Week 1:
The overall model for this course
The trend
Industry life-cycles have become compressed faster developments
Growth patterns may differ each time
Boundaries between industries are less pronounced firms cross boundaries (cross-industry
collaboration)
Technological change forces firms towards innovation technology becomes crucial,
development towards high-tech
Morgan 2006
Nature intervenes: Organizations as organisms
Discovering organizational needs:
Work activities are influences as much by the nature of human beings as by formal design.
The human being as a kind of psychological organism struggling to satisfy its needs in quest
for full growth and development. The idea of integrating the needs of individuals and
organizations became a powerful force.
Making employees feel mere useful and important by giving them meaningful jobs and by
giving as much autonomy, responsibility, and recognition as possible as a means of getting
them involved in their work.
Sociotechnical systems: to capture the interdependent qualities of work the nature of one
element in this configuration always has important consequences for the other. When we choose a
technical system (technology, org. structure, job design..) it always has human consequences, and
vice versa.
Concept of “open system”:
Recognize that individuals, groups, and organizations have needs that must be satisfied,
attention is invariably drawn to the fact that they depend on a wide environment for various
kinds of sustenance.
Characterized by a continuous cycle of input, internal transformation, output, feedback
(whereby one element of experience influences the next). The idea of openness emphasizes
, the key relationships between the environment and the internal functioning of the system.
Main inspiration: organizations, like organisms, are “open” to their environment and must
achieve an appropriate relation with that environment if they are to survive.
Key issues:
1. Emphasis on the environment in which it exists (interactions with customers, suppliers,
competitors)
2. Defines an organization in terms of its subsystems (individuals, departments, BU’s)
3. Establish congruencies or alignments between different systems (identify/eliminate
potential dysfunctions)
They possess: homeostasis (self-regulation), negative entropy (attmpt. to sustain themselves)
Cycle: constantly adapting, introducing changes in het organization
When the environment changes, so does the way of organizing
Contingency theory: adapting the organization to the environment
Organizations are like open systems that need careful management to satisfy and balance
internal needs and to adapt to environmental circumstances.
Management must be concerned: achieving alignments, and good fits (to the environment)
Different approaches to management may be necessary to perform different tasks within the
same organization.
Not one best way of organizing it all depends on the environment.
In-between Porter’s outside-in and RBV inside-out.
The more turbulent the environment, the more adhocratic or organic the organization should be
(Morgan, 2006).
Mechanistic view: Organic view:
Static (bureaucratic) Dynamic
Machine Living
Routinized Ad-hoc
Efficient Inefficient, yet effective
Reliable Failure-prone
Predictable Unpredictable
Hierarchical Flat
Management control Decision management
Fragmented Holistic
Sum of parts Whole is more
Fit for stability Fit for change
Closed Open
,Statement: “There is absolutely no guarantee that firms find the appropriate more of organization.
Limitations of the organismic metaphor:
1. We are led to view organizations and their environment that is far too concrete.
2. The assumption of “functional utility”: in organization different elements do not operate in
complete utility.
3. The danger of the metaphor becoming an ideology.
The evolutionary process
Variation in business requires a creative spark
Innovation drives variation
Who determines what will be the next big thing? (according to
Morgan 2006: the environment, markets, Governemnts)
Internal selection: product, business development, protocols
Retention requires learning processes, sense making
(Brugelman 1991) Giving meaning to new developments that
are ‘selected’
Brugelman 1991
Intra-organizational ecology of strategy making and organizational adaption
Introduction:
The paper is based on the premise that there need not be a fundamental opposition of
ecological and strategic perspectives, and that a fruitful integration of these ideas is possible
in some ways.
Purpose of the paper:
1. The paper proposes the usefulness of an intra-organizational ecological perspective on
strategy making.
2. The paper proposes patterned links between the intra-organizational ecological
processes and different forms of adaptation that have previously been identified in the
literature.
Strategy results, in part, from selection and retention operating on internal variation associated with
strategic initiatives.
Induced strategy making: Autonomous strategy making:
Initiatives that are within the scope of the Concerns initiatives that emerge outside of it and
organization’s current strategy and build on provide for new organizational learning more
existing organizational learning. what do we external, outside of the regular process.
have right now? Forward-looking (future variations)
Based on retrospective rationality Outside the scope of current strategies
Within the scope of current strategies Variation-increasing
Variation-reducing Bottom-up, often by operational level
Top-down from TMT-level Strategic context (less rules)
Structural context (current processes) Suitable for strategic renewal
Inert (resistant to change), or suitable for Expands the firm’s domain and renews the
adjustments in reorientation organization’s distinctive competence base,
Leads to relative inertia and incremental countering inertia and serving some of the
adjustments. functions of reorientation.
,Strategy making and organizational adaption:
Relative inertia: the rate of strategic change that the organization can implement will, in the
long run, be lower than the rate of change in the environment. The inertial consequences of
environmental selection are likely to affect the core features of an organization.
Adjustment: leave the overall strategy in place and operate on more peripheral features.
Adjustments are to a large extent deliberate, reflecting strategic choice and managerial
discretion, and are instances of non-random adaption.
Reorientation: confronted with chronic low performance due to radically new technologies,
TMT is more likely to take major risks. Reorientation by major changes in the strategy is
perceived as necessary to maintain and regain viable. This however, could also speed up the
process of failure.
Strategic renewal: major changes in the strategy effected through the autonomous strategic
process. Learning new skills and capabilities in anticipation of making major changes in its
strategy but without knowing in advance how it should be changed.
Feldman & Pentland 2003
Re-conceptualizing organizational routines as a source of flexibility and change
Their goal:
1. To create a new theory of organizational routines that retains the valuable insights of prior
work, while enabling us to account for the empirical limitations of this work.
2. We propose that organizational routines also consist of ostensive and performative aspects,
which are closely related to the concepts of structure and agency.
,They argue:
1. The ostensive aspect enables people to guide, account for, and refer to specific
performances of a routine, and the performative aspect creates, maintains, and modifies the
ostensive aspect of a routine.
2. The relationship between ostensive and performative aspects of routines creates an on-
going opportunity for variation, selection, and retention of new practices and generate a
wide range of outcomes, from apparent stability to considerable change.
Organizational routines: repetitive, recognizable patterns of interdependent actions, carried out by
multiple actors. They cannot be understood as static, unchanging objects.
Primary means by which organizations accomplish much of what they do.
Are a well-known source of inertia, and even mindlessness..
An important source of accountability and political protection as well as a source of
stagnation (inflexibility).
They are functional: are a potential for efficiency and legitimacy
Determine how firms react to changing conditions (genes, Morgan 2006). Or fail to ract..
Although a source of inertia/inflexibility, they can also be a source of flexibility and change,
merely by its ongoing performance.
Consist of two related parts:
1. Structure: the abstract idea of the routine.
2. Agency: the actual performance of the routine by specific people, at specific times, in
specific places.
Problems with prevailing theory:
To minimize conflict organizational routines are like habits or programs (executed without
conscious thought)
Conceptualizing routines as habits, programs, or genes limits the role of human agency.
Differences in information, perception, preferences, and interpretation among people who
perform these routines fade into the background and become peripheral to the
understanding of organizational routines.
The traditional explanation of organizational routines as a source of cognitive efficiency
tends to reinforce the absence of agency within the routine itself.
New theory of organizational routines:
They consist of two aspects:
1. Ostensive (the idea, know that..): the idea or schematic form of the routine. The
abstract, generalized idea of the routine, or the routine in principle.
Shapes our perception of what the routine is.
May have a significant tacit component, embedded in procedural knowledge.
Incorporates the subjective understandings of diverse participants. Their
understanding of the routine depend on their role and view.
2. Performative (the enactment, know how..): the specific actions, by specific people, in
specific places and times.
Practices are carried out against a background of rules/expectations, but the
particular courses of action we choose are always, to some extent, novel
(ongebruikelijk).
Although actions appear automatic, or mindless at times, there is always the
possibility of resisting expectations and doing otherwise.
It could: generate a constant stream of variations and expectations as the
performers accommodate and innovate.
,The way people can use the ostensive aspect in relation to the performative aspect of routines:
Accounting: explain what we are doing and provides a sense of when it is appropriate to ask
for an accounting. Helps us decide what aspects of our performance we should report.
Referring: refer to patterns of activity that would otherwise be incomprehensible. Allows us
to refer to and make sense of a sea of activities that could otherwise be overwhelming.
Guiding: serve as a template for behavior or a normative goal. It cannot specify the details of
the performance which people must always choose.
The performative aspect is essential for the creation, maintenance, and modification of the ostensive
aspect:
Creation: Organizational routines are repetitive (more than once). A disconnected collection
of performances does not constitute a routine without a corresponding ostensive category
that makes the patterns coherent and recognizable as a routine.
Maintenance: performing a routine maintains the ostensive aspect of the routine by
exercising the capability to enact it.
Modification: Deviate from the routine. Do new things in response to external changes or in
response to reflective self-monitoring.
New theory important influences on the flexibility of and change in routines.
Subjectivity: routines are guided by the subjective perceptions of the participants. The
ostensive aspect of a routine enables us to create an apparently objective reality through the
subjective aspects of guiding, accounting and referring.
Agency: the active engagement of individuals in on-going practices and the interpenetration
of agency with various forms of structure. Agency is apparent in each participant’s choice of
actions and the reflective self-monitoring of those actions.
Power: The creation and enforcement of routines van be seen as a mechanism for the
domination of labor by management.
Conclusion:
Routines facilitate cognitive efficiency, they also embody a selective retention of history,
filtered by subjectivity and power.
Routines are produced by many people with different information, preferences, and
interpretation, they are enacted over time and space, and they interact with other streams
of action in such a wat that it is not always clear where one organizational routine ends and
another begins. For these reasons, routines always have potential for change!
Ostensive and performative aspects of routines are mutually necessary.
, Determinism: victim of the environment
Voluntarism: you can make your own future
