic”
measure of output called the profit margin), internal rules were needed to control expenditures, assure fair treatment of outside groups, and coordinate largescale
activities. The presence of these rules, in turn, demanded extensive internal monitoring to ensure compliance, and such monitoring meant more reports, and more
communication, and more checks. Thus, Downs’ “Law of Hierarchy’’ is a function of how an organization reacts to its task environment. Other theorists have
expounded on these ideas by explaining those elements in the environment that shape the internal structure of public organizations: legislatures may do so by statute;
accounting and budgeting bureaus may mandate highly bureaucratized recordkeeping procedures; interest groups may pressure for internal changes; and so forth
(Warwick, 1975).
A somewhat different view of the role that environmental factors play in the dynamics of public organizations also has surfaced. This perspective accepts that the task
environment has an unusually salient impact on public organizations, and that public organizations react to these impacts by “bureaucratizing”—that is, by adding on
increasingly complex mechanisms. However, such bureaucratization is not a sign of resistance to new demands from the environment but is instead one of eagerness to
accommodate those demands; “additional layers of hierarchy result in part from their openness to their environments” (Meyer, 1979:5). This is a more upbeat view, but
the consequence is the same: bureaucratization.
Whether the motivation is to resist or respond to demands from the task environment, bureaucratization of the public agency nevertheless is the result. Later, more
empirical research suggests that the two major environmental sources of “red tape” in public organizations are “external rules and laws concerning such functions as
personnel and procurement” (Rainey, Pandey, and Bozeman, 1995:567). How public administrators deal with this bureaucratization, however, differs from how their
counterparts in the private sector deal with it. This study of 566 top public and private managers (about evenly divided between the two types) found that both sets of
executives agree in roughly equal measure on the need to enforce rules but that public administrators were much more likely to believe that their agency’s rules resulted
in their professional performance being inadequately recognized and rewarded in terms of pay and promotion.
In sum, public organizations are pounded by a far heavier hand, in the form of their task environments, than are private ones, and this pounding has made public
organizations more bureaucratic—often in the worst sense of the word—than are private organizations. But other differences emerge from this pummeling, too,
including how public organizations deal with a “declining environment,” or an environment that threatens the future of the organization.
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A classic study of a university library that was in the process of administratively breaking down because of too many demands and not enough resources sheds some
light on how public organizations deal with increasingly harsh realities. The researcher wanted to know how an institution without the benefits of functioning in a free
market environment, where the price of the product could be raised to reduce demand, responded to environmental overload (Meier, 1963). He delineated fourteen
strategies used by such organizations to cope with rising levels of demand, including queuing (for example, keeping library patrons in waiting rooms “outside” the
organization), decentralizing (such as by creating branch offices), creation of a mobile reserve (such as teams of personnel transferable to units as needed), the setting of
specific performance standards followed immediately by a reduction of those standards, a “brainstorming” search for a “magic formula,” promotion of selfservice (for
example, letting patrons into the stacks, which is a radical strategy because it represents a deliberate reduction of organizational sovereignty), the limitation of work to
capacity as determined by rigid, ritualistic rules and characterized by the denial of error and the refusal of challenge (in other words, the kind of bureaucratization that
we associate with totalitarian political systems), and, ultimately, the dissolution of the organization.
The library, in a very real sense, had no choice but to play out this scenario. It did not have the control over demands from its environment that, say, International
Widget would have had. International Widget could simply hike the price of widgets and thereby reduce demand, or overload. But the library—and, presumably, any
public organization—did not have this option. It had to adjust internally.
One can infer from this case study that, as a declining environment forces public organizations to change, the organization’s response grows less rational, more
“bureaucratic,” and more negative as its environmental conditions worsen. More systematic research supports this conclusion. A survey of 1,312 administrators and
board chairs of small, independent colleges found ‘‘that as a college moved from moderate to severe decline it experienced a significant increase in five organizational
responses: (1) centralization of decision making, (2) no longterm planning, (3) high employee turnover, (4) resistance to change, and (5) loss of excess resources.”
Even slow growth, no growth, or moderate decline produces “the politicizing of the college’s climate” and an acceleration of “specialinterest group activity” (Sellars,
1994:13).
Nevertheless, it does appear that public organizations do find ways of dealing with a declining environment that private organizations seem unable to undertake. In a
fifteenyear study of the ten “provinces” of the largest religious order in the United States (the Jesuits), it was found that this public organization dealt with an
increasingly challenging environment by increasing cooperation among its provinces (or subunits) and placing a
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priority on the internal communication. “There is little reason to believe that this would have happened without the trigger of decline” (Ludwig, 1993:54).
This kind of interorganizational coordination does not appear to occur in privatesector organizations; at least one study has concluded, for example, that
cooperative, interorganizational “strategic capacity” in a hostile environment is essentially unobtainable to private firms (Harrigan, 1980).
But this possible advantage is not without its costs. The intensifying cooperation and expanding linkages among subunits within the organization renders the central
administrator’s role more complex and his or her power weaker: “the administrator’s role changes from autocrat to facilitator” (Ludwig, 1993:54). So, just as the
college library experienced a loss of organizational sovereignty when environmental overload swamped it, so the individual public administrator loses managerial
autonomy when interorganizational cooperation and information sharing is used as a strategy to cope with an environment which is growing more difficult for the
organization to thrive in.
ARE PUBLIC ORGANIZATIONS DIFFERENT?
We have contended in this chapter that the sector—public or private—in which an organization finds itself makes a big difference in how an organization and the people
in them behave. Traditionally, organization theorists, by and large, have rejected this distinction: ‘‘virtually all the major contributors to the field [of organization theory]
were conceived to apply broadly across all types of organizations, or in some cases to concentrate on industry...thedistinction between public and private organizations
receive short shrift. In some cases, the authors either clearly implied or aggressively asserted that their ideas applied to public, private, and other types of
organizations....Public organizations as a distinctive category receive sporadic, speculative attention, with the clear implication that their distinctiveness plays a minor role
compared to other influences” (Rainey, 1997:55).
Without doubt, the public/private distinction sometimes cloaks other kinds of organizational differences which function at a deeper level than society’s convenient but
shallow categories of “government” and “business.” For example, one study of how federal, stateandlocal, and private sector managers implemented policy found that
the state and local administrators and the private managers approached implementation in a fashion that was quite similar to each other, and that only the federal
administrators differed (McGowan, Spagnola, and Brannen, 1993)! The public/private distinction obviously did not explain these differences. Other research also has
found that the public/private distinction to be inadequate as an ex
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plaining variable in predicting organization behavior, and other dimensions, such as organizational scope and vulnerability to the task environment, may have greater
explanatory power (McKelvey, 1982; Pugh, Hickson, and Hinings, 1969). Admittedly, the public/private distinction sometimes is used as a “firstpass” that may not
always apply in every analysis; it may well veneer more profound and important realities; it is not perfect. But sector does seem to work rather well as an explanatory
variable—and a simple, understandable, and consistent one—in most cases.
So, yes, public organizations are different.
NOTE
Portions of this chapter are adapted from Nicholas Henry, Public Administration and Public Affairs, 7th ed. (Englewood Cliffs, NJ: PrenticeHall, 1999). © 1999. Adapted by
permission of Pearson Education, Inc., Upper Saddle River, NJ.
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Chapter 2
Organization Theory: From PreClassical to Contemporary and Critical
Theories—An Overview and Appraisal
Ali Farazmand
INTRODUCTION
Modern organizations are complex, and understanding this complexity requires advanced knowledge and experience. Knowledge about organization theory and
behavior is abundant, but the field is still developing with advancements being made in various dimensions and with significant implications for public administration and
management. Theories attempting to explain organizations and to predict their future actions or behaviors have proliferated with applications in public and private
sectors around the globe. Theories simplify, and by simplification we attempt to bring phenomena under a focused lens to see and understand them better. Theories,
then, like models, serve to explain and help us understand what happens in our surrounding world. They claim to represent reality, or they are ‘‘interpretations of
reality” (Morgan, 1986:12).
But simplification may also pose a danger of biased frame of mind to the exclusion of unfavored or disliked phenomena. Consequently, generalizations about reality
may in fact turn out to be unrealistic. As Charles Perrow (1979, 1986) argues, over the past seventy years theories of organization have produced realities that do not
exist (cited in Fischer and Sirianni, 1984:4). Thus, what is seen as a reality may be a social creation of reality and, hence, a false consciousness of reality. True reality
may require critical and interpretive thinking, a process of maturation and development that enables us to see and understand phenomena in our surrounding
environment. Organizations play a fundamental role in the creation of social reality. And the larger and more powerful the organizations are, the greater the possibility of
planned, goaldirected, strategic organizational actions
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that not only influence the surrounding environment but alter them altogether. The role of the giant organizations and multinational corporations, backed by their
supportive political and militarysecurity organizations of powerful states, is so formidable that few if any can escape their effects (Perrow, 1979, 1986; Morgan, 1986;
Scott and Hart, 1989). Bertram Gross (1980) has called this new trend of large, centralized organizational pervasiveness and the rise of bureaucratic capitalism
“friendly fascism,” with its principal agent “the organization man” (Whyte, 1957) “replacing the freemarket entrepreneur, yet we are still guided by free market
capitalism” (Fischer and Sirianni, 1984:3).
Organization theory is a fastgrowing and fascinating field that is multidisciplinary or interdisciplinary in nature. Contributions have come from such diverse fields or
disciplines as sociology, cultural anthropology, biology, psychology, management, political science, and public administration. Research on aspects of organizations has
focused on different levels of analysis. Micro, macro, and meso or inbetween levels of analysis have been used to explain the complexity, ambiguity, and paradoxical
nature of organizations. At the macro level an organization is analyzed as a whole and in relation to the outside environment, while the micro analysis deals with issues
and aspects concerning individuals and tasks within organizations and in connection with each other. At the meso or inbetween level, the groups and their various
aspects are analyzed. Different approaches to analyzing organizations have produced different perspectives and images, and together they have contributed significantly
to our knowledge about organizations, their nature, their actions, and their inactions—hence, organization theory.
Most theories developed so far about organizations have had a managerial ideology or bias; that is, they have been developed for managerial implications. Few
theories have been advanced that are either critical of the managerial biases or attempt to explain the other side of organizations—that is, the individual side and what
organizations do to society and people. Critical theories are among the latter, which originate in the grand works of John Stuart Mill, Gaetano Mosca, Robert Michels,
Emanuel Kant, Karl Marx, and Max Weber, and some others like Jean Paul Sartre. Some of the more wellknown organization theories that are treated in this chapter
include classical or formal theory, also called functional/structural theory; neoclassical decision theory; behavioral theory; systems theory; contingency theory; market
and transactioncost theories; agency theory; informal theories; organizational humanism theories; populationecology theory; critical and interpretive theories; Marxist
theory and Marx’s alienation theory; Habermas’ neoMarxist theory; and nonMarxist theories of natural selection, integrative, and nonhierarchical models. Other
wellknown and emergent theories presented in the following chapters include garbagecan theory; institutional and neoinstitutional theories; chaos and
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transformation theories; and organizational elite theory. The following is a synoptic view of the theories, presented in the current chapter, of modern organization with
implications for three groups: managers, individuals (both organizational members and citizens outside organizations), and society. Discussion of each theory is followed
by a brief critique.
MARXIST AND NEOMARXIST THEORY
Although known mostly for his philosophical and revolutionary theories of economic and political systems, Karl Marx (1818–1883) had perspectives and views on
organization theory and social action that are impossible to ignore in any major social science discussion. In organization theory Marx’s views have powerful
implications for administration and society. His perspectives on organization and society relate directly to the fundamental issues of hierarchy, power, autonomy and
freedom, authority, dominance, equality, inequality, contradictions and crises, change, and revolution; hence, they pertain directly to the question of organizational role in
governance of society, in social change, and in individual development.
At the risk of some oversimplifications, Marx’s views seem to center around the basic issue of dialectical change and its three principles found in Frederick Engels’
Dialectics of Nature (1873). These principles include: (1) “the mutual interpretation (struggle, or unity) of opposites; (2) the negation of the negation; and (3) the
transformation of quantity into quality’’ (Morgan, 1986:258). The constant changing nature of organizations as a result of continuous tensions and contradictions
between opposites and as a consequence of developmental changes rejecting changes leads to a transformation of quantitative changes to qualitative changes in society
and its systems of governance as well as its economic and social relations. This is accomplished either by peaceful means or by social revolutions. Everything in society,
including its organizations and administration, is in a constant changing process. While good elements of the past are promoted and others are rejected, new changes
lead to developments that in turn generate their own contradictions, which may result in more changes. This is the dialectical process of change, which includes both
positive and negative elements: contradictions leading to crises leading in turn to revolutionary changes, and complementary changes strengthening each other and
leading to more qualitative changes in society. Thus, this is a historical view of the dialectical relationship between past and present, between present and future, and
between opposite elements within the present.
In capitalism, which is the main focus of Marx’s analysis, the organization of the economic system and its social relations are dictated by the forces of capital, and
labor is subordinated to those forces. The contradictions between labor and capital are irreconcilable, for they are two opposite
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forces, each seeking to further its own interests. The organizations of modern capitalism employ labor and other materials that are subordinate to capital and its
accumulation. There is a system of domination of labor—whether blue collar or white collar middle class—by capital, which owns the means of production. The
modern organization of capitalism promotes hierarchy and domination, for it is the capitalists who hold the authority and power and, therefore, dominate the rest of
society. Thus, organization is a rationalizing instrument of control, domination, capital accumulation, and repression; should labor resist capital’s increasing exploitation
of its surplus value, it would be denied a basic or equitable share. Modern organizations are instruments of exploitation, domination, control, and repression of the
working class and middle class who are dependent on the capitalist ruling class.
Modern organizations perform conscious, rational, strategic functions decided upon by the capitalist ruling class who control them. The capitalist class rules by means
of interorganizational relationships in the form of “interlocking boards of directors” (Hall, 1991:284), as well as internal organizational rationality—hence, a “classwide
rationality” (Useem, 1979; Moore, 1979). By occupying key governing positions of organizations, or by appointing their loyal confidants, the ruling class seeks not only
to maintain but also to enhance its position through active participation in the governance of modern organizations. As Richard Hall (1991:285) notes, “there is strong
evidence in regard to the presence and role of interlocking boards of directors” in almost all major organizations of modern society.
According to this theory, the same process is found within organizations. Organizations operate within an overall system of political, economic, and social relations
that determine their parameters; they do not operate in a vacuum. Organizations change as their environments change, and changes are imperative within organizations,
for the internal contradictions and tensions generate demand for changes, and quantitative changes within organizations lead to qualitative changes. There is a hierarchy
of administrative authority that tends to dominate the rest of the organizational members. This itself generates contradictions that develop between the leadership—as
well as its ownership—and organizational members over a wide range of issues from salaries and benefits to the exercise of power, decision making, and control. As
new changes replace the old system, they generate their own negations and contradictions. For example, in capitalism the capitalist dominates and dictates society and
its socioeconomic relations, it generates its own degenerating or destructive forces, and the organizations operating under this system are also subject to the same
dialectical processes.
Formalization, depersonalization, and bureaucratization of the nineteenthcentury organization of European industrialization led to the increasing development of
informal organization; the same happened in the
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United States in the early twentieth century (this is discussed in more detail later). The struggle between hierarchical command of superiors and subordinate members of
an organization is another example of generating contradictions, tensions, and ultimately crises resulting in further changes.
Although not a Marxist, Frederick Thayer, a contemporary organization theorist, in his provocative work An End to Hierarchy and Competition (1981), makes a
formidable argument against hierarchy and competition, two of many modern bureaucratic organizational characteristics that generate destructive forces of inequality,
domination, and so on. He proposes a consensual relationship in organizations where consensus and cooperation replace hierarchy of command and competition
(Thayer, 1981).
Theory of Alienation
Marx’s analysis of modern organizations may also be found in his view of bureaucracy, which is dominating and alienating. “Bureaucracy is a circle no one can leave. Its
hierarchy is a hierarchy of information....The universal spirit of bureaucracy is the secret..., the mystery sustained within bureaucracy itself by hierarchy and maintained
on the outside as a closed corporation....Bureaucracy is the imaginary state beside the real state, the spiritualism of state....Thus, everything has a double meaning, a real
and a bureaucratic meaning” (Marx, 1967:185–187: also in Fischer and Sirianni, 1984:40–41).
Marx’s theory of alienation—both self and work alienation—is acknowledged even by supporters of capitalism and modern organization theorists who continuously
conceptualize ways of reducing it to promote organizational productivity. His argument that the modern organization of capitalism alienates workers and employees
who, by performing in bureaucracies characterized by high division of labor, work standardization, and impersonalization, cannot identify themselves with the outcome
of their labor has profound impacts on modern social and philosophical thoughts. According to Marx, organizational members become cogs in the machine owned and
controlled by outsiders—capitalists. Being involved in only a fraction of the production process or services rendered and having no control over the type or nature of
these products or services in modern organization, the workers/employees feel alienated from their work, for they see themselves as aliens; there is no personal
attachment to the outcome of their labor and to the organization in which they work. This results increasingly in selfalienation, a phenomenon that emanates from the
work that is external and the self who is no longer a total person. Work is external to worker; ‘‘in his work, therefore, he does not affirm himself but denies himself,
does not feel content but unhappy, does not himself develop freely his physical and mental energy but mortifies his body and ruins his mind. The worker therefore only
feels himself outside his work, and in his
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work outside himself. He is at home when he is not working, and when he is working he is not at home” (Marx, quoted in Tucker, 1978:74).
Marx pays close attention to individual human beings whose capacities for development and happiness are great, but these capabilities are constrained or suppressed
by conditions set by the ruling capitalist class, which organizes its institutions of governance and administration. The individual has no autonomy of action to develop
himself or herself in whatever ways he or she freely chooses. Marx’s argument, therefore, is that it is not sufficient to understand or explain organizations, but it is
imperative to change the conditions that cause us suffering and unhappiness. By critically reflecting on the human condition and the suffering promoted by social
domination, “we are compelled to act to increase our autonomy and responsibility, both for ourselves and for our society” (Denhardt, 1984:26). Observing Marx’s
ideas correctly, Robert Denhardt (1984:26) notes “the connection between reflection and action, between theory and practice, is very close.” However, despite its
powerful foundations, the Marxist theory of organization seems to overlook the complexity of human nature, which is inherently conflict producing, not only among the
class but also among and within individuals at work and home alike. Human nature is simplified and human ability for cooperation and interest in reaching harmony
among each other, even within the same social class, is overstated. At the same time, human potential for conflicts, disagreements, and seeking power is understated by
Marxists.
Few organization theorists have recognized and paid attention to Marx’s analysis of organization. Denhardt (1984), Gareth Morgan (1986), Frank Fischer (1984),
Michael Harmon (1981), and Thayer (1981) are among the few exceptions, though Marx’s theory of alienation seems to have received more attention than his political
and philosophical ones. Much of organization theory literature seems to be obsessed with rationality, efficiency, and control.
CLASSICAL/FORMAL THEORIES OF ORGANIZATION
Four major theories of formal organization constitute the early stage of knowledge development in the field: Frederick W. Taylor’s “scientific management” (1947),
Luther Gulick and L. Urwick’s ‘‘principles of administration” (1937), Henri Fayol’s “principles of management” (1949), and Max Weber’s “idealtype
bureaucracy” (1947, 1968). But Georg Hegel’s theory of bureaucracy must not be ignored; its differences from as well as similarities to Weber’s ideas are also
explored (see Shaw, 1992).
The fundamental aspects of the classical/formal organization theory lie in the formal structure in design and the technical rationality in the processes of organizations
toward maximizing internal efficiency while maintaining administrative control over organizational members and operations.
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Unlike Marx, who views modern organizations from a critical perspective for taking social action to change their dominating conditions, classical/ formal theorists’ main
emphasis is on the internal efficiency and control that these modern organizations bring about; their external environment is a given.
A German sociologist, Weber was highly influenced by Marx’s writings, as Weber acknowledges himself (1947). But, unlike Marx, Weber promotes the structural
functional theory of organization, rationalizing capitalism. To him, bureaucracy and capitalism are inseparable (1947). His idealtype bureaucracy is, according to
Weber, the most efficient type of modern organization for policy implementation as well as the most effective instrument of administrative and political control. In
contrast to the traditional and charismatically run organizations in which rationality is lost to traditional norms and the personal will of the ruler, the idealtype
bureaucracy is based on legal and rational principles that determine its structural design, operational processes, and normative values. It is characterized by a clear line
of hierarchy and chainofcommand system, division of labor and increasing degrees of functional specialization, formal rules governing the internal operations, formal
and taskoriented communication, meritbased recruitment and promotion, and maintenance of files and records for future administrative action. Such an organization is
a machinelike system that maximizes efficiency and control, hence rationalizing the modern state.
According to Weber, the more developed and industrialized the society, the greater the degree and extent of bureaucratization it will experience. And increased state
ownership would also mean increased bureaucratization of society. Bureaucratization of society is inevitable for attaining high efficiency and control. Weber is, however,
ambivalent about the power of bureaucracy, which, he contends, has a tendency to “overtower” itself and to permeate society (Weber, 1947).
Weber’s idealtype bureaucracy has been the subject of numerous studies in various disciplines, including political science, management, and public administration.
Critics argue that his bureaucratic organization, while it may produce efficiency, has a tendency to dehumanize organizations and to promote red tape and delayed
decision making, as well as being inflexible and rigid in rule application. It is also argued that in the real world of organizations, the idealtype bureaucracy does not
work or even exist (see Bennis, 1965), and that it is culturally biased and its knowledge is inherently against its fundamental principle of hierarchy (Thompson, 1961).
Despite the criticisms, however, Weber’s idealtype bureaucracy as a model of organization has invaded the modern world of public, private, and nonprofit sectors. It
is safe to say that most organizations in the modern world are designed bureaucratically and seek maximum efficiency.
Hegel’s theory of bureaucracy (1976), although not widely studied yet, has powerful utilities. While both Hegel and Weber tend to stress the ra
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tionality of the modern state and its organizations, they differ fundamentally. For Hegel, bureaucracy is based on knowledge and practical wisdom (1830, 1975) while
for Weber, it is based on technical expertise and its application in modern organization—an instrumental rationality. Hegel’s theory needs yet to be developed.
Taylor’s scientific management theory is perhaps one of the most influential classical theories. Focusing on internal efficiency maximization, work standardization,
separation of managerial functions from operational functions, and maintenance of effective managerial control, Taylor’s principles of scientific management rely
fundamentally on formal, structural design of modern organizations. It is a “machine model” of organization. Its basic premises emphasize managerial supremacy in
exercising unchallenged authority for the achievement of maximum organizational control, internal efficiency, and productivity. The only motivator managers can and
should use in achieving these goals is material rewards offered to workers. Through time and motion studies, managers can and should find out (by learning from
workers who already know) one best approach to get jobs done and tell workers what to do, when to do it, and how to do it, and never to question why (Taylor,
1911).
While Taylorism has been adopted in industry and government in the United States and around the world, its critics have argued that Taylorism was fundamentally a
managerial strategy to monopolize the workplace authority during the labor struggles of the industrialization period, 1880–1920, and to establish organizational control
and worker exploitation by capitalists. This was accomplished in the hands of the modern profession of management. The result was growing labor opposition to
Taylorism and scientific management leading to numerous worker strikes. One major strike took place against it at the federal government’s Watertown Arsenal in
1915 and the subsequent congressional hearings that elevated Taylorism to “the level of national concern” (Fischer, 1984:177; Braverman, 1974; Clawson, 1980).
Indeed, according to Dan Clawson (1980), Taylor never conducted any study that would approximate scientific experiment, and the increasing productivity had little to
do with Taylorism.
Although decades have passed since the golden age of Taylorism and its rigid structural and functional dominance that led, ironically, to the lowering of organizational
efficiency, today’s technologically advanced and managerially improved organizations of modern society are operating with an even more sophisticated, Taylorized
system of management than the contrary slogans of democratization and workers participation have been popularizing (Shaiken, 1986). The bottom line in modern
organizations is managerial control and increased productivity, not employee/worker’s happiness and development (Shaiken, 1986; Scott and Hart, 1989; Morgan,
1986; Perrow, 1979, 1986; Fischer, 1984; Thayer, 1981).
Other formal/classical theories of organization include Gulick and Ur
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wick’s universally valuefree principles of organization. Their theory is usually identified by the acronym POSDCORB, which stands for planning, organizing, staffing,
directing, coordinating, reporting, and budgeting. These principles integrate structural and functional aspects of organizations with managerial and administrative control.
The design of numerous federal agencies and organizations, as well as reorganization of the federal executive bureaucracy in the United States, was one result of the
various presidentially formed study commissions on improving government efficiency during the 1930s and 1940s. Gulick was one of the key members of these
committees.
French theorist Henri Fayol extended the principles of management, which included not only Gulick and Urwick’s who borrowed from him, but also enlarged the list
of principles to fourteen, all in structural and functional lines. The formal theories of organization were highly preoccupied with the central concepts of structure,
managerial control, efficiency, and work deskilling by excessive work standardization. As such, they were managerially biased and reflected the social and political
movements of the early twentieth century in which industrial workers played a significant role. Also during that time were the rapid industrialization and the rise of
corporate capitalism requiring “organizational personality” for maximizing rationality. The rise of the largescale corporate bureaucracies was inevitably accepted as a
“necessary evil’’ because of their ability to bring food to the market during times of need (Schumpeter, 1950, 1955).
The result was bureaucratization of society and dehumanization and alienation of workplace bureaucratic organizations with social, economic, political, and
psychological consequences. Both corporate capitalism and socialist states achieved a high degree of rational accomplishments during this period, but both systems
have failed in improving human conditions. Both contributed to the rise of the bureaucratic state dominated by a centralized, inner circle elite with an interlocking
network of political, economic, and administrative memberships—an iron web of formidable power blocs that has masterfully utilized psychological, political, and
economic tools of human manipulation to maintain and enhance its interests. Having lost in the global competitive struggle, the socialist states have virtually paved the
way for capitalist power elites to dominate globally with little or no challenge. The new organizational elite will play a more leading global role of structural integration
and administrative domination.
INFORMAL THEORIES OF ORGANIZATION
The formal theories of classical organization produced their own antitheses. One of the most important and wellknown such antitheses is the human relations theory of
organization, born out of the experiments conducted at Western Electric Company at Hawthorne near Chicago in the
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1920s. Examining the effect of working conditions on productivity, Elton Mayo, F. J. Roethlisberger, and William J. Dickson, and their associates found a positive
relationship between employee/worker morale and productivity (Mayo, 1933; Roethlisberger and Dickson, 1939). Their findings led to the foundation of the
significance of “informal organization” and of “the logic of sentiments” in designing and managing modern organizations, a phenomenon long neglected and in fact
considered unimportant by Taylor’s machine. That model assumed workers were mere cogs in the machine and viewed workers/employees by nature as economic
animals moved by economic incentives only.
Adopting almost totally Vilfredo Pareto’s (Henderson, 1935) optimality ideas regarding the imperative of maintaining ‘‘equilibrium,” Mayo and his associates viewed
organizations as social systems that must constantly strive for such status and avoid or eliminate causes of disequilibrium. Human elements must be taken at least equally
seriously if not more seriously than the technical side of organizations. Therefore, a balance must be maintained between technical and human elements, between the
formal and informal, and between efficiency and sentiments. Later, the contributions of Chester Barnard, Chris Argyris, and Douglas McGregor developed further the
foundations of the human relations school to what has been established as a theory of organizational humanism (to be dealt with later). While Barnard may belong to the
classical category, his consideration of organizations as a “system of consciously coordinated personal activities or forces” (1968:72) separates him from the earlier
theorists. Reflecting the labor discontent of the Great Depression during the 1930s and the failure of Taylorism to increase productivity by managerial command,
Barnard’s views seemed novel in bringing the value of treating employees decently into the system of organizational structure and process. To Barnard, without people,
there is no organization, and without human cooperation, there is no sound management.
Barnard’s emphasis on communication and persuasion, employee cooperation, and sound leadership decision making constitutes the essence of modern
organizations. The crucial task of modern managers/leaders is to perform these fundamental “functions [of the executive]” to achieve a maximum balance between the
technical and human dimensions of organizations. However, when faced with a crisis of survival, the collectivity of organization as a system must be given priority over
the individual; hence, “survival of the fittest.” As Barnard put it, individuals in organizations have a “dual personality—an organization personality and individual
personality” (1968:88). Here, Barnard joins the classical theorists whose primary interest lies in the organization, not in the individuals working in them; he could, thus,
be considered a conservative theorist (Harmon and Mayer, 1986). As Perrow (1979, 1986:67) notes, to Barnard, organizations are “superior to individuals:
organizations are rational; individuals are not.”
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Mayo detested unions and called their leaders “psychological deviants.” His attitude toward social class conflicts was hostile, and his answer to labormanagement
problems was the application of psychologically equipped techniques of supervision. Education of supervisory “social skills” was essential to eliminate class tensions,
and as critics argue, the human relations theory was elevated to the “twentieth century’s most seductive managerial ideology” (Rose, 1975:124; Fischer, 1984:184–
185).
CONTEMPORARY ORGANIZATION THEORY
The literature on various contemporary theories of organization is vast. But perhaps the underlying factors most commonly found in almost all of them include the
significance of external environment and its impact on organizations, the utility of managerial feedback, the importance of strategic planning and top managerial decision
making, the role of technology and resource dependence, the necessity of worker cooperation, and the desire for a participative management, as well as a host of other
variables representing managerial and individual employee perspectives. These theories reflected the post–World War II relative economic prosperity followed by the
increasing social, political, racial, and economic conflicts that dominated the periods of the 1950s and 1960s. Attention was shifted toward strategic, environmentally
conscious, and globally motivated decisions with managerial innovations for meeting the ideological challenges of the Cold War period both politically and economically.
Organizational planning was generally discouraged because of its being socialistic in nature, therefore restricting individual freedom of choice.
DECISION AND BEHAVIORAL THEORIES
Herbert Simon’s decision theory of the 1950s heralded a shift in attention from worker control and human relations perspectives to the top organizational functions of
strategic decision making and searching for “behavioral facts,’’ rather than values, on which decisions should be based. This was accompanied by the relative decline of
the human relations theory as a managerial ideology. To Simon, administrators seek to “satisfice” rather than maximize, and through decision making, they exercise
power and authority with limited alternatives. Individual administrators are rational, but their rationality is constrained by a given organizational environment and by the
available alternatives—a “bounded rationality.” Managerial rationality is constrained by limitations of time, information, and resources (Simon, 1976:81–125). Unlike
Bernard’s “zone of indifference,” to Simon most organizational decisions are accepted by subordinates (133–134). Thus, Simon is a behaviorist as well as an early
advocate of systems theory, arguing for seeking equilibrium (Harmon and Mayer, 1986).
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The behavioral theory of organization as purported by James March and Simon (1958) and Richard Cyert and March (1963) invaded the field of organization and
management, as did its behavioral science cosines in the disciplines of economics, political science, sociology, and psychology. Analysis of “facts” and decisions based
on quantifiable facts constitute the thrust of the theory, and nonfactual values have little utility in scientific analyses of phenomena. Modern administrators must rely on
behavioral facts, not on normative values, to make decisions and solve organizational problems (Cyert and March, 1963).
Behaviorism (not behavioralism based on psychology and social psychology) as a school of managerial, political, and economic thought has had a powerful impact
on organization theory and practice. According to behaviorism, numerical data and quantitative analyses are the fundamental requirements in achieving rationality
bounded by environmentally imposed limitations. A major flaw of the behavioral organization theory is, therefore, its fanatic obsession with data crunching and
quantification of information, often at the expense of quality. Also, such a fanatic emphasis on quantifiable data as the only acceptable facts tends to promote the
proliferation of “artifacts” in face of obstacles or limitations. Consequently, the result of such analytical process may often be questionable, for it may not reflect reality.
SYSTEMS THEORY
Systems theory of organization introduced a number of key elements to the parameters of the field reflecting the evolutionary process of the time. Originating in the
structuralfunctional sociology of the 1950s and in biological science, systems theory was further developed with a wide range of perspectives and versions, all
contributing to a body of knowledge with several key characteristics. The powerful works of Talcott Parsons (1951), Ludwig von Bertalanffy (1968), Daniel Katz and
Robert L. Kahn (1966, 1978), James D. Thompson (1967), Walter Buckley (1967), Russell Ackoff (1974), and others established a theoretical foundation for
systems theory of organization that has since the 1960s influenced almost all thinking about modern organizations, with worldwide applications in the public, private, and
nonprofit sectors.1
Despite the divergent perspectives presented by these theorists, the systems theory of organization has a number of characteristics that are important to note.
Modern organizations as social systems receive inputs from outside environments, transform them to outputs, and return them to society. And through constant
interactions with their environments—political, social, economic, cultural, religious, technological, demographic, interorganizational, and so on—organizations learn, and
must be able, to adapt to environmental changes. Thus, environment, change, adaptability,
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and purposive goals are some of the key features of the systems theory of organization. Other key characteristics include the interrelatedness and interdependence of
the internal parts or subsystems of the organizational system in achieving common goals, the “natural and necessary need to survive to seek homeostasis and to increase
negative entropy” (Harmon and Mayer, 1986:166). It is a positive quality, an antibody, that enables the system as a whole to detect and correct the “entropy’’ that
tends to degenerate or decay the system from within.
There are two types of systems—closed and open. A typical closed system is highly preoccupied with internal efficiency and is generally closed to its surrounding
environment. Stability and internal rationality are the central features of closed systems. The closed system is unable to adapt well to external changes and lacks the
dynamic negentropy to fight internal degenerating forces, which is opposite of the open system. Open systems have the negentropy quality to overcome entropy and to
maintain equilibrium. However, it is not impossible to conceive of a modern organization declining and dying because of its lack of or diminishing ability to survive.
Indeed such a phenomenon is becoming more commonplace in the rapidly changing technological and socioeconomic environments. Therefore, internal, technical
rationality is essential to the survival and equilibrium of modern organizations, which operate within a larger system at the national and international level.
In order to understand an organization, we must understand the whole societal system—governmental, political, social, economic, and so on—within which it
operates, both in the national and the international environment. And to understand how effectively or efficiently the various parts or units of an organization work, we
must first understand the nature of the organization as a whole system. Only through the whole can we analyze properly the relationships and effectiveness of the parts
or subsystems. Like all social systems, organizations are in constant search for equilibrium and stability, for environmental changes may be rapid and adaptability is
essential for survival; therefore, they have a concern and desire for system maintenance and system enhancement. Here, to some theorists such as Katz and Kahn
(1966, 1978), environment determines organizational structure and actions, while others like Thompson (1967) argue in favor of strategies that organizations should use
to influence and change their environments to suit their goals. While the mutual impacts of organizationenvironment are key aspects of systems theories, it is interesting
to know why and how modern multinational corporations and certain governmental organizations act and react to, as well as change and reshape, their environmental
conditions around the globe. Their ability to alter political and other societal conditions worldwide to their favor is enormous, not to mention their negative impacts on
the environment in the forms of pollution, destruction, and global warming. Thus, organizational systems seeking maintenance,
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harmony, order, and stability tend to preserve themselves at any possible cost to society and individuals, for their main concern is to survive and expand with an
equilibrium. This is, then, according to critics, a conservative theory of organization favoring the status quo (Harmon and Mayer, 1986; Perrow, 1979, 1986; Morgan,
1986). Systems theory, despite its promises to the contrary, followed similar patterns that characterized the structural, classical theories.
CONTINGENCY THEORY
Closely related to systems theory is the contingency organization theory. Its founders Paul R. Lawrence and Jay W. Lorsch (1967) argue that environmental
contingencies or situations determine the structural and functional aspects of organizations. Organizational effectiveness, therefore, depends on contingencies confronted
through the organizationenvironment interface. Multiple organizational forms are needed to respond to environmental situations or contingencies confronted by an
organization. Hall (1991:283) and others (Galbraith, 1973, 1977; Negandhi and Reimann, 1973; Donaldson, 1985) developed the idea further, and Lex Donaldson
elevates contingency theory to the level of “normal science” (1985, ix; also see Hinings, 1988).
Richard Scott (1981:114) summarizes contingency theory as “the best way to organize depends on the nature of the environment to which the organization must
relate.” Critics (Schoonhoven, 1981; Tosi and Slocum, 1984; Katz and Kahn, 1966, 1978) have questioned the foundations of contingency theory as a “theory” but
have, nevertheless, recognized it as “an important part of the literature on organization” (see Hall, 1991:284). Its utility is that a number of contingencies outside an
organization determine its structural, processual, and functional underpinnings (Daft, 1992).
POPULATIONECOLOGY THEORY
Also closely related to systems theory is the populationecology model of organization. Based on the works of Howard E. Aldrich and Jeffery Pfeffer (1976), Michael
T. Hannan and John H. Freeman (1977b), Aldrich (1979), Glenn R. Carroll (1988), and Bill McKelvey (1982), the model is built around the idea that ‘‘organizational
forms that have the appropriate fit with their environment are selected over those that do not fit or fit less appropriately” (Hall, 1991:275). Competition among
organizations and the constraints and opportunities developed in such an environment put organizations in a dynamic situation. Organizations must respond to changes
by changing their forms and by being able to create the appropriate “fit” through finding in the environment their own “niches,” for the rule
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of survival of the fittest dominates modern organizations and their effectiveness.
Also called the “natural selection” model, the populationecology theory argues that the process of selection and fitness takes place “naturally” in the environment,
and those who do not find their niches will be selected out. “Selection in” and “selection out” among organizations is as natural a phenomenon as that which takes place
in the nature of animals and human beings—hence, a reformed version of social Darwinism (Perrow, 1979, 1986:210). Three stages constitute the natural selection
process: variations, selection, and retention. This occurs as organizations go through a process of coping with environmental and situational changes.
Critics of the populationecology model of organization charge that it tends to remove the human aspects of the environment (Hall, 1991) and that it ignores power,
conflict, social class struggle, and revolutionary upheavals in the analysis of the social processes (Perrow, 1979, 1986:243). Andrew H. Van de Ven (1979) and Ruth
C. Young (1988) also criticize the model for drawing too heavily on analogies with biological sciences. This analogy, they argue, is illfounded, for it ignores human
motives and decisions, as well as its ‘‘downplaying of strategic choices made on behalf of organizations” (Hall, 1991:276). But, perhaps more important, the model
ignores the powerful effects organizations have on their environments by making deliberate changes in the ecology.
Despite the criticisms, however, the model seems to have major utilities for modern organization and administration. It tends to explain the “ultimate test” of
effectiveness, a positive or negative indication of organizational growth or decline and death, an implication for managerial ideology. The model also traces the dynamics
of the growth and decline of entire populations of organizations (Hall, 1991:277).
RESOURCEDEPENDENCE MODEL
What the populationecology model has been criticized for, the resourcedependence model seems to have picked up and dealt with. Closely associated with the
political economy model of organization (Wamsley and Zald, 1973; Benson, 1975), the resourcedependence model is based on several premises. One is that no
organization can generate the necessary resources all by itself and that there is an imperative of dependence on other organizations or environmental sources for
resources. Another premise is that decisions are made within the internal political context of organizations and that decisions deal with environmental challenges. Also,
perhaps more important, is a key element of the model that considers the organization as an active participant able to manipulate and change its environment to suit its
purposes. Managers and administrators are engaged in “managing their environments as well as their organizations, and the
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former activity may be as important, or even more important, than the latter” (Aldrich and Pfeffer, 1976:83).
This is generally done by strategicchoice making, which takes place in three ways: autonomous decisions made by organizational actors; manipulation of the
environment; and deliberate attempts to perceive, interpret, and evaluate the environment and turn the perceptions into reality (Aldrich and Pfeffer, 1976:83). An
organization must seek ways not only to reduce its dependence on environmental resources but to try to make other organizations dependent on it (Dunford, 1987).
The application of strategies by giant organizations such as McDonald’s, IBM, and other multinational corporations (Daft, 1992) may be considered as a tested reality
about this theory of organization, though the idea is not new. James Thompson and other systems theorists, for example, had similar prescriptions for large
organizations. Despite the criticisms raised against the model for ignoring the goals of the organization (Hall, 1991), the power of its practical value seems appealing to
large organizations and to those in control of strategic resources. This model also has utility for modern political systems/regimes as well as multinational or
transformational corporations.
MARKET THEORY
The market theory of organization is derived primarily from economic theory and secondarily from sociology. Based on the neoclassical economic theory, the market
theory is based on the economic, rational assumptions that man is a selfinterested, rational animal seeking to maximize individual interests in the marketplace.
Bargaining, exchange, and strategies to minimize transaction and exchange costs and to maximize benefits are central to the market theory of organization. Modern
organizations are seen as rationalizing institutions of exchange and transactions of the free market system in which individuals as utility maximizers trade and exchange
their goods and services for something in return—hence, a methodological individualism. Mainly developed for application in the private sector, the market theory of
organization and administration has found its way into public administration and organization theories.
Drawing from neopolitical economics, public administration, and sociology, the works of a divergent group of theorists constitute this new and powerful theory of
organization. The sociological perspective of the theory is mainly based on the works of Oliver E. Williamson (1975, 1981, 1985) who prefers the term “transaction
cost” model of organization in which the exchange of goods and services, not production, is critical, as well as the “importance of the structures that govern the
exchanges” (Schutz, 1987a: 148). Four components form his theory: uncertainty, smallnumbers bargaining, bounded rationality, and opportunism (Perrow, 1979,
1986:237).
The economic perspectives of the market theory are deeply rooted in the
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much earlier works of David Hume, Thomas Hobbes, Jeremy Bentham, and John Stuart Mill (Harmon and Mayer, 1986). Utilitarianism forms the basic principle of the
theory, which is based on methodological individualism as a level of organizational analysis. The works of such theorists as James M. Buchanan and Gordon Tullock
(1962), Vincent Ostrom (1974), Anthony Downs (1967), Charles E. Lindblom (1959, 1965, 1977), and others have had a major influence on modern organization
and administrative theories, as well as on economic and political theories.
Several principles form the foundations of the market theory, also called “public choice” theory. These include individual choice as the basis for organizational or
‘‘collective actions,” individual preferences as expressions of individual choices, rules to facilitate and assure order and stability in the process, satisficing rather than
maximizing strategies by individuals in the pursuit of their selfinterests, and, eventually, the incremental nature of changes in collective or individual decisions that are
made in organizations and society (Harmon and Mayer, 1986:242–243).
The works of such public choice theorists as Ostrom (1974), Downs (1967), and William A. Niskanen, Jr. (1971) have had significant influence on public
organizational and administrative theory. Being critical of hierarchy and large bureaucratic organizations, the public choice or market theory of organization calls for
small organizations with overlapping jurisdictions. Criticizing the earlier theories of organization and administration, Ostrom outlines several major principles of his theory
of “democratic administration” in his seminal work of 1974. These include divided political authority to limit the exercise of political power, no separation of or
distinction between politics and administration, multiple organizational arrangements and competition among government agencies, overlapping jurisdictions in service
delivery, and maximizing “efficiency as measured by leastcost expended in time, effort, and resources” (Ostrom, 1974:112). Ostrom’s public choice model of
organization and administration centers around the selfinterested, rational individual seeking to maximize his or her utility in the marketlike environment of public
organizations and administration.
Despite their powerful implications in contemporary American society and its public administration, the market theory of public choice in general and Ostrom’s
administrative model in particular have been criticized on many grounds. First, the theory’s basic foundations are made on many assumptions that are unrealistic.
Second, the testability of the methodological individualism is highly doubtful (Harmon and Mayer, 1986:260–261); the theorists offer little empirical evidence (Perrow,
1979, 1986). Third, as Thomas R. De Gregori (1974:209) notes, “Selfinterest, absent of any specific content merely names, rather than predicts, action.” Fourth, the
argument that decentralization is better or more democratic has no real empirical proof in the real world of centralizing trends of organizations,
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public and private, around the world. In fact, Ostrom’s decentralized organizations with multiple and overlapping jurisdictions may inherently produce inefficiency and
consequently lead to organizational merging and consolidation. Empirical evidence of local government consolidation has proven the public choice assumptions wrong
(Loweri and Lyons, 1989). Besides, as Neil Gilbert (1983:177) notes, such a decentralized arrangement may lead to “localism that is intrusive, parochial, and
potentially oppressive” while, because of their lack of concern for personal affairs and special circumstances, “programs administered by the large scale bureaucratic
apparatus of central government allow greater latitude for privacy and individual freedom.” Also, as Robert T. Golembiewski notes, decentralization may simply be
“chaotic localism” (Golembiewski, 1977a: 1497–1499).
There are some other facts public choice theorists either ignore or choose not to address. The public choice theory’s selfinterest utility maximizer behaves at the
expense of the broad public interest. He or she contributes to the growth of a jungle full of hungry animals in search of maximizing selfinterest at the expense of
community and general public interests. Only the more powerful are able to determine the outcome or consequences of market transactions that are based more on
coercion rather than free choice. The public choice model is silent about how the poor, the sick, the elderly, and the disabled are supposed to maximize their self
interests. It is also silent about the severe externality problems, both domestic and international, particularly the problems of pollution and social displacement, that the
transnational corporations cause in developing countries where regulations either do not exist or are not enforced.
The transactionchoice model of organization mentioned above (Williamson, 1975, 1981, 1983, 1985) severely contradicts the public choice theory principles of
decentralization, democratic administration, and responsiveness. The model allows for market distortion and for the free market to be supplanted by hierarchies and for
the organizational forms to take over the marketplace, even if this means more centralization by concentration and merging into a few giant ones: ‘‘I argue that efficiency
is the main and only systematic factor responsible for the organizational changes that have occurred” (Williamson, 1983:125). Furthermore, the market theory of
organization has come under criticism from both Marxist and nonMarxist perspectives for its promotion of “moral atomism at the expense of public morality” (Harmon
and Mayer, 1986:264).
Despite these fundamental problems, the market theory in general and the public choice theory in particular have since the 1980s had enormous implications in the
United States and in many nations that have adopted or have been forced to adopt it. The economic and administrative policies of privatization of public enterprises
recommended by the public choice model and its zealous advocates in the United States are examples. Similar
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policies have been adopted in education, health, welfare, and justice systems.
TRANSACTIONCOST THEORY
As a key variant of market theory, transactioncost theory of organization has recently captured the conservatives’, and many liberals’, interests in their rush to
sweeping privatization and contractual agreements across the world. Rooted in the public choice theory noted above and institutional economics (Coase, 1937), the
concept of transactioncost analysis has resurfaced through neoinstitutional economics (Eggerston, 1990) and sociology (Williamson, 1975, 1985) and has captured
much attention in public management, especially under the rubric of “new public management” originating from the British government and academic sources. It is a
major force driving the currency of reform toward privatization, contracting out, or outsourcing, although these practices have historical roots in ancient empires,
especially the World State Persian Empire in the fifth century B.C. (see Farazmand, 1998, 2000, 2001).
According to this model, transaction costs determine the organizational context in which transactions occur. Transaction costs are “the costs associated with carrying
out twosided transactions—e.g., the exchange of goods or services from one individual to another with agreedupon payment for performance. These costs vary with
the nature of the transaction and the way it is organized” (Ferris and Graddy, 1998:227; Coase, 1937). The choices of organizational form are determined by
“transaction attributes and include the frequency of transaction, its complexity, the extent of uncertainty, the extent to which performance is measurable, and the
specificity of the required assets” (Ferris and Graddy, 1998:227).
Uncertainty and bounded rationality are two major factors in determining the frequency of the market transaction activity; the lower the uncertainty and bounded
rationality, the higher the frequency of marketdriven, transactioncost activities, hence a higher frequency of transaction cost organizational form. Conversely, the more
uncertainty and bounded rationality, the more likely that transactions will be handled within a hierarchical organization (Williamson, 1985). According to this model,
public organizations will be better off by providing service and performing directly public management functions when uncertainty and bounded rationality are low in the
environment. Therefore, formal hierarchical organizations, while good under stable and certainty conditions, should outsource or contractout their functions. Here, the
concepts of ‘‘transactingout” as opposed to “transactingin” (my added terminologies) become important as a function of environmental contingencies.
Problems with the transactioncost theory of organization, viewed from either economic or sociological perspectives, are many and have dangerous
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consequences for public administration and public interests. First, it trivializes the nature and functions of governance and administration, and hence of public
organizations, by reducing its activities to the concept of the mercenarywage relationship of the ancient and medieval ages, where wage slavery and misery were
common features of life for the majority millions.
Second, the application of the activity of transactioncost analysis does not obscure the cardinal and ultimate purposes of the government in society. Performing its
service delivery and achievement of its ultimate goals can be done in many ways, and transactioncost analysis approach is only one of them. Third, application of
transactioncost theory can be contradictory to the goals governments have to achieve, that is, the serving of broad public interests and the promotion of equity,
fairness, equality, and correction of market failures. Fourth, cheating becomes a mutual motivation for both sides of the transaction process, each trying to lower the
transaction costs; the seller or offerer of the contract tries to lower his/her cost, and the transactee finds ways to minimize his/her cost by cheap labor, cheap resources,
cheap parts, and cheap product or performance. As a result, quality is sacrificed and citizens are worse off.
Fifth, coercion becomes a powerful instrument in the transactioncosting process; that is, the more powerful party will try to manipulate the marketplace, or simply
the other side of the transaction, by applying forces of coercion to get what it wants. This leads to another, sixth problem with the model, that the concept of voluntary
entrance into the transaction process becomes meaningless when one party has no choice but to sell or offer at any price in the marketplace. An example is the millions
of unskilled labor or farm workers whose subsistence depends on the daily work they find, and for any wages offered; there is no voluntary transaction involved here.
The same happens with white collar employees of the modern state and corporate organizations who are, by multiple means of manipulation, coercion, and threat of
downsizing or attrition, made to understand that the alternative to their employment is unemployment, homelessness. Employees with many bills to pay and children to
feed have no choice or personal preference but to agree to the wage slavery available to them.
Seventh, in the marketplace, where transaction costing takes place, the power structure, or the power elites—from business corporate elites to the governing elites
representing and defending their interests—dominate the transaction process and have direct and comprehensive access to sensitive information beneficial to their
transaction analysis, whereas the individuals or weaker parties of transaction fall into a disproportionately disadvantageous position and lose.
Finally, as noted earlier, the transactioncost analysis model of organization severely contradicts the principles of competition, decentralization, and the overlapping
jurisdictional arrangement of organization of the mar
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ket theory espoused by public choice theorists. Here, Williamson (1975, 1985) extends the earlier arguments of Coase (1937) by pushing them beyond the market
versus firm comparison to consider a wide variety of ‘governance systems,’ “ranging from markets to hybrid forms, such as franchising or alliance form, to hierarchical
forms, such as unified firms and multinational corporations” (Scott, 1995, 26; Williamson, 1985, 1991). Therefore, mergers, organizational centralization, concentration
of the corporate power structure, and manipulation as well as monopolization of the private market and of public sector by a few organizations are justified according to
the transactioncost theory of organization.
This argument extends even further by justifying the globalization of the world by corporate capitalism, a process through which fewer and fewer globalizing,
transworld, corporate organizations dominate the world market, production, service, and industries, making governments either irrelevant or agents of their successful
operation. They minimize their uncertainties by imposing their will—through the powerful globalizing state and military force—and maximize their profit. They lower their
transaction costs by exploiting cheap labor and natural resources, and under a deregulated legal environment, and with no concern for the natural environment or the
local economic and social wellbeing of the people.
AGENCY THEORY
Still another variant of the market theory is the agency theory, an extension of the transactioncost theory of organization, which Perrow (1979, 1986:235) calls a
“dangerous explanation.” The most insidious danger of agency theory is “that all of us apply it in our daily life when we shouldn’t, and we should be aware of
this” (235).
Agency theory considers social life as a series of contracts. There is a buyer of goods and services who is the “principal” and the seller or provider of goods and
services who is the “agent’’—hence the term agency theory. A contract governs the principalagent relationship, and specifications are spelled out regarding the terms
and conditions (see Perrow, 1979, 1986:224–235). According to this model, both parties (principal and agent) apply the principles of lowering costs, maximizing
certainty, and avoiding risks involved in their relationships. Having an information advantage over the principal, the agent tries to exercise risk aversion and maximize
his/her chances of increasing self interests. On the other hand, the principal tries to learn as much as possible by acquiring information and through the competitive
process of selecting multiple agents to perform contractual tasks. Therefore, contracts and contract management become central to the agency theory as advanced by
institutional economists. The works of Armen A. Alchian and Harold Demsetz (1972), Eugene F. Fama
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(1980), and Michael C. Jensen and William Meckling (1976) were among the most influential in forming the basis of agency theory earlier on.
In line with other market theories, agency theory preaches the principle of “selfregarding versus otherregarding behavior in organizations” (Perrow, 1979,
1986:231). A proponent, Jensen (1983:324) even proclaims “a revolution in the science of organization” based on agency theory, a view echoed by some observers
(see Moe, 1984:757). Agency theory has gained strong strands since the 1980s, with contracting out, privatization, outsourcing, and contract management dominating
modern organizations of public, private, and nonprofit sectors. The sides of the contract, the principal and agent, enter into a process of contractual agreement in which
both parties try to gain an edge over the other. The agent may have the advantages of expertise, skills, and information, and therefore may become opportunistic and
attempt to take advantage of the principal’s possibly weaker position.
To guard against potential agency problems, the principal may try to control opportunistic agency behavior by developing an effective and elaborate process of
contractual agreement. To do so, according to Ferris and Graddy (1998:228), the principal may adopt three possible factors: (1) cost of information, for both obtaining
the appropriate agent, and monitoring and enforcement of the contract; (2) the uncertainty of the production and service delivery process; and (3) the risk preferences
of the actors or agents, who want to avert the risk involved in the process. The theory implies that the nature of the supply side determines the process of the
contractual agreement between principal and agent.
Advocates of agency theory argue in favor of its application in the public sector (Ferris and Graddy, 1998:229). Their argument is based mainly on simplistic
assumptions of the market theory of agency models in which the agent is portrayed as the appropriate actor of public service performance. A key example of this
model application as a central instrument of the “new public management” ideology is “contracting out” of public service activities and governmental functions.
Contracts are considered the most appropriate form of organizational arrangement for public management in government and administration. Contracts are either
negotiated or cooperatively processed rather than competitively arrived at and closed (DeHoog, 1990). Agency theory is nothing new, as we can trace its practice
from over 2,500 years ago in the ancient time (see, for example, Farazmand, 1998, 2000).
The complexity, or perplexity, of the agency theory of organization becomes evident when we find that agency theory is not just an economic theory of organization.
It is also a political institutional theory, and here we find confusion over the meaning and application of the theory in the real world. For example, the concept of
principal in government and public administration becomes fuzzy, as multiple principals and agents enter the
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political and policy process. Citizens can be considered principals whereas representatives may be viewed agents, who then can be considered principals over the
administrative agents. The same applies to the hierarchy of organizational authorities and managers from top to the bottom; that is, the organizational heads are
principals, and subordinate managers are agents who then view their subordinates as their agents. This is, of course, the organizational arrangement in publicsector
organizations, where command of relationship is relatively defined by legislation and constitutional laws.
However, such a relationship is not easily understood in the marketplace, especially as the government also becomes a principal, a weak principal dealing with
powerful corporate business elites whose economic powers and influence dictate the terms and conditions of contracts, and government actors become actual agents of
corporations rather than principals. This is a point that has also been suggested by others (see, for example, Moe, 1984). Advocates of the theory of organizational
economics and its application to government and public administration have nevertheless argued the advantage of the agency theory (Ross, 1973; Williamson, 1975,
1985; Eggerston, 1990).
However, some social scientists, such as Perrow (1986:226) point out numerous flaws in the theory for its promotion of hierarchy and dysfunctional capitalism.
According to Perrow, the model ‘‘gives scant attention to the cooperative aspects of social life and ignores how exploitation is structurally encouraged by the
asymmetric distribution of power in bureaucracies” (235). Furthermore, the agency theory tends to dangerously simplify the socalled principleagent relationship as
being voluntary and free from coercion; far from it. All the problems associated with the transactioncost theory directly apply to the agency theory of organization.
Agency theory clearly promotes, among other negative things, dependency in the principalagent relationship, as the powerful always tend to dominate. And this has
become even far more dangerous in the age of globalization and globalizing corporate capitalism. Wage slavery, masterservant, and hierarchical relationships appear to
be on the rise globally, and the agency theory of organization seems appealing to some people, especially powerful corporate elites, but their actions are not
accountable under most circumstances.
Even more dangerously, agency theory tends to generalize principalagent relationship at free will, confuses the true nature of the relationships at the macro
organizational level, and trivializes the complexity of both human nature and organizational behavior at all levels. It ignores the coercion, power, and influence that
dominant power structures or power elites impose on the conditions in which a principalagent relationship takes shape. Options are not available to less powerful, or
powerless, parties who are conditioned to play by the rules of the game dictated by capitalist power elites and their operative organizational elites. This is a political
economy
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question, a normative organizational power question, that the principalagent model avoids.
ORGANIZATIONAL HUMANISM
The earlier human relations theory, which dropped in significance for some time (Fischer, 1984), was reinvigorated and evolved into the organizational humanism theory
of organization. Based on the works of McGregor (1960), Abraham Maslow (1962, 1989), Argyris (1957, 1970a, 1973a, 1973b), David C. McClelland (1989),
Frederick Herzberg (1968), Edgar H. Schein (1970), Rensis Likert (1967), Warren G. Bennis (1966), Golembiewski (1977b, 1985), and others, the theory has
gained wide applications. The main themes of this later theory of organization center on the humanization and democratization of modern organizations. Group
dynamics, planned change for organizational performance improvement, paying more attention to human needs and motives of organizational members, participative
decision making, external intervention, motivation and job satisfaction, quality circles, team management, and so on constitute the foundations of organizational
humanism. Of the above theorists, McGregor’s Theory X and Theory Y, Argyris’s psychological theory of emphasizing human values, Herzberg’s twofactor theory
of motivation, Maslow’s hierarchy of needs theory, Bennis’ democratic administration, as well as Golembiewski’s ideas for “humanizing” public organizations are the
hallmarks of this new breed of organization theory. Organizations and managers are advised to pay closer attention to individual needs and expectations, and employees
are guided to fulfill their personal lives.
A major offspring of this theory is its subfield of organization development (OD), with wide applications reported in the public as well as the private sector. The
purpose is to develop organizations—employees’ attitudes, organizational structure, and so on—through a planned change process introduced via outside behavioral
expert interventions. The ultimate objective is to optimize or maximize organizational performance and effectiveness as well as to promote individual happiness and
development for employees. Worth noting in this connection are the earlier works of such theorists as Mary Parker Follett (1918, 1924, 1940) who set the basic
foundations of the humanistic organization theory to balance the managerial demands for efficiency and productivity on the one hand and the human needs of employees
and democratic values in governance of organizations and society on the other.
The humanistic theory of organization or organizational psychology as well as the earlier human relations theory have been severely criticized as new managerial
techniques or tools for worker manipulation and exploitation. As Fischer (1984:172) notes: “to put the issue bluntly, organizational psychology emerged to facilitate the
bureaucratic processes of
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twentieth century corporate capitalism.” What emerges from the history of organizational psychology is a picture of ideological corruption. “Both wittingly and
unwittingly, organizational psychology has evolved into a tool of manipulation and control in the ongoing struggle for command of the workplace’’ (Fischer, 1984:187).
To correct for this corruption, Fischer argues for “a political theory of organizational science” (187).
Such a theory of organization must include the premise of knowledge as a critical resource in the politics of class struggle, both inside and outside the workplace, and
“in the elaboration of such a theory, one must recognize the complexity of the role of organizational expertise in the larger class struggle between capital and
labor” (Fischer, 1984:188). Other critics have also attacked organizational humanism as a theory. The works of Jacques Ellul (1954, 1964), Robert Michels (1915,
1959), and James Burnham (1941, 1960) are but a few. To Ellul, who predicted this new theory and called it “human techniques,” the humanistic theory has provided
new dimensions of legitimacy through techniques of niceness. As William Scott and David Hart (1989:23) note, “since every one is either a manager or is managed,
humanistic practices have become important in establishing the right of the new managerial elite to rule. Legitimacy is augmented by niceness.” To Michels (1915,
1959), modern organizations by nature produce a managerial elite, the “tyranny of expertise” and its corollary “iron law of oligarchy.” In these organizations, people
have little to say, and the legitimacy of the managerial elite is beyond question (see Scott and Hart, 1989:20). To Burnham (1941, 1960), modern organizations
produce a managerial elite that is winning everywhere, for managerial expertise is the principal element of control inherent in modern organizations (see Scott and Hart,
1989:21).
Closely related to organizational humanism has been a general drive, since the 1960s, for participative management in the private sector and a more powerful
movement in public administration theory: the new public administration as a theory of organization and management for organizing and managing the public’s business
and public interests. Born out of a conference sponsored by the Maxwell School of Syracuse University, the new public administration theory was based on a number
of papers and books reflecting the changing political, administrative, and economic environments of the turbulent decade of the 1960s.
The publications of Frank Marini (1971), H. George Frederickson (1974), David K. Hart (1974), and others established the theory with applications for public
managers to not only act as implementors of public policy, but also to actively engage in making social change possible and to promote democratic values of
representation, responsiveness, social equity and justice, and individual rights and freedom. The managerial values of efficiency and effectiveness must be balanced by
the new democratic values of the changing society. Borrowed from political theorists (Lowi, 1969;
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Waldo, 1971), from administrative theory (Frederickson, 1971, 1974, 1980; Waldo, 1971), and from economic and other theories, the new public organization theory
was a major advancement in the evolutionary process of the field (see Harmon and Mayer, 1986; Denhardt, 1984).
CRITICAL AND INTERPRETIVE THEORIES OF ORGANIZATION
Originated in European social and political thought, critical and interpretive theories of organization maintain that an inherent and permanent tension characterizes the
relationship between our true consciousness and the limitations imposed upon us by society or environmental conditions.
Being unaware of the constraints placed upon us by those in control of the society, we develop a “false consciousness” that keeps us from realizing our human
fulfillment. Therefore, the major concern of the critical theory is to critique the status quo, which designs for us an artificial reality and social conditions, and to release
those constraints by changing the status quo. The primary concern is domination of organizations as instruments of rule by those in control of the status quo. Modern
critical theory has coupled the Marxian critique of capitalism with Weber’s bureaucratic instrumentality in rationalization of societal conditions. Weber himself was
ambivalent about the role of rational bureaucracy, which, he argued, has a tendency to overtower society and become an organization of domination.
In addition to Marx’s analysis of modern capitalism and its organizational domination (discussed earlier), the works of neoMarxists and other critical—but non
Marxist—theorists provide the foundations of this important theory of organization. The works of such theorists as Jurgen Habermas (1970, 1971), John Forester
(1983), Denhardt (1981), R. Hummel (1976, 1977, 1982), and Thayer (1981), to name a few, represent the Marxist and nonMarxist views of this range of
arguments. Habermas’ analysis of social science in general and organizations in particular deals with the relationship among modes of communication, the exercise of
domination, and the experience of alienation that work against authentic human interaction (see Harmon and Mayer, 1986:319).
To Habermas, the communicative practices we use every day are highly distorted by the language we use to reason and to justify our actions; the distortion prevents
us from seeing what we should be freely seeing. In other words, we are conditioned by forces external to us, and our reasoning is often instrumental rather than critical,
which contributes to the legitimacy of status quo. Such a relationship between language and reason is central, for it shapes the meaning of social life. Therefore, language
contributes to our alienation from both ourselves and others.
Habermas identifies three modes of reasoning: instrumental, practical,
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and critical. Instrumental reasoning leads to social domination and control because of its inflexible use of technique. Instrumental reasoning serves technical interests
of social control only and becomes a legitimating force of the pregiven ends of modern capitalism. Capitalism and bureaucratization of society are rationalized by
instrumental reasoning, which tends to enforce their legitimacy in society without our being consciously aware of it. As Habermas (1970:98) states, “traditional
structures are increasingly subordinated to conditions of instrumental or strategic rationality,” which permeate society and social life. Practical reasoning involves
interpretation aimed at understanding and enables us to see possibilities for consciously deciding to change or to sustain the existing rules and ends. Practical reasoning,
according to Habermas, is concerned with matters of human choice that encompass the broad moral choices involved in sustaining a human community. Therefore, it is
the communicative action, as opposed to the technical and instrumental action, that involves communication through “symbolic interaction” governed by “consensual
norms which define reciprocal expectations about behavior and which must be understood and recognized by at least two acting subjects” (Habermas, 1970:92).
Communicative distortions take place because of the social domination in capitalism by the more powerful and by selfprotection interests of those with less power.
And as long as the existing consensus is taken for granted uncritically, the organizations of modern society serve the technical interests of those in social control. The
existing consensus that is rationalized and accepted needs to be questioned by communicative discourse. Discourse makes human emancipation possible, and
emancipation is the goal of critical reasoning. Through critical reasoning and discourse, we question the existing consensus, which gives us a false consciousness of
reality, and we are able to release ourselves from an unconscious dependence on social conditions that have forced us to reify. And reifying prevents us from taking
responsible and autonomous action. Critical reasoning, therefore, enables us to selfreflect. Selfreflection is the ability to act with authentic freedom of choice and
autonomy, allowing human emancipation, which is almost impossible to achieve in capitalism (for more on this see Harmon and Mayer, 1986). Seeing modern
organizations as instruments of social domination legitimized by instrumental rationality, Habermas and other neoMarxist theorists argue that only through relentless
criticism of these institutions of domination can status quo legitimacy and our false consciousness be brought under question. And such questioning is the first step
toward achieving and exercising our true freedom.
NonMarxist critical theorists also present formidable arguments about modern organizations and their biased instrumentality. The works of such contemporary
critical theorists as Denhardt (1981), Ramos (1981), Hummel (1976, 1977, 1982), Thayer (1981), Fischer (1984), Scott and Hart (1973, 1989), and Farazmand
(1999) represent a wide range of perspec
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tives. Using Habermas’ ideas of communicative practices, and being critical of instrumental rationality, Denhardt (1981, 1984) points out a fact shared by others:
the control mechanisms of complex organizations trivialize personal interaction so that individuals are merely objects to be used in the production process.
Each becomes an instrument to be manipulated by the other in the efficient pursuit of organizational goals. More important, each loses that sense of self
reflection and selfunderstanding that is essential to creativity and personal growth. (1984:154)
The central question is how the ‘‘individual may transcend” the existing system, not how he or she may contribute to it (Denhardt, 1981:131).
For Ramos (1981), modern organization theory has been developed with a managerial tendency for the marketcentered society interested only in maximizing
efficiency and “economizing” societal relations. Those in control of modern organizations relentlessly seek efficiency through rationalized production processes to meet
the market demand, the result of which has serious consequences for the individual and society. Rationalized organization leaves little place for individual self
actualization and selfdevelopment (Ramos, 1981:23; see also Denhardt, 1984:152–153). However, Ramos finds bureaucratic organizations indispensable
requirements for our material survival, and our job should be only to limit their influence (Ramos, 1981:123–134).
Hummel’s (1976, 1977, 1982) critique of modern organization, particularly bureaucracy, similarly centers on the adverse consequences the individual suffers. This is
echoed by psychological theorists such as Argyris (1957, 1962) and others who raise serious concerns about the wellbeing of “individuals” affected by the large,
rationalizing, and dehumanizing organizations of the modern world. Their answer, as discussed earlier, is “humanization” of organizations without changing fundamental
social relations, an attempt which Thayer (1981) considers useless or meaningless.
Thayer’s (1981) arguments against “hierarchy and competition” challenge the conventional theories of organization and administration and have provocatively
stimulated the ongoing intellectual debate on the nature of modern organization, politics, economics, and administration. To Thayer, competition, hierarchy of
organizations, and political democracy are fundamental problems modern civilization has faced and is suffering from. “We achieve from competition absolutely no
benefits at all” for it entails market distortion and leads to “competitive waste” (Thayer, 1981:83). Organizational hierarchy as a means of rationalization instrumental to
the status quo legitimacy promotes only illegitimate authority that furthers inequality, injustice, and human bondage.
Hierarchy is coercive in nature, and along with competition it promotes alienation in organizations, for competition is destructive and wasteful. Both hierarchy and
competition hinder rather than foster human freedom.
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“Competition, hierarchy, and alienation are closely related to each other in that they reinforce each other” (Thayer, 1981:82). To Thayer, political democracy is
undemocratic for several reasons, and “even at its best, ‘democracy’ has tended only to limit the power of the rulers, without changing the fundamental relationship
between those who rule and those who are ruled. This is because all theories of democracy contain within them the pervasive assumption that hierarchy is inevitable,
desirable, and necessary” (1981:44); there is ‘‘the complete marriage” between “hierarchy and democracy” (53). Thayer proposes to eliminate hierarchy, competition,
and political “democracy as hierarchy and alienation.” In their place, he suggests “consensus” and consensual structure based on “nonhierarchy” as the foundation of
political, economic, and organizational theories.
To Fischer (1984), modern organization theory is a managerial ideology, therefore biased toward capitalists. Its main objective is to enhance the interests of
capitalism. “As a workplace ideology, organization theory has conventionally represented a managerial ‘world view’. In this sense, it has programmatically embodied
the interests, values and objectives of the professionalmanagerial class” (Fischer, 1984:173). Echoing this point, Farazmand (1999) argues that modern organizations
are used by carefully selected “organizational elites” who translate the will of the ruling economic and political elites—the power elites—into reality (see Chapter 4 for
details).
The interpretive theories of organization are diverse, but they all share certain premises. The development of interpretive theories has been a reaction against the
positivist orthodoxy of American social science dominant since World World II. Originating primarily in European social and philosophical thought, the interpretive
theories derive from German idealism influenced by Immanuel Kant (1724–1804). As Harmon and Mayer (1986:291) note, to Kant, “human consciousness, rather
than the seemingly selfevident world of facts and things, is the core problem of philosophical discourse.” The issue is subjectivity versus objectivity in social science. In
line with such earlier social philosophers as JeanPaul Sartre and others, Alfred Schutz’s (1899–1959) sociological view of interpretive theory, and David Silverman’s
(1971) “actionframe of reference” seem to provide the most direct application of the interpretive “sociology to the study of organization theory” (Harmon and Mayer,
1986:293).
The basic premise of the interpretive theory is that our real understanding of the social world occurs only through our subjective interpretations of our everyday
experience. To simplify the otherwise sophisticated interpretive theory, it may be said that we do things first, then try to make sense of them by making subjective
interpretations of our actions. This is a selfreflexiveness and a retrospective sensemaking. The social world is a product of our consciousness. Intentionality and
intersubjectivity are two principal factors in the creation of the social world. What we experience is a social world seemingly external to us, but it “is really nothing more
than
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the residue of our ‘sedimented’ experience which has over time accumulated and uncritically been taken for granted” (Harmon and Mayer, 1986:295)—hence, an
objectification of social phenomena. But what we might call “objective reality” is a creation of our subjective intentionality, and intersubjectivity socializes our subjective
creation of reality. Language, therefore, plays an essential role, for it is the essence of social existence.
The implication of interpretive theories, particularly the one developed by Silverman (1971) for organization theory, is that they reject systems theory and some of its
fundamental principles such as the influence of external forces like technology and social structure on organizations and their structures. The theory also rejects the
structural and functional theories’ preoccupation with organizational control and rationality. One outcome effect of this theory is the humanizing character and the new
public administration movement, which have influenced the study of organization and administrative theories. Phenomenology is embraced for taking responsible action
toward social change. Other contemporary interpretive organization theorists such as Gibson Winter (1966), Harmon (1981), and Hummel (1976, 1977, 1982) shed
significant light on the nature of modern organizations that tend to dominate and alienate society and individuals.
Process, rather than ends, is important as a means of intentional subjectivity for the creative and conscious decisions we make. For Harmon (1981), for example,
hierarchy and objectification are dangerous elements of modern organizations, for they contribute to alienation and false consciousness of reality resulting in reification.
To Harmon, hierarchy is one of the five possible “decision rules” that may govern authority relationships in organizations. The other four are voting, contract, bargaining,
and consensus. Here, the similarity between Harmon and Thayer is striking, for they both prefer the values of consensus as the mode of organizational governance.
However, Harmon does not go as far as Thayer (1981), ‘‘who urges the outright elimination of hierarchical organizations” (Harmon and Mayer, 1986:316).
In short, the critical and interpretive theories of organization contribute to a new and important body of knowledge away from the traditional mainstream organization
theory. Several principles form the foundations of this new body of knowledge. First, instrumental rationality of the classical, neoclassical, and systems theories is
rejected as a tool for social domination. Second, instead of integrating individual and organizational goals, individuals should transcend organizations, and not the other
way around. Third, the longestablished, dominant social science of positivism is rejected in favor of subjectivism, an epistemology that considers organizations as a
creation or reflection of human consciousness. A major implication is that we should not take for granted, uncritically, the seeming reality of the social world and
consider it as the only fact. Rather, we must exercise a critical frame of mind and through subjective interpretations or readings transcend the given world of social
reality into the one that is consciously understand
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able and acceptable, the world in which we are able to make free but responsible choices.
Administrators of modern organizations should do likewise when taking action. Their actions should be guided by a true consciousness gained by critical and
interpretive sensemaking of the phenomena in the surrounding world. Their job is to transcend rather than to accept the given social order. The critical and interpretive
theories of organization have made enormous contributions to our knowledge of social science and of the nature of modern organizations. At least they enable us to
raise our level of human consciousness about the social reality by thinking critically, by freeing ourselves from societally imposed constraints, and by making free and
responsible choices in organizations of various natures and types. These theories may also contribute to our becoming more responsible and democratic global citizens
in a world in which the existing artificially set national boundaries will crumble. Only through such a true consciousness can we as individuals transcend the existing social
order into a consciously transformed reality that will allow us to achieve individual fulfillment and personal growth—hence, a true freedom.
Despite their significant contributions to organization theory, critical and interpretive theories of organization suffer the same problem the Marxists’ view of
organization faces—that is, individual conflicts, organizationally or classinduced and personalitybased. The inherent tendency in human nature to dominate, to exploit,
and to generate conflict is too strong to be overlooked.
CONCLUDING POINTS
The above overview of the literature on organization theory reveals the diversity of the field in terms of both disciplinary and conceptual perspectives. However, the
entire spectrum of the theories may fall under the three broad categories of instrumental rationality of the classical and neoclassical traditions, the systems theory and its
variants pointing to the broader concepts of organizations with their rational and environmental determinism, and the critical and interpretive theories with their main
focus on processes and changeorientations leading to improvements in human life and society entangled by organizational rationality of modern capitalism and
bureaucratic order. The central points of all these theories are the struggle between organizations and individuals on the one hand, and the organizations’ changing
environments on the other. Pure rationality serves organizations at the expense of individuals’ free choice and fulfillment of personal life, while rationality of organizations
dealing with environmental phenomena lead to various strategic alterations of such environments around the globe.
The organization theory that developed in the past century has predominantly been biased with a managerial ideology. Analysis of organizations in isolation from
political and economic theories has reinforced this
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ideology, which has shown us one side of the picture only. What is needed is an interdisciplinary approach to organization theory that also combines political and
economic theories in a comparative perspective and one that reflects a balance between humanity and instrumental rationality, between normative values and positivist
values, and between labor and management.
The elite theory of organization presented in Chapter 4 only attempts to demonstrate the failure of the conventional theories of organization in searching for such a
balance on the one hand, and offers an alternative perspective to broaden and enhance our social, political, and economic consciousness and organizational knowledge
toward achieving an equitable and effective balance in management and administration of society. In conclusion, it may be said that there is no major alternative to the
existing order of elite nature, and any attempt on the part of the masses of ordinary people, including the white collar professionals, to replace the dominant elite would
eventually lead to the emergence of another elite with a different nature, such as the one that emerged in the socialist states of the former Soviet Union and elsewhere.
However, it is the nature and behavioral outcomes of elites’ actions or inactions toward the absolute majority of citizens that matters most. The overriding fact is that
modern organizations, by the nature of their rationality and irrationality, are alienating, and this trend will continue to be the dominant paradigm in the new global order
for the decades to come. The tyranny of organizational rationality has just begun, and individuals have no choice in this new organization society but to play by the rules
of the survival game, unless they revolt and totally alter it.
Consequently, individual citizens will be reduced to passive subjects of the marketplace in which human values are transformed into commodity values and alienation
will increasingly reign. The elite theory poses a challenge to conventional rational organization theorists and to political and economic theorists as well. As Whyte
(1989:396) concludes, “there is no solution. The conflict between individual and society has always involved dilemma; it always will, and it is intellectual arrogance to
think a program would solve it.”
NOTE
1. For more details see Harmon and Mayer (1986): 99–100.
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Chapter 3
Emergent Theories of Organization: An Overview and Analysis
Ali Farazmand
INTRODUCTION
Like other theories of social sciences, organization theory has undergone significant changes during the last two decades. New models and theories have emerged that
challenge the traditional or even critical and interpretive theories and models of organization. New paradigms are emerging which suggest alternative modes of
organization and administration with explanatory and predictive powers in society. Now, the phenomenon of globalization and innovations in technology have also
opened up new frontiers for research and studies in organization theory, behavior, administration, politics, and management. This chapter deals with some of these
recent and emergent changes in the body of knowledge in organization theory and behavior.
This chapter and the one that follows, therefore, extend the discussions of the previous chapter on organization theory with assessments and appraisals. In addition to
some of the critical and interpretive theories and systems theories (Habermas, 1970, 1971; Forester, 1983; Denhardt, 1981; Hummel, 1976, 1977, 1982; Thayer,
1981) discussed in the previous chapter, which have gained power over time, there are several other emerging theories or models of organization that deserve close
attention and extensive analysis. These theories include the “garbage can” model of organization, “natural selection’’ theory (Weick, 1979), the “newinstitutionalism”
and “institutional theories of organization,” the “chaos and transformation theories,” and “organizational elite theory” (Farazmand, 1999). The first of these theories are
briefly presented here with
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comments, while others are discussed at length. Elite theory of organization is the topic of the next chapter.
While the garbage can and institutional models and chaos theory seem to have functional and practical implications for contemporary organizations and
administration, the elite theory has psychological, normative, and political foundations aimed at improving individual life in organizations, at redistributing power and
building equity in the organization and administration of society, and at building and developing social and political consciousness with predictive power for future action
and change. The latter has many similarities with the critical and interpretive theories in that both share certain premises and principles, all aimed at freeing individuals
from the constraints of organizational life and from the prevailing given social order as well as promoting equity, balance of interests, and justice in society.
However, differences persist within some of the emergent theories, as well as between this group of organization theory and the critical and interpretive theories.
Structure and process are two determining factors of demarcation between and among theories discussed below.
GARBAGE CAN MODEL
The garbage can theory of organization seems to have had an enormous influence on organization theory, with significant implications for practitioners. According to
Michael D. Cohen, James G. March, and Johan P. Olsen (1972:2), “an organization is a collection of choices looking for problems, issues and feelings looking for
decision situations in which they might be aired, solutions looking for issues to which they might be the answer, and decision makers looking for work.” Thus,
organizations are garbage cans into which problems are tossed; the problems become solutions for some people, and solutions look for issues to be dealt with. The
fluid can, with its problems, then becomes full of opportunities and resources for others. The process is more important than the goals. In fact, goals tend to appear and
take shape after the fact emerges from the process. The model tacitly approves the incremental approach to decision making in that it rejects the traditional, structural,
and rational approaches to organizing and choice making. Bargaining, conflict resolution, negotiation and renegotiation, and so on are parts of the process and
eventually determine goals (Cohen, March, and Olsen, 1972; March and Olsen, 1976; Cyert and March, 1963).
The significance of the garbage can model can also be understood in a sense that it tends to “deconstruct” the earlier and existing structural and functional theory of
organizations. The garbage can theory is an attempt to deconstruct the existing constructed world of reality about organizations and society, and then reconstruct out of
a fluid anarchy in which all sorts
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of garbage may enter and exit with different forms and shapes. Its premise is that humans are not completely rational, that their planning and goals do not work, and that
their emotions and feelings intervene in the process of actions that at times are purposeless but have consequences that produce goals and lead to new construction.
The garbage can model seems to have a mix of approaches borrowed from the incremental model, which rejects the rational, structural, and comprehensive models
and their acceptance of past decisions or actions (Harmon and Mayer, 1986); from Simon’s bounded rationality model, which points to imperfect information, time
constraints, and lack of knowledge of causeandeffect relationships, and other limitations administrators face in making organizational decisions (Perrow, 1979, 1986);
from the interpretive and critical theories, which question the structural/functional model with its strict interest in instrumental rationality (Weick, 1979); and from the
behavioral and human relations approaches to organizational studies (Perrow, 1979, 1986; Argyris, 1962, 1973; Argyris and Schon, 1978). The model is an amalgam
of several theories without cohesiveness in that it contradicts within itself the basic elements of the model. Yet, it seems useful to practicing administrators who find the
model applicable to the unexpected and changing outcomes of daily organizational life. As a local police chief, also a graduate MPA student of mine, put it, “I find the
garbage can model very useful in my everyday performance. I enter the office every day with some plans but end up doing a number of things as they arise and making
a lot of decisions with unexpected outcomes.” And Perrow observes that the garbage can theory has had “an enormous impact in the decade since it has appeared....It
notes that people fight hard to gain access to committees, then rarely attend, because of unstable priorities and limited attention span” (Perrow, 1979, 1986:136). But
Perrow is also rightfully critical of the garbage can model in that by rejecting structure, the model admits the necessity of structure, and indeed it purports that such a
fluidity of organization will lead to a new structure, however unplanned and unintended.
Perrow’s criticism is also aimed at the deconstructionist movement and the garbage can theory’s deemphasis not only on ‘‘rationalism but theories of human
nature” (1979, 1986:138). Nevertheless, garbage can theory plays a significant role in the general trend of deconstruction in the social sciences and humanities, a trend
which is likely to be very significant into the early twentyfirst century. Such a social science trend originated in the earlier works of Friedrich Nietzsche, Ludwig
Wittgenstein, Alfred Schutz, and many others who challenged rationality and introduced the notion of “social construction of reality” in criticism of what we take for
granted as reality in our daily life (see Perrow, 1979, 1986:137). The model has theoretical and practical implications for organization theory and public administration.
But it is also conservative in that it tends to reject the notion
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of goaldirected organizational activities, particularly strategic goals aimed at altering environmental conditions.
NATURAL SELECTION THEORY
Closely related to the garbage can theory is Weick’s (1979) “natural selection” theory of organization, a theory that is also related to the interpretive theories of
organization. Rejecting causeandeffect relations and emphasizing process and retrospective sensemaking, Weick argues that human rationality is limited by
constraints imposed by inside and outside environmental factors, thus embracing Simon’s bounded rationality. But his views are far more significant than Simon’s in that
Weick rejects the conventional wisdom about the reality of the world, including the traditional structural schools of organization that emphasize that goal and structure
must precede process; he attempts also to deconstruct. By approving the assumptions of the garbage can model, Weick (1979:86) supports multidirectional and
circular, not linear, directions of relationships among people in organizations. “Most managers get into trouble because they forget to think in circles. I mean this literally.
Managerial problems persist because managers continue to believe that there are such things as unilateral causation, independent and dependent variables, origins, and
terminations” (Weick, 1979:86).
Weick persistently argues that “processes are logically prior to, and therefore more important than, substantive ends” (Harmon and Mayer, 1986:351). People and
their patterns of relationships shape the process, not structure or goals, and organizations are inventions of people. Through “doubleinteraction’’ of human
relationships, an evolutionary process of organization emerges. Weick’s evolutionary model of organization, therefore, is based on several principles that include
process, change, and retrospective sensemaking—people do things, then try to retrospectively make sense of what they have done. Harmon and Mayer (1986:353–
356) provide a useful analysis of Weick’s four basic steps in organizing activities: ecological change, or people’s response to environmental changes; enactment as a
process of creating an environment that, in consequence impinges on people; selection, which is a process of sensemaking activity—action precedes thought; and
retention, as the final step of organizing which depicts “meaning” or “believing” (“knowing what I think”).
Despite its considerable contribution to our knowledge of organizations, Weick’s theory of natural selection and the garbage can model tend to oversimplify the
relationships between people in that they at least overlook the nature of those relationships, their motifs in taking actions, as well as the social class and power as
normative factors in the process of organizing activities. The theories do not tell us why people engage in the process of actions and what their intentions might be. Also,
the garbage can model
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and Weick’s theory both seem unrealistic in the real world of modern societies dominated by a web system of multinational organizations and the more powerful states
that tend to reign.
Moreover, the theorists’ view of process organizing activities seems to reject the role of idea or theory as a guiding force that people may use in constructing or
changing phenomena. Weick also rejects the active role of individuals, particularly significant members of groups, and giant organizations whose strategic decisions to
alter social relations and political and economic systems around the world are too pervasive to ignore. Both the garbage can model and Weick’s seem to overlook the
fact that organizations do change society and that society must adapt to organizations. This problem is also present in the institutional model of organization.
INSTITUTIONAL THEORIES OF ORGANIZATION
Institutional theories have made significant contributions to modern political science, economics, sociology, and organization theory. They have received high currency at
the turn of the new millennium. Institutions provide the “basic structure by which human beings throughout history have created order and attempted to reduce
uncertainty in exchange....They connect the past with the present to the future so that history is a largely incremental story of institutional evolution,” states new
institutional economist Douglas North (1990:118). Richard Scott (1995) has traced the contributions of institutional theory to organizational studies to the appearance
of systems theory in the 1960s, and others who have made direct contributions to the field (Zucker, 1977, 1988; Powell and DiMaggio, 1983, 1991) have reported its
emergence in organization theory since the mid1970s.
However, I have argued that contributions of institutional theories to social science in general and to organization theory had begun long ago. If we were to trace its
origin even farther back to before the nineteenth century, we will find, as I have outlined below, that institutional theory began to emerge in the ancient time when
thought and practice of organization and administration developed along with the development of great world civilizations. The powerful influence of institutional theory
has been responsible for advancing many institutional changes in modern history of governance, administration, and politics as well as economics and organization
theory.
Historically, institutional theories can be grouped under three labels, denoting three historical periods of development: (1) the early institutional theories of the ancient
time; (2) the classical or traditional theories reacting to the earlier traditional models; and (3) the contemporary, newinstitutional theories. Characterized by diversity in
perspectives, and sometimes being contradictory with each other, these historical institutional
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theories have originated from various disciplines of economics, political science, sociology, and organization theory. An enormous literature has emerged, and is still
growing, on newinstitutionalism commanding attention from all disciplines.
Early Institutionalism
The earliest institutional tradition can be traced to the ancient and medieval times. These include, for example, the Greek Aristotle (fifth century B.C.); Persian Rozbeh
(late seventhcentury thinker, philosopher, writer, and the last prime minister of the Persian Sasanid Empire, and later known as Ibn Moqaffa of the eighth century);
NizamulMulk, (eleventhcentury prime minister of the Great Saljugh Empire of Persia, thinker, and author of the book, Governance and Administration—Seyasat
Nameh); Farabi (also known as the Second Teacher in history, after Aristotle); and Tunisian Islamic Ibn Khaldun (father of sociology in the fourteenth century). They
also include some philosophers and thinkers of Enlightenment Europe, such as the Italian Machiavelli (sixteenth century); the French Jean Bodin (sixteenth century),
Montesquieu (eighteenth century), and Rousseau (eighteenth century); the German Hegel (nineteenth century); and the English Hobbes (seventeenth century) and Jean
Stuart Mill (nineteenth century). These earlier institutionalists set the foundations for the modern traditional and newinstitutional theories of organization of governance
and administration. Key features of these very early theorists included building major elements of institutions—be it market, government, bureaucracy, justice systems,
and administration—such as structure, process, and values.
The early institutional theory of the modern time began in nineteenthcentury Europe and later in the United States. Avoiding the exhaustive citation, examples include
Emanuel Kant (1965, 1978), Georg Hegel (1830, 1975), Thorstein Veblen (1898), John Commons (1924), as well as John Dewey, James J. Schumpeter, John
Kenneth Galbraith, and Gunnar Myrdal (see Swedberg, 1991; Scott, 1995). A key feature of early institutionalism was the focus on the “rule of conduct” (Commons,
1924:376), though the “centrality of change” as a process as well as structure in economic tradition was recognized by some who tended to break away from the
earlier approach (Veblen, 1919:239), and those whose revolutionary thesis was historical evolutionary transformation via dialectical process of materialism, with
“change’’ being constant, central, and imperative, coming out of the internal contradictions and tensions of systems (Marx, 1967; also in Sabine, 1961). This shows the
dialectical nature of historical development of knowledge on institutions, organizations, and social systems. The normal course of social development, according to
Marx’s dialectical evolutionary theory, is “feudalism, capitalism, and socialism, with a form of political organization fitted to each” (Sabine, 1961:767).
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Much of the early institutional thought was preoccupied with “permanence,” and unchanging structures, rules, rights, and procedures, with a place in the present but
“no future” (see Simon’s critique, 1991:3, 57). Exceptions were the works of Hegel and Marx. The early institutionalists were also mostly nontheoretical, mostly
“constitutionmakers” (see Eckstein, 1963:10), crude positivist, applying philosophies to real world and ‘‘looking at hard facts.” But, Weber stood in the crossroads of
three currents: (1) those who viewed social sciences as natural sciences, (2) the idealist school of Durkheim (1893, 1949) and the historical materialist school of Marx
(1967) with emphasis on internal contradictions as forces of institutional change and transformation, such as from feudalism to capitalism to socialism (see Chapter 1 for
details), and (3) the classical interest in “general theoretical principles” (Scott, 1995:11; see also Farazmand, forthcoming).
In short, early institutional theory contributed to organization theory by laying the foundations for the cumulative knowledge in organization theories for governance
and public administration. History matters, and it is the past that has given the present a frame of reference, which is also the springboard for the future. Coherence in
early institutional theory was the centrality of institutions with structure, process, and values. Disagreement and divergence were the centrality of internal contradictions
as leading forces of institutional change, their breakdown, and evolution, qualitatively as well as quantitatively. Therefore, continuity and change characterized this early
tradition of institutional thought on organization theory (Farazmand, 1997, forthcoming).
Classical/Traditional Institutionalism
Coming from political science, sociology, philosophy, and economics, these theorists dominated public administration, governance, administration, and organization
theory. The classicists formed the core of the modern structuralfunctional foundation of institutionalism based on constitutional law, economic system and structure, and
topdown administrative organization in both business and public administration. Organization theory then began to reflect the writings of major institutionalists whose
influence shaped the body of knowledge in the field now known as classical and neoclassical organization theories (see Farazmand, forthcoming, for details).
The works of such names as Max Weber (1924, 1947), Woodrow Wilson (1889), Willoughby (1896, 1904), Merton (1940, 1957), Barnard (1938), Selznick
(1949), Blau (1955), Simon (1945, 1957), March and Simon (1958), Gulick and Urwick (1937), Parsons (1956, 1960) and Stinchcombe (1968) form the classical
or traditional institutionalism. The
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central characteristics of the traditional or classical institutional theory of organization included overemphasis on permanence, stability, instrumental rationality—whether
maximizing or satisficing—maintenance of institutional power, structure, functionalism, order, centralization, and goals and efficiency. Students of organization theory
and administration are familiar with the body of literature on classical organization theory reviewed in the previous chapter. Organizations become institutionalized
through value commitments enforced through socialization and institutionalization, and it is this process that makes organizations “as structural expression of rational
action” (Selznick, 1948:25).
The role of environment becomes increasingly important as time goes on, and the later institutionalists, namely some systems theorists (see, for example, Katz and
Kahn, 1966), recognized this fact and placed the whole concept of systems analysis on the notion of organization—environment relations and the need for adaptability
of the former to the latter. A clear example of the application of the later traditional institutional theorists is the strong application of “strategic action” by large
organizations—especially multinational corporations—to not only adapt to their changing environment, but also to take “strategic actions” to alter their environmental
culture to suit their purpose (see Farazmand, forthcoming; also, discussion on systems theory in the previous chapter). This point was illustrated by Parsons (1934,
1990 and 1956, 1960) and further elaborated and spelled out by Thompson (1967), whose recommendations led many large corporate organizations to political and
economic adventures in developing and lessdeveloped nations rich in certain natural resources (such as oil in Iran, copper in Chile, and elsewhere) with tragic and
catastrophic consequences for those nations and their people (see Farazmand, 1989, forthcoming, Chapter 2 of this book).
NeoInstitutionalism
A key feature of neoinstitutionalism is the recognition that organizations must be understood and predicted within the larger system or environment in which they
operate. This is an appreciation, and extension, of the systems theory concepts which, as noted in a previous chapter, underlie the importance of the surrounding
environment of which the organization is a part. Ironically, it is the older or earlier institutional theorists who advanced this notion, which was overshadowed for decades
by the instrumental rationality, structure, and control of the classical theorists. They paid little attention to the environmental changes affecting organizations.
The newinstitutional theory of organization is developed mainly by Walter W. Powell and Paul J. DiMaggio (1983, 1991), Richard Scott (1977), Scott and John
W. Meyer (1983), Scott and Backman (1990), Scott (1995), Lynne G. Zucker (1977, 1988) and others, whose much research has been
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carried out in nonprofit organizations (Hall, 1991). However, the institutional model is presented here within two streams of knowledge contributing to organization
theory and administrative behavior.
Narrow Stream
The first stream of neoinstitutionalism is based on the assumption that organizations exist in the “fields’’ of other organizations of similar nature. “By organizational field,
we mean those organizations that, in the aggregate, constitute a recognized area of institutional life” (Powell and DiMaggio, 1983:148). The model assumes that
organizations with a certain field become homogenous, develop sameness, and resemble each other. Examples are universities, hospitals, fast food restaurants,
department stores, and airlines. To the theorists, organizations are affected heavily by external environmental forces—government regulations, cultural pressures, and so
on—which tend to institutionalize organizations (Meyer and Rowan, 1977), but they turn more inward than outward. Organizations also mimic or model each other in
the field: “The rapid proliferation of quality circles and qualityofworklife issues in American firms is, at least in part, an attempt to model Japanese and European
successes” (Powell and DiMaggio, 1983:151). This perspective of institutional theory seems to have gained attention much more within organizations than outside in
interaction with other organizations. Using simplistic assumptions, this perspective falls short in explaining major institutional and organizational phenomena playing
formidable roles in terms of power, authority, and control in and around organizations in modern society. Thus, this perspective of the institutional model rejects the idea
that organizations plan, make strategic choices, and have a tendency not only to influence their own external environments but also to alter them. The active role of
multinational corporations or translational organizations in taking over, changing, and dominating societies across the world is a prime example. Their strategic decisions,
their funding, and their organizing activities have not only changed and dominated Third World countries’ economies and cultural milieux, they have also played an
active and leading role in altering even political systems to their favor around the globe (see Morgan, 1986). Perrow (1979, 1986) gives numerous examples in support
of his criticism of the institutional model and the claims its proponents, including Philip Selznick (1948, 1957), make. As he points out, the major defect of the model is
that
the school’s view of organizations and society fails to connect the two. Parts of the environments are seen as affecting organizations, but the organization
is not seen as defining, creating, and shaping its environment....Society is adaptive to organizations, to the large, powerful organizations controlled by few,
often overlapping leaders. To see these organizations as adaptive to a turbulent, dynamic, ever
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changing environment is to indulge in fantasy....Standard Oil and Shell may compete at the intersections of two highways, but they do not compete in the
numerous areas where their interests are critical, such as foreign policy, tax laws, import quotas, government funding of research and development.
(Perrow, 1979, 1986:173–174)
Both Perrow (1979, 1986) and Hall (1991) also attack the model for its downplaying of goalorientation of organizations, as well as its embracing of the “assumptions
of the earlier structuralfunctional [model] which tend to ignore the fact of organizational power in organizational society” (Perrow, 1979, 1986:166). To Perrow, “the
area of institutional analysis reflects in part what is worst about sociology” (166). To Hall (1991:289), the first problem with the model is its ‘‘potential tautological
reasoning,” which is “circular” in nature, thus “making causes and effect obscure and difficult to assess” (Turner and Maryanski, 1979:124).
As discussed earlier, the “garbage can” theory and Weick’s natural selection model, with their preoccupation with processes and circular multidirectional factors,
face the same problem of tautological reasoning this perspective of the institutional model makes. Hall also finds three other problems with the model, including the
tendency to apply it in “an ex post facto manner”; the danger of making the reality that was “the source of the myth into the myth itself”; and “overextension” of the
theory into a vast array of “situations and organizations” (Hall, 1991:290), a problem Perrow (1979, 1986:172) calls “trivial[izing]” organizations.
BroadBased Stream
The second perspective of institutional theory presents a much broader picture of the theory and its applications to the real world of governance, administration, and
organizations in society. Drawing on the traditional and recent institutionalists in political science, sociology, and political economy mentioned earlier, this new
institutional perspective frames the analysis around the environment and organization or institutional arrangement in a mutually interactive and dialectically operative
system of relationship. Organizations feel external and internal cultural pressures as they become more professionalized with standardized norms. Organizations absorb
these pressures by learning from the external living ecosystem in which they operate, but they also learn how to alter those elements in their environment that are not
hospitable to their goal attainment. The works of Guy Peters (1994), Ali Farazmand (1997a, forthcoming) as well as the earlier works by Philip Selznick (1957, 1948),
Karl Marx (1967), Max Weber (1947, 1968), Parsons (1934, 1990), March and Olsen (1984), Harold Laswell (1936), John Commons (1924 and 1950, 1970),
Thorstein Veblen (1898), Stinchcombe (1968), Curt Lewin (1951), Krasner (1988),
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Thelen and Steinmo (1992), Argyris and Schon (1978), and others represent, with variability, this perspective.
Central to understanding the institutional theory of organization are several elements of the institutionalism and institutional theory, such as structure, process, values,
change, time, environment, institutionalization, and institution and organization. Structure, process, and values are the key properties of institutions. Structure provides
the physical and organizational aspects of institutions, while process offers their functioning; values come from the environment in society, as well as being produced
within institutions. The values embedded in society affect the ways institutions are structured and function. In turn, institutional values influence the value structure of the
environment in which the institutions operate. Examples include religious and market institutions or marriage.
However, without organization, institutions either collapse or malfunction and are subject to manipulation, decline, and death. It is possible to have institution without
sound organization, therefore subject to external threats. For example, many market institutions are weak in lessdeveloped nations; they are easy targets for global and
Western corporations. Weak and poorly organized marriages and other forms of partnerships are fragile institutions.
On the other hand, institutionalization is imperative for organizations and other structures (e.g., political systems or regimes) to survive and prosper. Without
institutionalization, structures and organizations are fragile and lack legitimacy (Farazmand, 1997a, forthcoming). Similarly, change and environment form key bases of
the institutional foundation of organizations. Change provides opportunities for survival, continuity, and dynamism, whereas environment presents challenges to
organizations and offers opportunities for dynamism and evolution. It can also challenge them to death if they fail to adapt in a timely manner. Chaotic changes and long
term qualitative transformation in social systems, as well as in the biological ecosystems in which humanity and, by inference, organizations and institutions exist, can
cause institutional crisis or breakdown, which may result in either death, or transformation and/or evolution into new institutional entities. Therefore, time and change
play a key role in the institutionenvironment relationships of organizations in public or private sectors. It is the sudden changes and breakdowns in systems of
institutions and organizations that must concern all humanity and particularly public organizations with enormous responsibilities in shaping modern human civilizations.
CHAOS AND TRANSFORMATION THEORIES
Chaos and transformation theories have emerged as new currencies in the social sciences in general and in systems analysis and futuristic studies
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in particular. However, the relevance and utility of chaos and transformation theories to organization theory are still being developed, with the present analysis being one
of the first contributions. These theories also have significant implications for governance, administration, environment, and global studies. Some social scientists have
elevated its status to a “new science” of chaos theory (Wheatley 1999), telling us that we live in a complex world full of uncertainties, randomness, and unpredictable
events that can scramble plans and drive systems, including organizations into chaos and breakdown. Crises, surprises, rapid change, confusion, and things out of
control prevail in our world, and we must be prepared to deal with such chaotic phenomena and manage organizations accordingly.
A key feature of paradigmatic chaos is what Warren Bennis (1967) calls “temporary society,” Peter Drucker (1969) calls the “age of discontinuity,’’ and Charles
Handy (1997) calls the “age of unreason,” in which we must be prepared to mange our public and private lives by bold imagination, and by “thinking the unlikely and
doing the unreasonable” (cited in Daft, 1995:93). These warning expressions imply that current world crises, including many organizational problems, can no longer be
solved or managed through traditional approaches and methods; they require new ways of thinking and solutions.
One example of solving critical social problems by an old approach is the passage of the 1994 Mandatory Arrest Law of Domestic Violence in the United States.
According to critics, it is an example of the inability of the modern capitalist state to deal with a gender problem with a history of several millennia. The traditional
businessasusual solution, opted for by the power structure dominated by the bourgeoises elite, has been under growing pressures from the female population to make
mandatory the arrest of men, in almost any domestic conflict or potential violence, regardless of who the victim is. Mandatory arrest of the man is a policy which law
enforcement officers must carry out, even if they see or determine that either no one is hurt or it is the woman who has prevailed. Consequently, the law has seemingly
fixed a longstanding problem of female suppression by men, but it also has created a more dangerous problem by giving a loaded gun to women, many of whom have
used it and will likely use it for vengeance, for blackmail, or gaining an edge over a man. Even though men have for millennia suffered most from both external abuse in
the forms of slavery, heavy construction work, fighting in wars, and risking lives to work under dangerous conditions, as well as domestic abuse by some women, they
still are the first and easy targets of the new law in the United States. It automatically encourages many decent men to run for their lives when involved in domestic
conflicts because they fear they would not stand a chance against women in an environment which considers men guilty in advance; it is politically correct to damn them.
Because police officers have the incentive to make more arrests so as to look better in their annual
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performance appraisal, the problem of mandatory arrest is further aggravated for men. Thus, moving from one extreme to another causes more problems, including the
social problems of marriage breakups and ever increasing separation of men from women out of fear of their lives and careers being ruined. Fatherless America
(Blackenhorn, 1995), or criminalization of America, has become a common and sad reality (see Lowi, 1996; Davey, 1995; Farazmand, 1997a, forthcoming). Chaos
theory would perhaps require a much different approach to deal with this and other crisis issues, but it would also be an oversimplification of the concept if we take this
at face value. As we will see later, due to several limitations, application of chaos theory can also cause potential harm with unexpected consequences for men and
women.
Understanding chaos theory requires a deeper understanding of the relationships between parts and whole, of segments and system, and of constant dialectical
relationships between constant and change, and stability and chaos, leading eventually to a new form of order and stability. This is the dialectical nature of phenomena,
whether natural or social, in the universe. Below is a succinct discussion of chaos and transformation theories and their assessment or critique with implications for
organization theory and public management.
Originally, the concept of chaos theory is claimed to have appeared in natural sciences—just like the earlier systems theories of the 1960s—but then the concept
began to find its equivalence in social sciences with contributions to recent implications for organization theory and public administration. It is ironic that both chaos and
transformation theories in social sciences have a very long historical origin back to ancient times, yet as focuses of scientific inquiries, they became subjects of interest to
natural sciences in the late twentieth century. Thus, contrary to the popularly held view, it was not the natural sciences that started the concepts with social sciences
following; the social sciences did it first.
As a background to our main discussion we may note that the early systems theories of the 1960s had brought to our attention the imperative of (1) environment and
its effects on organizations; (2) the need for adaptability as a necessary property of open organizations to survive and develop; (3) the concept of negative or
negentropy dynamic open organizations have as living systems, a quality that enables systems to detect and correct malfunctions, system erosion, and parts that have
performance disorder; (4) the interconnectedness of parts or components of an organization or system that serve as subsystems functioning in harmony toward goal
achievement; (5) the relationship of an organization or system in relationship to a larger and broader system or environment within which the organization or system
operates; (6) the importance of feedback, and feedforward, as a warning radar system; and (7) the characteristic that systems or organizations tend to maintain their
stability or equilibrium at almost any cost.
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Systems theories borrowed from natural sciences, but it was not the first time that the theories had been discussed. In fact, Marx and Engels (nineteenth century) and
before them Hegel (nineteenth century), Jean Bodin (sixteenth century) and before him the Persian philosophers AbuAli Sina (Avicenna, tenth century) and Farabi,
(ninth–tenth century), as as well as some Greek philosophers, including Plato (fifth–fourth century B.C.) could be considered systems theorists who had presented
eloquently some of the key features of systems and chaos theories. These features included the interrelationship between parts, the idea that organization is conditioned
by the larger environment—sociopolitical and economic—within which a system operates, and that systems tend to protect their equilibrium at any cost and crush
forces of system challenge. Sina presented a “synthesis” of a dialectical process of change, including chaotic change, that follow a pattern of stability and order. For
Sina, the dialectics of nature included the good and bad, and the nonlinearity of the brain functions in which patterns of stability are always followed by turbulent
commands of thought and action.
For Marx (1967, 1984; see also the previous chapter) and Marx and Engels (Engels, 1873), as we know, change is central in all living systems, including
organizations, and there is always a dialectical contradiction, an inner tension, a tenacious urge among parts representing stability and change, order and disorder, and
stagnation and breakaway within an organization or system. Dialectics of nature, as Marx and Engels (Engels, 1873) presented over a century ago, formed the
foundation of the scientific views on chaos and transformation. Without turbulence and change, stagnation and decay prevail, causing a halt in system survival and
continuity. According to Plato, “wonder” produced philosophy, which served as a source of various sciences for a long time, until its bifurcation into various sciences,
such as psychology, physics, astronomy, medicine, chemistry, biology, and more. As we know philosophy was until the twentieth century considered the mother of
sciences, and a philosopher must have mastered all or most of those sciences.
The breakdown of philosophy into various branches of science represents an example of the bifurcation that living systems do and go through. It is the process of
transformation and evolution. Today, each of these sciences is studied so narrowly that the big picture or the system and its holistic change process are ignored by
natural scientists. The induction approaches and methods of scientific studies have become atomistic and have lost interconnections with the rest of the systemic
interactions and feedback processes so necessary for system development, breakdown or disorder, and returning pattern of order and stability. This dialectical law of
nature is the principle that has become deterministic in producing order and disorder, chaos and stability.
Environments cue or stimulate, stabilize or intensify these dialectical
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forces of order and disorder, resulting in new changes and possible chaos, as in the case of revolts and revolutions when systems totally break down with uncontrollable
outcomes. Further, Marx’s view was an evolutionary one, through historical transformation of material life of nature and phenomena, not idealistically as Hegel’s
dialectic suggested, but materialistically as their existence was realized. His view was dialectical nature. Therefore, chaos and transformation theories also present
implications for the evolutionary process of humankind and provide springboards for future strategic social action on the basis of past and present patterns of behavior
in the universe and in living systems, including organizations and environments. Thus, as we will see below, these ideas are not new, but the conceptualizations,
methodologies, and techniques of inquiry have improved, and sophistication has characterized the modern scientific studies of chaos and transformation theories.
It is astonishing to observe how ignorant the modern Western scientific community has been about the dialectical nature of chaos theory, yet all the discoveries of this
very community—in natural and social sciences—have proven the fundamental law of the dialectical nature of change and continuity, of chaos and order, and of stability
and turbulence. How many resources could have been saved and used for other healthy purposes within the scientific community—and elsewhere by the governments
funding this work—had the dialectic nature of patterns of chaos and order, as presented by the earlier philosophers, been perceived? How far could we have gone in
our scientific enquiry regarding nature, living systems, and organizations? What, then, has been discovered regarding chaos theory?
The idea of chaos or nonequilibrium theory is claimed to begin with a rigorous new scientific perspective on how order gives way to chaos and how chaos leads
to order. Studies are found in both natural sciences and social sciences, with appealing theoretical and practical implications for economics, political science,
governance, and public administration. Scientists claim a major breakthrough in discoveries about how the universe operates and how it affects social phenomena
traditionally viewed or understood as developments on linear paths with predictability. The works of the scientists in the natural science tradition can be too exhaustive
to list, but some of the key examples are Laszlo (1972), Capra (1982), Sivard (1983), Polanyi (1944), Feigenbaum (1980), Prigogine and Stengers (1984), Eldredge
and Gould (1972), Csanyi (1980), Csanyi and Kampis (1985), Maturana and Varela (1980), von Bertalanffy (1968), Boulding (1978), Miller (1978), Wiener (1948),
Abraham and Shaw (1984), and Loye and Eisler (1987). The contemporary works in the social sciences are also too many to cite, and their roots date back to the
ancient time, as we will see below. Examples of these contemporary social scientists are Parsons (1968), Maslow (1966), Myrdal (1969), Marx and Engels (Engels,
1873); Pareto (1961), Durkheim (1951, 1964), Max Weber (1947, 1961), Kurt Lewin
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(1951), Sorokin (1941), Spengler (1932), Toynbee (1947), Rene Thom (1972), Zeeman (1977), Jantsch (1980), Mesarovic and Pestel (1974), Capra (1982), Burns
and Ogilvy (1984), Loye (1977, 1978, 1980), Eisler (1987), Drucker (1969), Allen (1981), and all the systems theorists as well as those social scientists working on
futurism and contributing to such futuristic research projects as Club of Rome, and so on.
Chaos
The notion of chaos denotes crisis and disorder, a state of nonequilibrium, instability, turbulence, rapid or rapturing changes that scramble plans and cause
unpredictability, with consequences of anxiety, fear of the unknown, and triggering and tripling effects of destruction and system breakdowns. A key question for social
and natural scientists is how to control chaos so that its destructive effects could be eliminated or minimized. This is a notion that has until recently prevailed in traditional
ways of thought and action in social science. However, as explained by chaos theory, social and natural phenomena do not exist or develop or evolve on strictly linear
paths so that we can predict crises that would need to be avoided or controlled. The essence of chaos theory is that of the law of nature, as explained over a century
and a half ago by Marx and Engels and long before them by earlier philosophers of the East as well as of the West. Examples of chaotic events or systems breakdowns
in the world are many, and they may be found at macro and micro levels (see also Farazmand, 2001).
Contemporary scientists have grouped these crises or systems breakdowns into two types: microcosmic and macrocosmic.
Microcosmic Level
The microcosmic social realities of crises and discontinuities have worldwide impacts. Examples include financial crises, population crises, global environmental crises,
world population explosion pressures, desertification of productive lands, crisis of the widening gap between rich and poor countries, and the possibility of nuclear
wars, institutional crises, and a host of other crises. These crises and pressures “drive the breakdowns of systems that lead to states of social chaos” (Loye and Eisler,
1987:54; Capra, 1982; Sivard, 1983). These socalled “microcosmic” crises or social breakdowns are considered shortterm process events, with many more micro
oriented crises and chaotic bifurcations that affect open system organizations and living systems. Their downside trends should not be overlooked or ignored, because
human lives are at stake and institutions depend on these shortterm (which are in reality also longterm) events and trends that can produce longterm paradigm shifts.
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Macrocosmic Level
The second type of chaosoriented, or chaosdriving, or chaosdriven, forces that are longtermoriented with accelerated paradigmatic shifts, are macrocosmic. This
problem is “the great, overriding churning of history and acceleration of evolutionary forces that has led to’’ (Loye and Eisler 1987:54) expressions such as
disintegration, paradigm shifts, and longwave crises that threaten the whole global planet, a fundamental concern of the future that calls for present decision and social
action (Salk, 1983; Meadows et al., 1972; Capra, 1982). These longwave trends are characterized by mainstream social scientists as, for example, the “age of
disintegration” (Mumford, 1944), the “age of discontinuity” (Drucker, 1969), a “crucial epoch” (Laszlo, 1983), and the age of “temporariness” (Bennis, 1967). These
characterizations have by no means all been conceived of as too negative; in fact some, including the American legendary management thinker Peter Drucker (1969),
have even considered them positive evolutionary developments with smooth changes and transformations.
To these proponents, shortterm crises and chaotic events of destruction in population, hungerforced extermination, labor displacement, institutional demise, and
environmental degradation are important reasons to study chaotic events. Some even state that there is no cause for worry because in the long run the system will
correct itself. They argue that what appears to be chaotic and disorderly in the short term at the microcosmic level, may actually contribute to the longterm order and
equilibrium at the macrocosmic level (Drucker, 1969). On the other side of the coin, critical social scientists have voiced serious concerns about the consequences of
these short and longterm paradigmatic or megatrends that have already produced many catastrophic crises and continue to threaten the entire planet earth, the
ecosystems and the biosphere that all need to live and prosper. To these critics, the overriding interests of the few powerful and superrich have dominated the world
system and, through the political, economic, and military exploitation of the vast majority of the world population, are leading the whole world toward a global village of
serfdom, a catastrophic breakdown of the wholeplanet ecosystem. They argue that the global ecosystem is in danger, the world is closer to destruction, and humanity
is in serious crisis. This is the debate that has gained powerful currency under the globalization of late capitalism, a process of world integration and accumulation of
surplus capital, led by a few globalizing corporate elites and forced upon other nations through both dollar and military interventions (see, for examples of this literature,
Korten, 1995; Korbin, 1996; Offee, 1985; Modelski, 1979; Rifkin, 1996; Sklair, 1995; Parenti, 1995; Gill and Law, 1991; Dugger, 1989; Hankock, 1989; and
Farazmand, 1999).
Whatever the debate, a solution to the above problems offered by chaos theorists is “the first transdisciplinary understanding of bifurcational and
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transformational change” (Loye and Eisler, 1987:54) that requires understanding of natural sciences and their contribution to chaos theory. Here key works of such
scientists as Abraham and Shaw (1984), Laszlo (1972), Eldredge and Gould (1972), Miller (1978), and more notably the Belgian Ilya Prigogine (Prigogine and
Stengers, 1984), as well as the Hungarian scientist Csanyi and associates (Csanyi and Kampis, 1985), and Maturana and Varela (1980) are considered to be the core
of the chaos theory in natural sciences with spillover into social sciences. No reference is made in the literature of any prior works by former Soviet scientists whose
contributions to chaos and transformation theories emanate from Marx’s dialectical changes and evolutionary transformation in historical developments.
Change and how change occurs in the world and in any living systems are central issues in all the works on chaos theory in the West. Key concepts are
nonequilibrium, nonlinear dynamics, bifurcation or branching out, entropy, crossanalysis, dissipative structures or the formation of order out of chaos through auto
analysis, attractors, autopoiesis, autocatalysis, and selforganizing capacities of living systems including organizations as open systems that make changes from order to
chaos and make order out of chaos possible. Many of these ideas of chaos theory are found in systems theory discussed in a previous chapter. There are, however,
differences between chaos theory and systems theory. Systems theory is concerned with stability and equilibrium whereas chaos and transformation theories are
characterized by chaotic changes that lead to order and vice versa. As we will see below, natural and social systems theories were concerned with system maintainers
and would do anything possible—including use of bloody repression—to maintain stability and equilibrium. Chaos theory goes beyond this level, and moves into a
higher level of scientific analysis of systems existence, change, and evolution. Chaotic behaviors and changes caused by nonlinear dynamics and through systems
breakdowns and bifurcations are considered healthy processes and should in fact be encouraged.
Scientific observations by Feigenbaum (1980) showed recurrent patterns of order out of chaos in mathematics. Lorenz’s (1984) discovery of how “chaotic
attractors” produce a complete breakdown of predictability systems in weather forecasting is an example. Others point to the ideas of such thermodynamic systems
concepts as entropy, negentropy, bifurcation or the branching out of phenomena or matter into other forms during chaotic states. Belgian chemist Prigogine’s idea of
“dissipative structures’’ are forms (or formations) of order out of chaos that take place through “autocatalysis” and nonlinear processes of interactions that occur within
and among the interdependent components or subsystems of a system, and through the mutual feedback processes or what Prigogine calls “crossanalysis” (Prigogine
and Stengers, 1984). Another discovery by Eldredge and Gould (1972) reveals that, contrary to Darwin, chaotic states are born
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out of “punctuated equilibrium,” or what I would also call “the shaking and cracking state,” a process during which “peripheral isolates may eventually” transform a
system into another one, a new living identity.
This phenomenon is known by contemporary social scientists as the “butterfly effect” (see Daft, 1995:13) meaning that a small isolate can emerge from a system
periphery on the verge of chaos and break down and become a major core system of its own. Small changes in a system may produce consequences far beyond
expected or planned outcomes. For example, the breakup in the AT&T monopoly led to a whole new set of communication systems, and the small liberalization policy
under the former Shah of Iran in the mid1970s caused a new series of serious challenges and caused the Revolution of 1978–1979 which toppled the dictatorial
regime of the Shah. It is also Prigogine’s “dissipative structures’’ as well as “bifurcation” or branching out into new systems as a result of “shakes and cracks” as I have
pointed out earlier. Then came the Hungarian biologist Csanyi’s (1980) comprehensive new general theory of evolution incorporating the earlier nonequilibrium theory.
Both Csanyi and Kampis (1985) expanded Progogine’s “autocatalysis” and articulated it with Maturana and Varela’s (1980) “autopoeisis” or selforganizing, self
regulating, and selfcorrecting systems. Then came the general systems theory developed by von Bertalanffy (1968), Boulding (1978), Miller (1978), and Laszlo
(1972).
The concept of “selforganization” as a key characteristic of living and open systems becomes a central determining factor in both evolutionary and chaos
nonequilibrium theories. Selforganizing means two broad things: one is the ability of systems to generate capacity to organize and govern themselves, and by so doing
produce inner forces of change that generate energy and other forms of structures and entities capable of selforganization. Selforganization also means self
governance, selfcontrol, and selfregulation, a capacity or quality of dynamism within a system that does not need external imposition of control and governance; its
inner forces cause bifurcation and chaos with the capacity of maintaining order and stability (Farazmand, forthcoming). It is a dynamic process of selfregeneration
which, along with negentropy and environmental cues, releases forces of new entities or bifurcative elements that lead to new systems or dissipative structures. This is
exactly what Marx and Engels (Engels, 1873) called dialectical process of change, development, and evolution, a basic law of nature.
The study of chaos theory in social sciences produces similar fascination as the urgency to deal with, and solve, global problems becomes imperative. Loye and
Eisler (1987) report Prigogine and Stengers’ (1984) view that there are three stages of historical development in science which social science lags behind. First is the
ancient Aristotelean physics and early modern thermodynamics; second is the recognition of equilibrium as a state in which fluctuations and oscillations occur, but the
system equilibrium re
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mains intact; and third is the notion of extreme change, instability and unpredictability, or chaos “where true rather than only quasiillusory systems transformation may
occur” (Loye and Eisler, 1987:56). Systems experiencing extreme instability and entropy caused by either internal or external forces progress into the bifurcative state
of breakdown with unpredictable outcome possibilities regarding how and how many new dissipative structures may emerge or how many new systems regenerate.
This is a key element of the nonequilibrium chaos theory. The analogy is the common saying that “sometimes things must really be broken before they can be fixed.”
Transformation and Evolution
It is this third stage of scientific evolution that social scientists have come to claim great benefits for work on chaos and transformation theories. They are concerned
with, and interested in, dealing with the normative question of what kind of evolutionary ideals should humanity—or those who are able to—pursue, exercise control
over, or make change for desired future systems. This normative question raises serious policy implications for governments and public organizations (Maslow, 1966;
Myrdal, 1969; Laszlo, 1984b). Other benefits of work on chaos theory are also given as rationalizations for its application.
In social science, the concept transformation is used as a preferred term to subsume chaos, ‘‘a process out of order, through which order gives way to chaos and
chaos again leads to order” (Loye and Eisler, 1987:58). As noted earlier, both chaos and nonequilibrium evolutionary theories are nothing new. Historically its origin
dates back to ancient time, to the Chinese Book of Changes (I Ching, cited in Loye and Eisler, 1987:59) and to Greek philosophers, notably Heraclitus (see Sorokin,
1966) and the Persians’ Praxis in the sixth and fifth centuries B.C. when the concept of a “synthesis of civilizations into a universal civilization under the Persian world
order” was conceived in 559 B.C. by Cyrus the Great who founded the first “worldstate” Persian Empire in history (Frye, 1963; Olmstead, 1948; Ghirshman, 1954;
Farazmand, 1998). The concept was followed by Alexander’s quest to Helenize the world and by Romans who tried to enforce their system in the West as far as they
could but were checked by the Persians in the East. The same concept is now being pursued by Americans who are trying to accomplish the same through forceful
globalization and global hegemony and the new world order (Dugger, 1989; Gill and Law, 1991; Hamilton, 1989; Farazmand, 1994, 1999).
The modern origin of chaos and transformation theories begins with Hegel (1830, 1975 and 1967) and Marx and Engels (Engels, 1873), whose works focused on
historical evolution through dialectical processes of interactions between opposite forces of stability and change. Others like
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Durkheim (1951), Weber (1924, 1947 and 1961), and Pareto (1961) should also be mentioned. All of them grappled with the idea of change and transformation. Out
of too much order develops alienation, tendency or forces of disorder. And in social psychology we see Curt Lewin’s (1951) central concern with change in open
system organizations, including a deliberate change of people’s attitudes and behavior toward a new order. Lewin’s work in the 1940s led to the threestage process of
change by design: “unfreezing” of the prevailing state or order to “break open the shell of complacency and selfrighteousness,” followed by the second stage of
“moving to new level” of reshaping or desired changes, and the third stage of “refreezing’’ the changed behavior to avoid regression (Lewin, 1951:228–229). Other
early works on chaos and transformation theories, including Sorokin’s (1941), and the American Riegel and Soviet Rubenstein’s (Riegel 1979), to name a few, have
also focused on nonequilibriaorientations and have offered new insights on evolutionary history and cultures as well as on how to meet the challenges of the chaotic
changes affecting existing or emerging orders.
The third period of development of chaos and transformation theories has emerged through the contemporary works of both natural and social scientists mentioned
earlier. One is Zeeman’s (1977) view of “catastrophic” shifts during the nonequilibrium and nonlinear states of changes when systems break down and bifurcation take
place. Also, Jantsch’s (1980) The SelfOrganizing Universe is particularly notable as an elaborate extension of Prigogine’s idea of selforganizing capacity or
negentropic quality of systems that produce new structures during systems breakdowns into new structures or systems. In social as well as natural sciences, extensive
research associated with the international Club of Rome Projects have produced significant results with normative policy recommendations for social actions regarding
the future of the world and its problems. Also important, for example, are Laszlo’s (1987) Grand Evolutionary Synthesis Theories or GESTs, Capra’s (1982) synthesis
of the “new paradigm” idea in The Turning Point, and Salk’s (1983) concern with fundamental problems for social nonequilibrium theory in finding possible solutions
to the current crises or chaos and to “choose the most evolutionary advantageous path” (Salk, 1983:3) for human society. “Survival of the world as we know it is not
possible....Theworld will have to be transformed and evolve for continued survival” (Salk, 1983:106; also cited in Loye and Eisler, 1987:62). Capra cites a necessity
for “a transformation of unprecedented dimensions, a turning point for the planet as a whole” (1982:16).
Extensive studies of the last two decades have been carried out in such Californiabased futuristic research institutions as SRI International (Loye and Eisler, 1987)
and elsewhere which have focused on dialectical polarities of systems’ changes and systems stability, normchanging and normmaintaining, leaders and followers, soft
and toughminded people, and
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older and younger generations. To Loye and Eisler (1987), these recent studies on the dialectical polarities represent crucial elements of analysis of historical evolution
in culture and human development. To them, the relationship between dominator and dominated, oppressor and oppressed, leaders and followers, superiors and
subordinates must be changed into a cooperation and partnershipbased relationship, if human evolution is to continue. This is what Marx and Engels called
complementary dialectics as opposed to contradictory dialectics. Later on Mary Parker Follett (1918, 1940) argued for “integration” and cooperation in managing the
modern state and government organizations.
According to Marx, there are two types of dialectical materialism which contribute to the transformation and evolutionary process of nature and social and natural
systems. One is the internal contradictory, tensionbased, or irreconcilable forces in constant struggle, with the new and evolutionary forces breaking away from the
prevailing ones. Every system, for example capitalism, carries within itself the forces of destruction and change that contribute to its evolutionary process—Prigogine’s
dissipative structures and selforganizing capacities that enable a system to survive through bifurcation, just like new branches of a tree. The second type of dialectics
presented by Marx and Engels is the complementary and contradistinctive dialectical process, producing unity and harmony, like male and female creatures among
humans, animals, and birds. The latter type of dialectics is important for survival of nature, global ecosystems, and of humankind. But the former, contradictory
dialectics producing bifurcative changes is also both central and rational to historical evolution of systems.
To avoid continuous chaos, the selforganizing capacities of the dissipative structures reproduce order with a dynamic found in open systems of both nature and
human organizations.
Implications of Chaos and Transformation Theories in General
At least three different implications can be drawn from the chaos and transformation theories for the current global and worldsystems designs.
The first interpretation may be offered based on the late approaches of the former Soviet Union as the leaders of the world socialist system, first under Brezhnev and
most notably under Gorbachev, whose ideas of international “coexistence,” detente and nuclear arms control policies with the West were purported to be a way to
save the planet from total nuclear destruction. While irreconcilable contradictions between socialism and capitalism would no doubt continue, it was nevertheless
understood by both superpowers—United States and USSR—that continuous confrontations would likely lead to a catastrophic annihilation (Rosenau, 1990).
The second interpretation of the chaos and transformation theories implies that the world capitalist system under the United States would need
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to continue to build new weapons systems to show the latest technology in warfare to the world, and to pursue designs for control and domination of the world, a
worldsystem design through which forces of chaos can be suppressed or eliminated and the process of global transformation be ideally directed to suit the goals of
capitalism and the political world order under its leadership. This interpretation is not without foundation, as the recent process of globalization of capital has been
pursued with extraordinary aggressiveness through use of military force and interventions around the globe, i.e., the Persian Gulf war of the 1980s and the relentless
bombing of Yugoslavia resulting in its dismemberment. Both were as much ideologically and politically motivated as economically rationalized.
The third interpretation of the chaos and transformation theories is the current global trends of what I call “system shake up,” which is to induce by design the
dynamics of chaotic changes to maintain and enhance the system of late capitalism. Designed forces of chaos include, for example, corporate—and by extension
government—downsizing, organizational restructuring through mergers, massive privatization, elimination of job security and other employee rights and benefits, as well
as intensification of many institutional crises and periodic wars in various parts of the world that are created by the globalizing transworld corporate elites. These
globalizing elites are backed and promoted by the globalizing military and political powers, such as the United States, with aims for global dominance and hegemony
(Dugger, 1989) and for protection and promotion of “America’s global interests’’ (Hamilton, 1989). Chaotic workplace organizations of the capitalist system create
pressures or bifurcations and dissipative structures that are hoped, by corporate designers, to produce selforganizing forces for desired system changes. These induced
changes are, it may be argued, for prevention of system collapse out of the endemic crisis of “disorganized capitalism” (Offee, 1985) and of “legitimacy” (Habermas,
1984). They are also for revitalization of the system from stagnation to pursuit of higher levels of surplus value accumulation of global capital, as well as for the
achievement of the new world order dominated by the hegemonic global corporate power elites (Farazmand, 1999, forthcoming; Korten, 1995).
A short period of five to ten years of adverse effects from induced chaotic changes, such as massive labor displacement and unemployment due to privatization and
downsizing, as well as to other social costs produced by market chaos, for example, is considered an insignificant sideeffect and yet a healthy manifestation, at the
microcosmic level, for the “smooth” transformation of capitalism in the long run at the macrocosmic level (Drucker, 1969). To chaos theorists, the opposite is also true;
that is, systems may appear stable and organized in the short run but are unstable and chaotic in the long run. According to Prigogine, while a system “appears as irreg
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ular or chaotic on the macrocosmic scale, it is, on the contrary, highly organized on the microcosmic scale” (Prigogoine and Stengers, 1984:141).
Implications for Organization Theory
Chaos and transformation theories have several implications for organization theory. First, chaos theory implies that organizations as open systems are capable of
producing within themselves, and through their internal constitutive components, forces of dissipative structures, most of which have selforganizing capacities that lead
to new organizational entities and order. This is what the MarxEngels’ dialectical nature demonstrated over a century ago (see the previous chapter for details). Like
other living systems (Miller, 1978), open organizations possess selfcorrective mechanisms or negentropies that fight forces of decay and stagnation and revitalize the
system. This is the dynamics of all open, living systems.
Second, historically speaking, organization theory has evolved from the classical closed systems represented by the early twentiethcentury bureaucracy and
structural/functional/formal designs characterized by stability, order, and avoidance of change to the newest forms of organizational evolution characterized by instability,
chaotic changes, system breakdowns with bifurcations into new orders, and negative feedbacks as well as nonequilibrium features as positive ingredients producing
dynamism in the organizational system.
Third, the systems theory of the 1960s and after was an evolutionary improvement over the previous periods. It recognized the importance of change, environmental
interaction, feedback, entropynegentropy, and equilibrium or stability, as well as the need for understanding organizations within the broader sociopolitical system
environment in which they operate. Both chaos and systems theory have in common the elements of environmental interaction, negentropy, and subsystemsystem
relationships. But chaos and transformation theories depart from the systems theory in that the former thrive on nonequilibrium, quantum dynamics, and chaotic events
or changes with instability and negative feedbacks being positive signs of system change and evolution toward higher levels of organic state. While systems theory
suppressed forces of chaotic changes disturbing system equilibria, chaos and transformation theory foster such “dissipative structures” in hope of revitalizing the system
from entropic decline or decay. Therefore, organizations and their leadership must induce periodic changes of a chaotic nature to “shake up and crack” the stable
system for renewal and revitalization.
Fourth, chaos and transformation theories imply the learning organizational concept necessary for change, adaptation, and adjustments to respond to the external
environmental changes and paradigmatic shifts or trends. Organizations that learn, adjust, and adapt to the external pressures
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causing systems breakdown and bifurcations can survive and evolve, and their evolution comes through internal learning and transformation. Learning takes place
through changes in structure, process, and values of the organizational system, and this learning needs to be institutionalized; hence the relevance of the institutional
theory discussed earlier.
Fifth, like many dialectical processes of change and evolution, organizational changes and behavior—and their management—are not caused by causal and linear
based forces alone. Nonlinear relationships, chance, and randomness characterize much of modern organizational systems, and many organizational problems must be
managed or solved by nonlinear thinking (Kaufman, 1985). This is what Karl Weick (1979) called “natural selection” toward evolution, with the fittest to survive and
those selected out to die.
Sixth, chaos theory may explain the current chaotic changes and trends so pervasive in the management of public, private, and nonprofit organizations worldwide.
Such organizational reform or change realities as massive downsizing, sweeping privatization, environmental deregulation, and expansion of the corporatebased, private
sector worldwide are seen as healthy phenomena that tend to energize and revitalize organizations and their management systems.
Seventh, chaos theory can help predict possible future patterns of order out of chaotic behavioral patterns of the present and the past. Such potential improvements
are already explained by mathematical modeling, weather forecasting, and the prediction of climatic changes in the atmosphere. It can also potentially help in diagnosing
organizational entropies by providing the benefits of an early warning system and the need for timely interventions for systems correction and revitalization.
Limits of Chaos Theory: A Critical Appraisal
Despite many perceived benefits of chaos theory, it has many limitations. In fact, chaos theory can be considered, to a great extent, a dangerous theory that should be
avoided or confronted with creative alternatives. First, the theory tends to promote deliberate chaos and destruction in social as well as natural processes; it attempts to
tamper with the dialectics of nature by interfering in the natural evolutionary processes. Implications of this sort are far beyond the lowlevel intellectual discussions and
can be frightening. Its potential to destroy, clone, and reshape by a few powerful elites equipped with advanced technology at the global level can cause devastating
negative effects on the future of the planet, the global ecosystem, and all humanity. However, its purported advantage of guiding human beings to determine human
destiny should be noted.
Second, as an extension of the first, chaos theory can be a powerful tool of manipulation and control in the hands of a few powerful elites for eco
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nomic, social, political, and military reasons. Third, unpredictability of outcomes of chaotic states or systems pose further dangerous, and potentially fatal, threats to
individuals, groups, cultures, and peoples around the globe. Unpredictability and chaotic changes also tend to produce unanticipated secondary or multiple
consequences or outcomes that may defy any systems designer’s calculated or perceived ideal or desired states. Fourth, designed orders can be repressive to millions
while beneficial to a few whose economic and sociopolitical interests derive from, and drive, chaotic conditions. An example is the current massive marketization,
downsizing, privatization, and corporatization trends pursued by globalizing capitalist elites. While the few gain in profit massively, the vast majority of human
populations around the world suffer from joblessness, income insecurity, job insecurity, poor health—both mental and physical—hunger, poverty, homelessness, and
other crises that have been characteristics of modern capitalist societies, West as well as East.
Fifth, ethical problems emerge with the chaos theory: Who gives the right to the few power elites to decide the future of billions of people and to alter the global
system? Why should the future generations’ right to selfdetermination be taken away or violated by the current few powerful elites in both government and corporate
organizational systems? Why should chaos designers, dictators, and directors decide the fate of billions of populations around the globe? How do we know that
designed chaotic events or processes do not lead to global annihilation and destruction? Who will be responsible for the grand failures and possible catastrophes?
Sixth, dissipative structures may either dissipate forever or cause unexpected consequences or outcomes beyond anyone’s control. Besides, if chaotic events or
processes will eventually lead to order, or order to chaos, how do we know that injecting chaotic forces into a prevailing stable system will lead to eventual order,
especially desired order? Could it cause massive dissipative evaporation? What do we replace it with? Further, whose order is the desired order? An order for some
may be the most repressive and chaosgenerating force for the vast majority of people who go through chaos, lose everything they have, and become potential forces
of chaos for others—causing further social chaos. It is easy to speak of chaos; it is a hardship to go through it. It is intellectual arrogance to assume we know everything
and can alter the natural systems by design. Market chaos is too costly to the millions of people worldwide suffering from malnutrition, homelessness, joblessness, and
health crises, and it requires order which can be very repressive; it produces its own antithesis of system destruction within itself.
Seventh, chaos may lead to order, an order that is often manipulated by the power elites who then require conformity, harmony, obedience, and cooperation for
promoting capitalism and its ultimate goal of rapid surplus value accumulation. Chaos theory may explain its own limit, that is its
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gradual transformation of capitalist system into socialism. Can it be controlled by the designers? Who knows?
Finally, the transformation theory as espoused by the theorists suggests a desired globally designed system dominated and led by the global capital and its political
military system of the United States and other Western countries. This may backfire as dissipative structures and selforganizing forces will likely rise through the
dialectical process of crosscatalysis and crossanalysis (to use Prigogine’s terms). Nationstates, peoples, and cultures will resist hegemonic global order dictated by
the Western powers and might produce new structures capable of breaking the order into global chaos, which then will have to be put back into order by the global
power elites through military force and coercion. The September 11, 2001 terrorist attacks in New York and Washington, D.C., and the subsequent U.S. global war
on terrorism is a clear example of a tragic cycle of events. Here, organizational elites will play a key role in maintaining the new global system of order, and managing
the induced chaotic changes that are necessary for system transformation into a stronger one.
Contemporary chaos theorists avoid the issue of power and power structures led by the few elites, who are constantly trying to alter the natural and human systems.
Organizations play a fundamental role in the transpostioning, exposure, and promotion of chaos. Organizations themselves go through chaos and chaotic stages of life
cycle, but do they not return into a sort of chaos sooner or later? This itself presents another limitation of the chaos theory.
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Chapter 4
Elite Theory of Organization: Building a Normative Foundation
Ali Farazmand
Throughout the world, public, private, and nonprofit organizations are undergoing significant changes. These changes include structural adjustments, organizational
reconfiguration, and process improvements to maximize rationality and bottomline concepts. A radical feature of these changes is the massive downsizing of
organizations almost everywhere, with the effect of massive social and economic displacement. Giant corporations and governmental organizations alike have led a
crusade of turning the table upside down in organizational life. They have embarked on a major structural change in governmentsocietymarket relations that not only
has altered decades of policy on state functions but also has created a chaotic and unpredictable future for all peoples around the globe. This structural change will most
likely continue to persist in the foreseeable future with fundamental consequences for society and implications for public and private management. Privatization,
downsizing, reorganization, and redefinition of public and private spheres of organization and administration are but a few of the structural changes that have had
profound impacts on society. Chaos, disruption of traditions, and unpredictability seem to be permeating life around the globe, causing anxiety and stress.
Behind these chaotic changes appears to be a strong ideological, marketbased, conservative trend with a pursued manifest mission of antibureaucratic character and
of trimming big governments with outofcontrol bureaucracies. Proponents of these trends claim they improve service delivery, increase efficiency, and promote high
performance in response to citizens’ demands for accountability, transparency, responsiveness, and cost control. These trends also are said to adapt to changing
environmental pressures that affect organizational survival, competitiveness, and effective
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ness. Adaptation and effectiveness have become keywords for survival and development.
When explaining the necessity for organizations to adapt to environmental and technological changes, organization theorists have followed the traditional academic
line. However, what is often overlooked or avoided in all these discussions in the organizational literature is the issue of the strategic position of the elites who exercise
power in setting longterm directions for organizations. Theorists have avoided the question of who makes these decisions that affect millions of people inside and
outside modern organizations. People do not downsize themselves; organizational elites do. Common people do not privatize government functions; public
organizational elites do. Furthermore, most organization theorists have long avoided focusing on the central normative issues of power, control, and politics in
administration as well as the political culture that affects organizations from the outside. Finally, theorists have avoided the key subject of inquiry regarding the
cohesiveness or harmony with which these strategic and significant decisions are made in public and private organizations and the ways in which strategic elites direct
and redirect societal allocations of resources and powers. Exceptions are few; they may be found in the literature on sociology and political economy.
Generally, mainstream organization theorists have treated the normative issues of power, politics, and control as internal phenomena that exist only within
organizations, except for the acknowledgment of an external influence that organizations should adapt to or accommodate. The singular role of technical rationality has
been emphasized in explaining collective action and organizational behavior. These theorists have focused on instrumental rationality as a means to achieve
organizational ends or goals. But how these organizational goals, especially the longterm strategic ones, are determined is a central question that often is overlooked, or
even ignored, in the studies of organization. Exceptions are few (see, for example, Farazmand, 1994; Fischer, 1984; Kaufman, 1964; Michels, 1959, 1984; Ott, 1989;
Perrow, 1986; Pfeffer and Salankik, 1978; Waldo, 1978; Weber, 1947).
Rarely have organization theorists embraced political theory in the development of organization theory (Kaufman, 1964). Political and organization theories have
been developed in parallel, one without considering the other. As Kaufman (1964, in Gorthner, Mahler, and Nicholoson, 1987) points out, ‘‘if there is any conscious
agreement between the two fields, it is on their separateness from each other” (91). Drawing on different disciplines and grounds, “political theorists are frankly
normative; organization theorists generally believe their work is valuefree.”
Exclusion of political theory from organization theory also is explained by other social scientists and organizational theorists (see, for example, Miles 1980; Schein,
1977; Waldo, 1978). According to Miles, organiza
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tions have dual realities: technical rationality and political rationality or irrationality. Exclusion of political theory from organizational theory results in a presentation of
only one side of the organizational reality, the technical rationality. Political rationality or irrationality constitutes the other side of all organizations, especially public
organizations of all types. As Miles (1980) notes, “the second reality of organizational life is that purely rational conditions seldom obtain” (157). Power is not used by
itself in organizations and in administration; it is exercised by organizational and administrative elites.
Similarly, political theorists have avoided a discussion of organization theory. This separation of organizational and political theorists actually has impaired rather than
enhanced both bodies of knowledge about the ways society is organized and administered (Farazmand, 1994; Fischer, 1984; Kaufman, 1964). It is surprising to see
this negligence despite the fact that organization and administration are central to political systems and, as Matthew Holden (1997) reminds us, administration is power.
Centrality of administration and organization is beyond doubt. It is through organization that power is exercised, and a long history of political changes and
administrative continuity, dating back to ancient times—Babylon, Persia, Rome, and others—has proved this over and over (Eisentadt, 1963; Jacoby, 1973; Waldo
1980).
The purpose of this chapter is to present a discussion of elite theory as it relates to organizational elite, a longneglected area of organizational research. Political
rationality is brought back in for prescriptive as well as descriptive explanations. The discussion will attempt to develop a model of organizational elite as a preliminary
step toward building a normative theory of organization. The suggestive normative organizational elite theory is, therefore, both descriptive and prescriptive, offering the
advantages of both explanatory and predictive powers.
Elite theory and the concept of power elite, as opposed to the Marxist notion of ruling class, is well established in the disciplines of political science, sociology, and
economics (see, for example, Balbus, 1971; Burch, 1981; Domhoff, 1983, 1990; Dye and Zeigler, 1993; EtzioniHalevi, 1992; Field and Higley, 1973, 1980; Higley
and Burton, 1989; Higley and Moore, 1981; Hunter, 1953, 1959; Jones, 1987; Lindblom, 1990; Macpherson, 1987; Mills, 1956; Mosca, 1939; Parenti, 1988;
Prewitt and Stone, 1973; Schumpeter, 1942, 1976). Surprisingly, however, even the elite theorists have neglected in their research the centrality of organizational elite.
Little has been published on this important, if not central dimension of elite theory (see Domhoff and Dye, 1987, and Farazmand, 1999, for exceptions).
Other exceptions include recent works on interorganizational networks and interlocking boards of directorate in connection with corporate power elites (see, for
example, Aldrich and Pfeffer, 1976; Domhoff, 1971; Mintz and Schwartz, 1981b; Mizruchi, 1980; Pfeffer and Salankick, 1978; Useem,
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1984). However, despite these studies, no study has focused on the concept of organizational elite. This is a grossly neglected area of research on modern
organizations, a fact that is admitted by elite theorists as well as mainstream organization theorists (DiTomaso, 1980; Domhoff and Dye, 1987; Gorthner et al., 1989;
Perrow, 1986).
This chapter addresses this neglected area of organization theory. Such negligence is regrettable because it has closed the doors of opportunities for researchers in
social science in general and the students of organization theory and public administration in particular. By addressing the key and neglected area of elites, the chapter
presents a novel approach to the study of modern organizations, their management, and performance. It will open up an invitation to elite theory in the study of modern
organization and administration, hence filling in a major gap in the literature of organization theory.
RATIONALE, JUSTIFICATION, AND THE NOVELTY OF THE NEW THEORY
The significance and rationale of this chapter are discussed in some detail toward the end. Briefly noted here is that studying organizational elites is important for several
reasons. First, we live in an organizational society. Modern society and civilization function and flourish through organization (Harmon and Mayer, 1986; Presthus,
1962). Billions of people live and die through organizations, and governments and their political, social, and economic systems rise and fall through organizational
structure and performance. Organization is a collective action, and collective action is an exercise of power, which in turn is central to administration and politics.
Therefore, organizations are indispensable to those who exercise power, power is exercised through organizations, and it is organizations through which administration
is practiced. As Holden (1997) asserts, “administration is power,” which is “central to effective governance” (126). Therefore, centrality of organization as well as of
power is both acknowledged and emphasized almost invariably by all elite theorists as well as nonelite theorists of organization. For example, in his analysis of “the
biology of organizations,’’ Bertrand Russell (1938) stressed organizations as necessary social institutions for the exercise of power.
Power is dependent upon organizations in the main, but not wholly. Purely psychological power, such as that of Plato or Galileo, may exist without any
corresponding social institution. But as a rule even such power is not important unless it is propagated by a church, a political party, or some analogous
social organism. (158)
Second, as discussed below, almost all definitions of elite theory have invariably stressed the word organization as a central means of exercising
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power by those holding the elite power. Similarly, nonelite theorists have long stressed the importance of organizations for the exercise of power as well as the
importance of power within organizations (see, for example, Long, 1949; Pfeffer, 1981; Scott and Hart, 1989).
Third, organizational elites are instrumental to the realization of the will of the elites in government, business, and society. They are the translators of power elites’
abstract ideas into practical realities. Organizational elites’ socioeconomic and political backgrounds reflect the representative interests of the power elites in society.
Organizations serve this and other similar purposes. Downsizing, reform and reorganization, and privatization are some of the strategic organizational decisions that are
made by organizational elites to reflect the will of the overall power elites in society. These are some of the hot issues that are transforming societies’, governments’,
labor, and peoples’ lives at local, national, and global levels. Globalization is a process that is directed primarily by the corporate and governmental strategic elites,
whose decisions are translated into operational behaviors by organizational elites across the globe.
Fourth, organizational elites perform unique functions of maintaining the “invisibility shielding” of the power elites from the public eye, making them unaccountable for
failures and taking credit for good performance. Fifth, the theory of organizational elites presents a novel dialectical approach toward studying significant strategic issues
about organizations, administration, and governance in society. Studying and understanding such issues as elite cohesion and unity, elite disunity, elite rivalry and
settlement, elite configuration and reconfiguration, interelite competition, elitenonelite rivalry and fighting, elite recruitment and retention, and elite crisis management
provide opportunities to develop a deeper understanding of the ways in which organizational elites behave, to predict those behaviors. Such a knowledge of
organizational elites helps managers manage organizational behaviors more effectively, responding to environmental demands and pressures from the public—
citizenry—according to the prescribed rules of conduct in organizational behavior. Similarly, studying organizational elites helps citizens, employee unions, and clienteles
to understand and predict elites’ behaviors and preferences and to find appropriate ways to exert pressures on elites and/or influence policy choices through both
decision making and organizational implementation. This counterelite or massbased organization of pressures from below is extremely important for the citizenry in its
attempt to alter or modify power elites’ behaviors. Organizational elite theory provides a useful conceptual framework for such studies and understandings for citizens,
managers, and employees in organizational systems. No other models or theories of organization offer such a novel approach to the study of organization and
administration in society (further justifications and rationales are given in a later part of this chapter under “Significance and Implications”).
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The concept, assumptions, and implications of a suggestive theory of organizational elite are presented here as a step toward developing a normative theory of
organization. This is done at two levels of analysis: (1) macroorganizational power environment, including the interorganizational level and (2) micro, intra
organizational level.
First, a background on elite theory is provided to clarify the concept and to prevent any confusion with similar or contending theories of organization. Then, models
of elite theory are presented and discussed. This is followed by a discussion of the organizational elite, including the characteristics of elites and sources of elite
cohesion, solidarity, and unity. Then, an analysis is made to present possible contributions to a normative theory of organization and to identify some implications for
public administration and modern governance.
BACKGROUND TO ELITE THEORY
No organization, public or private, operates in a vacuum. All organizations and institutions perform in a political or power environment through which the broad
parameters are more or less defined, and any organizational action contradicting rather than enhancing, or conforming to, that environmental power structure is
sanctioned by institutional means of the state, whether autonomous, dependent, mediating, or weak in dealing with powerful transnational corporations (TNCs), which
are becoming “stateindifferent” (Mandel, 1975:328; see also Held et al., 1983; Jessop, 1982; King, 1986; Miliband, 1969; and Skocpol, 1979, for a discussion on
state theories; and Korten, 1995, on the role of transnational corporations).
Peter Dobkin Hall’s (1984) The Organization of American Culture, 1700–1900 describes and documents the process of Puritanism’s secular influence and
cultural survival. “Private organizations took the place of both the state, the family, and the locality in conducting fundamental economic and cultural activities.”
Therefore, “the rise of private corporations brought about political, economic, and cultural nationality’’ (Hall, 1984:1; also quoted in Johnson, 1988:586). According to
Hall, culture is defined neither on Weberian terms nor based on moral ethos of bureaucracy, but rather as “a set of social values and institutions used by people in
organizing the entire range of their fundamental activities” (8). Hall focuses on the role of religion in shaping society; the reshaping of religion by society; the development
of the notion of character; the bureaucratization of business, government, and society; and the role of elites in reorganizing American culture. According to Hall, the
story of the organization of the American culture is “essentially the story of developing bureaucratic elites in the service of economic and social nationality” (quoted in
Johnson, 1988:593).
Arguing that the culture of a political system is “inextricably bound up
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with the existing governmental structure,” Gortner et al. (1987) correctly state that the power structure of a society “influences the procedures around and in the
bureaus [public organizations] established to carry out [public] policy” (79). In other words, the political and power environment or structure determines the broad
parameters in and around public organizations. Actually, this also may be true of all organizations, private and nonprofit. Gorthner et al. then state, “Therefore, theories
of about how the political system works, who has access where, and what is considered ‘proper’ within the political sphere are vital to understanding how public
structure develops and is maintained” (79). Similarly, systems theorists emphasize the role of environment in shaping organizational structure and process (Ackoff,
1974; Katz & Kahn, 1966, 1978; Thompson, 1967), but they do not focus on the power structure in or out of organizations.
It is this understanding that is essential to explaining properly the nature and functions of modern organizations. Of the competing theories of politics and democracy,
the Marxists, the pluralists, and the elitists tend to have occupied more space in the academic arena than any others in the field. All three theories may be useful in
explaining how organizations, especially public organizations, “attempt to operate as actors in the political system” (Gortner et al., 1987:79).
Traced to the works of Benthly (1908), Truman (1951), and Dahl and Lindblom (1953), the pluralist or group theory generally espouses that dispersed, fragmented,
and independent groups, individuals, and organizations pursue their interests in the governmental system. “An interest group is a sharedattitude group that makes
certain claims upon other groups in the society. If and when it makes its claims through any of the institutions of government, it becomes a political interest
group’’ (Truman, 1951:37). In “a critique of the ruling elite model,” Dahl (1958) rejects the notion of elite consensus and homogeneity in decision goals. He argues that
power is dispersed, that no one group is capable of determining the outcomes of decisions made in government and society in a consistent or persistent manner. As will
be seen below, even pluralists, including Dahl and Lindblom, do not reject the notion of elites in society.
The Marxist and neoMarxist theories of politics and economics assert that a ruling capitalist class dominates society, including its government, business, and other
social institutions. Accordingly, organizations, public or private, are instruments of class domination, exploitation, and control for the purpose of maintaining and
enhancing the capitalist system controlled by the ruling class (see, for example, Marx, 1966; Miliband, 1969; Poulantzas, 1969; Tucker, 1978). Similarly, the
conservative neoclassical public choice or market theory posits that organizations, like individuals, are rational decision makers and always tend to maximize their self
interests by minimizing costs and maximizing benefits in a marketplace. According to the market or public choice theory, competition and overlaps
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characterize modern organizations. In the political system, they are dispersed, not centralized or concentrated. Most other traditional organization theories fall under the
instrumental rationality of the pluralist and market theories of politics, economics, and democracy (see, for example, Buchanan and Tullock, 1962; Downs, 1967;
Niskanen, 1971; Ostrom, 1974; Stocky and Zekhauser, 1978; Williamson, 1981, 1983, 1985).
The elitist theory of politics is as “old as history, but the first presentation of it as a model of local government in the United States can be traced to Hunter
[1953]” (Gortner et al., 1987:80). The elitist democratic politics, not the same as Marxist ruling class theory, asserts that a few individuals or groups make the most
commanding decisions in society, and they do this outside of the formal governmental structures. This theory holds that
Few have power and many do not; the few allocate values and resources in society, and the masses do not decide on these strategic value choices; the
few who govern are not typical of the mass of people.
The elite are drawn disproportionally from the upper socioeconomic strata of the society.
The elitenonelite movement must be slow to preserve the structure and nature of the system.
Elites share a consensus on the basic values of the social system and tend to preserve those values, and their disagreements are on a narrow range of
dispersed issues.
Public policy does not reflect the preferences of the masses, but rather the interests of the elite, and changes in public policy are incremental rather
than radical or revolutionary.
Elites influence masses more than masses influence elites. (Dye and Zeigler, 1984:6; 1993:5)
Elites, not masses govern all societies. (Dye and Zeigler, 1993:3)
This theory also holds that the masses are generally frustrated by the selfperpetuating status quo but are unable to alter it incrementally. The only viable option is for the
counterelites to take over elite power or to stage revolutions. For further assumptions of elite theory and of the suggestive organizational elite theory see Farazmand
(1994:36–38).
MODELS OF ELITE THEORY
The above assumptions by elite theory may be vague and subject to divergent perspectives on the concept of elite. However, a few definitions may help in
understanding the true meaning of the term elite as opposed to Marx’s ruling class.
Defining Elite
There is no single definition of the concept of elite. What the literature reflects is a divergent array of definitions of the term. The lack of a unified
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meaning of elite emanates from the scope and limit of those included in the spectrum of elite rank, given the universality of the accepted meaning of the term itself.
Therefore, various definitions arise and different models and constructs develop as frames of analysis.
Despite the differences in definitions, all elite theorists seem to agree on one thing: the powerful position of a small group of individuals or groups who either shape or
influence decisions that affect national outcomes. Thus, all actors occupying key positions in the political, economic, military, governmental, cultural, and administrative
institutions and organizations are considered members of the elite because they affect the national outcomes. First, let’s settle the definition issue at hand.
According to Mosca (1939),
In all societies, from less developed to the most advanced, two classes of people appear, a class that rules and a class that is ruled....
The class that rules is few, whereas the second, the more numerous class, is directed at and controlled by the first, in a manner that is now more or less
legal, now more or less arbitrary and violent. (50)
The few elites “acquire a stake in preserving the organization and their position in it. This motive gives leaders a perspective different from that of the organization’s
members. An elite is then inevitable in any social organization” (Dye and Zeigler, 1993:2–3). To Michels (1959), ‘‘he who says organization, says oligarchy” (70), and
“government is always government by the few, whether in the name of the few, the one, or the many” (Lasswell and Lerner, 1952:7).
According to Gwen Moore (1979), the term political elite refers to “persons who by virtue of their institutional positions have a high potential to influence national
policy making” (674). Therefore, it “includes politicians, government officials, and the leaders of various interest groups, which attempt to influence the allocation of
values in society” (Moore, 1979; see also Parry, 1969:13). More clearly, Higley and Burton (1989) define “national elites as persons who are able, by virtue of their
authoritative positions in powerful organizations and movements of whatever kind, to affect national political outcomes regularly and substantially” (18).
In defense of elite theory, and signifying the importance of the organizational context of elites, Higley, Burton, and Field (1973) maintain that they have “consistently
followed Weber and Michels in conceiving of elites as rooted in bureaucratic organization. Movement leaders are elites only to the extent that the movements are
bureaucratically structured and thus powerful on a sustained basis.” Those leaders then “can affect political outcomes regularly and substantially” (Higley, Burton, and
Field, 1990:422–423).
Dogan and Higley (1996) define elites as
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the few hundred or at most few thousand persons who head the major institutions, organizations, and movements in a society and who are therefore able
to impel or impede political decisions on a regular basis. Elites consist, therefore, of the top leaders of political parties, governmental bureaucracies, large
and/or pivotally located business firms and large unions, the military, the media, professional, religious, educational, and other major organizations, as well
as the leaders of powerful interest groups and mass movements. (3–4)
Because these definitions are too broad, inclusive, and confusing, they are subject to interpretations and challenges, such as the one offered by Alan Knight (1996) in
his extensive and provocative analysis of elite theory.
To Hunter (1959), elites are the “top leaders” who shape and control the “power structure,” whereas to Mills (1956), they are the “power elite,”
composed of men whose positions enable them to transcend the ordinary environments of ordinary men and women; they are in positions to make
decisions having major consequences. Whether they do or do not make such decisions is less important than the fact that they do occupy such pivotal
positions: their failure to act, their failure to make decisions, is itself an act that is often of greater consequence than the decisions they do make, for they
are in command of the major hierarchies and organizations of modern society. They run the big corporations. They run the machinery of the state and
claim its prerogatives. They direct the military establishment. They occupy the strategic command posts of the social structure, in which are now centered
the effective means of the power and the wealth and the celebrity which they enjoy. The power elite are not solitary rulers. Advisors and consultants,
spokesmen and opinion makers, are often the captains of their higher thought and decision. Immediately below the elite are the professional politicians of
the middle levels of power, in the Congress and in the pressure groups, as well as among the new and old upper classes of town and city and region. (3–4)
Mills’ definition of the concept of power elite is both clear and comprehensive in that it includes not only the macro elites, but also the micro elites who operate the
organizations and institutions controlled by the power elite. This view is shared by the more contemporary elite theorists who focus in their studies on interlocking
organizational networks of the elites. Despite the common tenets emphasized in these definitions, the following perspectives on elite theory may be discerned.
The Models
Different models of elite theory emerge when one examines the above definitions, deriving from the fact that different perspectives represent the elite concept. Higley
and Moore (1981:584–585) identify four elite models based on the two dimensions or criteria: (1) inclusiveness of personal in
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teractions among top position holders and major elite groups and (2) the structure of interaction that facilitates contacts between these individuals and groups. These
models are the consensually integrated elite model(s), the plural elite model, the power elite model, and the ruling class model(s). To these models, I propose to add a
fifth, an organizational elite model, using the same dimensions or criteria offered by Higley and Burton (1989), for the reasons provided below.
Before discussing these elite models, it is useful to understand the terms inclusiveness and structure of elite as given by Higley and Burton (1989). Their criteria
also include the terms fragmentation and integration, referring to elite disunity and unity. This is important, according to elite theorists, especially for elite cohesion in
determining national outcomes and for regime or political system survival (for a detailed discussion of these terms, see Higley and Burton, 1989; Higley and Moore,
1981).
Consensually Integrated Elite Model
In this elite model, “there is an inclusive network of formal and informal communication, friendship, and influence welding among top position holders in all major elite
groups, i.e., business, trade union, political governmental, mass media, voluntary association, academic, etc.” (Higley and Moore, 1981:584). Prominent formal
organizational positions as well as centers of national policy making are the locus of interactions among these elites. As decision structures, politicalgovernmental
decision centers attract the most powerful actors for their ready accessibility. The consensually integrated elites come to consensus based on a variety of system’s
factors, which they all share. However, this group is relatively small and markedly centralized, with frequent interaction among its members. These elites are integrated
after perhaps a long process of fragmentation but have come to unity through consensus and settlement. Countries such as the United States, Australia, Britain, France,
and Canada are mentioned as examples (Higley and Moore, 1981).
Plural Elite Model
Like the consensus elite model, the plural model is based on interest groups, organizations, and the prominent leaders or elite groups present in the interaction networks
located on different decision centers. This model depends on prominent positions and involvement in significant policymaking areas. Class membership or other
background characteristics are not major criteria for elite interaction (Dahl, 1958, 1961, 1979; McConnel, 1966; Rose, 1967). The plural elite model is postulated on
the premise that no single elite group dominates the structure, that interaction among elite groups is generally less frequent and not consciously centralized in an inner
circle or core group, and that interaction occurs on specific issues. Intrasectoral elite interaction is greater than intersectoral interaction, and direct
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intersectoral elite interaction is frequent only with governmental elites. Therefore, public organizational elites are the targets of most frequent interaction and serve as the
conduit to all other elite sectors for interest articulation and consensus building.
Power Elite Model
Unlike the pluralist model, in the power elite model an informal yet a clear hierarchy of power and influence exists among elite groups. At the apex of this hierarchical
elite structure are business, political, and perhaps military elites. It is not an inclusive model, the interaction network is small and concentrated, and interaction is frequent
among the uppermost elites only (Hunter, 1959; Mills, 1956; Porter, 1965).
Shared objectives, values, wealth, and educational and social backgrounds hold the power elite groups together. There are extensive positional overlaps, interlocks,
and interchanges among the uppermost elites. Business elites hold the primacy, and top military and government position holders also occupy a core, but the former
group is the determining and most powerful actor of the circle. The executive cabinet members and top political elites appear to be centrally located, with legislators and
highlevel politically appointed officials taking secondary seats just below the first inner circle group.
The first group of uppermost elites generally sets the broad parameters and boundaries of the political and governmental system, allowing the secondary level of non
inner circle elites to interact and function on the plural model. Should the secondary level elites step beyond the boundary limit, they will be subject to sanctions,
including removal from membership. Whereas the first group of uppermost elites includes the boundary setters, the second elite groups are the operational decision
makers and implementers of the directives of the former. Autonomy of the first elite group from the state is expected, and the state actually is dependent on this elite.
Mills (1956) calls this group the “power elite,’’ whereas Hunter (1953) calls it the “power structure,” which conditions the structural parameters and their boundaries in
society.
Empirically, this model can be applied to many countries in the developed and developing world, but it does not seem to apply to some, especially revolutionary
societies such as Iran, Nicaragua under the Sandanistas, and elsewhere, where the lower middle class, including members of the peasantry and some professional
groups, actually governs the society and dominates the politics and administration, although the economic elite may still hold considerable bargaining power. However,
the masses of people—especially the working and lower classes who exercise influence on the governing elite—also have strong demand on and expectations of the
government they legitimize, and their claims cannot be ignored. Therefore, the viability of the governing elite depends on the support it receives from the
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lower strata of the mass people, whereas at the same time, it must accommodate the collective body of the bourgeoisie/capitalist class. However, the revolutionary
government in Iran, for example, has not hesitated to act against the latter in favor of policies benefiting the former (Farazmand, 1989, 1996).
Ruling Class Model
Similar to the power elite model is the ruling class elite model. The apex of the elite hierarchy is occupied by the business class and some political ruling classes. Much
controversy exists surrounding this model, but what is clear about the ruling class model is the unambiguous position of those uppermost elites who are present in most
significant decisions, and choices of nondecision, made in society. Different configurations may develop over time in the ruling class elite, but eventually the
configurations must gravitate toward and around the center elite, or ruling class.
The number of people in this circle is small, and their less powerful positions are delegated to the secondary elite groups, whose functions include translation of policy
preferences and choices of the ruling class elite or adoption of policy choices that do not contradict the will of the ruling class. This is the “second stratum” elite—the
plural elites, or even some members of the power elites, or both (see, for example, Connel, 1977; Domhoff, 1967, 1970, 1974, 1978, 1983, 1990; Espingo
Anderson, Friedland, and Wright, 1976; Miliband, 1969; Mosca, 1939; Therborn, 1978). Although both the ruling class and power elite models are similar in
description, they are different in the “level of interpretation” (Higley and Moore, 1981:585) and the degree of deterministic power in society.
Organizational Elite Model
In each of these elite models, the centrality of key organizations and their position holders is emphasized as a necessary institutional mechanism through which elites act
and exercise power. It is this necessity that leads us to conceive of a fifth model, a model of organizational elite. These elites operate organizationally and in
organizational contexts. It is this area on which even the elite theorists concede that research has been neglected (see DiTomaso, 1980; Domhoff and Dye, 1977).
ORGANIZATIONAL ELITE
Implicit and explicit in all elite theories is the centrality of key organizations for the exercise of power and control by elites. This is especially emphasized by
contemporary elite theorists (see, for example, Higley et al., 1990:422).
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Concept of Organizational Elite
The concept of organizational elite refers to the idea that organizations, public or private, small or large are directed, controlled, and dominated by a few whose
decisions and nondecisions not only affect the entire organization and its members but also are in accordance with the political and economic elite’s overall goals and
directions. There is general harmony among the elite sectors in their overall policy directions, strategic considerations, and political as well as economic philosophies.
The organizational elite then operates in an environment in which the ordinary people or the mass of lower social classes constantly strive to and struggle for elite
positions, which entail special power, prestige, privileges, and economic benefits. The elite is separated from the masses of ordinary members of organizations and
responds to their demands only when such demands exert irresistible pressures. The overriding rationale and goal of the elite are to maintain and enhance itself.
To maintain itself, the elite system of organization responds to potential challenging demands of the masses with different methods and styles—coercion, reform,
bonuses, motivation, persuasion, manipulation, elite membership recruitment, and adaptation—but never by abdication of its power unless forced by formidable
pressures. Abdication of power is more likely to happen in developing nations, but it can happen in advanced industrialized societies as well. This also is true regarding
the bureaucratic elite. Through its position and interlocking membership in political, economic, and administrative elite circles, the bureaucratic elite only enhances its
own position and the interests of the organization as well as of the larger system of which it is a part.
Drawing on political science, economics, psychology, social psychology, sociology, cultural anthropology, history, and administration and management, the elite
theory of organization, therefore, is interdisciplinary and concerned with allocation, distribution, and exercise of power and the consequential conflicts and decisions that
may arise from those activities in organizations.
Assumptions and Foundations
The major assumptions of the organizational elite theory are as follows: First, organizations are creations of people, but a few people control and dominate them once
created (Wamsley and Zald, 1976). Second, organizations operate in a sociopolitical and economic environment of which they are a part, but the role of the political
and economic elites determines the directions and processes of most organizations (Farazmand, 1994; Selznick, 1957). Third, this leads to the major limitations of the
pure rationality often claimed by other theorists to be the only instrumentality in organizing
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and achieving societal goals. Fourth, even the purest, and most businesslike enterprise is, by nature, also political, because its processes and structures contribute to the
maintenance and enhancement of the existing political and economic system (Farazmand, 1982; Lindblom, 1990; Miles, 1980). Fifth, conflicts arise among members of
organizations as a result of human nature and social class, the former being reconcilable whereas the latter is extremely difficult if not impossible to reconcile, because
the elite will not abdicate its power and privileges (Dye and Zeigler, 1993; Fischer, 1984; Michels, 1959, 1984; Mills, 1956; Mosca, 1939).
Sixth, to gain compliance, the elite must convince the masses who are prone to withdraw their legitimacy. Legitimacy, however, is not always given to the elite, and
the masses are not always free to exercise such a right, for it is already conditioned and controlled by the elite in organizations (Perrow, 1986; Scott and Hart, 1989).
Seventh, the elite sits on many interlocking boards and resides in leadership positions to which the masses and the average individual members of organizations do not
have access (Moore, 1979; Perrow, 1986; Useem, 1979, 1984). Accessibility to elite membership is limited and controlled by numerous gatekeepers whose primary
function is to serve the elite’s interests rather than those of the ordinary people. Organizations then become the private realms of a small number of significant people.
Secrecy is a central and essential operational feature of the elite power structure (Farazmand, 1994; Michels, 1959, 1984; Scott and Hart, 1989). This phenomenon is
prevalent in the private corporate sector and in large government organizations of the administrative state, making citizens “captives” of the modern state (Korten, 1995;
Nachmias and Rosenbloom, 1980; Parenti, 1988; Rosenbloom, 1993).
Eighth, the elite may extend membership to the masses for two reasons: to recruit potential members as managers to do its job, for which the elite is the primary
beneficiary, thus rewarding the manager for his or her loyalty; and to obtain further legitimacy and technical expertise (Perrow, 1986; Scott and Hart, 1989; Selznick,
1953). Cooptation is a good example. Ninth, average individuals have little to say in the organization’s elite decisionmaking and strategic directions, but they may
form pressure groups to influence or cause minor adjustments or changes in elite decisions, as purported by the pluralist elite theorists. Finally, the top
managerial/organizational elite is considered part of the elite because it serves the interests of the strategic apex elite, and it acts and behaves like an elite. It also is
separated from the rank and file in terms of its lifestyle, its compensations and reward systems, as well as the ideology it perpetuates and serves, consciously or
unconsciously. Here, the elite theory combines instrumental rationality with political rationality in ruling and controlling the masses in general and organizational domains
in particular. Any attempt on the part of the masses to join the elite circle must include proof of system
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loyalty and economic, ideological, and personal qualifications. Qualifications are not checked formally through interviews; rather, they are generally checked by the
norms and values of inclusion institutionalized through socialization in society, a process in which the strategic power elite plays the key determining role. Organizations
become centrally essential to elite domination of society. Society must adapt to these large powerful organizations dominated by the elites, who enjoy “a shield of elitist
invisibility’’ (Scott and Hart, 1989).
Elite invisibility shielding takes place in several forms, making its members invisible, unrecognizable, and unaccountable. First, most modern capitalist organizations
are run legally and formally by managers who are separate from the owners, whose identity is shielded by the managerial class. Ordinary people almost never see or
know who the key strategic owners are and who actually controls and dominates organizations. Second, it is often said that organizations behave this or that way, but
we always seem to forget that individuals make the decisions, not organizations. This takes responsibility away from the elite members and depersonalizes values and
morality. The elitist invisibility makes it extraordinarily difficult to hold high level, strategic managers—public or private—accountable for their actions (Hershman,
1977). Other forms of elite invisibility shielding include their expertise, which ordinary members of organizations do not understand (Scott and Hart, 1989), and
instrumental rationality and efficiency criteria (Farazmand, 1994), but perhaps the most important method of elite shielding is that “the value system of modern
organizations has developed behind closed doors, so to speak....Ordinary people are not privy to the intricacies of the value system,” leading to a “widening gap
between the popular beliefs about organizations and the actual practices of managers in modern organizations” (Scott and Hart, 1989:37). Secrecy prevails in almost all
modern organizations (Michels, 1984; Weber, 1984).
Finally, the environmental and strategic decisions made by the elite in organizing and reorganizing activities have consequential outcomes for the ordinary people,
inside and outside of organizations. This especially is true with regard to organizations with lowskilled personnel, but even highskilled members of organizations
“cannot afford to rock the boat. Similarly, ambitious careerists may play a role of perfection, intentionally or unintentionally, for sociopolitical and economic
advancement, but will eventually find that doors at the top are usually closed” (Farazmand, 1994:39). The result is increasing alienation on the part of the masses, who
have lost confidence not only in the modern organizational elite but also in the political and economic elites that tolerate and promote it. Hence, there is a problem of
legitimacy in corporate and governmental sectors, including in the administrative state (Denhardt, 1981; Habermas, 1975; Lipset, 1987; O’Connor, 1973; Ostrom,
1974; Thayer, 1981). Massive downsizing, elim
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ination of employee benefits, and other unilateral decisions by organizational elites to create a “leaner and meaner” workforce only exacerbate this legitimacy problem,
which tends to spill over to other areas of society, economy, and politics. But, modern organizations and people remain indispensable to governance, politics, and
administration of society and economy.
Organizational Imperative
Many nonelite theorists emphasize the role of organizations in society (Harmon and Mayer, 1986; Kaufman, 1989; Perrow, 1986; Presthus, 1962; Waldo, 1978,
1980). But all elite theorists emphasize the centrality of modern organizations in the exercise of power and control by the elites. Specifically, Higley et al. (1990:422)
stress the necessity of organization for the elites to channel their wills into action and for the nonelite masses to channel their demands and pressures on the elites. Mass
mobilizations are not possible unless they are organized (Dogan and Higley, 1996).
The emphasis on organizational necessity in elite theory also is provided by Robert Michels (1984) and Max Weber (1946). To Michels and Weber, modern
organizations are major institutional structures for the exercise of power by elites. In his analysis of oligarchy, Michels states: “Democracy is inconceivable without
organization. Be the claims economic or be they political, organization appears the only means for the creation of a collective will” (in Fischer and Sirianni, 1984:48).
Organization implies the tendency to oligarchy. In every organization, whether it be a political party, a professional union, or any association of the kind, the
aristocratic tendency manifests itself very clearly. The mechanism of the organization, while conferring the solidity of structure, induces serious changes in the organized
mass, completely inverting the respective position of the leaders and the led. As a result of organization, every party or professional union becomes divided into a
minority of directors and a majority of directed (Michels, 1984:51–52).
Similarly, Weber’s (1946) position on the concepts of power and organizational elite is emphasized (implicitly on the elite).
Everywhere the modern state is undergoing bureaucratization. But whether the power of bureaucracy within the polity is universally increasing must
remain an open question....
The fact that bureaucratic organization is technically the most highly developed means of power in the hands of the man who controls it does not
determine the weight that bureaucracy as such is capable of having in a particular social structure. (Weber, 1984:37)
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This statement indicates clearly that bureaucratic organizations, however indispensable they may be to society and the power elite, are only means or channels for
exercise of power by those who hold it. Weber (1984) further explains that, under normal conditions, the power position of a fully developed bureaucracy is always
“overtowering” (37). The political master finds himself in the position of the dilettante, who stands opposite the expert, facing the trained official who stands within the
management of administration. This holds whether the master whom the burcauracy serves is a ‘‘people,” or a parliament. It holds whether the master is an aristocratic,
collegiate body, legally or actually based on selfrecruitment, whether he is a popularly elected president, a hereditary and “absolute” or “constitutional” monarch
(Weber, 1946, 1984:38).
Finally, Weber (1984) asserts emphatically, “Therefore, as an instrument for ‘socializing’ relations of power, bureaucracy has been and is a powerful instrument of
the first order for the one who controls the bureaucratic apparatus” (35).
Immediately, four fundamental inferences can be drawn from these statements by Weber: First, once established, bureaucracies are the hardest to destroy. It also
holds that bureaucracy is a power instrument of the first order for the one who controls the bureaucratic apparatus, meaning a complex of bureaucratic organizations
either together forming the state or in a seemingly dispersed fashion forming the pluralist notion of competing enterprises. Second, bureaucracy tends to overtower
under normal conditions, yet its power position can be checked no matter how indispensable it may be to society or to the political master. “Bureaucratic administration
always tends to be an administration of ‘secret sessions’ ” (Weber, 1984:38), and secrecy is a major reinforcer of power structures, whether organizational or political.
Third, the masters (elites) and bureaucratic organization and administration are mutually interdependent. It is through organizations that the exercise of external power
is practiced, and it is with the power of the elite that bureaucratic organizations are created, legitimated, and controlled. And it is through the organizational elites that the
societal relations and the power position of the master/elite are maintained and enhanced. Bureaucratization of society and culture (Hall, 1984) facilitates “the
legitimation of bureaucratic elites,” whose positions and decisions are rarely challenged effectively. With regard to structural deficiencies or political irrationality in the
design and structuring of public organizations to serve elite interests, Terry Moe (1989) states, “A bureaucracy that is structurally unsuited for effective action is
precisely the kind of bureaucracy that interest groups and politicians routinely and deliberately create” (269). Therefore, organizational effectiveness is “repeatedly
sacrificed on the altar of interest protection and representation” (Wise, 1994:85). Fourth, central to eliteorganization and elitemass relations is the term control to
maintain
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the power elite position. Without masses, there would be no elite, and without elites, there would be no masses. Almost all people would enjoy equality and consensual
relationship would flourish. Otherwise, chaos would prevail, as in the case of major crises and revolutions followed by order and appearance of new elites (for a
detailed discussion of this issue, see Farazmand, 1996, 1997; Knight, 1996).
Applying the WeberianMichelsian concept of elites, some contemporary elite theorists (Higley et al., 1990:422) stress the central role of organizations in their
analysis of elites and draw attention to the organizational constraints on elite behavior. Such an organizational constraint on influencing elite behavior also is established
by neoinstitutionalists (see Peters, 1994; Peters and Pierre, 1997; Scott, 1995). The need to maintain control of the organization that gives the elites power shapes
their actions and outlooks in many ways, frequently overriding substantive interests and vague ideological principles and often impeding elites’ ability to enter the
settlements and other transformations from disunity.
Both Weber and Higley and associates concede that organizations as well as masses can influence elites by putting pressures on some segments of an elite against
other segments or on a combination of various elite configurations. This mass pressure can sometimes reshape and even alter elite configurations, as in the case of the
Great Depression in the United States, or in postrevolutionary situations. Crises play a fundamental role in elite reconfiguration, power position, and even elite
replacement.1
Organizational elites in particular operate with high secrecy, concentrated interorganizational interaction, and cohesion. Explaining all these terms fully is beyond the
scope of this chapter. Briefly stated, however, organizational secrecy is explained by Weber (1946), Michels (1959, 1984), and others, including Marx, of course.
Interorganizational networks or organizational interlocks are the focus of other recent literature with a growing body of knowledge (see, for example, Allen, 1974;
DiTomaso, 1980; Kadushin, 1979; Lauman and Pappi, 1973; Mintz and Schwartz, 1981b; Presthus, 1973; Sonquist and Koenig, 1975; Useem 1984). A brief
discussion of organizational elite cohesion is given below.
Levels of Organizational Elite Analysis
Conceptually, organizational elites may be analyzed at three different organizational levels: macro/strategic, macromicro/leadership elite, and micro/operational elite.
Macro/Strategic Elite
First is the macro level, which includes the members of the small innercircle elite groups in control of the giant and most powerful organizations of governmental and
corporate sectors in society. These are the key inter
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locks, or interorganizational network elites. “This group of strategic organizational elite sets the boundaries and parameters for organizations, large and small, public and
private and nonprofit” (Farazmand, 1994:37). These organizations occupy and dominate the field of organizational ecology to which other organizations must adapt for
their survival. With the everincreasing concentration of power among this core of giant organizations—mostly globalized transnational corporations—the inner circle
strategic elites tend to centralize coreperipheral relationship and produce a much higher degree of organizational complexity. They also tend to “cannibalize” other
organizations, including the traditional communitybased organizations of public and private sectors, “leaving no place for people” (Korten, 1995).
I call this group of organizational elite the ‘‘most strategic or organizational apex elite,” whereas other elite theorists of corporate interlocks (Mintz and Schwartz,
1981b) call it a “hub.”
Financial institutions, it appears, are the organizing units of the interlock network and the most powerful sources of intercorporate power and unity; they
are “highly central” because they are the center of all other interlocking institutions, and they interact with other “central institutions.” (93)
In the governmental sector, key executive organizations appear to occupy this position of high centrality and small circle, strategic apex. The strategic or apex
organizational elites, therefore, are the driving forces of organizational elite configurations and reconfigurations, and they provide and generate sources of cohesion and
unity. In times of crisis, their members stick together in harmony with the national power elite, which is a part of the innercircle elite.
The strategic or apex organizational elites within a specific organization or agency include the uppermost leaders or most powerful people, who by virtue of their
positions, sources of connection, and shared values in ideology, politics, and socioeconomic status in society fall in this category. They also may be called the “strategic
administrative or bureaucratic elites.” They are indispensable to the innercircle elites they represent. Not all these strategic bureaucratic/organizational elites are
members of the uppermost or innercircle elites; only some belong to those apex interlocks with which they interact frequently.
MacroMicro/Leadership Elites
The macromicro level includes the leading members of significant organizations in society, but their location is immediately below the first strategic elites. The
organizations belonging to this level of elites include all those central but not most central to the ecology of organizations. Mintz and Schwartz (1981a: 37) call this group
of organizations the bridge that
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unites the hubs. I call it the linking elites because it is key to the interaction of the interlocking networks or strategic organizational elite groups. It also is key to
interactions between the first strategic elite and the operational elite at the middle of the organizational hierarchy. High political appointees, agency deputy directors,
executives, undersecretaries, public enterprise managers and directors, and occupiers of similar positions in public and nonprofit organizations belong to this group of
organizational elites.
Micro/Operational Elites
The microoperational elite group includes both the owning and the appointed managerial elites of individual organizations and owners of some smaller organizations.
Although it forms a class of its own, the former also is part of the elite because it serves the interests of the strategic elite and tends to act and behave like an elite.
The managerial elite also is separated from the rank and file in terms of its lifestyle, its compensations and reward systems, and the ideology it perpetuates and
serves, consciously or unconsciously. Therefore, instrumental rationality is employed as a means, in the analysis of organizational elite theory, to signify the importance
of political rationality in elitemass relations (Farazmand, 1994:37).
The concept of managerialism as an ideology has found a warm cushion in modern organizations of the corporate sector, but its application as a selfproclaimed
marketbased management system also has been pervasive in governmental organizations and public administration around the world. As a reinforcement of the plural
elite model, managerialism
argues that the modern firm has little incentive to create interorganizational ties and is unlikely to be dramatically influenced by outside forces. It implies a
corporate structure characterized by fragmentation. On a societal level, this implies that corporate power is dispersed and the danger of corporate
domination is minimal. (Mintz and Schwartz, 1981a: 853)
Kanter (1987) and Block (1987) have argued that middle managers should be further empowered by higher level managers or elites. Middle managers, department
heads, division directors, and others at this level occupy the transformational rank and provide continuity and enhancement of organizational values, norms, and culture,
assuring the steady flow of task performance toward its established goals and objectives set by strategic elites (Morgan, 1986; Ott, 1989; Perrow, 1986; Scott and
Hart, 1989).
Middle managers as “operational organizational elites” promote conformity and stability at the mass level of organizations. To maintain and enhance the system’s
power structure, leadership elites at the higher level feed this organizational stability and culture into a cohesive interorganizational elite. However, it is the uppermost
strategic organizational elites
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who maintain elite cohesion by building consensus (Korten, 1995; Lindblom, 1990).
ORGANIZATIONAL ELITE COHESION
Immediately, a key question is raised: How does a small group of powerful individuals control an organization, and how does a small number of strategic elites control
the entire system of power structure outside organizations? Answering the second part of the question is beyond the scope of this chapter. According to some studies,
however, the answer appears to be the degree of cohesion and consensus that is achieved through interlocking networks (see Mintz and Schwartz, 1981b, for a
discussion of the sources of elite cohesion) and the requirements that organizational elites put on organizational members through recruitment, socialization, and retention
(see DiTomaso, 1980; Farazmand, 1994, 1996). Although research on interorganizational networks or interlocks is recent and growing, there is ample room for more
theoretical and empirical studies on these questions. These questions beg serious examination both theoretically and empirically.
Organizational cohesion and control are achieved through a multitude of managerial, supervisory, and structural mechanisms as reflected in the extensive body of
literature on modern organizations from classical to contemporary theories. First, the linking elites and the operational elites within organizations have a primary task of
assuring stability, compliance with organizational rules, and cohesion and control among members of their organizations. They are the agents of the strategic elites
located at the apex of modern organizations in government, corporations, nonprofit institutions, and political parties.
Second, organizational cohesion also is achieved through other internal and external channels of control. For example, Rosenbloom (1993b) identifies three broad
approaches to hold administrators accountable in modern organizations:
1. The political approach uses various legislative mechanisms such as sunshine and sunset laws, oversight investigation and control of administration, confirmation
approval, and annual budgetary processes.
2. The legal approach uses judicial and semijudicial means of reviewing and controlling administrative action through court intervention in matters of regulation,
protection of individual rights, and constitutionality of administrative behavior.
3. The managerial approach uses a variety of organizational mechanisms, including institutional loyalty through hierarchy, promotion and reward system,
socialization, sanctions, recruitment, and placement. (Rosenbloom, 1993b, ch. 12)
Third, organizational and interorganizational cohesion also is achieved through another, and perhaps more powerful, means in modern society:
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socialization into the social and political systems and the culture. This is the most pervasive and most solidifying mechanism of social control used by the elites to achieve
organizational cohesion. Elites and all the institutions of society—including the market, the church, the family, the schooling and educational systems, the media, sports,
and the government—socialize individuals into the system of culture from childhood to adulthood, mold their attitudes, belief systems, perceptions of self and others.
The elites also mold the behaviors about what is desirable and what is not, what behavior is subject to sociopolitical sanctions and what leads to rewards, what is
patriotic and praiseworthy, and what is punishable. It is this cultural structuring of individuals that elites rely on most heavily to achieve organizational and
interorganizational cohesion and control (Korten, 1995; Lowi, 1995; Triandis, 1995). People are conditioned to believe that elites in private corporations and
governmental institutions are legitimate and whatever they do or say is acceptable and is good for the country and its people. Elites understand this and capitalize on it.
For example, “What is good for GM is good for America.” A phenomenon of dependable autonomy along with possessive individualism (Macpherson, 1985)
promotes a false sense of freedom through the bureaucratized society. Bellah, Madson, Sullivan, Swidler, and Tipton (1985) warn of a cult of dependable autonomy
and internal control that is so pervasive in the bureaucratized American society that it gives expression to the bureaucratic individualism that is conducive to the
bureaucratic elites (see Johnson, 1988, especially 592–596).
Common goals serve as another major source of cohesion among elites in general and organizational elites in particular. Common goals and interests among
government agencies often promote cooperation and collaboration in the face of common external challenges. This is done in spite of the competition that may be
carried out among them on different grounds. Airline agencies lobby for protection, favors, and regulatory schemes that will help them. City mayors’ or governors’
associations meet and adopt policy recommendations. Oil companies may compete for a few cents across the street, but all work more or less cohesively in the relation
to foreign competition or governmental policies. They also act together when faced with nationalization challenges from foreign governments (e.g., the oil boycott of Iran
during the 1953 nationalization crisis produced by the British Oil Co.; the 1974 copper nationalization crisis in Chile produced by ITT and GM; both popular
governments were overthrown in coordination with the U.S.CIA led military coup d’états).
Finally, the financial leverage of the elites is one of the most, if not the most, effective means of achieving organizational and interorganizational cohesion. This
especially is true with regard to the business elites, who are able to lead or dominantly influence the political and policy processes that affect public and private sector
organizations (Hall, 1984; Jones, 1987; Lindblom, 1990).
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SIGNIFICANCE AND IMPLICATIONS
Significance
The explanatory power of organizational elite theory is significant in several ways. First, the theory is descriptive in that it not only explains the organizational power
structure as is, it also explains the external power structure that more or less sets the parameters for organizational power and functions. Second, the theory is
prescriptive in that it also focuses attention on what ought to be done by making suggestions regarding elite configuration and reconfiguration, elite recruitment from
masses, elite benevolence, and elite decisions on strategic choices that affect both the elites and nonelites. The prescriptive dimension of the elite theory also is
significant in that it may espouse alternative models of governance, policy choices, and administrative structures.
Therefore, the elite theory of organization contributes to the normative theory of organization not only by building on descriptive aspects of organizational power,
politics, and administration (e.g., how organizations function and who is in charge). It also considers alternative modes of power structure in organizations (what ought
to be done or who can or should take power, or how power should be distributed). Furthermore, by analyzing the existing situation, the elite theory attempts to predict
possible outcomes of policy choices and to recommend corrective actions at strategic levels both inside and outside of organizations. Because the organizational elite is
an integral part of the overall strategic apex of elites—both inner circle and general elites—it must be studied in that context.
The suggestive theory of organizational elites employs institutional, systems, ecological, and other theories of organization because they all are relevant to both
descriptive dimensions of the organizational elite. It also employs the rational choice model as a way of explaining how elites get what they intend; this is an integral part
of institutional and systems theories to the extent that organizations try to control their environment to maintain their equilibrium. Such employment does not, however,
automatically imply acceptance of or justification for these theories.
Furthermore, organizational elite theory uses a dialectical approach as a method of analyzing organizations, the relationship between the leaders and the led,
management and labor, and the elites and the masses, because without one the other is inconceivable (Knight, 1996). The dialectal process is a method of analysis of
interaction between masses and elites, and between elites and counterelites at all levels of organization and society. Such dialectical interactions are key ingredients of
the elite theory in general and of the organizational elite in particular. As long as the relationship between organizational members and elites is not antagonistic and
hostile, elites are able to manipulate smoothly the environment under their control or influ
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ence. Once the relationship becomes irreconcilable, the elites will have little to offer and whatever they do offer may be too late and may not satisfy the nonelites, who
then have little to lose in their attempt to take over the position of the power elites.
Unfortunately, as in many revolutions, the replacement or reconfiguration of the old elite with the new elite has a tendency to circularize, that is to say an elite
circularity almost inevitably will develop (see Farazmand, 1994). The survival and thriving of the elite will then depend on how it behaves in society and organizations.
If it is benevolent, sincere, and equitable to the masses, its power position will likely increase. Conversely, the position of the elites weakens or is eroded when the elites
become authoritarian, selfserving, and oppressive. In such situations, the institutions of government tend to focus their attention, resources, and policy choices more on
the coercive and repressive functions to control the masses and organizational members and less on the service and welfare functions of governance and administration
(Eisenstadt, 1963; Farazmand, 1997; Lindblom, 1990). The elites become obsessed with system maintenance and regime enhancement. Organizational and
administrative elites then become more an instrument of domination and control for repression than an agent of positive change, service delivery, and promotion of
equity and fairness in society. Empirical studies of authoritarian, repressive regimes support this relationship (Eisenstadt, 1963; Farazmand, 1982, 1989; Lutjens, 1991;
Rehren, 1991; Riposa, 1996).
Implications
Implications of the organizational elite theory are many and universal. First, elites can be identified in all societies, in government, business, and politics. Elites are easily
found at community, local, and state/subnational levels as well; they form the power structure. Members of the power structure tend to develop a network of interlocks,
which affects public policy and administration at all levels. Third, there is almost everywhere a trend of counterelite development, which tends to either replace the elite
and its power structure or at least to influence the public policy decisions and outcomes. The nonelite masses almost everywhere try as much as they can to influence
public policy and administrative behavior as well. Citizen protests, labor union actions, and other forms of mass reaction counteracting elites’ power position and
behavior are universal around the globe. This is a dialectical process that produces changes in the relationship between elites and nonelite masses, and within the power
structure of the elites.
This also is manifest in organizational settings everywhere in the world. The applicability of organizational elite theory in almost all organizations of public, nonprofit,
and private sectors is clear, in that power is exercised through organizations and organizations are institutional settings or ar
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rangements through which policy decisions are made and carried out (Presthus, 1962, 1973; Simon, 1945, 1957 and 1991). Organizational elite theory, therefore, not
only explains how organizations operate within the power structure and what they contribute to and, in so doing, who benefits most, it also purports to predict and
prescribe corrective behaviors or policy recommendations for elites to be effective in society. The effectiveness of elites will then depend on their ability to adapt to the
dialectically produced changes in society. The dynamics of elite continuity, legitimacy, and performance are determined by the ability to adapt. Adaptable elites survive
and continue, whereas nonadaptable elites who resist change face decline and severe competition from dynamic adaptable elites who are aggressive enough to
monopolize power. Alternatively, the unadaptable elites face the ultimate challenge of overthrow by counterelites by a spontaneous mass uprising. Modern revolutions
have produced enough evidence in support of this phenomenon. The French and Iranian revolutions are two examples (Cottam, 1979; Halliday, 1979; Skocpol,
1979).
The study of organizational elites needs to be taken seriously, both conceptually and empirically. Such studies will shed further light on different aspects of
organizational elites and will help build a sound normative theory of organizational elites. They also are needed to deal with various dimensions of organizations, both
internally and externally. Internally, for example, mechanisms and dynamics of decision making and implementation need to be examined closely and carefully.
Externally, the linkage of organizational elites to the power structure or power elite, whether general or innercircle elites, is extremely important, because all
organizations operate in an environment of power structure that defines the general parameters for society, organizations, and individuals. More studies on the
organizational elite will result in a major contribution to the body of knowledge in organization theory and behavior. Aside from the justifications and rationales noted
earlier, building and application of organizational elite theory provide many advantages in the study of modern organizations and of the administrative behavior in
society. It provides a conceptual framework for analyzing and understanding such topdown organizational behaviors as downsizing, reform and reorganization, and
publicprivate sectors’ redefinition and reconfiguration, globalization, and privatization. It also provides public administrators and organizational researchers with a way
to broaden their outlooks and perspectives, enhance their knowledge of democratic values, and play more progressive roles in society by transforming those
democratic values into organizational and administrative behaviors in service of the broad public interests. Finally, not all elites and their behaviors are bad for society.
There are benevolent elites—both in the power structure and organizational elite systems—whose actions and decision outcomes benefit all in society, whereas the
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selfserving and exploitative elites’ behaviors are repressive and enhance only the ruling power structure at the expense of society and mass citizenry. Studies of
organizational elites help illuminate differences between these two groups and provide frameworks for appropriate social action.
CONCLUSION: IMPLICATIONS FOR ORGANIZATION THEORY
Studies of organizations have systematically ignored or overlooked the normative aspects or dimensions of organizational theory. They have focused and refocused on
the instrumental rationality driving organizational action and inaction. This oversight may be the result of many factors, including preoccupation by organization theorists
with issues of management, control, efficiency, and technology; however, political and normative factors shaping modern organizations cannot and should not be
overlooked. No organization operates in a vacuum. Organizations operate under elites, small groups of individuals whose decisions and nondecisions affect
organizations and the people and environments around them. Similarly, the environment and the power structure outside organizations affect the structure, decisions,
and operations of organizations (Pfeffer, 1981; Pfeffer and Salankick, 1978).
Organizational elites constitute those powerful individuals who, either by institutional structure and norms or requirements or by higher interlocking power sources,
determine organizational goals and lead them strategically in harmony with the broader macrolevel elite interests, missions, and goals. Research on organizational elites
is needed in this age of massive organizational restructuring, reform, and reconfiguration. These changes are both strategic and global, and they affect almost all
organizations in public, private, and nonprofit sectors. Building a normative theory of organization is both important and needed, as political factors are as important as
instrumental rationality factors in determining organizational goals, operations, and processes. The rank and file in organizations do not make such significant decisions
as downsizing; strategic elites do, and strategic elites make such decisions in harmony with the goals of the power elite, who shape the environment of organizations
(Korten, 1995). However, the power of the people in social changes and the reshaping of the power structure should not be underestimated. This is a reality that both
elites and nonelites are aware of, and only appropriate time and conditions determine the outcome of the dialectical relationship between the powerful elites and the
powerless nonelite people both inside and outside organizations. This is an important consideration that all studies of power structure, organizational elites, and
democratic participation must take into account (Bachrach and Botwinick, 1992; Waldo, 1980).
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APPENDIX: SUGGESTED READING LIST
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NOTE
1. For details on the role of crisis in elite restructuring and reconfiguration, see the papers presented at an international conference on Regime Change and Elite Change, held in El
Paular, Spain, May 30–June 1, 1996, and the forthcoming book, Political Elites, Crises, and the Origins of Regime Change, edited by Mattei Dogan and John Higley. Also see the
author’s forthcoming book, Regime Change, Elite Change, and the Bureaucracy.
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Part II
Public Organization Design and Reorganization of
Administration
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Chapter 5
The Public Service Configuration Problem: Designing Public Organizations in a
Pluralistic Public Service
Charles R. Wise
Public administration has evolved from an almost exclusive concern with institutional management (management within a single organization) to coverage of
transorganizational management (management across organizational boundaries). At this point in the development of the public service, implementation of changes in
public policy effectively means altering the behavior of public service configurations that dominate a particular public policy area. Such public service configurations
consisting of public, private forprofit, and private nonprofit organizations operating within interorganizational fields have become exceedingly complex as a result of
three primary phenomena that have characterized U.S. public policy: (1) horizontal fragmentation of policy responsibility within governments; (2) decentralization of
programs and devolution of authority to organizations at other levels of government; and (3) privatization. Together these developments have accelerated pluralization
within public service configurations.
The task of designing public organizations must take into consideration the implications of the aforementioned developments for altered states of public service
configurations. It is now, more than ever, obsolete to conceive of public organizations as delivering public services. Public service configurations deliver public services
and heavily impact public policy outcomes. Designing public organizations today inevitably means confronting the public service configuration problem. This chapter
discusses the evolving nature of developments affecting public service configurations and delineates the implications for designing public organizations in the new
environment.
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THE NATURE OF PLURALIZATION PHENOMENA
With regard to the first, horizontal fragmentation at the federal level, various Congresses have succumbed to pressures from sectional, economic, and interest group
interests and have continually translated their entreaties into the creation of new federal organizations.1 Presidents, too, have given into pressures for immediate, tangible
answers to highly complex problems, and often the response is to create a new organization.2 In addition, both Congress and presidents, as a part of new policy
initiatives, often prefer to assign new policy responsibilities to new organizations rather than to existing ones under the supposition that new organizations will pursue
them with greater vigor. They are supported in this supposition by the front end of life cycle theory, which holds that new responsibilities will be pursued with energy
and power provided by zealous administrators, supportive interest groups, and attentive politicians in a position to protect their ‘‘new baby.” Proponents often claim
that “independence” is the essential design ingredient to give the new organization room to solve problems existing organizations cannot. For example, bills to put the
new consumer safety program in the Food and Drug Administration or the Department of Health, Education, and Welfare were rejected by Congress in favor of one
establishing the Consumer Product Safety Commission as an independent body. The House Committee report stated the oftfound rationale Congress uses in creating
new agencies that “Independent status, and bipartisan commissioners with staggered and fixed terms, will tend to provide greater insulation from political and economic
pressures than is possible...ina cabinetlevel department.”3
Unfortunately, such hopes for new agencies are soon eclipsed by the realities of organizational life in real government. Startup times and costs are very often greater
than proponents foresee, and the lack of experience, expertise, and learning leads to struggle rather than aggressive pursuit of policy priorities.4 Also, constituency
support does not follow the creation of a new agency as a matter of course but is subject to the shifting alliances within subsystem politics that pertain in various policy
areas. As Charles Goodsell discusses, the diversity of bureaucracies and the scarcity of resources available to them almost inevitably combine to create interagency
conflict, which takes the form of sustained institutional rivalry.5 The operation of such subsystem politics can substantially transform the program of the organization.6 In
addition, proponents seldom foresee that separateness or independence in itself does not secure a powerful position within the interorganizational field already
occupying the policy area. For example, in the early 1970s, Congress designated the Drug Enforcement Agency as the lead federal agency to bring together federal law
enforcement efforts in controlling illegal drugs. However, by 1986, after many years of findings that drug enforcement among several federal agencies was
uncoordinated,
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Congress created still another new agency, the Office of National Drug Control Policy (the Drug Czar) to coordinate federal drug efforts. Two directors of the office
during the Bush administration made some attempt at the coordination objective mandated by Congress. In the attempt, a sizable staff was created within the office to
assist in the task. Nonetheless, at the beginning of the Clinton administration, the new president and his inner staff decided to reduce the drug office’s staff to just a few
people, which constitutes an assessment that meaningful agency coordination in the drug area, even from the White House, was unlikely to succeed.
Decentralization in the United States has led to greater vertical fragmentation of operations and authority. The earlier period of national government leadership in
domestic initiatives characterized by multiple grantinaid programs controlled through extensive regulation by federal departments and agencies gave way to block
grants and then to a period of program elimination. Brought on by fiscal austerity at the national level, the United States has moved increasingly in domestic
programming to what some have called de facto7 or “fendforyourself”8 federalism. This devotion of authority to state and local governments in the federal programs
that do remain, and the greater assumption by; state and local governments of various other domestic responsibilities, has profoundly changed the patterns of influence
and role relationships among and within U.S. political jurisdictions. Authority patterns are not monotonic but vary between and within public service configurations.
The term “decentralization” hardly captures what has happened because it implies a hierarchy in which authority is devolved downward from the national
government. As the analysis by Vincent L. Marando and Patricia Florestano demonstrates, “Notions of administrative hierarchy, although difficult to dispel, have never
provided accurate assessments of how American federalism functions and are inappropriate for explaining how problems are defined and managed.”9 Concomitantly,
hierarchy is becoming an even less useful point of departure in designing public organizations. Federal policy makers cannot assume that a federal organization will in
any sense dominate policy direction or program operations in any area of policy. Deil Wright observes: “The nature of authority relations in IGM (intergovernmental
management) is preponderantly nonhierarchical. The presence and pervasiveness of networks create the presumption of widely if not evenly shared power distribution
patterns. There may be varying dependency—autonomy power patterns among specific entities in a network, but across the complete network there is no prime, single,
or central source of guidance.”10 Catherine H. Lovell argues that coordination or concerted action may occur in a variety of ways, sometimes more by accident and by
informal links than by force or by central direction.11 Thus, the complexity of public service configurations within which federal organ
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izations interact has been greatly increased by the proliferation of intergovernmental authority patterns.
Privatization is often advocated as a simplifying strategy for government, but unless government vacates a given policy area totally in favor of complete private service
provision and production, then the responsibilities of public organizations do not disappear; they are just altered. In fact, it takes considerable time for public
organizations receiving altered responsibilities to adjust to fulfill these altered responsibilities adequately. For example, airline deregulation and the elimination of the Civil
Aeronautics Board resulted in shifts of certain responsibilities in consumer protection to the Department of Transportation and an expanded role in airline safety to the
Federal Aviation Administration, resulting in profound effects on system capacity. The expansion of air travel and the formation, bankruptcy, and reformation of airline
companies have raised severe capacity and policy problems for both organizations, and both are still working out their new roles after a decade of deregulation.
Congress became so concerned about the impact on airline safety and capacity that it enacted legislation establishing a commission to investigate the situation and
evaluate organizational alternatives.12
Privatization is not a single policy but is an umbrella concept that has come to mean a variety of policies. These include transfer of ownership (sales of stateowned
assets and enterprises); deemphasizing monopoly production of public services by introducing or increasing competition or reducing obstacles to it in the hope of
increasing efficiency in the production of public services (contracting out portions of public activity; encouraging private options along with public ones for service); and
encouraging private production of services that are currently provided by government (load shedding). Even when government reduces its role in the actual production
of a service or even in seeing to it that a service is provided, government organizations often take on an increased regulatory role. The upshot of all this activity has been
that public service configurations have been increasingly crowded with a variety of both nonprofit and profitseeking organizations. The implications for federal
management could not be more stark. As Lester Salamon has documented, a significant transformation has taken place in the way the federal government goes about
its business—a shift from direct to indirect or ‘‘thirdparty” government. This is a sea change from the situation in which the federal government ran its own programs to
one in which it increasingly relies on a wide variety of third parties.13
CAUSES AND CONSEQUENCES OF PLURALIZATION
The two primary causes of horizontal fragmentation are interest representation and policy frustration. In the first place, as Terry Moe puts it, “Structural politics is
interest group politics.”14 Moe argues that because
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interest groups are intensely focused and well informed on the issues of structuring government agencies that affect their interests and the wider public is neither, interest
groups are in a position to pressure congresspeople who have strong incentives to do what such groups want. Bureaucratic structure emerges from the battle of
interests with features determined by the powers, priorities, and strategies of the various designers. Policy effectiveness is not the primary criterion on the minds of the
designers. Not even proponents of the agency demand an effectively designed organization first, but one that will protect their hardwon accomplishment in creating the
organization and its initial priorities from being captured or destroyed. Opponents exact concessions designed to create structural features that will limit the
organization’s effectiveness and limit its reach. In the politics of structure, as the group system becomes more competitive and political uncertainty and political
compromise increase, a proliferation of structural forms illsuited to effective organization results. According to Moe, the cumulative result stems directly from the
political system: “A bureaucracy that is structurally unsuited for effective action is precisely the kind of bureaucracy that interest groups and politicians routinely and
deliberately create.”15 Organizational effectiveness is repeatedly sacrificed on the altar of interest protection and representation.
The charge against interest group intentions is perhaps overstated. There is good reason to believe that proponents at least “believe” that some structural components
they advocate will lead to greater organizational effectiveness. For example, when proponents of the reformed savingsandloan regulatory system removed regulations
allowing savings and loans to pay market rates and invest in more profitable businesses, they did so believing greater financial resources would be made available and
ultimately more financing for housing would result. However, they insisted on the continued separation of their own weakened regulatory agency Federal Savings and
Loan Insurance Corporation (FSLIC), rather than merging with the more experienced and tighter regulation of the Federal Deposit Insurance Corporation (FDIC).
The roots of policy frustration are often found in organizational ineffectiveness. Congress and presidents have created organizations that have ineffective structures,
and in separate actions over the years have also layered on governmentwide budget, personnel, and purchasing restrictions that have had the unintended cumulative
effect of stifling management adaptation of public organizations. Congress passes these controls such as the GrammRudmanHollings budget control process or
personnel regulations. However, when the cumulative effect of these is to stymie the effective attainment of some policy goals that are also prized, then interest group
and congressional advocates clamor to create still other organizations exempt from these very same management controls. For example, Congress
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created the Resolution Trust Corporation to clean up part of FSLIC’s savingsandloan mess but exempted it from GrammRudmanHollings.
Creating organizations that operate offbudget is a timehonored congressional device16 and one that is finding increasing popularity as Congress tries to find ways to
have more activist government in an era of budget stringency. Governmentsponsored enterprises that operate offbudget, enjoy lines of credit at the Treasury, are
governed by boards of directors with a majority of privatesector members, and are exempt from standard Government Accounting Office (GAO) auditing
requirements are increasingly the organization structure of congressional choice. If anything, the federal government is likely to see the creation of more of these.17 The
financial magnitude of federal guarantees for such enterprises is over $800 billion and growing.18
The practice of creating new structures of everincreasing variety seems to feed on itself. James D. Barber argues that, in fact, it does. He points out that the process
of creating new organizations—a pluralization process—is selfreinforcing. The establishment of a new unit serves as an example for others to follow. It sets a
precedent, and pluralization progressively becomes the norm, both in the sense of something expected to happen and something reasonable to do.19 James G. March
and Johan P. Olsen agree that institutional forms tend to diffuse through a population of institutions in much the way other fashions diffuse.20 Barber argues the costs of
operating the system in aggregate rise radically as pluralization proceeds; enhance the relative power of large, permanent, highly organized interests in society; and
decrease the number of policy proposals adopted in the aggregate system.21
Barber’s selfreinforcing pluralization process finds empirical support in recent federal government experience. The 1993/1994 U.S. government manual lists sixty
two independent establishments and government corporations outside the executive departments. In addition, during the period 1960–1980, Congress created
approximately twentysix government corporations. In 1988, Congress created three governmentsponsored enterprises for the farm credit system and one to
guarantee and insure loans and bonds issued to build and renovate college facilities.22 This preference to create multiple hybrid organizations with varying legal statuses,
authorities, structures, and financing mechanisms even if the same policy area is represented by the actions taken to create multiple organizations in the ‘‘S&L bailout
bill,” the Financial Institutions Reform, Recovery, and Enforcement Act of 1989,23 which created four organizations.24
Pluralization is not exclusively a legislative branch disease. Presidents have joined in as well. President Richard Nixon created the Environmental Protection Agency
by Executive Order. In 1976, the National Education Association supplied then candidate Jimmy Carter with a disciplined block of 172 votes at the Democratic
convention, and its support was believed
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to have been crucial to his election victory of 1976. President Carter moved quickly to pay the debt and saw to it that the NEA’s top priority, the creation of the
Department of Education, was brought to fruition.25 Carter’s first domestic policy crisis brought an organizational rather than a policy response with the creation of the
Department of Energy. Candidate Ronald Reagan campaigned on a “less bureaucracy is better” platform, promising to dissolve Carter’s departmental creations, but he
quickly abandoned the proposals when Congress resisted. He then went on to propose transforming the Veterans Administration into the Department of Veterans
Affairs. The multiorganizational structural scheme that was adopted to administer the S&L bailout was proposed by President George Bush. President Clinton’s health
reform bill called for the creation of several new organizations including Health Alliance Organizations at the state level and a new National Health Board at the national
level.
Since the failures of Nixon and Carter in attempting comprehensive reorganizations of the executive branch, presidents may be more likely to look to other
management tools such as the budget and regulatory controls as Reagan and Bush did, join the organizational incrementalists as Bush did in the S&L bailout bill, or a
series of proposed incremental management reforms pursuant to the National Performance Review as Clinton did. According to some, this runs the risk of removing the
only counterforce to horizontal fragmentation. Ron Moe argues, “Congress tends toward disaggregation and relies upon the President to provide the necessary
counterforce, so that the end result provides a sound internal management structure and clear lines of political accountability to both the President and Congress.”26
Decentralization, too, has been profoundly affected by budgetary austerity. Reagan’s formal New Federalism proposals to divide national and state domestic
responsibilities did not pass, but fiscal and political realities delivered a “fendforyourself” federalism that has resulted in a “sorting out of sorts.”27 As the federal
government consolidated some fiftyfour categorical grant programs in the early 1980s into more flexible block grants in the areas of social services, lowincome energy
assistance, substance abuse, and mental health, the states also ended up with 30 percent less money. Categorical grantinaid programs hardly disappeared, going from
539 at the peak in 1981 to 405 in 1984,28 to 492 in 1991 to 600 spending an estimated $221.1 billion in fiscal 1994.29 The new block grants to the states and the
retention of the other grant programs did not necessarily result in an even pattern of less regulation or more flexibility for state and local governments, however. One
study demonstrates that for the block grant programs, state regulations replaced federal regulations on local governments except in education. In addition, in the
categorical grant programs that remained, more complex and restrictive federal requirements have been applied.30 In addition, Congress has created 100 new grant
pro
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grams since 1981, fiftysix between 1987 and 1989, predominantly for drugs, the homeless, AIDS, and education. Many of these, however, carry with them very small
dollar amounts (median of $3.8 million for the 1987–1989 programs) and have larger nonfederal matching requirements.
What Congress has been doing recently is mandating more action by the states and localities and making them pay for more of it. For example, when the block grant
for alcohol, drug abuse, and mental health came up for renewal in 1988, Congress added a requirement that half of the money had to be used for services to
intravenous drug users. In 1989, when governors found out that expanded Medicaid coverage required by Congress alone was taking up onethird of increases in state
revenues, the National Governors Association passed a resolution calling for a twoyear moratorium on further mandates. Congress responded with a new mandate
requiring extension of Medicaid coverage to pregnant women and infants up to 133 percent of the federal poverty line.31 A state of Michigan analysis of its increased
state costs as a result of changing federal policies concluded that of $125 million in increased costs, 73 percent were due to mandates, 12 percent from changing
federal requirements, and only 10 percent from cuts in federal aid.32
Another way Congress and the president have been decentralizing domestic policy implementation is through decentralizing regulatory activity to the state level,
sometimes on a mandatory basis and sometimes on a voluntary basis. This has come about for three reasons. First, budgetary stringency has made it less likely that
Congress will appropriate large sums to entice state and local governments to deliver programs to achieve federal policy goals. Continuing a trend that began in the late
1970s, federal aid as a percentage of state outlays dropped from 25 percent in 1981 to 19 percent in 1987.33 As a result, Congress has turned more to enacting
statutes requiring states to impose regulations to achieve policy goals. As a report of the Advisory Commission on Intergovernmental Relations put it, ‘‘Washington
turned increasingly to programs based on the ‘stick’ of regulation rather than the ‘carrot’ of financial subsidy in its dealings with state and local governments.”34 The
Clean Air Act requirements are one example of attempts to achieve policy goals through regulatory decentralization. Second, budgetary stringency has made Congress
reluctant to appropriate funding directly to federal regulatory agencies so that they can administer programs on their own. In fact, many federal regulatory agency staffs
have been cut in the past ten years. For example, the staff of the Federal Trade Commission has 900 work years in 1990, down from 1,800 in 1980. This almost
forces understaffed federal agencies to seek ways to join forces with state agencies, which is what the Federal Trade Commission (FTC) has begun doing in antitrust
enforcement.35 Third, a concerted effort was made by the Reagan administration to devolve regulatory authority to the states.
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Through reduced federal oversight, acceleration of formal delegation, and more flexible standards, the states’ regulatory role was strengthened.36
The result of these decentralizing changes means that, more than ever, domestic policy management is intergovernmental management. This means that not only are
elected political officials of approximately 80,000 governmental units involved, but also multiple organizations within these jurisdictions must act in a concerted fashion
for any implementation of a federal program or regulation to take place. “Most domestic sectors rely on complex intergovernmental patterns, often including several
organizational actors linked together in complicated fashions for policy success.”37 Obtaining the right intergovernmental pattern—that is, the appropriate match of
responsibilities, authorities, and resources between the involved federal and state organizations—has an important impact on implementation success. In addition,
interorganizational problems are caused by the lack of attention to, and incentives for, coordination among the involved organizations.38
Privatization policies also have contributed to pluralization. In its broader connotation, privatization occupies a range of relationships on a government organization–
private organization continuum, with governmentfunded andproduced services at one end, privately funded and produced services at the other, and a wide array of
combinations in between.39
As policy makers have introduced privatization measures, not only are more organizations from the private sector involved in various ways in the conduct of public
activities at federal, state, and local levels, but more complex interactions among public and private organizations have developed in each sector of public activity.
Privatization proponents argue that this provides more ways in which citizens as public service consumers can express their preferences, and the increased variety of
organizations operating in the public service configuration facilitates a more efficient and equitable way to aggregate choices from individuals with disparate tastes.40
This can be true under certain circumstances, but there are some significant externalities and tradeoffs,41 and the creation of choices leaves or creates multiple public
sector organizations in the public service configuration with altered roles and relationships. Thus, the configuration of organizations involved in delivering particular public
services shifts, producing changes in all the organizations constituting the configuration.
Even if many actual service production activities are contracted out or are made available through voucher systems, government retains a service provision and/or
regulatory role that is the responsibility of one or more public organizations. Privatization policies are not necessarily simplifying strategies. They often mean public
organizations will be operating in an altered interorganizational field that requires considerable organizational adaptation.
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THE PUBLIC SERVICE CONFIGURATION PROBLEM AND ORGANIZATION DESIGN
Taken together, the above developments have had pronounced effects on the environment of public organizations and have contributed to the public service
configuration problem in several ways:
1. An emphasis on aggregation of interests has led to an integration gap.
2. Institutions are less capable of pursuing longterm national interests.
3. The tasks of coordinating multiorganizational efforts have become more complex.
4. While formal accountability efforts have proliferated, less accountability has been achieved.
With respect to the first, as March and Olsen discuss, public institutions involve both aggregative and integrative processes. Aggregative processes are fundamentally
processes of interests, power, and exchange and involve such questions as: are preferences precise, suitable, and tolerable enough to be aggregated, and do institutions
provide for all the mutually satisfactory exchanges that exist.42 Integrative processes seek the creation, identification, and implementation of shared preferences and
involve such questions as: do the processes develop and use genuine expertise of relevance to the problem, and do they strengthen the capabilities of citizens to
understand and act on issues of public policy and to select competent representatives and advisors? The idea is that political institutions ought to be evaluated in terms
of their contribution to the integration of society, as well as their contribution to the aggregation of diverse interests.43 Of course, these are not separable but affect one
another.
March and Olsen assert that the increase in the number of nondepartmental bodies at the margin of the state and the interpenetration of governmental agencies and
organized interests (subgovernments or policy networks in the United States) have led to a segmentation of the state in many Western societies and have fragmented the
political community into small constituencies.44 The emphasis in designing institutions in this current cycle of change is on aggregative processes to the neglect of
integrative ones.45 The concern is that the present aggregative phase has weakened the integrative aspects of public policy making. What is diminished is the institutional
capability to transform political interests to mold political community and a sense of common identity within which decisions are made.46 Functions of public
organizations, then, extend beyond the concerns of delivering a given service to those who currently demand it to furthering the development of a broader citizenship
that builds greater democracy in the community.47
With respect to the second problem mentioned above, John E. Chubb
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and Paul Peterson maintain that the United States needs institutions that have the responsibility and the authority, the incentives and the power to pursue longrun
national interests.48 A key role of public organizations extends beyond the service they deliver in the immediate term to the encouragement they give to policy makers to
give greater consideration to the national interest. One implication of this perspective is that certain public organizations are those in the public service configuration that
possess a responsibility as a trustee for the nation’s longterm interests, and they must act as a counterweight to the more parochial and immediate interests advanced
within the daytoday workings of the public service configuration.
The third problem—the increasing complexity of coordinating—complicates the achievement of service delivery and makes adaptation of public organizations to the
new requirements of the public service configuration more difficult. For instance, contracting does not necessarily mean more flexibility, but it can mean less. Oliver
Williamson maintains that the choice between contracting or hierarchy as an organizing mode turns on which mode has superior adaptive properties in a particular
environment. Environmental uncertainty combines with bounded rationality of human decision making to limit reliance on longterm contracting because it would require
specification of complex future contingencies. Instead, decision makers may rationally choose internal organizational production of services where, through vertical
integration, adaptation can be made in a sequential way without the need to consult, complete, or revise interorganizational agreements.49 Further, Donald E. Kettl
points out that government through third parties frequently undercuts the prevailing allegiance to hierarchy and control, and tempts politicians and managers to respond
to problems by writing rules, recentralizing program administration, or unleashing auditors, thus adding a new layer to the already difficult task of managing programs
indirectly.50 Relatedly, Laurence J. O’Toole and Robert S. Montjoy detail the high coordination costs that could be expected to accompany successful
interorganizational implementation.51
The fourth problem—increasing methods of accountability but achieving less system accountability—is exacerbated by organizational proliferation and complexity.
As just discussed, the response to complexity is often to try to increase control. Politicians and managers seeking to do this have a wide range of methods from which
to choose, and different groups of them often impose several controls concurrently.52 As Goodsell discusses, analysts of accountability mechanisms typically emphasize
how each kind of control is plagued with inadequacies but do not look at the multiple restrictions placed on a public organization and its managers. From the standpoint
of the manager, these constraints are collectively cumulative. Managers face the controls all at once and are expected to also build a credible record of achievement.53
The net effect stifles managerial adaptation. A National Academy of Public Administration panel or examining
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federal management systems observes “that Federal management systems are now overregulated in the sense that by accretion, each has acquired an overburden of
controls, limitations and constraints, reviews, approvals, data requirements, and other mandates, which in total, significantly reduce value and effectiveness.”54 In short,
by attempting to regulate so many of the processes, management is prevented from adapting the organization to achieve its primary objectives. The emphasis needs to
be on achieving organization goal accountability, which often means determining how well the organization influenced the public service configuration to produce desired
policy impacts. The proliferation of segmented control measures is unlikely, in and of itself, to achieve that.
DESIGNING PUBLIC ORGANIZATIONS TO ADDRESS THE PUBLIC SERVICE CONFIGURATION
PROBLEM
The perspective provided above argues that policy makers controlling decisions over public organization designs need to focus on more than the organization at issue.
They need to focus first on the public service configuration that operates in the policy area of interest. They need to consider:
1. where the existing public organization(s) fits within the public service configuration—that is, how it interacts with other organizations and how its structure affects
that interaction;
2. what the policy maker wants the public service configuration to produce;
3. what configuration of the interorganizational network is most likely to produce the outputs; and
4. what configuration of public organizations within the jurisdiction is most likely to facilitate the desired change in the public service configuration—that is, how
should the relevant public organizations be structured and interact.
Elsewhere I discuss three dimensions that can be applied in the analysis of alternative organizational structures—public interest, economic, and management.55 Elements
of these dimensions need to be examined in order to address the public service configuration problem. While a full discussion of the application of these dimensions is
not workable in the space available here, some idea of the relevant considerations can be provided.
THE PUBLIC INTEREST DIMENSION
The public interest dimension contains factors that are consequential for the ability of the organization to function within the governmental framework in such a way that
it advances the public interest. In the United States, the public interest contains notions of popular control, leadership, and assumptions about the appropriate use of
sovereign power. As such, it has both substantive and procedural aspects.
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The substantive aspects have to do with producing policy outputs that a substantial proportion of the public wants and those that are in the longer term national
interest. Public organizations need to act to construct a balance between meeting immediate needs and longer term requirements. As such, public organizations have to
be designed so that they seek out the articulation of public needs, influence other organizations in the public service configuration to help meet them, and also help policy
makers understand what the alternatives are for meeting the longer run needs of the country for the future.
Other substantive aspects include advancing the goals of equity, liberty, due process, and community. By having representatives of various segments of society
working in public organizations, various publics indirectly participate through their bureaucratic representatives.56 Equity has several variations in public organizations,57
and organizational policies can further some types at the expense of others.58 Liberty is always a highly prized value in democracy. David Rosenbloom asserts that in
the United States, the conflict between bureaucratic power and democratic constitutionalism is highly pronounced because bureaucracy promotes uniformity and the
Constitution promotes diversity.59 The rights found in the main body of the Constitution and the Bill of Rights, such as freedom of speech, or press, of religion, and
against unreasonable searches and seizures, are dedicated to protecting individual liberty, and organizations need to operate in such ways that these values are
protected.
Organizations are also to be judged by the degree to which they help build the community. As March and Olsen discuss, “One of the oldest claims for democratic
political processes is that they help develop an ethos of preferences that encourage cooperation and a sense of community.”60 March and Olsen point out that the
choice of institutions is a choice of values and cannot simply be treated as an implementation of them.61 Thus, public organization design involves choices between
structures that encourage community and cooperation but may also encourage passivity and discourage individual initiative and those that emphasize individual freedom
and choice but may also encourage greed, envy, and competitiveness.
The procedural aspects of the public interest have to do with issues of representing citizen voices, providing an open and participatory policymaking process,
avoiding abuse of power, and instilling integrity in public service. Douglas Yates enumerates the following desired features that reinforce democracy: representation,
responsiveness, openness, participation, control of experts and competition, and balance among interest groups.62 Thus, in the United States, the public interest is very
much rooted in notions of popular control and accountability, the appropriate exercise of sovereign power, and public leadership responsibility to balance competing
interests in developing solutions and building public support for them.
Public organization designers then need to consider how the powers be
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ing assigned to public organizations will impact public service configurations. Just as important, they need to consider how the powers will be constrained and how
oversight will be exercised to ensure conformance with democratic norms. A basic point of departure in the United States is to examine how structures are to respond
to the three branches of government and operate within the system of checks and balances. Policy makers need to be careful to delineate the linkages to officials and
organizations within the three branches of government and demonstrate how democratic direction, popular accountability, and protection of individual liberty will be
preserved and enhanced. Too often certain organizational designs, those that advocate independent agencies, government corporations, government “instrumentalities,’’
or other governmentsponsored enterprises, are advocated by their proponents as good because they remove the organization from politics. This is a misnomer. The
design may make the operations of the organization more removed from the three branches of government and the operation of democratic politics inherent in the
actions of our three branches of government, only to make the organization more responsive to a narrower interest group politics defined by those groups given the
most power by the organization’s charter and the development of the subsequent subsystem politics. The question that must be asked is not only what politics is being
escaped from, but what politics is the operation of the organization being subjected to.
This does not mean that all organizations at the federal government level must be uniformly subjected to all governmentwide regulations. Today, the federal code
contains between 100 and 150 generic management laws depending on the definition employed. Ronald C. Moe and Thomas H. Stanton assert, “Generic laws,
properly written, provide a means to implement a comprehensive managerial strategy.”63 However, “properly written” is the critical qualifier. The fact is that these
generic management laws have been written incrementally, and their cumulative effectiveness on variously situated organizations has never been systematically assessed.
Just as it is not appropriate to advance organization designs that provide blanket exclusion from all such management laws, it is similarly inappropriate to endorse
blanket inclusion.64 Rather, organization designers need to examine these laws anew in the context of creating and altering public organizations. Perhaps, in this way the
key democratic responsiveness questions will be addressed, and also the governmentwide laws and regulations requiring reform will be examined.
THE ECONOMIC DIMENSION
The economic dimension includes factors that are important to insure that the organization functions effectively within the political economy of the jurisdiction. It includes
incentives for the production of public goods,
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for the contribution of public organizations to furthering activities of private organizations, and for economic development of the jurisdiction as a whole.
When public policy makers make decisions structuring public programs, they are making decisions that affect the nature of the relationships between public, private
nonprofit, and private forprofit organizations in the public service configuration. Policy makers can emphasize marketlike mechanisms or lean more toward integrated
delivery and control by public agencies. Actual configurations seldom represent pure types, but rather embody mixed modes, so that it is more accurate to conceive of
a market–direct service continuum. Policy makers actually have a variety of policy tools from which to choose that can influence the relationships of organizations within
the public service configuration and, thus, where on the continuum the organizations within the public service configuration can be found. Examples of such tools include
grants, loan guarantees, tax expenditures, loans, regulation, and direct government.65
However, policy makers need to be careful that the public service configuration will respond in the ways desired to the policy tool of choice. Public decision makers
have been legitimately chastised in the past for automatically assuming direct service by a centralized bureaucracy was necessary to respond to an identified public
problem without considering the nature of the tasks, the social and economic environment within which they would be undertaken, and the degree of control the public
organization would need to impact the other organizations in the interorganizational field. By the same token, today, policy makers are cautioned against “assuming a
market.” A relevant first question is, what in the environment of existing or potential organizations suggests that a market can exist, and, if it can, what kind of market?
The argument of market advocates is that the public service configuration is adequately populated with organizations with the capabilities to provide services to publics
with diverse interests in such a way that they all receive desired services at lowest cost.66 This assumes that the nature of the service fosters multiple providers on a
continuing basis and that the nature of the relationship among the organizations precludes monopoly capture. This is possible, but it is not certain. For example, Ruth
DeHoog finds that with respect to social services and employment and training services in the state of Michigan, only infrequently were there sufficient suppliers to
achieve the desired level of competition.67 Some studies do show cost savings of privatization,68 but other studies show cases where privatization has been
implemented and no cost savings have resulted!69
The economic dimensions also involves the role for public organizations in the economic system of the nation. While the United States is not going to adopt a formal
comprehensive industrial policy, the government still takes actions the sum of which shape business actions and affect economic
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growth. The government will continue to make economic development decisions on a sectorbysector basis that will inevitably involve the role of public organizations
in supporting the efforts of private forprofit organizations in fostering economic growth. These are not tangential effects. As Robert A. Leone and Stephen Bradley put
it, “The effect of federal policies often go to the heart of strategic decision making in the private sector. Not only do they influence key corporate decisions on product
mix, vertical integration, and competitive emphasis, they also encourage or discourage R&D programs, diversification into multiple product lines, reliance on patent
protection, and pricing strategies.”70
For example, it is quite apparent that one of the longterm purposes of the Federal Aviation Administration and the National Aeronautics and Space Administration
is to foster the growth of both the domestic aircraft manufacturing and air transport industries, and through their research and development, regulatory, and
infrastructure programs, these organizations along with the Department of Defense have contributed and continue to contribute to a significant U.S. dominance in world
markets. The decision to build the “space plane” is clearly directed at maintaining such dominance and will expand the promotional role of such organizations.
Renewed recognition exists of the role of public organizations in contributing to the competitiveness of private forprofit organizations in the global marketplace.
Public policy debates are focusing on the criticality of public infrastructure, education, and publicly funded research in restoring the U.S. position as a leading edge
economy. There is an awareness that public expenditure is not all directed at public consumption but also at public investment, which has an important impact on the
capabilities of domestic enterprises to compete in the global marketplace, and which is not a drain on, but a support for, the economy.71 In 1987, the Office of
Management and Budget (OMB) reported $126.9 billion in investment in the defense area and $82 billion in nondefense areas. These investments are channeled
through and directed by public organizations, and how they are structured to do the investment job is a central element in today’s public policy debates.72
Public organizations must be designed in such a way that they play positive roles in setting the stage for other organizations in the public service configuration to do
well in advancing economic growth. There must be elements that insure that public organizations act not merely in the shortrun interests of certain companies, but also
in the longer run national interest. The task of coordinating multiorganizational efforts in pursuit of such an objective has become increasingly complex, especially with
state and local organizations taking on more ambitious regulatory and economic development roles.
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THE MANAGEMENT DIMENSION
The management dimension involves the capacity of public organizations to adapt to changes in the public service configuration and produce desirable quantities and
qualities of public and private outputs. It concerns how various tools and systems enhance or constrain public organization managers in guiding their organizations to
effectively adapt to needed changes. As stated at the start of this chapter, there is a dual management responsibility in public organizations—institutional management
and transorganizational management. The focus of transorganizational management is on impacting the public service configuration—that is, managing interdependencies
among the extant array of different types of organizations. The focus of institutional management is on developing the capacity to fulfill institutional maintenance
requirements but also to make available the wherewithal to perform transorganizational management functions.
Public organizations differ in their capacity to manage public functions. Public administration has long been concerned not just with individual management situations
and techniques but with building capacity in public organizations that will perform multiple functions over time in the public interest while maintaining individual freedom
and integrating various interests into the national interest.73 The capacity of public organizations is directly linked to their relationships with other organizations in the
configuration. Beth Walter Honadle’s model for capacity is compatible with this perspective. She proposes that the organizational requirements of capacity in the public
sector include: the ability to forge effective links with other organizations; processes for solving problems; coordination among disparate functions; and mechanisms for
institutional learning.74 The model is a dynamic one with the capacity of public organizations determined by their ability to adjust and coordinate with other organizations
to produce desired public policy outcomes.
The design of public organizations can have a significant impact on their capacity to manage the implementation of public policies successfully. Malcolm L. Goggins
and associates argue, on the basis of research on statelevel implementation, that integrated structures should be easier to induce into action because there are fewer
veto points and prospects for delay, but for policies requiring an adaptive implementation style, organizations with more complex and variegated implementation
structures should be more successful in the long run in achieving actual satisfactory outputs and outcomes. In addition, the congruence of goals among implementing
units and the fit of such goals with the purposes articulated in official policy messages are important for successful implementation.75 They also find that in addition to the
appropriate administrative structure, plentiful, skillful, and motivated administrators and also sufficient financial resources that are well targeted can influence
implementation success.76 Thus, complex struc
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tures can be made workable for longrun performance, provided that the other key elements are in place to provide the capacity necessary for goal achievement.
Unfortunately, far too often the other elements are neglected.
Inadequate management capacity in public organizations is, and will remain, a problem in many public organizations. For example, at the federal level, the Report of
the National Commission on the Public Service (Volker Commission) observed about federal management systems: ‘‘Essential management and regulatory decisions,
for example, are now engulfed in redtape and paperwork to the point that the process often drives the decisions, and not vice versa.”77 Relatedly, Comptroller General
Charles Bowsher warns about an emerging crisis in federal organizations resulting from a disinvestment in capacity. 78 Pluralization is not in and of itself a solution to this
problem. In fact, it can be a complicating factor. William F. West finds that federal regulatory administration agencies’ environments tend to be more pluralistic today,
and thus the task of regulation has become both more complex and more characterized by internal conflict.79 Adding a whole new set of actors increases the
coordination problem.
Policy makers need to be aware that both policy tools and management systems, which are key components of public organization design, will significantly determine
the capacity of the public organization to affect the public service configuration to achieve desired policy outputs and outcomes. As Salamon points out with respect to
policy tools, the choice of a policy tool not only embodies a particular type of activity, but it also involves a delivery mechanism. “The nature of the delivery system is
important because it affects the complexity of the implementation process, the degree of control that can be exercised over program operations, and the nature of the
pressures built into the program administration by the involvement of different types of organizations with different outlooks and purposes.”80 Management systems,
too, whether prescribed on an individual or government wide basis, will either provide the assistance and flexibility to adjust to changes in the public service
configuration or will constrain such adjustment. Too often, the effect has been unintended constraint. The Volker Commission found for the federal government that,
“Demands for administrative consistency, in the name of equity or White House control, have made it virtually impossible to adjust to changing circumstances.”81 Policy
makers need to examine the cumulative effect of management constraints they place on public organization in order to understand whether the organization will be
enabled to play a meaningful role in the public service configuration.
CONCLUSION
The public service configuration problem means that, more than ever, policy makers interested in program performance must design public or
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ganizations with a view to how the public organization will be enabled to impact and influence the relevant public service configuration. This perspective implies an
analysis of how the public organization can best be structured to interact with other organizations to arrive at a configuration that is most likely to produce desired policy
outcomes.
If the effects of recent trends are to be corrected, public organization designers need to focus on design elements that will provide for integration as well as
aggregation of interests. In addition, designers need to consider what elements will permit pursuit of longer term national interests. Also, designers should be aware that
organizational pluralization has proceeded to make the coordination of multiorganizational efforts more complex and that concerted attention to coordination
mechanisms and administrative capabilities to make them work is even more critical to implementation success. Finally, policy makers need to understand that layering
additional accountability and control requirements will not necessarily provide more accountability, but in order to address these concerns, public organization designers
need to skillfully blend three dimensions—public interest, economy, and management. This perspective implies not one way to design a public organization, but it does
mean that an analysis of how design elements combine to make tradeoffs among these dimensions is essential.
NOTES
1. Harold Seidman and Robert Gilmour, Politics position, and power, 4th ed. (New York: Oxford University Press, 1986), 28.
2. Ibid., 25.
3. Quoted in Gary C. Bryner, Bureaucratic discretion (Elmsford, NY: Pergamon, 1987), 150.
4. Cathy Marie Johnson, New wine in new bottles: The case of the consumer product safety commission, Public Administration Review 50 (January/February 1990): 74–81.
5. Charles Goodsell, The case for bureaucracy (Chatham, NJ: Chatham House, 1985), 131–132.
6. Kenneth J. Meier, Regulation Politics bureaucracy, and economics (New York: St. Martin’s Press, 1985), 10–14; Cornelius M. Kerwin, Transforming regulation: A case study of
hydropower licensing, Public Administration Review 50 (January/February 1990): 91–100.
7. S. Kenneth Howard, De facto new federalism, Intergovernmental Perspective 10 (Winter 1984): 4.
8. John Shannon, The faces of fiscal federalism, Intergovernmental Perspective 14 (Winter 1988): 17.
9. Vincent L. Marando and Patricia Florestano, Intergovernmental management, in Public administration, edited by Naomi Lynn and Aaron Wildavsky (Chatham, NJ: Chatham House,
1990), 295.
10. Deil Wright, Federalism, intergovernmental relations, and intergovernmental
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management: Historical reflections and conceptual comparisons, Public Administration Review 50 (March/April 1990): 172.
11. Catherine H. Lovell, Where we are in intergovernmental relations and some implications, Southern Review of Public Administration 3 (June 1980): 6–20.
12. See Charles Wise, Whither federal organizations: The air travel challenge and federal management’s response, Public Administration Review 49 (January/ February 1989): 17–28.
13. Lester Salamon, Rethinking public management: Thirdparty government and the changing forms of government action, Public Policy 29 (Summer 1981): 258.
14. Terry Moe, The politics of bureaucratic structure, in Can the government govern? edited by John Chubb and Paul Peterson, 269 (Washington, DC: Brookings Institution, 1989).
15. Ibid., 328.
16. Examples include Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank System, Student Loan Marketing Association,
College Construction Loan Insurance Association, Federal Asset Disposition Association, Federal Agriculture Mortgage Corporation, and the Financial Corporation and the
Resolution Funding Corporation of the Federal Home Loan Bank System.
17. Former Congressional Budget Office (CBO) Director Rudolph Penner observes, “You do have a swing away from the radical conservatism to one that looks more benignly toward
spending that heads straight into constraints. So you look at other ways of doing things. And governmentsponsored enterprises are a very convenient way.” Quoted in Lawrence
J. Haas, Dodging the budget bullet, National Journal (October 1, 1988): 2465.
18. Thomas Stanton and Ronald Moe, Using generic law to manage thirdparty government: The case of governmentsponsored enterprise, speech delivered at the National Conference
of the American Society for Public Administration, Los Angeles, April 1990, 4.
19. James D. Barber, Some consequences of pluralism in government, in The future of the United States government, edited by Harvey S. Perloff, 243 (New York: George Braziller, 1971).
20. James G. March and Johan P. Olsen, Rediscovering institutions (New York: The Free Press, 1989), 137.
21. Barber, Some consequences, 246–253.
22. Farm Credit Assistance Corporation, Federal Agriculture Mortgage Corporation, Farm Credit System Insurance Corporation, and College Construction Loan Insurance Corporation.
23. P.L. 10173, 103 Stat. 183; 12 U.S.C. 1800.
24. Resolution Trust Corporation (RTC), Resolution Funding Corporation (REFCORP), Office of Thrift Supervision (OTS), and Federal Housing Finance Board.
25. Beryl A. Radin and Willis D. Hawley, The politics of federal organization: Creating the US Department of Education (Elmsford, NY: Pergamon, 1988).
26. Ron Moe, Traditional organizational principles and the managerial presidency: From phoenix to ash, Public Administration Review 50 (March/April 1990): 135.
Page 155
27. John Shannon, The return to fendforyourself federalism, Intergovernmental perspective (Summer/Fall 1987): 36.
28. David Nice, Federalism (New York: St. Martin’s Press, 1987), 56.
29. Advisory Commission on Intergovernmental Relations, Cataloging of federal grantsinaid to state and local governments: Grants funded in FY 1989, M167 (Washington, DC:
Advisory Commission on Intergovernmental Relations, October 1989); National Performance Review, Strengthening the partnership in in intergovernmental service delivery
(Washington, DC: Office of the Vice President, 1993).
30. Catherine H. Lovell, Deregulation of state and local governments: The Reagan years, in Intergovernmental relations and public policy, edited by J. Edwin Benton and David R.
Morgan, 150 (Westport, CT: Greenwood Press, 1986).
31. David S. Cloud, Rhetoric confronts reality as the 1991 budget battle gets under way, Governing (May 1990): 22.
32. John Kamensky, Federal grants increase, but no one is complaining these days, SIAM Intergovernmental News (Summer 1990): 3.
33. Shannon, The return to fendforyourself federalism, 36.
34. Advisory Commission on Intergovernmental Relations, Regulatory federalism: Policy, process, impact, and reform (Washington, DC: Advisory Commission on Intergovernmental
Relations, 1984), 146.
35. Randall Bloomquist, FIC mirrors style of its new head, begins cooperating with states, Governing (August 1990): 19–24.
36. Michael Fix, Transferring regulatory authority to the states, in The Reagan regulatory strategy: An assessment, edited by George C. Eads and Michael Fix (Washington, DC: The
Urban Institute Press, 1984).
37. Laurence J. O’Toole, Strategies for intergovernmental management: Implementing programs in intergovernmental networks, International Journal of Public Administration 11 (4,
1988): 418.
38. Laurence J. O’Toole and Robert S. Montjoy, Interorganizational policy implementation, Public Administration Review 44 (November/December 1984): 491–500.
39. See National Academy of Public Administration (NAPA), Privatization: The challenge to public management (Washington, DC: NAPA, 1989), 7–8; and Ted Kolderie, Two
different concepts of privatization, Public Administration Review 46 (July/August 1986): 285.
40. President’s Commission on Privatization, Privatization: Toward more effective government (Washington, DC: President’s Commission on Privatization, 1988), 248.
41. For a discussion of these, see Charles Wise, Public service configurations and public organizations: Public organization design in the postprivatization era, Public Administration
Review 50:143–147.
42. March and Olsen, Rediscovering institutions, 120.
43. Ibid., 120–129.
44. Ibid., 97, 166.
45. Ibid., 135.
46. Ibid., 165.
47. See Steven Kelman, Public choice and the public spirit, The Public Interest 87 (Spring 1987): 80–94; and Curtis Ventris, Two critical issues of American public administration,
Administration and Society 19 (January 1987): 37.
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48. John E. Chubb and Paul Peterson, American political institutions and the problem of governance, in Can the government govern? edited by John E. Chubb and Paul Peterson, 116
(Washington, DC: The Brookings Institution, 1989).
49. Oliver Williamson, Transaction cost economics: The governance of contractual relations, in Organizational economics, edited by Jay Barney and William Ouchi, 116 (San Francisco:
JosseyBass, 1986).
50. Donald E. Kettl, Government by proxy (Washington, DC: CQ Press, 1988), 154.
51. O’Toole and Montjoy, Interorganizational policy, 499.
52. See Bernard Rosen, Holding federal bureaucrats accountable, 2nd ed. (New York: Praeger, 1989).
53. Goodwell, The case for bureaucracy, 129.
54. National Academy of Public Administration (NAPA), Revitalizing federal management: Managers and their overburdened systems (Washington, DC: NAPA, 1983), 4.
55. See Wise, Whither federal organizations, 17–28; and Wise, Public service configurations, 141–155.
56. Stephen MaynardMoody, Beyond implementation: Developing an institutional theory of administrative policy making, Public Administration Review 49 (March/April 1989): 139.
57. H. George Frederickson, Public administration and social equity, Public Administration Review 50 (March/April 1990): 228–237.
58. Lois Recascino Wise, Social equity in civil service systems, Public Administration Review 50 (September/October 1990): 567–575.
59. David Rosenbloom, Public administration and law (New York: Marcel Dekker, 1983), 20.
60. March and Olsen, Rediscovering institutions, 140.
61. Ibid., 141.
62. Douglas Yates, Bureaucratic democracy (Cambridge, MA: Harvard University Press, 1982), 182.
63. Ronald C. Moe and Thomas H. Stanton, Governmentsponsored enterprise as federal instrumentalism, Public Administration Review 49 (July/August 1989): 324.
64. A panel of the National Academy of Public Administration concludes: “Thus, a careful formal structuring of authority and responsibility through a legally mandated framework of
statute and regulation has become one of the fundamental characteristics of our government. This principle has been carried through into the further implementation of federal
management systems, but in this context formality and structure come into conflict with the reality of what is needed to achieve excellent and cost efficient management.” National
Academy of Public Administration, Revitalizing,2.
65. See Lester M. Salamon and Michael Lund, eds., Beyond privatization: The tools of government action (Washington, DC: Urban Institute Press, 1989).
66. Robert Bish and Vincent Ostrom, Understanding urban government: Metropolitan reform reconsidered (Washington, DC: American Enterprise Institute, 1979), 27–30.
67. Ruth DeHoog, Human services contracting: Environmental, behavioral, and
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organizational conditions, Administration and Society 16 (February 1985): 427–454.
68. Stephen Morse, Contracting out: A painless alternative to the budget cutter’s knife, in Prospects for privatization, edited by Steve H. Hanke, 60–73 (New York: Proceedings of the
Academy of Political Science, 1987).
69. Robert W. Bailey, Uses and misuses of privatization, in Prospects for privatization, edited by Steve Hanke, 138–152 (New York: Proceedings of the Academy of Political Science,
1987).
70. Robert A. Leone and Stephen Bradley, Toward an effective industrial policy, Harvard Business Review (November/December 1981): 92.
71. See Robert Heilbroner and Peter Bernstein, The debt and the deficit (New York: W. W. Norton, 1989), 76–85.
72. See, for example, John E. Chubb and Terry Moe, Politics, markets, and the organization of schools, American Political Science Review 82 (December 1988): 1065–1087.
73. See George A. Graham, America’s capacity to govern (University: University of Alabama Press, 1960), 74.
74. Beth Walter Honadle, A capacitybuilding framework: A search for concept and purpose, Public Administration Review 41 (September/October 1981): 579.
75. Malcolm L. Goggin et al., Implementation theory and practice (Glenview, IL: Scott, Foresman, 1990), 119–133.
76. Ibid., 128–133.
77. Report of the National Commission on the Public Service, Leadership for America: Rebuilding the public service (Washington, DC: The National Commission, 1989), 19.
78. Charles Bowsher, The emerging crisis: The disinvestment of government, Webb Lecture, National Academy of Public Administration, Washington, DC, December 2, 1988.
79. William F. West, The growth of internal conflict in administrative regulation, Public Administration Review 48 (July/August 1988): 773–782.
80. Lester Salamon, The changing tools of government action: An overview, in Beyond privatization: The tools of government action, edited by Lester M. Salamon and Michael Lund,
35–36 (Washington, DC: Urban Institute Press, 1989).
81. Report of the National Commission on the Public Service, 19.
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Chapter 6
Government Reorganization: Theory and Practice
Guy Peters
Contemporary governments invest a great deal of effort in the reform and reorganization of their administrative structures. This practice is a continuation of a long
history of reorganization. This continued investment of time and energy must appear paradoxical to the disinterested observer. Most of the literature on reform—
whether written by practitioners or academics or whether historical and contemporary—argues that reform and reorganization are largely wasteful and produce few
tangible results. Further, the same reform may be considered a success by some observers and a failure by others—the standards for judging success at reforming are
idiosyncratic and ambiguous, and often influenced by the political ambitions of the observer.
A second notable element that would lead the objective observer to question the utility of administrative reforms is the dominance of fad and fashion in these reforms.
In recent years examples of fads have included privatization, deregulation, and the devolution of authority within government, e.g. creation of the “Next Steps” agencies
in the United Kingdom. Once initiated, the same reform may be implemented in one country after another. Some of this dissemination of reforms is autonomous, with
governments attempting to make themselves more efficient, or at least make themselves appear more modern (Olsen and Peters, 1996). Some governments have these
fashionable reforms forced upon them as conditions of grants and loans, whether the reforms are suitable for the needs of that country or not.
Still, in the triumph of hope over experience, governments continue to reform and to reorganize themselves. They often do so with only the vaguest and fuzziest ideas
about what makes governments function and what
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the effects of particular attempts at initiating change might be (Peters, 1998). Although the use of social science theory is often denigrated by practitioners in
government, there is good reason to think about some fundamental approaches to organizations and how these theories can guide reform. This chapter will be a
discussion of three important approaches to organizations and their potential impacts on administrative reform. These three approaches are themselves composed of a
number of alternatives, so that there are multiple sources of explanation or guidance available to the wouldbe reformer, and to the wouldbe analyst.
THEORETICAL APPROACHES TO REFORM
There are at least three alternative theoretical positions useful for understanding reform and reorganization efforts in the public sector. For one approach discussed
below, it may be stretching the claims of the position itself to refer to it as being theoretical, but even that more descriptive and commonsense approach does appear to
have an implicit theory lurking somewhere at its core. We will describe briefly these three fundamental positions, along with the various subsets contained within each.
We will also discuss how each of the approaches might be applied in the public sector and how we might decide among them as ways of understanding what has been
happening in public administration.
There may even be a case to be made for the ability of several of the approaches to predict what might transpire in any prospective administrative reforms. One
major weakness in most public administration literature, and indeed the political science literature taken more broadly, is the inability to predict the logical outcomes of
emerging situations and opportunities in the public sector. As a consequence, most administrative analysts postdict rather than predict, outcomes in the public sector;
these ex post analyses will always be correct, but not particularly useful for the practical policymaker. The approaches which will be discussed here are by no means
fullblown predictive models, but there are at least some inklings of movement in that direction.
As we discuss theories in reorganization, we will need to be extremely careful to distinguish the theories (implicit or explicit) that have guided practitioners who
constructed the reorganizations from those theories that political scientists and other organizational analysts have utilized in their attempts to understand, ex post, the
changes imposed. In some instances the two bodies of theory may be synonymous, while in other cases there are marked differences. Several of the more abstract
theories of the analysts may in fact be useful for informing practical reform efforts, but few appear to be consulted as governments cycle through their progression of
reform and then reform again. We should point out here that we will be looking at changes that could be considered either as reorganizations—structural
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changes—or as reforms—procedural or relational changes (Ingraham and Peters, 1988). These two categories are at times difficult to separate in practice, and the
motivations underlying them tend to be very similar. Therefore, we will deal with the two types of change as synonymous for the purposes of this chapter.
Purposive Models of Reform
The first major category of approaches to reform are broadly purposive in their perspective on the process. That is, these analyses assume that one or more actors in
the process have a particular end state in mind when they propose the reform or reorganization. These approaches further assume that the actor(s) involved are
sufficiently powerful or skillful to have the reform adopted and implemented. These purposive models consider the perceived problems and motivations of political
actors—including the organizations within the public sector themselves—and seek to comprehend why reorganization decisions are taken, given those motivations.
Many of these approaches focus more on the implicit theories of the reformers themselves rather than supplying independent analytical frameworks of their own to help
understand the process. At least one purposive approach (the economic approach), however, is capable of providing a powerful (if somewhat simplistic for most
purposes) theoretical analysis of bureaucratic policy making. There are several different approaches to reform contained within this broader category.
Administration as Usual
The first alternative approach to understanding reorganization in government is the one most commonly used in the real world and, to some extent, also most commonly
used (at least over time) in academic studies of public administration. In this approach, reorganizations occur because of the perceived political need to produce a
change in the administrative structure and from the perceived inadequacies of existing arrangements. Christopher Pollitt (1984) refers to these studies as the
‘‘traditional, pragmatic” approaches to the machinery of government, and therefore to changing that machinery. Dealing specifically with the British literature (Chester
and Wilson, 1968; Chapman and Greenaway, 1980), Pollitt points to the tendency of writers in this tradition to ascribe reform to a “need” for change without ever
specifying whose need or the operational definition of such a need. In reality the need is usually the one perceived by a political leader (a prime minister) who wants to
achieve a set of goals (including perhaps greater efficiency) through the public sector. That leader may see the existing administrative structures as impediments to
achieving those goals and therefore attempt to restructure government. This tendency toward attributing vague political causes for reform is not confined to Britain,
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and a good deal of writing on administrative reform in the United States and elsewhere has the same characteristics (Seidman and Gilmour, 1986; Caiden, 1970, 1984;
Savoie, 1996). Stephen Skowronek (1982) refers to this pattern of pragmatic and ad hoc analysis of administrative reorganization as a “patchwork” in the context of
the United States.
This traditional mode of analysis is not, however, without substantial value. In the first place, it is often descriptively much richer than is more theoretically motivated
research on organizational change, and a reader can understand the logic in action justifying the changes in government. Further, this writing generally approaches more
closely the understandings of practitioners actually involved in government about what happened in a reorganization and why it happened. The politicians and
administrators involved in reform rarely think about their activities in the theoretical terms that fill the political science literature. Finally, although there may not be a
theory explicitly stated in the work, there is often one underlying the description of change, and that theory generally is one based on a detailed and nuanced
understanding of organization politics. The difficulty is that the theory may not be comprehensible to anyone who has not lived through the same set of experiences as
the formulator of the “theory.”
Political Science
Pollitt (1984:170–172) discusses a second category of reform literature (again largely British) under the category of ‘‘political science.” This approach to reform
emphasizes the impacts of overall governmental change on public administration, and especially those changes produced by a sense of “overload” and “ungovernability”
that began in the late 1970s (Rose, 1978; Rose and Peters, 1978) and has persisted (Snellen, 1985; Chubb and Peterson, 1989). In administrative terms, these
diagnoses of the condition of modern governments have produced numerous reform efforts. At perhaps the simplest level, some of these have been called “cutback
management” and have been concerned with the need of some managers in government to reduce the size of their own departments or agencies in order to meet
externally imposed budgetary ceilings (Levine, 1978; Dunsire and Hood, 1989). The “cutback management” approach has emphasized the managerial need to produce
reductions in programs and personnel without excessive disruption to the services provided clients. Some disruption is inevitable, but the managerial question is how to
reduce the human and organizational impacts of change.
The cutback approach in some ways presaged subsequent events in the public sector that, in turn, have required even greater managerial changes and greater
adaptation to fiscal reductions (Caiden, 1997). Most of these changes have been associated with the conservative governments elected in the aftermath of economic
slowdowns and apparent mushrooming of the public sector; Reagan, Thatcher, and former Canadian Prime Minister
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Brian Mulroney are wellknown examples of the breed (Savoie, 1996). Associated with these political regimes were a host of reforms and reorganizations, most
directed toward reducing the size and influence of government and having more public services implemented privately. Privatization and deregulation have been one of
the dominant themes in these reforms (Wright, 1994), as has the decentralization of administrative authority to autonomous or quasiautonomous organizations (Peters,
1990). Even less conservative political leaders have found it fiscally advantageous to reduce direct public employment and to utilize privatization, deregulation and
contracting (Peters, 1996a) as means of reducing their levels of expenditure in the face of rising costs and increasing taxpayer resistance to big government. In fact
some of the most extreme versions of administrative reform have occurred under the leadership of Labor governments.
As with the “traditional” approach, there is a theory implicit in this approach to governmental reform. The theory is more evident in the reforms themselves than in
most of the scholarship that has been applied to them. One strand of this thinking has been rather simplistic bureaucracy bashing, based upon a naive belief that the
problems of modern government are largely a function of the inefficiencies of large complex public bureaucracies (Goodsell, 1985; Milward and Rainey, 1983). This
approach has produced a number of attempts to make the public sector look like the private sector, and some have used privatesector executives to implement those
ideas (Metcalfe and Richards, 1984; Kelman, 1985; Wilson, 1988). These hymns of praise to privatesector management have been sung while government has been
called in to save a number of failing steel mills, automobile factories, and financial institutions in the private sector.
A more complex version of the same idea about reform parades under the banner of manageralism (Aucoin, 1990; Hood, 1991). The idea put forward here is that
the civil service has been much too concerned with policy advice and insufficient attention has been directed toward managing organizations within government. The
second part of the thesis is that most, if not all, of the perceived inefficiencies of government are a function of poor management rather than more fundamental problems
of policy design. Therefore, it argues that the formulation of policy ideas should be left to political leaders, and civil servants should be directed simply to manage their
organizations or to oversee the management of the newly created, decentralized quasiprivate organizations. This approach to the public sector can be justified as good
democratic practice, with the publicly elected politicians responsible for policy and program ideas and the unelected civil servants responsible for their administration.
In a peculiar way, much of the academic literature on policy implementation (Pressman and Wildavsky, 1973; Mazmanian and Sabatier, 1983) shares the view of the
politicians responsible for pushing manageralism onto the public sector. It could be argued (Linder and Peters, 1987) that
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the implementation literature works from the underlying premise that most of what malfunctions in government is largely a function of faulty administration. Therefore, if
the systems of implementation are designed properly, there will be fewer policy failures and better government. Little blame for failure is placed at the doorstep of the
designers of programs, other than their failure at times to consider the implications for implementation of the programs they have formulated. The implementation
literature does not share the manifest ideological distaste for, and suspicion of, the career bureaucracy. Its diagnosis of the policy problems of government, however, is
in many ways similar to the more ideological strand of thought about the public sector.
Even more recently the emerging “governance” literature (Rhodes, 1997; Kooiman, 1993) has argued that the capacity of government to control society effectively is
even weaker than was argued by earlier, more conservative critics. This literature argues that the changing nature of the international environment at one level, and the
increasing empowerment of social actors in domestic politics, have limited the capacity of governments at the center to exert effective social control. Therefore, arguing
from very different premises, the conclusions of the governability literature in the 1990s are remarkably similar to those of the ungovernability literature of the 1970s—
the mixedeconomy, welfare state in Western countries is no longer capable of providing the benefits of governance that it once was able to do for society.
Economics
It may appear internally contradictory to lump economic models of administrative change into a larger section containing primarily political approaches to change, but
there is a close theoretical connection if the two classes are considered from the appropriate vantage point. Just as the political models tend to look at the motivations of
political (largely elective) actors to make things work properly in government and thereby to meet campaign promises and satisfy ideological supporters, the economic
models look at the motivations of officials (largely nonelective although often the two types are conflated in economic analyses) to maximize their own utilities. These
models then assume the impacts of those motivations on the structure and performance of administrative institutions. All of these models, therefore, assume individual
purposive actions to generate structural and procedural changes, and all assume that the institutions themselves are largely responsive to those internally generated and
rationalistic (within different frameworks of rationality) assumptions about the appropriate shape of the organizations.
Economic models of public administration (Niskanen, 1971; Breton and Wintrobe, 1975; Bendor, 1989) all assume that the individual bureaucrat is a rational actor
attempting to maximize his or her personal utility
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through involvement in the administrative process. In most of these models, the utility of the individual bureau chief is linked with the size of the bureau’s budget and/or
personnel allocation. In another variant of the model, Anthony Downs (1967) has the bureau chief identify more with the collective goals of the organization so that
maximizing the size of the organization is a means of protecting it against possible future cuts imposed by politicians. Expanding the size of the bureau by adding new
functions—one of several possible strategies—in the Downs model becomes a means of protecting the “heartland” of the organization from cuts. Therefore, in any of
these models, the bureau chief has an interest in making the organization as large as possible, and reform would be seen as a means of improving the competitive
position of the organization in the budgetary process.
The fundamental problems with these economic models of bureaucracy have been discussed a number of times (Jackson, 1982; Blais and Dion, 1994), and we will
not repeat that exercise here. Rather, we will point to a few specific problems for the models that arise in the context of examining contemporary reform efforts in the
public sector. The most obvious problem is that most contemporary reform efforts involve attempts to reduce the size of the bureaucracy. This strategy is intended to
counteract the traditional means through which an aggressive bureaucratic entrepreneur as able to maximize the size of his or her organization. Given the generally
tautological nature of these economic models, it is almost impossible to prove that a bureau chief did not act rationally in a reform; we do not know what sort of
damage might have been done without the use of a rational economic strategy. Unless one is willing to accept a highly convoluted version of the model, these models
simply do not appear applicable in decremental times (Tarschys, 1985).
Following from the above, most economic models of bureaucracy are largely silent about structural change, although structure is a crucial feature of any bureaucracy.
In fact, these economic models are largely silent about strategies other than simply that organizations should disguise their true production functions and that
communications patterns have an effect on the ability of organizations to achieve their goals through the policy process (Tullock, 1965). In many ways one set of
reforms that has been introduced tends to make budget maximization more likely, given that granting organizations enhanced independence may increase their
opportunities to use budgetmaximizing strategies.
Another problem with the economics literature as it relates to the reform and reorganization of government is that it is illsuited to predict for the scholar, or to advise
the practitioner, what types of reforms might be most efficacious. The concentration on the size of the budget and the personnel allocation as the (posited) sole concern
of the bureau chief does not permit any nuanced or subtle discussions of strategies. Indeed, the major help in
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that regard comes from other political scientists who have commented on these economic models and sought to elaborate their meaning in the real world of government
(Dunleavy, 1985; Goodin, 1982). This latter discussion has included a discussion of the types of expenditures that would be most beneficial to a bureaucratic
entrepreneur, and the right types of personnel and programs to pursue if indeed the goals are to grow as large as possible. In this analysis, “bureaushaping,’’ rather
than sheer size of the organization, is the goal for the rational administrative politician. Unfortunately, the advice rendered by those scholars has little or nothing to do
with the type of models that most scholars using the economic approach have developed.
Assessment
The above models of public sector change all assume a particular purpose to a reform advocated by one or a few influential actors. These reforms are generally
rationalistic, with a clear meansends connection assumed between the diagnosis of a problem and the remedy. Both the diagnoses of problems and the remedies
proposed are related to a common collection of ideological and/or professional beliefs about good government and good administration, but there is a basic belief that
the actors in government themselves are central to the identification, selection, and implementation of administrative changes.
It is easy to criticize these approaches to administrative reform. All the approaches involve placing at times a very simplistic template over organizations and
attempting to force them all into something like a common pattern. Diversity tends to be endemic, and important, within the public sector, and the promoters of simple
volitional models tend to press toward uniformity. Further, they often make unrealistic assumptions about the capacity of public organization, or organizations in general,
to change in response to hierarchial directives. These approaches apparently fail to understand the informal aspects of organizations and the need to modify not only
formal structures but operating patterns if a reform is to be successful. Finally, most are based on assumptions about efficiency in organizations that, as R. Miles (1977),
Lester M. Salamon (1981), and others have argued, is often a very fleeting value in the study of public organizations. These problems are perhaps exaggerated in the
economic models of bureaucracy, but they exist to some degree in all the approaches identified in this section.
Despite the readily apparent weaknesses of the economic models of bureaucracy, they have been implemented through many of the administrative reforms of the
past several decades. Mrs. Thatcher in particular was enamored of the Niskanen analysis of public organizations, and many of her reforms were intended to break the
monopoly powers of public organizations. In can be argued, however, that in creating a number of more au
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tonomous organizations to replace the “monopolies,” she actually created greater opportunities for bureaucratic aggrandizement.
Environmental Dependency
The second major grouping of approaches to administrative change tends to be the reverse of the first in that the changes that do occur are posited to be a function of
the relationship of the structures to the environment. Again, that environment may be political or economic, but the underlying logic of the approaches is very similar.
That is, over time structures adapt, or perhaps whole groups of structures adapt, to the environment and construct patterns of organizations that are functional for the
fulfillment of their collective goals. This pattern of adaptation is in large part a function of the resources and challenges posed by the environment rather than more
conscious choices by organizational leaders. While the first group of models depends upon the volition of individual political actors, these models appear to work more
automatically, and any individuals involved appear to be in the role of transmitting environmental forces rather than necessarily making independent decisions of their
own.
Political Science Approaches
The first models of this type are again derived from political science/ public administration and are based on the assumption that responses to environmental change will
create new organizations designed to exploit the emergent opportunity, or control the potentially destructive anomaly in the environment. In this model reactions to
changes in the environment tend to be more in the creation of new organizations rather than in the reorganization of existing organizations.
The major work in this area has been done by C. Grafton (1984) who argues that reorganization and the creation of new organizations within the federal government
could be explained by the occurrence of changes in the environment. In particular, he argues for the importance of “SET” anomalies requiring governmental innovations.
This term refers to social, economic, or technological changes that may occur in the environment and that may require new organizations or the reorganizations of
existing ones to manage them. A social change might be the civil rights movement of the 1950s and 1960s requiring a variety of changes in the public sector. The
economic changes of the Depression created a huge variety of new or changed government organizations. Finally, the increased technical demands on government
could be seen in the creation of the National Aeronautics and Space Administration (NASA) and in a variety of energy and environmental organizations.
The difficulty with using these types of models is that it is not clearly stated when an innovation is an innovation. That is, the environment of
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the public sector is changing constantly. When is the change significantly large enough to trigger a change in the organizational structures of government to compensate
for it or to take advantage of it (Dempster and Wildavsky, 1980)? These models appear to provide no answer to that question but can only say, ex post facto, that the
change must have been sufficiently large since something did happen with the organizational structures.
Contingency Approaches
The most familiar of the environmentally driven approaches to organization and reorganization is contingency theory (Lawrence and Lorsch, 1969). The logic of this
approach is that the internal structuring of organizations will, over time, come to reflect the characteristics of the task environment of the organization. There are a
number of different versions of this approach. The Aston group and related British researchers (Pugh and Hickson, 1976) sought to relate the structure of organizations
to characteristics such as task specialization and technological intensity of the environment. Charles Perrow (1986) relates the structure and functioning of organizations
to the nature of the raw material being processed and the degree of certainty about causal processes within the organizational domain. A variety of other models also
have been developed to attempt to demonstrate that internal organizational features depend upon the environment, and this is even more true for the public sector. For
example, several British studies have applied contingency theory to both subnational governments and to the departments of central government (Greenwood, Hinings,
and Ranson, 1975a, 1975b; Pitt and Smith, 1981). The results for both applications were disappointing, to say the least.
It appears rather that, much as was pointed out when discussing the numerous public sector reforms of the 1980s and 1990s, fad and fashion may have as much to
do with organizational formats as does the nature of the task environments. Governments adopt either the organizational format with which they are most familiar
(hierarchial, ministry forms) or fashionable formats (decentralized “agencies” in the 1990s) rather than planning some systematic connection with the environment and
the tasks of the newly formed or reformed organization. As in other settings, there appears to be an “iron cage’’ (DiMaggio and Powell, 1983) that drives organizations
toward a single structural format, or at most a limited range of organizational formats, rather than the highly differentiated structures dependent upon tasks or resources
posited in contingency theories.
Another problem with contingency theory as a means of understanding the structures of public administration is measurement. That is, public administration as yet
does not have a very good vocabulary for describing the structure of formal organizations in the public sector (see Hood and Dunsire, 1981). Also, we lack an effective
vocabulary for describing policy
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problems and the characteristics of policy problems that might be related to the need for alternative structural forms in the public bureaucracy. Some scholars have
attempted to provide instruments for categorizing public bureaucracies and their structures (Hood and Dunsire, 1981; Darbel and Schnapper, 1969), and of
categorizing organizational forms more generally (McKelvey, 1982), but as yet this analysis remains rudimentary. The work still does not appear capable of bearing the
load that contingency theories imposes on it for elaborate structural categories to be associated with differentiated environmental factors. The work on categorizing
policy areas appears if anything even more rudimentary and to have progressed little beyond Theodore Lowi’s (1972) familiar four types of policy. That categorization
has been seminal in many ways but as yet also lacks the ability to confront the needs of a fully developed contingency theory.
Population Ecology Approaches
A third family of models attempting to explain the nature of organizations in relationship with the environment are population ecology models (Aldrich, 1979; Carroll,
1984; Peters and Hogwood, 1991). The basic premise of this family of models is that analysts should look less at the existence, performance, and structure of
individual organizations than at the characteristics existing within whole populations of organizations. Just as with biological organisms, this approach argues that the best
way to understand the birth, death, and survival of organizations is to understand them as whole “ecosystems” and to look at the evolution of populations of
organizations. The population ecology approach is environmentally deterministic to the extent that it assumes that the success (measured largely in terms of survival) of
individual organizations is a function of both their relationships with other organizations in the environment and their relationships with the environment. In this case, the
environment of the organizations is conceptualized in terms of the available niches within which it can survive, including the availability of funding sufficient for its survival
in the case of a publicsector organization.
Given the volitional character of most descriptions and analyses of decision making in the public sector, it is not surprising that ecological models have been applied
relatively infrequently in public administration (but see Peters and Hogwood, 1991; Casstevens, 1980; Kaufman, 1976, 1985; and Brudney and Herbert, 1987).
Further, the tendency of ecological models to reify organizations, for example to assume that they react as would biological entities to the availability of niches, also
causes scholars concerns about the utility and desirability of this approach in the public sector. Despite these concerns, the ecological approach does appear to have
substantial utility for understanding observed changes within groups of organizations, including organizations within the public sector. This utility is especially evident
when we consider the evolution of larger, inclusive
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structures over time, and the generation of niches for different types of organizations within those larger systems. So, for example, reorganization efforts within
governments can be analyzed as the exploitation of new niches created by social and/or technological change, or as responses to the creation of new niches through a
changing ideological conception of how the public sector should be structured or managed. Likewise, the models of Grafton (1984) with public organizations exploiting
SET changes in the environment can be reconceptualized as governments simply responding to the appearance of the new environmental niches by creating new
organizations. The organizations occupying those niches need not be entirely new themselves, but rather may simply be reconstructions (Hogwood and Peters, 1983) of
previously existing organizations, redesigned to better exploit a changed environment.
One of the more interesting applications of this family of models involves linking ecology models with some concepts emerging from strategy in management theory
(Hrebiniak and Joyce, 1985; Zammuto, 1988). The idea of blending ecological and strategic choice approaches is that organizations usually are unable to find niches on
their own, as biological organisms might. Rather, organizations must be led to find those niches, and the organization’s managers are the strategists and entrepreneurs
within the organization charged with exercising leadership in searching out new or underutilized niches. These organizations’ leaders have several alternative strategies
available to them. These strategies are to some degree based on the nature of the niches that appear to exist within the environment.
Theorists working with ecological models describe niches in terms of their width. A narrow niche is one in which only a limited type of organization can survive, while
wide niches are hospitable to a wide range of organizational types. At the broadest possible level, the distinction is made between generalist and specialist organizations
that might fit into those niches. This is a familiar distinction in reference to individual civil servants, but some of the same logic can be applied to organizations. Do
organizations choose to allocate resources toward a narrow range of goals and with a narrow repertoire of policies, or do they attempt to meet a wider range of policy
goals with a more extensive repertoire of policies? One set of strategies might be successful if the niches are relatively wide and varied, while the other might be
successful in more tightly defined environmental situations.
Another characteristic of the environment important for understanding governmental reorganization is the grain of the environment (Freeman and Hannan, 1983). By
grain we mean the existence of different types of niches, and hence the opportunities for different types of organizations to survive simultaneously. A finegrained
environment would have most niches of the same type, while a coarsegrained environment might have a variety of different niches existing simultaneously. We have
already noted that the
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public sector tends toward relatively common forms (e.g., agencies in the United States or ministries in most other democracies). Some attempts at reorganization and
reform tend toward making that grain even finer (e.g., “quangobashing” in Thatcher’s Britain to eliminate a number of nondepartmental bodies [Hood, 1981]). Other
reforms tend toward increasing diversity, as the Gore Commission’s strategy of “reinvention” has allowed organizations to create their own structures and procedures
(Peters and Savoie, 1994). Perhaps especially for the public sector, we need to look at the grain of the environment over time as well as at any single point in time. As
different organizational fashions sweep through the public sector, different vestigial structures may remain and continue functioning for years, with the result that the grain
may actually appear coarser than it is at any one time. In particular, the process of forming new organizations may function as if the grain were very fine, and limited
structural options may be considered for new organizations.
A final factor to be considered in the relationship of organizations to their niches is the role of the density of the population of existing organizations (Brittain and
Freeman, 1980). When a niche is opened initially, there is little necessity of competition among the entities involved (whether organizations or biological organisms) for
resources, and efficiency is not particularly valuable given the comparatively easy access to resources. As more entities begin to crowd into that niche, competition for
resources increases and efficiency in the use of available resources becomes important for survival. These factors led to the idea of two types of organizational
strategies for dealing with the environment, labelled r and k strategies. An r strategy involves rapid exploitation of new niches and rapid reproduction of new
organizations or organisms to fill the available space. A k strategy, on the other hand, involves generating the staying power for an organization to occupy the niche and
hold off competitors over the long run, usually through relative efficiency in the use of resources.
In terms of organizations within the public sector, the formation of r organizations may be seen in the rush to create new organizations when there is some sort of
perceived crisis in government, or the identification of a new opportunity. These may be Grafton’s (1984) SET opportunities. The creation by Franklin Roosevelt of so
many new organizations during the first year of his administration is a classic example of adopting the r strategy. Likewise, the rapid creation of social service and
poverty agencies during the Johnson administration, and the apparent inefficiency of many of them, is an indication of rapid exploitation of new niches. In some
instances, however, the nature of the policy itself may dictate that a single, largescale organization be vested with responsibility for the policy (Schulman, 1977), as has
been the case for NASA with space travel, rather than integrating that function in other, larger existing organizations.
On the other hand, the numerous attempts of governments to produce
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greater efficiency and coordination by consolidating apparently similar organizations in a single, large organization may be implicit recognitions of the need for k
strategies for coping with survival in the long run. For example, the Canadian cabinet reforms of 1993 moved from over fifty cabinet level departments to just over
twenty. This tendency is more than countered, however, by the creation of a large number of specialized agencies, formed out of previously existing cabinet
departments. The most obvious example is the creation of “Next Steps” agencies in the United Kingdom (Greer, 1994).
These various approaches to reorganization do not imply that such largescale reorganizations of government are always, or even usually, successful but rather that
those reforms do recognize the need to match the space available within a niche with a number of organizations, and the grain of the environment with the number and
types of organizations being created. Of course, the practically minded advocates of these reforms rarely, if ever, discuss concepts such as densitydependent selection
models of public organizations.
Institutional Models of Organizational Change
The final family of models of organizational change is a product of an increased interest in the ‘‘new institutionalism” in political science (March and Olsen, 1989, 1994;
Smith, 1988) and to some extent the other social sciences (DiMaggio, 1988; Bromley, 1989). There is now a variety of institutional models in political science (Peters,
1996b) but we will concentrate on the normative version associated with by March and Olsen. This institutional model begins with rather different assumptions about
the behavior of organizations and about their ability to absorb necessary changes in their structures and operations. The most fundamental differences are between these
models and the volitional models discussed first. In volitional models, individuals within organizations are purposive and thus tend to alter organizations to fit their own
goals, whether those goals are political (e.g., Chapman and Greenaway, 1980) or personal (e.g., Niskanen, 1971). In institutional models, however, the goals pursued
by an organization are more collective than individual and do not necessarily represent purposive, maximizing behavior. Rather, the behavior of an organization is
understood better as the attempt to match organizational behavior with standards of “appropriateness” derived from the history and collective values of the organization.
Organizational reform from an institutionalist perspective is less mechanical than it might appear from other perspectives. Rather than requiring only the wishes of an
organizational leader, or significant changes in the environment, to occur, reform in this mode of analysis requires altering to some extent the values of the organization. It
therefore requires modi
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fying the operative values of organizational members as well. Thus, an institutional approach to reorganization and reform is somewhat similar to an approach relying on
the concept of organizational culture (Ott, 1989). One significant difference might be the extent to which the organizational culture literature, given its roots in business
management, assumes that those cultures are highly mutable and can be manipulated by managers to produce greater efficiency (but see Peters, 1990). The
institutionalist literature, on the other hand, tends to stress the durability of organizational values, or cultures, and therefore the extreme difficulty that may be
encountered in attempting to produce any rapid or significant changes in performance through reorganization. This viewpoint therefore is not dissimilar from much of the
traditional literature in public administration pointing to difficulties in producing efficiency through reorganization (Miles, 1977; Salamon, 1981).
The institutional approach is also capable of providing a more differentiated viewpoint of the nature of an organization and, therefore, of organizational change. Most
of the approaches we have discussed tend to treat an organization as an integrated entity, speaking with a single voice. Further, the presumed integration of values
within an organization tends to be a “topdown” conception rather than a “bottomup” conception, and there is little possibility for discussion or conflict over the nature
of the organization or of its mission. From an institutionalist perspective, there does not have to be such an integration of values. Internal conflicts over the definition of
organizational mission, and even over the deeper meaning of the organization itself, are more an integral part of organizational life than in other approaches. A goal of
development within the organization may be an integrated perspective, but that perspective cannot be assumed a priori as it is in, for example, economic models of
organizations. This recognition of internal differences, in turn, means that organizational reform can be more internally generated, if there is agreement on the need and
nature of reform. Further, the existence of alternative viewpoints within the organization may mean that reform pressures arise naturally from inside the structure itself.
The existence of alternative visions also means that attempting to implement a reorganization or reform plan from above that is not acceptable to most members of the
organization would not be judged to be very likely to succeed by an analyst operating from this perspective.
Although we can think of the internal differentiation of institutions as a source of innovation, institutions can also be extremely conservative and attempt (knowingly or
not) to preserve routines and structures (March, 1981a, 1981b). Institutions develop routines and defenses that make the imposition of change difficult and permit the
perpetuation of routines and procedures, the utility of which have long been exhausted. Further, any apparent innovations in an institution may be adapted to look as
much as
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possible like old routines as they are being implemented (Browning, 1968). Another of the more important of these defenses for organizations is the contemporary trap,
in which an organization appears to be competent at what it does and institutionalizes certain means of achieving its ends. By doing so, however, it also ignores the
possibilities to respond in other ways that might be more efficient or effective. Thus, a publicsector organization that has always relied on economic instruments for
policy intervention will tend to staff itself with economists who will, in turn, also see economic instruments as the best means of intervening (Linder and Peters, 1989).
Once a successful pattern of functioning is established, it becomes difficult for an organization or institution to reform itself.
Another of the virtues of the institutional approach is that the essentially random and ad hoc aspects of much of organizational change present no mystery. Changes
may be initiated by a rational process, but once in train the process becomes largely unpredictable. If there is an assumption that history is efficient and teleological, then
this randomness creates a severe problem (see March and Olsen, 1989:54–56). On the other hand, if it is assumed that individuals and institutions respond poorly to
many efforts to induce change and that the outcomes are therefore unpredictable, any notion of the efficiency of history and of the positive developmental aspects of
organizational responses becomes untenable. Therefore, much of organizational change becomes a “garbage can” model of choice. The outcomes that emerge are not
really planned or perhaps even explicable by rational processes, but rather represent the confluence of a number of streams of thought and action within the
organization.
Finally, it must be pointed out that as much as they represent the search for efficient administration, the administrative institutions of a government represent important
social values. Groups want organizations to provide benefits but also serve as symbols of their social significance and their political muscle. As a consequence, reform
and reorganization efforts may be understood as more significant political events than their advocates sometimes perceive when they initiate the change process. The
rationalistic advocates of reform assume that its effects can be contained within the narrow organizational or policy area bounds within which the organization appears
to apply, but the effects of even seemingly minor reforms can be profound. Institutionalist models may not enable us to predict the nature of those consequences very
well, but they do at least alert the practitioner (and the analyst) that they are likely to occur. By so doing, they interject a healthy skepticism into any attempts to
generate organizational change.
CONCLUSION
This chapter demonstrates the impact that several alterative conceptions of reform and reorganization have on the analysis of organizational change
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in the public sector. None of these alternative views is necessarily completely right or wrong, but each adds a different dimension to the analyst’s understanding. The
purposive models discussed as the first alternative add substantial realism and detail to the discussion, but many depend upon premises about organizational change that
appear untenable in the real world of government. Models positing dependence of organizations on their environment collectively make an important point about such
dependence but lack a clear explanation of the dynamics of organizational adaptation. In essence, the first group of models depends too much on the will of individual
political and administrative actors, while the second group tends to rely excessively on invisible hands to force change. Neither extreme appears particularly viable.
If I were forced to make a choice among these alternatives, I would certainly place my money on the institutional models discussed here as the third approach. This
approach in many ways combines the explanatory benefits of the other two approaches. Because of its fundamental concern with the interpretive meaning expressed
through organizations, the institutional approach places great value on understanding the detailed (and largely unpredictable) impact of proposed changes on the
organization. Also, by virtue of its recognizing the cultural and ideational aspects of organizations, the institutional approach can propel the discussion of government
reorganization and reform beyond a strictly mechanical or political level to a more cultural level of understanding organizations and the involvement of their members.
In the institutional approach the preferences of the individuals are not exogenous to the administrative process but are in large part a function of the values of the
organization itself. This linkage of the individual and the organization makes change at once more understandable and more difficult to implement. The institutional
approach also acknowledges the relationship of an organization to its environment; an organization is not conceptualized as capable of being effective if it is
incompatible with its environment. In this approach, the environment may be conceptualized substantially more broadly than in the ecological approaches, but much of
the same logic of fitting organizations into available niches operates. The difference is that the dynamics of change in institutional analysis is within the organization rather
than in the environment.
In summary, government reorganization is one of the most enduring activities in the public sector. It continues to represent the hope that things can be made better
through structural and procedural change. Even if that practical aspiration cannot be achieved, the scholarly exercise of understanding the causes and consequences can
succeed. We have outlined three alternative ways to interpret the changes and have pointed out the strengths and weaknesses of each. Further, we have argued that the
institutional approach appears to offer the best hope of an effective interpretation. There
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is still a long way to go before that effective interpretation is achieved, but governments kindly do continue to provide case after case from which to build our theories.
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Part III
Organizations, Individuals, and Administration: Issues and
Perspectives
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Chapter 7
Diversity in Public Organizations: Moving toward a Multicultural Model
Sally Coleman Selden and A. Frank Selden
America’s workforce is changing and rapidly growing more diverse. Demographics are being reshaped by three decades of increasing immigration, primarily from Asia
and Latin America, by increased representation of persons with disabilities, and by the maturation of the baby boomer generation. These trends changed the
composition of the workforce (Booth, 1998). By 2020, women and minorities will comprise more than twothirds of the net workforce entrants (Judy and D’Amico,
1997). The percentage of AfricanAmerican workers is expected to remain constant over the next two decades, while the percentage of AsianAmerican and Hispanic
workers is anticipated to grow during this period. By 2050, Hispanics are expected to comprise approximately 25 percent of the population, African Americans 14
percent, and Asian Americans 8 percent (Booth, 1998).
Public agencies have already witnessed considerable demographic changes over the past two decades. At the end of fiscal year 1996, the federal government
workforce consisted of more than 29 percent minorities (OPM, 1998a). As shown in Table 7.1, the percentage of minorities holding positions within the executive
branch increased between 1984 and 1996, but the percentage of women decreased during this same period. When the figures are broken down by specific racial and
ethnic group, the results indicate that all four minority groups have increased their share of executive branch positions between 1984 and 1996.
Diversity within public agencies has also changed with respect to age and disabilities. The average age of the American worker is expected to continue to rise in the
next two decades, with the number of workers between sixteen and twentyfour falling by approximately 8 percent. The average age for fulltime permanent federal
civilian employees was 45.2 years in 1997, up
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Table 7.1
Executive Branch Employment by Race, Ethnicity, and Gender (percent)
1984 1992 1997
AfricanAmerican 15.71 16.53 16.70
Hispanic 4.72 5.52 6.20
AsianAmerican 2.77 3.75 4.40
Native American 1.65 1.95 2.10
White, NonHispanic 75.15 72.25 70.60
Total Minorities 24.85 27.75 29.40
Men 60.01 56.60 55.80
Women 39.99 43.40 44.20
Source: OPM, 1998a.
from 44.3 years the previous year (OPM, 1998a). While an aging workforce can have positive effects, such as greater experiencebased work knowledge, older
workers may be less responsive to organizational changes, less mobile, less interested in training, and more prone to frustration by their lack of advancement (Lambs,
1996; MSPB, 1993). Out of thirtytwo federal agencies surveyed by the Merit Systems Protection Board (MSPB) in 1991 and 1992, twentyfive agencies indicated
that the average age of their workforces was increasing. However, most agencies had not yet encountered problems associated with an older workforce (MSPB,
1993).
According to recent census data, more than 15 percent of individuals entering the labor market have a disability. Disabilities include both cognitive and physical
impairments, such as blindness, epilepsy, human immunodeficiency virus (HIV), and acquired immunodeficiency syndrome (AIDS) (Slack, 1997a). As shown in Table
7.2, the percentage of persons employed in the executive branch with disabilities increased after the passage of the Americans with Disabilities Act in 1990, which
heightened awareness of the rights of persons with disabilities; however, the share of positions held by persons with disabilities declined slightly between 1994 and
1997.1 In March of 1998, President Clinton issued an executive order ‘‘to increase the employment of adults with disabilities to a rate that is as close as possible to the
employment rate of the general adult population.” Because of the increased attention toward workers with disabilities, agencies are being challenged to reevaluate their
job descriptions, to determine their capacity to provide reasonable accommodations, and to reduce employment barriers.
Workplace environments will change as the demographic characteristics
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Table 7.2
Executive Branch Employees with Disabilities (percent)
1986 1990 1994 1997
Employees with disabilities 6.6 6.9 7.4 7.2
Source: OPM, 1998b.
of the labor pool evolve. These changes, according to Loden and Loeser (1991:21), “have far reaching implications for the ways that public... institutions are to be led
and managed in the future.” Because of constrained budgets and growing demands for more efficient government, public organizations have not invested as heavily in
diversity programs as their privatesector counterparts even though many publicsector organizations are committed to diversity efforts (Chambers and Riccucci,
1997). However, in light of the challenges posed by the projected demographic changes and the legal erosion of affirmative action programs, scholars and practitioners
must understand the diversity research and consider the future direction of diversity efforts within public organizations.
This chapter reviews policies and research on the representation and diversity of public organizations. The chapter first briefly reviews the evolution of equal
employment opportunity (EEO) and affirmative action policies in the federal government and then highlights the tenets and perceived benefits of representative
bureaucracy, a theory often cited as a rationale for diversity. The third section considers the application of three paradigms, based on the practices of private
organizations, for understanding diversity efforts in public agencies. Finally, the chapter proposes an approach for managing diversity that facilitates the development of
a multicultural organization.
EVOLUTION OF EQUAL EMPLOYMENT OPPORTUNITY POLICIES2
As we enter the new millennium, some public organizations are beginning to implement diversity initiatives in an effort to move beyond equal employment opportunity
and affirmative action efforts by taking advantage of the expected demographic changes of the labor force and changing legal environment.
The origins of current affirmative action programs date back to EEO efforts aimed at eliminating discrimination (Kellough, Selden, and Legge, 1997). Examples of
policies prohibiting discrimination in federal employment and contracting are found in provisions of the Ramspect Act of 1940 and Executive Order 8587 issued by
President Roosevelt that year. The
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following year, Executive Order 8802 established the first meaningful administrative mechanism to enforce the law. The Fair Employment Practices Committee (FEPC)
was tasked with hearing complaints of discrimination from individuals working for, or applying for, positions with federal government contractors or agencies. The
FEPC investigated complaints and had the authority to make recommendations but lacked the power to enforce its recommendations. Although subsequent presidents
reorganized and renamed the federal program, the investigation of discrimination remained the primary focus of the effort to overcome discriminatory employment
practices.
In the 1960s, the political climate changed and programs targeting discrimination took new shape. Programs introduced during the Kennedy and Johnson
administrations were confined primarily to three activities: reviewing patterns of minority and female employment; examining the relationship between job qualifications
and actual job requirements; and recruiting efforts to attract women and minority applicants (Kellough, Selden, and Legge, 1997). Also, during this time, significant
legislative action sought to improve equal opportunity to minorities. For example, Title VI of the Civil Rights Act of 1964 declared that “no person in the United States
shall, on the grounds of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program
or activity receiving federal financial assistance.”
In a 1965 commencement address at Howard University, President Lyndon B. Johnson argued that fairness required more than a commitment to impartial treatment.
You do not take a person who for years has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, you’re free
to compete with all the others, and justly believe that you have been completely fair....Itis not enough just to open the gates of opportunity. All our citizens
must have the ability to walk through those gates. (in Eastland, 1996:39–40)
By the 1970s, it was apparent that the existing executive and legislative actions were not sufficient to overcome longentrenched discrimination. In response to the
discontent that persisted, the federal government, under Nixon’s leadership, adopted a policy that permitted consideration of race and gender in selection decisions.
This approach was also accompanied by the development of numerical goals and timetables for the inclusion of minorities and women. The ultimate goal was to bring
the level of representation for minorities and women within an agency into parity with the relevant labor pool. Goals and timetables often required that race, ethnicity,
and gender be taken into account in employment, college admissions, and contract awards (Kellough, Selden, and Legge, 1997). These race, ethnic,
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and genderconscious remedies, or affirmative action programs, have encountered criticism to one degree or another since being introduced.
In the past decade, the split between the two major political parties on this issue has widened, with Democrats typically supportive of such programs and
Republicans more often opposed to the use of such measures. The division has led to considerable debate in the media, state legislatures, and classrooms about the
future of affirmative action (Kellough, Selden, and Legge, 1997). In 1996, California voters approved Proposition 209 which declared that “neither the State of
California nor any of its political subdivisions or agents shall use race, gender, color, ethnicity, or national origin as a criterion for either discrimination against, or granting
preference to, any individual or group in the operation of the State’s public employment, public education, or public contracting.’’ In 1997, the Supreme Court refused
to hear an appeal of the case on Proposition 209, upholding the prohibition on affirmative action in California. In 1997, similar initiatives were introduced in nine state
legislatures, but none were signed into law (Kellough, Selden, and Legge, 1997). Given that the Supreme Court did not deem Proposition 209 unconstitutional, similar
efforts will likely reemerge in state legislatures during future sessions. Riccucci (1997b: 69) predicts that the legal status of affirmative action is “likely to continue to
erode as we move into the twentyfirst century.”
REPRESENTATIVE BUREAUCRACY: DIVERSITY IN AGENCY COMPOSITION, PROCESSES, AND
OUTCOMES
An original intent of affirmative action in public organizations was to establish a bureaucracy representative of the general population; that is, groups would be
represented in government in the same proportion as their composition in the general population. Some scholars have argued that a bureaucracy will be more
responsive to public interests (and will therefore better serve democratic principles) if the personnel in the bureaucracy reflect the public served, in characteristics such
as race, ethnicity, and gender (Rourke, 1978:396; Meier, 1993b; Selden, 1997). This idea forms the rationale for the theory of “representative bureaucracy.” Mosher
(1968) introduced the key distinction in the definition of representation: he divided representation into two spheres, passive and active. Passive representation pertains
to the similarity in demographic backgrounds of bureaucrats and the public. Representativeness is active when individuals, or civil servants, advocate the interests and
the desires of groups sharing their demographic origins. The central tenet of the theory of representative bureaucracy is that passive representation, or the extent to
which a bureaucracy employs people of diverse demographic backgrounds, leads to active representation, or the pursuit of policies reflecting the interests and desires
of those people (Meier and Stewart, 1992; Meier, 1993a).
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The argument is premised on the belief that such attributes lead to certain early socialization experiences that in turn give rise to attitudes, values, and beliefs that
ultimately help to shape the behavior and decisions of individual bureaucrats (Kranz, 1976; Krislov, 1974; Saltzstein, 1979; Selden, 1997). Proponents contend that a
bureaucracy that reflects the diversity of the general population implies a symbolic commitment to equal access to power (Gallas, 1985; Meier, 1993b; Mosher, 1968;
Wise, 1990). The symbolic role results from both the personal characteristics of distinctive group members and the assumption that because of these characteristics, the
bureaucracy has prior experiences in common with other members of that group (Guinier, 1994). When members of distinctive groups become public officials, they
become legitimate actors in the political process with the ability to shape public policy. Representative bureaucracy provides a means of fostering equity in the policy
process by helping to ensure that all interests are represented in the formulation and implementation of policies and programs (Saltzstein, 1979).
As stated earlier, representative bureaucracy offers a means of reconciling bureaucratic government with democratic values by ensuring that public organizations are
responsive to the public through employee representation. EEO and affirmative action programs have been means by which agencies attempt to achieve a
representative bureaucracy. Because of the changing labor force demographics and legal challenges to EEO and affirmative action, scholars and practitioners are
shifting their focus to workplace diversity, a voluntary, proactive program aimed at improving organizational effectiveness as opposed to democratizing the workplace
(Chambers and Riccucci, 1997; Riccucci, 1997a, 1997b). In order for this shift to be successful, Slack (1997b: 75) argues that “an accompanying shift in
organizational paradigm must also occur.”
PARADIGMS OF DIVERSITY
Based on their research in private sector organizations, Thomas and Ely (1996) identify three paradigms for understanding diversity: discriminationandfairness,
accessandlegitimacy, and learningandeffectiveness (see Figure 7.1). These models are also useful for understanding public agencies’ approaches to diversity, as well
as provide the basis for developing strategies to benefit from a diverse workforce.
Paradigm 1: DiscriminationandFairness
The discriminationandfairness paradigm focuses on whether minorities and women are given an equal chance of obtaining employment in public organizations.
According to this paradigm, public organizations pursue diversity under the guise of equality and fairness and are concerned primarily
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Figure 7.1
Paradigms of Diversity within Public Organizations
with compliance with equal employment opportunity and affirmative action legal requirements (Thomas and Ely, 1996). The primary goals of organizations adhering to
this paradigm are to provide both access and equal opportunity in the recruiting and hiring processes. Success is determined by the number of minorities and women
holding positions within the agency. According to Thomas and Ely (1996), organizations operating under this premise often adopt a “colorblind, genderblind” ideal,
encouraging minorities and women to blend into the culture of the organization.
Since this model focuses on descriptive representation and assimilation
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of persons into the organizational cultures, agencies adhering to this model are not likely to explore how employees’ differences can improve organizational processes
and outcomes. Moreover, the discriminationandfairness model often puts pressure on employees ‘‘to make sure that important differences among them do not
count” (Thomas and Ely, 1996:81). This may serve to undermine potential benefits that an organization may experience through improved agency processes and
practices. Moreover, it may preclude individuals from identifying with their work and agency which, in turn, has been shown to be an important determinant of
motivation and satisfaction (Thomas and Ely, 1996).
Relevant Empirical Research
The central question of interest to agencies adopting this model is the extent to which the agency reflects the demographic origins of society. A primary concern, of
course, is the determination of which demographic characteristics are most important to public organizations. Kingsley (1944) suggested that socioeconomic class
should be the basis for comparing bureaucrats and citizens in England. Krislov (1974) argued, however, that race, ethnicity, and gender were more relevant than class
for comparing the composition of the bureaucracy and society in the United States. Overall, the literature has reached a consensus that race and ethnicity are perhaps
the most important demographic characteristics for comparing bureaucratic and public representation in the United States (Cayer and Sigelman, 1980; Dye and Renick,
1981; Herbert, 1974; Krislov, 1974; Kranz, 1976; Meier, 1975, 1993b; Nachmias and Rosenbloom, 1973; Rosenbloom and Featherstonhaugh, 1977; Rosenbloom
and Kinnard, 1977; Smith, 1980; Thompson, 1976, 1978).
Scholars also maintain that gender is a critical demographic variable in the American bureaucratic setting (Cayer and Sigelman, 1980; Daley, 1984; Davis and West,
1985; Dye and Renick, 1981; Hale and Kelly, 1989; Kranz, 1976; Krislov, 1974; Meier, 1975, 1993b; Rosenbloom and Kinnard, 1977; Smith, 1980; Thompson,
1978). The movement in the 1980s to make public bureaucracies more genderrepresentative resulted from changing relations between men and women, the changing
nature of the economy, and the increased participation of women in the labor force (DuerstLahti and Johnson, 1992; Guy and DuerstLahti, 1992; Guy and Duke,
1992; Hale and Kelly, 1989).
Researchers have examined a number of other demographic factors, such as age, disabilities, and father’s occupation (Daley, 1984; Davis and West, 1985; Meier,
1975; Meier and Nigro, 1976; Smith, 1980). However, in the American context, race, ethnicity, and gender have been considered the most salient characteristics
because numerous politically relevant attitudes and values are defined along these two dimensions (Meier, 1993b).
Typically, scholars have employed one of the following methods to eval
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uate the racial, ethnic, and gender representativeness of public bureaucracies.3
• Percentage comparison
• Representative index
• Stratified ratio
• Measure of variation (MV)
Each of these advances a somewhat different perspective on representation of minorities and women in public organizations. Table 7.3 presents a description of each
approach and cites some studies that have employed the technique. Although different techniques have been used to measure female and minority representation, the
findings have been relatively consistent. While minorities and women are broadly represented in local, state, and federal agencies, they are concentrated in lowerlevel
positions and have not advanced as successfully into toplevel decisionmaking positions. One argument often presented is that minorities and women are in the pipeline
for promotions. However, many women and minorities have been in the system long enough to advance but have not. This may be due to the fact that “many agencies
appeared to be concentrating more on increasing the intake of minorities than on strong programs for advancement of minorities who already are members of the
Federal workforce” (MSPB, 1993:24).
Paradigm 2: AccessandLegitimacy
The second lens through which organizations have viewed diversity is accessandlegitimacy (Thomas and Ely, 1996). According to this perspective, agencies value
diversity because it enables them to provide better access and services to their constituents. This paradigm organizes itself around differentiation. Under this framework,
the virtue of diversity is based on the fact that each group can offer knowledge about group members and can better serve their needs because of such knowledge and
shared group experiences. For example, in the mid1950s, the Farmers Home Administration (FmHA) responded to allegations that the agency was discriminating
against AfricanAmerican borrowers. The FmHA placed AfricanAmerican professionals in several Southern states to serve as “ ‘supervisorsatlarge’ to initiate loan
applications for blacks in offices where local supervisors were unwilling to do so” (Hadwiger, 1973:51). Agencies with increasing diversity expect that previously
underrepresented clients will feel more comfortable accessing agency resources and services when they are represented (Thielemann and Stewart, 1996). One reason
for this phenomenon is that individuals who share similar individual characteristics may also hold similar values and attitudes, have common ex
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Table 7.3
Measures of Employment Equality
Method Description Examples of research using measure
Percentage Percentage of a group within the organization Gibson and Yeager 1975; Hellriegel and Short 1972; Lewis 1989; Nachmias and Rosenbloom
comparison 1973; Page 1994; Rose and Chia 1978
Representative % of a group within the organization Cayer and Sigelman 1980; Dometrius 1984; Grabosky and Rosenbloom 1975; Lewis 1989;
index1 % of a group within the relevant population Mladenka 1991; Riccucci 1987; Saltzstein 1983, 1986; Selden 1997; Sigelman and Karnig 1976;
A ratio of 1.0 indicates that the composition of the Subramanian 1967
organization corresponds perfectly with the relevant
population.
Stratified Ratio % of a group within the upper level of the org. % of a Dometrius 1984; Riccucci and Saidel 1997; Saltzstein 1986; Sigelman and Karnig 1976
group within the relevant population
A ratio of 1.0 indicates that the composition of the
organization corresponds perfectly with the relevant
population.
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Measure of Grabosky and Rosenbloom 1975; Guajardo
variation 1996; Kellough 1990, 1998; Kim 1993;
Nachmias and Rosenbloom 1973
where f is the number of individuals of a certain race or ethnicity, i, j, k, …, n is the number of racial or ethnic
groups considered, and ft is the total number of employees in the agency.
The measure of variation is estimated by dividing the observed number of racial/ethnic differences in an
agency by the “maximum number of differences that could occur given the total number of employees in the
agency and equal representation of each racial/ethnic group” (Kellough 1990, 558).
The closer the MV score is to 1, the more equally represented are the groups under investigation.
1. This measure has also been referenced as the representative ratio (Sigelman and Karnig, 1976), measure of employment parity (Saltzstein, 1986; Mladenka, 1991), and
equal employment opportunity index (Lewis, 1989).
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periences, and therefore, find the experience of interacting with each other more positive. Thielemann and Stewart (1996:171) found evidence that clients of HIV
service delivery agencies have a demand for a representative bureaucracy, particularly among personnel delivering the service directly.
Students of representative bureaucracy also suggest that bureaucracies broadly representative of the general public should produce policy outputs that meet the
needs of all citizens (Meier, 1993b). Agencies adhering to this view of diversity tend to emphasize the role of cultural differences in the agency, but they pay little
attention to how these differences impact the work that is actually done (Thomas and Ely, 1996). For example, an agency may be concerned with Hispanic
representation because it perceives that Hispanic clients will be better served by someone from a similar background. As long as the clients and constituents are
represented substantively and allegations about service and program inequalities are being reduced, agencies are satisfied.
One potential downside of this perspective, according to Thomas and Ely (1996), is that employees working in organizations operating with this philosophy may
sometimes feel exploited and devalued. Because employees were hired with the expectation of meeting the needs of clients in particular areas, they may perceive that
opportunities in other parts of the agency are closed to them or that they face dual and conflicting role expectations (Selden, 1997; Thomas and Ely, 1996).
Relevant Empirical Research
Most of the inquiry under this paradigm is concerned with the relationship between employment of minorities and women and agency outputs and outcomes affecting
these groups. Specifically, research has examined the relationship between demographic representation and disciplinary actions and ability groupings in school systems,
charges or complaints of discrimination filed by a regulatory agency, and housing loan eligibility determinations made by a federal agency (Meier and Stewart, 1992;
Meier, 1993a; Hindera, 1993a, 1993b; Selden, 1997).
In the first study linking demographic representation and policy outcomes, Meier and Stewart (1992) found that the increased presence of AfricanAmerican street
level bureaucrats (e.g., school teachers) had a significant effect on policy outcomes favoring AfricanAmerican students. In a similar approach, Hindera (1993b)
focused on African Americans and women in the Equal Employment Opportunity Commission (EEOC). He found that as the employment of African Americans
increased, discrimination charges filed on behalf of that group also increased. Selden (1997) found that as the employment of African Americans, Hispanics, and Asian
Americans increased in the Farmers Home Administration, the percentage of rural housing loan eligibility determinations favoring each group increased.
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Paradigm 3: LearningandEffectiveness
In effect, the third paradigm, learningandeffectiveness, bridges the two aforementioned paradigms. Agencies adopting this perspective value diversity because it
improves internal processes by incorporating the varied perspectives and approaches to work that different group members offer an organization (Milliken and Martins,
1996). Agencies operating under this frame seek to integrate, as opposed to assimilate or differentiate, diverse individuals within the agency. This model is founded
upon both understanding and valuing the notion that cultural differences exist. Diversity may affect work groups’ abilities to “process information, perceive and interpret
stimuli, and make decisions’’ (Milliken and Martins, 1996:416). Nemeth (1986) contended that the logic underlying majority decisions is superior when consistent
counterarguments are made by minority groups. Studies of undergraduate and graduate workgroups have shown that diversity affects the number of alternative
scenarios considered, quality and creativity of ideas, and the extent of cooperation among group members (Cox, Lobel, and McLeod, 1991; McLeod and Lobel,
1992; Watson, Kumar, and Michaelsen, 1993). According to Thomas and Ely (1996:85), agencies adopting this approach are “tapping diversity’s true benefits” which
will increase agency effectiveness, lift employee morale, and enhance productivity.
Relevant Empirical Research
Scholars suggest that workgroup diversity promotes creativity and innovativeness in the quality of ideas, problem solving, and decision making (McLeod and Lobel,
1992). McLeod and Lobel (1992) found more ethnically diverse groups produced higher quality and more unique ideas in a brainstorming task than did less diverse
groups. Despite a growing need for knowledge about the effects of diversity in the daily operations of public organizations, relatively little systematic research has been
done to explore how race, ethnicity, and gender have influenced specific internal work processes. One process that has been examined is performance appraisals, but
the findings are mixed (Lewis, 1997; Pulakos, Oppler, White, and Borman, 1989; Sackett and DuBois, 1991). Some research has illustrated that raters generally give
higher performance ratings to members of their own race, even after controlling for other factors that influence ratings (Sackett and DuBois, 1991). Other scholars have
found that race and gender have minimal influence over ratings (Pulakos et al., 1989). A 1996 MSPB study of federal employees found that Caucasians in professional
and administrative jobs received higher performance ratings than minorities, whereas women received higher ratings, on average, than men. The report suggested, but
did not empirically examine, that the differences were attributable to supervisory biases. This proposition was later challenged by Lewis (1997).
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Although little research has explored the impact of diversity on internal public sector operations, a number of agencies have adopted diversity training in an effort to
take advantage of the perceived benefits. In 1993, the Merit Systems Protection Board found that twenty of the thirtytwo agencies in its sample indicated that they
provide “valuing diversity” training programs. The typical program focused on sensitivity to cultural differences, emphasizing that such differences contribute to the
organization (MSPB, 1993). Despite efforts to promote diversity, minority employees were as likely to perceive they had been discriminated against in 1996 as they
had been in 1992 (MSPB, 1998:37). Based on data from a survey of 9,710 federal employees in 1996, the MSPB (1998:37) found the following:
When asked whether they had been denied a job, promotion, or other job benefit because of their race, 34 percent of the African Americans, 35 percent
of the Asian Pacific Americans, 23 percent of Hispanics, and 18 percent of the Native Americans thought they had been. About 9 percent of the White
employees thought they had been discriminated against because of their race.
Moreover, the survey results reveal that a large percentage of minorities perceived that “people of their race or national origin were not treated with respect” (MSBP,
1998:38). Although 88 percent of federal supervisors surveyed received diversity training and 59 percent of those individuals perceived that diversity training had
improved their leadership, some minority federal employees still believed they were not valued and treated equitably.
Paradigm 4: ValuingandIntegrating: Creating a Multicultural Organization
The fourth paradigm, valuingandintegrating, seeks to build directly upon the learningandeffectiveness paradigm, as well as incorporate aspects of the other two
paradigms. This approach encompasses the goals discussed in the three aforementioned paradigms: democratization, access, effectiveness, and service to stakeholders.
Although diversity is often discussed at the organizational level, the valuingandintegrating model proposes that one needs to understand diversity from an individualistic
perspective before viewing the aggregate organization. As Simon (1957:110) noted, “an organization is, after all, a collection of people, and what the organization does
is done by people.” A diversified organization is founded, by its very nature, upon the fabric of cultures that each person offers and adds to the collective working
environment.
Culture consists of “all those things that people have learned to do, believe, value, and enjoy in their history. It is the totality of ideals, beliefs,
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skills, tools, customs, and institutions into which each member of society is born’’ (Sue and Sue, 1990:35). The value of multiculturalism to public organizations
highlights the importance of viewing culture and cultural differences not simply as demographic representation within an organization. Rather, an individual’s cultural
foundation is a complex, dynamic development of sensibilities that impact and refine the ways in which an individual views, perceives, and interacts with his or her
environment. The aforementioned paradigms approach multiculturalism with different levels of acknowledgment of individual diversity. For example, the fairnessand
equality paradigm proposes that individuals assume the agency’s cultural identity. Viewing diversity from this perspective presents a paradox. An organization’s
treatment of cultural differences reflects the extent to which nondominant cultures remain intact and, subsequently, may contribute to the organization’s mission, policies,
and programs.
Under paradigm 1, fairnessandequality, a fundamental tension exists when individuals with ethnic, racial, gender, and cultural backgrounds different from the
dominant culture attempt to interface, or coexist, within the dominant culture’s environment. In essence, these individuals are often faced with the polarity between
assimilation and acculturation. Assimilation is the process of integrating oneself within the agency’s culture and, subsequently, assuming the values, beliefs, and attitudes
attributed to the agency’s culture. Through assimilation, the individual’s culture of origin is often subordinated and, thus, compromised in an effort to blend in with the
prevailing culture. While the process of assimilation does not explicitly mandate that an individual lose his or her culture, in reality, as one compromises intrinsic cultural
sensibilities, the environment’s majority culture assumes precedent. As a result, the individual’s culture of origin is diluted and homogenized through the process of
organizational socialization.
Alternatively, the process of acculturation challenges the conforming nature of assimilation and the negative consequences of differentiation. Acculturation is the
process of maintaining one’s cultural background while immersed in an agency’s cultural environment. In spite of emersion in a different culture, an individual is
expected to maintain his or her values, beliefs, and attitudes that may run counter to the prevailing agency culture. The process of acculturation postulates that
nondominant cultures can coexist within an environment of a dominant culture. Furthermore, individuals from nondominant cultures do not tend to experience the
overriding pressure, whether overt or covert, to integrate into the dominant agency culture. In the process of acculturation, cultural backgrounds, experiences, and
sensibilities are not checked at the doorstep upon entrance into the dominant culture’s environment.
Assimilation and acculturation are processes that individuals experience in ranging degrees as they move from their culture of origin into their working environment.
With agreement that assimilation compromises and
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thus dilutes an individual’s personal values, attitudes, and beliefs, organizations with explicit pretense of valuing cultural diversity should elect to support and foster
acculturated environments. The postulations underlying acculturation support cultural coexistence and, in turn, present a more accepting approach to diversity and
represent a clear movement toward multicultural understanding and learning. The objective of this paradigm is not to politicize agencies; rather, it is to create public
organizations that are more effective, innovative, communicative, and fluid. Through the process of creating a multicultural organization, agencies will encounter
numerous barriers, some of which are discussed below, that require attention in order to create an agency environment that values and benefits from individual
differences.
First, nonWestern cultures place differing importance and value on expressiveness. That is, the degree to which a person expresses himself or herself verbally,
emotionally, and behaviorally is often a critical element defining cultural and ethnic experiences. Whether promoting or attempting to limit expressiveness, agencies must
consider not only cultural and ethnic values but also contextual factors. Second, the notion of expressiveness brings forth a larger, related issue regarding potential
barriers to cultural understanding: patterns of communication. The importance placed on verbal communication in Western culture cannot be overestimated. Non
Western cultures differ in their styles of verbal and nonverbal communication as well as the relative import attributed to each (Wise and Miller, 1983).
Additionally, language is often embedded in cultural experiences and background. Agreement on a common English vocabulary, for example, does not necessarily
suggest that clear communication between individuals will result. Rather, the complexity of understanding language and thus culturally grounded communication style
must include the symbolic, metaphoric, and cultural implications that arise during interpersonal interactions. Thus, agencies must develop greater sophistication in their
notions of language and nonverbal communication to more fully comprehend individual backgrounds. Common ground between cultures will be realized when agencies
consider the historical, sociological, and political implications and influences that underlie communication.
Another critical dimension of understanding diversity is the notion of mistrust. American history bears witness to the tangible and enduring experiences of racial and
ethnic discrimination, maltreatment, and violence that, in turn, have developed and solidified a pervasive feeling of distrust among minority groups within the majority
culture. In order to survive in this country, many minority groups have developed, out of necessity, behaviors that allow them to gauge potential threats (Stanback and
Pearce, 1985). The mistrust experienced by minority groups has a documented historical antecedent (Jones, 1985; Mays, 1985). This distrust of the dom
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inant culture is not necessarily insurmountable. Rather, organizations must understand and, more directly, must respect the authentic foundations of mistrust before they
are able to establish trust with individuals from different cultural backgrounds.
In addition, locus of control and locus of responsibility are two critical components that will assist organizations in further understanding the perspectives of minorities
and women. Rotter (1966) posited that locus of control has two dimensions. Internal locus of control suggests that people believe reinforcements are dependent on
their actions; consequently, people are able to shape their existence and futures. External locus of control suggests that people believe reinforcements are independent
of their actions; thus, their futures are determined more by chance than direct personal intervention. Jones, Kanouse, Kelley, Nisbett, Valins, and Weiner (1972)
discussed the notion of locus of responsibility, that is, the degree of responsibility or blame placed on an individual or system. Internal locus of responsibility places
emphasis on the individual’s contribution or degree of blame; alternatively, an external locus of responsibility tends to place blame on a system for outcomes. The
notions of control and responsibility interact with one another and, in turn, impact an individual’s world view—the ways in which a person perceives the impact of both
self and environment on his or her life.
Minority groups tend to adhere to the external locus of control that they are not active participants in shaping their futures (Sue and Sue, 1990). Public organizations
have the social and political opportunity to utilize the diversity of their employees to foster the active participation and contribution of individuals from nondominant
cultural backgrounds. A fundamental element of this process of minority and gender empowerment within organizations is the critical systemic movement from viewing
diversity as separate and compartmentalized to a context in which diversity is valued, utilized, and institutionalized.
Public organizations are faced with the challenge to preserve cultural, racial, ethnic, and gender identities in order to foster multicultural expression. The process of
assimilation may simply lead to a context in which cultural diversity is measured by skin pigmentation, geographic origin, and other extrinsic differentiations from the
dominant culture. Instead, the essence of cultural diversity is the array of worldviews developed through individuals’ degree of identification with their background. The
“melting pot theory” of diversity is tragically flawed. Inherent in this approach is the “myth of color blindness” which overlooks an individual’s group membership, thus
denying an intimate, critical aspect of his or her identity (Sue and Sue, 1990). This model suggests that public organizations should engage in the process of recognizing
and promoting the external measures of diversity as secondary to the internally developed social vision that each individual offers an organization.
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The potential barriers to and dynamics of multicultural understanding are not mysterious. Public organizations will realize their capacities to comprehend, value, and
benefit from cultural diversity through their movement toward creating a climate of genuine acceptance of and sincere respect for ethnicity, gender, and other
characteristics that define an individual’s cultural background. Fostering a multicultural environment suggests that an individual’s ethnicity, race, or gender, for example,
is not experienced as a ‘‘necessary evil” but rather cherished as an asset to the organization’s diversified culture. In turn, individuals from nondominant cultures will be
welcomed and encouraged developers and participants in the organization’s mission, policies, programs, and decisionmaking processes. Under this paradigm,
agencies will position themselves to learn. Previous externally driven strategies to diversify public organizations may have changed the demographic composition of
public organizations, but the extent to which they have altered organizational norms and practices is less clear. As agencies and their members learn and evolve through
multiculturalism, they will institutionalize new rules, standards, procedures, and norms in the organization’s culture and collective memory. Individuals of all races,
ethnicities, and cultures will be welcomed into multicultural organizations by the signals and symbols of the rules.4
CONCLUSION
Managing multiculturalism is a process, not a program, that encourages agencies to examine themselves critically and move forward as they learn. As illustrated by the
recent Merit Systems Protection Board (1998) survey of federal employees, diversity programs have not eliminated perceptions of discrimination and mistreatment of
minorities. Moreover, as the labor force changes and the public work force becomes more diverse, the prevalence of these perceptions may continue to grow.
Diversity training is not enough to eliminate the feelings of mistrust that nondominant groups have continued to experience. Agencies need to embrace a paradigm of
multiculturalism that cultivates a climate in which individuals from dominant and nondominant cultures coexist and thrive. Consequently, agencies will then attain the
expected benefits of higher levels of diversity.
When agencies value diversity and appreciate differences associated with the heritage, characteristics, and values of members of different groups, as well as
respecting the uniqueness of each individual, they will make a serious commitment to workforce diversification. Creating a multicultural organization is about changing
the mix of employees to reflect trends in the labor market and democratization, but not politicization, of public service. It is about satisfying constituent demands and
meeting the needs of all citizens without making employees from nondominant cultures or groups feel like their primary role in the agency is to serve constituents with
ap
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parently similar backgrounds. It is about changing work processes to reflect the diversity and creativity of unique perspectives that exist within an organization and
creating a culture that encourages diverse workers to stay and contribute over time (Coleman 1994).
NOTES
1. Persons with disabilities employed by federal agencies are protected by the 1973 Rehabilitation Act. The 1990 ADA covered persons employed in state and local governments and
most private organizations that employ fifteen or more persons (Slack, 1997b).
2. The description of equal employment opportunity and affirmation action highlights only some of the major shifts. For a more comprehensive discussion, see Kellough (1990).
3. This study reviews the four most used measures of passive representation. However, other approaches have been used to explore representation. For example Meier (1975) used the
Lorenz Curve and Gini index of concentration to explore representational equality between federal government employment and the general population.
4. This statement builds on a comment made by Johnny Yinger on March 27, 1998.
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Chapter 8
Organizational Socialization
Michael Klausner and Mary Ann Groves
The speed and effectiveness of socialization determine employee loyalty, commitment, productivity, and turnover. (Schein, 1968:2)
INTRODUCTION: THE IMPORTANCE OF ORGANIZATIONAL SOCIALIZATION
Organizational socialization is defined as the process through which persons become familiar with an organization and learn the norms, values, and role behaviors
which are expected of organizational members in particular positions. The process also may involve unlearning certain attitudes, beliefs, and behaviors that were
functional when the person occupied certain positions in other organizations, or even in the same organization, but are no longer appropriate or desirable.
In addition to learning their own roles, it is also essential that organizational members learn the norms and behaviors associated with roles that are related to theirs.
Doing so will facilitate their own role performance, and just as important, will enable the person to perceive how his or her role and contributions relate to the
organization as a whole.
Socialization is an ongoing, dynamic process. Every time an individual enters or exits a position, socialization processes become operative. Indeed, even when a
person is performing an organizational role, socialization continues, as changes in personnel, products, services, roles, norms, and values occur. While organizational
socialization is most intense and relevant when a person first becomes a member of an organization, it continues as long as the person is associated with the
organization. As organizational per
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sonnel respond to varying internal and external conditions and as managerial changes occur, employees must be socialized anew.
As is the case with socialization in all contexts, organizational socialization is always a matter of degree. Thus the organizational socialization process should be
viewed as a continuum. At one extreme would be total (complete) socialization of the organization’s values, norms, philosophy, and perspective. At the other extreme
would be no organizational socialization occurring at all. Viewing the organizational socialization process as a continuum provides us with an analytical tool which
enables us to see organizational issues and problems in terms of the degree to which such socialization has taken place. This does not imply, of course, that all
organizational problems involve faulty socialization.
Also, we should note that organizational socialization is never total, since the individual brings to the organization many attributes that may be incompatible with
elements of the content of his or her organizational socialization. Among those would be certain personality traits, value orientations, philosophies, and attitudes
(especially those toward authority). Indeed it would not be in in the best interests of the organization if socialization were total, since that would preclude positive
changes and innovations within the organization.
Organizational socialization is a vital topic since socialization experiences can affect the degrees of cohesion and cooperation within an organization, job satisfaction,
commitment, the degree of anxiety and uncertainty among new members, the productivity and morale of members, interaction patterns, and job turnover rates. In this
chapter we shall discuss the content of organizational socialization, socialization mechanisms, the processes of organizational socialization, the factors which influence the
effectiveness of socialization techniques, individual responses to socialization efforts, the role of anticipatory socialization in the organizational socialization process, and
the relationship between a person’s affective dimension of self and organizational role demands.
CONTENT OF ORGANIZATIONAL SOCIALIZATION
There are two major aspects to any kind of socialization: mechanisms and content. Mechanisms refers to the means by which people learn and internalize the content
of socialization. Examples of such mechanisms would be formal training and orientation sessions, informal interactions with seasoned members, and on another level, the
primary means by which people learn, such as classical conditioning, reinforcement, observation, and insight.
Content refers to what is being learned or internalized. The content of socialization, whether it be organizational or other kinds, will vary greatly, while the
mechanisms and techniques are apt to be relatively invariant. The
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content of organizational socialization is organizational culture. Following J. Steven Ott (1989:50), we posit organizational culture as having the following features:
• It is comprised of such things as values, norms, assumptions, beliefs, expectations, and philosophies.
• It is a socially constructed, unseen, unobservable force behind organizational activities.
• It functions as a control mechanism, informally approving or prohibiting behaviors.
The overriding significance of the organizational culture concept is encapsulated in the following observations made by several authorities on organizational behavior:
• “Culture is to the organization what personality is to the individual—a hidden, yet unifying theme that provides meaning, direction, and mobilization” (Kilmann et
al., 1985:11).
• ‘‘Organizational culture is not just another piece of the puzzle, it is the puzzle. From one point of view, a culture is not something an organization has; a culture is
something an organization is” (Pacanowsky and O’DonnelTrujillo, 1983:126).
Ott (1989) lists almost eighty elements of organizational culture, which include anecdotes, assumptions guiding behavior, ceremonies, organizational “climate,”
communication patterns, customs, historical vestiges, ideologies, jargon, knowledge, management practices, meanings, myths, informal rules, symbols, and tacit
understandings.
MECHANISMS OF OCCUPATIONAL SOCIALIZATION
Selection
Organizational managers use a variety of techniques to increase the chances that the people they hire will be successful in their organizational roles. They may recruit
people from certain colleges, regions of the country, or other organizations which they believe will increase the probability of successful role performance. In addition, a
preferred psychological profile may be developed for potential employees on the basis that individuals having such a profile will fit in well into the organizational culture.
Interviews, background checks, testing, and simulations are some of the specific ways that can be utilized in the selection phase of the recruitment process. The
preselection process, if done well, will greatly facilitate the upcoming socialization process and help perpetuate the organization’s culture (Ott, 1989). For example, if a
department store chain’s culture emphasizes serv
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ice to customers and a philosophy that “the customer is always right,” potential employees already having such an orientation will be more easily socialized and more
likely to fit in well with the culture than those not possessing such an orientation. Employees at a community center studied by Ott (1989) were the parents of children
with developmental disabilities who were served by the center’s programs. Ott notes that “They are known to have the right attitudes before they are hired” (1989:89).
Socialization Techniques
Once they are hired, how do new members of an organization learn the norms, values, and expected behaviors within an organization? Meryl Lewis, Barry Posner, and
Gary Powell (1983:859) list the following ways:
formal onsite orientation sessions, offsite residential training, other new recruits (employees), a buddy relationship with more senior coworkers, mentor
and/or sponsor relationships, your first supervisor, secretary or other support staff, daily interactions with peers..., social/recreational activities with people
from work, and business trips with others from work.
The ways include both direct and indirect socialization procedures. In their empirical study of 217 undergraduate business school alumni who were surveyed six to nine
months after graduation, Lewis, Posner, and Powell (1983:861) found that the socialization strategy that was judged by the respondents as most helpful to them as new
employees was the daily interaction with other new recruits (peers) while working, followed by perceived importance of relationship with a senior coworker and
relationship with first supervisor. However, when the socialization came from the secretary/support staff, the perceived helpfulness of the process was not so positive.
“Lower levels of job satisfaction, commitment, and tenure retention were reported by newcomers when the secretary/support staff was available as a source of
socialization” (Lewis et al., 1983:861).
John Van Maanen (1978) noted that occupational socialization strategies vary in the extent to which they are formal or informal, individual or collective, sequential or
nonsequential, fixed or variable, tournamentoriented or contestoriented, serial or disjunctive, or investiture or divestitureoriented. These seven dimensions of
organizational socialization are described below.
1. Formal or Informal: the use of direct socialization in a formal training session contrasted with the new employee’s ‘‘learning the ropes” during informal
interaction in the work setting (Van Maanen, 1978:23). Formal training sessions utilizing manuals, books, and audiovisual material might be used in the process
of formal organizational socialization, during which the philosophy and values
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of the organization, as well as specific behaviors and skills linked to the new employee’s role, may be covered.
2. Individual or Collective: the extent to which persons are socialized singly or collectively (Van Maanen, 1978:24). Collective strategies, of course, can be less
expensive and more efficient and may lead to more conformity.
3. Sequential or Nonsequential: whether the socialization process involves a series of specific stages through which the individual must pass when moving to a
new role or status, contrasted with a person’s moving to a higher status within the organization in one transitional stage (Van Maanen, 1978:26).
4. Fixed or Variable: whether or not there is a precise time for each step or transition during occupational socialization. Van Maanen (1978:28) suggests that fixed
strategies may result in more worker loyalty and more cohesion among workers.
5. Tournament or Contest: whether clusters of new employees are separated into different programs or tracks based upon their differences in background,
abilities or motivation (tournament strategy), contrasted with the situation in which there are no sharp distinctions or clusters of superiors and inferiors of the same
rank, and the channels of movement through socialization programs are more open (the contest strategy). According to Van Maanen (1978:30), the tournament
strategy is more efficient and may encourage lower risk taking than the contest strategy.
6. Serial or Disjunctive: whether or not experienced individuals train newcomers to assume their roles in the organization (serial socialization strategy). Serial
strategies may result in less change in the organization, while disjunctive strategies encourage more innovation (Van Maanen, 1978:32).
7. Investiture or Divestiture: the extent to which socialization procedures are designed either to confirm (i.e., investiture) or to dismantle (i.e., divestiture) the
incoming identity and characteristics of the newcomer.
Van Maanen (1978:35) summarizes the likely consequences of various socialization strategy combinations:
If we are interested in strategies that promote a relatively high degree of similarity in the thoughts and actions of recruits and their agents, a combination
of the formal, serial, and divestiture strategies would probably be most effective. If dissimilarity is desired, informal, disjunctive, and investiture strategies
would be preferable. To produce a relatively passive group of hardworking but undifferentiated recruits, the combination of formal, collective, sequential,
tournament, and divestiture strategies should be used.
Organizations, of course, vary regarding the emphasis that they place on the socialization of new members. This variation includes differences in both the range of
content that they believe members need to be socialized into and the intensity and duration of the socialization process itself. Morgan Guaranty Bank is a good example
of an organization that places much
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emphasis on all aspects of the socialization process (Pascale, 1985:27). The bank has specific socialization outcomes that the socialization process is to produce.
Prominent among them is a “collegial style” which is characterized by a stress on teamwork and cooperation as methods to attain organizational goals. Morgan
Guaranty recruits are tested not so much for intellectual ability but for their willingness and capacity to cooperatively interact with colleagues in pursuit of organizational
objectives.
Social psychologists have noted that social character—the personality and behavioral characteristics of individuals—can be traditional or adaptive in origin.
Traditional social character is the result of direct socialization efforts such as being directly taught the norms or values or behaviors considered important by the
socializers. Adaptive social character results not from direct teaching but from experiences—for example, learning norms or values or behaviors through the
observation of others or through individual experiences. The first organizational socialization choice described by John Van Maanen (i.e. formal or informal) relates to
the distinction between traditional or adaptive social character, while the remaining six strategy choices focus primarily upon traditional social character and direct
teaching.
Much of the socialization that occurs within organizations is very informal, indirect, and implicit. Observational learning is a major mechanism by which indirect
socialization takes place; the new employee observes the dress, behavior, actions, interactions, and reactions of veteran employees and makes inferences based upon
those observations. Even though an employee may be told during the job interview that she is entitled to an hour for lunch, if she observes that most of the other
employees take half an hour or eat their lunches at their desks, she may do likewise.
Tierney (1997), in his study of faculty socialization, argues that college employees are socialized primarily during the ordinary daily activities that take place on the
job. He contends that the view of organizational socialization that posits it as a clearcut and direct process where new members learn and internalize an already existing
organizational culture is misleading and overly simplistic. Instead he argues that socialization is a negotiated process during which the employees interpret the
organization through their own idiosyncratic backgrounds and the context in which the organization exists (Tierney, 1997). He sees organizational socialization as a
dynamic, interpretive process fraught with ambiguities, where new members are continuously modifying their perception of the organization.
Tierney’s research on faculty socialization indicates that most participants did not view formal socialization events, such as employee training sessions, speeches by
administrators, or convocations, as the primary ways in which they learned about the organizations (Tierney, 1997). Instead they received messages, often
contradictory and ambiguous, about what was expected of them and what was important and what was not, by being
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involved in the everyday organizational culture. Thus the rites, rituals, and other types of practices that have been viewed as important elements of organizational
socialization may not be as effective as previously assumed. Rather, intense microinteraction with veteran organizational members may be more significant.
Equally important is Tierney’s (1997) contention that the organizational cultures are not static, unchanging entities but are dynamic ones, and that when a person is
being socialized into an organization, the organizational culture is recreated and modified.
Some organizations have found that a combination of formal and informal socialization processes are most effective in producing the desired results. A case in point is
Siemens, a large multinational manufacturing company based in Germany (National Public Radio, 1998). At first the staff emphasized informal socialization as the means
to train new employees. Experienced personnel would show new employees how to perform a particular task. Problems developed, however, when it became evident
that different employees would perform the same task in a different fashion. While the end result could be satisfactory, the company staff believed that selecting the
method that was most efficient and teaching it to new employees would result in productivity improvements. Consequently, the staff developed videos that depicted
what were believed to be the best methods for performing specific tasks. This formal socialization process, however, worked best when combined with informal
interaction between veteran employees and new ones. No matter how detailed the video depicting the preferred method to be used to accomplish the task, invariably
questions emerged that were not dealt with in the video. Many times these issues and questions did not arise until the employee was attempting to perform the task.
Such questions were best answered by experienced workers while they were interacting with the new workers. Interviews with those being trained indicated that they
preferred a combination of formal and informal socialization procedures.
A major feature of indirect socialization is that its content may contradict the content of formal modes of socialization, as illustrated in the following discussion of the
socialization of police officers. The importance of the organization’s informal structures and processes cannot be overemphasized.
Socialization of Police Officers
As we have discussed, organizations use specific, formal, and structured methods to socialize their members. Examples of such methods are using lectures, tapes,
simulations, printed materials, and training sessions which may be on site or at some “retreat.” In many cases the formal socialization process is relatively long and
intense, as in the training of police recruits in the police academy. Other times formal socialization may be of a short
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duration but still be intense and focused. The famous McDonald’s ‘‘university” where selected employees learn the ins and outs of making hamburgers and french fries
“the McDonald’s way” is an example of a short but focused and intense formal socialization method.
Formal methods of organizational socialization convey the values, norms, procedures, and policies that the organization’s leaders want employees to learn. The
content of the formal socialization of police recruits includes criminal law training, crowd control, investigative techniques, selfdefense, firearms training, and community
relations. These are relatively objective and straightforward matters. However, once the formal socialization process is finished, employees will then work with people
who have been on the job for some time, and they, in turn, will commence to socialize the new organizational members. Unlike the formal process of organizational
socialization, however, this informal process will be relatively indirect, informal, unstructured, and sporadic.
Moreover, in many instances the content being conveyed to the new members may be different from, indeed sometimes in direct opposition to, the content
conveyed during their formal socialization experience. When the differences are relatively small and over relatively minor matters, they are inconsequential. However,
when they are big differences, over issues that are fundamental, they will affect the organization, the new members, and the clients served by the organization.
We shall discuss the informal socialization experiences of police officers to illustrate what happens when there are significant contradictions between the content of
formal and informal socialization. In addition, our illustration also will show the effects of acts of commission or omission by the police department’s upper echelon on
creating a particular type of “organizational climate” that affects the police officers.
The informal socialization of police consists of a set of values, norms, and attitudes that are so tightly knit and interrelated that they comprise an “occupational
subculture.” Among its key elements are the following: “cynicism, alienation from conventional society, strong ingroup loyalty and solidarity, an occupational code of
secrecy and contempt for constitutional principles of due process of law” (Voigt, Thornton, Barrile, and Seamon 1994:474).
A great deal of the cynicism created in cops can be seen in the timehallowed advice given to the rookie...bythesenior cop, whose first words are usually
“Forget all the bullshit they gave you at the police academy, kid; I’m gonna show you how things really work here on the street.” (Bouza, 1990:76)
These norms and the accompanying mindset are not conveyed to new members of the department during their training at the police academy;
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rather they are conveyed when the recruits graduate from the academy and are assigned to a precinct.
Police recruits soon learn that the price for acceptance is to consistently and conscientiously abide by the norms constituting the police subculture. “They learn very
quickly that loyalty—the obligation to support a fellow officer—is the first priority. Respect for police authority, honor, individualism, and group solidarity also rank high
among esteemed values” (Westley, 1970:226).
Many police officers do not enter the profession with such a mindset, but they learn it as they become involved in police activities and interact with established
members of the force. The role demands and nature of police work, more than anything else, are responsible for police subcultures’ values and norms as well as for the
highly negative sanctions directed toward those persons violating the norms.
For example, police officers may find themselves at times in dangerous, lifethreatening situations; they must trust their partners and other members of the department
to be loyal to them and risk their lives for them. Indeed, one of the reasons that police officers are reluctant to testify against fellow police officers accused of
wrongdoing is the fear (a realistic one) that doing so would make their partners reluctant to provide them with assistance when they need it.
A police department is a paramilitary organization where the use of force to achieve certain ends is condoned. Police are equipped with firearms, nightsticks, mace,
and other items which are instruments of physical force. These items reinforce the officers’ view of themselves as “crime control agents.” Thus they are oriented, via the
socialization process, to “operate more according to a crime control standard than to a ‘due process’ one” (Voigt et al., 1994:274). Consequently, police officers tend
to assume that suspects are guilty and see nothing wrong with practices that contravene constitutional due process procedures (Voigt et al., 1994:274). This mindset is
reinforced on a daily basis due to the very nature of the job and working environment. The police are called to deal with troublesome and dangerous matters. They see
the worst aspects of the human condition, and this breeds cynicism and a suspicious perspective.
Also crucial in the informal socialization process are the latent messages communicated by acts of commission or omission by midlevel and upperlevel police
department officials. Anthony V. Bouza, who has occupied nearly every position during his career with the New York City and Minneapolis police departments, puts it
well when he states
Virtually all agencies have written procedures calling for truth, beauty and justice, yet the internal daily reality of agencies may be out of sync with their
noble ideals. The mere existence of explicit rules doesn’t mean that they will be followed or enforced by the administration. Written guidelines may not
even reflect the admin
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istration’s true thinking. The employees tend to respond to the value system transmitted in the daily actions of the hierarchy rather than to written policy.
(Bouza, 1990:49) (emphasis added)
Bouza also notes that even when the most qualified people are hired and their formal socialization emphasizes fairness, justice, and ethical practices, if “the CEO’s
policies reflect favoritism, racism or any other counterproductive ‘ism,’ these negative practices are going to surface on the street in various forms” (Bouza, 1990:49).
The organization’s social climate, whose ultimate source stems from the upper echelon’s practices, plays a key part in shaping members’ attitudes and behavior.
Moreover, new members’ behavioral tendencies will either be intensified or mitigated, depending upon the implicit messages sent and explicit practices that occur. As
Bouza astutely observes, “An organization that condones or subtly encourages brutal messages will take normal employees and strengthen their aggressive instincts to
the point where someone eventually goes over the line. Some may have had proclivities in that direction...but these tendencies could easily have been channeled into
productive and positive pursuits by a more salubrious organizational climate’’ (Bouza, 1990:70). Since the incident involving Abner Louima, the Haitian immigrant
allegedly tortured by police in a Brooklyn station house in August 1997, there have been many articles in newspapers and magazines (e.g., “Cases Expose Problems,”
1997; “Police Beating Case,” 1997) suggesting that a “culture of brutality” has been created in some police settings.
The powerful effects of the informal socialization process experienced by rookie police officers is due, in part, to the intense and continuous interaction they have
with each other and with veterans. Rookie cops are “admitted into a secret society where a code of loyalty, silence, secretiveness and isolation reign. They work
around the clock and begin to socialize mostly with other cops, usually members of their own squad” (Bouza, 1990:71).
Police officers soon develop the feeling that “outsiders” cannot understand the dangers and assorted problems that confront them daily. Only those who are on the
force can understand. This perception of “us” versus “them” emerges and “helps to forge a bond between cops....Itiscalled the brotherhood in blue and it inspires a
fierce and unquestioning loyalty to all cops everywhere” (Bouza, 1990:74). Once rookies graduate from the police academy and become involved with the everyday
minutiae of police work, they experience a “clash between expectations and reality as they begin to see that their preconceptions of ‘the job’ were well off the
mark” (Bouza, 1990:78).
In an article in the New York Times on August 30, 1997, Frank Serpico, who testified twentyfive years ago before the Knapp Commission on police corruption in
New York City, discusses the Louima case and concludes
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that police culture has not changed much since he left the NYPD in 1972. He notes that the police officer who broke the “blue wall of silence” by identifying the
precinct’s rogue officers in the Louima case found himself needing police protection from other police officers. Serpico states that honest police officers cannot reveal
negative information about their colleagues without fear of reprisal from their fellow officers.
Many of the points made regarding the informal socialization process occurring within police departments also apply to other types of organizations. Workers learn
the rules of the organizations through informal interaction and observation, and there can be social pressure on workers not to be “whistle blowers.” However, the
content of the organizational subculture and intensity of the process (pressure to conform to the subculture, for example) differ considerably from one organization to the
other.
PROCESSES AND STAGES OF OCCUPATIONAL SOCIALIZATION
Much of the literature on organizational socialization focuses upon three changes among newcomers to the organization: (1) changes in role behaviors, (2) changes in
work skills and abilities, and (3) learning the norms and values of the organization (Feldman, 1981:309). The literature (Porter, Lawler, and Hackman, 1975; Feldman,
1981; Sanders and Yanouzas, 1983) discusses three phases or stages through which newcomers learn these role behaviors, work skills, and norms and values: (1)
prearrival stage of anticipatory socialization, (2) encounter stage, and (3) change and acquisition stage.
Prearrival Stage
Daniel Charles Feldman (1981:310), in his theoretical model, delineates four factors which affect the results of organizational socialization: (1) the degree to which the
newcomer has a realistic picture of the goals and climate of the organization, (2) the degree of realism of the newcomer’s knowledge of the new job duties, (3) the
degree of congruence between the skills and abilities of the newcomer and the needs of the organization, and (4) the extent of congruence between the needs and
values of the newcomer and the values of the organization.
The Role of Anticipatory Socialization
Regardless of the context, socialization for any role begins before the person actually occupies the relevant position. The process by which someone learns about and
commences to develop perceptions about a given role is called anticipatory socialization. Thus, even before an individual actually is hired by an organization to perform
a particular role, he or she has
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formed expectations and images regarding it. Among others, the media is a major source of anticipatory socialization. Children and adults watch television programs
and receive information as to the nature of a wide variety of occupational roles. The basic principle regarding anticipatory socialization’s relation to onsite socialization
is that to the extent that the content of the anticipatory socialization is accurate and truly reflects the target role, it will facilitate onsite socialization. To the degree that it
is inaccurate and distorts the true nature of the role, it will impede socialization into that role.
In many instances, formal socialization agents, such as training schools, business schools, police academies, and so forth, have given inaccurate images of the role
their clients are being prepared for. Thus, when the studentteacher or police rookie or business student graduates and begins to actually occupy and perform the role,
he or she may face what is called “reality shock.”
In addition to the media, schools, and academies as sources of inaccurate information about organizational roles, sometimes company recruiters give unrealistic
information about the roles prospective employees will perform (Dunnette, Avery, and Banas, 1973). When the unrealistic expectations generated by the recruiters are
not met, the socialization process is made more difficult. Employee dissatisfaction, if strong enough, may result in the departure of the employee. Both the organization
and the employee lose in this case.
The retail industry provides a good example of problems caused by inaccurate anticipatory socialization. The industry has had a relatively high rate of attrition among
management trainees recruited directly from colleges and universities (Salzmann, 1985:43). Management entrylevel positions require long hours, rapid pace, and, at
times, arduous physical activities. According to Salzmann, these aspects of the job were evidently quite distasteful to many of the trainees since 40 percent quit during
their first five years. To deal with the problem, the industry began to have company recruiters give highly realistic accounts of the pros and cons of a retailing job to
potential employees. They initiated informational programs to give both sides of the retailing story. Potential employees were told that the initial years of their career in
retailing would be mentally, emotionally, and physically demanding and that many aspects of their duties would be far from glamorous. They were also told that if they
had what it took to endure the initial discomforts, in the long run, the rewards they would gain from their jobs would more than make up for the costs incurred.
Encounter Stage
During this initial stage of interaction, “breaking in’’ in an organization, the newcomer begins to learn new tasks, establish new interpersonal rela
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tionships, and define his or her role within the work group, while at the same time facing intergroup role conflicts and conflicts between personal life and work life.
Arnon E. Reichers (1987:279) argues that the primary tasks which a newcomer meets during the encounter stage are to (1) establish a situational identity and (2)
understand organizational policies and procedures. Van Maanen (1978) suggests that this encounter stage is the most influential period of organizational socialization,
since socialization is more intense at this period (Frese, 1982:216).
Change and Acquisition Stage
The mastery of these tasks faced during the encounter stage occurs in the change and acquisition stage, the “settling in” stage (Feldman, 1976). If the newcomer
masters these tasks, the behavioral and affective outcomes will be “positive”—that is, the newcomer will perform successfully and be satisfied with the job. Feldman’s
model suggests that the factor determining internal work motivation is ‘‘task mastery.”
Feldman (1976) describes four outcomes of organizational socialization programs: general job satisfaction, mutual influence (power and control over work), internal
work motivation (selfmotivation), and job involvement. He finds that the first two variables (general job satisfaction and mutual influence) are correlated with the
variables associated with the socialization process, while the remaining two variables (internal work motivation and job involvement) are not significantly correlated with
the socialization variables. Feldman concludes that the “nature of the work itself” (rather than socialization or the way an employee is recruited or trained) is the most
important factor influencing the last two variables (1976:74).
What five factors affect the motivating potential of particular jobs? According to Feldman, they are “(1) variety of skills required to do a job, (2) task identity (the
degree to which the job requires completion of a ‘whole piece of work’), (3) the significance of the job to other people, (4) the amount of freedom and discretion the
employee has at work, and (5) the amount of feedback the employee gets from the job itself” (Feldman, 1976:74).
Symbolic Interactionism Process
A symbolic interactionist view of the socialization process reveals the importance of verbal and social interaction between newcomers and veterans, the process through
which newcomers begin to understand organizational realities and establish “situational identities.” Reichers (1987:284) notes three classes of variables that promote
interaction within organizations: (1) certain newcomer characteristics, (2) certain insider characteristics, and (3) situational characteristics within the organization. Field
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dependence (reliance upon the field as a referent and having the interpersonal skills to initiate interactions), tolerance of ambiguity, and the need for affiliation are the
three variables which enable newcomers and insiders to initiate the interaction necessary for organizational socialization to occur. These characteristics of newcomers
and insiders, combined with situational characteristics promoting interaction, lead to social interaction and the subsequent establishment of situational identity,
development of appropriate role behaviors, work skills and abilities, and adjustment to the organization’s norms and values by the newcomers. This symbolic
interactionist model emphasizes the importance of personal characteristics of both newcomers and insiders, the situational context, and the social interaction processes
occurring within organizations during the socialization process.
Reichers (1987:283) discusses these individualdifference variables that affect the degree of “proaction” (“any behavior that involves actively seeking out interaction
opportunities”) and thus the speed of socialization; therefore these three factors motivate people (both newcomers and insiders) to seek out interactions with others
during the organizational socialization process:
1. Tolerance of Ambiguity: “The intolerance for ambiguity may inhibit the socialization process. These inhibiting effects occur when the individual reaches closure
on the meaning of events before closure is warranted. In interactionist terms, such an individual may rely too heavily on the attitudes and values held by one or
two significant others, rather than coming to appreciate and influence the meanings of the whole group of which the individual is a member’’ (Reichers,
1987:283).
2. Need for Affiliation: “Newcomers with high, unmet relatedness needs would be motivated to seek out interpersonal interactions in the workplace that might
gratify these needs” (Reichers, 1987:283).
3. Field Dependence: Having both motivation and ability to initiate interactions that help speed the adaptation of newcomers to new situations (Reichers,
1987:283).
FACTORS INFLUENCING THE EFFECTIVENESS OF SOCIALIZATION EFFORTS
The Newcomer
As G. R. Jones (1983:464) argues, in order to fully understand factors affecting the results of organizational socialization efforts, we must not focus upon only the
techniques and processes of the socialization. We must also take into consideration the persons toward whom the socialization efforts are targeted. As previously
discussed, symbolic interactionists em
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phasize that newcomers play an active role in mediating personal and role outcomes and in interpreting socialization efforts. Organizational plus individual factors should
be considered. The newcomer’s orientation toward the organization, psychological attributes, and attributional processes all affect the outcome of socialization efforts.
Patricia Sanders and John Yanouzas (1983), for example, note that one of the factors affecting the results of socialization efforts during the encounter stage is the level
of motivation of the newcomer. If the level of motivation of the new member to join the organization is high, “the new member will be very tolerant of uncomfortable
socializing experiences. If the level of motivation is low, however, socializing efforts will not succeed” (Sanders and Yanouzas, 1983:16).
Howard Weiss (1978:717) finds that levels of selfesteem among new employees affect the degree to which role models are important. The higher the esteem, the
less important the role models and the more likely the individual is to rely on internal, selfgenerated information.
As previously discussed, field dependence, tolerance of ambiguity, and need for affiliation are suggested by Reichers (1987) as personal characteristics of both
newcomers and insiders which affect the organizational socialization process.
Features of the Socialization Techniques
Speed of the socialization process: Some suggest that a rapid socialization process is beneficial in that it reduces more quickly the anxiety associated with a lack of
situational identity in the “encounter stage” (Wanous, 1980; Reichers, 1987:278).
Realism of the presentation of the new organization and the likely problems the recruits will face: The more realistic the picture presented during
organizational socialization, the less likely the newcomer will quickly leave the organization.
Situational factors: As Reichers (1987:285) notes, “interdependent task technology” (that is, task technology that forces interactions between newcomers and
insiders), as well as orientation and training programs, are situational factors that affect the organizational socialization process. The “climate’’ within the organization
and the degree to which organizational leaders consider socialization to be important also affect the outcomes of the socialization processes.
The amount and content of exposure to information supporting organizational beliefs: Feldman (1980:18) states that the greater the exposure to information
supporting organizational beliefs, the more likely those values are to be accepted, and selective exposure of information (i.e., omitting information that contradicts
dominant organizational values) will lead to more acceptance of organizational values by newcomers.
The credibility of the information presented during the socialization process: Not surprisingly, the more credible the information presented to
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the recruits, the more likely the recruits will accept the information and the more effective the socialization process (Feldman, 1980:18). Feldman states that the
credibility of the information is evaluated primarily on the basis of the expertise of the communicator and the similarity of the communicator to the newcomer.
The intensity of the socialization effort: On the basis of his studies of organizational socialization (primarily involving graduate management students and hospital
workers), Feldman (1980:18) concludes that when socialization attempts are too strong, they are ineffective; that is, when corporate recruiters threaten recruits’ senses
of selfcontrol, and their presentations are perceived as selfserving and overbearing, they are likely to be rejected by the potential recruits.
Consequences of Organizational Socialization
Lewis et al. (1983) identify three dependent variables: job satisfaction, commitment, and tenure intention (i.e., how long the new employee expected to stay). Business
students were surveyed six to nine months after graduation and asked about their early job experiences. They reported ten “socialization aids”—that is, ten sources of
organizational socialization which they had experienced: formal onsite training; offsite residential training; socialization from new recruits, senior coworkers, mentors,
peers, supervisors, secretaries and other support staff; social/recreational activities; and business trips. How important were these socialization aids in explaining
variation in these three dependent variables? For job satisfaction, 10 percent of the explained variance was the result of the availability of various socialization aids,
while for commitment and job intention, 20 percent of the variance was explained by the availability of socialization aids (Lewis et al., 1983:861).
ORGANIZATIONAL SOCIALIZATION FROM THE PERSPECTIVES OF THE INDIVIDUAL AND THE
ORGANIZATION
Our understanding of organizational socialization is enhanced when we view it from the perspectives of both the individual and the organization. Individuals who have
become organizational members bring with them a set of varying attitudes, personalities, goals, needs, expectations, and motivations from past histories. They are
concerned with having the organization fulfill their goals and other elements of their personal agendas. Moreover, they want to maintain their individuality, autonomy, and
selfrespect by retaining and even building upon their idiosyncratic features (Johns, 1988:289). However, they also realize that they will have to conform to
organizational values, norms, and expectations in order to be accepted and rewarded within the organization.
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Organizational leaders realize the necessity of socializing new members into the organization’s culture, expectations, and way of doing things. If this does not occur to
a certain minimum degree, “organizational goals will be impossible to achieve because the firm or institution simply won’t be organized” (Johns, 1988:289). Wise
organizational leaders will also acknowledge that the oversocialization of members into organizational culture, policies, and practices is counterproductive. As Gary
Johns puts it, “Complete and total allegiance to existing norms and role requirements will render the organization dinosaurlike, unable to adapt to a changing
environment’’ (Johns, 1988:289). When this happens, “creative and innovative behaviors on the part of individual members are stifled and existing norms and roles take
on a life of their own” (289). A trained incapacity would occur whereby organizational members would not be able to react quickly and effectively to changing
conditions, whether they be within or outside of the organization. Many organizations have gone aground because of their oversocializing members which resulted in
inflexible mindsets unable to make appropriate changes in response to changing technological, market, economic, or political conditions. Thus, organizational leaders
should socialize members enough to produce effective, fruitful, and integrated role performers but not so much that the newcomers become mindless automatons unable
to effectively deal with changing conditions and environments.
The incompatibility apt to exist between organizational and individual goals and agendas must be constructively addressed by organizational leaders. Fine tuning of
the selection and recruitment practices to ensure the attraction of appropriate people is needed. Another way to increase the “fit” between the newcomers and the
veteran employees would be to redesign certain organizational roles to better fit the expectations and desires of certain members. Doing so does not have to be at the
expense of effective organizational functions. Indeed, it may result in innovations that have positive effects for the goal attainment function of the organization. The key to
effectively dealing with the problem of the match between the newcomer’s goals and needs and the organization’s goals and needs is recognition of the problem by
organizational members and a willingness to resolve it via flexibility and compromise.
Organizational socialization can be usefully viewed as the means by which organizational integration occurs (Gibson, Ivancevich, and Donnelly, 1988). It is a process
which aims to achieve a “congruence of organizational and individual goals” (Gibson, Ivancevich, and Donnelly, 1988:674). This objective can never, of course, be
totally achieved; the extent to which organizational and individual goals become congruent varies and is always a matter of degree. Socialization processes bring about
greater congruity between individual and organizational goals, in part, “by undoing the individual’s previously held goals and creating new ones that come
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closer to those valued by the organization” (Gibson et al. 1988:674). Whether or not the employees really substitute organizational goals for their own is an empirical
question that is not easily answered. Employees may, on the surface, appear to internalize organizational goals, but this may not really be the case. They may only act as
if they have done so in order to obtain desired rewards from the organization.
As Gibson and colleagues point out, the integration of individual and organizational goals and interests may involve ethical issues. “These ethical issues are most
evident when the two parties do not share the same information or hold the same legitimate power” (1988:675). These issues and the dilemma faced by employees who
are asked (required) by management to behave in ways that are not congruent with their own attitudes and feelings is clearly exemplified by Arlie Hochschild’s (1988)
account of the socialization of flight attendants. Hochschild’s description and analysis of the socialization of flight attendants also nicely illustrates other aspects of the
occupational socialization process.
Socialization of Flight Attendants
The socialization of flight attendants, according to Hochschild, begins even before an applicant is interviewed. Applicants are asked to study a preinterview pamphlet,
which is designed to teach them how to project particular emotions during the interview. For example, the booklet tells interviewees that during the interview their social
expressions should be “sincere’’ and “unaffected.” Their smiles should be “modest but friendly.” The applicants should project a sense of alert attentiveness and be
neither reticent nor overly aggressive. Balance of emotional orientation is stressed and extremes of affect are discouraged. The booklet states that “a successful
candidate must be ‘outgoing but not effusive,’ ‘enthusiastic with calm and poise,’ and ‘vivacious but not effervescent’ ” (Hochschild, 1988:457). The pamphlet goes on
to say that “maintaining eye contact with the interviewer demonstrates sincerity and confidence, but don’t overdo it. Avoid cold or continuous staring” (457). The
probability that applicants would be hired depends upon how successful they are in projecting the types of affect and mannerisms suggested by the preinterview manual.
Psychological and social prerequisites for the position of flight attendant are “a capacity to work with a team, interest in people, sensitivity, and emotional
stamina” (457). Most important, however, is the trainees’ capacity to “take stage directions about how to ‘project’ an image. They were selected for being able to act
well—that is, without showing the effort involved” (458).
According to Hochschild, once applicants were hired by the airline, they underwent a rather arduous training program which was mentally, emotionally, and
physically demanding. Trainees attended lectures from 8:30
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A.M. to 4:30 P.M., prepared for daily examinations during the evenings, and went on practice flights during weekends.
The airline used a variety of social psychological techniques designed both to make the employees feel dependent on the airline and to emotionally identify with it.
Several of these techniques have also been used by certain religious cults, branches of the armed forces, and other organizations whose aim is to foster among its
members a sense of dependency and identification. Among these socialization tactics are separating the trainees from family members and other significant others, the
use of the peer group to develop a strong sense of solidarity, and using trainers as role models.
Regarding the first tactic, the airline trainees were kept at the airport during the monthlong socialization period and were not permitted to go home. This facilitated
the internalization of airline values, norms, and philosophy. Second, to establish solidarity among peers, trainees were divided and subdivided into small groups, which
greatly facilitated feelings of attachment. Third, as role models, the trainers consistently manifested the kinds of affect, traits, mannerisms, and behavior that they wanted
the students to develop. In spite of long hours and other demanding aspects of their work, the trainers were consistently pleasant, enthusiastic, and patient. As a result
they were well liked by the students. The mechanism of observational learning was operative here since “through their continuous cheer they kept a high morale for
those whose job it would soon be to do the same for passengers” (Hochschild, 1988:459).
While the trainees had to master much informational material (numerous rules, the location and usage of safety equipment on four different planes, and what to do in a
variety of emergencies), the emphasis in their socialization for the role of flight attendant was on projecting a pleasant demeanor, even under the most trying conditions.
Hochschild states that “There were many direct appeals to smile—trainees were continuously told—‘Really work on your smiles,’ ‘Your smile is your biggest asset—
use it’ ” (Hochschild, 1988:460).
Since the socialization agents knew that during the course of their work the flight attendants would be subjected to many situations in which it would be difficult to
smile and that they might not be in the mood to smile, the trainees were given psychological aids that would help them to convey that upbeat, happy tone. They were to
act as if the airplane cabin were home and to think of passengers as guests in their living rooms. One recent graduate of the airline training program described the
process this way:
You think how the new person resembles someone you know. You see your sister’s eyes in someone sitting at that seat. That makes you want to put
out for them. I like to think of the cabin as the living room of my own home. When someone drops in [at home], you may not know them, but you get
something for them. You put that on a grand scale—thirtysix passengers per flight attendant—but it’s the same feeling. (Hochschild, 1988:460)
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In addition, the trainees were told to empathize with the passengers, to see things from their perspective, just as they have seen things from the perspectives of their
friends and family members. So crucial was affective demeanor to the role of flight attendant that trainees were provided with “backup analogies” to assist them in
projecting the rolerequired affect under difficult circumstances (for example, when passengers are obnoxious, planes are congested, and departures are delayed). One
of these “backup analogies” was the “passenger as child’’ analogy. Trainees were told to perceive the irate passenger as a child. Doing so would increase the patience
and inhibit the anger of the flight attendants toward rude passengers.
While it is true that the cognitive redefining of situations can lead to effective “deep acting” (i.e., acting that convinces oneself, that begins as an artificial act but later
transforms one’s own feelings), and thus be very useful in projecting rolerequired feelings, there are situations that by their very nature are extremely difficult to redefine
in the desired manner. For such cases, “surfaceacting strategies” (i.e., involving behaviors that one feels to be false) were taught to the trainees. They were told to
“work” the passengers’ names into their responses as much as possible and to use empathetic phrases such as “I know just how you feel” whenever the passengers
were angry. Such communications of empathy were intended to show the irate passengers that they had misplaced their blame and anger, according to Hochschild.
Throughout the flight attendants’ socialization, the exclusive emphasis, Hochschild says, was on the ways by which they could manage their negative feelings, never
on the real causes of those feelings. Hochschild’s account of the gap that existed between the flight attendants’ actual feelings and the behavior they were urged to
project as they performed their role is an excellent example of Erving Goffman’s (1961) concept of role distance. Role distance “represents a wedge between the
individual and his role, between doing and being” (Goffman, 1961:108). Role distance behaviors are the mechanisms by which role performers convey to themselves
and to others that certain elements of the role that they are enacting are not representative of their true selves. Examples of such behaviors on the part of the flight
attendants abound: wearing lowheeled shoes, putting on an extra piece of jewelry, spitting in a passenger’s coffee, and muttering obscenities under one’s breath. Role
distance behaviors are most apt to occur when there is great incongruency between how the person enacting a role actually feels and is predisposed to act and how her
superiors want her to feel and act. These behaviors are expressions indicating that the role performer “is not capitulating completely to the work arrangement in which
he finds himself” (Goffman, 1961:114). When a person manifests role distance actions, it is his or her way of saying “I do not dispute the direction in which things are
going and I will go along with them, but at
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the same time I want you to know that you haven’t fully contained me in the state of affairs” (Goffman, 1961:133).
Facetoface interactions that transpire between alienated role performers and their audiences provide a fertile context for the expressions of role distance behaviors,
of what Goffman calls a “double stance.” Here, “the individual’s task actions unrebelliously adhere to the official definition of the situation, while gestural activity that can
be sustained simultaneously and yet noninterferingly shows that he has not agreed to having all of himself defined by what is officially in progress” (Goffman,
1961:133). A good example of this type of “noninterfering” role distance behavior is when, contrary to the wishes of the airline, flight attendants smile less broadly and
release their smiles more quickly than they have been socialized to do. Role distance behaviors are especially likely to occur in the presence of one’s coworkers,
according to Goffman. When this happens, it results in a delicious feeling of both emotional release and sweet revenge for both the person eliciting such behavior and
the coworkers who observe it. Indeed, many times particularly poignant instances of role distance behaviors become part of the flight attendants’ subculture and are
conveyed to newcomers by veterans. The following is such an instance.
A young businessman said to a flight attendant, “Why aren’t you smiling?” She put her tray back on the food cart, looked him in the eye, and said, ‘‘I’ll tell
you what. You smile first, then I’ll smile.” The businessman smiled at her. “Good,” she replied, “Now freeze and hold that for fifteen hours.” Then she
walked away.
In one stroke the heroine not only asserted a personal right to her facial expressions but she also reversed the roles in the company script. (Hochschild,
1988:465)
While we have focused on the manifestation of role distance behaviors by flight attendants, they are by no means restricted to personnel in that occupation. While role
distance behaviors may occur among members of any occupation or profession, they are most likely to occur among members of service occupations. Those in sales as
well as those who deal with the public in bureaucratic organizations are very prone to exhibit role distance behaviors. Such behaviors are the role performer’s means by
which he or she manifests aspects of the authentic self while still going along with the organization’s and client’s definitions of the situation. Such behaviors enable the
person to maintain selfrespect in the course of performing behaviors that are not congruent with his or her feelings or inclinations. Role distance behaviors may also be
seen as chronic resistance to certain facets of the occupational socialization process, specifically those facets that are incompatible with the organizational member’s
selfconcept. They can be viewed as safety valve mechanisms which usually only minimally interfere with a person’s occupational role performance yet allow her/him to
maintain a degree of personal authenticity while enacting an organizational role.
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INDIVIDUALS’ RESPONSES TO ORGANIZATIONAL SOCIALIZATION
As Hochschild’s account of the socialization of flight attendants shows, organizational members are not passive entities who automatically behave in ways that their
socializing agents desire. The person’s personality, past experiences in organizations, social status, and values are some of the factors that influence how he or she will
respond to the process of organizational socialization. Edgar Schein (1968) categorized three types of reactions to socialization attempts:
1. Conformity is when the recruit accepts the values, norms, and philosophy that he/she is being socialized into. The notion of the “organization man” depicts this
type of response to organizational socialization.
2. Rebellion constitutes an extremely negative response to the organizational socialization process. Here the person openly rejects the attempt to socialize him into
the organizational culture.
3. Creative individualism is a response whereby the individual accepts the fundamental values and norms of the organization but substitutes peripheral ones with
his or her own. This does not constitute a major threat to the organization; indeed, it may be the source of positive changes. A person may not conform to the
organization’s dress codes or may make creative changes in the hours he or she is assigned to work. If the person is viewed as a valuable resource by the
company, the company leaders are apt to allow him or her to violate these and other kinds of marginal norms. There is a chance that in time the new modes of
behavior may diffuse and become the norms. These categories should be seen as existing along a continuum. In most cases, complete conformity or total
rebellion do not occur. These categories are useful in classifying an organizational member’s response to socialization.
The relationship between the person who is in the process of being socialized into the organization and the organization itself should be viewed as dynamic and
reciprocal. R. M. Steers (1984:461) puts it well when he observes:
Organizations typically attempt to exert—overtly or covertly—subtle pressures on employees to shape them into the kinds of employees desired. This
process is called socialization. Simultaneously, individuals continue to attempt to shape the work environment so it meets their own needs. This process is
called individualism. The interaction of these two processes, operating continuously, creates the work place in which everyone works and lives.
While the major focus of this chapter is on how new members are socialized into organizations, we should be aware that by resisting certain facets of the socialization
process and by creatively modifying established
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norms, structures, procedures, policies, and practices, individuals can resocialize veteran organizational members and produce organizational change.
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Chapter 9
Is Organizational Membership Bad for Your Health? Phases of Burnout as
Covariants of Mental and Physical WellBeing
Robert T. Golembiewski
A long history of commentary urges that organizational life bends people out of shape, and may even make them crazy, in the vernacular. This literature has roots deep
in early industrialization, as in detailing the momentous alleged movement from a comfy gemeinschaft to an often heartless gesellschaft (e.g., Tönnies, 1887). The
genre also contains warnings about cookiecutter “organization men” emerging from the presses of personality testing and behavioral science (e.g., Whyte, 1956;
Baritz, 1960). Other thoughtful observers worry that our increasingly collective lives suck most of the true meaning and value out of the only life worth living, so much
so that “our most successful social invention” has become an “organizational imperative” that leaves little room for individuals directed by their own needs and
consciences (Scott and Hart, 1979).
In the pessimistic view, organizations increasingly put people into repressive service, while the ideal proposes that people create organizations to increase individual
freedom. This essay stands in the latter tradition, after turning attention to a longstanding question: Is organizational membership bad for one’s health? Not wishing to
feign suspense, the working answer here is: Well, yes and no.
To explain, many organizations apparently do much mischief to their members; but some organizations and especially their subunits seem to do very much better
than others in the central particular of member mental and physical wellbeing. Since organizations seem destined to play a large role in all of our futures, native cunning
encourages learning a bit more about both the bad as well as the more tolerable effects. Only in this way will we learn about organizational antecedents that will help us
accentuate
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the positives and eliminate the negatives in the organizational lives that virtually all of us live.
This much having been said, I hasten to retreat a bit. The present perspective on organization life squints at complex realities through a keyhole, as it were, if
apparently a strategic keyhole. The focus here is on psychological burnout in organizations and, while it permits seeing some things clearly, it certainly narrows the field
of vision. But so be it. The tradeoffs have their attractions as well as limitations.
This chapter moves through three emphases in illustrating what the present conceptual keyhole facilitates seeing. Initially, attention goes to describing the phase model
of burnout. Later, the focus shifts to several of the healthrelated covariants of the phases. In short, what features tend to coexist with burnout? Then, this chapter
reviews what we know about the specific organization features that are associated with low levels of burnout, and also what we know about other features that seem to
propel large proportions of organization members into advanced phases of burnout.
An important bit of valueadded characterizes this chapter which constituted researchinprogress when the first edition of Modern Organizations was being
produced. It is now possible to report with some confidence that a growing panel of studies basically extends the scope of the generalizations below to a worldwide
perspective. The original version of the chapter concentrated on North American studies.
SKETCHING THE PHASE MODEL OF BURNOUT
About a decade of intensive work permits substantial if bounded confidence about the usefulness of a “phase model of burnout’’ (e.g., Golembiewski, Munzenrider,
and Stevenson, 1986; Golembiewski and Munzenrider, 1988; Golembiewski, Boudreau, Munzenrider, and Luo, 1996). Three major emphases develop aspects of the
model and sketch several of its major features. In turn, discussion introduces the operational definition of the phase model, provides a summary of numerous tests of its
validity, and, finally, emphasizes the incidence as well as the persistence of phases assigned to individuals. All of this provides necessary perspective for moving toward
a working answer to the question: Is organizational membership dangerous to your health?
Operational Definition of Phases
The present way of estimating experienced stress differs from most used to estimate stress or strain, for the latter focus on the number and severity of stressors at work.
In sharp opposition, the phase model focuses on the ways individuals experience whatever stressors they encounter.
This approach builds on two common observations. Individuals differ
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widely—not only among themselves at any one time, but also at different points in time within an individual’s life—as to the level of stressors acceptable to them.
Moreover, some level of stressors can be energizing and motivating, while a higher level may be herniating. How to take these two observations into account? Since an
incidence and intensity of stressors comfortable for one person may be distressing for another individual, the phase model focuses on the question: Are the stressors one
now experiences too much, whatever their number and severity?
More specifically, the phase model rests upon the three subdomains of the Maslach Burnout Inventory, or MBI (Maslach and Jackson, 1982, 1986), and in several
significant particulars the model also transcends those subdomains and the items used to estimate them. Some details will help. Basically, in effect, a simple paperand
pencil instrument asks respondents: How are things at work, relative to your comfortable coping attitudes and skills? And the responses, provided in perhaps five to ten
minutes, permit characterizing each individual on three subdomains of burnout. These subdomains include:
• Depersonalization, where high scores indicate a marked tendency to think of others as things or objects, a tendency to distance self from others;
• Personal Accomplishment (Reversed), where low scores indicate a person who reports doing well on a worthwhile job; and
• Emotional Exhaustion, where high scores indicate people who are at or beyond their comfortable coping limits, who are near the “end of the rope.”
The phase model builds on these three subdomains, and assumes they are progressively virulent in the order given. Hi or Low assignments for each individual on each
subdomain are made in terms of norms derived from a large population of employees under considerable stress (Golembiewski and Munzenrider, 1988:27–28). The
point is significant because other users of the phase model have relied on other cuttingpoints, such as the various medians on the three MBI subdomains from their
own populations (e.g., Burke, Shearer, and Deszca, 1984). This may prove the correct convention, but it differs markedly from the present reliance on three norms that
remain constant in our phase research.
Interpretively, high Emotional Exhaustion contributes more to burnout than high Personal Accomplishment (Reversed). Moreover, both are more virulent than high
Depersonalization.
These simple operations permit developing an eightphase of progressivelyvirulent burnout which takes the form in Figure 9.1.
Validity of the Phases
The phase model does not propose that any individual will proceed in order through each phase to highest burnout—that is, from Phase I to VIII.
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Figure 9.1
Phase Model of Burnout
Indeed, that is psychologically awkward, as consideration of Figure 9.1 and a possible II → III movement illustrates. Rather, the model proposes only that the phases
are differentially virulent in the order given, however and whenever one arrives at a particular phase. Directly, those in Phase I should exhibit fewer deficits or
deficiencies than those in Phase II, who in turn should be better off than those in Phase III, and so on.
Beyond this important elemental stage, onset in the phase model can be either chronic or acute, following conventional usage. The single chronic flightpath through
the phases is I → II → IV → VIII, which reflects an accumulation of three sets of stressors experienced in a specific order. Thus, High Depersonalization deprives an
individual of important information, which over time can impede performance on task, and these two then can eventuate in a level of strain beyond the individual’s
comfortable coping capabilities reasonably labelled emotional exhaustion.
In contrast, acute onset can take several flightpaths. Thus the sudden death of a loved one might precipitate a I or a II into a V or VI, and a severe grieving process
might then result in VII and VIII status. These acute flightpaths can vary substantially, however, depending upon the stimulating trauma (e.g., a new boss, a corporate
merger, a poor performance appraisal, and so on).
Extensive analyses support the view that the phases are associated with worsening degrees of many covariants. Overall, as the phases progress I → VIII, numerous
populations report such convariants, and many similar ones (Golembiewski et al., 1996):
• less satisfaction with work
• higher turnover
• lower selfesteem
• greater physical symptoms
• lower performance appraisals
• greater negative affects such as hostility, anxiety, and depression
• greater charges against medical insurance
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Typically, such variables show a distinct stepladder effect, phase by phase. That is, nonrandom variation does exist somewhere in the distribution of scores on each
variable arrayed by the phases. In addition, most of the pairedcomparisons on each variable fall in a consistent and expected direction—that is, job satisfaction is
greater for Is than IIs, greater for IIs than IIIs, and so on. This often happens in 80 to 90 percent of all cases, or more. Paramountly, the pairedcomparisons not only
usually are in the expected direction, but the differences also often are large enough to attain statistical significance. The observed proportion of pairs showing
statistically significant differences in the expected direction approximates 20 to 60 percent of all comparisons, whereas 5 percent might be expected by chance.
So the stepladder effect dominates. Virtually all variables studied so far worsen as the phases progress. This sounds bold, but it merely describes what exists. Only
the exceptional variable in the 300plus studied thus far fails to reflect such a pattern, in fact. The research catalog contains a few archival or “hard” variables, but self
reports dominate.
As noted in the earliest parts of this chapter, the generalizations above apply substantially to both North American and worldwide settings. Table 9.1 presents a very
important set of comparative particulars. To explain, the basic research strategy to test the validity/reliability of phase assignments relies on concurrent validity.
Numerous “marker variables” (i.e., job involvement, job tension, job satisfaction, and so on) should covary with the phases for theoretical and practical reasons. Well,
do these marker variables covary with the phases in expected ways? Table 9.1 implies a robust answer: Overall, almost always. In thirteen U.S. worksettings, to
interpret Table 9.1, marker variables isolate statistically significant variance in the cases of over nine of every ten marker variables run against the phases. In addition,
over 82 percent of all pairedcomparisons are in the expected direction, and over 40 percent of those pairs also achieve statistical significance as well as fall in the
expected direction. A bit over 17 percent of the pairedcomparisons fall in a contrary direction, but less than onehalf percent of them achieve significance. The results
are quite comparable for fifteen global worksettings, as Row B in Table 9.1 shows.
Incidence and Persistence of the Phases
The consistent pattern of covariation of the phases implies enough bad news, but the optimist might hope that one or both of two conditions typify burnout:
• not very many people find themselves in advanced phases at any point in time; and/or
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Table 9.1
Summary, Marker Variables X Phases
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• even if substantial numbers of people do find themselves in advanced phases of burnout at any point in time, they do not stay there very long.
These hopeful conditions do not seem to characterize burnout, however. The news seems bad on both counts. The presently available data are not ideal, however. So
one can entertain some hope that better data will change one or both estimates, but not much hope seems appropriate.
INCIDENCE OF THE PHASES
Ideally, an estimate of how many people fall in which phase assignments would come from a scientific survey of the working population of each nation or other large
subdivision. That costly estimate does not exist, and what follows reflects studies of convenience populations that might not be representative.
However, data come from about 100 publicsector and business organizations, with over 31,000 individual respondents worldwide, and those data support several
significant conclusions. First, as Table 9.2 shows, the overall distribution of phase assignments is bimodal and, on average, contains a substantial proportion of cases in
the two clusters of extreme phases. The distribution in Table 9.2, Row A reflects many convenience populations from North America, and “better” organizations may
be overrepresented. In any case, the North American proportions have remained basically stable as the total tested population has grown—from 5,000 cases to nearly
9,000 cases (Golembiewski et al., 1986:132–133), then to over 12,000 cases (Golembiewski and Munzenrider, 1988:115–118), and now to over 24,000 cases
(Golembiewski et al., 1996).
Second, this time with reference to Row B in Table 2, the news about incidence is even worse for about a score of global worksites (Japan, China, Taiwan, Belarus,
Poland, Ghana, Romania, and so on). For technical reasons beyond this chapter, burnout phases measure much the same domains crossculturally (Golembiewski et
al., 1996:42–48) but it appears that the average incidence of advanced phases is greater in global than North American settings.
Third, again with reference to Table 9.2, but now to Row C, the minimum proportion of employees in a large organization ever observed in Phases VI–VIII is higher
than most observers will find comfortable, or even bearable. Twentytwo percent represents the smallest proportion of cases from any substantial organization classified
in the three most advanced phases, with ‘‘substantial” here meaning 100 or more employees. This “lowest” distribution seems “high” enough, given the sorry catalog of
covariants associated with the advanced phases. The largest proportion in Phases VI–VIII approximates 80 percent (Golembiewski and Boudreau, 1989)! No doubt
that can be considered unacceptably “high.”
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Table 9.2
Four Perspectives on Global Incidences of Phases
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Fourth, since the best distribution is pretty bad, it is not easy to label the worst case depicted in Row D, Table 9.2. The setting is a global one—a comprehensive
healthcare center in a physically demanding location. To risk a sardonic pun, there is plenty of healing to do in that hospital! But whether the label is “best” or “worst,”
these incidence of the phases, along with the dour covariants of advanced phases, combine to imply the high costs of burnout, both to individuals and their employing
organizations.
What accounts for the extreme distribution Row D shows? No doubt, much remains to be learned. But the hospital population in Row D comes from a culture that
most observers see as encouraging substantial degrees of ‘‘politeness” and social distancing from others. In short, depersonalization is high at this site and, hence, there
are few people in Phase I. Moreover, chronic onset seems to have propelled employees to outlying phases—I → II → IV → VIII, for readers who recall the earlier
discussion. In addition, the Row D worksite seems to reflect an orientation to working very hard and (especially) very long hours. To suggest the point, the hospital is in
a country whose culture has five specific words to describe how one can kill oneself by working unwisely (Golembiewski et al., 1990).
Overall, to make explicit a useful generalization, organizations are not monolithic when it comes to burnout phases. Typically, they contain substantial representations
of both those classified as least burnedout as well as most burnedout. The key factor seems to be the dynamics in the several groups of firstreports of which
organizations are comprised. A president and her/his gaggle of vicepresidents constitutes a group of firstreports, and so does the collection encompassing a firstline
supervisor and the operators reporting to that person. Organizations may be viewed as collections of such groups of firstreports, following Likert’s “linking pin” notion.
In short, groups of firstreports seem to have a strong affinity for extreme scorers on burnout—either I–IIIs or VI–VIIIs, but not both, cluster in groups of first
reports. Mixed collections of phases are not common (e.g., Golembiewski, 1983; Rountree, 1984).
PERSISTENCE OF THE PHASES
Most available data about the phases come from snapshot research designs or, to put the same point in another way, longitudinal designs are relatively rare. This limits
the confidence that can be placed in interpretations of existing studies.
However, the persistence of burnout seems substantial, even given this noteworthy warning. Table 9.3 summarizes the findings from several studies which gathered
data at intervals of up to one or two years (Golembiewski et al., 1996:173–177).
Overall, the results provide little support for the proposition that burnout
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Table 9.3
Summary, Persistence of Phases, in 11 Worksettings (N = 1,411)
A. No Change 44.9 percent
B. No Change, or 1 Phase 49.7 percent
C. Stability within Phases I III 67.1 percent
D. Stability within Phases VIVIII 65.2 percent
E. Stability within Phases IVV 25.3 percent
tends to come and go. Quite the opposite, in fact. The persistence is marked on measures A through D in Table 9.3, and little stability is expected on measure E,
consistent with earlier research (e.g., Golembiewski and Munzenrider, 1988:126), as well as with theoretical features that see phases IV and V as brief transitional ones
in chronic and acute onset, respectively (Golembiewski et al., 1996: esp. 173–177).
The overall findings in Table 9.3 no doubt understate persistence, if anything, as three points imply. At the very least, Table 9.3 estimates certainly contain some
measurement error, with the consequence that some individuals who really had the same or similar phase assignments in T1 and T2 appear to have changed. In addition,
especially over longer periods, some “natural change” should be expected—not only in the case of acute onset, but also when conscious change is planned. Recall that
Table 9.3 encompasses observational intervals up to two years. Finally, if only for present purposes, Table 9.3 does not discount estimates A through D for the greater
instabilities of Phases IV and V. So these four estimates of persistence seem conservative.
HEALTHRELATED COVARIANTS OF THE PHASES
Let us get more specific about how organizations can affect the health of their members, for good or ill. Two foci provide illustration of a strong regularity in burnout
research: health tends to go down as burnout increases (e.g., Burke et al. 1988; Cherniss, 1980:15–16; Freudenberger, 1980; Maslach and Jackson, 1981:99–101).
The present illustrations of this pervasive general conclusion relate to a batch of physical symptoms, and then to a measure of mental health.
Physical Symptoms and the Phases
Does a widely used set of nineteen symptoms covary with the phases? Both simple and bivariate analysis, as well as factor analysis, suggest direct
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and consistent associations (e.g., Golembiewski et al., 1986). The results of one analysis illustrate support for the point, and they relate to a Total Symptoms score as
well as to scores on four factors generated by factor analysis. The four scores include the following symptoms, which come from a standard list (Quinn and Shepard,
1979):
• Factor I: General Enervation and Agitation
—pains in stomach
—headaches
—coughing or heavy chest colds
—becoming very tired in a short period of time (fatigued)
—finding it difficult to get up in the morning
—hands sweating or they feel damp and clammy
—feeling nervous or fidgety and tense
—being completely worn out at the end of the day
—poor appetite
• Factor II: CardioVascular Complaints
—pains in heart
—tightness or heaviness in chest
—trouble breathing or shortness of breath
—feeling heart pounding or racing
• Factor III: NonCardiac Pains
—cramps in legs
—stiffness, swelling, or aching in leg muscles and joints
—swollen ankles
—pains in back or spine
• Factor IV: Sleeplessness
—having trouble getting to sleep
—having trouble staying asleep
It would be tedious to provide data about the association of all estimates of physical symptoms as arrayed by the phases. However, Table 9.4 illustrates the pattern for
Total Symptoms only. Higher scores on Total Symptoms reflect poorer health, and the present distribution is almost certainly not random. Table 9.5 provides a
convenient summary of the results of the full tests of the association of the five measures of physical symptoms and the phases in a large population (N = 1,535). The
summary supports the stepladder effect described earlier, as three points establish. First, except for Factor IV, over 90 percent of the cases show average symptoms
increas
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Table 9.4
Means of Total Physical Symptoms by Phases of Burnout (N = 1,535, ANOVA)
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Table 9.5
Summary of Associations of Means, Five Measures of Physical Symptoms by Phases (N = 1,535)
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ing, phase by phase, as is expected. For the single exception, over 70 percent of the pairedcomparisons fall in the expected direction.
Second, large proportions of the pairedcomparisons are statistically significant while they also meet expectations about directionality. In two cases, these
proportions surpass 60 percent; the overall average is 42.9 percent; and in no case is the estimate lower than 17.9 percent. Chance would generate differences in
pairedcomparisons that attain statistical significance in 5 percent of the cases.
Third, except in one case, less than 10 percent of the pairedcomparisons fall in a direction contrary to expectations. Even in that one case, less than a third of the
comparisons violate expectations. The overall average does not quite reach 10 percent of the pairedcomparisons falling in a contrary direction.
Fourth, not even a single pairedcomparison in a contrary direction achieves p < .05.
In sum, the phases of burnout covary regularly and robustly with the phases, but the conclusion must be tempered by an elemental fact. As in the present case, most
research uses selfreports of physical health and, so far, physiological and objective measures show inconsistent and usually smaller associations of stress or burnout
with healthrelated estimates (Steffy and Jones, 1988). However, early efforts to relate the phase model to physiologic measures show consistent but modest
associations (e.g., Golembiewski et al., 1996:108–128).
Details will differ (e.g., the marker variables estimating health) but much the same picture holds for North American as well as global worksettings (e.g.,
Golembiewski et al., 1996:88–92). Globally, that is, health estimates worsen as the phases progress I → VIII.
Mental Health and the Phases
Evidence for the association of mental health and the phases is less solid than for physical health, though the presumptive case seems strong. Consistently, for example,
Deckard (1985) discovers substantial covariation between the phases and several affective states relevant to mental health—depression, anxiety, and so on. Relatedly,
clinically oriented observers (e.g., Freudenberger, 1980) agree on the essential point that overloads of experienced stressors at work “can make you crazy” in a variety
of ways.
So far, the direct linkage between mental status and the phases has not been established definitively, but early work is consistent with burnout theory as well as the
phase model (Golembiewski et al., 1996:91–104). This work relies on the General Health Questionnaire, or GHQ (Goldberg, 1972), which permits a judgment about
which respondents have mental health symptoms that, if diagnosed, would attract clinical notice. As Goldberg explains (1972:1), setting aside those persons “with
qualitative de
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Table 9.6
“Cases” and “Normals” by Phases, in Percent (N = 47)
viations, such as organic mental disorders and the functional psychoses,’’ he sought to “devise a selfadministered questionnaire that would identify respondents with a
nonpsychotic psychiatric illness, by assessing the severity of their psychiatric disturbance.” Goldberg’s definition clearly includes the various neuroses and phobias.
Conceptually, the GHQ’s focus is on the current mental state, “the way the respondent has felt, thought and behaved in the time leading up to the occasion on which
[the questionnaire] is completed” (Goldberg, 1972:2). Looked at negatively, then, the GHQ attempts neither to measure “longstanding attributes of the personality,”
nor does it propose to assess the “liability to fall ill in the future” (Goldberg, 1972:3).
The GHQ has several noteworthy features, both practical and conceptual. Most relevant for present purposes, the GHQ’s major attraction is the claim that scores
above a cuttingpoint identify individuals presenting symptoms that on individual diagnosis would merit clinical interventions. For the thirtyitem version, the GHQ’s
developer estimates that the most serviceable cuttingpoint is between 3 and 4, when (0, 1) scoring is utilized on each item to indicate the absence/presence of a
presenting symptom. Those with GHQ scores of 4 or greater are considered “cases,” and others are “normals.” Goldberg estimates less than a 20 percent rate of
misclassification.
Table 9.6 reflects the expected pattern between GHQ and the phases, and its two examples characterize numerous other studies. Overall, the percentages of
“cases” in different populations can differ, but the slope of their occurrence when charted by the phases seems general, if not universal. As the phases advance I →
VIII, so do the proportions of respondents classified as “cases.”
Again, much the same pattern holds for mental health and the phases, in North America as well as globally (Golembiewski et al., 1996:103–108).
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ORGANIZATIONAL FEATURES AND THE PHASES
Now, let us attempt to close the loop, and not tentatively at that. The evidence illustrated above suggests that advanced phases of burnout seem definitely bad for the
health of organization members. But do specific clusters of organization features induce the phases? If this is the case in substantial degree, one can then propose that
organizational membership can be good or bad for one’s health, depending upon whether or not a specific organization’s features tend to induce moreadvanced or
lessadvanced phases of burnout.
So are organization features directly linked to the phases?
No definitive answer is appropriate today, but the growing balance of evidence increasingly supports an affirmative answer. Thus, the phase model is conceptually
imbedded in an environmental context (Golembiewski and Munzenrider, 1988: esp. 103–113), and the items used to make phase assignments are rooted in
relationships at work. Moreover, as noted, the phases clearly covary with many organizational features—job satisfaction, tension at work, job involvement,
participation in decisions at work, and so on. See also Figure 9.2. Perhaps, paramountly, changes in the distribution of the phases have been made by consciously
changing specific organizational relationships and policies (Golembiewski, Hilles, and Daly, 1987).
On the other hand, significant issues remain only partially explored, or neglected altogether. For example, it seems that personality factors account for little of what
the phase model measures (e.g., Golembiewski et al., 1986; Golembiewski and Kim, 1989), but much more clinically oriented and longitudinal investigations are
required to test this prevailing impression, which derives largely from opinion surveys that are administered at a single point in time only. Moreover, the heavy work of
establishing the causal direction of the associations between worksite features and burnout remains largely undone (e.g., Rountree, Golembiewski, and Deckard, 1989).
However, if one were to make the most educated estimate possible today—and all managers have to strive to make just such estimates—substantial confidence
seems appropriate when responding to the key question: What organizational features seem to induce advance levels of burnout?
Figure 9.2 provides a convenient summary of some of the things we know with relative certainty about answering this key question. The focus there is on those
organizational features that are substantially within the power of managements and employees to change, as well as on those features having a reasonable degree of
support from the literature on the phase model (e.g., Golembiewski and Munzenrider, 1988; Golembiewski, 1990: esp. 156–201).
This summary of concurrent validation of the phase model reinforces earlier work, but it is hardly complete. That is, the covariants of both high
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Figure 9.2
Organizational Features and the Phase Model
Organizational Features Associated with Less Advanced Phases Organizational Features Associated with More Advanced Phases
• high participation in decisions at work • low participation in decisions at work
• high job involvement • low job involvement
• high satisfaction in most or all facets of work • low satisfaction in most or all facets of work
• high sense of psychological community; high cohesion of primary work group; high • low sense of psychological community; low cohesion of primary work group; low
social and emotional support from supervisor and coworkers social and emotional support from supervisor and coworkers
• high trust in all levels • low trust in all levels
• high needsatisfaction in job • low needsatisfaction in job
• low job tension • high job tension
• high clarity about job requirements • low clarity about job requirements
• 1tomany or grouporiented supervision • 1to1 supervision
• high orientation to getting task done • low shared orientation to getting task done
• low work pressure • high work pressure
and low burnout in Figure 9.2 have a familiar ring, consistent as they are with the bulk of work of the past several decades in Organization Behavior and Organization
Development, or OD (e.g., Golembiewski, 1979; 1990). For example, readers of Likert (e.g., 1977) as well as of numerous others of his genre, will recognize the
multiple reinforcement of this earlier work reflected in Figure 9.2. Similarly, the emphasis above on groups of firstreports as the critical context for burnout also
coincides with the decadeslong emphasis in training and development on the “intact work group” as critical in both theory and practice (e.g., Golembiewski, 1983;
Rountree, 1984).
At the same time, the existing research on the phase model of burnout is limited in some ways. All research derives from convenience populations, to begin, which
implies a basic question about representativeness of results, despite mounting evidence of concurrent validity. In addition, research with “objective data” is not common.
Specifically, designs involving the phases with objectively related performance or productivity are rare in the litera
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ture because opportunities to do a full analysis are so limited in practice (e.g., Golembiewski et al., 1986:93–103). Finally, research on the phase model shows a weak
emphasis on macroorganization as well as contextual features—structural patterns, technologies, markets, economic conditions, and so on. A fullerscale theory of
burnout must fill such gaps.
DISCUSSION
Given qualifications and indeterminacies, then, the managerial mariner navigating the seas of stress and employee health need not proceed byguessandbygolly.
Certainly, the situation is no analog of the intercontinental ballistic missile, which can be targeted to some small bull’s eye thousands of miles down range. On the other
hand, neither is today’s manager a whiteknuckled explorer worrying about dropping off the edge of the organizational earth.
Less fancifully, real progress has been made by research on the phase model in three basic senses. Thus, we have available a relatively reliable and valid tool for
assessing the degree of burnout in systems of all sizes—quickly and economically.
Moreover, the phase model and its covariants seem to apply broadly, not only in different organizations but in all global settings so far investigated. Of course, this
applicability reinforces the phase model, and so do the broad attempts to replicate our present understandings.
Significantly, also, we are some piece down the road in learning what can be done to ameliorate burnout, and even to prevent it. The case for substantial success
rates in preventing burnout has been made elsewhere, in detail (e.g., Golembiewski et al., 1996: esp. 222–228). The amelioration of burnout, once advanced, presents
more difficult challenges—in principle, and for detailed reasons developed elsewhere which are beyond the present scope (Golembiewski and Munzenrider, 1988: esp.
108–221). But a real start has been made even on the difficult task of ameliorating advanced burnout.
These features reflect the optimistic news concerning organizations and employee health.
At the same the time, the news has a dour character. Directly, specific managerial orientations seem directly related to the physical and emotional health of
employees, for good or ill. This dramatically raises the ante for constructive actiontaking, in short, by those who determine or powerfully influence these managerial
orientations. Hence the question now becomes: Will organizations do more to decrease the probability that membership in them will be bad for your health?
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Burke, R., and E. Greenglass (1988). A longitudinal study of progressive burnout. Working paper.
Burke, R., J. Shearer and G. Deszca (1984). Burnout among men and women in police work. Journal of Health and Human Resources Administration 7: 249–
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Cherniss, G. (1980). Staff burnout: Job stress in the human services. Beverly Hills, CA: Sage.
Deckard, G. J. (1985). Work, stress, mood and ecological dysfunction in health and social services settings. Unpublished doctoral dissertation, University of
Missouri, Columbia.
Freudenberger, H. J. (1980). Burnout: The high cost of high achievement. Garden City, NY: Anchor Press.
Goldberg, D. P. (1972). The detection of psychiatric illness by questionnaire. London: Oxford University Press.
Golembiewski, R. T. (1979). Approaches to planned change. 2 vols. New York: Marcel Dekker.
———(1983). The distribution of burnout among work groups. In Proceedings, edited by D. D. Van Fleet, 158–163. Annual Meeting of the Southwestern Division,
Academy of Management, Houston, TX.
———(1984). Organizational and policy implications of a phase model of burnout. In Organizational policy and development, edited by L. R. Moise, 135–147.
Louisville, KY: Center for Continuing Studies, University of Louisville.
———(1990). Ironies in organizational development. New Brunswick, NJ: Transaction Books.
Golembiewski, R. T., and R. Boudreau (1989). Burnout and stress in American, Canadian, and Japanese work settings: Nomothetic and ideographic perspectives.
Kaihatsu Ronshu: A Journal of Development Policy Studies 44: 53–77.
Golembiewski, R. T., R. Boudreau, R. F. Munzenrider, and H. Luo (1996). Phases of burnout. Greenwich, CT: JAI Press.
Golembiewski, R. T., R. Hilles, and R. Daly (1987). Some effects of multiple OD interventions on burnout and worksite features. Journal of Applied Behavioral
Science 23: 295–314.
Golembiewski, R. T., and BS. Kim (1989). Selfesteem and phases of burnout. Organization Development Journal 7: 51–58.
Golembiewski, R. T., and R. F. Munzenrider (1984a). Active and passive reactions to psychological burnout. Journal of Health and Human Resources
Administration, 7: 264–289.
———(1984b). Phases of psychological burnout and organizational covariants: A replication using norms from a large population. Journal of Health and Human
Resources Administration 8: 290–323.
———(1988). Phases of burnout. New York: Praeger.
Golembiewski, R. T., R. F. Munzenrider, and J. G. Stevenson (1986). Stress in organizations. New York: Praeger.
Golembiewski, R. T. et al. (1990). Two aspects of burnout in crosscultural settings: Are the phase model and its underlying subdomains generic? Paper prepared for
delivery at the Annual Meeting, International Association of Applied Psychologists, Kyoto, Japan, August 22–26.
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Likert, R. (1977). Past and future perspectives on system 4. Paper presented at the Annual Meeting of the Academy of Management, Orlando, FL.
Maslach, C., and S. E. Jackson (1981). The measurement of experienced burnout. Journal of Occupational Behavior 2: 99–113.
———(1982, 1986). Maslach burnout inventory. Palo Alto, CA: Consulting Psychologists Press.
Quinn, R. P., and L. J. Shepard (1979). The 1972–73 quality of employment survey. Ann Arbor: Survey Research Center, University of Michigan.
Rountree, B. H. (1984). Psychological burnout in task groups. Journal of Health and Human Resources Administration 7: 235–248.
Rountree, B. H., R. T. Golembiewski, and G. J. Deckard (1989). A causal path analysis of burnout and agitation. Journal of Health and Human Resources
Administration 12: 95–111.
Russell, J. A. (1980). A circumplex model of affect. Journal of Personality and Social Psychology 39: 1161–1178.
Scott, W. G., and D. K. Hart (1979). Organizational America. Boston: Houghton Mifflin.
Steffy, B. D., and J. W. Jones (1988). Workplace stress and indicators of coronarydisease risk. Academy of Management Journal 31: 688–698.
Tönnies, F. (1887) Gemeinschaft und gesellschaft. Leipzig: Fues’ Verlag.
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506–514.
Whyte, W. H., Jr. (1956). The organization man. Garden City, NY: Anchor Books.
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Chapter 10
God, Science, and Administrative Theory: An Unfinished Revolution
Frederick C. Thayer
The pronouncements of a Supreme Being or Her equivalent (“God’s Word”) and, in modern times, Science (“Scientific Law”), sometimes separately and sometimes
together, are the two sources of knowledge that have long been used to legitimize the authority of priests, rulers, and managers. In principle, these authority figures
know what their subordinates do not know, what those subordinates should do, how well or how poorly those subordinates have performed, and how those
subordinates should be rewarded or punished for their performance. If Mohammed, Jesus, Buddha, and Confucius have acquired longterm acceptance as the
originators or transmitters of legitimate knowledge, countless Scientists have contributed to the body of “Scientific law’’ that has become the basis for secular authority.
Especially in the Modern West, Science mounted an intellectual challenge to the legitimacy of “God’s Word” and topdown authority in general, but has been unable to
make its arguments powerful enough to replace the authority structures that remain the basic design of the era of Civilization.
As a philosophy of knowledge, and action as well, Science has invented and expanded what is arguably the greatest contribution of the modern West—the principle
that all knowledge is uncertain. Nobody can know for sure, that is to say, if any decision will achieve its desired objective, the everyday managerial version of the
classic causeeffect chain of the Scientific enterprise. The Scientist, and the manager, can only assess “possibilities” and “probabilities” that their experiments and
decisions will “work.” No Scientist and no manager, in other words, can know enough to exercise unilateral authority over those who are the subjects of experimental
Science, or the subordinates of designated managers. Scientific principles also
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provide that no Scientist should accept the truth claims of any other Scientist without carefully studying or, if at all possible, testing those truth claims.
Even though Science did not and does not now claim that “Scientific law” justifies topdown authority, the uncertain knowledge that Science produces is in fact
widely used to justify such authority. “Competent” managers feel they must pretend they know what they are doing when they routinely reward and punish underlings.
Yet, according to Science itself, they cannot possibly know. This fundamental contradiction is given little attention in the contemporary literature streams of philosophy,
administration, and politics, from writers who declare their allegiance to Scientific method, but blame government and nongovernment “leaders” for not having
known what they could not possibly have known.
The principle of uncertainty is not sufficient of itself to distinguish Scientific law from God’s Word and its guiding principle of absolute certainty. Initial appearances
to the contrary, the principle does not at all assume that a decision maker who obeys God’s instructions and imposes them upon subordinates can know what will
happen. The decision maker need only believe that if God’s instructions are faithfully obeyed, any outcome will be God’s decision. Only God, that is to say, can know
in advance the outcome of any decision. To the ordinary mortals who make and obey decisions, outcomes remain uncertain. The principle of certainty, therefore,
applies only to the requirement to obey God’s Word and to the twin assumptions that God’s Word must be correct and that no “new knowledge’’ has been produced
since God’s Word first appeared on Earth. By definition, the principle relieves those in authority from trying to assess in advance the probability that a decision will
“work,” because God, not decision makers, is in control. Understandably, the principle encourages rigid authoritarianism because those who question any decision can
be considered blasphemous.
As one of several major “revolutions” that originated in the West, Science quickly learned that it could not implement its basic principle that topdown authority is
illegitimate. The other “revolutions” did not question the principle of authority, even though the explanations for those “revolutions” still give the appearances of rejecting
authority. The Protestant Reformation appeared to reject the authority of priests, but not the direct authority of God over male heads of families. “Democracy”
provided for the election of leaders, but granted them authority to make laws, issue commands, and imprison or kill those who disobey. The “free market” appeared to
provide for the dominance of “consumers” over producers, but not for the dominance of “workers” over producers, nor even for the decent treatment of those
“workers.” To this day, “workers” and “consumers” are considered as different groups, even if most individuals must “work” before they can afford to “consume.”
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The use of Science’s uncertain knowledge to legitimize topdown authority, of course, thoroughly corrupts the principles of Science. Leaders find it much easier to
rely upon God’s Word when using the products of Science. It is comforting to surrender responsibility to a Supreme Being, especially one who authorizes the use of
weapons of mass destruction (religions often preach “love,” but only for loyal followers, not for members of other religions). Science, moreover, cannot offer “paradise”
for those killed in wars, “reincarnation,” or “eternal life,’’ promises that politicians cannot match. To those comforted by faith, the absence of solid evidence to support
such promises is meaningless. The contrasts between God’s Word and Scientific Laws can be highlighted by examples from everyday observation and contemporary
intellectual discourse.
In recent years, selfdesignated “religious” broadcasters have come to occupy increasing numbers of cable television channels. These broadcasters constantly
“preach” their versions of God’s Word, but give no indication at all that their pronouncements can, should, or will be opened to questions about the legitimacy of those
pronouncements, just as religious sermons are not followed by question periods. Scientists, conversely, generally acknowledge that knowledge creation must, by
definition, be an endless process of intense discussion, debate, and conflict resolution. A second example is the current attack by “postmodernists” on what they regard
as the failures of “modernism,” an attack that I see as aimed at the wrong target. There is no question, as I suggested above, that the Religious, Scientific, Democratic,
and Economic Revolutions of recent centuries have not brought the “freedoms” that those revolutions seemed to promise; but if, as I also suggest, God’s Word is
historically associated with the origins of topdown authority structures, it must be the case that those structures cannot be replaced unless the basic principle of God’s
Word—certainty—is rejected.
The purpose of this chapter, therefore, is not to outline in detail how the world might respond to the challenge Science has presented to design new forms of decision
making because topdown authority cannot be justified. Rather, the purpose is to highlight and clarify the contradictions, to suggest revisions in the ways that
organizational literature has looked at concepts or categories of “legitimate authority,” and to indicate how Western concepts of “individualism,” “freedom,” and “human
rights” are much narrower in scope than claims made in their behalf would indicate. Put more simply, all such claims appear to be only false fronts for topdown
authority rather than substitutes for it. A central point to keep in mind is that any theory of knowledge must simultaneously serve as a theory of administration because
the theory must specify how humans should decide what is true or what should become true by virtue of social action.
The following three sections of this chapter seek to flesh out three propositions in support of the basic argument that the four Revolutions of the Modern West,
especially the Scientific Revolution, can be viewed as intel
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lectually valid but operationally inadequate attacks upon topdown authority and its religious and quasireligious origins. The first of three sections argues that Scientists
in laboratories and managers in their offices perform precisely the same functions. Ironically, the recognition that Scientists can perform experiments that affect human
subjects has led to more stringent restrictions on the Scientific enterprise than are imposed upon ordinary managers whose every decision amounts to an experiment that
affects their subordinates and many others as well.
The second section revisits Max Weber’s widely known “categories” of authority, which he labeled as “charismatic,” “traditional,” and “legalrational.’’ It seems
obvious in retrospect that the first two of these categories, the “charismatic” and the “traditional,” really are a single category that Weber mistakenly divided. With a
more valid recombination, the two remaining categories—“charismatictraditional” and legalrational”—correspond to the categories of “God’s Word” and “Science”
used herein. I then point out that such Western concepts as “freedom” and “individualism” are not attacks upon topdown authority but are more in the nature of
disguised reinforcements of authoritarianism. The larger argument, of course, is that topdown authority is the basic organizational design of all societies, regardless of
alleged differences in culture and ideology.
ADMINISTRATION AND SCIENCE: IDENTICAL TWINS
The late Sir Kenneth Clark introduced the eighth program of his powerful television series “Civilisation” by referring to the “revolutionary change in thought” that began
in Holland in the midseventeenth century, “the revolution that replaced Divine Authority [with] experience, experiment and observation.”1 Using “The Light of
Experience” as the title of both the program and the chapter in the book based on his series, he elaborated as follows:
When one begins to ask the question “does it work?” or even “does it pay?” instead of “Is it God’s will?” one gets a new set of answers...thepractical
social application of the philosophy that things must be made to work....This could be done either by the accumulation of observed evidence or by
mathematics; and of the two, mathematics offered to the men of the seventeenth century the more attractive solution. Mathematics became, in fact, the
religion of the finest minds of the time... the means of expressing a belief that experience could be united with reason... [that] reality lay...in the realm of
measurement and observation. And so began that division between scientific truth and the imagination. Between Descartes and Newton, western man
created those instruments of thought that set him apart from other peoples of the world...a belief in cause and effect....Carried into the nineteenth century
this new religion had behind it a body of doctrine without which it could never have maintained its authority over the seriousminded....Thesacred books of
Malthus and Ricardo were taken as gospels by the most serious and even
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pious men who used them to justify actions they would never have thought of defending on human grounds.2
In the intellectually fragmented world of today, Sir Kenneth’s designated field might be Fine Arts or Western Culture. Indeed, he traced developments in Western
European civilization from the Dark Ages to the present by looking at their artistic and cultural manifestations. He did not explicitly focus on administration, organization,
or management, but he could not avoid linking his observations with the concept of authority. To elaborate on a revolution in thought, he had to refer to the Divine, to
the synonymous meanings of “religion” and “authority,” and to Science and its new methods of legitimizing knowledge. He declared, in effect, that every decision was
an experiment to determine the validity of the hypothesis that the decision would “work,’’ that Scientific observers could then record their observations of
experimental results, and that the sum total of those observations would become the record of experience, or knowledge. Even under presumably identical
circumstances, the same experiment might not produce identical outcomes. It probably did not occur to him that in mentioning “cause and effect,” he was citing a
concept that is central to both Science and daytoday administration. Any managerial decision (cause) seeks to achieve an effect (goal, end, objective, value), just as
the Scientist hopes that an experiment will achieve hopedfor results, whether in a laboratory or as a bomb is dropped over Japan.
To be sure, Sir Kenneth did not specifically endorse Scientific law as a legitimate basis for administrative authority and, indeed, the subject is seldom discussed in the
modern literature on organizations. Since he did not wholly reject the concept of authority itself, however, my translation of his views seems reasonable. The granting of
authority, to repeat, must inevitably depend upon the belief or hope (especially in the case of parents) that those who legitimately exercise that authority possess the
requisite knowledge to do so. The opposite view (those in authority do not need to know anything at all) remains indefensible.
In order to understand why Science, even in its failed or incomplete state, remains a threat to the concept of legitimate authority, it is necessary to grasp the essentials
of the shift in thinking from the certainty of God’s Word to the uncertainty of Science. In the premodern view, God was “the source of all authority, the maker and
master of all that there is, the author of the world and its laws, both physical and moral. The authority of parents, or priests and kings, of teachers, and of executives
[came] from God. Each [played] a role in the divine scheme of things.”3 The idea that God is both “master” (executive) and “maker of laws” (legislator), not to mention
final judge of human worth, remains powerful today, even in those societies that claim to have separated church from state. A respected com
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mentator on ethics and morality in public life not only begins her major work with a passage from the Bible, but declares:
Issues such as whether to perjure oneself to protect a political relationship, or whether to feign worship of a hated deity in order to escape persecution,
were once hotly debated among the theologians and philosophers. What remains of their debate may be fragmentary, at times unsystematic. But their
writings are alive to us still....Some now look back with derision or impatience at the Stoics, the Muslim mystics, the Early Christian fathers, or the rabbis
for their passionate pursuit of minute distinctions. Nevertheless, we have much to learn from these traditions. Without such groundwork, larger distinctions
often blur, as they now have.4
It has long been common for the leaders of both “religious” and “secular” societies, especially the United States, to use God or moral standards attributed to God to
justify their decisions. President William McKinley, after much agonizing about entering into war with Spain, experienced a revelation that “there was nothing left to do
but to...educate the Filipinos, and uplift and civilize them, and by God’s grace do the very best we could by them, as our fellowmen for whom Christ also died.”5
President Franklin D. Roosevelt vowed to defeat Japan in World War II with Divine help (“so help us God!’’). When Filipino President Ferdinand Marcos declared
martial law in 1972, he announced that God had used “signs” to instruct him to do so.6 And when President Jimmy Carter met with an auditorium full of government
employees in Washington, D.C., in 1977, he instructed them to “get married, if you are living in sin, and [if] you have left your spouses, go back home....I’mvery
serious about this.”7
The revolutionary change in thinking from certainty to uncertainty is less widely appreciated than it should be because Science is generally considered applicable
only to those labeled “Scientists,” the experimenters who labor in obscurity except for occasional “breakthroughs.” The decision rules of Science, however, are
administrative principles, in that they prescribe how Scientific communities should decide what is true: These principles include:
the requirement that the knowledgeclaims of science be in principle capable of test (confirmation or disconfirmation, at the least indirectly and to some
degree) on the part of any person properly equipped with intelligence and the technical devices of observation and experimentation. The term
intersubjective stresses the social nature of the scientific enterprise. If there be any “truths” that are accessible only to privileged individuals, such as
mystics or visionaries—that is, knowledgeclaims which by their very nature cannot independently be checked by anyone else—then such “truths” are not
of the kind that we seek in science. The criterion of intersubjective testability thus delimits the scientific from the nonscientific activities of man. (emphasis
in original)8
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Together with the widely accepted contemporary view that a knowledgeclaim never can be proved beyond question, only disproved,9 the principle is that Scientists
should accept only the evidence they have collected themselves or have studied and accepted of their own volition. Superiorsubordinate relationships among members
of the Scientific community are inappropriate, and so are the “truths” proclaimed by religious figures. The existing knowledge is whatever has been agreed to by
Scientists concerned. Research Scientists, of course, cannot adhere to their own basic principles because some Scientists (“professors”) hold authority over those of
lesser rank (“instructors” and, of course, “students”), but the Scientists at least give lip service to those principles.
Managers who exercise authority over other humans are also Scientists, and universities often offer programs in “Management Science.’’ Any managerial decision
begins an experiment to test the hypothesis that the decision will achieve the desired objective, the most standard “ifthen” hypothesis imaginable.10 Managers,
therefore, also are experimental Scientists whose laboratories include the organizations they manage, the members of those organizations, and anyone and anything
else affected by their decisions. To whatever extent possible, these managers are expected to rely upon the accumulated observations of past experiments conducted
under similar conditions, a body of judgments and experience about previous causeeffect relationships.11 Decisions reflect the hopes of managers that their
assessments of “probabilities” will give a favorable answer to Sir Kenneth’s question, “does it work?” No matter how “sophisticated” their analyses, managers can do
no more than hope.
We are not accustomed to having political leaders and other managers announce that their decisions are experiments, that those affected by the decisions are
experimental subjects, and that success is wholly problematic. Were they to do so, they might be accused of weakness, vacillation, and indecision. Yet the concept of
strong and decisive leadership is out of step with the great contribution of Western Civilization—uncertainty. No leaders can possibly know they will win the wars they
choose to enter, but they must pretend that they do indeed know. This fundamental contradiction poses a problem for contemporary philosophers who are expected to
defend the cultures within which they live but who must then wrestle with such intellectually intractable problems.
One oftrepeated solution is to distinguish between a form of authority based solely upon assigned position, and a second form of authority based upon mastery of
knowledge, but the explanations of how these forms of authority should function can become very twisted. It can be argued, for example, that the “epistemic” authority
of college professors is indeed based upon knowledge, but that any teacher really “has authority only to the extent that...students grant it...by acknowledging him as an
authority for them.” Those with “performatory” authority, on the other
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hand, should have the ability to command obedience by virtue of their positions.12 This seems invalid in both directions. Students whose grades may determine their
futures, and who must take prescribed courses, are in no position to reject the authority of their teachers. “Performatory” authority, or authority without knowledge, is
as empty a justification as ever.
In the premodern view, those in authority were assumed to know God’s Word. Yet the oftrepeated question, “Does God exist?” never has made sense. The
appropriate question always has been, “Who speaks for God?” The answer to that question is a byproduct of organizational design in which one human is considered
a legitimate spokesperson for the Supreme Being. As unsuitable as the answer might be, that premodern view was more internally consistent than the modern version
that endorses the issuing of orders by those who know nothing at all.
The knowledge issue remains largely unexplored because it would be much too uncomfortable to confront. In addition to the untenable position outlined above, there
is often a vague allusion to the alleged benefits of ‘‘democracy.” Sir Kenneth, for example, used a popular version of democratic political theory in asserting that “to try
to suppress opinion [knowledge claims] which one doesn’t share is much less profitable than to tolerate them.”13 This assertion ignores the fact that all versions of
“democracy” have assumed from the beginning that citizens do not reach decisions through voluntary agreement, and that political interaction is limited to male heads of
households, a belief resoundingly endorsed today by many religious leaders. Sir Kenneth also implies that individuals can be left to do as they please, despite laws or
norms to the contrary. As I will later show, the reliance upon “individualism” is of little help.
Ironically, the modern view of uncertainty is not all that startling on a commonsense basis. Who expects a president of the United States to know what every
member of the Cabinet is doing, let alone what every federal employee does and should do? This is not enough, unfortunately, to come to grips with the problem. If
nobody in a position of authority can know enough to exercise that authority, why does the authority exist at all? The premodern concept of certainty has been
abrogated by Science, which is to say that “knownothing,” a label of political derision,14 has become the unpublicized operational principle that undergirds authority in
the modern world. The problem cannot be solved by an endless search for “competent” managers who are wholly uptodate on “Scientific” approaches to decision
making.
This accounts, I think, for Sir Kenneth’s rather dour, but very incomplete, analysis of what has happened since the change in thinking. “In its first glorious century,”
he noted, “the appeal to reason and experience was a triumph for the human intelligence.” Few philosophers and historians noticed “that the triumph of rational
philosophy had resulted [by the midnineteenth century] in a new form of barbarism.”15 The same outcomes
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obviously have persisted in this century, the most destructive wars in history having originated in the West, the region presumably most dedicated to that “triumph for
the human intelligence.” Slavery, of course, is an old form of barbarism that became worse in the modern world.
SIMPLIFYING THE CATEGORIES
Max Weber’s writings became widely available in the United States only when translations arrived after World War II, but he remains the best known analyst of the
modern “idealtype” bureaucracy. I suggest here that Weber’s famous typology of authority should be drastically revised. Two of his categories (“charismatic” and
“traditional”) should be combined, his third category (‘‘legalrational”) should be acknowledged but expanded, and, above all, we should end the practice of dealing
with such categories on a superficial basis. Perhaps without conscious intention, Weber’s approach made it easy to condemn bureaucracy as a form of excessive
authority without challenging the concept of authority itself. Indeed, bureaucracy is supposed to be a form of knowledgebased authority, so that it is slightly more
defensible than the “democratic” forms of ignorancebased authority that presumably protect us from oppressive bureaucrats.
Weber borrowed “charisma” from a church historian’s use of a quote from St. Paul who, in turn, had used the word to refer to gifts or powers that were direct
manifestations of God’s grace.16 Jesus was the primary example for St. Paul, but Weber also had Mohammed in mind,17 and it may be inferred that such historic
figures as Moses have similar status in other cultures. Such leaders often articulated “the promise of a new Truth, which is absolute, unshakeable and solid, but
previously unknown.”18 By vaguely referring to such mundane characteristics as “specifically exceptional powers or qualities,” Weber opened the door to longrunning
debates about the “charisma” (or lack of it) displayed by George Washington, Abraham Lincoln, Franklin Roosevelt, Clark Gable, General George Patton, Martin
Luther King, John Kennedy, General Colin Powell, Henry Ford, Ronald Reagan, and Lee Iacocca, not to mention Adolf Hitler and Saddam Hussein. Clearly, the
contemporary use of “charisma” is at odds with the original intention, now broadened to include “speakers who hold their audiences spellbound, show business
celebrities who leave their fans weakkneed, and almost any variety of magniloquent blowhard....St. Paul would find it all quite puzzling.”19
The present day usage of “charisma” not only violates the premodern concept but is equally offensive to Science because it “has failed to meet the standards [of]
usefulness to succeeding investigators in their further research and writing.”20 Modern Social Science cannot cope with a concept based upon the premodern concept,
but neither can it provide valid methods for measuring “charisma.” The failure and/or unwillingness of Science
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to deal forthrightly with the issue of authority contributes mightily to the confusion.
The original “charismatic” authority figures appear to be the earthly originators of “traditional” authority. The charismatics left behind them, often in social commands
inscribed in the holy books of various religions, the ‘‘established beliefs in immemorial traditions”21 and beliefs “in the rightness and appropriateness of the traditional
way of doing things.”22 More concretely:
Not only hereditary bureaucracies but such practices as Jewish and Islamic food prohibitions fall under the scope of traditional authority. Their meaning
depends not on the actual pollutedness of pigs or alcohol, but on the fact that once very long ago people rejected them. The sense of authority, or stability,
comes from the very length of time this memory has endured; it is what we mean when we speak of a custom as hallowed by tradition...they make sense
only in terms of myths and legends, rather than in terms of practical and immediate life.23
Because the traditions are attributed to the original charismatics, those earthly originators or transmitters of religious doctrines, “traditional” authority is more reasonably
defined as a continuation of “charismatic” authority, thereby combining the two forms of authority into “charismatic/ traditional,” a single category. Significantly, the
authority of those charismatics, Jesus being only one prominent example, becomes much greater after their deaths than when they walked the Earth. Indeed, the
charismatics of history may often have been social inventions badly needed to show how Supreme Beings transmitted their instructions to ordinary mortals. In many
cases, charismatics have not been described as the original authors of the instructions they disseminated (Moses), but, in other cases (Confucius), they are considered
the authors.
Weber’s third category, “legalrational,” is the one associated with modern impersonal organizations, but it also reflects the incompatibility of Science and authority.
“Legal” authority is a constitutional grant and, even if “democratically” legitimized, has nothing to say about knowledge. The U.S. Constitution and “democratic”
political theory, are totally silent on the presumably necessary connection of authority and knowledge,24 with political theorists often relying upon such vague concepts
as “social contract,” “servants of the people,” and “general will.” “Rational” authority refers to conscious efforts to devise the best available means of implementing and
achieving social and organizational ends, a vague and unacknowledged bow in the direction of the classical causeeffect sequence of Science. In a sense, even the
“knownothing” political executive is expected to use Scientific knowledge in making “legalrational” decisions. Weber acknowledged as much when he observed that
“bureaucratic administation means fundamentally the exercise of control on the basis of knowledge” (emphasis added).25
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All too often, organizational and political analysts play down the importance of authority and its contradictory premises. It is often assumed that in modern
“democratic societies,” for example, authority cannot exist in the pure forms of idealized hierarchies, and that managers have no choice but to act in nonauthoritarian
ways.26 A “generalist” manager, some argue, cannot supervise in detail the activities of “skilled specialists.” Others assert that organizations can in general be viewed as
collections of individuals who “freely” choose to “cooperate’’ in the pursuit of common objectives. Those in command, moreover, may be quite limited by law or
custom in the punishments they can visit upon subordinates. If legitimized authority is all that insignificant, however, why grant it at all? Why reward the holders of
supposedly meaningless authority with much larger salaries than are paid their subordinates? Does it make sense to assume that assemblyline workers, coal miners,
and garbage haulers, to cite only three obvious examples, report to work every day out of sheer love for the job, and that more challenging and more lucrative
employment is instantly available to them? Authority and subordination are not empty of meaning.
The vague connection between the Protestant Reformation and Science accounts for the impersonal aspects of modern organization. The principle of the
Reformation was that individuals constitute a “universal priesthood of all believers” and should rely upon direct communication with God for moral guidance and
instruction. A church, corporation, or government agency, therefore, should not seek to control the inner conscience of members but only those aspects of behavior of
immediate relevance to basic membership and task performance. In this sense, organizations do not control whole persons, and it is easy to visualize them at work as
parts, or “cogs,” of machines. Notably, however, the Reformation denied only the authority of the church and its priests, not authority itself.
Given the simplification outlined here, “charismatictraditional” and “legalrational” are the only two approaches to authority that have been used since the invention
of Civilization and the great religions between two and five thousand years ago. The shift from God’s Word to Scientific Law is incomplete and unworkable because
Science and authority remain wholly incompatible. Indeed, Science becomes more and more dangerous to the world as it becomes more and more the instrument of
the authority structures its philosophy deplores. The Western world has obscured the dangers by inventing social doctrines that appear to challenge or eradicate
topdown authority but actually reinforce it.
THE FALSE PROMISES OF “INDIVIDUALISM” AND “FREEDOM”
To whatever extent modern democratic governments and other organizations in such societies have displayed authoritarian tendencies, the tendencies often are viewed
as temporary or unusual departures from
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otherwise accepted norms. To some observers, the modern bureaucratic organization has become almost a permanent transgressor of democratic norms, having
produced a “major [and ugly] transformation” in American values “since the years of our national founding.”27 Among these “founding values’’ were individualism,
indispensability, community, spontaneity, and voluntarism, along with the “traditional American conceptions of legitimacy [in which] the flow of approval was upward”
from the rank and file to the governors and “the belief that each person could know and achieve his or her interests better than any collectivity.” All decisions by a
collectivity or community should, in this view, be wholly voluntary on the part of the individuals involved. If the governing parties are granted authority, it is only with
accountability to those who relinquish that power,28 a concept of popular sovereignty that hides authority by pretending that ordinary citizens have delegated that
authority to elite governors.
Any stirring advocacy of democracy and the American values developed by the owners of slaves cannot survive or bear close analysis. To begin with the value of
“individualism,” the idea that each person knows what he or she wants and should be left free to seek it is absurd. Suppose, for example, that an individual is granted
authority to make decisions in pursuit of his or her interests. To be of social significance, the decision of that individual (A) must affect at least one other individual (B). If
B must accept A’s decision because A has legitimate authority to make it, then B must obey A, a relationship of topdown authority. If, on the other hand, A must
secure B’s wholly voluntary agreement, the decision becomes collective or joint and is no longer an individual decision. Individualism, therefore, is merely a restatement
of authoritarianism that uses the doctrine of “freedom” to hide authoritarianism. In this example, the freedom and individualism of A leave nothing for B.
The notion of “voluntarism” was a very limited one from the beginning, and, while its operational meaning is slightly different now, the changes are relatively
insignificant. Women, of course, were expected to carry out their traditional roles of fulltime subservience to their husbands. Children were and are restricted to
activities directed or approved by parents and society. The only function of slaves was to obey, and the same is now the case for employees; the unskilled boss can fire
the skilled subordinate. To be fired for incompetence is indistinguishable from being fired for disobedience.
Reduced to essentials, individualism originally applied only to the activities of rich, white males, and only then during their leisure time. If and when these males
assembled to make decisions about public or community affairs, they met as the unelected representatives and spokespersons for their individual households and
plantations. What we now label sexism and racism were (and are) only exclusions from positions of authority in community, organizational, and family decision making.
Page 263
If the United States and other societies gradually have been moving toward the inclusion of those previously excluded, whether as voters or workers, this has little to
do with decision making at the workplace. Freedom and other human and civil rights are as incompatible as ever with legitimate authority. As a managerial concept,
individualism is only a concept that expands authoritarianism and centralization in organizational settings. The widespread condemnation of committees and groups, for
example, is usually accompanied by arguments that individualist decision making is fully in accord with democratic traditions, an argument that is precisely correct. The
“democratic” tradition of individualism is indeed authoritarian. To question the claims made for the “founding values” of this country and others, however, is not to
suggest that any other society has solved the universal problems outlined in this chapter, but only to argue that individualism and freedom are less than they often appear
to be and, indeed, virtually the opposite of what they appear to be.
SUMMARY
The partial “separation” of Church and State in the Modern West has encouraged Social Scientists to study politics and administration with little reference at all to the
importance of God’s Word as a continuing source of “knowledge” that guides elected leaders in their decision making. With dedicated religionists increasingly attacking
anything and everything that can be labeled ‘‘secular,” there is no reason for those Social Scientists to ignore religious influence out of fear they will be labeled “anti
religion.” The most secular and democratic societies retain all of the premodern decision structures that were the original targets of modernism. This society, along with
others, still searches for “charismatic,” “strong,” and “decisive” leaders who do not make mistakes, a search that should long ago have been abandoned as fruitless. The
only distinctive theory of the Modern West—uncertainty—has yet to be put to use.
As it stands, there is one religion and one organizational design throughout the civilized world, the religion and design of topdown authority. Paradoxically, this offers
a slight ray of hope; if all societies are basically identical, or are much more alike than different, universal change and innovation may be less of a chore than we have
been led to believe by notions of “cultural differences.” Given the significance of the contradictions outlined herein, the world might well take up the challenge of Science
to reject topdown authority and the religious principle of certainty. Intellectuals trained in the traditions of secularism and churchstate separation are not as alert as
they should be to the everincreasing merger of politics and religion.
Protestant ministers, once the most dedicated advocates of churchstate separation, now routinely step forward as presidential candidates. One,
Page 264
Jesse Jackson, has defined himself as “liberal,” while another, Pat Robertson, is considered a “conservative.” During the 1988 campaign, the latter was a serious
Republican candidate for some time. He went so far as to declare that God had commanded him to seek the presidency.29 As noted earlier, presidents often have
referred to God or the Bible when making important decisions, especially those involving war and peace. It is something else again for a preacher to declare that God
has selected him to become President of the United States, presumably after carefully considering the qualifications of all other eligible citizens.
NOTES
1. Kenneth Clark, Civilization: A personal view (New York: Harper & Row, 1969), 193.
2. Ibid., 195, 197, 208, 218–220, 326–327.
3. Richard Sennett, Authority (New York: Knopf, 1980), 93.
4. Sissela Bok, Lying: Moral choice in public and private life (New York: Vintage Books, 1979), xx–xxi.
5. Julius W. Pratt, A history of United States foreign policy (Englewood Cliffs, NJ: PrenticeHall, 1955), 386.
6. New York Times, December 4, 1972.
7. Washington Post, February 11, 1977.
8. Herbert Feigl, The scientific outlook: Naturalism and humanism, in Readings in the philosophy of science, edited by Herbert Feigl and May Brodbeck, 9–11 (New York: Appleton
CenturyCrofts, 1953).
9. Karl R. Popper, The logic of scientific discovery (New York: Harper Torchbooks, 1968).
10. Martin Landau, On the concept of a selfcorrecting organization, Public Administration Review 33(6) (November/December 1972): 533–542.
11. Herbert A. Simon, Administrative behavior, 2nd ed. (New York: Free Press, 1957), 49.
12. Richard T. DeGeorge, The nature and function of epistemic authority, in Authority: A philosophical analysis, edited by R. Baine Harris, 76–93 (University: The University of
Alabama Press, 1976).
13. Clark, Civilization, 195.
14. For a brief description of the history of the term in U.S. politics, see Jay M. Shafritz, The Dorsey dictionary of American government and politics (Chicago: Dorsey Press, 1988), 312.
15. Clark, Civilization, 220.
16. John W. Gardner, The heart of the matter: Leaderconstituent interaction (Washington, DC: Independent Sector, 1986), 20.
17. Sennett, Authority, 21.
18. Ibid.
19. Gardner, The heart of the matter, 21–22.
20. Ibid., p. 22: John Gardner, On leadership (New York: Free Press, 1990), 35.
21. Sennett, Authority, 21.
Page 265
22. Nicos P. Mouzelis, Organization and bureaucracy: An analysis of modern theories (Chicago: Aldine, 1967), 16.
23. Sennett, Authority, 267.
24. Dwight Waldo, The enterprise of public administration: A summary view (Novato, CA: Chandler & Sharp, 1980), 79.
25. Max Weber, The theory of social and economic organization (London: Oxford University Press, 1947), 311, quoted in Mouzelis, Organization and bureaucracy, 189 n.2.
26. Michael M. Harmon and Richard T. Mayer, Organization theory for public administration (Boston: Little, Brown, 1986), 380.
27. William G. Scott and David K. Hart, Organizational values in America (New Brunswick, NJ: Transaction Publishers, 1989), 27.
28. Ibid., 28, 31, 46.
29. Washington Post, February 15, 1988.
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Index
Accountability:
and elitist invisibility shielding, 112;
mechanisms of, 118
Administrative reform. See Government reorganization;
Organizational change
Administrative state, 102;
centralized structure of, xxiv;
elite power structure in, 111;
facilitative versus dominating nature of, xii–xviii;
securitypolicing orientation of, xxiv–xxv
Affirmative action policies, 185;
legal actions against, 187;
origins and evolution of, 185–87
AfricanAmerican workers, 183, 191, 194, 196
Agency theory, 39–42;
flaws in, 41–42;
publicsector application of, 40
Airline deregulation, 138
Alchian, Armen A., 39–40
Aldrich, Howard E., 32
Americans with Disabilities Act, 184
Ancient civilizations, organization in, xvi–xvii
Argyris, Chris, 28, 42, 46, 73
Aristotle, 68
AsianAmerican workers, 183, 194, 196
Barnard, Chester, 28
Behavioral theory of organization, 30
Bentham, Jeremy, 35
Block grants, 137, 141
Bodin, Jean, 68, 76
Bounded rationality, in decisionmaking models, 29, 65
British Oil Company, xix–xx
Bureaucracies:
aristocratic tendency in, 113;
capitalism and, 20;
categorization of, 169;
classical/formal theories of, 25–26, 27;
hierarchy and, 10–11;
largescale corporate, 27;
Marx’s view of, 23–24;
organizational elite in, 110, 114–18;
and policy implementation, xxi–xxii;
rational, 44;
representative, 187–88;
Weber’s view of, 113–15, 259
Bureaucratization of society, 25, 27
Burnout, phase model of, 231–48;
healthrelated covariants of phases in, 240–45;
incidence and persistence of phases in, 235–40;
mental status in, 244–45;
operational definition of phases in, 232–33;
physical symptoms in, 240–44;
and prevention/amelioration of burnout, 248;
reliability and validity of, 248;
usefulness
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and applicability of, 232, 248;
validity of phases in, 232–35;
worksite features associated with burnout in, 246–47
Bush, George H. W., 137, 141
Butterfly effect, in chaos theory, 81
California Proposition 209, 187
Canadian cabinet reforms, 172
Capitalism:
bureaucratic, 20;
corporate, xxii–xxiii, 27, 39, 41;
and dynamics of chaotic change, 85;
global, xxv–xxvi, 84–86, 87–89;
and instrumental reasoning, 45;
Marxist critique of, 21–22, 44–45;
and modern organization theory, 47;
and structuralfunctional theory, 25
Capra, F., 77, 83
Carroll, Glenn R., 32
Carter, Jimmy, 140–41, 256
Chaos and transformation theories, 73–89;
ancient origins of, 76, 82;
contemporary, 83–84;
dialectical nature of, 77–78, 80, 81, 82;
ethics and, 88;
functional/practical implications of, 64;
and global/worldsystems design, 84–86;
key concepts of, 80;
limitations of, 87;
macrocosmic and microcosmiclevel events in, 78–82;
modern origin of, 76, 82–83;
natural science tradition in, 75, 77–81;
nonequilibria orientations in, 81–82, 83;
and organization theory, 86–87;
relevance and utility of, 74;
selforganization concept in, 81;
social science tradition in, 77–78, 81–82;
and systems theory, 80;
as tool for manipulation and control, 87–88;
transformation and evolution in, 82–84
Civil Aeronautics Board, elimination of, 138
‘‘Civilisation” (television series), 254–55, 258
Clark, Kenneth, 254–55, 258
Class exploitation, organizations as instruments of, xxii–xxiii
Classical/formal theories of organization, 24–27;
instrumental and technical rationality in, 24, 25–26, 49, 98, 103–4;
and scientific management theory, 26;
and theories of bureaucracy, 25–26
Clean Air Act, 142
Clinton, Bill, 137, 141, 184
Club of Rome, 78
Cohen, Michael D., 64
Congress:
airline deregulation of, 138;
creation of new federal agencies/programs by, 136–37, 139–41;
and regulatory decentralization, 142–43;
and state/local mandates, 142
Consumer Product Safety Commission, 136
Contingency theory, 168
Contracting out, 37, 40, 138, 143, 145, 163
Corporate capitalism, xxii–xxiii;
and agency theory, 41;
rise of, 27;
and transactioncost analysis, 39
Corporations:
largescale, 27, 71–72;
power elite in, 99;
problem of legitimacy in, 112.
See also Globalizing corporations;
Multinational/transnational corporations
Critical reasoning, 45
Critical theory, 44–49, 65, 66;
and creation of social reality, 19;
and elite theory, 64;
and Habermas’ modes of reasoning, 44–45;
Marxist/neoMarxist, 44–45;
nonMarxist, 45–49;
origination of, 20;
political democracy in, 46–47;
principles of, 48
Cultural norms and values, organizational influence on, xx–xxi
Cutback management, 162
Decentralization:
and “fendforyourself” federalism, 137, 159;
and intergovernmental management, 153;
and market theory, 35–36;
politics and, 163;
regulatory, 142–43;
and transactioncost analysis, 38–39
Decision making:
behavioral organization theory of, 30;
bounded rational
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ity model of, 29;
incremental approach to, 64;
of public versus private managers, 6–7;
role of conflict in, 7;
vortexsporadic style of, 7
Decision theory (Simon), 29–30
Deconstructionist movement:
and garbage can theory, 64–66;
and natural selection theory, 66
Democracy:
“corpocracy” and, xxv–xxvi;
and humanistic organization theory, 42–44;
and organizational necessity, 113;
political, in critical theory, 46–47
Democratic Party, affirmative action and, 187
Demsetz, Harold, 39–40
Denhardt, Robert, 24, 44, 45–46
Department of Education, creation of, 141
Department of Energy, creation of, 141
Department of Transportation, 138
Department of Veterans Affairs, 141
Deregulation, 159, 163;
airline, 138;
of savingsandloan system, 139
Developmental policies/programs, xxii
Dewey, John, 68
Dialectical polarities, research on, 83–84.
See also Marxist/neoMarxist theory
Dialectics of Nature,21
DiMaggio, Paul J., 70
Downsizing:
and organizational elite theory, 101, 112–13;
and social/economic displacement, 97
Drucker, Peter, 74, 78, 79, 85
Drug Enforcement Agency (DEA), 136–37
Durkheim, Emile, 69, 77, 83
Economic models of bureaucracy, 164–66
Ecosystem, global, and corporate elites, 79
Elite theory of organization, 97–123;
assumptions and foundations of, 110–13;
centrality of organizational necessity in, 109, 113–15;
concept of organizational elite in, 110;
consensually integrated model in, 107;
and corporate and governmental legitimacy, 112–13;
criteria of inclusiveness in, 106–7;
defining elite in, 104–6;
dialectical process in, 120–21;
and elitist democratic politics, 104;
hierarchy in, 115–18;
implications of, 121–23;
instrumental and political rationality in, 110–12;
membership of the masses in, 111–12;
models of, 106–9;
and normative theory of organizations, 120;
organizational cohesion and social control mechanisms in, 118–19;
organizational elite model in, 109;
plural elite model in, 107–8;
power elite model in, 108–9;
prescriptive dimension of, 120;
and rational choice model, 120;
ruling class model in, 109;
secrecy and elitist invisibility in, 101, 112, 114;
significance and rationale of, 100–102, 120–23;
theoretical background of, 102–4;
utility of, 64
End to Hierarchy and Competition, An, 23
Engels, Frederick, 21;
dialectical law of nature of, 77–78, 80, 81, 82
Environment:
and institutional theory, 70, 71–73, 103;
multinational/transnational corporations and, 19–20, 31–32;
and natural selection model, 66;
and populationecology model, 32–33;
and resourcedependence model, 32–33;
and SET (social/economic/technological) changes, 167, 170, 171
Environmental dependency reform models, 167–72, 175
Environmental Protection Agency, 140
Equal employment opportunity (EEO) policies, 185–87, 188
Evolutionary theory, concept of selforganization in, 81
Fair Employment Practices Committee (FEPC), 186
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Farabi (Persian philosopher), 68
Farmers Home Administration (FmHA), 191
Fayol, Henri, 24, 27
Federal agencies:
characteristics of administration in, 5–6, 13;
creation of, 136–37, 167.
See also Government reorganization;
Public organizations
Federal Aviation Administration, 138, 150
Federal Deposit Insurance Corporation (FDIC), 139, 140
Federal employment:
antidiscrimination policies in, 185;
women and minorities in, 183–84
Federal Savings and Loan Insurance Corporation (FSLIC), 139, 140
Federal Trade Commission (FTC), 142
Female workers:
in federal government, 183;
and workplace discrimination, 186
Financial Institutions Reform, Recovery, and Enforcement Act, 140
Fischer, Frank, 24, 42–43, 45, 47
Follett, Mary Parker, 42, 84
Forester, John, 44
Freeman, John H., 32
Galbraith, John Kenneth, 68
Garbage can theory, 174;
criticism of, 65, 66–67;
incremental decisionmaking approach in, 64
General Health Questionnaire (Goldberg), 244–45
General Motors, xix–xx
Global capitalism, chaos/transformation theories and, 84–86, 87–89
Global organization theories/behaviors, xxx–xxvi
Globalizing corporations:
agency theory and, 41;
“corpocracy” of, xxv–xxvi;
and designed forces of chaos, 85;
negative impacts of, xi, 79;
organizational elite of, 115–16;
and transactioncost theory, 39
Golembiewski, Robert T., 36, 42, 231
Gore Commission, reinvention strategy of, 171
Government Accounting Office (GAO), 140
Government reorganization, 159–76;
bureaushaping versus size of organization in, 165–66;
contingency approaches to, 168–69;
and creation of new organizations, 136–37, 140–41, 167;
cultural/ideational aspects of organization in, 175;
cutback management approach in, 162;
decentralization/devolution of authority, 35–36, 137, 142–43, 159, 163;
deregulation, 159, 163;
dissemination of, 159;
dominance of fad and fashion in, 159, 168;
economic models of, 164–66;
environmental dependency models of, 167–72, 175;
environmentorganization linkage in, 175;
individual political/administrative actors’ motivations in, 161–62, 164–65;
individualorganizational linkage in, 175;
institutional models of, 172–74, 175;
and management theory, 170;
manageralism and, 163–64;
nature of task environment in, 168;
political science models of, 160, 161–64, 167–68, 172–74;
population ecology approaches to, 169–72;
pragmatic/ad hoc analysis of, 161–62, 174;
and privatesector management, 163;
purposive models of, 161–67, 172, 175;
r and k strategies in, 171–72;
and “SET’’ anomalies, 167, 170, 171;
theoretical approaches to, 160–74;
and ungovernability thesis, 164;
utility/efficacy of, 159, 165
Governmentcorporate partnerships, interestbased arrangement networks in, xxiv
GrammRudmanHollings budget control process, 139, 140
Grand Evolutionary Synthesis Theories (GESTs), 83
Grantinaid programs, 137, 141–42
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Great Depression, 115, 167
Gulick, Luther, 24, 26–27, 69
Habermas, Jurgen, 44–46
Hall, Peter Dobkin, 102
Hannan, Michael T., 24, 32
Harmon, Michael M., 48
Health Alliance Organization, 141
Health reform bill (Clinton), 141
Hegel, Georg, 24, 25–26, 68, 69, 76, 77
Heraclitus, 82
Herzberg, Frederick, 42
Hierarchy:
administrative, 137;
in agency theory, 41;
in critical theory, 46–47;
in design of public organizations, 137;
Down’s law of, 11;
and individual alienation, xxiii;
in interpretive theory, 48;
in organizational theory, 22–23;
as organizing mode, 145;
in public organizations, 10–11
Hispanic workers, statistics on, 183, 194, 196
Hobbes, Thomas, 35
Human relations theory of organizations, 27–29;
and worker exploitation, 42–43
Humanistic organization theory. See Organizational humanism theory
Hume, David, 35
Hummel, R., 44, 45, 46, 48
Ibn Khaldun (father of sociology), 68
Individual rights, organizations as threat to, xxiii–xxiv
Innovation, in private versus public sector, 8.
See also Organizational change
Institutional economics, transactioncost analysis in, 37
Institutional state:
organizational elite in, 110–11;
and transnational corporations, 102
Institutional theories of organization, 67–73;
ancient and medieval roots of, 67, 68;
change and environment as key bases of, 73;
classical/traditional, 69–70;
criticisms of, 67, 71–72;
of early institutionalists, 68–69;
environmental role in, 70, 71–73;
functional/practical implications of, 64;
learning organizations and, 87;
and Marx’s dialectical evolutionary theory, 68–69;
modern structuralfunctional foundation of, 69;
multinationals and, 70–71, 73;
and neoinstitutionalism, 70–73;
political science models of, 172–74, 175
Instrumental rationality:
in critical theory, 44–45;
in organizational elite theory, 110–12, 117;
and organizational goals, 98;
in structural/functional theory, 26, 65;
in traditional organization theory, 49, 98, 103–4
Intergovernmental management (IGM):
decentralization and, 143;
nonhierarchal authority relations in, 137
International Telephone and Telegraph (ITT), xix–xx
Interorganizational coordination, in public versus private sector, 12–13
Interpretive theory, 47–49;
basic premise and principles of, 47–48;
and creation of social reality, 19;
elite theory and, 64;
garbage can theory and, 65;
natural selection theory and, 66
Jackson, Jesse, 264
Jensen, Michael C., 40
Job satisfaction, of public versus private managers, 4–6
Johnson, Lyndon B., 171, 186
Kant, Immanuel, 20, 47, 68
Kennedy, John F., 186
Labor government reforms, 162–63
Lawrence, Paul R., 32
Lazlo, E., 83
Learning organization, chaos theory and, 86–87
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Legitimacy, of elite power structure, 111, 112–113
Legitimate authority:
and charismatictraditional authority figures, 259–60;
and false promises of individualism and freedom, 261–63;
God as source of, 251–52, 255–56, 258;
and knowledgeclaims of science, 251–53, 257;
and legalrational decisions, 260;
and managerial decisions, 257;
and modern view of uncertainty, 258;
and performatory authority, 257–58;
and scientific principle of uncertainty, 251–52, 257;
and Western concepts of freedom and human rights, 253
Lewin, Kurt, 72, 77–78, 83
Life cycle theory, 136
Lorsch, Jay W., 32
Louima, Abner, 216–17
Machiavelli, Niccolò, 68
Macro analysis, xi, 20
Management:
and ideology of managerialism, 117;
intergovernmental, 137;
style, public versus private, 8–9;
Taylorized system of, 26
Managementworker conflict, organizational management of, xxiii
Managerial bias, in organization theory, 20, 47, 49
Managers:
in elite power structure, 111, 112;
as experimental scientists, 257;
legitimate authority of, 257;
job satisfaction of, 4–6;
as micro/operational elites, 117–18;
motivations of, 3–4;
public, crisis management of, 10
Mandatory Arrest Law of Domestic Violence (U.S.), 74–75
March, James G., 64
Marcos, Ferdinand, 256
Market theory, 34–42, 103–4;
administrative model of, 35–36;
and transactioncost theory, 37–39;
utilitarianism and, 35
Marx, Karl, 21
Marxist/neomarxist theory, xxii, 20, 21–24, 25, 72, 103;
of alienation, 23–24;
of complementary dialectics, 84;
of dialectical nature of social development, 68–69;
of dialectics of nature of, 77–78, 80, 81, 82;
historical materialist school of, 69
Maslach Burnout Inventory (MBI), 233
Maslow, Abraham, 77;
hierarchy of needs theory, 42
Maxwell School of Syracuse University, 43
Mayo, Elton, 28, 29
McGregor, Douglas, 28, 42
McKelvey, Bill, 32
McKinley, William, 256
Meckling, William, 40
Medicaid coverage, 142
Mental and physical wellbeing, pessimistic view of, 231.
See also Burnout, phase model of
Mentoring, in private versus public sector, 9
Meso analysis, xi, 20
Meyer, John W., 70
Michels, Robert, 20
Micro analysis, xi, 20
Mill, John Stuart, 20, 35, 68
Minorities, and workplace discrimination, 186
Montesquieu, Charles de Secondat, 68
Morgan, Gareth, 24
Morgan Guaranty Bank, 211–12
Mosca, Gaetano, 20
Mulroney, Brian, 163
Multinational/transnational corporations:
dominating role of, 71–72;
environmental impact of, 19–20, 31–32;
foreign relations/international politics role of, xix–xx;
institutional state and, 102;
institutional theory and, 70–71, 73;
and resourcedependence model, 32–33
Myrdal, Gunnar, 68, 77
National Aeronautics and Space Administration (NASA), 150, 167, 171
National Education Association, 140–41
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National Governors Association, 142
National Health Board, 141
Native American workers, 196
Natural selection theory, 32–33;
overview of, 66–67
Neoinstitutionalism, 70–73, 172
New Federalism proposals (Reagan), 141
New public administration movement, 48;
and transactioncost theory, 37
Nietzsche, Friedrich, 65
Niskanen, William A., Jr., 35
Nixon, Richard M., 140
NizamulMulk (eleventhcentury philosopher), 68
Nonprofit sector, state functions of, xxiv
North, Douglas, 67
Office of Management and Budget (OMB), 150
Office of National Drug Control Policy (Drug Czar), 137
Oligarchy, organizational tendency to, 113
Olsen, Johan P., 64
Open systems:
chaos theory and, 86;
versus closed systems, 31
Organization(s):
as change agents, xx–xxi;
destructive aspects of, xxii;
functions, overview of, xvii–xxvi;
nature of, xi–xvii;
open system in, 31, 86;
repressive, xxiii–xxiv;
system maintenance activities of, xx.
See also Bureaucracies;
Federal agencies;
Public organizations
Organization development (OD), 42
Organization of American Culture, 1700–1900, The, 102
Organization theory:
agency, 39–42;
classical/formal, 24–27;
contemporary, common factors in, 29;
contingency, 32;
critical and interpretive, 44–49;
decision and behavioral, 29–30;
informal, 27–29;
interdisciplinary approach to, 50;
managerial bias/ideology in, 20, 47, 49;
market, 34–42;
Marxist/neomarxist, xxii, 21–24, 25;
organizational humanism, 42–44;
overview of, 19–50;
and political theory, 98–99;
populationecology, 32–33;
public/private distinction in, 3–14;
resourcedependence, 32–33;
and social creation of reality, 19;
and systems theory, 30–32;
transactioncost, 37–39.
See also Elite theory of organization
Organizational change:
consequences and implications of, 97;
deregulation and, 138, 159, 163;
downsizing and, 97, 101, 112–13;
in Marxist theory, 21–23;
and normative issues of power and politics, 97–98;
and organization mission, 173;
and organizational elite theory, 101;
and popular culture, xxi;
in private versus public sector, 8, 10–13.
See also Government reorganization
Organizational culture:
and administrative change, 172–74;
concept, 209;
and popular culture, xxi
Organizational elite:
concept of, 110;
hierarchy of, 115–18;
Weber’s position on, 113–15.
See also Elite theory of organization
Organizational humanism theory, 42–44;
foundations of, 42;
and new public administration theory, 43–44
Organizational socialization, 207–29;
change and acquisition stage of, 219;
congruity between individual and organizational goals in, 222–24;
consequences of, 222;
content of, 208–9;
and contradictions between formal/informal and formal process of, 210–11, 212–17;
effectiveness, influencing factors in, 220–22;
encounter stage of, 218–219;
ethics in, 224;
of flight attendants, 224–27;
individual reactions to, 228;
informal/indirect, 210–11, 212–13, 214–17;
and latent messages, 215–16;
mechanisms and techniques, 208, 209–17;
media role in, 218;
of newcomer, 218–19, 220–22;
observational learning in, 212–
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13, 225;
organization culture impacted by, 213;
organizational emphasis on, 211–12;
and personal characteristics, 220–21;
of police officers, 213–17;
and prearrival stage of anticipatory socialization, 217–18;
processes and stages of, 217–22;
and reality shock, 218;
in retail industry, 218;
and role distance behaviors, 226–27;
situational factors in, 221;
symbolic interactionist view of, 219–20;
task mastery in, 219;
and traditional versus adaptive socialcharacter, 212
Organizational society, concept of, xviii
Ostrom, Vincent, 35–36
Pareto, Vilfredo, 28, 83
Parsons, Talcott, 30, 69, 70, 72
Participative management, 43
Performance appraisals, 195
Persian philosophers, as systems theorists, 76, 82
Peters, Guy, 72
Pfeffer, Jeffrey, 32
Phenomenology, 48
Plato, 76
Plural elite model, 107–8
Pluralist/group theory, 103, 104
Political democracy, in critical theory, 46–47
Political economy model, 32–33
Political elite, 108;
defined, 105
Political institutional theory, 40–41
Political science:
models of institutional change in, 160, 161–64, 167–68, 172–74;
new institutionalism in, 172
Political theory, and organization theory, 98–99
Politics:
interest group, 138–39;
and multinational corporations, xix–xx, xxii–xxiii, 102;
organizational, xix–xx;
and organizational structure and process, 102–3;
in public management, 8–9
Population ecology models, 169
POSDCORB theory (Gulick and Urwick), 26–27
Powell, Walter W., 70
Power elite:
concept of, 99–100, 106;
model, 108–9;
as neglected area of organization theory, 98–100.
See also Elite theory of organization
Practical reasoning, in critical theory, 45
President:
creation of new federal agencies by, 136–37, 140–41;
and regulatory decentralization, 142
Prigogine, Ilya, 77, 80, 81–82, 83, 84, 85–86
Priority setting, in public sector, 9
Privatesector organizations:
and corporategovernment partnerships, xxiv;
decision making of, 6–7;
and individual rights, xxiii–xxiv;
job satisfaction in, 4–6;
management style in, 8–9;
manager motivation in, 3–4;
organizational change in, 11, 12
Privatization, 135, 136, 143, 159;
and bureaucracy bashing, 163;
as globalization strategy, xi, xxvi;
and organizational elites, 101;
and public choice model, 36–37;
variety of programs in, 138
Public administration theory:
predictive shortcoming of, 160;
social change and democratic values in, 43–44
Public choice theory. See Market theory
Public organizations:
agency theory and, 40;
bureaucratization in, 10–11;
capacity of, 151–52;
de facto (fendforyourself) federalism in, 137, 141;
decision making in, 6–7;
demographic changes in, 183–84;
diminution and crisis in, xxiv;
globalization and, xi;
institutional management of, 135, 151;
and interagency conflict,136;
interorganizational coordination in, 12–13;
job satisfaction in, 4–6;
legitimacy of, 112;
management style/problems in, 8–9;
manager motivation in, 3–4;
organizational change in, 10–13;
and public choice/
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market theory, 35;
transorganizational management of, 135, 151.
See also Government reorganization
Public service configurations, 135–53;
accountability and regulation in, 145–46, 148;
aggregative processes emphasized in, 144;
and de facto federalism, 137;
decentralization and devolution of authority in, 136, 137, 141–43;
and delivery systems, 152;
economic dimension in, 148–50;
and global marketplace competition, 150;
horizontal fragmentation in, 135, 136–43;
interagency conflict in, 136;
and interest group politics, 138–39;
and intergovernmental authority patterns, 137–38;
management dimension in, 151–52;
multiorganizational coordination of, 145;
nonhierarchical organization design in, 144–46;
pluralization in, 135, 136–37, 139–41;
policy frustration/organizational ineffectiveness in, 139–40;
privatization in, 136, 138, 149;
public interest and democratic responsiveness in, 146–48;
and pursuit of longrun national interests, 145;
and selfreinforcing pluralization, 140
Public workforce diversity, 183–201;
and accessandlegitimacy model, 191–94;
and affirmative action/equal employment opportunity policies, 185–87, 188–89;
and aging of workers, 184;
and assimilation/acculturation, 197–98, 199;
and democratization goals, 188–91;
and demographic changes/characteristics, 183–84, 190–91;
and disability, 184;
and disciplinary actions, 194;
diversity and representation in, 183–201;
and fairnessandequality model, 188–91, 197;
and language/nonverbal communication, 198;
and learningandeffectiveness model, 195–96;
and locus of control/locus of responsibility, 199;
and mistrust of dominant culture, 198–99;
programs, 188;
and representative bureaucracy, 187–88;
and value of expressiveness, 198;
and valuingandintegrating model, 196–99
Qualityofworklife issues, 71
Ramos, Alberto Guerreiro, 45, 46
Ramspect Act of 1940, 185
Reagan, Ronald, 141, 142–43, 162–63
Recruitment:
and fit between newcomer and veteran employes, 223;
occupation socialization and, 209–10
Regulations:
decentralization of, 142–43;
and deregulation, 138, 139, 159, 163;
generic management laws in, 148;
implementation of, 143
Representative bureaucracy theory, 187–88
Republican Party, affirmative action and, 187
Resolution Trust Corporation, 140
Resourcedependence model, 32–33
Robertson, Pat, 264
Roosevelt, Franklin D., 171, 185–86, 256
Rozbeh (Persian philosopher), 68
Russell, Bertrand, 100
Salk, J., 83
Sartre, JeanPaul, 20, 47
Savingsandloan industry:
bailout of, 140, 141;
regulation of, 139
Schumpeter, James J., 68
Schutz, Alfred, 47, 65
Science:
criterion of intersubjective testability in, 256;
principle of uncertainty in, 251–52, 257;
and topdown authority, 251–53
Scientific management theory (Taylor), 26
Scott, Richard, 70
Selznick, Philip, 71–72
Serpico, Frank, 216–17
SET (social/economic/technological) changes, and government reorganization, 167, 170, 171
Silverman, David, 47, 48
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Simon, Herbert, 29–30, 65
Sina, AbuAli, 76
Social science theory:
in administrative reform, 160;
and chaos theory, 77–78, 81–82
SovietU.S. relations, and chaos theory, 84–85
Spiritual organizations, multifaceted nature of, xviii
SRI International, 83
State/local government: and devolution of authority, 137;
and grant programs, 141–42;
regulatory role of, 142–43
Stenger, I., 77, 80, 81–82
Structuralfunctional theory, 25–27;
capitalism and bureaucracy in, 25;
organizational control and rationality in, 24–26, 48, 65;
and Weber’s idealtype bureaucracy, 25
Supreme Court, affirmative action rulings of, 187
Systems theory, 29, 30–32, 48;
ancient roots of, 76, 82;
and chaos theory, 80, 86;
foundation for, 30
Task environment, public organization’s reaction to, 10–13
Taylor, Frederick W., 24, 26
Technical rationality:
in classical/formal and systems theories, 24–26;
and organizational behavior, 98
Thatcher, Margaret, 162–63, 166–67
Thayer, Frederick, 23, 24, 44, 46–47, 48, 251
Time management, 10
Transactioncost theory, 34, 36, 37–39.
See also Agency theory
Transnational corporations. See Multinational/transnational corporations
United Kingdom, “Next Steps” agencies in, 159, 172
United States, global hegemony of, 84–85, 89
Urwick, L., 24, 69
Value systems:
cultural, organizational influence on, xx–xxi;
and organizational secrecy, 112
Veblen, Thorstein, 68, 72
Veterans Administration, transformation of, 141
Volker Commission (Report of the National Commission on the Public Service), 152
Voucher systems, 143
Weber, Max, xxi, 20, 25–26, 44, 69, 72, 77, 83;
concepts of power/organizational elite, 113–15;
typology of authority, 254, 259–61
Weick, Karl, 66
Western Electric Company, 27–28
Western hegemony, chaos/transformation theories and, 84–85, 89
Williamson, Oliver E., 34
Wilson, Woodrow, 69
Winter, Gibson, 48
Wittgenstein, Ludwig, 65
Work behaviors, in private versus public sector, 10
Worker exploitation:
and humanistic organization theory, 42–44;
organizations as instruments of, xxii–xxiii
Workforce, American, demographic changes in, 183.
See also Public workforce diversity
Worldsystems design, chaos theory and, 84–86
Zucker, Lynne G., 70
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About the Editor and Contributors
ALI FARAZMAND is Professor of Public Administration at Florida Atlantic University, where he teaches MPA and Ph.D. courses in Organization Theory and
Behavior, Personnel, Bureaucratic Politics and Administrative Theory, Ethics, and Conceptual Foundations of Public Administration. Farazmand holds a Ph.D. in Public
Administration from the Maxwell School at Syracuse University. His research and publications include more than sixty journal articles and book chapters, and
seventeen authored or edited books and handbooks, including The State, Bureaucracy, and Revolution in Modern Iran (Praeger, 1989), Public Enterprise
Management (Greenwood, 1996), Privatization or Public Enterprise Reform? International Case Studies with Implications for Public Management
(Greenwood, 2001), and Administrative Reform in Developing Nations (Praeger, 2001). He is an active member of numerous professional organizations, including
the American Political Science Association, the American Society for Public Administration, and the International Political Science Association. He has served on the
editorial boards of several national and international refereed journals, and is the Founding Editor of Public Organization Review: A Global Journal.
ROBERT T. GOLEMBIEWSKI is Research Professor of Political Science and Management at the University of Georgia and has a special interest in change within
large organizations, both public and business. Golembiewski is the author/editor of over sixty books, including Managing Diversity in Organizations (1995),
Practical Public Management (1995), and Global Burnout (1996). He is the recipient of the four top awards in business schools and in business administration: the
Irwin Award for Scholarly Con
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tributions to Management from the Academy of Management, the Dwight Waldo Award of the American Society for Public Administration, the National Association of
Schools of Public Affairs and Administration Award as a Distinguished Researcher, and the National Academy of Public Administration Award as a lifetime Fellow.
MARY ANN GROVES is Professor of Sociology at Manhattan College in Riverdale, New York. She received her Ph.D. in Sociology from the University of
Illinois. Her areas of expertise are work and occupations, sociology of the family, and gender roles. She has published articles on organizational conflict, organizational
socialization, and multiculturalism in higher education.
NICHOLAS HENRY is Professor of Political Science at Georgia Southern University. He served as President of Georgia Southern University for eleven years, and
is a Fellow of the National Academy of Public Administration. He served as President of Pi Alpha Alpha, the national public administration honorary society, and his
text, Public Administration and Public Affairs, is now in its 8th edition.
MICHAEL KLAUSNER is Associate Professor of Sociology at the University of Pittsburgh–Bradford. He has previously taught at Hunter College in New York
City. Professor Klausner earned his B.A. in Sociology and Psychology at Herbert Lehman College in New York City and his M.A. and Ph.D. in Sociology at the
University of Illinois at Urbana–Champaign. Among his interests are organizational behavior, social psychology, and sociological theory.
GUY PETERS is the Maurice Falk Professor of American Government and former chair of the Department of Political Science at the University of Pittsburgh. He
received his Ph.D. from Michigan State University in 1970. He is the author of a number of books on comparative public policy and administration.
A. FRANK SELDEN is with Chapel Hill Pediatric Psychology in Chapel Hill, North Carolina. His major areas of research interest include multicultural
psychotherapy and sports psychology.
SALLY COLEMAN SELDEN is Associate Professor of Public Administration in the School of Government at the University of North Carolina at Chapel Hill. Her
major areas of research interest include human resource management and public management. Her recent work has appeared in Public Administration Review,
Journal of Public Administration Research
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and Theory, and American Journal of Political Science. She is the author of The Promise of Representative Bureaucracy (1997).
FREDERICK C. THAYER is Professor of Public Administration at Troy State University, European Division Graduate Program, and also Senior Fellow for
Education Policy at the PhelpsStokes Fund, New York. Since 1990, he has been Professor Emeritus of Public and International Affairs in the Graduate School of
Public and International Affairs at the University of Pittsburgh, where he taught Organization and Administrative Theory, Personnel, and Public Management. He is the
author of numerous articles and several books, including Rebuilding America (Praeger, 1984).
CHARLES R. WISE is Professor of Public Affairs in the School of Public and Environmental Affairs at Indiana University, Bloomington. He is the former managing
editor of Public Administration Review. He has twice been awarded the William Mosher Award (1985 and 1991) and is the only recipient of the award to have
received it twice. In addition to his current position, he has served in the Department of Justice, was elected to the National Council of the American Society of Public
Administration, and worked as project director for the Conference on U.S. Public Policy Development. His research is in the areas of public organization design and
analysis, public law and administration, and public program evaluation.