seems like a vast jungle . . . Not only are ... their actions, these organizations define poverty and social problems as well as ...... networks of social relationships.
New Directions for Organization Theory Problems and Prospects
M
JEFFREY PFEFFER
New York
Oxford
OXFORD UNIVERSITY PRESS 1997
r^
1 The Development and Scope of Organization Studies
We live in an organizational world. Virtually all of us are bom in an organization—a hospital—with our very existence ratified by a state agency that issues a certificate documenting our birth. Under the current U.S. income tax regulations, if we are going to be claimed as a dependent on someone's tax return, within the first year of our life we will be issued a social security number by an agency of the federal govemment. When we die, a death certificate will be issued by another public bureaucracy and our passing may be announced by a newspaper organization. An organization will see to the dispositioii of our bodies, and other organizations will concern themselves with the disposition of our assets. And during the time in between, more than 90 percent of individuals living in the United States will earn their livelihoods working for an organization (as contrasted with being self-employed), having been prepared for employment by being schooled in educational organizations. "Organizations are all around us. Because of their ubiquity, however, they fade into the background, and we need to be reminded of their impact" (Scott, 1992, p. 3). Not much more than a century ago, organizations were much less present in the social landscape. Public bureaucracies and business firms were both fewer and smaller in size. Boulding noted: [L]abor unions were practically non-existent. There were practically no employers' associations or trade associations. There were no farm organizations of any importance . . . National govemment absorbed . . . an almost infinitesimal part of the total national product. . . Outside of the Masons there were practically no fraternal organizations . . . Organizations outside the govemment were largely confined to the churches, a few local philanthropic societies, and the political parties . . . In place of the sparse fauna of 1852 we now have what seems like a vast jungle . . . Not only are there many more oq tions . . . but the organizations are larger, better organized, more closely h u , . . . Yet this
4 New Directio'- ""T Organization Theory revolution has -received little study . . . It has crept upon us silently. (1968, pp.
And in tiines past, fewer people worked for others: "We look back after wage labour has won a respected position by two centuries of struggle. We forget the time when complete dependence on wages had for centuries been rejected by all who regarded themselves as free men" (Hill, 1964, p. 63). One of the indicators of the importance of organizations is that with increasing frequency "organizations are singled out as the source of many of the ills besetting contemporary society" (Scott, 1992, p. 4). For good or ill, many of society's assets are managed by and controlled by organizations such as mutual funds, banks, and pension fimds. Their decisions affect who will get credit, what investments and technologies will receive backing, and, as a consequence, which sectors of the economy will be developed, and how and where people live. "Organized" religion has spread, as have organized community and self-help groups, to do things that used to be done informally by neighbors in a community. Through their actions, these organizations define poverty and social problems as well as help determine their remediation. The fact that so much of our material and social welfare and life is inextricably bound up with organizations means that it is important to understand how they function and how they can be analyzed. As Stem and Barley have argued, it is important to study "how organizations affect the social systems in which they are embedded" (1996, p. 146). The field of organization studies, developed to understand these ubiquitous social entities, comprises an interdisciplinary focus on (a) the effect of social organizations on the behavior and attitudes of individuals within them, (b) the effects of individual characteristics and actions on organizations, with a particular emphasis on the efficacy and, indeed, the possibility of potent individual influence (e.g., through leadership) in organizational systems, (c) the performance, success, and survival of organizations, (d) the mutual effects of environments, including resource and task, political, and cultural environments on organizations and vice versa, and (e) concerns with both the epistemology and methodology that undergird research on each of these topics. As such, the study of organizations is broad in both its theoretical scope and empirical focus. For instance, social psychological theories and findings relevant to the above issues would appear as a subfield, and possibly a small one at that, in the domain of organization studies. Given the breadth and scope of the field, which today reaches out to the humanities (Zald, 1993), one might well ask to what extent considering organization studies as a separate subject of inquiry makes sense, especially since the discipline's boundaries are so permeable. This question has traditionally been answered by the claim that the interdisciplinary nature of organization studies makes cross-level analysis and the advance of theory more likely through processes of cross-fertilization. However, there are clear trade-offs involved. Even as organization studies becomes broad enough in scope to include virtually all relevant methods and theoretical perspectives, this very breadth makes integration of knowledge or even cognizance of the entire domain of organization studies substantially more difficult
Development and Scope of
nization Siudies
Because of the scope and difiuseness of the subject niatter, which has ii creased substantially over time, any freatment of organization studies must nece sarily be somewhat arbitrary in its coverage and its organization. In previous inca nations of this book (Pfeffer, 1982; 1985), I chose to organize the material 1 focusing on different levels of analysis (individuals, coalitions, and subunits c one hand and the total organization on the other) and on different perspectiv on action. This latter categorization differentiated among perspectives that er phasized rational choice and decision making, situational constraint and soci influence, and a third perspective focusing on the emergent, almost random n ture of organizational behavior. Although treatments by level of analysis are st common, particularly in texts on organizations (e.g., Northcraft and Neale, 199 Wagner and Hollenbeck, 1992), and although differences in perspectives on a tion remain important, for the researcher or student trying to access the fie what may be even more important arc the fundamental concepts and mode used and usefiil for understanding organizations and the controversies that chara terize the development of the field. Consequently, what I have chosen to do this book is first to give the reader some sense of the evolution and particulai the more recent history of the field and its scope and content and then to co sider the relevant literature organized by the major issues and concepts that ma sense of organizations and are relevant to those who live in and manage them. To understand or analyze organizations, it is important to consider the loc of causality and whether that is lodged in individuals, situations, or some com] nation. The locus of causality directs where we place our research emphasis ai how we go about understanding and affecting behavior. This topic constitutes ti focus of chapter 2. It is the case that scholars, managers, and casual observe approach the analysis of organizations with a set of implicit or explicit models behavior. These models both structure what we observe and leam and also affe the choice of how to intervene to change organizations and their members. Cha ter 3 explores five various models and assumptions about behavior that distingui some prominent, competing theories and approaches to organizational analys including the economic model, the social model, the retrospectively ratior model, tiie moral model, and a cognitive, interpretive model of organizatior behavior. As developed in chapters 2 and 3, one important distinction among theor: of organizations is the extent to which dimensions of the social structure are us to help understand behavior by analyzing the context and constraints with which behavior occurs. Chapter 4 presents an overview of the literature on den graphic composition and ite effects on organizations, one prominent example tiie use of structural analysis to understand organizations and groups within the Chapter 5 then considers mechanisms of social control. Control has been a ma i theme in organizational studies since it began more than 100 years ago and cc tinues to be prominent in numerous literatures relevant to organizations, inch ing culture and socialization, rewards and incentives, and leadership. ControM a hierarchical emphasis to it, but many of the decisions in organizations occ through processes of interpersonal influence that rely on power and negotiati rather than on formal systems and authority. Chapter 6 explores how power a
Devebpment and Scope of Organization Studies 7
6 New Directions for Organization Theory social influence are developed and exercised and how negotiation, one important way in which interpersonal influence is employed, occurs. Since Ae beginning of organizational studies, one of its goals has been to understand variations and determinants of organizational performance. Chapter 7 considers some prominent approaches to analyzing organizational performance and how they have evolved. Subjects such as control and organizational performance speak to the managerialist orientation that has been and still is prominent in organization studies. This functionalist orientation has stimulated a reaction in critical theory, which seeks to remind us that "organizations can trample personal freedom and individual fulfillment" (Stem and Barley, 1996, p. 148). Chapter 8 provides a brief overview of what constitutes some elements of a critical perspective on organizations and organization studies. In the concluding chapter 9, some substantive topics, largely overlooked in recent writing, are considered, and I take up the question of the evolution of organization studies and whether or not we are increasing our understanding of these important social entities. Together these topics and their exploration permit us to begin to understand what we know and what we don't, to identify some important directions for future research, and to glimpse the extent to which research and writing has been unevenly distributed and some of the factors associated with the field's attention. A number of conclusions or themes emerge from this overview of the field. First, tiie location of much of organization studies in business schools, and U.S. business schools at that, coupled with the profusion of theories and absence of paradigmatic consensus has led to a substantial overemphasis of economic models and logic. The field is unduly entranced by economistic thinking. This is unfortunate because social and social psychological modes of organizational analysis are potentially both more valid and useful. Second, the location of organization studies has also led to a focus on particular subjects (e.g., performance, survival, leadership, culture) and an emphasis on a more micro (individual or individual organization) level of analysis. The relationship between organizations and society and various social problems and issues is given only occasional attention (e.g., Stem and Barley, 1996). Critical perspectives are seldom seen in empirical analyses and are more frequently found in European writings. But as organization studies evolves in Europe and tends to be located increasingly in prominent schools of administration, one wonders about the future of the European critical tradition. Third, the absence of paradigmatic consensus and the consequent value placed on uniqueness (Mone and McKinley, 1993), clevemess, and being interesting have not always led to research focusing on powerful but apparendy obvious effects on organizational behavior. And, coupled with the occasional insecurity that comes from paradigmatic profusion and the vulnerability that creates, organization studies has often eschewed an engineering orientation, implied by being an applied social science, that was present at its founding (e.g., Thompson, 1956). Thus, the field is at once captivated by topics that have the appearance of being applied wi : always taking seriously issues of design, intervention, and ch*^ ^ge.
Organizations Defined How are organizations distinguished from other social collectivities such as small groups, families, mobs, and so forth? Scott noted that "most analysts have conceived of organizations as social sfructures created by individuals to support the collaborative pursuit of specified goals" (1992, p. 10). Parsons (1956) distinguished organizations from other social collectivities by noting that organizations had some purpose or goal. Donaldson maintained that "organizations are created and sustained . . . in order to attain certain objectives" (1995, p. 135). The goaloriented or instrumental view of organizations implies that organizations are collections of individual efforts that are coordinated to achieve things that could not be achieved through individual action alone (Pfeffer and Salancik, 1978, p. 23). However, defining organizations in terms of goal pursuit is somewhat problematic, and there is a large literature that treats the concept of an organizational goal and whether or not the consbnict is meaningful (e.g., Simon, 1964). One problem is that many organizations have within them members or employees who either do not know the organization's goal or, if they do know it, do not necessarily support it. For instance, although the goal of most publicly held corporations in the United States is something like profit maximization or the maximization of shareholder value, many employees are more concemed with job security and their relative influence than they are about profits. In one contract manufacturer, employees, not knowing the elements of corporate accounting, thought that the more overtime they worked (and the higher their own incomes), the better. The goal of maximizing overtime, however, was not an organizationally sanctioned or even recognized goal. Moreover, the goal of maximizing shareholder value does not generate much commitment or excitement among inost organizational participants. A second issue is that tiiere is evidence that even when a goal is clearly. identified, if and when it is attained organizations often develop new goals—as if the goal of an organization, once created, was simply its own continued survival and perpetuation. In a notable example of this process, Sills (1957) studied what happened to the National Foundation for Infantile Paralysis (the March of Dimes) when a vaccine for polio—the reason for its existence—was discovered, As we know, the March of Dimes did not disband upon achieving this success but instead took on the task of understanding and assisting in the treatment of other diseases such as genetic birth defects that crippled children. Or consider the case of the Interstate Commerce Commission (ICC), established by legislation in 1887 to "break up huge concentrations of wealth in the hands of the country's railroad magnates" (Sanger, 1996, p. 9). Although railroads came to face substantial competition from trucking and tiie power of the railroad magnates declined substantially, the organization's purpose evolved and it endured. Over the years its powers expanded substantially so that it "gained authority over frucks, buses, and virtually anything else that mov^ across state lines. . . . consumer complaints about moving companies . . . ha'' go through the I.C.C." (Sanger, 1996, p, 9). Although the deregulation mv icnt of the late a. - T / ^ ^
..^^ c
«,
8 New DiTecttK
Jr Organization Theory
virtually all of its functions were removed. Stripped of its power to set transportation rates or to control entry to the industry .^except in very rare instances, the agency continued to collect reams of data on transportation rates and employ a considerable staff: the commission survived numerous assassination attempts. Richard Nixon tried to merge the I.C.C. out of existence in 1970. . . . Ronald Reagan tried to eliminate its budget. . . . Sheer inertia, bureaucratic guile and lobbying by companies that thought twice about what life would be like in a completely competitive marketplace resulted in reprieve after reprieve. (Sanger, 1996, p. 9) Pfeffer and Salancik noted that "organizations are . . . a process of organizing support suflRcient to continue existence" (1978, p. 24). Organizational survival receives focus as a goal because survival must be continually accomplished and is never automatic. As March and Simon (1958) noted, organizations provide inducements for social actors to participate in them and in return obtain contributions that become inducements for others. From this perspective, an organization is viable and survives only as long as the inducements-contributions balance is positive, such that the available inducements are sufficient to produce the voluntary contributions of participation and effort necessary to maintain the organization. Consequently, organizational survival is more problematic than the survival of some oiher social groups because resources and energy must be expended in order to keep the organization going. Individuals must be recruited and offered sufficient inducements to remain in the organization, resources to support the organization must be extracted from the environment, and even the very legitimacy of the organization and its activities must occasionally be maintained against opposition. For the most part, organizations have at least one goal—the survival if not the growth of the organization. Individuals not interested in helping the organization perpetuate itself typically leave. Individuals' well-being and status are often at least somewhat related to the well-being and status of the organization in which they are a member or an employee, producing some commonality of interest in perpetuating the organization. This can be seen by noting how often individuals identify themselves by what they do and their employment and other affiliations. Membership in high-status organizations confers status on the member, and employment in an organization that is larger or earns more money typically brings larger financial rewards. Another distinction between organizations and other social entities is that organizations are, in many (although not all) instances, formally recognized by some governmental entity. The femily may have legal definition, but mobs and informal small groups do not. In the case of public agencies ox public bureaucracies, the organization may be created by statute or charter and is funded to carry out certain tasks and responsibilities. But, even private corporations are granted charters by the state and as part of that process must submit articles of incorporation that state their purpose, even if oidy in general terms. And unincorporated businesses may file fictitious business name statements and other forms with the fifofo ¥f\
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,*
J 1
l.V
Development and Scope of Ot^^.dzation Studies
g
connection to the state, which confers legitimacy that distinguishes them from less formal collectivities such as families, mobs, or informal groups. • Organizations can also be distinguished by the nature of their boundaries. Inclusion in an organization is something granted by that organization, frequently with some sort of formal designation such as a membership card or employee identification. One is born into a family, and expulsion from the family is unlikely if not impossible. The boundaries of small groups and mobs are clearly evanescent. It is seldom the case in less formalized groups that the task of boundary maintenance and demarcation becomes a significant and identified role, but this is common in organizations—hence the frequent description of organizations as being "formal." j^though organizational boundaries are clearly permeable—after all, an open-systems view of organizations sees them as taking in various types of inputs and, after some transformation process, exchanging what is produced for resources to continue the cycle (Katz and Kahn, 1978)—permeability is to some degree under the control of the organization. Formal boundary-sparming units such as purchasing and human resources attempt to ensure that inputs meet specifications, while other boundary-spanning units such as marketing and public relations seek to develop extemal support and demand for what the organization does. So, we can say that organizations are more likely than other social groups to have a goal of survival and self-perpetuation, have more clearly defined, demarcated, and defended boundaries, and often (although not invariably) have some formal relationship with the state that recognizes their existence as distinct social entities—obligated to pay taxes as an entity, capable of suing and being sued, and so forth.
The Evolution of Research and Writing on Organizations Several trends are apparent in organization studies as the field has evolved since the mid-1980s. First, the field is increasingly, although certainly not exclusively, lodged in business schools. It has virtually disappeared in psychology and political science departments, particularly in the United States, and, although it seems to be enjoying some slight resurgence in sociology departments, still represents a comparatively small part of that field also. The study of management and organizations is currently growing, albeit from an extremely small base, in schools of engineering, particularly in departments of industrial engineering and erigineering management. This concentration of organization studies in a professional school environment is a phenomenon with important consequences for both what is studied and how it is studied. And, the evolution of organization studies in various disciplines is informative about the development of the field and its orientations, for this history still affects many aspects of the content of organization studies. The study of management and organizations had some substantial part of its origins in engineering, both mechanical and industrial. Shenhav dowimpntpd *hp
) New Directions for Organization Theory
Development and Scope of Organization Studies
iscipline of engineering in the late 1800s. He noted that "beginning in the late S80s, parallel to the attempts to standardize and systematize mechanical matters, le movement was erfended more explicitly to organizational and administrative sues" (1995, p. 560). N
The extension of technical principles to social and commercial endeavors was based on the assumption that human and nonhuman entities are interchangeable and can equally be subjected to engineering manipulation. . . . Including organizational design within the jurisdiction of engineers was justified by their claim that the analysis of organizations "is to the enterprise what the engine diagram is: to the designer" (Engineering Magazine, April 1908: 83-91). . . . The rise of this group marks the origin of management as a distinct phenomenon. (p. 561) The rise of Frederick W. Taylor and scientific management in the early 1900s larked the culmination of the efforts to apply engineering principles to the degn and management of work and ushered in the golden age of engineering. etween 1880 and 1920, the number of engineers in the United States grew fi-om ,000 to 135,000 (Jacoby, 1985). It is impossible to overestimate the importance of the scientific management movement in the shaping of the modem corporation and indeed all institutions . . . which carry on labor processes. . . . Taylor dealt with the fimdamentals of the organization of the labor process and of control over it. . . . The successors to Taylor are to be found in engineering and work design, and in top management. . . . Work itself is organized according to Taylorian principles, while personnel departments and academics have busied themselves with selection, training ,. . and adjustment of "manpower" to suit the work processes so organized. Taylorism dominates the world of production; the practitioners of "human relations" and "industrial psychology" are the maintenance crew for the human machinery. (Braverman, 1974, pp. 86-87) Principles of scientific management involved the separation of the planning nd design of work firom its actual execution and the scientific study of work rocesses (using time and motion studies, for instance) to figure out the most fficient way of doing jobs. Concerns of the early engineering orientation to orgaizations and management remain in contemporary writing. The scientific study f work processes to enhance efficiency can be seen in the contemporary writing bout reengineering and in the work-process continuous improvement programs 1 many assembly plants. The separation of work design and planning firom its xecution is evident in attempts to reintegrate planning and doing in selflanaging teams and in the implementation issues raised by moves toward decenalization of control. Taylor (1903) maintained that his piece-rate system for awarding work could end labor unrest and that the science-based system was npartial and above class prejudice (Shenhav, 1995, p. 567). Developing management processes that-~'^intain labor peace and are fair remain important issues to le present day. Ai ;e organization of writing and thinking about management
11
and organizations "around engineering ideals rather than around religious, philanthropic, paternalistic, or social Darwinist ones" (p. 564) also continues to the present. Although Taylorism and engineering remain influential in the literature, this orientation is now more likely to be found in business schools. Management concerns have diminished in schools of engineering. Industrial engineering departments have substantially diminished in importance over time compared to disciplines such as electrical, chemical, and civil engineering, which are based on physical, not social, sciences. To the extent industrial engineering has survived, much of its attention has shifted to production and operations management, which it views fi:om a modeling or mathematical perspective emphasizing techniques such as queuing theory and linear programming. With only a few exceptions, the study of organizations and management diminished substantially in industrial engineering departanents, which were themselves in some decline. Since the 1980s, there has been some reversal in this trend, for two reasons. First, business education, particularly in private schools, is often offered only to graduate students. This permitted industrial engineering to offer engineering management to undergraduates, an attractive option in the educational market place. Second, concerns with the management of high-technology companies and the fi-equent transition of engineers firom technical to managerial responsibilities as their careers progressed have led to a market-based demand for more emphasis on management topics in engineering schools. Nevertheless, concern with management issues remains comparatively small in engineering colleges today, particularly when one contrasts the present with the situation around the turn of the century, when engineering was taking a leading role in developing the study of management and organizations. The study of organizations began, in psychology with industrial and organizational psychology, subspecialties within psychology departments. The Journal of Applied Psychology, first published in 1917, contained articles on subjects in applied psychology—testing and measuring individual capabilities, interests, and attitudes through various assessment instruments (the study of individual differences), the effects of work environments on attitudes and, to a lesser extent, behavior such as turnover and performance, and the design (both physical and social) of jobs and work environments. Table 1-1 presents the titles of selected articles from the first several volumes of the Journal of Applied Psychology to illustrate both the enormous continuity in subject matter between then and now and the substantive focus of the early research in applied psychology. Bravernian argued that both industrial psychology and industrial sociology arose as handmaidens to the engineering orientation of Taylorism and can be best understood in that context: Shortly after Taylor, industrial psychology and industrial physiology came into existence to perfect methods of selection, training, and motivation of workers, and these were soon broadened into an attempted industrial socio' • the study of the workplace as a social system. The cardinal feature of these is schools
5 New Directions { denization Theory . . . is that. . . they do not by and large concern themselves vsath the organization of work, but rather with tiie conditions under which the worker may best be brought to cooperate in the scheme of work organized by the industrial engineer. (1974, p. 140) Industrial and organizational psychology first lost status and then position hin the discipline, quite possibly because of its applied orientation and its role mpporting manageinent and engineering. Today industrial psychology exists in itively few psychology departments and virtually none of the most prestigious. e Society for Industrial and Organizational Psychology (SIOP) has split off n the American Psychological Association and now holds separate meetings. 1 social psychology's increasing emphasis on individual cognition on the one id and personality on the other, with a deemphasis on groups and social influe (e.g., Markus and Zajonc, 1985) has left a growing gulf between more mainam psychological research and organizational issues and problems. In sociology, the study of organizations was at one time a cential focus of the ipline. Many of the central figures in sociological theory—Weber (1947), rx (1967), and Durkheim (1949)—contiibuted to the understanding of bureau;y, the employment relationship, and the division of labor and basis of solidarA series of case studies of the Tennessee Valley Authority (Selznick, 1949), a sum mine (Gouldner, 1954), and a state employment agency and federal lawwcement organization (P. M. Blau, 1955) began the process of developing jirically based general principles to describe organizational functioning. Aligh organizational sociology remains viable, particularly in comparison to inlial/organizational psychology, firom 1990 to 1994 only 15 percent of the artiin the American Sociological Review, the discipline's leading journal, could considered to concern organizations. Thus, organization studies' place within ology is a small one, particularly compared to the study of stratification. A similar erosion of interest in organizations is visible in political science. ly of the most prominent early figures in organization science came firom le 1-1 Tides of Selected Articles from the 1917, 1918, and 1919 Volumes of the nal of Applied Psychology Human Element in Business bsolute Intelligence Scale :al Tests for Prospective Telegraphers : Can flie Psychology of Interests, Motives, and Character Contribute to Vocational Guidance? an Engineering donal Tests for Retail Saleswomen on flie Committee on Classification of Personnel in the Army ing Course of the American Steel and Wire Company jrvice Tests of Aptitude for Flying naming Curve in Typewriting lelation of die General Intelligence of School Children to tiie Occupation of Their Fathers
Development and Scope of Organizai
tudies
13
political science—people such as Herbert Simon (1947) and James March (March and Simon, 1958; Cyert and March, 1963). Many of the eariiest studies of organizations were studies of public bureaucracies (e.g., P. M. Blau, 1955; Blau and Scott, 1962; Selznick, 1949), so there were many connections between public administration, at one point an important subfield of political science, and organizational behavior. However, as documented by Green and Shapiro (1994), the discipline of political science has evolved to a point at which it has lost its institutional roots (March and Olsen, 1989) and instead has come to be dominated by formal models of rational choice. By 1992, this particular theoretical perspective, rational actor theory, was represented in some 40 percent of the articles published in the American Political Science Review, the disciplinary association's major journal. This formal modeling, often based on economic assumptions and methodological apparatus, has left political science increasingly distant from the less mathematical methods that characterize theory and research in organization studies and also somewhat distant from the concerns of administiation and practice. Public administration, as a major subfield of political science, has withered as the study of institutions has become less important in the discipline, replaced by an emphasis on voting, coalitions, and legislative behavior. The study of organizations fit uneasily in basic disciplines such as sociology and psychology where it appeared to be too applied and became marginalized in engineering schools, which were more concerned with disciplines based on the physical sciences. But the study of management, administration, and leadership has always found a home in business schools because of continuing interest in subjects such as motivation, human effects on productivity and performance, and organizational structure and strategy. Although organization studies programs have at times been under attack in various business schools (e.g., Carnegie Mellon, Yale, Rochester) because of the field's absence of mathematical, formal rigor, demands for relevance from business schools' constituencies have ensured it a place in business school curricula where it is a required course at both the undergraduate and graduate levels. Business schools are much more prevalent in the United States than in Europe, and as a consequence the location of organization studies primarily in business schools has given it a distinctly American flavor. Clegg has noted that "organization studies . . . have drawn on both a range of materials and theoretical approaches which have been too restricted" (1990, p. 1). His descriptions of the French bread industry, Benetton, and industrial organization in the Far East including Taiwan, Korea, and Japan consistently challenge ideas of efficiency, whether these are derived from the transaction cost theory of Williamson (1975) or structural contingency theory ideas (Donaldson, 1985). Clegg noted that "the major thrust of efficiency arguments has been towards predicting a convergence in the range of organizational forms to be found in modernity" (p. 151). The proliferation of forms actually observed—witness the difference between the bread industries of the United States and France—belies simple efficiency accounts. But, these differences are apparent only to the extent one's empirical and theoretical scope transcends the confines of single counties, particularly the United
12 New Directiom for Organization Theory . . . is that. . . they do not by and large concern themselves with the organization of work, but rather with the conditions under which the worker may best be brought to cooperate in the scheme of work organized by the industrial engineer. (1974, p. 140) Industrial arid organizational psychology first lost status and then position within the discipline, quite possibly because of its applied orientation and its role in supporting management and engineering. Today industrial psychology exists in relatively few psychology departments and virtually none of the most prestigious. The Society for Industrial and Organizational Psychology (SIOP) has split off from the American Psychological Association and now holds separate meetings. And social psychology's increasing emphasis on individual cognition on the one hand and personality on the other, with a deemphasis on groups and social influence (e.g., Markus and Zajonc, 1985) has lefl: a growing gulf between more mainstream psychological research and organizational issues and problems. In sociology, the study of organizations was at one time a central focus of the discipline. Many of the central figures in sociological theoiy—Weber (1947), Marx (1967), and Durkheim (1949)—contributed to the understanding of bureaucracy, the employment relationship, and the division of labor and basis of solidarity. A series of case studies of the Tennessee Valley Authority (Selznick, 1949), a gypsum mine (Gouldner, 1954), and a state employment agency and federal lawenforcement organization (P. M. Blau, 1955) began the process of developing empirically based general principles to describe organizational functioning. Although organizational sociology remains viable, particularly in comparison to industrial/organizational psychology, from 1990 to 1994 only 15 percent of the articles in the American Sociobgical Review, the discipline's leading journal, could be considered to concern organizations. Thus, organization studies' place within sociology is a small one, particularly compared to the study of stratification. A similar erosion of interest in organizations is visible in political science. Many of the most prominent early figures in organization science came from Table M Titles of Selected Articles from the 1917, 1918, and 1919 Volumes of the Journal of Applied Psychology rhe Human Element in Business Sxi Absolute Intelligence Scale idental Tests for Prospective Telegraphers Vhat Can the Psychology of Interests, Motives, and Character Contribute to Vocational Guidance? luman Engineering 'ocational Tests for Retail Saleswomen /ork on the Committee on Classification of Personnel in the Army raining Course of the American Steel and Wire Company ir Service Tests of Aptitude for Flying He Learning Curve ir jwriting he Relation of tiie Gei.^.dl Intelligence of School Children to the Occupation of Their Fathers
Development and Scope of Organization Studies 13 political science—people such as Herbert Simon (1947) and James March (March and Simon, 1958; Cyert and March, 1963). Many of the earliest studies of organizations were studies of public bureaucracies (e.g., P. M. Blau, 1955; Blau and Scott, 1962; Selznick, 1949), so there were many connections between public administration, at one point an important subfield of political science, and organizational behavior. However, as documented by Green and Shapiro (1994), the discipline of political science has evolved to a point at which it has lost its institutional roots (March and Olsen, 1989) and instead has come to be dominated by formal models of rational choice. By 1992, this particular theoretical perspective, rational actor theory, was represented in some 40 percent of the articles published in the American Political Science Review, the disciplinary association's major journal. This formal modeling, often based on economic assumptions and methodological apparatus, has left political science increasingly distant from the less mathematical methods that characterize theoiy and research in organization studies and also somewhat distant from the concerns of administration and practice. Public administration, as a major subfield of political science, has withered as the study of institutions has become less important in the discipline, replaced by an emphasis on voting, coalitions, and legislative behavior. The study of organizations fit uneasily in basic disciplines such as sociology and psychology where it appeared to be too applied and became marginalized in engineering schools, which were more concerned with disciplines based on the physical sciences. But the study of management, administration, and leadership has always found a home in business schools because of continuing interest in subjects such as motivation, human effects on productivity and performance, and organizational structure and strategy. Although organization studies programs have at times been under attack in various business schools (e.g., Carnegie Mellon, Yale, Rochester) because of the field's absence of mathematical, formal rigor, demands for relevance from business schools' constituencies have ensured it a place in business school curricula where it is a required course at both the undergraduate and graduate levels. Business schools are much more prevalent in the United States than in Europe, and as a consequence the location of organization studies primarily in business schools has given it a distinctly American flavor. Clegg has noted that "organization studies . . . have drawn on both a range of materials and theoretical approaches which have been too restricted" (1990, p, 1). His descriptions of the French bread industry, Benetton, and industrial organization in the Far East including Taiwan, Koreia, and Japan consistently challenge ideas of efficiency, whether these are derived from the transaction cost theoiy of Williamson (1975) or structural contingency theoiy ideas (Donaldson, 1985). Clegg noted that "the major thrust of efficiency arguments has been towards predicting a convergence in the range of organizational forms to be found in modernity" (p. 151). The proliferation of forms actually observed—witness the difference between the bread industries of the United States and France—belies simple efii''''"ncy accounts. But, these differences are apparent only to the extent one's empi and theoretical scope franscends the confines of singje countries, narticulnrlv tKrOrganmtiori Theory already noted, oiganization theory is not only largely housed in U.S. journals, it is also largely focused on U.S. organizations and ideas. In a comparative study of the development of organization theory, Guillen argued: the adoption of models or paradigms of organizational management does not necessarily follow from their scientific credibility and is not solely determined by economic and technological factors. . . . Managers in different countries adopted , . . paradigms in selective ways during the twentieth century, depending on the problems they were facing and such institutional factors as their mentalities and training, the activities of professional groups, the role of the state, and the attitude of the workers. (1994, pp. 1-2) It is also the case that the field has tended to eschew engagement with concerns of public policy. The changing nature of the employment relationship and its differential effects on women and minorities, the changing stiucture of wages in firms, and the increasing influence of shareholder capitalism, over what might be called a stakeholder model all have profound social implications. For the most part, however, the field has been content to leave public policy debates to economists and, to a lesser extent, sociologists, even though much of the phenomena of interest occur in organizations. This neglect is unfortunate because a comparative—both over time and across place—research approach has much to recommend it for testing theories and models more rigorously and helping to discover the extent to which analytical perspectives are bound by either period, location, or both. Neglect of policy tends to keep the field of organization studies on the sidelines in debates about issues in which it potentially has much to contribute. In thinking about the various perspectives on organizations to be discussed below, the changing features of organizations—both those highlighted here and others—should be kept firmly in mind. One way of evaluating organizational models and theories is to ask to what extent they provide a productive way of understanding and predicting the evolving nature of organizations.
Understanding the Causes of Behavior
Perhaps the most fimdamental question addressed by organization studies is how we are to understand what causes behavior. The question is important for those seeking to affect organizations and is equally important for those doing research on them, for, depending on how it is answered, attention focuses on some factors or variables and away from others. For much of its history, organization studies was dominated by a situationalist perspective, in which die causes of behavior were sought in the environment of the individual. Thus, for instance, in learning and operant-conditioning perspective's (Luthans and Kreitner, 1975; Nord, 1969), behavior is seen to be a function of its consequences, and analytic attention is therefore directed at understanding the cues that trigger behavior, the consequences that follow the behavior, schedules of reinforcement, and the relative efficacy of rewards or punishment (O'Reilly and Weitz, 1980) in altering behavior. The large literature on job design (Hackman and Oldham, 1980) asked what dimensions of jobs—things such as autonomy, variety, and the feedback received—affected employee motivation and job satisfaction. Studies of job attitudes such as satisfaction with pay, with the job overall, and with co-workers typically looked to the environment—the level of pay received, job characteristics, the availability of alternatives, what co-workers thought and said (Salancik and Pfeffer, 1978a)—as the critical explanatory factors. There were a number of reasons for the situational emphasis, but certainly two are a legal environment that made focusing on individual differiences more difficult and a political context in which social problems and their solutions tended to be located in the. environment and—for good or ill depending on one's perspective—the role of individual choice and responsibility were deemphasized. As to the first point, a landmark legal case, Griggs v. Duke Power, established the principle that if the application of selection criteria such as written tests had an adverse imoact on OT-mms nrntaMoA v... ii,^ —:—
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Understanding the Causes of Behavior
New Directiom for. Organization Theory
In an experiment in which subjects watched cartoon displays of physical and social events and reported their causal perceptions, Monis and Peng (1994) predicted and found that American and Chinese would differ significantly in how they attributed behavior in the social situation, with the Americans emphasizing internal forces and the Chinese emphasizing external pressures. A second study found that attributions for mass murders reported in the newspaper differed systematically between Americans and Chinese. "American reporters attributed more to personal dispositions and Chinese reporters atbributed more to,situational factors" (Morris and Peng, 1994, p. 961). This research is important because it suggests that attributions of causality and psychological phenomena such as the fundamental attribution error (L. D. Ross, 1977) are not invariant across cultures. Consequentiy, fhe growing interest in dispositional explanations for organizational behavior is almost certainly a Western if not strictiy an American phenomenon, and we need to be much more sensitive to the culturally embedded character of our explanations of causality and, for that matter, the culturally and socially embedded character of our models of behavior.
women or minorities, so that they scored less well on that screening device, then the test or selection standard had to be validated in order to be employed. Validation, of course, not only involves determining whether test scores predict subsequent performance but can entail selecting more broadly from the applicant pool (to avoid restriction-of-range problems) and then following those selected to see if their scores on the test predicted their performance. Moreover, since expectations for performance are often self-fulfilling (e.g., Archibald, 1974), a true validation study must gather test scores when an individual enters the organization and then keep them secret until they can be compared to performance measures that are uncontaminated by knowledge of the individual's scores. This process is quite costly and could be undertaken only by comparatively large organizations, and then only for those jobs that had enough incumbents to make the effort worthwhile (e.g., Howard and Bray, 1988). The practical effect of the Griggs decision and its vigorous enforcement by the Equal Employment Opportunity Commission was to make employment testing less important in selection and socially suspect. Without reviewing in detail the political and social history of the Great Society of President Lyndon Johnson or other social reforms, it seems clear that the 1960s and 1970s were periods in which social interventions to affect the environment of behavior were seen as important. Early childhood education and development was emphasized in the Head Start program, the establishment of Legal Aid promised to give poorer Americans access to the court system for redress of problems, and the federal role in education was greatly expanded in an effort to provide better and feirer educational opportunities in the belief that this would aid social mobility. By contrast, the current political climate emphasizes individual choice and responsibility. Subsequent Supreme Court decisions have weakened the requirements for demonstrating the adverse impact of tests or other screening devices. Legal services for the poor are under attack, and current budgeting and legislation seek the devolution of responsibility for education away from the federal government. This different social context with its focus on the individual has surely helped shape what organizations scholars study as well as the perspective they bring to that endeavor.
The 1980s and 1990s have witnessed a renewed interest in research seeking the causes of individual behavior and attitudes not in a person's particular organizational or social environment but rather in the individual's own personality or dispositions. One of the stiongest statements of this view was made by Schneider, who argued, "fhe attributes of people, not the nature of the external environment, or organizational technology, or organizational structure, are the fundamental determinants of organizational behavior" (1987, p. 437). He argued this was true because organizations would tend to recruit, select, and retain people on the basis of individual attributes, and consequently, those attributes would come to constitute the basis of the organization. The attraction-selection-attiition (ASA) cycle would operate to produce homogeneity over time; thus, "the situation is not independent of the people in the setting; the situation is the people. . . . Structure, process, and culture are the outcome of the people in an organization, not the cause of the behavior of the organization" (Schneider, Goldstein, and Smith, 1995, p. 751). Of course, some formulations stress the interaction between persons and situations (e.g., Chatman, 1991; O'Reilly, Chatman, and Caldwell, 1991), but the resurgence of interest in individual differences as an important way of understanding organizational behavior has been both vigorous and contioversial,
It is not just the historical context that affects how causes for. behavior are perceived. There is also accumulating evidence that the attribution of causes of behavior is significantly affected by cultural norms and values. In a set of experiments, Morris and Peng tested the idea that: dispositionalism in social attribution . . . reflects an implicit theory about social behavior that is more widespread in individualist cultures than in coUectivist cultures. . . . An implicit theory about a domain is acquired from culturally bound experience with events in the domain and with public representations of the domain (e.g., folktales, sacred texts, laws, and works of art). . . . In highly individualist cultures, such as die United States, persons are primarily identified as individual units . . . and they are socialized to behave according to personal preferences. ighly coUectivist cultures, such as China, persons are primarily identified as ^ ^p members . . . and they are socialized to behave according to erouo norms, role constraints, and .
