Structure and Strategy
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Structure and Strategy

Introduction

The purpose of these notes is to examine the historical development of organisational structure. This involves drawing upon each of the conceptions of structure (two positive, one critical) outlined in the lecture on organisational structure. The specific focus is the design of jobs which includes consideration of their organisation and control. `Positive' concepts of organisational structure are used to identify ways in which the design of jobs has changed historically, both in terms of the division of labour and the culture of organisations. The `critical' concept of structure is employed to challenge the view that their design is determined by the impersonal forces of the market or of technology.

The Historical Construction of Organisational Structure

The development of organisational structure and changes in job design is bound up with processes of industrialisation. There are basically two perspectives on the process of industrialisation. One stresses the role of impersonal forces - such as technology and markets - in stimulating economic development. This perspective is closely associated with `hidden hand' philosophies and explains the (re)design of jobs, for example, in terms of their increased efficiency and effectiveness. The alternative stresses the role of social forces. The development of particular technologies, the rise of markets and the design of jobs are understood to be a product of struggles between different groups to define and enact a reality which expressed or confirmed their access to valued material and symbolic goods. From this second perspective, analyses which stress the role of impersonal forces are regarded as ideologies which reify principles and obscure the political processes of struggle. Conversely, from the first perspective, the emphasis upon struggle is regarded as `politically' motivated or biassed.

The `Impersonal' Forces Argument.

From this perspective, changes in the organisation and control of jobs (e.g. cottage industry to factory production) is viewed as the result of forces of rationalisation which eliminate inefficient and unproductive institutions. Factories are seen to produce economies of scale. Markets are understood to overcome barriers to exchange and facilitate circulation of labour and goods. Technology is considered to enable rises in productivity. The forces which drive this change are regarded as natural and inevitable, albeit that they are sometimes resisted (at least for short periods) by reactionary elements (e.g. Luddites) who fail to understand the logic of progress.

The `Social' Forces Argument.

From this perspective, change is always inspired, and struggled for, by social groups (e.g. classes) often in the face of opposition from other groups. Technologies are developed, markets are created, factories are built because particular groups press for such change. It is not necessarily denied that these changes eliminate inefficiency, etc. But it is argued that what is meant and sought by improvements in efficiency is very much shaped by the preconceptions and interests of particular groups. Such improvements may bring benefits for other groups (e.g. workers) but this is regarded as a `spin-off' rather than a primary objective (although much may be made of such spin-offs in order to legitimate changes, such as the redesign of work). The two major sociological contributions to the social forces argument have been made by Weber and Marx

 

* Weber's Contribution to the `Social' Forces Argument. Weber argued that the drive for rationalisation associated with `the spirit of capitalism' was simulated by the protestant ethic. In particular, the Calvinist doctrine of predestination meant that people became (i) more individualised and (ii) fearful of their fate over which they had no control. However, instead of leading to fatalism, their fear is understood to generate an anxious search for reassuring material signs of their probable likely destination (i.e. Heaven or Hell). This led them to strive, on an individual basis, both to save and to work hard. The product of this doctrine was the arousing and focussing of human energy in efforts to improve productivity. From this point of view, ideas (Calvinism, etc.) are understood to be a critical precondition of the development of capitalist societies. It also illustrates Weber's argument that actions frequently have unintended consequences since Weber saw the process of rationalisation, exemplified in bureaucratisation, being set in motion by the asceticism of the protestant ethic.

`Since asceticism undertook to remodel the world and to work out its ideals in the world, material goods have gained an increasing and finally an inexorable power over the lives of men'

* Marx's Contribution to the `Social' Forces Argument. Marx argued that social change arises out of contradictions which lie dormant within existing forms of political and economic organisation. The development of capitalism is traced to instabilities and inconsistencies within the feudal order. Feudalism, like capitalism, is understood to contain the seeds of its own destruction. In order to increase the military strength of the nation (and thereby protect their own privileged position), the nobility was obliged to encourage the growth of a merchant class and to loosen restraints upon trade (e.g. liberalisation of Charters). In order to secure and advance their wealth, feudal lords were obliged to grant greater individual freedoms to their serfs (e.g. allow them to sell their labour). Paradoxically, the feudal order breaks up in the very effort to secure its continuation (c.f. contemporary reforms in the Soviet Union). The transformation is understood to occur as guild organisaton is complemented and then displaced by the activities of merchants who set themselves up as `middle men' between cottage producers and the markets for raw materials and finished goods. Initially, workers retained control over the production process within their cottages but this was reduced by the establishment of factory production in which control was exercised by the owner through internal contractors. Historically, internal contracting was gradually replaced by the closer, inclusive supervision afforded by bureaucracy. According to this argument, factories were established by capitalists in order to gain greater control over labour, which was a precondition of raising its productivity. In common with Weber, Marx stresses the rationalising effects of capitalism but attributes these directly to the revolutionary activities of the new ruling class of capitalists, the bourgeoisie.

`The bourgeoisie...has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy waters of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom - Free Trade...Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all former ones'

Comment

Weber and Marx differ in the emphasis they place upon the role of ideas in social change and, relatedly, in the extent to which capitalism is destined to change. Weber's analysis leads us to believe that we are trapped in an `iron cage' of rationalisation, a cage whose bars are constructed out of materialistic values from which there is no escape. In contrast, Marx argues that the bourgeois epoch is characterised by instability and uncertainty which, eventually, will produce a revolutionary transformation. Their respective analyses may be combined to argue that bureaucracy, in the form of the Welfare/Warfare State, has intervened to smooth out or institutionalise conflict in a way which reduces the likelihood of radical change. This includes the development of a variety of institutions and discourses in which compliant subjectivities are constructed. The ability of the owners (capitalists) to secure and expand their property can be seen to depend upon (positive) discourses about the design of the structure of factory organisation. The two `positive' conceptualisations of structure are examples of such discourses. (The combining of the insights of Weber has been a central theme of the Frankfurt School (Marcuse, Habermas)). In other words, organisational means have been devised to manage the tensions in capitalist society. What remains to be seen is whether these tensions can be managed indefinitely. What Weber and Marx agree about is the tendency within modern society for subjectivity to become individualised. With regard to job design, Weber comments upon how `the performance of each individual worker is mathematically measured, each man becomes a little cog in the machine and aware of this, his one preoccupation is whether he can become a bigger cog'. Similarly, Marx refers to the dominance of `egotistical calculation'. But, in contrast to Weber who predicted an endless process of rationalisation, Marx anticipates that processes of individualisation will be complemented and contradicted by process of collectivisation as all workers are subjected to similar processes of rationalisation/ alienation. Unfortunately, neither Weber nor Marx make more than passing comment on the construction of subjectivity within the capitalist labour process, and this is an area which has been neglected by subsequent generations of sociologists.

Strategy as a Product of `Social' Forces

The concept `strategy' is employed to describe the content and/or process of decisions which have long-term implications. `Corporate strategy' refers to a range of decisions about products, markets and technologies (as well as about organisational structure) which have long-run consequences for the organisation. These consequences may be more or less intended : strategy does not refer only to those decisions which are self-consciously strategic. Structure' and `Strategy' are interrelated in a number of ways. The structure of an organisation (division of labour, etc.) will facilitate or impede processes of strategic decision-making. The strategy of an organisation has more or less direct implications for its structure.

Strategic Decision-Making as a Contradictory Process

From a `critical' perspective, strategic decision-making is not an impersonal process. Rather, it involves a process of political struggle in which decision-makers strive to manage the contradictions inherent within capitalism as a mode of production. Accounts of strategy which stresses their `rational', technocratic creation are viewed as ideological (because they omit consideration of the social forces which mediate strategic decision-making) and/ or impractical because their prescriptions take little or no account of the conditions in which strategic decision-making is organised. It is interesting to note that, in recent years, the `positive' literature on corporate strategy has moved away from `rational' approaches to incorporate an appreciation of decision-making as a cultural process involving incremental change (c.f. Quinn). However, the problems associated with `rational' approaches are universalised/ naturalised by referring to the presence of norms and values which both enable and constrain change. From a `critical' perspective, both approaches are seen to overlook the fundamental contradictions which render all such decisions sub-optimal. Writing from this perspective, Hyman argues

`there is no "one best way' of managing these contradictions, only different routes to partial failure. It is on this basis that managerial strategy can best be conceptualised : as the programmatic choice among alternatives none of which can prove satisfactory' (original emphasis).

Structure as an Outcome of Strategic Decision-Making.

The horizontal and vertical division of labour within organisations (the first `positive' conception of organisational structure) and to an increasing extent the values and norms which have legitimacy within an organisation (the second `positive' conception of organisational structure) can each be examined as the product of strategic decision-making. To repeat, strategic decision-making need not be intentional. The design of jobs, for example can be, and often is, the product of decisions relating to `other' concerns - such as markets, technology, etc. It may well be assumed that jobs can be redesigned around new technology or the manufacture/ assembly of new products.

The `critical' perspective on organisation structure assumes that, in the context of a capitalist economy, the organisation and control of work is accomplished in ways which secure the private accumulation of wealth by owners/ shareholders. There is no inevitablem, or "one best way", of doing this. However, strategic choice in the design of jobs is constrained. For example, it is not feasible to give workers control over what they make, how they make it or when they make it unless the workforce is totally in agreement with the priorities of the owner/ manager. In most cases, this agreement is uncertain if not unlikely. In any event, few capitalists would willingly surrender control (exercised through managers) of their property (and the source of future income) to workers. From a `critical' perspective, this lack of trust (and presence of suspicion) explains why there is little or no industrial democracy; and why decision-making about the design of jobs is entrusted to managers who mediate between employers and employees. A central contradiction of the capitalist mode of production concerns the simultaneous requirement for the work of employees to be designed by managers and for these employees to be motivated and cooperative.

This contradiction is expressed in the tendency for management practice to alternate between elements of a strategy of `direct control' (DC) (e.g. Taylorism) and a strategy of `responsible autonomy' (RA) (e.g. autonomous working groups). When DC is in the ascendent, the outcome is the `machine bureaucracy' typified by Weber. Fordist production techniques are also an example of this strategy. Rules and procedures - the dominant feature of the `first', `positive' conception of organisational structure - are central. When RA is applied, the result is a more `organic' design of jobs in which employees are encouraged to identify with a few core values which serve to guide their activity. Adopting a critical approach, the plausibility of `mechanical' and `organic' conceptions of structure is related to the historical structure of social relations in which they are developed and applied. The `mechanical' conceptualisation of organisational structure (and the design of jobs) is associated with an authoritarian philosophy of management in which positions are established, and rules invoked, in order to counter real and potential resistance. Coercion is the chief means of control. The second, `organic' discourse is associated with a totalitarian philosophy of management which assumes that resistance is irrational and can be eliminated by developing a more embracing corporate culture. Compliance with the culture provides the chief means of control. In practice, these philosophies are often combined to take the form of paternalistic authoritarianism and meritocratic totalitarianism. What they share is a reliance upon bureaucracy and a suspicion of, and lack of commitment to, democracy as a basis of work organisation. This is because democratic decision-making in organisations presents a potential threat to the hierarchy of positions and processes which constitute the structure of organisations.

Bureaucracy as the Dominant Strategy of Organisation

Despite the numerous efforts to contain the contradictions of a strategy of `direct control' (e.g. inflexibility, work to rule, indifference, etc.) by introducing elements of `responsible autonomy' (e.g. quality circles, flexitime, job enrichment, etc.), the hierarchical, impersonal principles of bureaucracy remain firmly in place. Even in the most structurally innovative of organisations, in which organicism and fluidity are highly valued, this is encouraged within a highly programmed framework. Describing this as `simultaneous loose-tight properties' (which they regard as a `summary point' of In Search of Excellence), Peters and Waterman argue that

`Organisations that live by the loose-tight principle are on the one hand rigidly controlled, yet at the same time allow (indeed insist on) autonomy...' (P&W, p.318, emphasis added).

For this reason, Weber's analysis of bureaucracy has continuing relevance. According to Weber, the existence and operation of bureaucratic organisation depends upon a belief in the legitimacy of the offices (positions) that comprise its organisation. Those who occupy these offices are understood to exercise the authority of the office according to the requirements of rules which are expressions of a legally established impersonal order. This order is impersonal in two senses. First, it is not the officials, but this order, which determines what they can or cannot do - including the formulation of additional rules or duties. Access to these offices is also controlled by the impersonal order which makes certain qualifications a prerequisite for appointment. Second, the resources associated with the execution of a particular office are strictly separate from the private property of the official (cf Marx). Although the rule-bound quality of bureaucracy is most developed within military, ecclesiastical and governmental organisation, Weber (1948 : 215-6) (writing at the beginning of this century) observes that its capacity to increase reliability, precision and continuity results in its widespread adoption in private sector.

`...it is primarily the capitalist market economy which demands that the official business of the administration be discharged precisely, unambiguously, continuously, and with as much speed as possible. Normally, the very large, modern capitalist enterprises are themselves unequalled models of strict bureaucratic organization'

He continues: `It specific nature, which is welcomed by capitalism, develops the more perfectly the more the bureaucracy is "de-humanised", the more completely it succeeds in eliminating from business love, hatred, and all purely personal, irrational, and emotional elements which escape calculation. This is the specific nature of bureaucracy and it is appraised as its special virtue'

Bureaucracy is favoured, according to Weber, because it excludes from the process of organisation all `personal, irrational, and emotional elements'. This is technically necessary in order to eliminate all sources of inefficiency associated with rules and decisions coloured by `sympathy and favour, by grace and gratitude'. But it is also politically necessary in order to support and secure the legitimacy of bureaucratic rule. For this depends upon maintaining a belief in the impersonal basis of its authority.

Comment

Weber's analysis of bureaucracy contains a mixture of the two `positive' conceptions of organisation structure. Most obviously, he describes bureaucracy as a hierarchy of offices occupied by those who possess specialist competences demonstrated through the attainment of formal qualifications whose activities are simultaneously enabled and constrained by detailed sets of rules and procedures. But when he stresses that the very existence and operation of bureaucracy relies upon a belief in the legitimacy of what he terms `rational-legal authority', he alludes to the importance of the cultural processes (norms and values) which underpin bureaucratic work. Sadly, Weber has very little to say about the practicalities of accomplishing bureaucratic work. He does not, for example, recognise the inevitable presence or the contribution of sentimental elements within bureaucracy. It is perhaps not far-fetched to interpret the prescriptions of the corporate culture literature as a modern antidote for the dulling, demotivation qualities of bureaucratic organisation and job design. In which case, P&W can be seen to recommend a variety of methods for rationalising the management of sentimentality.

In order to go beyond Weber's description of bureaucracy it is important to stress that the impersonal nature of its authority is an appearance, a construction of reality, and not a reflection of it. By overlooking the complex of cultural processes which comprise bureaucratic work, the `positive' elements in Weber's analysis serve to strengthen and legitimise the appearance of impersonality. This effect can be reversed if we focus upon his understanding of the form of rational-legal form of authority which underpins bureaucracy. According to Weber legitimate authority rests `on a belief in the "legality" of patterns of normative rules' (emphasis added). That is to say, the authority of the holder of a bureaucratic office depends upon a belief in the impersonal formulation and implementation of the rules, a belief which must be constructed and maintained. As Berger and Luckman's `Social Construction of Reality' thesis suggests, the maintenance of belief, especially in modern society, is precarious. If belief in the impersonality of the rules is not acquired or is eroded, then the bureaucrat is obliged to rely upon other sources of power. For example, the material or psychological dependence of others upon the work of the bureaucrat which s/he deploys to maintain or advance his/her position. One important source of power resides in the control of material and symbolic resources which can be exchanged for compliance with bureaucratic requirements, whether these be based upon (instrumental) conformity with rules or upon identification with values. The contemporary literature on corporate culture can be interpreted as an effort to uphold the legitimacy of bureaucratic forms of organisation. But it can also be anticipated that its prescriptions will meet with resistance and `partial failure' (Hyman) as its installation is checked and rebuffed by continuing struggles over access and control over value material and symbolic resources.

(Finish)

 

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