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El dia a dia, Llibres, PhD, Phd - Comprehensive Exam

89 – Administrative Behaviour (Simon, 1945)

Reference:

Simon, Herbert T. 1945.
Administrative Behaviour.
The Free Press, New York.

Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist, sociologist, and psychologist, and professor—most notably at Carnegie Mellon University—whose research ranged across the fields of cognitive psychology, computer science, public administration, economics, management, philosophy of science, sociology, and political science.
Simon was a polymath, among the founding fathers of several of today’s important scientific domains, including artificial intelligence, information processing, decision-making, problem-solving, attention economics, organization theory, complex systems, and computer simulation of scientific discovery. He coined the terms bounded rationality and satisficing, and was the first to analyze the architecture of complexity and to propose a preferential attachment mechanism to explain power law distributions.
He also received many top-level honors later in life. These includethe Nobel Memorial Prize in Economics “for his pioneering research into the decision-making process within economic organizations” (1978).
Source: Wikipedia

Topic:

Proposal of a theory of human choice or decision-making including the rational aspects and its limits. It studies also the mechanisms of influencing its members and decisions’ premises.

Summary and citations:

• In his introduction to the 2nd ed. Simon writes that “social science suffer from a case of acute schizophrenia”, economists attribute to economic man an omniscient rationality and social psychology says that people are’nt as rational as they though to be. Which is Simon’s point of view on this issue?

Simon answers “human behavior is intendedly rational, but only limited so.”

I- Decision making and Administrative Organization

Value and fact in judgment-“In so far as decisions lead toward the selection of final goals, they will be called “value judgments”, so far as they involve the implementation of such goals they will be called “factual judgments”. “

II- Some problems of administrative theory
III- Fact and value in decision-making

• “Given a system of values ,there is one alternative that is preferable to the others”

IV- Rationality in Administrative Behavior: “is concerned with the selection of the effective means”

• P67: “The series of such decisions which determines behavior over some stretch of time may be called strategy”.
• Decision steps: 1) listing of all alternatives; 2) determination of conseguences;•3) evaluation or “valuation”
• Choice: 1) knowledge (to list all alternative strategies and determine the consequences); 2) preferences comparing set of consequences (this is the difficulty)
• “The ultimate aim of knowledge […] is to discover a single unique possibility which is consequent behavior alternative”
• “…means and ends do not completely correspond to facts and values…”
• Means-end chains. Intermediate ends are value-indices
• Behavior pattern of a group will be competitive (=>instabilaty) or cooperative
• Meanings of rationality: objective, subjective, conscious, deliberate, organizational, and personal.

V- The Psychology of Administrative Decisions

• “The limits of rationality have been seen to derive from the inability of the human mind to bring yo bear upon a single decision all the aspects of value, knowledge, and behavior that would be relevant.
• Stimulus-response pattern more than a choice of alternatives.
• “Social institutions may be viewed as regularizations of the behavior of individuals through subjection of their behavior to stimulus-patterns socially imposed on them.”

VI- The equilibrium of the organization

Organization is a system in equilibrium between 1) receives contributions and 2) offers inducements.

VII- The role of authority

• Decisions influenced by: stimuli (external) and psychological “set” (internal)
• sanctions of authority 1) social sanctions; 2) psychological differences; 3) “purpose has been stressed (…) as a sanction of prime importance”; 4) economic security and status; 5) disinclination of accept responsibility – p134
• uses of authority: 1) inforces responsibility of the individual to those who wield the authority; 2) It secures expertise in the making of decisions; 3) It permits coordination of activity
• Menber of a group: “appplies the same general scale of values (…) as do other members (…) and when his expectations of the behavior of other members influence his own decisions.”
• “When coordination goes farther than communication, (…)it generally involves (…) authority.”
• “Authority does not seek to convince the subordinate, but only to obtain his acquiescence.”

VIII- Communication

• Commnication upward if: 1) transmission will not have unpleasant consequences 2) better tell superior first; 3) helpful for superior’s dealings with his own superiors
• “The specialization of decision-making functions islargely dependent () of adequate channels of communication to and from decision centers”
• Formal and informal communication
• Units that are specialised for particular communication units: internal and external.

IX- The criterion of efficiency

• Efficiency: Maximization of output
• “The criterion of efficiency dictates that choice of alternatives which produces the largest result for the given application fo resources”. But criticisms have been made.

X- Loyalties and Organizational Identification

• “Identification is the process whereby the individual substitutes organizational objectives (service objectives or conservation objectives) for his own aims as the value-indices which determine his organizational decisions.”
• “Social values in place of personal motives”
• “An organizational structure is socially useful (…) brings a correspondence between social value and organizational value”
• Undesirable effect if organizational values must to be weighted against values outside the area by the individual.
• Useful in depersonalizing choice and enforcing social responsibility

XI- The anatomy of organization

• “How does the authoriry of the commander extend to the soldiers in the ranks? How does he limit and guide their behavior? He does this by specifying the general mission and objective of each unit on the next level below and by determining such elements fo time and place…assure a proper coordination…”

• Review and its function: 1) check work 2) influence further decisions 3) appellate function 4) effective exercise of authority

• “We may conclude, then, that some measure of centralization is indispensable to secure the advantages of organization: coordination, expertise, and responsibility. On the other hand,, the costs of centralisation must not be forgotten. It may place in the hands of highly paid personnel decisions which do not deserve their attention…. Duplication of function…”

• Area of rationality and its limits (i.e. limited alternatives, reorientation of values, limits of knowledge, indiviual vs group rationality)

Personnal comments, interesting issues and findings:

P67: “The series of such decisions which determines behavior over some stretch of time may be called strategy”. For me strategy would be what Simon calls the “ultimate” goal and successive decisions are made to reach that goal. As Simon defines strategy, it is like strategy is defined step-by-step over time and is not something agreed and planned.

P72: Barnard defined cooperative organizations. For Barnard, cooperation could be effective and efficient or not. Simon distinguishes cooperation and competition.

I found interesting Simon’s interest for firm values, identification the impact on social responsibility as it is an aspect that was not much analysed at that time (1945) and that took much more importance in research in recent years.

Common points with Barnard:

• P111: equilibrium: “If the sum of contributions [related to Barnard’s “effectiveness”] is sufficient, in quantity and kind, to supply the necessary quantity and kind of inducements [related to Barnard’s “efficiency”], the organization survives and grows; otherwise, it shrinks and ultimately disappears unless an euilibrium is reached”. Simon’s contributions = Barnard’s contributions; Simon’s inducements = Barnard’s compensations

• P116: Simon’s “limits and area of acceptance” when he refers to the limits of authority and Barnard’s “zone of indifference” on the study of incentives

• Authority: Barnard and Simon both agree that authority exists when both, superior and subordinate accept its role. Simon distinguishes between momentary instances of the exercice of authority and roles (over a period of time).

• Both defend the hierarchy of authority or pyramid.

• Formal and informal organisation.

• Importance of channels of communication to and from decision centers.

Differences between Barnard and Simon:

• P120: Simon: Equilibrium in commercial organizations by 1) PROFITS (modifying objective to satisfy customer demand) and CONSERVATION (reaching employees and firms’ goals)

• Simon’s definition of effectiveness (reaching firm’s goals) and efficiency (optimizing resources of the firm or the ratio between input and output) are different from Barnard’s.

• For Simon persuasion is separated from authority. Barnard: “persuasion is an important task of the executive achieving cooperation”; Simon: “confusion among these terms results from the fact that all three phenomena –persuasion, suggestion, and command- are frequently present in a single situation.” P127

• Barnard talks about methods of incentives and persuasion (changing subjective attitudes): a) coercitive conditions; b) rationalization of opportunity; c) inclucation of motives. And Simon talks about sanctions of authority 1) social sanctions; 2) psychological differences; 3) “purpose has been stressed (…) as a sanction of prime importance”; 4) economic security and status; 5) disinclination of accept responsibility – p134

• Administrative hierarchy (responsibility) and hierarchy of authority (expertise) p138. Is related to the fact that people with expertise are recognised by offering them hogher positions in the administrative hierarchy, where other skills other than technical expertise is required. The result is the Peter Principle: the principle that “in a hierarchy every employee tends to rise to their level of incompetence”.

• Simon’s book was more a “description rather than prescription”. Barnard’s book pretended to be more a guide to executives.

• Simon: “Authority does not seek to convince the subordinate, but only to obtain his acquiescence.” Barnard, in opposition, took into consideration persuasion and put a stress on cooperation and subordinates’ aims (efficiency)

• Barnard refers to communication up-down as a major function of the executive. Simon refers to communication also bottom-up (p163). Simon’s also talks about the receiver.

El dia a dia, Llibres, PhD, Phd - Comprehensive Exam

73 – The Functions of the Executive (Barnard, 1938)

Reference:

Barnard, Chester I.
The Functions of the Executive
Harvard University Press, Boston, 1938

Chester Irving Barnard (1886 – 1961) was an American business executive, public administrator, and the author of pioneering work in management theory and organizational studies.

Topic:

The functions of the executive derived from the theory of cooperative systems.

Main questions:

Cooperative systems, effectiveness and efficiency, formal and informal organizations, economy of incentives, theory of authority, theory of opportunism, functions of the executive.

Data and Methods:

Theories derived from practical work as executive at NJ Bell Company

Interesting issues and findings:

I – Introduction
• Formal organizationis that kind of cooperation among men that is conscious, deliberate, purposeful
• In our western civilization only one formal organization, the Roman Catholic Church, claims a substantial age.
• Failure to cooperate […] are characteristic afcts of human history
• The survival of an organization depends upon the maintenance of an equilibrium of a complex character in a continous fluctuating environment

II – The individual and the organization

III – Physical and biological limitations in cooperative systems
• Biological limitations: a) application of human energy; b) perception; c) understanding
• Systems of cooperation are never stable, because of changes in the environment and the evolution of new purposes. […] implies special management processes and in complex cooperations, […] executives.

IV – Psychological and social factors in systems of cooperation
• Social factors: a) interactions between individuals within a cooperative system; b) the interation between the individual and the group; c) the individual as the object of cooperative influence; d) social purpose and the effectiveness of cooperation; e) individual motives and cooperative efficiency

V- The principles of cooperative action
• the nature of the joint limitations on cooperation “imposed” by physical, biological, and social factors; 2) the processes of overcoming those limitations in purposive conduct; 3) their bearing on effectiveness of ccoperative effort; 4) their bearing on the efficiency of cooperative effort.

VI – The definition of formal organization
• Cooperative situations can be : related to aspects of a) physical environment; b) social environment; c) individuals ; d) other variables
• Definition of formal organization: A system of consciously coordinated activities or forces of two or more persons

VII – The theory of formal organisation
• Organization when: 1) there are persons able to communicate to each other; 2) who are willing to contribute action 3) to accomplish a common purpose.
• External equilibrium has two terms in it: 1) the effectiveness of the organization and 2) its efficiency, which comprises the interchange between the organization and individuals.
• Willingness to communicate ; 2) Common purpose ; 3) Communication
• Effectiveness: ability to carry out its purpose, it is primarily a matter of technological processes. Paradox: an organization must disintegrate if it cannot accomplish its purpose. It also destroys itself by accomplishing its purpose.
• Efficiency: securing of nefcessary contributions to the cooperative system

VIII – The structure of formal organizations
• Complete, incomplete, subordinate and dependent organizations
• Origins: a) spontaneous; b) direct individual’s effort ; c) infant bodies from existing ; d) result of segmentation of existing ones.
• Necessity of a leader: a) complexity of purpose; b) difficulty of communication process; c) extent to which communication is necessary; d) complexity of the personal relationships involved.

IX – Informal organizations and their relation to formal organizations
• “By informal organization I mean the aggregate of the personal contacts and interactions and the associated groupings of people […] joint purposes are excluded by definition, common or joint results of important character nevertheless come from such organization.
• Effects: a) it establishes certain attitudes, understandings, customs b) it creates the condition under which formal organization may arise
• “comradeship is more powerful than patriotism”
• Formal organizations create and require informal organizations.
• Functions of informal in formal organizations: 1) communication; 2) maintenance of cohesiveness 3) maintenance of the feeling of personal integrity, self-respect, of independent choice.

X – The bases and kinds of specializations
• Associational specialization: repeated mutual adjustment of persons to persons.
• “The effectiveness of coopeartive systems depends almost entirely upon the invention or adoption of innovations of specialization”
• “The primary aspect of specialization is the analysis of purpose”
• “organization and specialization are synonyms”: the correlation is accomplished by analyzing purpose into parts or detailed purposes or ends.

XI – The economy of incentives
• “The egoistical motives of self-preservation and self-satisfaction are dominating forces”
• The method of incentives (offering objective incentives)
• The method of persuasion (changing subjective attitudes): a) coercitive conditions; b) rationalization of opportunity; c) inclucation of motives.

XII – The theory of authority
• “Authority is the character of a communication (order) in a formal organization by virtue of which it is accepted by a contributor to or member of the organization as governig the action he contributes”
• Authority involves two aspects: 1) the subjective and 2) the objective
• “There exists a zone of indifference in each individual within which orders are acceptable without conscious questioning of their authority.”
• Authotity of position // authority of leaderhsip
• There cannot be authority without corresponding responsibility
• A) Channels of communication should be definitely known; b) objective authority requires a definite formal channel of communication to evey memmber of the organisation; c) the line of communication must be as direct or short as possible; d) the complete line of communication should be usually be used; e) the competence of the persons serving as communication centers, that is, officers, supervisory heads, must be adequate; f) the line of communication should not be interrupted during the time when the organization is to function.; g) every communication should be authentificated.

XIII – The environment of decision
• […] a sort of dual personality is required of individuals […] – the private personality, and the organization personality (can not be delegated, technique of decision)
• Executives […] represent a specialization of the process of making decisions. […] are under the obligation of making decisions.
• Decisions originate: a) from authoritative communications from superiors; b) from cases referred for decision by subordinates ; c) […] iniciative of the executive
• […] most decisions produce no direct evidence […] and can only be derived from the cumulation of indirect evidence.
• The decision may be not to be decided (not pertinent, lacking data, prematurely, cannot made effective others should take)
• The fine art of executive decision consists in not deciding questions

XIV – The theory of opportunism

• Moral element is indispensable (existing purpose and an objective environment). Its antithesis is the opportunistic element, that is indispensable to the theory of organization. Action takes place in the present under present conditions and means.
• “The limiting (strategic) factor is the one whose control, in the right form, at the right place, and time, will establish a new system or set of conditions which meets the purpose. (vs complementary factors)
• “This is the meaning of effective decision – the control of the changeable strategic factors, that is, the execercise of control at the rigth time, right placce, right amount and ritgh form so that purpose is properly redefined and accomplished”.
• “Decision relates to action.[…] Purpose will have to be redefined in practical terms.
• “The unbalance in the discrimination of the facts of the environment is added the confusion of the past with present environments.”
• “Purpose is the bridge between the past and the future which functions only as it rests upon the present.”
• “The direct environment of the executive decision is primarily the internal environment of the organization itself”[…]” It is the organization, not the executive, which does the work on the external environment”.

XV – The Executive Functions

• Points of interconnection = executives
• “…executive functions the specialized work of maintaining systems of cooperative effort”
• “It is not even quite correct to say that the executive functions are to manage the system of cooperative efforts”
• Essential executives functions: 1) to provide the system of communication [executive personnel and executive positions] ; 2) to promote the securing of essential efforts ; 3) formulate and define purpose
•

XVI – The Executive Process

• Art rather than science
• Known by its effects rather than by analysis
• An organization is a system of cooperative human activities the functions of which are: 1) the creation 2) the transformation and 3) the exchange of utilities. It embraces 4 different kind fo economies: a) material economy, b) a social economy, c) the individual economies, and d) the organization economy.
• This philosophy of giving as little as possible and getting as much as possible in the other man’s values is the root of bad customer relations, bad labor relations, bad credit relations, bad supply relations, bad technology.
• The reward of service is more service

XVII – The Nature of the Executive Responsibility

• […] the moral factor […] spell the necessity of leadership, the power of the individuals to inspire cooperative personal decision by creating faith […]
• Cooperation, not leadership, is the creative process; but leadership is the indispensable fulminator of its forces.
• Leadership has two aspects 1) local, individual, ephemeral 2) responsible
• The point is that responsibility is the property of an individual by which whatever morality exists in him becomes effective in conduct.
• If morality to which the responsibility relates is low, the organizations are short-lived.

XVIII – Conclusion
• “I believe that the expansion of cooperation and the development of the individual are mutually dependent realities, and that a due proportion or balance between them is a necessary condition to human welfare.”

-.-.-.-.-.-.-.-.

Interesting personal discussion points:

– Barnard, even from the fact that is a practitioner, theorizes about multiple topics on management. Why so many? As a general manager, he dealed with all the different aspects of management as he said “the higher the positions in the line of authority, the more general the abilities required”. He then wanted to make a complete study of management, not only specific aspects.
– Without mentioning the current common names of the domains, he writes about strategy, human resources (ie selection, incentives), OB (ie. informal communication), structure, leadership, motivation (related to his concept of efficiency), social corporate responsibility (executive responsibility)
– strategic management (about concepts mission/ vision that he calls purpose): p137 “Understanding or acceptance of the general purpose of the complex is not, however, essential”. This idea is in confrontation with current ideas of well-defined and accepted mission/vision.
– Barnard wants to explain the main characteristics of organizations, not only commercial, but also religious, social and political. This helps him to analyze common aspects and at the same time, differentiate them.
– I used to be an executive. As an executive, I would be attracted by this book (first by its title, second the author’s background) but would expect a more practical approach and would be surprised by the lack of illustrative examples and abstract theories.

El dia a dia, Llibres, PhD, Phd - Comprehensive Exam

87 – The Elusive phenomena (Roethlisberger, 1977)

Book Summary (main chapters)
“The Elusive Phenomena” by F.J. Roethlisberger (1977)

“The Elusive Phenomena” is the intellectual autobiographical account of the author’s work in the field of Organizational Behavior at Harvard Business School.

2
Born in New York in 1898 and son of Swiss immigrants, the author was soon attracted by science and studied mathematics and physical science at Columbia and at the MIT, where he was deceived by the way ‘scientific management’ was taught. His passion for knowledge and certainty pushed him to join Prof. Mayo at Harvard (1927) where he became a phenomenologist.

3
At Harvard, he joined the committee on Industrial Physiology and counselling students, where he observed the uniformities, basis of the ‘life space’: (1) Preoccupation and Attention, (2) The Form of Thinking: tending to treat the world of fact simple and to complicate its thinking of it, creating False Dichotomies, (3) Preoccupations and Personal History, (4) Preoccupations and the Future and (5) The Dyatic Relation. He was more interested in scientific knowledge and epistemology (what makes knowledge knowledge) than in metaphysics (real) or ethics (good) or aesthetics (beautiful), considering notion of truth as consistent, correspondent to the phenomena and convenient and useful.

4
Through the Hawthorne researches, Roethlisberger studied the social space, the interactions between workers and their productivity, satisfaction and motivation. In his best-seller book ‘Management and the Worker’ the author explains ‘The Hawthorne effect’ that shows the influence of the experiment itself and the influence of the difference of behavior of the supervisors.

5
Under the influence of the ‘triumvirate’ Mayo, Henderson (researcher in chemistry and follower of sociologist Pareto) and Donham (Dean of Harvard BS), the author became a concrete sociologist, observing interactions between persons, involving feelings. Agreeing with Henderson, both theory and practice were necessary. 1) The need of a conceptual scheme for purposes of investigation; 2) A matter of convenience and utility and not of truth or falsity; 3) A way of thinking to be practiced, 4) to be pratices in relation to a class of phenomena; 5) To be used so long as it remained useful; 6) Be prepared to a more useful way of thinking. At that time, he was also interested in general semantics taught by Alfred Korzybski.

6
Roethlisberger did research in, among others, General Motors, the Government and Macy’s. There he studied the social structure of the organization and the salesclerk-customer relation (the motivation and cooperation he observed were ignored by the scientific management). His goal was to analyze Society and Organisation by studying the basic social processes.

7
In 1942, Pearl Harbor attack and some colleagues’’ death or retirement pushed Roehlisberger to a nervous breakdown. He joined a farm family to recover. There he found a social behavior laboratory in an organisation without standards, principles of therapy or leadership, only uniformities in the processes of individual growth and learning, and individual and group cooperation.

8
In his early teaching years, he taught the War Industry Retraining Program where his goal was “not to make persons into better executives but instead to make executives into better persons”. He taught an MBA course: “Administrative Practices” about motivation, productivity and satisfaction of people. In 1946 was a turning point in the development of social science.

9
At Harvard, the author taught according to the Case Method, a HBS teaching and research method. Roethlisberger lists the commonly agreed objectives of this method but also shows its limitations (rationale opposed to theory, exclusively economic facts, reinforcing responsible behavior and a ‘perfect’ solution) and denounces the ‘blind spots’ (social interactions, social organization, illogical conflicts, etc) and shows the influence of assumptions and feelings in perceptions and finally in actions.

13
In the early 50’s, Roethlisberger was involved in the Human Relations Clinic, a program addressed to practitioners that had to obtain the understanding and cooperation of others to get their own job done and had to act as multipliers of competence in matters of human relations. These skills were improved by a clinical method studying extrinsic and intrinsic aspects (a diagnostic or research, a counselling, a membership, a leadership and a personal context) to reach a better knowledge of oneself.
At Bethel, a summer training center, he was a trainer and a trainee. There he learned that if the more inefficiently the members of a group carried out a task, the better they were able to examine their interpersonal relations and that the here-and-now most appropriate member that met the needs of the group became at that time its leader.
By 1954, Roethlisberger felt that his work was not getting further.

14
Between 1942 and 1954, Roethlisberger did Human Relations research preparing teaching cases. These cases were descriptions of actual concrete happenings with a clinical orientation (not solely with economical and objective data), giving importance to soft as well as hard data (that can be measured and quantified) to make it more understandable.
Together with George Homans, Abe Zaleznik and Roland Christensen, Roethlisberger did a prediction study; to see if the clinically knowledge could be also proved analytically. This study showed that Homans’ theory of distributive justice could not be explained by the hard data but only considering the soft data.

20
A skill is a concrete behavior, either physical or social, involves concrete operations, results and outcomes. Instead of a technique, it is a way of learning with 3 characteristic: 1) There is a balanced development between the outward and the inward aspects; 2) the skill improves in time; 3) it develops through attention. The person with the skill is action-oriented, not knowledge oriented, does not have a notion of how things should be or a special interest in verbalizing, is intuitive, with no distinction between theory and practice. Social skill viewed as a technique could arouse ethic issues. Social skill is an ever-improving capacity to communicate feelings to each other to promote better understanding between them and to a better participation in a common task. Social skill is not a verbal skill. Skill is practice. The author considers himself as a phenomenologist. Natural social phenomena are men’s interaction with their associated sentiments and feelings. Paradoxally social knowledge impedes to develop social skill.

21
The author affirms that the knowledge seeker searches for a class of phenomena (taxonomy) to make further observations and generalizations.
The concept of equilibrium may be applied to a system and its environment, the relations among the components of the internal system or relations between the internal and external system. The distinction between the external system (the organisation where activities are differentiated) and internal system (the diffentiated individuals) have mutual dependent consequences. A group needs both roles but they might have different goals. The needs of individuals and groups don’t have to be confused; they need to be differentiated before being related and to search for equilibrium. These ‘open’ or ‘dynamic’ systems (with external and internal systems and relations that vary in time) are difficult to conceptualize.

22
Roethlisberger wanted to go further in his research, from a limited clinical to a more scientific analytical knowledge but the absence of a ‘shared paradigm’ among researchers made impossible to build more knowledge based on a common ground. The author differentiates different types of knowledge makers: 1) conceptual logicians; 2) clinicians; 3) correlation seekers and testers; 4) hypotheses seekers and testers (methodologists); 5) general-proposition makers; 6) model makers or model builders

(See table p.393 about Skill, clinical knowledge and analytical knowledge, its characteristics, methods and products.

Roethlisberger regrets the lack of shared skill, conceptual scheme, paradigm among researchers to the elusive phenomena of human behavior in organizations.

Definitions:

ELUSIVE: tending to elude: as
a : tending to evade grasp or pursuit
b : hard to comprehend or define
c : hard to isolate or identify

(Source: http://www.merriam-webster.com/dictionary/elusive )

PHENOMENON in Greek means “that which reveals itself”