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Organisational Theory Revision - Management and Organisations
Mid-Term: Chapter 1, 2, 8, 9, 10, 11
Final: Chapter 12, 13, 14, 15
Chapter 1; Managing and organisations
Summary;
● Managing and organising is very dynamic; its world never stays still – so innovation, change and tension
are characteristic of the way events pan out
● No organisation or manager today can escape the effects of digitalization.
● Managing and organisations today are increasingly either global enterprises or related to them as
suppliers, markets, customers, employees, or shapers of others’ environments.
● Managing and organisation is never done in isolation from broader social trends and contexts, which is
why it is important to contextualise how it is being done.
Organisations are tools. They are; purposive, goal-oriented, instruments designed to achieve a specific objective.
Organisations extend human agency (Perrow, 1986).
Digitalisation; the use of digital technologies and data to manage organisation processes.
Digital nomads; mobile workers armed with a laptop and wifi, connecting anywhere and choosing mobility rather
than a fixed abode - many of the jobs of the future will be created and filled by this.
Automated job processes are carrying out mundane work, providing opportunities for open/platform based
collaborations and transactional management that facilitate a market based form of coordination, making
organisation less reliant on hierarchies and as a consequence - on long term relationships with a trusted workforce.
Policies on digital developments, with objectives to make labour more expensive; a personal good for those
who receive it as well as an institutional good. With rising costs, industries that only thrive on low-cost labour will
either be outsourced to countries with fewer rights and protections, or increasingly adopt robotics and AI.
Arguments of productivity enhancing devices should be taxed, however, arguments against mention that it
may impede innovation only if low-cost workforce is available; limit the opportunities that legislation and
enforcement and objectives would be dissolved.
Enterprises who relied on super-exploitation would die - priced out of the market or would adjust into
improving conditions and practices; helping to lift average wages, improve skill and domestic income.
Organisations in the digital age are switching from managing through hard power to soft power through induction
into organisational culture, training, strategy, leadership.
Improvements in productivity and quality would accrue when corporate cultures systematically align individuals
with formal organisational goals.
New public management; replaces public sector bureaucracy with public managers and citizens with customers,
managed by targets and audits - increased adoption of private-sector management techniques.
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Microeconomic theory anchored in a ‘market- based model’ advocated downsizing government, applying private
sector management principles to public sector administration, viewing citizens as customers, divorcing policy
making from administration implementation, and viewing government as akin to a ‘business within the public sector.
Principal agency theory has a fundamental premise that the provision of capital by shareholders is a risk-based
endeavour in which the risks can be minimised if the agents managing individuals' capital at a distance are also
themselves shareholders. Important to have interests align as it will create more efficiencies as there is a focus on
increasing shareholder value. The consequences with regards to the deconstruction of the corporate model of
employment relations as a norm in the dominant global economy, has been profound.
CEO compensation grew strongly throughout the 1980s but exploded in the 1990s and peaked in 2000, more than
200 per cent between 1995 and 2000. Chief executive pay averages peaked at around $20 million in 2000, a growth
of 1,279 per cent from 1978. This increase even exceeded the growth of the booming stock market, the value of
which increased 513 per cent as measured by the S&P 500, or 439 per cent as measured by the Dow Jones Industrial
Average from 1978 to 2000.
Digital organisation; knowledge-intensive work depends on much subtle tacit knowledge (enables you to speak
grammatically or ride a bike; you can do it but it would be hard to explain how to a novice) as well as explicitly
mastery (Alvesson’s, 2004).
Working according to instruction and command will not be effective with management or managing,
especially where employees are involved in design and other creative work on a team basis or projects. Increasingly
common in contemporary work due to high degree of independence and discretion to use their own judgement,
knowledge workers (digital workers) and professionals require a leadership based on informal peer interaction rather
than hierarchical authority (Sandberg and Targama, 2007).
The digital economy is a terrain with rich picking for those who know how to exploit it. Those with data,
bots, domain, money, technology, have stacked the best odds for effecting closure to their advantage.
Electronic media buttresses digital tribalism, accomplished through networks targeting groups (social
media/websites) that is referred to as a bubble. Emotional significance is important (Bauman 2017). Legitimacy is
provided by what's inscribed within the digital bubble and shared imagine experiences of those who subscribe to it.
Legitimacy is inscribed in a shared sense of emotionality rather than a shared rationality (e.g. Apple and their brand
loyalty, exploited commercially).
The emergence of a digital platform economy enables broad resources to a market type of governance by
organisations; using spot contracts- dramatically reducing translation costs and making it easier to assess the
contribution of providers.
The freelancing platform can help subjects excluded from the market to accumulate experience and
visibility at the cost of a commodification and marketisation of everything.
Gig economy; participation in a labour market characterised by the prevalence of short-term contracts or
freelance work as opposed to permanent jobs.
Increasing reliance on input and data, boundaries of a firm dissolves due to easy accessibility to
information (of strategies/ideas; increased pressure). Control is widely distributed across a network of different
actors; a diminishing sphere of management and control. In holacracy (decentralised management, you work
challenges change and require creativity), vertical hierarchy is replaced with overlapping and concentric circles
dedicated to specific functions where circle members can pursue other projects if the circles work is complete (e.g. a
team within the circle dedicated to improving user experience)
Digital technologies allow tasks that were previously embedded in the fixed space of traditional
organisations (operation/ management) (Kallinikos, 2006).
Managing as sensemaking; the process through which individuals and groups explain novel, unexpected or
confusing events. The predominant sense of what organisations should be has been modelled on lean and efficient
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private sector organisations that are profit oriented. Here, managing involves top management teams seeking to set a
common frame within which organisation members, customers, suppliers, investore.., make common sense of the
organisation.
Sensemaking is the ongoing retrospective development of plausible images that rationalise what people are
doing (Weick, 2008).
Occasionally, organisation leaders bring new phenomena to the attention of people, sometimes events are
so disruptive it's impossible not to register the phenomena that they bring to attention. Interaction with others is
essential to constructing a shared view, if coordinated action is to occur.
● Ongoing; we are always making sense - we never stop doing so.
● Retrospective; we make sense of something as it is elapsing and we are constantly reviewing the sense we
make considering additional sense data.
● Plausible; we never make perfect but rather provisional sense- sense that is good enough for the matter and
people at hand. While accuracy may be desirable, reasonable constructions work better as continuously
updated.
● Images; we work with representation of things (models, mental maps). We navigate our way around
unfamiliar territory and we try to understand and accommodate information to things we already know.
● Rationalise; we logically rationalise the meaning of things to make them clearer and justifiable.
● People; people do the sensemaking not computers, they are key.
● Doing; we do things through thinking and action, which define one another. Enactment is key.
The identity of the person making sense is important; their role and the legitimacy others attach to their capabilities
for making sense will frame the reception of the sense made.
Managing entails framing; by framing on what you decide on what is relevant from the infinite number of
stimuli, behavioural cues, sense data, and information that surrounds us. Frames define what is relevant; involves a
creation of devices that assign meaning to organisational situations (Fairhurst, 1993). Managers create a frame
enabling things to be connected together to make coherent sense. Once we have a frame, we can make sense.
Sensegiving attempts to influence sensemaking of others so others come to accept a preferred meaning.
Sense Breaking occurs when organisational members disrupt existing sense in order to make alternative sense.
Leaders often employ sensegiving during a strategic change; the real sense of emergency aids common
sensemaking, a leader's role is to make, break, and give sense to events.
Sensemaking has social and cognitive elements; issues such as the performative role of emotion in strategic
conversations are vital as a leader's sensemaking has a strong emotional element- information served up with
dramatic intent and performative ability provides a strong response. Legitimacy of rational sensemaking is in
accordance with professionalised knowledge.
Managerial rationality; managers who claim to be able to make decisions that deny legitimacy to other forms of
knowledge based on their generalised managerial competence understood as managerialism; managers manage on
the grounds of exclusive education and the possession of codified bodies of knowledge.
Managers that epouse the ideology into the ideology of managerialism assume that organisations should be
normatively integrated by a single source of authority, legitimacy and decision-making embedded in the managerial
hierarchy that controls the organisation (e.g. members represented by unions within organisations will formulate
views that may conflict with that of management).
Managerialism is a construct that emerged in profit-making organisations as an expression of economic
rationalism; which argues that markets and prices are the only reliable indices of value, delivering better outcomes
than states and bureaucracies.
The whole point of sensemaking is to be economically rational, signified by making profit. Symbolic
capital (reputation), social capital (set or relations and knowledge embedded in those relations that you are able to
mobilise), as well as financial capital (asset owned with intention of delivering a return to the owner, implying a
complex set of relations of ownership and control) is important to ensure.
Capital is a liquid asset; social capital is a metaphor.
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Sensemaking, sensbreaking, and sensegiving are different ways of mediating the flow of sense data that
provides information for your environment.
● Sensemaking; formulation of accounts of what's going on
● Sensegiving; strategic attempt to frame others perception to accord with the sense you are making
● Sensebreaking; strategic attempt to disrupt existing flows of sensemaking and sensegiving
Bounded rationality; producing satisfactory rather than optimally rational decisions, a process referred to as
‘satisficing’ meaning accepting decisions that are both sufficient and satisfying.
Managerialist rationality places managers in control, symbolising that they know what they are doing and
position them as authoritative.
Resistance to change; consists of those organisational activities and attitudes that aim to thwart, undermine
and impede change initiatives. Resistance (viewed as irrational) serves as an additional evidence for managers of the
rightness of the reforms being resisted and so a vicious cycle of more control generating more resistance often
ensues. Can be thought of as an attempt to assert an alternative rationality; claims to management knowledge that
position it as rational often assume all other claims are merely the promotion of selectional, self-interested and
irrational strategies.
=> Global shifts; one of the implications of growth in AI, is the development of more team-based working where
robot intelligence is an integral part of a team that is often project-based and globally connected, whose members
require skills of emotional and physical ability.
Symmetric social relations of power, dominance and control manifest themselves in spatial disparities.
Functionally and symbolically, knowledge and power tend towards spatial concentration, whereas low-skilled
routine activities in production and administration show a trend towards dispersion and decentralisation. The former
comprise the core components of the global spatial economy (in financial and design capabilities). Design and
capital dominante and locate in the cores; networked and subcontracted manufacturing populates the margins in a
network society. Managerial rationality laces the network together.
Consequences of AI repositioning routine jobs; staff will need to be more skilled (costly), environments
subject to rapid and radical change, globally connected (facing different cultures and different work ethics). Digital
economies make the world economy increasingly globalised. Competition is based less on traditional comparative
advantage as a result of ‘factor endowments’.
A consequence of shifting international division of labour is organisations in the developed world are
increasingly based on the production of services rather than goods. In the developing world, workers are more in
factory and physical labour rather than knowledge work.
Diversity is an asset for organisations; people with diverse experiences can contribute more varied insights,
knowledge and experience than a more homogenous workforce. Good to introduce more polyphony into
organisations, however it can also introduce more conflict; a way to do this is to ensure employees understand the
market in order to trade effectively if wanting to sell globally for instance.
Conclusion; Everywhere in the developed world has produced an economy that is more polarised and more prone to
crisis and run by less regulated organisations. One effect of the loss of bureaucratic regulation in the private sector
has been the diminution of opportunities for well-paid careers, while in the public sector the impositions of austerity
and the slow war waged on welfare and bureaucracy have seen the erosion of standards and opportunities.
Increased inequality results as the range of middle-class occupations supported by bureaucracies diminishes, while
benefits and salaries going to the wealthiest increase disproportionately. The changes are often assumed to be
inexorable – the result of the market, efficiencies, economic rationality, globalisation, and so on. The result of
‘strategic choices’ made by those people comprising political, public and private elites.
Chapter 2; Managing Individuals
