Reference:
Thompson, James D.
« Organization in Action: Social Science Bases of Administrative Theory » (1967)
Transaction Publishers, 2003, 192 p., ISBN: 0-7658-0991-5
Topic: Uncertainty avoidance in complex organizations.
Summary and citations:
Proposition 2.1: Under norms of rationality, organizations seek to seal off their core technologies from environmental influences
Organizational Rationality
“At a minimum, then, organizational rationality involves three major component activities: (1) input
activities, (2) technological activities, and (3) output activities” (Chapter 2, p. 19)
Proposition 2.2: Under norms of rationality, organizations seek to buffer environmental influences by surrounding their technical cores with input and output components
Proposition 2.3: Under norms of rationality, organizations seek to smooth out input and output Transactions
Proposition 2.4: Under norms of rationality, organizations seek to anticipate and adapt to environmental changes which cannot be buffered or levelled
“Organizational rationality therefore is some result of (1) constraints which the organization must face, (2) contingencies which the organization must meet, and (3) variables which the organization can control” (Chapter 2, p. 24)
Fluctuations
Proposition 2.5: When buffering, leveling, and forecasting do not protect their technical cores from environmental fluctuations, organizations under norms of rationality resort to rationing
Management of Interdependence
Proposition 3.1: Under norms of rationality, organizations seek to minimize the power of task- environment elements over them by maintaining alternatives
Proposition 3.2: Organizations subject to rationality norms and competing for support seek prestige
Proposition 3.3: When support capacity is concentrated in one or a few elements of the task environment, organizations under norms of rationality seek power relative to those on whom they are dependent
The Acquisition of Power
Cooperative strategies
Proposition 3.3a: When support capacity is concentrated and balanced against concentrated demands the organizations involved will attempt to handle their dependence through contracting
Proposition 3.3b: When support capacity is concentrated but demand dispersed, the weaker organization will attempt to handle its dependence through coopting
Proposition 3.3c: When support capacity is concentrated and balanced against concentrated demands, but the power achieved through contracting is inadequate, the organizations involved will attempt to coalesce
Defense of Domain
Proposition 3.4: The more sectors in which the organization subject to rationality norms is constrained, the more power the organization will seek over remaining sectors of its task environment
Proposition 3.5: The organization facing many constraints and unable to achieve power in other sectors of its task environment will seek to enlarge the task environment
Organizational Design
Proposition 4.1: Organizations under norms of rationality seek to place their boundaries around those activities which if left to the task environment would be crucial contingencies
Proposition 4.1a: Organizations employing long-linked technologies and subject to rationality norms seek to expand their domains through vertical integration
Proposition 4.1b: Organizations employing mediating technologies, and subject to rationality norms seek to expand their domains by increasing the populations served
Proposition 4.1c: Organizations employing intensive technologies, and subject to rationality norms seek to expand their domains by incorporating the object worked on.
Balancing of Components
Proposition 4.2: Multicomponent organizations subject to rationality norms will seek to grow until the least-reducible component is approximately fully occupied
Proposition 4.3: Organizations with capacity in excess of what the task environment supports will seek to enlarge their domains
Departmentalization
Proposition 5.1: Under norms of rationality, organizations group positions to minimize coordination costs
Proposition 5.1a: Organizations seek to place reciprocally interdependent positions tangent to one another, in a common group which is (a) local and (b) conditionally autonomous
Proposition 5.1b: In the absence of reciprocal interdependence, organizations subject to rationality norms seek to place sequentially interdependent positions tangent to one another, in a common group which is (a) localized and (b) conditionally autonomous
Proposition 5.1c: In the absence of reciprocal and sequential interdependence, organizations subject to norms of rationality seek to group positions homogeneously to facilitate coordination by standardization
Hierarchy
Proposition 5.2: When reciprocal interdependence cannot be confined to intragroup activities, organizations subject to rationality norms seek to link the groups involved into a second-order group, as localized and conditionally autonomous as possible
Proposition 5.3: After grouping units to minimize coordination by mutual adjustment, organizationscunder rationality norms seek to place sequentially interdependent groups tangent to one another, in a cluster which is localized and conditionally autonomous
Proposition 5.4: After grouping units to solve problems of reciprocal and sequential interdependence, organizations under norms of rationality seek to cluster groups into homogeneous units to facilitate coordination by standardization
Proposition 5.4a: When higher-priority coordination requirements prevent the clustering of similarcpositions or groups, organizations seek to blanket homogeneous positions under rules which cut across group boundaries, and to blanket similar groups under rules which cross divisional lines
Proposition 5.4b: When organizations employ standardization which cuts across multiple groupings, they also develop liaison positions linking the several groups and the rule-making agency
Proposition 5.4c: Organizations with sequential interdependence not contained by departmentalization rely on committees to accomplish the remaining coordination
Proposition 5.4d: Organizations with reciprocal interdependence not contained by departmentalization rely on task-force or project groupings to accomplish the remaining coordination
Environmental Constraints
Boundary-Spanning Structures
Proposition 6.1: Under norms of rationality, organizations facing heterogeneous task environments seek to identify homogeneous segments and establish structural units to deal with each
Proposition 6.2: Under norms of rationality, boundary-spanning components facing homogeneous segments of the task environment are further subdivided to match surveillance capacity with environmental action
Proposition 6.2a: The organization component facing a stable task environment will rely on rules to achieve its adaptation to that environment
Proposition 6.2b: When the range of variation presented by the task-environment segment is known, the organization component will treat this as a constraint and adapt by standardizing sets of rules
Proposition 6.2c: When the range of task-environment variations is large or unpredictable, the responsible organization component must achieve the necessary adaptation by monitoring that environment and planning responses, and this calls for localized units
The Organization as a Joint Result
Proposition 6.3: When technical-core and boundary-spanning activities can be isolated from one another except for scheduling, organizations under norms of rationality will be centralized with an overarching layer composed of functional divisions
Proposition 6.4: Under conditions of complexity, when the major components of an organization are reciprocally interdependent, these components will be segmented and arranged in self-sufficient clusters, each cluster having its own domain
Complexity and Change
Proposition 6.5: Organizations designed to handle unique or custom tasks, and subject to rationality norms, base specialists in homogeneous groups for “housekeeping” purposes, but deploy them into task forces for operational purposes
The Variables of Assessment
Proposition 7.1: Under norms of rationality, assessors prefer efficiency tests over instrumental tests, and instrumental tests over social tests
Proposition 7.2: At the institutional level, organizations subject to norms of rationality measure their fitness for the future in satisficing terms
Proposition 7.2a: Under norms of rationality, organizations facing relatively stable task environments seek to demonstrate fitness for future action by demonstrating historical improvement
Proposition 7.2b: Under norms of rationality, organizations facing dynamic task environments seek to score favorably in relation to comparable organizations
Proposition 7.3: When the organization cannot hope to show improvement on all relevant dimensions, it seeks to hold constant on some and show improvement on those of interest to task-environment elements on which the organization is most dependent
Proposition 7.4: Under norms of rationality, complex organizations are most alert to and emphasize scoring well on those criteria which are most visible to important task-environment elements
Proposition 7.5: When organizations find it difficult to score on intrinsic criteria, they seek extrinsic measures of fitness for the future
Proposition 7.5a: When task-environment elements lack technical ability to assess performance, organizations seek extrinsic measures of fitness for future action
Proposition 7.5b: When cause/effect knowledge is believed incomplete, organizations seek extrinsic measures of fitness for future action
Organizational Assessments of Components
Proposition 7.6: When technologies are instrumentally perfected, and task environments stable or well buffered, organizations under rationality norms measure components in terms of (past) efficiency
Proposition 7.7: Where task environments are relatively stable or well buffered and knowledge of cause and effect believed reasonably complete, organizations under rationality norms seek to account for interdependence and to assess each unit in efficiency terms
Proposition 7.8: When knowledge of cause/effect relationships is known to be complete, organizations under rationality norms evaluate component units in terms of organizational (rather than technical) rationality
Proposition 7.8a: Where interdependence is controlled through rules, such units are measured in terms of adherence to or deviation from rules
Proposition 7.8b: Where interdependence is controlled through scheduling, such units are measured in terms of quota filling
Proposition 7.8c: Where interdependence is controlled through mutual adjustment, units are measured in terms of the confidence expressed in them by coordinate units
Proposition 7.9: When units operating imperfect technologies are conditionally autonomous, they are measured by extrinsic standards
Proposition 7.10: As the organization’s posture with respect to the task environment fluctuates, the organization adjusts relative weightings of the multiple criteria by which it evaluates component units
Inducements/Contributions Contracts
Technologies and Negotiation Strategies
Proposition 8.2: Inducements/contributions contracts for jobs in routinized technologies are determined through collective bargaining
Proposition 8.2a: In collective bargaining, both parties have strong interests in governmental processes which establish the boundaries and rules for collective bargaining
Proposition 8.3: Inducements/contributions contracts at contingent boundaries of the organization are determined by (a) the power of a task-environment element and (b) the individual’s ability to handle the organization’s dependence on that element
Proposition 8.3a: To the extent that the organization gains power over task-environment elements, it reduces its dependence on the boundary-spanning jobs which deal with those elements
Proposition 8.4: Individuals in early-ceiling occupations in intensive technologies seek leverage in the negotiation process through collective action to upgrade the occupation relative to others
Proposition 8.5: Where the intensive technology employs late-ceiling occupations (professions), the
Inducements / contributions bargain rests on the individual’s visibility among occupational colleagues
Proposition 8.6: In the managerial technology, the inducements/contributions negotiation process rests on the individual’s reputation for scarce abilities to solve organizational-rationality problems
Proposition 9.1: When the individual believes that his cause/effect resources are inadequate to the uncertainty, he will seek to evade discretion
Proposition 9.1a: Organizations can thwart the exercise of discretion by establishing inappropriate Structures
Proposition 9.2: The more serious the individual believes the consequences of error to be, the more he will seek to evade discretion
Proposition 9.2a: Organizations can thwart the exercise of discretion by establishing inappropriate assessment criteria as bases for rewards and penalties
Proposition 9.2a: Organizations can produce systematic bias in the exercise of discretion by assessing performance on multiple, incompatible criteria
Proposition 9.3: Complex organizations and their supporting social structures encourage some individuals to exercise organizational discretion at considerable personal sacrifice
Multiple Consequences of Discretion
Proposition 9.4: Organizations seek to guard against deviant discretion by policing methods
Proposition 9.5: When work loads exceed capacity and the individual has options, he is tempted to select tasks which promise to enhance his scores on assessment criteria
Proposition 9.6: Where work loads or resource supplies fluctuate, the individual is tempted to stockpile
Proposition 9.7: Where alternatives are present, the individual is tempted to report successes and suppress evidence of failures
Proposition 9.8: Individuals in highly discretionary jobs seek to maintain power equal to or greater than their dependence on others in the organization
Proposition 9.8a: When the power of an individual in a highly discretionary job is less than his dependence, he will seek a coalition
Proposition 9.8b: Individuals representing precarious values in the organization become junior partners in organizational coalitions
Proposition 9.8c: To increase their power in organizations, individuals in highly discretionary jobs may form coalitions with essential elements of the task environment
Proposition 9.9: Changes in organizational dependencies threaten some coalitions and make new ones possible
Power Structure Variations
Proposition 9.10: The more sources of uncertainty or contingency for the organization, the more bases there are for power and the larger the number of political positions in the organization
Proposition 9.10a: Decentralization dilutes the power structure by creating more power positions but limiting the organization’s dependence on each one
Proposition 9.11: The more dynamic the technology and task environment, the more rapid the political processes in the organization and the more frequent the changes in organizational goals
Proposition 9.12: When organizations commit future control over resources in exchange for present solutions to contingencies, they create limitations on their abilities to adapt to future change of technologies or task environments
Control of Decision Premises
Proposition 10.1: The more numerous the areas in which the organization must rely on the judgmental decision strategy, the larger the dominant coalition
Proposition 10.1a: The less perfect the core technology, the more likely it will be represented in the dominant coalition
Proposition 10.1b: The more heterogeneous the task environment, the larger the number of task- environment specialists in the dominant coalition
Proposition 10.2: As areas within the organization shift from characteristically computational to characteristically judgmental decision strategies, the dominant coalition will expand to include their representatives, and vice versa
Dynamics of Organizational Control
Proposition 10.3: Potential for conflict within the dominant coalition increases with interdependence of the members (and the areas they represent or control)
Proposition 10.4: Potential for conflict within the dominant coalition increases as external forces require internal compromise on outcome preferences
Proposition 10.5: Potential for conflict within the dominant coalition increases with the variety of professions incorporated
Coalition Management
Proposition 10.6: When power is widely distributed, an inner circle emerges to conduct coalition business
Proposition 10.7: The organization with dispersed bases of power is immobilized unless there exists an effective inner circle
Proposition 10.8: When power is widely dispersed, compromise issues can be ratified but cannot be decided by the dominant coalition in toto
Proposition 10.9: In the organization with dispersed power, the central power figure is the individual who can manage the coalition
Personal comments, interesting issues and findings:
In closed systems, uncertainty can be controlled with planing and control and the goal can be focused on maximization. On the other hand, in the current world, organizations are complex and are open-systems and according to Thompson, their goal is satisficing. In both organizations, it is a quest to avoid uncerainty.
Thompson writes that organizaations with similar technological and environmental problems should exhibit similar behavior. So this leads us to think that he believes in organizations’ convergence. Convergence theory argues that the advent of technology makes a trend towards convergence, that means that the different systems (organizations, countries’ institutions, etc) trend to be similar. In a way, convergence, by creating standards, could be said to reduce uncertainty because the effects of the same technology in other organizations and systems could be forecasted. But Thompson argues that tecnologies and environments are basic sources of uncertainty for organizations.
Thompson also refers to convergence when he writes “the basic functino of administration appears to be co-alignmet, not merely ofpeople (in coalitions) but of institutionlaized action –of technoloy and task environment into a viable domain, and of organizational design and strcture appropiate to it. “ p 157. This leads us to what Thompson calls the “Paradox of Administration”: organizations look simultaneously for a reduction of uncertainty and a search for flexibility. For me, there is no such paradox as flexibility is a reaction to uncertainty. Flexibility (in structure, in strategy) is what allows an organization to cope with an uncertain and ever-changing environment. As Thompson writes in his conclusion: “Uncertainty appears as the fundamental problem for complex organizations, and coping with uncertainty, as the essence of the administrative process” p159