Summary of chapters 1-6 from the book Organizations in Action, written by Thompson. These chapters are necessary for the course Organization Design, from the master Organizational Design & Development.
MAN-MOD001 Organisation Design 23/24 - Thompson: Organizations in Action Summary
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Organizations in Action
Written by: James D. Thompson
Organizations do some of the basic things they do because they must – or else. They are expected to
produce results, their actions are expected to be reasonable or rational.
- The concept of rationality brought to bear on organizations establishes limits within which
organizational action must take place.
Uncertainties pose major challenges to rationality, and technologies and environments are basic
sources for uncertainty.
1. Strategies for studying organizations
Complex organizations are housed in a variety of fields or disciplines, and communication among them
more nearly resembles a trickle (drop continuously) than a torrent (a violent flow).
- Gouldner (1985) was able to identify two fundamental schools underlying most of the literature
I. Rational models of organizations closed-system strategy
II. Natural-system models of organizations open-system strategy
Closed-system strategy
The search for certainty
If we wish to predict accurately the state a system will be in presently, it helps immensely to be dealing
with a determinate system.
- However, this requires a system to be closed or, if closure is not complete, that the outside
forces acting on it be predictable.
o There are strong human tendencies to reduce various forms of knowledge to the
closed-system variety, to rid them of all ultimate uncertainty.
Three schools in caricature
1. Scientific management, focused primarily on manufacturing or similar production activities,
clearly employs economic efficiency as its ultimate criterion, and seeks to maximize efficiency
by planning procedures according to a technical logic, setting standards, and exercising
controls to ensure conformity with standards and thereby technical logic.
2. Administrative-management literature focuses on structural relationships among production,
personnel, supply and other service units of the organization; and again employs as the
ultimate criterion economic efficiency.
o It achieves closure by assuming that ultimately a master plan is known, against which
specialization, departmentalization and control are determined.
3. Bureaucracy focuses on staffing and structure as means of handling clients and disposing of
cases. Again the ultimate criterion is efficiency.
Developers of several schools using the rational model have been primarily students of performance
and efficiency, and only incidentally students of organizations.
- Having focused on control of the organization as a target, each employs a closed system of
logic and conceptually closes the organization to coincide with that type of logic, for this
elimination of uncertainty is the way to achieve determinateness.
Open-system strategy
The expectation of uncertainty
We can, if we wish, assume that the system is determinate by nature, but that it is our incomplete
understanding which forces us to expect surprise or the intrusion of uncertainty.
- Central to the natural-system approach is the concept of homeostatis, or self-stabilization,
which spontaneously, or naturally, governs the necessary relationships among parts and
activities and thereby keeps the system viable in the face of disturbances stemming from the
environment.
This research area focuses on variables not subject to complete control by the organization and hence
not contained within a closed system of logic.
- Students of the open-system strategy regard interdependence of organization and environment
as inevitable or natural, and as adaptive or functional.
Choice or compromise?
Complex organizations are often effective instruments for achievement, and that achievement flows
from planned, controlled action.
, - A reasonable degree of purposeful, effective action will be forthcoming from the many complex
organizations on which they depend.
o There can be no question but that the rational model of organizations directs our
attention to important phenomena – to important “truth” in the sense that complex
organizations viewed in the large exhibit some of the patterns and results to which the
rational model attends, but which the natural-system model tends to ignore.
However, complex organizations are also influenced in significant ways by elements of their
environment, a phenomenon addressed by the natural-system approach but avoided by the rational.
- It appears that each approach leads to some truth, but neither alone affords an adequate
understanding of complex organizations.
This book extends a never tradition which evades the closed- versus open-system dilemma.
- The assumptions it makes are consistent with the open-system strategy, for it holds that the
processes going on within the organization are significantly affected by the complexity of the
organization’s environment.
o But this tradition also touches on matters important in the closed-system strategy:
performance and deliberate decisions.
The cutting edge of uncertainty
Supporters of each extreme strategy had different purposes in mind:
- Open-system strategists attempting to understand organizations per se
- Closed-system strategists interested in organizations mainly as vehicles for rational
achievements.
These two strategies reflect something fundamental about the cultures surrounding complex
organizations – the fact that our culture does not contain concepts for simultaneously thinking about
rationality and indeterminateness.
- The newer tradition with its focus on organizational coping with uncertainty is a major advance.
We will conceive of complex organizations as open systems, hence indeterminate and faced with
uncertainty, but at the same time as subject to criteria of rationality and hence needing determinateness
and certainty.
The location of problems
Organizations exhibit three distinct levels of responsibility and control – technical, managerial and
institutional.
1. Every formal organization contains a suborganization whose problems are focused around
effective performance of the technical function – the conduct of classes by teachers for
instance.
o The primary exigencies to which the technical suborganization is oriented are those
imposed by the nature of the technical task, such as the materials which must be
processed and the kinds of cooperation of different people required to get the job
done effectively.
2. The second level, the managerial, services the technical suborganization by:
a. Mediating between the technical suborganization and those who use its products –
the customers for instance.
b. Procuring the resources necessary for carrying out the technical functions.
The managerial level controls or administers the technical suborganization.
3. The organization which consists of both technical and managerial suborganizations is also part
of a wider social system which is the source of the “meaning”, legitimation, or higher-level
support which makes the implementation of the organization’s goal possible function of
institutional level of the organization.
The more variables involved, the greater the likelihood of uncertainty, and it would therefore be
advantageous for an organization subject to criteria of rationality to remove as much uncertainty as
possible from its technical core by reducing the number of variables operating on it.
- Hence if both resource-acquisition and output-disposal problems – which are in part controlled
by environmental elements and hence to a degree uncertain or problematic – can be removed
from the technical core, the logic can be brought closer to closure, and rationality, increased.
Uncertainty would appear to be greatest at the institutional level. Here the organization deals largely
with elements of the environment over which it has no formal authority or control.
- The organization is open to influence by the environment which can change independently of
the actions of the organization.
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