Which type of formal organization people join to pursue morally worthwhile goals?

A broad definition of an organization could be said to be that of any purposeful arrangement of social activity that implies active control over human relations ordered for particular ends. In this sense, organizations involve patterns of relationships beyond primary group associations that are largely spontaneous, unplanned, and informal, and that are typified by kinship relations, peer groups, and localized community networks. There is, however, no generally accepted definition of an organization since its meaning may vary in terms of the different sociological approaches applied to the subject. Moreover, while organizations may be deliberately constructed or reconstructed for specific ends, the problem of definition founders on the specification of ‘‘organizational goals,’’ since groups and individuals within organizations may hold a variety of different and competing goals and the level of compliance and cooperation displayed by subordinates may vary, thus leading to the distinction between ‘‘formal’’ and ‘‘informal’’ organizations.

There are numerous existing sociological frameworks of organizational analysis and many have sought to categorize their forms by recourse to various criteria. For example, by using a classification of motivation behind adhering to organizational authority, Amitai Etzioni (1975) identifies three types. Those who work for remuneration are members of a utilitarian organization. Large commercial enterprises, for instance, generate profits for their owners and offer remuneration in the form of salaries and wages for employees. Joining utilitarian organizations is usually a matter of individual choice, although the purpose is that of income. Individuals joining normative organizations do so not for remuneration but to pursue goals they consider morally worthwhile, perhaps typified by voluntary organizations, political parties, and numerous other confederations concerned with specific issues. Finally, in Etzioni’s typology, coercive organizations are distinguished by involuntary membership which forces members to join by coercion or for punitive reasons.

Max Weber (1946 [1921]), to whom the first comprehensive sociological treatment of organizations is usually attributed, offered a distinction between modern bureaucracies and other forms of organization (Verband). Weber pointed out that patterns of authority in previous forms of organization did not conform to what he regarded as his typology of ‘‘legal rational’’ authority that infused the modern bureaucracy. Formal organizations, however, as Weber accounts, dated back to antiquity. The elites who ruled early empires, ranging from Babylonian, Egyptian, to Chinese, relied on government officials to extend their domination over large subject populations and vast geographical areas. Formal organizations, and their attendant bureaucratic structures, consequently allowed rulers to administer through the collection of taxes, military campaigns, and construction projects.

Typically, cultural patterns in pre industrial societies placed greater importance on preserving the past and tradition than on establishing rationally oriented organizational structures. The systems of authority underlying early organization forms were, in Weber’s typology, ‘‘affectual’’ or ‘‘emotional’’ loyalties or those solicited from custom or force of habit. In their rationalized bureaucratic form, Weber identified organizations as pervading the structures of modernity and holding increasing sway over human life, including the agencies of the state, business enterprises, education, infirmaries, the military, political parties, penal or rehabilitation institutions, and even religious establishments. This hegemonic hold of such organizations was also exemplified in Etzioni’s famous statement that ‘‘we are born in organizations, educated by organizations, and most of us spend much of our lives working for organizations’’ (1975: 1). There were various historical reasons identified by Weber for this expanding mode of bureaucratic existence. These included, in the West at least, the overlapping developments of the calculated pursuit of profit in the emergent capitalization of the marketplace, the diffused Protestant work ethic, an advanced form of geographical communication, the growth of representative democracy, and inscribed for mats of legal regulations.

Weber considered the bureaucratic organizational type to be the clearest expression of a rational worldview because its principal elements were intended to achieve specific goals as efficiently as possible. In short, Weber asserted that bureaucracy transformed the nature of western society in the same way that industrialization revolutionalized the economy – pointing out that large capitalist enterprises are unequaled models of strict bureaucratic organizations. In his exploration of their proliferation, Weber’s ‘‘ideal type’’ bureaucracy displayed a number of overlapping characteristics. Firstly, there is the distinguishing feature of specialization. Throughout most of human history, social activity was dominated by the pursuit of the basic goals of securing food and shelter. Bureaucracy, by contrast, assigns to individuals highly specialized duties. Secondly, bureaucracies arrange personnel in a vertical hierarchy of offices. Each official is thus supervised by superiors in the organization, while in turn supervising others in lower positions. Thirdly, rules and regulations replace cultural traditions through operations guided by rationally enacted rules and regulations. These rules control not only the organization’s own functioning but also, as much as possible, its larger environment. Hence, a bureaucracy seeks to operate in a completely predictable fashion. Thirdly, a bureaucratic organization anticipates that officials will have the technical competence to administer their official duties. It follows that bureaucracies regularly monitor the performance of staff members. Such impersonal evaluation based on performance contrasts sharply with the custom or patronage which informed earlier forms of organization. Fourthly, in bureaucratic organizations rules take precedence over personal caprice, encouraging uniform treatment for each client as well as other officials. Finally, rather than casual verbal communication, bureaucracies rest on formal, written reports which subsequently underpin their mode of operation.

While Weber recognized the unparalleled efficiency of bureaucratic organizations, he identified them as simultaneously generating widespread alienation. The stifling regulation and dehumanization of the ‘‘iron cage’’ that came with expanding bureaucracy led to an increasing ‘‘disenchantment with the world.’’ Bureaucracies, Weber warned, tended to treat people as objects and a series of ‘‘cases’’ rather than as unique individuals. Moreover, working for large organizations demanded specialized and often tedious routines. Weber therefore envisaged modern society as a vast and growing system of rules seeking to regulate everything and threatening to crush the human spirit. Weber also predicted that the same rationality would overspill into other aspects of social existence and subject individuals to apathetic functionaries. In total, bureaucratic rationality stifled creativity and turned on its creators and enslaved them, reducing the official to ‘‘only a small cog in a ceaselessly fixed routine of march.’’

The alienating nature of organizations was much later to inform such works as that of George Ritzer in his account of ‘‘McDonaldization,’’ whereby the rationalizing processes of production in large scale capitalist enterprises entail ‘‘efficiency,’’ the quickest and most effective way of reaching a goal; ‘‘calculability,’’ mass produced uniformity according to a calculated plan; ‘‘uniformity’’ and ‘‘predictability,’’ which result from a highly rational system of organization that specifies every course of action and leaves nothing to chance; and technological ‘‘control’’ over people and eventually automation, which replaces even the standardized operations of individual workers. In echoing Weber’s fear that rationality may be irrational in its consequences, Ritzer suggests that the ‘‘ultimate irrationality’’ of such processes has a tendency to contaminate other dimensions of social existence and brings the danger that ‘‘people could lose control over the system and it would come to control us’’ (Ritzer 1993: 145).

Weber also added to his fears the observation that the ‘‘technical superiority’’ of bureaucracies was not necessarily superior. Neither, he asserted, was it excluded from personalized interests that were typified by the pursuit of the accumulation of capital. On the latter count, one of the major foci of the extensive literature from the 1970s was on the politico economic environment which circumscribed organizational dynamics. In this respect, Marxist interest in the nature of organizations offered far reaching critiques of bureaucracies, particularly in their relations with state and corporate power, alongside an assessment of the embedded interests of professional groupings in organizational life. Such a perspective threw light upon the nature of domination observable through systems of repression and exploitation.

Weber’s fear that bureaucracies were not devoid of personalized interests was taken to its furthest extreme by another classical theorist of organizations, Robert Michels (1958 [1915]). Michels’s dictum of the ‘‘iron law of oligarchy’’ supposed that organizational control inevitably gave way to elitist rule that negated democratic participation. This was exemplified by political parties, which tended to have a tendency to replace organization controls with those at the apex of the organizational hierarchy. Hence, a position of dominance invariably led to the pursuit of interest even in opposition to stated organizational goals, alongside the recruitment of underlings involving a system of patronage and deference.

The early critiques of organizational functionality did not, however, curtail the tendency for the discipline of sociology to view the organization as a central hallmark of modernity. This explains the normative appeal of particular schools of organization theory that dominated for so long within the discipline. A yard stick of such an attraction was inherent in the mid twentieth century analytical frame works of the structural functionalist accounts of Talcott Parsons, who established an organizational typology that was underpinned by rational instrumentality (Parsons 1960). In short, functional imperatives and rules established a relationship between the needs of organizations as organic social systems and individual and collective roles and motivations.

The structural functionalist analysis of organization provided a theoretical paradigm that was subsequently subject to attempts to elaborate upon a fairly simplistic model. One challenge was to identify and explain dysfunctional aspects of the organizational structure. A common assumption was that any potential temporary disequilibrium was likely to be generated by one element in the organic system changing more rapidly than others. In contrast, Robert Merton saw the potential for dysfunction built into the very nature of organizational life (Merton 1968). To this end, he coined the term ‘‘bureaucratic ritual’’ to designate a preoccupation with rules and regulations to the point of thwarting an organization’s goals. For Merton, ritualism impedes individual and organizational performance since it tends to stifle creativity and innovation. In part, ritualism emerges because organizations, which pay modest fixed salaries, provide officials little or no financial stake in performing efficiently. Merton further argued that if bureaucrats have little motivation to be efficient, their principal incentive derives from endeavors to sustain employment. Hence, officials typically strive to perpetuate their organization even when its purpose has been fulfilled. The result has frequently been termed ‘‘bureaucratic inertia’’ – the tendency of organizations to perpetuate themselves even beyond their former objectives – and this is one of the reasons why, in his account of bureaucracy, Weber wrote that ‘‘once fully established, bureaucracy is among the social structures which are hardest to destroy.’’

A further critique of the structural functionalist framework was developed by theorists such as Crozier (1964) and Simon (1976 [1945]), who suggested that far from exhibiting an underlying principle of rationality, organizations were best identified by fragility, instability, and weakly integrated internal relations. Organizations were thus best appraised as a conglomeration of conflicts, adjustments, and negotiations. Ironically, then, an efficient organization was not necessarily one tending toward an equilibrium and ordered functioning, but one of complexity, compromise, and uncertainty. Such concepts as Simon’s ‘‘bounded rationality’’ and Crozier’s view of organizational power as being essentially problematic were to become associated with ‘‘contingency theory,’’ which pin pointed the dynamics of internal competing forces. Put succinctly, organizations could no longer be conceived as unified organic systems based on rationalizing prerequisites.

In questioning the efficiency of formal rules and regulations, Blau (1963) insisted that unofficial practices are an established and vital part of the structure of all organizations, serving to increase internal efficiency. In particular, it is via informal networks that information and experience are shared and problem solving facilitated. Hence, knowledge of complex regulations is widened, leading to time saving and efficiency, while consultation transforms the organizational staff from a disparate collection of officials into a cohesive working group. Moreover, informality may help to legitimate needs sometimes overlooked by formal regulation, or may amount to ‘‘cutting corners’’ in the carrying out of duties in order to simplify the means to achieve specified goals. Thus, paradoxically, unofficial practices which are explicitly prohibited by official regulations may further the achievement of organizational objectives.

Other accounts conceptualized environmental effects within the context of the particular goals established by organizations. While different types of environments were surveyed, a popular theme has been the dynamics of entrepreneurial organizations within the market economy. The indications are that they involve a complex web of interdependence and institutional laws that tend to limit organizational dependency in an uncertain economic environment and thus render them dysfunctional: for example, deliberately overproducing or selectively promoting new products. Economists such as Eggertsson (1990) also addressed the nature of organizational practice through what came to be known as the ‘‘new institutionalism.’’ Inherent in this developing critique was the insistence that goal oriented rationality actually provides constraints in the dynamics of bureaucratic structures, especially in terms of the transaction cost endeavors of some forms of organization.

Despite the apparently dysfunctional aspects of a good deal of organizational life, the normative stance that was engrained in structural functionalist perspectives retained its appeal in neorationalist theory. Basic to this school of thought was that functional rationality should remain a desirable and reachable ideal. This view identified organizational managers as the strategic agents in determining roles, goals, and the nature of the organizational structure. Recognizing the actual or potential failures of organizational life, managers were held to be the gatekeepers in identifying goals–means imperatives and ideally responsible for rational order and behavior, while simultaneously accountable for necessary innovation and change. Integral to such an approach was the flexibility demanded by rapidly changing technological systems, the important role of human resource management, and adaptation to environmental conditions.

The postmodern approach to organizations is clearly currently increasingly influential. It has tended to deny the previous sociological preoccupation with organizational analysis. This is because postmodern accounts, which center on the application of literary and cultural theorizing, lead to the neglect or denial of structural theory in any shape or form. The increasing popularity of a postmodern approach, with its central concern of deconstructionism, has in turn added to a further development in organization study and theorizing: its increasing fragmentation and isolation. However, as noted above, organizational analysis, especially in the United States, continues to focus on the intricacies of structure, systems, hierarchy, and technology. Thus there remains an enduring interest in the relationship between organizations and their wider environment, particularly with macroeconomic factors and the dynamics of the contemporary marketplace.

The work of Foucault (1975), to some degree at least, has informed postmodern concerns. Marking a radical departure from the structural analysis of organizational study, Foucault’s historical interpretations have attempted to uncover discursive systems that permeate the growth of coercive institutions, including organizational forms which exerted an all embracing domination over the human subject. Of particular influence has been Foucault’s exploration of ‘‘surveillance’’ and discipline in the industrial and institutional fields of the state, and the ways in which new forms of production of information and knowledge led to relations of power in organizational life. Put succinctly, Foucault’s concern with the growth of organizational control turned upon a historical appraisal of the role of ‘‘mass’’ organizations in the control, discipline, and surveillance of subject social groups in such settings as the mental hospital, penal institutions, and the large scale armed forces.

There have proved to be numerous other threads discernible in the postmodern approach to organizations. Overall, however, postmodernists have offered a new wave of critique derived from broader philosophies of culture and language that constitute a thorough undermining of the ‘‘project’’ of modernity. In contradiction to earlier organization theory is the focus on the subjectivity and random nature of ‘‘truth’’ claims and instrumental rationalities at the core of modern organizations. This move away to a postmodern scrutiny of organizations emphasizes the discursive practices of bureaucratic life and its theorization. Nonetheless, the postmodern analysis of organizations, their agencies and operation, has also taken off in other directions that embrace the problematic areas of management, performance, and productivity. For instance, Clegg (1990) observes that capital oriented organizations in a post Fordist economy have often developed as conglomerates with distinct elements dealing with different aspects of the marketplace. The strategy for the company does not therefore originate from a central source coordinating the activities of diverse parts of the conglomerate. Instead, strategy originates from members of the organization with ‘‘core competencies,’’ that is, a particular expertise in the area on which the organization concentrates.

In addition to such areas of focus, many other sociological concerns have emerged in organizational studies which would appear to be concomitant with postmodernity: the emergence of micro level ‘‘spontaneous’’ and temporary forms of organization such as self help groups and those expressing a variety of mutual interests. Many such forms of organization may be derived from primary association, which subsequently and ironically renders a reworking of those definitions of organizations from which the subdiscipline of sociology initially emerged.

References:

1. Blau, P. (1963) The Dynamics of Bureaucracy. University of Chicago Press, Chicago.
2. Clegg, S. (1990) Modern Organizations: Organizational Studies in the Post Modern World. Sage, London.
3. Crozier, M. (1964) The Bureaucratic Phenomenon. University of Chicago Press, Chicago.
4. Eggertsson, T. (1990) Economic Behaviour and Institutions. Cambridge University Press, Cambridge.
5. Etzioni, A. (1975) A Comparative Analysis of Complex Organizations: On Power, Involvement, and Their Correlates. Free Press, New York.
6. Foucault, M. (1975) Discipline and Punish: The Birth of the Prison. Vintage, New York.
7. Merton, R. (1968) Social Theory and Social Structure. Free Press, New York.
8. Michels, R. (1958 [1915]) Political Parties. Free Press, New York.
9. Parsons, T. (1960) Structure and Process in Modern Societies. Free Press, Glencoe, IL.
10. Ritzer, G. (1993) The McDonaldization of Society: An Investigation into the Changing Character of Con temporary Social Life. Pine Forge Press, Thousand Oaks, CA.
11. Simon, H. (1976 [1945]) Administrative Behaviour. Macmillan, New York.
12. Weber, M. (1946 [1921]) Bureaucracy. In: Gerth, H. & Mills, C. W. (Eds.), From Max Weber: Essays in Sociology. Oxford University Press, New York.

Back to Sociology of Organizations