Week 3 : Organizing through Hierarchies, Markets, Clans, Networks,etc

1
Week 3 Organizing through Hierarchies, Markets,
Clans, Networks,etc

• Bureaucracy
• Weberian model
• Tensions
• Studies Gouldner, Blau, Jackall, Ritzer
• Markets and Networks as Alternative/
  Complementary Forms of Organizing
• Market v. Hierarchy (Bureaucracy) v. Network
• Social embeddedness of economic action

2
The Weberian Ideal-Type Model of Rational-Legal
Authority (Bureaucracy)

• Hierarchy based upon specialization and expertise
  (merit) (Inequality)
• Clearly defined and fixed areas of responsibility
• Impersonality without hatred or passion
• Universality separation of organizational from
  personal
• Career (Identity)
• From a purely technical point of view,
  bureaucracy is capable of attaining highest
  degree of efficiency (Weber) (Power)

3
Tensions in Bureaucracy

• Formal rule following or obedience to authority
  (procedural compliance/ ritualism) v. efficient
  pursuit of goals (pragmatic operations)
• Issue of morale, cooperation and trust (Power)
• Punishment-centred (imposition) v. representative
  (negotiation) bureaucracy. Work to rule issue
• Primary tension conflicts of ownership and
  associated interests
• Wider commitments prevent and constrain
  organizational rationality
• Secondary tension resistance to supervisors
  practices introduced to address primary tension.
  Can be functional in obscuring primary tensions
• the degree of bureaucratisation is a function
  of human striving it is the outcome of a contest
  between those who want it and those who do not
  (Gouldner)

4
Unintended Consequences of Pragmatic Operations

• Blau study of state unemployment agency
• Receptionists uncomfortable with delaying
  appointments with interviewers
• face-to-face interaction
• inconsistent with ascribed purpose of agency and
  detrimental to client self-esteem (Identity)
• Interviewers overloaded with clients and
  performance based on number of placements
  (Insecurity), so
• Job information hoarded, low cooperation with
  other interviewers, records falsified, clients
  placed in inappropriate positions

5
Bureaucracies as Moral Mazes

• Jackall study of influence of forces of
  bureaucracy
• Bureaucratic work causes people to bracket,
  while at work, the moralities that they might
  hold outside the workplace or that they might
  adhere to privately
• Personal loyalty is primary rule of behaviour for
  managers
• Circles of affiliation (Insecurity, Identity)
• Cultivation of proper modes of appearing as the
  means of personal advancement (Insecurity,
  Identity)
• humans create the tensions, conflicts and
  dynamism in bureaucratic structures and, through
  the exercise of their capacities, reshape the
  internal structures of organization (Jaffe)

6
McDonaldization of Society

• Ritzers commentary on contemporary forms of
  organizing
• Efficiency fast way of filling up
• Calculation precise measurement and timing of
  all cooking and serving operations
• Predictability standardization of everything
• Control elimination of uncertainty
• Polarized reactions by employees and consumers
  to McDonaldization fanaticism, alienation,
  disaffection
• How to prevent anomie, construed as a lack of
  commitment/loyalty while reaping the benefits of
  the rationalization that exacerbates anomie

7
Markets, Hierarchies, Networks (Powell)
8
Networks

• Markets - undersocialized of human behaviour
  (individualism self-interest rabble)
  Hierarchies oversocialized conception (control
  and program all activity) (Granovetter)
• Networks
• Embedded in social relationships (temporary or
  enduring) involving trust and obligations
• Entrepreneurialism through network building and
  participation
• Include numerous forms of collaboration and
  cooperation between organizations that defy
  market-hierarchy duality. Learning and mutual
  adjustment e.g. IBM and Toshiba collaboration

9
Emergent Patterns of Economic Activity

• Globalization
• - vertical disintegration through outsourcing of
  manufacture (but not design and marketing) to
  dispersed plants
• - spatial concentration but vertical
  disintegration through milieus of innovation
  (Silicon Valley)
• real options just-in-case mentality exploits
  anticipated highly profitable opportunities
• High risk construction of 3 power plants to
  capitalise on spikes in energy prices (e.g.
  7,000 from 40 megawatt hour of electricity)

10
Summary / Take-Away

• Ideal-type bureaucracy as benchmark of modern
  organization
• recurrent tensions and contradictions
• pervasive presence - McDonaldization
• Alternative (Market and Network) forms
• Market low transaction costs, flexible but
  risky as little control
• Network higher transaction costs, limited
  control, potentially inflexible and lock in
  problems
• Continuing reliance upon bureaucracy for market
  regulation and network integration and
  reproduction