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90 – Organization in Action: Social Science Bases of Administrative Theory (Thompson, 1967)

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