Essay: The Industrial Revolution

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The concept of organization is certainly not a new one as one looks back over centuries of history. Aristotle, for example, referred to the importance of organization in his discussion of household management in his book, The Politics of Aristotle. In discussing the managerial hierarchy, he noted that there is only one situation in which one could imagine managers not needing subordinates. This condition would be that each inanimate instrument could do its own work at the word of command or by intelligent anticipation. Even thousands of years later, though, we are not at that point.

Of course, the primary thrust of contemporary thinking about organization, development and behavior of organizations came into focus toward the end of the 18th century. This was the period in which the industrial revolution introduced the application of scientific method and technology to problems of development. It is, therefore, appropriate to begin this section with a brief overview of the industrial revolution and its impact.

The initial experience with industrial revolution took place in Great Britain toward the end of the 1 700s. This event significantly changed Britain’s economy and society. Most immediately, the changes were in the nature of production, that is, what was produced as well as where and how.

Labor was moved from the production of primary products to the production of manufactured products and services. Manufactured goods were produced in greater quantity that ever before, and the technical efficiency of production methods increased substantially. As mentioned above, the growth in productivity was achieved by the systematic application of scientific and practical knowledge to the process of manufacturing. Efficiency also received a boost as the result of large agglomerations of enterprises locating within specified areas. The industrial revolution involved urbanization.

Among the most significant changes were those that happened in the organization of work. Typically, the enterprise expanded and took on new characteristics. In a general sense, production took place within the firm or the public enterprise, as opposed to the family or manor of the previous time. Tasks became more and more routine and specialized. Industrial production became increasingly dependent on the extensive use of capital. This was manifested in physical plants and equipment that were produced for the specific purpose of increasing efficiency. In addition, reliance on tools and machinery allowed individual workers to produce more goods than before. The advantages of experience with a specific task, piece of equipment or tool reinforced the trend toward specialization.

As a result of specialization and the application of capital, new class distinctions emerged. New social and vocational classes that were distinguished from workers by virtue of their ownership or control of the means of production developed. Those who were members of these new classes came to be called capitalists.

Britain was not for long the only country to pass through a period of industrial revolution. Attempts to indicate dates for the industrial revolution in other countries are the subject of many debates. However, scholars generally agree that the industrial revolution occurred in the United States, France, Belgium and Germany at about the middle of the 19th century. In Japan and Sweden, the revolution took place toward the end of the 19th century. In Canada and Russia, the industrial revolution took place just after the turn of the 20th century. And in parts of Africa, Latin America, the Middle East and Asia, the industrialization process did not come until the middle of the 20th century.

Industrial revolution was different in each instance, depending on the time and place that it occurred. At the outset, British industry had no foreign competitors that used the same methods and exported on a large scale. When other countries started to industrialize they had to deal with the fact that Britain had had a head start. But they also learned from the British example.

Successful industrialization involved not only the development of new methods of production, but also the modification of techniques used elsewhere, so that they could be applied to one’s own conditions and to one’s own country. Government intervention to promote industrialization was not insignificant in the British case, but the role of government was even more pronounced in countries such as Germany and Japan at the outset of their industrial revolutions and in almost all of the nations that have been industrialized since then.

The emergence of industrial America took place, generally speaking, between 1860 and 1990. There were a number of trends taking place in the United States in the late 1800s that culminated in the transformation of society.

The first trend was the expansion of American industry. In the period between the Civil War and the end of the 19th century, a diverse range of industries in the United States enjoyed tremendous growth. Another trend was the settling of the West. By approximately 1890, a flood of new settlers had moved into previously unsettled areas that were located west of the Mississippi River. A third trend was the growth of cities. Throughout the late 1 800s, numerous towns gained area and population. Cities expanded, in some cases reaching the one million mark in population.

All three of these developments were very closely linked. The result of the expanding settlement of the West was that new sources of raw materials, such as timber and iron ore, were provided. Industry also relied on the large and growing supply of workers who were moving to the nations’ growing cities. Both Western settlers and urban workers, as well, provided ready markets for the products of industry.

Industrial expansion also aided in the process of Western settlement. What brought the East and West even closer together was the creation of the railroad. Trains headed West with new settlers and manufactured goods; they returned East with products of Western mines, ranches and farms.

Urban areas needed the industries that were locating in and around them. The presence of factories encouraged people to move to and work in these urban areas. The workers purchased goods from urban area businesses, sent their children to urban area schools and in many other ways helped the urban areas to thrive. Certain cities, such as Chicago, were located on travel routes to the West and, as a result of migration, enjoyed spectacular growth.

It is appropriate to ask why these changes occurred during the late 1 900s, instead of earlier in the century. It is true that the roots for these changes go back before the Civil War period, however, it was the Civil War that gave a marked boost to industry, Western settlement and urban growth. In the time before the war, the conflicts between Northern and Southern leaders over national policy had essentially paralyzed the federal government. Once the Southern states seceded in 1861, Northern leaders were enabled to pursue their own plans regarding the nation and its economic growth.

Congress during the war years passed a number of laws that encouraged the growth of business. Government also was extremely active in encouraging the settlement of the West. Also, during this time was one of the great migrations to the United States. Beginning late in the 1900s, this human wave helped power the momentous changes that were occurring in American society.

The expansion of industry, the settling of the West, and the growth of urban areas transformed American society. Where once the nation had been rural, it was now urban. Where once the nation was primarily agricultural, it had become industrial.

The industrial revolution gathered force after 1860, primarily because of four factors:

1) Natural resources. The United States enjoyed an abundance of timber and rich deposits of iron ore, oil and coal. All of these were essential as sources for making goods and as fuel for running the industrializing society. In addition, an abundance of farm land and grasslands throughout the middle part of the United States ensured ample food supplies for Americans.

2) The increasing number of workers. The labor force grew tremendously during the late 1800s. Part of this was the result of immigration, as noted above. The other factor at work here was a high birth rate. These workers not only kept the factories working, but also bought the products of industry The large and growing consumer market helped to maintain the pace of industrial expansion.

3) A larger supply of capital. Significant amounts of capital were needed to construct factories for the production of goods, to develop transportation systems for moving these goods from point to point, and to construct facilities in which to sell these goods. Part of the capital came from foreign investors; part was raised by business partnerships that became known as corporations.

4) Inventions and innovations. The American free-enterprise system encouraged innovation, because it ensured the right of the people to engage in business and to profit from it.

These four factors and the boost provided by the Civil War, led to an explosion of economic growth in the United States during the late 1 800s. Productivity increased by twelve times in a period of 50 years. The number of factory workers increased by ten times. So widespread was the economic expansion that the nation’s growth became self-sustaining. Overall, the progress made between 1860 and 1900 resulted in the creation of a leading economic power in the United States.


Principles of Organization

Perhaps one of the best introductions to the study of organizations is Peter Drucker’s classic work, The Concept of the Corporation. His thesis is that the emergence of the large-scale organization is one of the most important economic and social developments of the century.

Drucker sets the stage for an analysis of the central problems associated with American industrial society. He assumes that nothing short of a depression or a total war could persuade most Americans to abandon the free-enterprise system. Indeed, in the decades that have followed publication of the book, most of the rest of the world has come around to embracing the same way of thinking.

Drucker sees the large corporation as an important and representative social institution that has to be organized in a way that allows it to function and to survive as an institution. The corporation also should enable human society to attain its basic goals, and should help society, as a whole, to function and survive.

World War II, says Drucker, brought about a radical change in how society viewed the corporation. Before the war, societal thinking about corporations was constrained by fixed views regarding raw materials and plant capacity. The war forced people to consider alternative sources of raw materials, and also led people to realize how quickly new products could be developed and manufactured if there were a human organization in place that was capable of such work.

Much time is spent in examining how decentralization can lead to more efficient decision-making. Using General Motors as his case study, he indicates that decentralization creates clear lines of authority and responsibility, while allowing decisions to be made at great speed. The system also helps to prevent personality issues from becoming a significant factor in decision-making, and promotes a sense of fairness among executives. Drucker indicates that decentralization worked well during the war, with individual plant managers having the authority to accept or cancel defense contracts.

Drucker presents GM as a model of decentralization that can be emulated by other corporations. He argues that, on the whole, decentralized organizations simply operate more efficiently than their centralized counterparts. However, developing good managers can be more challenging in a decentralized company. Also, top managers have to strike a balance between allowing the system to work, and still paying a good deal of attention to leadership development.

Corporations as social systems also are examined. Drucker offers several reasons why corporations have failed to provide equal opportunities to employees. Regardless of how many opportunities there may be, a large corporation has difficulty organizing them in a comprehensive fashion and ensuring that they are truly available to qualified employees. The insistence on formal education in formal management techniques often prevents entire classes of otherwise qualified people from becoming supervisors. Also, many companies fail to provide opportunities for people to use and develop their latent skills.

Updating Drucker, Phil Crosby helps one ease into the study of organizations and organization structure in his characteristic light and airy definition of the subject. He indicates that some organizations pride themselves on not having an organization chart. All this does, says Crosby, is produce confusion. The purpose of an organization chart is merely to establish lines of communication. There should be a number of basic rules. One is that people should report to one boss, although they may have others whom they contact to clear certain information. All bosses should have at least five or six people reporting to them. One over one is an absolute no-no, and one over two creates rivalries.

Crosby reminisces about a college campus in which there were six buildings, but no paths connecting any of them. Then the administrators had grass planted and allowed students and faculty to move from building to building for the period of one year. At the end of that time, they simply located trails that existed in the grass and put concrete paths in those locations. The system worked out very well.

Organizations, says Crosby, should be put together in a somewhat similar fashion. It is not important to start with a marketing department and a sales department and a purchasing department and such. All of that depends on the work of the company. There are certain functions that must be identified, because they are special and they are basically the same in every company, such as accounting, human resources and so forth. These are the functional operations. The organization chart should be well displayed, with all blocks the same size and all names the same size, recognizing that it is a form of communication.

That essentially was Crosby’s thinking on the matter of organization in his book, Running Things: The Art of Making Things Happen. Within a couple of years, he had developed his thinking about organizations in a much more significant way in a book called The Eternally Successful Organization, which we shall examine in detail in various sections below.

Clearly, though, the study of organizations and organization theory is much more involved than Crosby’s simple introduction suggests. That will become more evident as we examine a number of theorists and their thinking on the matter of organization structure.


The Structure of Organizations in Overview

Charles Handy, writing in The Gods of Management, indicates that his aim is to demystify organizations. He writes that the book is meant to encourage more people to think about how organizations actually work and what changes are on the way. Handy says that although 90% of us who study or work still do so in or for an organization, we also take their ways for granted, as if they were defined by natural law. He indicates that this is not the case, and that if his efforts help to demystify organizations to make them more understandable to the average person, then he will have served his purpose.

He identifies four kinds of organization structures which correspond to four Greek gods. The first is the club or power structure, which corresponds to Zeus. Zeus, as the head of the gods, was known for his impulses and the power of his presence. The second kind of organization structure is rule, which is associated with Apollo. Apollo was fond of rules and order. The third organization structure is called task, and is associated with Athena as the principle problem-solver. The structural focus of the fourth organization structure is the person, and is associated with Dionysus, which to Handy represented the supreme individualist.

Gareth Morgan, in his book Images of Organization, specifies a much more detailed explanation regarding organization structure. He says that a basic premise on which he builds is that our theories and explanations of organizational life are based on metaphors or images that lead us to see and understand organizations in specific but partial ways. The use of metaphor implies a way of thinking and a way of seeing that pervades how we see the world generally. Many of our taken-for-granted ideas about organizations are metaphorical, even though we may not recognize them as such. For example, we frequently talk about organizations as if they were machines designed to operate smoothly and efficiently. By using different metaphors to understand the complex and paradoxical character of organizational life, we are able to manage and design organizations in ways that we may not have thought possible.

Morgan’s eight images are as follows:

1) Power and conflict, organizations as political systems.

2) The ugly face, organizations as instruments of domination.

3) Creating social reality, organizations as cultures.

4) Mechanization takes command, organizations as machines.

5) Nature intervenes, organizations as organisms.

6) Toward self-organization, organizations as brains.

7) Exploring Plato’s cave, organizations as psychic prisons.


 Unfolding change, organizations as flux and transformation.

The theories of Handy and Morgan may be compared in that in the first structure of Handy’s theory, the club structure, relates, generally speaking, to the first three elements of Morgan’s images. That is, power and conflict, the ugly face and creating social reality. The second of Handy’s structures, role, equates to the mechanization image in Morgan’s theory. The task structural focus in Handy’s theory is the same as points five and six in Morgan’s theory, nature intervenes and toward self-organization. Finally, the person structural focus of Handy’s theory is the same as the exploring Plato’s cave and unfolding change sections of Morgan’s images.


Bureaucratic Structure

To further understand how organizations operate, it is necessary to examine the impact and structure of bureaucracies. It is a simple fact that the primary organizational force in industrialized society is the large bureaucratic institution. It is characterized by a role structure that Handy termed Apollo, and has been traditionally seen, in Morgan’s terms, more like a well-oiled operation than as a natural organism.

The scholar credited with the original formulation of the concept of bureaucracy was Max Weber. Weber was a German economist and social historian known for his systematic approach to world history and the development of Western civilization. Challenged by the Marxist theory of economic determinism, Weber combined his interest in economics with sociology in an attempt to establish that historical causation was not influenced merely by economic considerations.

One of his best known works was The Protestant Ethic and the Spirit of Capitalism. In that book, he tried to prove that ethical and religious ideas were strong influences on the development of capitalism. He expanded on this theme in later works in which he postulated that prevailing religious and philosophical ideas in the Eastern world prevented the development of capitalism in ancient societies. This was true despite the presence of favorable economic factors.

Weber’s most important book as pertains to this study is The Theory of Social and Economic Organization. He stated in that work that the decisive reason for the advance of bureaucratic organization has always been its technical superiority over any other form of organization. The fully developed bureaucratic mechanism compares with other organisms exactly as does the machine with non-mechanical modes of production. Precision, speed, unambiguity, subordination, reduction of friction and of material and other costs are raised to the optimum point in the strictly bureaucratic administration. Its specific nature develops more perfectly the more bureaucracy is dehumanized, the more completely it succeeds in eliminating from official business love and hatred and all purely personal irrational and emotional elements which escape calculation.

The specific features of Weber’s bureaucracy are:

1) A division of labor In which authority and responsibility is clearly defined for each member and is officially sanctioned.

2) Offices or positions are organized into a hierarchy of authority resulting in a chain of command.

3) All organizational members are to be selected on the basis of technical qualifications through formal examinations or by virtue of training or education.

4) Officials are to be appointed, not elected.

5) Administrators work for fixed salaries and are career officers.

6) The administrative official does not own the administered unit, but is a salaried official.

7) The administrator is subject to strict rules, discipline and controls regarding his official duties.

Alfred Chandler, in his book The Visible Hand: The Managerial Revolution in American Business, picks up where Weber left off and explains the development of bureaucratic structures in the United States during the 20th century. Chandler, however, starts at a much earlier point to demonstrate how the managerial processes developed in the realm of American business. Chandler thereby describes the life of the American business corporation.

Chandler notes that in the 1790s, the general merchant, the businessman who had dominated the economy of the colonial period, was still the grand distributor. He bought and sold all types of products and carried out all the basic functions. He was an exporter, wholesaler, importer, retailer, ship owner, banker and insurer. By the 1840’s, however, such tasks were being carried out by different types of specialized enterprises. Banks, insurance companies and common carriers had appeared. Merchants had begun to specialize in one or two lines of goods: cotton, provisions, wheat, dry goods, hardware or drugs. They concentrated more and more on a single function: retailing, wholesaling, importing or exporting.

During the first half of the 19th century, the specialization of enterprise in commerce, finance and transportation was a key feature of economic development. That degree of specialization produced an end to the personal business world of the general merchant in the colonial era, and replaced it with the increasingly impersonal world of the commissioning agent.

Along with such institutional specialization was an increasing reliance on impersonal market coordination. Such economic expansion and specialization failed, though, to bring about any institutional innovation. The volume of activity was still not large and owners had no difficulty in administering their enterprises. Also, in most cases, business remained a family affair. The two or three people responsible for an enterprise’s destiny handled the economic, administrative, operational and entrepreneurial activities. No management hierarchies appeared. Even in the case of larger enterprises, specialization of function remained very limited. Technological innovation had raced ahead of organizational development. However, internal specialization was beginning to appear.

The most influential businesses of the day were international interlocking partnerships. Such multi-unit enterprises lacking administrative managers remained little more than federations of autonomous offices. The federations were formed to control competition between units, or to assure enterprises of sources of raw materials or of outlets for finished goods and services. The owners and managers of the autonomous units agreed on common buying, pricing, production and marketing policies. Such loose federations however, could not provide the administrative coordination that became a central function of the modern business enterprise.

In the United States, in the latter part of the 19th century, the situation began to change. The principle instigators of change were the railroad and telegraph companies. Capital that was necessary to construct a railroad was significantly greater than capital that was required to build a textile mill. Therefore, a single entrepreneur, family or small group was rarely able to own and operate a railroad alone. The administrative tasks, as well, were too numerous and too complex.

There is little evidence that railroad managers merely copied existing military procedures. Instead, the evidence suggests that their answers came in response to immediate and pressing operational problems that required the organization of workers and machinery. They responded to the challenges in much the same rational way as they solved the mechanical problems of building a bridge or laying a railroad. The railroads were America’s first modern business enterprises.

In the 1850’s, the principal effort was to build and learn to manage the railroads. The 1860’s and 1870’s were a period of coordination and competition for the resulting traffic flows. The 1 890s were the years of system building. Because of competition, economic downturns and the Civil War, railroad companies became more willing to combine. Cartels joined together to set prices and to schedule production. The transformation of a loose alliance of manufacturing, transportation or distribution firms into a single consolidated unit with a central headquarters made possible economies of scale.

The quick victory of the railroad over the waterway resulted from organizational as well as technological innovations. Technology made possible fast, all-weather transportation. However, regular, safe, reliable movement of goods and passengers, as well as ongoing maintenance and repair, required the creation of a sizable organization.

What this meant was the employment of a set of managers to supervise these functions over an extensive geographic area. It also meant the formulation of new types of internal administrative procedures, including accounting. The overall impact was the creation of early forms of modern administration, which catered to the needs of a large-scale organization.

Chandler has presented the form and evolution of administrative management as it emerged in the United States in the late 19th century. This remains the characteristic of many large organizations today. He specified eight propositions, which cover the emergence and scope of administrative management:

1) Modern, multi-unit business enterprise replaced small traditional enterprise when administrative coordination permitted greater productivity, lower costs, and higher profits than coordination by market mechanisms. Chandler notes that this proposition is derived directly from the definition of a modem business enterprise. Such an enterprise came into existence and continued to grow by setting up or purchasing bushiness units that theoretically were able to operate independent enterprises. In other words, they internalized the activities that had been or could be carried on by several business units and the transactions that had been or could be carried on between them.

That internalization gave the enlarged enterprise many advantages. By routinizing the transactions between units, the cost of these transactions was lowered. By linking the administration of producing units with buying and distributing units, costs for information on market and sources of supply were lowered. Of much greater significance, says Chandler, the internalization of many units permitted the flow of goods from one unit to another to be administratively coordinated. More effective scheduling of flows achieved a more intensive use of facilities and personnel employed in the processes of production and distribution, and, therefore, increased productivity and reduced cost. In addition, administrative coordination provided a more certain cash flow and more rapid payment for services rendered. The savings resulting from that coordination were much larger than those resulting from lower information and transaction costs.

2) The advantages of internalizing the activities of many business units within a single enterprise could not be realized until the creation of a managerial hierarchy. Such advantages could be achieved only when a group of managers had been created to carry out the functions that once were handled by price and market mechanisms. Whereas the activities of single-unit traditional enterprises were monitored and coordinated by market mechanisms, the producing and distributing units within a modern business enterprise are monitored and coordinated by middle managers. Top managers, in addition to evaluating and coordinating the work of middle managers, took the place of the market in allocating resources for future production and distribution. To carry out these functions, the managers had to invent new practices and procedures, which, over time, became standard operating methods in American production and distribution.

The existence of a managerial hierarchy is a defined characteristic of the modern business enterprise. A multi-unit enterprise without such managers remains little more than a federation of autonomous offices. Federations were formed to control competition between units or to assure enterprises of sources of raw materials or outlets for finished good and services. The owners and managers of the autonomous units agreed on common buying, pricing, production and marketing approaches. If there were no managers, these policies were determined and enforced by legislative and judicial instead of administrative means. Such federations were able to bring small reductions in information and transaction costs, but they could not lower cost through increased productivity. They could not provide the administrative coordination that became the key function of modern business enterprises.

3) Modern business enterprise appeared for the first time in history when the volume of economic activities reached a level that made administrative coordination more efficient and more profitable than market coordination. Along with the increasing volume of activity came new technology and expanding markets. New technology made possible an unprecedented output and movement of goods. Enlarged markets were essential to absorb such output. Therefore, modern business enterprise first appeared, grew and continued to thrive in those sectors characterized by new and advancing technology, on the one hand, and expanding markets, on the other. Conversely, in those sectors and industries where technology did not bring a sharp increase in output and where markets remained small and specialized, administrative coordination was rarely more profitable than market coordination. In those areas, modern business enterprise was late in appearing and slow to spread.

4) Once a managerial hierarchy had been formed, says Chandler, and had successfully carried out its function of administrative coordination, the hierarchy itself became a source of permanent power and growth. The modern enterprise, in other words, took on a life of its own. Traditional enterprises normally were short-lived. Almost always they were partnerships that were reconstituted or disbanded when a partner died or retired. If a son carried on the father’s business, he found new partners. Frequently, the partnership was disbanded when one partner decided he wanted to work with another businessman. On the other hand, the hierarchies that came to manage the new multi-unit enterprises had a permanence beyond that of any individual or group in them. When a manager for some reason left an office through death, retirement or promotion, another was ready and trained to take his place. Men came and went; the institution remained.

5) The careers of the salaried managers who directed these hierarchies became more technical and professional. In these new business bureaucracies, says Chandler, as in other administrative hierarchies requiring specialized skills, selection and promotion became increasingly based on training, experience and performance, rather than on family relationship or money. With the advent of the modern business enterprise, the businessman for the first time could imagine a lifetime career involving a climb up the hierarchical ladder. In such enterprises, managerial training became increasingly longer and more formalized. Managers carrying out similar activities in various enterprises often had the same type of training and attended the same schools. They read the same journals and joined the same associations. They had an approach to their efforts that was closer to that of lawyers, doctors, and ministers than that of the owners and mangers of the traditional enterprises.

6) As the multi-unit business enterprise grew in size and diversity, and as managers became more professional, the management of the enterprise became separated from its ownership. The rise of modem business enterprise brought a new definition of the relationship between ownership and management, says Chandler. Therefore, a new type of capitalism was introduced to the American economy. Before the appearance of the multi-unit firm, owners managed and managers owned. Even when partnerships began to incorporate, their capital stock remained in the hands of a few individuals or families. Those corporations remained single-unit enterprises which infrequently hired more than a handful of managers. The traditional capitalist firm can, therefore, be properly termed a personal enterprise, says Chandler.

From its beginning, modern business enterprise required more managers than a family or its associates could provide. In some firms, the entrepreneur and his close associates who built the enterprise continue to hold most of the stock. They maintain a close personal relationship with their managers and they retain a major say in top management decisions, especially those involving financial policies, allocation of resources and selection of top managers. Such a modern bushiness enterprise could be termed an entrepreneurial or family one, and an economy or sectors of an economy dominated by such firms may be considered a system of entrepreneurial or family capitalism.

Where the creation and growth of an enterprise required large amounts of outside capital, the relationship and management was different. The financial institutions providing the funds normally placed part-time representatives on the firm’s board. In such enterprises, salaried managers had to share top management decisions, especially those concerning the raising and spending of capital, with representatives of banks and other financial institutions. An economy or sector controlled by such firms has often been termed one of financial capitalism.

In many modern business enterprises, neither bankers nor families were in control. Ownership became widely scattered. The stockholders did not have the influence, experience, knowledge or commitment to take part in the high command. Salaried managers determined long-term policy, as well as managing short-term operating activities. They dominated all levels of management. Such an enterprise controlled by its managers can be properly identified as managerial, and a system dominated by such firms is called managerial capitalism, says Chandler.

As family and financier-controlled enterprises grew in size and age, they became managerial. Unless the owners or representatives of financial houses became full-time career managers within the enterprise, itself, they did not have the information, time or experience to play a key role in top level decisions. As members of the board of directors, they did hold veto power. But they were rarely in a position to propose alternative solutions. Over time, the part-time owners and financiers on the board ordinarily looked on the enterprise in the same way as did ordinary shareholders. It became a source of income and not a business to be managed. They left current operations and future plans to the career administrators.

7) In making administrative decisions, career managers preferred policies that favored the long-term stability and growth of their enterprises to those that maximized current profits. For salaried managers, the continuing existence of their enterprises was essential to their careers. Their primary objective was to assure continuing use of material for their facilities. They were far more willing than were the owners to reduce or even forego current dividends in order to maintain the long-term viability of their organizations. They attempted to protect their sources of supplies and their outlets. They took on new products and services in order to make better use of existing facilities and personnel. Such expansion, says Chandler, led to the addition of even more workers and equipment. If profits were high, they preferred to reinvest them in the enterprise rather than to pay them out in dividends. In this way, the desire of the managers to keep the organization completely employed became a continuing force for its further growth.

As the large enterprises grew and dominated major sectors of the economy, they changed the basic structure of those sectors and of the economy as a whole. Chandler says that it must be emphasized that the new bureaucratic enterprises did not replace the market as the principle force in generating goods and services. The current decisions as to flows and the long-term ones as to allocating resources were based on estimates of current and long-term market demand. What the new enterprise did accomplish was to take over from the market the coordination and integration of the flow of goods and services, from the production of the raw materials through the several processes of production, to the sale, to the ultimate consumer. Where they did so, production and distribution came to be concentrated in the hands of a small number of large enterprises. Initially, this happened in only a few sectors or industries, says Chandler, in which technological innovation and market growth created high-speed and high-volume throughput. As technology became more sophisticated and as markets expanded, administrative coordination replaced market coordination in an ever-larger portion of the economy. By the middle of the 20th century, salaried managers of a relatively small number of large mass-producing, large mass-retailing and large mass-transporting enterprises coordinated current flows of goods through the processes of production and distribution, and allocated the resources to be used for future production and distribution in major sectors of the American economy. By then, says Chandler, the managerial revolution in American business had been carried out.

Chandler goes on to note that these basis propositions fall into two categories. The first three help to explain the initial appearance of the modern business enterprise. That is, they explain why it began when it did, where it did and in the way it did. The remaining five propositions concern its continued growth. That is, where, how and why an enterprise, once started, continued to grow and to maintain its position of dominance.

Chandler admits that historical realities are much more complicated than his eight general propositions suggest. Modern business enterprise and the new business class that managed it appeared, grew, and thrived in different ways, even in the different sectors and the different industries they came to dominate. Varying needs and opportunities meant that the specific substance of managerial tasks differed from one sector to another and from one industry to another. So did the specific relationships between managers and owners. Once a managerial hierarchy was fully established, the sequence of its development varied from industry to industry and sector to sector.

However, these differences can be viewed as variations on a single theme, says Chandler. The visible hand of management replaced the invisible hand of market forces where and when new technology and expanded markets allowed a historically unprecedented high volume and speed of materials through the processes of production and distribution. Modern business enterprise, therefore, was the institutional response to the rapid pace of technological innovation and increasing consumer demand in the United States during the second half of the 1800s.

The thinking that both Chandler and Weber have applied to bureaucracy and administration has been incorporated into Handy’s conceptions of a role culture associated with Apollo. When the typical person thinks of an organization, it is the role structure that he or she envisions. That structure is based on roles rather that personalities, projects or tasks. For Handy, Apollo, the god of order and rule, is the appropriate patron.

Next, we continue with a discussion of role structure, which is based on the assumption that humans are rational and that everything can be organized in logical fashion. The job of organizing can then be divided until one has a system of prescribed roles that is held together by rules and procedures.

As Handy notes in The Gods of Management, the Apollo style and structure is excellent when it can be assumed that tomorrow will be like yesterday. Yesterday can then be examined, pulled to pieces and put back together in the form of improved rules and procedures for tomorrow. Stability and predictability are assumed and encouraged. Handy says that that is fortunate. That the sun will rise tomorrow can be a most reassuring recollection in some of the bleak moments late at night. Wherever the assumptions of stability are still valid, it makes sense to codify the operation so that it follows a set and predictable pattern. Individuals in the role culture are, therefore, part of the machine, the interchangeable human parts of Henry Ford’s dream. The role, the set of duties, is fixed. The individual is he or she that is slotted into it. Handy’s thoughts on interchangeable human parts are similar to those of Morgan.

Weber compared the principles of bureaucracy in a favorable way with the efficiency of machines. Mechanical and civil engineers in the United States played a key role in establishing the first large-scale organizations.

Frederick Winslow Taylor, an American industrial engineer, is considered to be the originator of scientific management in business and is, therefore, one of the best known of the engineers mentioned above. While a foreman in a steel plant, Taylor applied himself to studies in the measurement of industrial activity. Based on his experiments, he developed detailed systems intended to gain maximum efficiency from both workers and machines in the factory. In 1898, he was joint discoverer of the Taylor-White process, a method of tempering steel. Taylor’s management principles were published in the Principles of Scientific Management. Because Taylor served as consulting engineer for a number of companies, his name became synonymous with the efficiency movement.

Taylor’s ideas of scientific work design were as follows:

1) Shift all responsibility for the organization of work from the worker to the manager. Managers should engage in all thinking relating to the planning and design of work. Workers should be left with the task of implementation.

2) Use scientific methods to determine the most efficient way of doing work. Design the workers’ task accordingly, specifying the precise way in which the work should be done.

3) Select the best person to do the job thus designed.

4) Train the worker to do the job efficiently.

5) Monitor worker performance to ensure that appropriate work procedures are followed and that appropriate results are achieved.

Handy referred to Henry Ford’s dream, which involved the building of Taylor’s ideas into the technology, itself. The technology, in turn, captured management’s imagination.

The positives and negatives of the machine as a metaphor for organization are reflected in the strong and weak points of mechanistic organization in practice. Mechanistic approaches work well under conditions where machines work well. That is, when there is a straightforward task to perform; when the environment is stable enough to ensure that the products or services supplied will be appropriate; when one wishes to produce the same thing time and again; when precision is at a premium; and when the human “machine parts” are compliant.

Mechanistic approaches also have many weaknesses. They can create organizational forms which find adapting to change difficult; result in mindless or unquestioning bureaucracies; have undesirable consequences as the interests of those working within the organization take precedence over the objectives it was designed to achieve; and have dehumanizing effects upon employees, particularly those at the lower levels of the hierarchy.


Organization Theory: An Overview

One of the most succinct and readable introductions to organization theory is contained in Peters and Waterman’s book, In Search of Excellence: Lessons From America’s Best-Run Companies. We’ll use that as a starting point, then examine organization theory in a more detailed and analytical fashion below.

The authors indicate that the old management theories were attractive because they were straightforward and not bogged down with ambiguity or paradox. On the other hand, though, the world isn’t like that. They find it fascinating the world of science is proceeding in paradoxical directions similar to those they are observing and hypothesizing for the world of management theory. The excellent companies know how to manage the paradox.

Several schemes have been elaborated to describe the evolution of management theories. For Peters and Waterman, the most useful starting place is Richard Scott’s. He imagines four eras of both theoretical development and management practice. Each is defined by the unique combination of elements in a two-dimensional grid. One side runs from closed to open; the other runs from rational to social. The first side of the spectrum proceeds from mechanical thinking about organizations, that is, closed, to gestalt thinking, that is, open.

In marked contrast to the prevailing wisdom of today, management theorists of the first 60 years of the 20th century didn’t worry about the environment, competition, the marketplace, or anything else external to the organization. They had a closed system view of the world. That view centered on what ought to be done to optimize resource allocation by taking into account only what went on inside a company. It didn’t really change much, say the authors, until 1960, when theorists began to acknowledge that internal organization dynamics were shaped by external events. Explicitly taking account of the effects of external forces on the organization’s internal workings, then, launched the open system era.

The second side of Scott’s grid runs from rational to social. In this context, rational means that clear purpose and objectives for organizations exist. These can be determined rather straightforwardly. For example, if one’s company is in the mining business, one’s goal ought to be to maximize earnings from present mines and future exploration activities. If we take these purposes and objective functions as givens, top management merely has to choose the means that most efficiently result in the achievement of the goals. Rational decisions can be made on this basis, and the organization’s course will be so charted.

Social, on the other hand, acknowledges the difficulties in determining purposes and implies that selection of purpose is not very straightforward. The social view supposes that decisions about objectives are value choices, not mechanical ones. Such choices are made not so much by clear-headed thinking as by social coalition, past habit patterns, and other dynamics.

The four distinct eras emerge when the two axes are juxtaposed. The first runs from 1900 to around 1930, and is the closed system-rational actor era. The two main proponents of that era’s theoretical position were Max Weber and Frederick Taylor. Weber postulated the view that bureaucracy — order by rule — is the most efficient form of human organization. Taylor put Weber’s theories to the test with time and motion studies. The thrust of that school was to suggest that if a finite body of rules and techniques could be learned and mastered, then the essential problems of managing large groups would be more or less solved.

The closed system-rational actor era was supplanted between 1930 and 1960 by a closed system-social actor era. It key figures were Elton Mayo, Douglas McGregor, Chester Barnard and Philip Selznick.

Mayo is mainly remembered as the father of the famous Hawthorne experiments. These investigations started out inauspiciously, as ordinary field work, consistent in most respects with the Taylor tradition. They were intended to be a study of industrial hygiene factors. The experiments took place mostly at the Western Electric plant in Circero, Illinois, and were designed to test the effect of work conditions on productivity.

Mayo and his followers established the field of industrial social psychology. Its growth was spurred by World War II. After the war, a major contribution was made by McGregor. He is mostly remembered for his development of Theory X and Theory Y, the opposing views that workers are lazy and need to be driven, and, alternatively, that they are creative and should be given responsibility. He railed against the rationalist approach of the Taylor school. He said that if there is a single assumption that pervades conventional organization theory, it is that authority is the central, indispensable means of managerial control. He noted that in reality, authority exists as one of several forms of social influence and control, but at the time it was regarded as an absolute concept.

McGregor termed Theory X “the assumption of the mediocrity of the masses.” Its premises are:

1) that the average human has an inherent dislike of work and will avoid it if he can;

2) that people, therefore, need to be coerced, controlled, directed, and threatened with punishment to get them to put forward adequate effort toward the organization’s ends;

3) that the typical human prefers to be directed, wants to avoid responsibility, has relatively little ambition, and wants security above all.

Theory Y, in contrast, assumes:

1) that the expenditure of physical and mental effort in work is as natural as in play or rest — the typical human doesn’t dislike work;

2) that external control and threat of punishment are not the only means for bring about effort toward a company’s ends;

3) that commitment to objectives is a function of the rewards associated with their achievement– the most important of such rewards is the satisfaction of ego and can be the direct product of effort directed toward an organization’s purposes;

4) the average human being learns, under the right conditions, not only to accept but to seek responsibility;

5) the capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems Is widely, not narrowly, distributed in the population.

The theories of McGregor and those that followed him became the human relations school of management. Its failure was due to its inability to be seen as a balance to the excesses of the rational model; also, it included a number of unnecessary excesses.

Whereas the rational model was a pure top-down play, the social model, as produced by what Peters and Waterman call McGregor’s misguided disciplines, became a pure bottom-up play, an attempt to start revolutions via the training department.

On the surface, Theory X and Theory Y are mutually exclusive. You pick one or the other. As a leader, one is authoritarian or democratic. In reality, say the authors, one is neither and both at the same time.

While McGregor and Mayo epitomize the social theory of organization applied to the individual human being, Barnard and Selznick may be the more influential theorists, say the authors. They believe the work of the two has been grossly neglected.

Barnard wrote a book called The Functions of the Executive, which the authors calls virtually unreadable, but, at the same time, a monument. His purpose is to provide a comprehensive theory of cooperative behavior in formal organizations. Cooperation originates in the need of an individual to accomplish purposes to which he is by himself biologically unequal.

It was Barnard who sensed the unconventional and critical role of executives in making it all happen. He concluded that it is the executive who must secure commitment and actively manage the informal organization. And he must do this while ensuring that the organization simultaneously achieves its economic goals. Peters and Waterman note that Barnard probably was the first balanced treatment of the management process.

He also was the first to talk about the primary role of the chief executive as the shaper and manager of shared values in an organization. He added that organizational values and purpose are defined more by what executives do than by what they say. He also emphasized that purpose, to be effective, must be accepted by all the contributors to the system of efforts. In excellent company, say the authors, values are clear; they are acted out minute-by-minute and decade-by-decade by the top brass; and they are well understood deep in the companies’ ranks.

Barnard’s genius, say Peters and Waterman, is perhaps best expressed by his unusual stress on managing the whole. That is still unusual today.

Slightly more than a decade after Barnard’s book appeared, Selznick unveiled a similar theory in which he invented such terms as “distinctive competence” — what a particular company is uniquely good at, and most others are note — and “organizational character — in which he anticipates the idea of organizations as cultures. Selznick’s discussion of organizational character, competence, institutional values and leadership are basic, say the authors, to the success of the excellent companies.

The Mayo-McGregor-Barnard-Selznick legacy is significant. Unfortunately, the first two were discredited when naive disciples perverted their ideas. The other two have never been widely read.

To return to Scott, stage three lasted from 1960 to 1970. It was described as a step backward and a step forward. He calls it the open system-rational actor era. Theory took a step backward in that it reverted to mechanistic assumptions about man. It took a step forward in that the theorists were finally viewing a company as part of a competitive marketplace, shaped and molded by forces outside itself.

A key contribution to the era was made by Alfred Chandler in his book, Strategy and Structure. He observed that organizational structures in great companies like Du Pont, Sears, General Motors and General Electric are all driven by changing pressures in the marketplace.

Chandler’s work was mentioned in considerable detail above. It was followed in 1967 by the work of Paul Lawrence and Jay Lorsch, which is discussed in greater detail below. They reached the same conclusions. They looked at organization structures and management systems and contrasted the top performers in a fast-moving business — specialty plastics — with the top performers in a stable, slow-moving business — containers. They found that the stars in the business characterized by stability maintained a simple functional organization form and simple control systems. By contrast, the stars in the fast-moving specialty plastics businesses had a more decentralized form and richer system than less-well-performing competitors.

Last, Scott indicated a fourth era, starting in approximately 1970 and continuing to the present. He describes it as the open system-social actor approach. Messiness dominates in both dimensions. The rational actor is superseded by the complex social actor, a human being with inbuilt strengths, weaknesses, limitations, contradictions and irrationalities.

The dominant paradigm in this fourth era of organizational thought, say the authors, emphasizes informality, individual entrepreneurship, and evolution. The clearest signal that the leading management thinkers are radically departing from past views is the shift in metaphors. Leaders of the era, such as Karl Weick and James March, say that new metaphors open up new veins for thinking about management. They include sailing, playfulness, foolishness, marketplaces and others. Each metaphor has articulated some property of organizations that might otherwise have gone unnoticed.

Efforts by today’s leading theorists add up to an important set of vignettes about managing. They contravene much of the conventional wisdom that existed previously. And, say the authors, they are entirely congenial with their observations of excellent companies. That’s not to say there is no need for new theory. The need is desperate if today’s managers, their advisers, and the teachers of tomorrow’s managers in the business schools are to be up to the challenges of the present environment.

Peters and Waterman don’t propose their own new theory. But they do offer a few dimensions of theory that deserve more attention. The clear starting point is acceptance of the limits of rationality. Four prime elements of new theory would include:

1) people’s need for meaning;
2) people’s need for a modicum of control;
3) people’s need for positive reinforcement;
4) the degrees to which actions and behaviors shape attitudes and beliefs, rather than vice versa.

In addition, there are some very important ideas from past and present management theory that need to be woven into the fabric of new theory. Two that they want to stress are:

1) the notion of companies, especially the excellent ones, as distinctive cultures;
2) the emergence of the successful company through purposeful, but specifically unpredictable, evolution.


Organization Theory: The Transition from Administrative Science to Behavioral Science

In terms of organization theory, the writings of Weber and his contemporaries fall into a category known as administrative science. Weber articulated the ideal administrative system and Henri Fayol, in his book Industrial and General Administration, was the first to produce a comprehensive administrative process.

Administrative systems are impersonal and analytical. They emphasize functionality and bureaucracy. Fayol derived his administrative principles out of a period of prolonged and methodical observation. His administrative process was as follows:

1) To administrate is to plan, organize, command, coordinate and control.

2) To plan means to study the future and arrange the plan of operations.

3) To organize means to build up the material and human organization of the business.

4) To command means to make the staff do their work.

5) To coordinate means to unite and collate all activities.

6) To control means to see that everything is done in accordance with the rules that have been laid down.


Human Relations Approach

From the 1920’s onward, the hard analytical edge was replaced with a softer edge. The person most responsible was the Australian Elton Mayo. He spent most of his working life in the United States. Before Mayo’s experience, teamwork was of no real significance in organizational life. The individual manager faced a mass of workers within an anonymous setting. There was no real perception of group interaction or of interpersonal dynamics. Mayo, in his book The Social Problems of Industrial Civilization, made it clear that the communal setting that characterized earlier primal management had disappeared in the wake of bureaucratic organization. He played a key role in introducing the behavioral sciences into management and in pointing out the importance of cooperation and teamwork.

His efforts were followed by those of Rensis Likert, who added more substance to the new argument. In his book, New Patterns of Management, Likert talked about group effectiveness. He indicated that the properties and performance of the ideal highly effective group are as follows:

1) The members are skilled in the various leadership and membership roles required for effective Interaction.

2) The group has been in existence sufficiently long to develop a well-established, relaxed working relationship.

3) The members of the group are loyal to it and its leader.

4) The members and leaders have a high degree of confidence and trust in each other.

5) The values and goals of the group are an expression of the values and goals of its members.

6) The members of the group are highly motivated to abide by the major values and achieve the important goals of the group.

7) All the interaction, problem-solving and decision-making activities of the group take place in a supportive atmosphere.


Insofar as group members perform linking functions with other groups, their goals and values are In mutual harmony.

The major areas of behavioral approaches to management can be divided into four categories: Human relations, organizational behavior, organizational and environmental systems, and organizational development.

The first approach, human relations, stretches between approximately the 1920’s and the 1960’s. It has connected the individual and the group in the context of the organization. Some of the key theorists in human relations are Australian Elton Mayo and American social psychologist Rensis Likert. The focus of human relations theory has been on processes of communication within small groups. It has questioned the means rather than the ends of human organization.

Generally, the human relations movement can be traced to an early group of sociologists in Europe. Two of them stand out, Emile Durkheim of France and Vilfredo Pareto of Italy.

Durkheim‘s book, The Division of Labor, was published in the 1 890s. It divided society into two types, mechanistic and organic. In the mechanistic realm, according to Durkheim, the individual self-interest of Adam Smith is paramount. It is guided by an invisible and impersonal hand. Among organic types, the social group takes over the individual as the ultimate source of values.

Pareto took a further step, looking at society as a social system, that is, a cluster of various but interdependent units. For Durkheim and Pareto, individual organizations and entire industrialized societies risked being overwhelmed by formlessness and rootlessness. This also was a theme for Mayo.

Mayo wrote in The Human Problems of an Industrial Civilization that “in traditional societies people knew their place and their future and there was social solidarity. The domestic system, built around family and kinship, gave people an identity in their working life, as well as in their social life. The factory system and the process of industrialization destroyed this solidarity through widespread division of labor, increased social and psychological mobility, and the growth of large-scale organizations in which the manner of dealing with interpersonal relationships shifted from a personal friendship basis to one of an impersonal nature. The result was a norm-less, rootless life in which individual identities were lost along with the social bonds that provided purpose and continuity to existence. Social invention to keep up with industrial changes had not kept pace with technical innovations.”

Mayo wanted to move forward from that point toward a new kind of cooperative society. He indicated that in any primitive society, although the will to work together is active and strong, fear and force nevertheless feature more than in a civilized one. A civilized society is one in which cooperation is based on understanding and the will to work together, rather than on force.

Daniel Wren, writing in the Evolution of Management Thought, said that in early research Mayo found that the problems of workers could not be explained by any one factor, but had to be dealt with in what he called the psychology of the total situation. The new person of industry was to be socially as well as economically motivated and controlled. Improvements in efficiency and morale were postulated to be due more to improved social or human relations than to material and environmental ones. Therefore, management had to be concerned with both technical and social aspects of work.

The critical fact, says Wren, brought to the attention of Mayo’s researchers was that the ordinary conception of manager-worker relations, as existing between company officials on the one hand, and an unspecified number of individuals on the other, is utterly mistaken. Management in any continually successful plant is not related to single workers but always to working groups.

In any department that continues to operate, the workers have, whether they are aware of it or not, formed themselves into a group with appropriate customs, duties, routines, rituals. Management succeeds or doesn’t succeed in proportion as it is accepted without reservation by the group as authority or leader.

In his early research, Mayo concluded that social study in organizations should start with careful assessment of communication. He described communication as the capacity of an individual to communicate his feelings and ideas to another, the capacity of groups to communicate effectively and intimately with each other. The problem of communication, says Mayo, is beyond all reasonable doubt the outstanding defect that civilization faces today.

Following Mayo was a generation of human relations theorists who tackled the subject of communication, as a part of their study into human relations in organizations, with an emphasis on its implications, particularly as regards processes of communication.

The first area of emphasis is group dynamics. Among the many individuals associated with group dynamics was American Robert Bales. In the 1950s, Bales developed a group of twelve interaction process categories that could be used to differentiate task achievement from group maintenance within groups.

His interaction process categories were:

1) Shows solidarity, raises other’s status, gives help or reward.

2) Shows tension release, jokes, laughs, shows satisfaction.

3) Agrees, shows passive acceptance, understands, concurs, complies.

4) Gives suggestion or direction, still implying autonomy from the other person.

5) Gives opinion, evaluation, analysis, expresses wish or feeling.

6) Gives orientation, information, repeats, clarifies, confirms.

7) Asks for orientation, information, repetition, confirmation.

8)  Asks for opinion evaluation, analysis, expression of feeling.

9) Asks for suggestion, direction, possible ways of action.

10) Disagrees, shows passive rejection, formality, withholds help.

11) Shows tension, asks for help, withdraws out of field.

12) Shows antagonism, deflates others’ status, defends or asserts self.

Every remark or gesture that an individual makes is registered under one of those twelve categories. After Bales, many variations were developed on his basic theme. The purpose of the communications exercise was to balance task achievement and group maintenance. Bales’ group process assessment included an outside analyst who observed individual interaction within a working group. The analyst categorized them for each individual case and then, based on his observation and analysis, developed each individual’s interpersonal effectiveness. The primary goal in improving individual and group effectiveness was to obtain a balance between task achievement and group maintenance.

Bales also attempted to use his process categories to discuss group development. He divided the process into three sequential phases. First is orientation, marked by questions in task categories seven, eight and nine. The second phase is characterized by attempted answers, parts four, five and six. The control phase, the last phase, is distinguished by the positive socially emotional categories, one, two and three, and by the negative ones, ten, eleven, and twelve.

Another approach to categorizing phases of group development was proposed by Barry Tuckman in Psychological Bulletin. The article called “Development Sequences in Small Groups,” included a four-stage cycle of problem-solving and development for groups.

The first stage of group development Tuckman called forming. At this stage, the set of individuals has not yet become a group. They are busy sounding each other out. Individuals explore each other’s attitudes and background. Members are also keen to establish their individual identities and make a personal impression on others.

The second stage of group development, according to Tuckman, is storming. This is a conflict stage in the group’s life, and it can easily become uncomfortable. Members bargain with one another as they attempt to sort out what each of them individually and collectively want out of the situation. It is likely that interpersonal hostility may be generated as differences in individual goals are revealed. The early relationships established in the forming stage may be disruptive.

The third stage is forming. The group usually develops a way of achieving its objectives together. The question of who will do what and how are addressed. Working rules are established in terms of norms of behavior and role allocation. The framework is therefore created through which each member can relate to the others.

The last stage of Tuckman’s four-stage cycle is performing. It is concerned with actually getting the job done. A fully mature group has been created which can now get on with its prescribed work. Not all groups develop to this stage, of course. Many become bogged down at an earlier stage.

David Bradford, author of Managing for Excellence, also has discussed stages of group development. In his first stage, members are individually deciding how committed they want to be to the group. Interaction is polite and guarded as members size up each other.

In stage two, subgrouping members seek allies and tend to speak from subgroups. Conflict is indirect and positions aren’t fully clear.

In stage three, conflict emerges across subgroups. This is a difficult stage as members wonder if relationships and the group itself can survive the battles.

In stage four, individual differentiation, if conflict has been successfully resolved members feel comfortable in being themselves. Low group conformity exists as members accept each other’s individuality.

In stage five, collaboration, the team works collectively to solve problems and to support each other in implementation. A synergistic outcome results with the whole being greater than the sum of the parts.

In terms of group structure, one of the best known scholars in that area is Alex Bavelas. He discussed them in a chapter called “Communication Patterns in Task-Oriented Groups,” in Group Dynamics. His structures were the circle pattern, the chain pattern, the wheel pattern and the Y pattern. He found that:

1) The centrality of positions in sending and receiving group messages produces group leaders.

2) For organizational efficiency, the wheel Is the fastest, followed by the Y, the chain and the circle. Efficiency reduces as centrality decreases.

3) For simple problems which required little interaction, the wheel was the fastest. For difficult problem which required much Interaction, the circle was fastest.

4) Satisfaction was highest in the circle when everyone was involved in the decision-making process.

In addition to the structure of the group, teamwork also deserves consideration. Phil Crosby talks about teamwork in his book, Running Things: The Art of Making Things Happen. He indicates that a team is a group of people selected to achieve a specific task. He goes on to say that there is much talk today about team-building, and that it is a very important concept even though the techniques may not always be effective. A team is really a concept and the purpose of the team leader is the same as the leader in a company. The purpose is to pull everything together and get it all defined, to get everybody working, to overcome the personality conflicts and to keep everyone’s eye on the goal.

A specific team for a specific task should also have a specific time limit on its life. It is not necessary for a team to go on forever on the same task. It is much better to have a victory party and disassemble the team and assemble a new team to pick up some necessary aspects of that particular task.

Crosby says that it takes about three meetings for a team to begin to pull itself together, and about ten meetings after that for the members to get tired of each other. Team meetings should always have an agenda and minutes should be taken at the meetings. Every task that is going to be accomplished should be assigned to a specific person or persons with a specific date for accomplishment. Teams should make periodic status reports to the senior executive responsible for them and should do it as a group. In this way, the senior people can determine whether the team is in fact cohesive in its work, or whether there are conflicts that are unresolved. Above all, says Crosby, a team should have as its objective something measurable so that the members will know when they are finished.

Peter Drucker discusses teamwork in The Effective Executive. He asks the question: Who has to use my input for it to become effective? That question immediately shows up the importance of people who are not in line of authority, either upward or downward from and to the individual executive. It underlines what is the reality of a knowledge organization. That is, the effective work is usually done in and by teams of diverse knowledge and skills. These people have to work together voluntarily and according to the logic of the situation and the demands of the task rather than according to a formal jurisdictional structure.

Drucker indicates that the typical institution of today has an organization problem for which traditional concepts and theories are not adequate. Knowledge workers must be professionals in their attitude toward their field of knowledge. They must consider themselves responsible for their own competence and for the standards of their work. In terms of formal organization, they will see themselves as belonging to a functional specialty. In terms of their personnel management, they will be governed by this knowledge-oriented function. In their work, though, they increasingly have to act as responsible members of a team with people from entirely different knowledge areas organized around the specific tasks at hand.

Thomas Peters and Robert Waterman, in their book In Search of Excellence: Lessons from America’s Best Run Companies, are substantially in agreement with Crosby and others on team use. They indicate that it is quite remarkable how effective team use in the excellent companies meets the best findings about the makeup of effective small groups. For instance, the effective productivity or new product teams in the excellent companies usually range from five to ten in size. The academic evidence is clear on this. Optimal group size in most studies is about seven. Other findings are supportive. Teams that consist of volunteers, are of limited duration, and set their own goals are usually found to be much more productive than those of obverse traits.

Another writer, British psychologist Meredith Belbin, has suggested eight roles that are needed for communication and teamwork. They are:

1) The chairman might also be termed the coordinator. He likes organizing people ,mapping their strengths and using them productively. He engineers consent and develops agreement among different interests. He commands respect and communicates easily, but may come across as unfeeling and impersonal.

2) The shaper is the forceful type who likes to influence group decisions and make his mark on meetings. He is willing to risk unpopularity to get his ideas across, and tries to insure that the group’s discussions and decisions conform to his own pattern of thought and action. Finally, his drive and self-confidence are likely to be balanced toward vague ideas and people.

3) The contacts man often looks further afield than the immediate tasks and brings in ideas, developments and phone numbers from outside. He works by personal networks and likes new ideas and techniques. He is curious and willing to see possibilities in anything new. Conversely, he may suffer from over-enthusiasm or a lack of follow up.

4) The ideas man is the innovator, the original, independent, imaginative fellow who is often frustrated in group work. He is a source of new approaches to old problems who is valued for his independence about work, as well as for his intelligence and imagination. He may well be impractical at times and poor at communicating his ideas to others.

5) The critic is the careful critical member, often slow but right. His judgment wins over his feelings, and he contributes to the group by analyzing problems, evaluating other people’s ideas and suggestions. He can poke holes in unsound proposals and make sure all the information is on had before a decision is made. He is long on critical thinking and objectivity but probably short on enthusiasm and creativity

6) The implementer is the practical kind who sticks to it, meeting targets and deadlines. He wants clear objectives and procedures and is sometimes uncomfortable with new ideas. He is the solid practical member who will make a practical plan to achieve an objective when the others have finished arguing about it. But he may prove somewhat inflexible and somewhat unresponsive to unproven new ideas.

7) The team builder likes people and works easily with them, even when their ideas differ from his own. He will support the others in their strengths and under pin their weaknesses while he oils the communication machinery among them. He has humility! and listening skills, but they may be offset by lack of toughness or decisiveness.

 The inspector’s role is to ensure the team is protected from errors of commission or omission with his fine eye for detail. He also maintains a sense of urgency in the team, acting as its conscience. His strengths include a sense of order and concern. His foibles are likely to include a sense of impatience and intolerance.


Organization Behavior

In Personality and Organization, Chris Argyris indicates his findings about the behavior of people within organizations. He focuses on the organization as a whole, and sees the individual in organizational life in a fundamentally new way. He argues that both individual and organization warrant a unique and separate identity.

His propositions are:

1) There is a lack of congruency between the needs of healthy individuals and the demands of the formal organization.

2) The result of this disturbance is frustration, failure, short time perspective and conflict.

3) Under certain conditions, the degree of frustration, failure, short time perspective and conflict will tend to increase.

4) Formal principles of organization cause the subordinate, at any given level, to experience rivalry, inter-subordinate hostility, and to develop a focus toward the parts rather than the whole.

5) The employee’s adaptive behavior maintains self-integration and impedes integration with the formal organization.

6) The adaptive behavior of the employee has a cumulative effect, feeds back into the organization, and reinforces itself.

7) Certain management reactions tend to increase the antagonisms underlying the adaptive behavior.

Job enlargement and enrichment, as well as employee-centered leadership, may decrease the incongruence between individual and formal organization under certain circumstances.

Although it was Emile Durkheim, mentioned earlier, who originally made the distinction between mechanistic and organic societies, it was not until the 1 960s that this distinction was brought into management in a meaningful way. The specific context was organizational behavior. Two British scholars, T. Burns and M. Stalker in their book The Management of Innovation, did some of the initial work in this area. They indicated that there seemed to be two divergent systems of management practice. Neither was fully and consistently applied in any firm, although there was a clear division between those management systems which adhered generally to the one and those which followed the other. One system which had been given the name mechanistic appeared to be appropriate to an enterprise operating under relatively stable conditions. The other system, the organic one, appeared to be required for conditions of change.

In mechanistic systems, the problems and tasks facing the concern as a whole are broken down into areas of specialization. Each person pursues his task as something distinct from the real tasks of the organization as a whole. Somebody at the top is responsible for seeing to its relevance. The technical methods, duties and powers attached to each functional role are precisely defined.

Interaction with management tends to be vertical. Operations and working behavior are governed by instructions and decisions issued by supervisors. This command hierarchy is maintained by the implicit assumption that all knowledge about the situation of the firm and its tasks is or should be available only to the top figure of the firm. Management, often visualized as the complex hierarchy visible in organization charts, operates a simple control system with information flowing through a succession of filters, and decisions and instructions flowing downward through a succession of amplifiers.

Organic systems are adapted to unstable conditions, when problems or requirements arise that can’t be broken down and distributed among specialized roles within a clearly indicated hierarchy. Individuals have to perform their special tasks in the light of their knowledge of their tasks of the firm as a whole. Jobs lose much of their formal definition in terms of methods, duties and powers which have to be redefined continually by interaction with others participating in a task. Interaction runs laterally as much as vertically. Omniscience can no longer imputed to the head of the firm.

The influence of the informal small group is much greater in an organically based organization than is the case in a mechanistic one. The organic system also has more integrative features than the mechanistic one. This makes it more attractive to behavioral scientists than to the administrative ones. Burns and Stalker proposed a form of organization that could circumvent Argyris’ incongruence, but they also made the point that different contexts warranted different forms.


Organization and the Environment

The preceding authors examined human relations and organizational behavior without consideration of the broader environment. That began to change with the role of organizational systems theorists.

One of the earliest writers on the subject was Chester Barnard. In his book, The Functions of the Executive, Barnard indicated that the search for a universal organizational theory had been obstructed by too much emphasis on civic and military precursors of business organizations. They placed too much emphasis on authority structures. Instead, he focused on the type of cooperation between people that is conscious, deliberate and purposeful. Barnard indicated that the morality that underlies enduring cooperation is multi-dimensional. It comes from and may expand to the entire world. It is rooted deeply in the past and faces toward the endless future. As it expands, it becomes more complicated, its conflicts must be numerous and deeper, its call for abilities must be higher, its failures for ideal attainment must perhaps be more tragic. Among those who cooperate, the things that are seen are moved by things unseen. Out of the void comes the spirit that shapes the ends of man.

Later writers on this same subject were Paul Lawrence and Jay Lorsche in their book Organization and Environment.. They were interested in the way in which the internal functioning of the organization was related to the technical and market conditions of the firm. They also were explicitly interested in the organization’s systemic behavior, especially its approach to differentiation and integration. The authors note that, at the most general level, we find it useful to view an organization as an open system in which the behavior of members is interrelated. The behavior of members of an organization also is interdependent with the formal organization, the tasks to be accomplished and the personalities of other individuals.

As systems become large, they differentiate into parts, and the functioning of these separate parts has to be integrated if the entire system is to be viable. Thus, the authors place the greatest emphasis on the states of differentiation and integration in organizational systems. As organizations deal with their external environments they become segmented into units. Each unit has its major task of dealing with a part of the conditions outside the firm.

A sales unit faces problems associated with the product, the customers, the competitors. A production unit deals with production, equipment sources, raw material sources and labor markets. Such external conditions as the state of scientific knowledge and opportunities for expanding knowledge and applying it are, in the most general sense, the purview of the design unit. These parts of the system also have to be linked together toward the accomplishment of the organization’s overall goals. The division of labor among the departments and the need for unified effort lead to a state of differentiation and integration within any organization.

Lawrence and Lorsche indicate that if our projection of environmental trends proves to be accurate, the viable organization of the future will need to establish and integrate the work of organization units that can deal with even more varied sub-environments. The differentiation of these units will be more extreme. Concurrently, the problems of the organization will be more complex. Great ingenuity will be required to evolve new kinds of integrative methods. The viable organizations of the future will have reasonably mastered the ability to organize work that ranges from basic scientific endeavors to highly standardized and routine production. They will have learned to operate worldwide and to link their operations. They will be able to move consistently into new product lines with a solid grasp of markets and technologies. In this way, they will be able to organize efforts toward the achievement of human purposes that the authors say were not conceived at their time. Such multi-organizations would be able to undertake and effectively perform tasks in what currently is defined at the public as well as the private sector. As regards the individual, the great diversity of required roles can give meaningful scope to the potential and career aspirations of many people.

The authors then indicate that we may find a division of labor based more on cultural differences emerging in these organizations. Different countries have traditionally divided labor partially on the basis of control of raw materials. More recently, this has occurred on technical and organizational lines. These sources of an international division of labor may be supplemented in the future, say the authors, by one based on differences and values. Basic cultural differences are among the slowest changing aspects of life. These values prepare people to play some occupational roles better than others. Perhaps, say the authors, our multi-organizations will be able to build on these differences to design a division of labor around them and to reduce the preset strong trend toward a universal culture of industrialized man.

At its top level, the multi-organization will require leadership that can formulate a general framework of purpose to guide the efforts of the parts. This will require the highest order of integrative and creative capacity. Perhaps one of the most important functions of these top managers, say the authors, will be the designing of new forms of complex organization to better achieve the multiple purposes of the evolving civilization.

By the 1960s and 1970s, general systems theory was becoming increasingly well known. One of the leading figures in this effort was German scholar Baron Von Bertalanffy in his book General Systems Theory The development of general systems theory has provided a basis for the integration of scientific knowledge across a broad spectrum. Von Bertalanfly said that we have defined a system as an organized unitary whole composed of two or more interdependent parts, components, or subsystems, and delineated by identifiable boundaries from its environmental supra-system. The term system covers a broad spectrum of our physical, biological and social world.

Organizations as systems have a number of properties:

1) The open system. A quality of closed systems is that they have an inherent tendency to run down. An open system, though, is in a dynamic relationship with its environment. It receives inputs in the form of material, energy and information, and transforms these into outputs. These inputs keep the system from running down. For example, the business system imports people, material, facilities, money and information. It then transforms these into products, profits and other economic social satisfactions.

2) Contrived systems. Social organizations are not natural, like mechanical or biological systems, but are contrived. That is, they can be set up for many reasons and do not follow the same life cycle of growth, maturity and death of biological systems. They may endure for centuries or longer.

3) Permeable boundaries. The open system has permeable boundaries between itself and a broader super system. In a social system the boundaries are determined by the activities and objectives of the organization.

4) Hierarchy of systems. A system is composed of subsystems of a lower order and is also part of a supra-system. People are organized into groups, groups are organized into departments, departments are organized into divisions, divisions form part of a company, companies may form part of a consortium or joint venture. Each company is part of a set of surrounding economic, social, political and cultural infrastructure.

5) Negative entropy. Closed physical systems are subject to the force of entropy. What that means is a movement toward disorder and ultimately death. Living systems, however, can avoid an increase in entropy and can even develop toward states of increased order and organization. A business enterprise, for example, can grow in scale and complexity.

6) Feedback mechanisms. The concept of feedback is important to understand how a system develops dynamic equilibrium. Through feedback, the system continually receives from the environment, which, in turn, enables it to adapt to change.

7) Adaptive and maintenance mechanisms. Systems must have two mechanisms which are often in conflict with one another. In order to maintain equilibrium, they have to have maintenance systems to make sure their overall behavior is consistent with their environments. The forces of maintenance are conservative in an attempt to keep the system from changing so rapidly that the various subsystems and the overall system get out of balance. However, adaptive mechanisms are necessary to provide a dynamic equilibrium, one that changes over time.

Growth through internal elaboration. Open systems, in contrast with closed systems, which tend to run down, move toward ever-greater levels of differentiation and integration. Complex social systems are made up of many subsystems, some of which have excess capacity or resources. This creates an ongoing pressure toward growth. In addition, social organizations will try to extend their boundaries of activity and influence in order to reduce uncertainty and ensure survival.

Moving beyond the general approach to systems to the specific approach to systems in organizations, we find that the organization is an open system which exchanges information, energy, and materials with its environment. It, therefore, imports people and things from and exports them to the surrounding general and task environments.

The environmental supra-system is divided into general, societal, and specific task environments. The general environments span culture, technology, politics, education, law, demographics, physical resources, the economy and society at large. The task environments include customers, suppliers, competitors, unions, governments and collaborators. The more varied and dynamic the environment, the more complex and differentiated the internal structuring of the organization.

Many organizational goals and values are imported from the broader socio-cultural environment. A premise of the systems approach is that the organization, as the subsystem of the broader society, must achieve certain goals that are determined by the larger system. The organization performs a function for society. If it is to be successful in receiving inputs, it must fulfill society’s expectations. Goals and values stem from five representative levels, both within and outside the organization. These involve individuals, groups, the organization as a whole, the task environments and the broader society. Each brings it own mission, purpose, objectives, targets and deadlines.

The technical subsystem relates to the knowledge required for the performance of a particular task. It is prescribed by the task requirements of a particular organization. The technology for manufacturing tractors is very different from the technology for manufacturing computers. The technical subsystem thus is shaped by the degree of specialization required, the degree of automation that is feasible and desirable, and by the amount of routine and non-routine work to be done. The technology affects both the organization’s structure and its psychosocial subsystem.

All organizations have a psychosocial subsystem that is composed of individuals and groups which interact. It consists of individual behavior and motivation, status and role relationships, group dynamics and influence systems. It is also affected by sentiments, values, attitudes, expectations and aspirations of the people in the organization. In addition, the psychosocial system is affected by the external environment, as well as by the internal environment. These forces set the organizational climate within which human participants perform their roles and activities. This climate is likely to differ considerably in different contexts.

In discussing structural subsystems, structure involves the way in which the tasks are divided and coordinated. In the formal sense, structure is delineated by organization charts, job descriptions, and rules and procedures. Structure also is concerned with patterns of authority, communication and work flow. Alongside the planned structure or formal organization is the informal organization that arises out of activities and interactions. These informal networks and communication flows are critical to the organization’s overall health.

The managerial subsystem covers the entire organization. In the process, it relates the organization to its environment, sets goals, develops comprehensive strategic and operational plans, designs the structure, and establishes control processes. Its principal role is that of integrating activities toward the achievement of implicit or explicit roles.


Organization Development

The term organizational development is frequently used, but with different meanings. Therefore, it is necessary to define the term so as to discuss it meaningfully in various groups.

There are at least two schools of thought on what organizational development is and what it is not. One is the system process school. It sees organization development as a process by which organizations can understand their relationship with their environment, and can make intelligent decisions about what the organization should be so as to operate effectively in what is called the organization environment interface. Supporters of this point of view see an organization as a system that can be identified, changed, and developed so as to achieve its goals and objectives. The best organization, then, is one that maintains optimal efficiency over time through developing a self-collecting, self-renewing system that uses, in an effective way, the resources of the organization to achieve its goals. It is an optimal integration of the needs and wants of organization members with the goals and objectives of the organization.

The second school of thought is known as the program procedure method. It doesn’t necessarily disagree with the first, but it tends to view organization development as the effective implementation of policies, procedures and programs expressed by an organization’s management. Typically, the personnel organization is the group within the organization that is responsible for organization development approaches. In that sense, organization development is interpreted to mean anything that develops the organization. This includes recruitment, training, career development, management development, organization planning, compensation and other personnel activities.

The program procedure school is the older one in that it is derived from long-established functions performed by personnel organizations. The system process approach has developed as a result of insights from the behavioral sciences that have been applied to management. The two are not necessarily incompatible, but often they are in conflict. This happens for many reasons. Behavioral scientists are often unfamiliar with life inside the organization. The terms and concepts they use sound foreign to that setting. Experienced personnel people, on the other hand, find it hard to translate behavioral science findings into appropriate meanings in a work setting. However, these two schools of though, when combined, find that they can benefit from the insights of the other.

One of the earliest writers in the system process area was Warren Bennis in The Planning of Change. He indicated that the major foundation of planned change is the application of systematic and appropriate knowledge in human affairs for the purpose of creating intelligent action and change. There should be a conscious, deliberate, and collaborative effort to improve the operations of a human system through the utilization of scientific knowledge.

Even earlier than Bennis and other writers in this area, in a general sense, was Mary Parker Follett in the 1 920s. In books such as The New State and The Creative Experience, she emphasized the full implications of freedom and democracy for the individual and for the organization. Parker Follett said that the importance of the new psychology is that it acknowledges man as the center and the shaper of the universe. In man’s nature all institutions are latent and per force must be adapted. Man, not things, must be the starting point of the future. Today, the individual is submerged, smothered choked by the crowd fallacy, the herd theory. Parker Follett said that it is necessary to free him from these to release his energies, and he will, therefore, be able to work out flexible, constantly changing forms which shall respond sensibly to every need.

The origins of organization development also reach back to the national training laboratories that were set up in the United Sates in 1947. The idea behind the laboratory was that participants, staff, and students would learn about themselves and their problems by collaboratively building a laboratory in which participants would become both experimenters and subjects in the study of their interpersonal and group behavior.

This gave rise to sensitivity training. James Clark, in his book Authentic Interaction and Personal Growth, said this about sensitivity training:

1) In a training group there exists some persistent incongruent behavior by member A. A is said to be incongruous if others see him as not being fully aware of his own feelings and reactions.

2) To the extent that A’s behavior is not considered trivial, it is fed back to him by other members.

3) To the extent such reflection causes A to perceive those aspects of his own behavior to be at variance with his own self-concept, he experiences some degree of psychological crisis.

4) Should A perceive the group as apathetic, his self-concept enlarges to include the reality with which he has been confronted.

5) A’s behavior changes in line with his new integration, and he, therefore, tends to be more congruent.

As a result of this, the understanding of self and others increases simultaneously.

Warren Bennis, in Changing Organizations, enlarged the implications of the organic organizational form. He described mechanistic systems as focused on individual’s skills; concentrated on authority and obedience relationships; having a strict division of labor and hierarchical supervision; having centralized decision-making; and engaged in conflict resolution through suppression, arbitration and warfare. Organic systems, on the other hand, were focused on relationships; concentrated on mutual influence and trust; tending toward interdependence and shared responsibility; engaged in wide sharing of responsibility and control; and engaged in conflict resolution through bargaining or problem-solving.

This approach, mechanistic versus organic, was what Bennis described as bureaucratic. The new organization he called democratic. The bureaucratic organization was characterized by a division of labor based on functional specialization; a well defined hierarchy of vertical authority; a system of fixed procedures for dealing with work content; and impersonal formal relations. In contrast, the democratic organization has a company organized around problems to be solved; people organized horizontally, according to professional skill; ad hoc procedures for dealing with changing situations; and personal, informal relationships.

Bennis wrote that the bureaucratic model was developed as a reaction against the personal subjugation, nepotism, cruelty, emotional vicissitudes, and subjective judgment which passed for managerial practices in the early days of the industrial revolution. Man’s true hope, it was thought, was his ability to rationalize and to calculate. Rationality and predictability were sought in order to eliminate chaos and unanticipated consequences. Bennis says that it doesn’t take much imagination to see the flaws and problems in the bureaucratic model. Everyone has experienced them: bosses without technical competence and underlings with it; arbitrary and zany rules; an underworld organization which subverts or even replaces the informal apparatus; and confusion and conflict among roles.

Bennis says that the way to move beyond this is with functional autonomy and learning. Processes that lead to such individual and organizational autonomy focus on:

1) An ability to learn from experience, to codify and to store the learning.

2) An ability to learn how to learn, that is, to develop methodologies for improving the learning process.

3) An ability to acquire and use feedback on one’s own performance to develop a process orientation, to be self-analytical.

4) An ability to direct one’s own destiny.

Thus, Bennis, writing in the 1970s, as compared with Chandler, who was writing in the 1950s, shifted the emphasis from structure to process and from organization to the individual. He did not, however, change the basic shape and form of the organization. The writer who has engaged in that process has been Charles Handy.

Handy, writing in The Future of Work, indicated that traditional thinking about organizations has certainly been dominated by the machine. Where the machines were originally close to the sources of energy and raw materials, there would be the people as well. Micro-division of labor became the official way to run things, breaking work into tiny separate components so that each person could concentrate on one process, the chain of humans looking as much like a machine as possible, and, it was hoped, performing predictably.

The new micro-technologies are changing all that. Mass production is disappearing in factories and offices. Just as significantly, the way in which workers on the floor are organized is changing. Small groups of people with sophisticated tools are being given responsibility for a total operation. The work now comes to them, and they organize how to do it.

Handy says that we have to build our organizations no longer around the machine, but around people. The new technology makes possible the dispersed organization, which probably means the beginning of the end of the gathered organization, the organizational model of the industrial age, with all its imagery of the works, the office, the company man or the company team. If our contemporary organizations are to survive, they must adapt their managerial philosophy to one suited to the needs and attitudes of professionals. This reorganization calls for not only an adjustment in scale and style, but also for a more profound qualitative change. As the organization man is pushed into retreat, the apparent organizational imperatives of increased size and greater consistency will tend to be ignored and indeed reversed. Work flows will be broken up, units made smaller and more independent, and employees will be working on contact, but out of sight and out of hearing.

Handy, then, presents a much more radical view of the organizational future than does Bennis. The implications for management are significant. The shift from a centralized, ordered administration to a decentralized dispersed professionalism is marked.

In discussing the real organization of work, Handy indicates that the principles options are:

1) Tools or dials
2) Trains or terminals
3) Wages or fees.

The likely consequences are:

1) The contractual organization

2) The federal organization

3) The professional organization

The actual and potential implications of such professionalism are set out precisely by Handy in the following way:

1) Professionals demand a lot of independence and autonomy.

2) Their organizations are flat structures.

3) A career means advancement in one’s profession, not necessarily In the same organization.

4) Professionals prefer networks to hierarchies.

5) They train the next generation themselves. Professional organizations, therefore, have to be schools as well as workplaces.

6) Fixed-term contracts will become more common than either casual or indefinite employment.

7) Flexible-time contracts will be introduced to make part-time work more feasible. Many of the professionals will be self-employed for the other part of the time.

 Personal and portable pensions will become more common.

To summarize, there has been a tremendous amount of research that has gone on from Mayo to Handy, through Rensis Likert, through Burns and Stalker, through Lawrence and Lorsche, and through Bennis. The only one of the group who might have kept up with the successive transformations from individual and group, to group and organization, to organization and environment is Mary Parker Follett. Hers is the only theoretical position that is capable, generally speaking, of encompassing all of them.

As far as the practicing manager is concerned, it is fair to say that basic human relations theory has become conventional wisdom, at least in the industrialized nations. Moving on to organizational behavior, the practitioner is not likely to have resolved Argyris’ incongruence with the context of the conventionally managed organization. Similarly, approaches to organization development, especially those that focus on personal growth, are likely to have done little more than nibble at the edges of change. It is only once one begins to take Handy’s thinking into consideration that possibilities of alleviating the incongruence present themselves.

Handy believes that large organizations in the 1 980s and 1990$ face three major dilemmas. These arise out of the need to accommodate variety, individuality and democracy.

Handy indicates that the first organizational dilemma is slack, a thermometer of incompetence. He says that the most immediately pressing problem of the organizational society is the growing incompetence of many of our organizations. Incompetence results from the wrong management cultures. If you are using the culture you are comfortable with instead of the one that is appropriate to the organization, incompetence is cushioned.

The second dilemma, says Handy, is the rise of individualism. Relieving the pressure problems of obvious incompetence will, however, only uncover a deeper dilemma in the organized society. it is becoming clear that organizations managed for maximum efficiency come into conflict with human needs, the needs of the individual for self-expression and autonomy in everyday life.

Handy’s third dilemma is instrument or community. He says that we would be wise to begin to think of the organization not as an instrument, but as a community. This is a community in which people belong and which belongs to them. Its outputs are measured in units rather than money. Its responsibilities are wider than economic success. Its methods and values mirror those of the wider democratic societies in which we claim to live.

The central thread that runs through Handy’s argument brings together individuality and variety. It reconciles crucial freedom with collective order. Even his idea of community, which is so different from America’s melting pot, is a means of accommodating individuality. Communities, then, which characterize successful organizations, each have their own distinct personality. More importantly, they are not owned by anyone. One belongs to a community as a member and that community can belong to a wider group, in turn, by agreement. Contractual arrangements replace those dictated by authority or even by common identity.


Understanding How Organizations Develop

Some of the earliest work on the developing organization was done by Rudolph Steiner, an Austrian scholar. He developed the concept of the three-fold commonwealth. These three and respectively economic, sociopolitical and cultural parts of a national whole were not to be united and centralized in some abstract body. Each one was to be centralized within itself. Then, through their mutual cooperation, the unity of the overall society would come about.

Steiner discussed his approaches in books such as Social Renewal and The Three-Fold Commonwealth. In the first book, he indicated that it must be evident that human cooperation in economic life be based on fraternity, which is inherent in associations. In the civil rights system, it is necessary to strive for the realization of equality. And in the relatively independent cultural sector of the social organism, it is necessary to strive for the realization of the idea of freedom.

In The Three-Fold Commonwealth, Steiner said if one is to contribute one’s share to the well-being of the social order in modern society, and if one is to add to the welfare of one’s community by cooperation in the production of values, one must first of all possess individual capacity, talent and ability. In the second place, one must be able to live at peace with one’s fellow man and to work harmoniously with him. Finally, one must find one’s proper place from which one can further the interest of the community by one’s work, one’s activity and one’s achievements.

Steiner had strong views on the evolution of humans of organizations and of the processes of social renewal. Human development and organizational evolution are intertwined in his approach.

Much more influential than Steiner, though, was Bernard Lievegoed. Lievegoed says that as an enterprise develops, its structure changes from an undifferentiated general beginning to successive stages of ever-increasing complexity. At each stage of development, a different subsystem dominates. The first phase is the pioneer phase, in which the dominant influence is the pioneer, himself. He takes the initiative within the economic subsystem of society. He finds the pioneering answer to a consumer need which he recognizes.

This phase reaches its limit when an organization has grown so much that the pioneer no longer knows everyone on a personal basis, when the technical equipment needed has become so complex that specialists are necessary, and when the market has grown so large that the pioneer finds himself working for an anonymous public instead of the customers he has known so well.

At this point, the pioneer organization can begin to disintegrate or it needs to be restructured so that is can start on another phase of development. In the second differentiated phase, the pioneer with his economic achievement is no longer the dominant factor. The requirements of the technical system in the enterprise become preeminent. With the assistance of scientific management techniques, the structure based on personal relationships is transformed into one based on an impersonal and logical division of functions. In other words, the man has been replaced by the system. The limit of this second phase is reached when the neglect of the social system in the enterprise begins to make its presence known. Progress achieved through technical improvements is slowed down by a decrease in the motivation by the people involved. Feelings of powerlessness against the system begin to crop up.

The third integrated phase can be established successfully only if the social subsystem is interwoven with economic and technical ones. This cannot be accomplished simply by maintaining the existing structure and adding human relations. What is required is the rethinking of the entire organization. The dominant factor now is the community of people, which is working together as a combined source of innovation and enthusiasm, all in the direction of a common objective. Next we will examine each of the phases in additional detail. First is the pioneering phase. At this stage of development, an owner/manger is mostly interested in answering a need at a price that his customer can afford. He is driven by economic needs. In its purest form, a pioneer enterprise is run by its founder. It comes into being as a result of a creative act by an individual. This person is the entrepreneur.

The pioneer runs his firm with the autocratic style of leadership that is based on the prestige he enjoys. He has the trust of his people. If there is a problem, he can be relied upon to find a way out of it. Communication is direct. The pioneer communicates straightforwardly with all his employees. Early on in the business, he speaks directly to them and works in close contact with them. The organizational form is simple. Therefore, there is no need for formal communication channels. Similarly, the working style is improvised; any problems that emerge are solved by improvisation, rather than by planning. The result is flexibility. Production or service can be rapidly adapted to demand.

In terms of the work force, it functions as one large family. The pioneer is not only close to his employees, but is also close to the customer. He does not know what it is to operate in an anonymous market place.

As long as external influences do not disturb the system, this type of firm can grow and even be taken over by the next generation without much difficulty. However, if there are external changes, if a new technology becomes available, if market conditions change, if competitors break into the field, if the market grows so that personal contacts are no longer possible, and so forth, then the pioneering phase may have reached its limits. What begins to happen when a pioneering company has become overripe is that employees begin to have doubts about the boss. His prestige declines and mistakes begin to happen. A crisis ensues in which there can be decreasing profits, increasing customer complaints, communication problems and decreased motivation.

There are techniques that can be used that forestall a business’ development into the next phase. These are cartels, conglomerates, and family business. However, in most cases, it is necessary to move to the next phase, the differentiated phase.

Lievegoed says that the main principles of the second, differentiated phase are mechanization, standardization, specialization and coordination.

Mechanization implies that technical resources must be used whenever possible in place of increasingly expensive, unpredictable, and relatively inefficient human resources. Mechanization, or automation, is not only concerned with labor¬saving devices on the factory floor, but also with enhanced information-processing facilities.

Standardization is concerned with interchangeability and uniformity. It means that everything, every process, every working method, can be whittled down to an exactly described standard. One chooses a possibility from a number of alternatives and declares it to represent the norm for reasons of expediency. The differentiated organization also has standard job descriptions, performance appraisals, wage and salary scales, etc. Business and organization become predictable and controllable. Individual departments become more directly concerned with meeting their own budgeted requirements than with satisfying customer needs and expectations.

Standardization and mechanization lead to specialization. Mechanization requires an ever-increasing perfection of equipment, as well as a growing concentration of knowledge and experience. Standards can be felt only if all the causes and effects that could influence the object to be standardized are controlled in considerable detail. All of this can best be achieved through the process of specialization.

Lievegoed says that three kinds of specialization appear in the differentiated phase. The first is functional specialization, in which similar activities are concentrated in a single department under one specialized department head who, in turn, engages further specialists. Operations, marketing, purchasing, finance and human relations become separate departments in place of the all-powerful pioneer. These departments, in their turn, are subdivided. The second kind of specialization Lievegoed discusses is hierarchical specialization, in which management authority is established and contained in and by vertical layers. The top layer is concerned with long-term policy-making. The middle layer converts these policies into medium-range strategies and structures. At the bottom of the hierarchy, immediate direction and control is exercised through implementation. The third type of specialization is specialized management processes in which three interrelated management processes –planning, execution and control — are recognized as being distinguishable and are separated.

The final principle, coordination, acts to counterbalance the forces of differentiation which tend to pull people apart. Coordination is accomplished through:

1) Unity of command. To avoid the issuing of contradictory orders, each person is given only one supervisor.

2) Manageable span of control. The number of subordinates that a given supervisor has to control is limited by the number of people about whom he is able to retain detailed knowledge.

3) Reliable communications. Clear goals and direct channels of formal communication are installed to insure that management remains informed about its personnel and they about management.

4) Systematic training. Systematic transmission of knowledge and skills ensures that people will do their work in a way prescribed by the formal plan. Higher levels of management coordinate the training of lower levels in the formal hierarchy.

The differentiated phase is the opposite of the pioneer phase. It is rational, not instinctive. It is impersonal, rather than personal. Finally, it is based on organizational, instead of situational, principles of management.

Still, there are problems in the differentiated phase. For after a period of time, new crises come up, which lead to a second major reorientation. Some of these crises are an overly rigid bureaucracy, excessive control and alienation.

In some organizations that reach these crisis points, there is a tendency to regress. As they encounter falling profits, declining productivity and diminished motivation, for example, it is easier for them to go backward than to go forward. They accomplish this by trimming their headquarters staff, decentralizing operations, and placing a tough person at the top for the purpose of turning the company around. Others, however, are going through a different change. They are differentiating their production, marketing and personnel functions even more finely. The emergence of flexible manufacturing systems, increasingly individualized products and services, and ever more flexible work patterns, mark a distinct change of emphasis from the mass to the individual. This prepares the way for the third phase.

The integrated phase is centered on the development of the organization’s social system and its integration with the already developed economic and technical subsystems. Lievegoed, in The Developing Organization, indicates that if we start with the entrepreneurial initiative of the pioneer as our thesis, then differentiated management is in a certain sense the antithesis, and a third step will have to be the synthesis of the positive elements of the first and second phases, with the addition of a new element which makes this synthesis possible — the mature social subsystem.

The premise of Lievegoed’s third phase is that every individual can and wants to develop. Real fulfillment can be achieved at work, if the condition is that individual need for ongoing development is satisfied. What is necessary to accomplish this is a mature social subsystem and a new form of organization. The organization of the pioneer phase was shallow and broad. The differentiated phase had a pyramid organization, with direction and control at the top. The third phase has what Lievegoed has called a cloverleaf organization.

The cloverleaf organization no longer has a board at the apex of a pyramid. It is situated at the center of the organization, at the crossing point of all channels of information and communication. The board’s purpose is to integrate the four subsystems: relations management, process management, resources management and information management.

The management and cultivation of relations refers to both internal and external approaches. The key external relations are those involved with marketing. Other external relations are with suppliers and distributors, unions, shareholders and government. Internal relations are the second part of relations management. This sub-function involves discovering the needs of people working within the company, including their desire for ongoing personal development and tending to these, individually and collectively. These needs are economic, psychological and social. Internal relations also incorporates the stimulation of innovation as an ongoing activity of all employees. Such innovation takes place as a process over time.

The next part of the cloverleaf is process management. Between the inputs and outputs of the company are many activities of a material and nonmaterial nature, which follow one another over time. Within these flow processes, human beings are used, or become superfluous, and, therefore, process management becomes a crucial test for the genuine integration of the social system. In contrast with the differentiated phase, in which people were organized vertically and oriented toward their superiors, the third phase emphasizes the organization of people horizontally within the process flow. In these horizontal consultation groups, people are oriented toward those who precede them and influence their work and toward those who are next in the process flow and whose work is influenced in turn. Within process management, there is close interaction between the technical and social subsystems. A truly functional process flow can be guaranteed only by integrating the technical and social aspects of the system. Such a flow is also predetermined by the availability and allocation of resources.

The third element of the cloverleaf is resources management. Resources of various kinds are necessary to make possible the process flow, which is determined, in turn, by external relations. Procurement, management, and disposal of these resources at the right place in the right amounts and at the right time is what’s essential. Resources include both material capital and facilities and nonmaterial people and know-how. Nonmaterial resources are more important than material ones.

The fourth leaf of the cloverleaf is information management. Information processing has grown qualitatively and quantitatively to such a degree in large-scale enterprises that it warrants a completely separate subsystem. Its task is to send every piece of information to the place where it is required, so that those concerned can act intelligently in the interest of the entire company. Its job is to distribute information in a firm that is useful for everyone as regards content, frequency and intelligibility. The information-processing center will have a department concerned with external functions, especially market research and intelligence, and it will have an internal department serving the administrative, financial and management functions. The section of the internal department serving process management will need to collaborate with engineers. Collaboration, mutual consultation and an attitude of service are the characteristics of the information-processing subsystem.

Instead of being at the top of a pyramid, the board is located at the center of the cloverleaf. At this point, it is able to be at the center of all channels of communication. Its members must have enough proficiency in the four main subsystems to ensure that they make balanced judgments and take corrective action. In addition, they have to initiate and innovate.

As a result of these changes, the role of the chairman changes accordingly. Ronnie Lessem, writing in his book The Roots of Excellence, says:

1) Instead of seeing himself at the top of a pyramid, the chairman shifts to the center of the organism at a point where all channels of communication meet. Ideally, the chairman would shift geographically, as well, away from a parochial and national center.

2) Instead of making heavy-handed decisions and exercising ultimate authority, the chairman selectively guides, encourages, envisages and harmonizes. He asks questions, gives support recognizes potential and inspires confidence. He also needs to publicly and imaginatively distinguish between these enabling and envisioning functions and the more established ones of entrepreneurship and management.

3) Instead of focusing primarily on efficiency and effectiveness, progressive corporate chairman have concentrated on the management of change. That occurs on an ongoing basis. What remains to be done is to shift the focus from change, which has no direction or higher purpose to it, to an evolutionary task of interdependent development serving to link past, present and future.

4) Instead of necessarily competing with companies outside, and resolving conflicts among people inside, the third stage chairman strives for association with enterprises and institutions and reaches decisions through mutual agreement. What remains is to accentuate this shift of emphasis, especially externally, away from an autonomous cooperation toward an interdependent corporate architecture.

5) Instead of pursuing business, technical, and organization development as separate goals, the new chairman strives to integrate all three within a transformed technological, commercial and social vision. What is required is for that transformed vision to percolate its way through the organization by a process of cultural evolution, stimulated by powerful images and suitably heroic figures.

6) Instead of insisting that individual goals and aspirations be subordinated to those of the organization, the new corporate chairman should adapt the organization to the needs of the individual. What he needs to do is to model the organization on the individual’s behavior, growth and development from youth to adulthood and maturity and to identify and accommodate diverse forms of individuality within in it.

lchak Adizes has written an entire book about the developing organization called Corporate Lifestyles: How and Why Corporations Grow and Die and What to do About It.. Adizes calls the first stage in the development of an organization courtship. The organization at that point is not yet born; it exists only as an idea. In courtship, the emphasis is on ideas and the possibilities that the future offers. Although the company does not yet physically exist, and some may question what the excitement and enthusiasm is all about, there is something very important taking place. During this time, the company can be compared to a jet sitting at the end of the runway preparing for take off. The pilot is revving up the engines and creating a lot of noise. Although nothing of substance appears to be happening, something very crucial is taking place; thrust and momentum are building so that, once the brakes are released, the jet will be able to take off quickly and smoothly. During the time of the courtship stage, the founder is building commitment; he or she is selling an idea of how great the organization is going to be.

For an organization to start performing the function for which it was designed, it needs to undertake risks. No risk is taken without the commensurate commitment that is built during the courtship stage. This process of building commitment is accompanied by excitement, enthusiasm and emotion. The process of building commitment can produce abnormal problems, complexities or pathologies. While building commitment, the founder could be making promises which, in retrospect, he or she may regret. Promises made during a courtship seem to be part of the process of building commitment. Founders will frequently promise and give away shares of the future company to family members, lawyers or friends. It seems as if, in order to get a piece of the action, all these beneficiaries need to do is make some vague promises of supporting the founder in some way.

An organization is born, says Adizes, when commitment is successfully tested, when risk is undertaken. Conversely, an organization dies when no one shares the commitment for its operation. Thus, the degree of commitment needed in an organization is a function of the degree of risk the organization is going to take once it is born. If we know the size of the risk the fledgling company will face, we can tell the founder how much of his or her and other people’s commitment will be required to have a successful launching of the organization.

Adizes says that when we talk about commitment to undertake risk, the question should be asked: Why is a person committed? What motivates the founder or the product champion? If the motivation is only to make money, it is an insufficient commitment at this stage of the lifecycle. No one really knows for sure what a company will produce in terms of profits.

The motivation of a founder has to be transcendental. It must exceed the narrow limits of immediate gain. The commitment cannot be only rational. First and above all, it must be an emotional commitment to the idea and its functionality in the marketplace. The founder should be responding to a perceived need. The idea should obsess him; he can’t help but satisfy that need. The profits or money the product or service will produce are merely a validation of the founder’s evaluation of the situation.

In the courtship phase, the founder’s motivating goal should be to satisfy a market need to create value added. The founder should be excited about the needs the product will satisfy, and, when challenged, he or she should defend the functionality of the product and its service. If we were to ask the founder to describe the company five years from now, he or she should describe a company that is servicing clients increasingly well, one that is satisfying needs more effectively. If he or she talks about the return of investment exclusively, the commitment is not sufficient to sustain the newborn company when difficulties arise in the future.

The commitment to client needs is independent of whether the client perceives the need or not. This is a very important point, says Adizes. A founder, like a prophet, is making prophecies about the needs as he perceives them, not necessarily as expressed by potential clients. In other words, the founder is talking about what the market should buy, not necessarily what it is buying.

Adizes says that it is normal to have doubts during the courtship stage of organizational lifecycle. Conversely, it is pathological to have no doubts whatsoever. The normal doubts and questions the founder should answer are:

1) What exactly are we going to do?

2) How is It going to be done?

3) When should it be done?

4) Who is going to do it and why?

Adizes says that this is reality testing. A courtship which has no reality testing is an affair. At the first sign of obstacles, the commitment evaporates.

What finally sparks the birth of the company? Adizes says that it is not when the articles of incorporation are signed; rather, it is when there is some tangible expression of commitment made, when some risk is undertaken. The risk can have different manifestations, such as someone quitting his old job, signing his rent check for his new office, or promising to deliver a product on a certain date. When substantial risk is incurred and undertaken, the organization moves to the next stage of development, which he calls infancy.

In courtship, there was time to talk and to dream. With the undertaking of risk in the infancy stage, there is no time to talk, only time to act. At this stage of the organization’s life, it is not what someone thinks that counts, but what he or she does. The question the founder is asked or the question he or she asks employees is: What have you done? Did you sell, produce or get anything done? The dreamers of yesterday are shunned and discouraged.

There is a major paradox facing infant companies, says Adizes. The higher the risk it faces, the higher the commitment needed to ensure success. Once the company is born, the risk is large and the organization will need a very hardworking results-oriented founder who is not a dreamer. The higher the risk in a venture, the greater the wakeup shock when the organization is actually born. It takes a very special person to make the transition from a prophet to an action leader who makes the prophecy come true.

Similar to what Lievegoed talked about in his pioneer stage, Adizes indicates that a company in infancy has few policies, systems, procedures or budgets. The whole administrative system might be written on the back of an old envelope in the founder’s vest pocket. Most people in this organization, including the president, are out selling, doing, etc. There are few staff meetings. The organization is highly centralized and is best described as a one-person show. It rushes ahead at full speed without knowledge of its strengths and weaknesses.

The infant organization is highly personal. Everybody is on a first-name basis and there is very little hierarchy. The organization has no system for hiring or for evaluating performance. People are hired when needed, because they impress those who hire them. They are usually asked to start working right away, because the infant organization is late in hiring the help it needs.

At this stage in the lifecycle, the organization is like an infant. It requires operating capital often. If it does not get it, it is very vulnerable. Usually, it has no managerial depth. No one is capable of leading if the founder dies. It also has no track record or experience, so a mistake in product design, sales, service or financial planning can be fatal. Such mistakes have a high probability of occurring, because the organization is usually on a shoestring operation, with no capital for establishing the complementary team that is necessary to make well-balanced business decisions. Adizes indicates that an organization cannot remain an infant forever. The energy required for takeoff is greater than the energy necessary for maintenance. One cannot long sustain the energy level required for the takeoff of an infant organization. The founder and people in the organization lose their enthusiasm, their commitment. Time is essential. A prolonged infancy stage is a sign of pathology.

An organization will emerge from infancy and move into the next stage of organizational lifecycle when cash and activities become more stabilized. The negative cash flow and the need for cash infusion cease to be problem. Customers start bringing in repeat business, there is some brand loyalty, suppliers stabilize and production problems are no longer a daily crisis. The founder finally has time to breathe. Once this stabilization occurs, says Adizes, the infant organization moves into the next stage, which is called go-go.

He describes a go-go organization as one that has reached a stage in which the idea is working, the company has overcome negative cash flow, and sales are up. It appears that the company is not only surviving, it is flourishing. This makes the founder and the organization arrogant. The greater the organization’s success, the more arrogant the founder becomes. Sometimes, he or she will feel invisible. The result is that go-go organizations usually get into trouble by going in too many directions at the same time. They see no problems, only opportunities.

In the go-go stage, an organization turns to its market. This does not mean a marketing organization, however, just a selling orientation. This sales orientation can have abnormal outcomes. Go-gos assume a fixed-profit margin on sales, thus believing more sales automatically mean more profit. However, as they expand uncontrollably their cost accounting becomes useless. Eventually, they might be selling more, but instead of making more profits, they might be losing money. To maximize sales, go-gos give discounts to the channels of distribution, commissions to salesmen and rebates to client. Due to their fast growth and rate of change, their cost accounting is ineffective. As a result, they do not usually know the cost of goods sold, and the net price of the product could be lower than the total cost of the product sold. The more they sell, then, the more they lose.

At the go-go stage of development, the organization may have a whole array of people with different capabilities and incentive systems. It is a random patchwork of decisions on who does what and for how much remuneration. There is little training, performance appraisals or salary administration systems. In the go-go organization, people share responsibilities and tasks overlap.

A normal problem of a go-go is that everything is a priority. As the company grows up, it learns what not to do by making mistakes that are inevitable. It is a trial¬ and-error learning process, and when a go-go makes major mistakes, the organization is thrown into the next stage of its lifecycle. When there is a major crisis, the organization is cured of its arrogance. The bigger the success and arrogance, the bigger the crisis to occur and push the organization to change. The organization realizes that it needs a set of rules and policies on what and how to do or not to do. The development of rules and policies indicates the emergence of an emphasis on the company’s administrative subsystem and the transition to the next stage of development, which is adolescence. If this emphasis on administrative systems does not happen, the company slips into a pathology called the founder’s or family trap.

What is the founder’s trap? In the courtship through go-go stages of the Lifecycle, the founder is basically the company and the company is the founder. The founder is the driving force. He is both the biggest asset and the biggest risk. With the emergence of administrative subsystems, the organization moves toward institutionalizing the guiding leadership of the founder. Because the company is now sufficiently established, the founder can no longer act as a one-person show. He or she cannot reach deeply enough into the company to personally implant leadership style and philosophy. Therefore, a system must be designed to do it.

The founder tries to be centralized by delegating authority and responsibility. Often it does not work very well. People begin to take initiative, something which the founder finds threatening, because it does not always reflect his own judgments, values, needs and preferences. There was no delegation during the infancy stage. This is frightening to the founder. He or she feels the loss of control. During this stage, the organization is in high turbulence.

The founder’s trap means that when the founder dies, the company might die as well. The founder’s trap can also develop into a family trap. The company may experience this when a family takes over the company on the basis of ownership, rather than on competence and experience. If this happens, the company has not separated ownership from management. It has not depersonalized the leadership role to the extent that it is capable of selecting the most competent person for the job. Instead, the person with the most ownership takes over. This is counterproductive in many companies.

One of the big innovations of capitalism, says Adizes, is the separation of ownership from professional management. If the company is not going to lose its hard- born gains, it must make the change from management by intuition to a more professional orientation. This should happen in adolescence. If the organization can’t make this transition, it falls into the founder’s or family trap.

In adolescence, the organization is being reborn apart from its founder. This rebirth is painful and prolonged, more so than the physical birth of infancy. The most distinctive characteristics of adolescent organizations are conflict and inconsistencies. There is an us versus them mentality. There is inconsistency in organizational goals. And there is inconsistency in compensation and incentive systems.

Why is this transition so difficult? There are three principal reasons:

1) Delegation of authority.

2) Change of leadership.

3) Goal displacement.

Adizes says that what is normal during the adolescent phase is that:

1) There Is conflict between partners or decision-makers and between the administrative and entrepreneurial types.

2) There is a temporary loss of vision.

3) The founder accepts organizational sovereignty.

4) Incentives systems reward the wrong behavior.

5) There Is a yo-yo delegation of authority.

6) Policies are made, but not adhered to.

7) The board of directors exercises new controls over management.

If the administrative systemization succeeds and leadership is institutionalized, the organization moves to the next stage of development and enters the prime phase.

The prime phase is the optimum point on the lifecycle curve, where the organization achieves a balance of self-control and flexibility. The characteristics of prime organizations are:

1) Functional systems and organizational structure.

2) Institutionalized vision and creativity.

3) Results orientation. The organization satisfies customer needs.

4) The organization makes plans and then follows up on those plans.

5) The organization predictably excels in performance.

6) The organization can afford growth in both sales and profitability.

7) The organization spins oft new infant organizations.

Adizes says that prime organizations know what they are doing, where they are going, and how to get there. They make money and are similar in growth characteristics to the go-go, with one major difference. A go-go can tell you why you made money. A prime can tell you why you are going to make money. And they do.

In the prime stage, a company has an aggressive budget and the variance of actual over budget is tolerable. It has the vision and aggressiveness of a go-go, with the controllability and predictability of implementation acquired during adolescence. The prime organization is not without problems. It often does not have enough well trained people. Also there is some infighting. The challenge of the prime organization is to stay prime.

Adizes then turns to the aging phase of organization. He indicates that the stable phase is the first of the aging phases of the organizational Lifecycle. The company is still strong, but is starting to lose its flexibility. It is at the end of growth and at the beginning of decline. The company is beginning to lose the spirit of creativity, innovation, and encouragement of change that made it into a prime organization. As flexibility declines, the organization mellows. It is still results-oriented and well-organized, but there is less conflict than in the previous stages. There is less to fight about and less threat from aggressive colleagues. There is increasing adherence to precedence and reliance on what has worked in the past. By this time, the organization has usually achieved a stable position in the marketplace. It has developed a sense of security that may be unfounded over the long term. Creativity and a sense of urgency still occur from time to time, but they are short-lived. Orderliness prevails and conservative approaches so past achievements are not in danger.

The following are characteristics of a stable organization:

1) Has lower expectations for growth.

2) Has fewer expectations to conquer new markets, technologies and frontiers.

3) Starts to focus on past achievements, instead of future visions.

4) Is suspicious of change.

5) Rewards those who do what they are told to do.

6) Is more interested in Interpersonal relationships than risks.

At this stage, interaction between people within the organization becomes important. The growing stages require change, which produces conflict. In the growing stages, interpersonal relationships, therefore, were not of major significance. In the stable stage, where there is not much change, conflict diminishes. There are fewer disagreements and an important old-buddy network emerges. This lack of conflict does not produce any noticeable dysfunctional results at this stage of the lifecycle, only the negative investment is made. The results will appear later. If creativity is dormant long enough, says Adizes, it begins to affect the company’s ability to meet customer needs. This leads to the next phase of the Lifecycle, aristocracy. The aristocracy stage is identified by the following behavioral patterns:

1) Money is spent on control systems, benefits and facilities.

2) Emphasis is on how things are done, rather than on what and why it is done.

3) There is formality in dress, address and tradition.

4) Individuals are concerned about the company’s vitality, but, as a group, the operating motto Is don’t make waves. It’s business as usual.

5) There is low internal innovation. Corporations may buy other companies to acquire new products in markets or in an attempt to buy entrepreneurship.

6) The organization is cash-rich, a potential takeover target.

Adizes says that the decline in flexibility which began in the prime stage has a long-range effect. Eventually, the capability to achieve and produce results must also decline. As the organization is less proactive in dealing with long-run opportunities, its capability to respond to short-term needs also suffers. The company produces results, but it is not proactive. Goals with short-term, relatively assured results become the norm, and the seeds of mediocrity are sown.

The decline in long-term results orientation creates a new style of organizational behavior. The climate in the aristocratic organization is relatively stale. What counts is not what one did, but how one did it. The aristocratic organization can be distinguished from others on the lifecycle by how its members dress, where they meet, how they utilize space, how they address each other, how they communicate with each other, and how they handle conflict. Eventually, the aristocratic organization becomes desperate over the continued loss of market share revenues and profits. It then enters the early bureaucracy stage. This is a relatively fast process. What happens is that the aristocracy covers its losses through acquisitions and by adapting prices upward. As prices go up, quantities start going down. At first, revenues increase because of the rising prices, but eventually the decreasing quantities have an effect and revenues start declining. The organization finishes cashing in on the good will that it so painstakingly built up from infancy.

In early bureaucracy the following characteristics are typical:

1) Emphasis on who caused the problem, rather than what to do about It.

2) There Is much conflict, backstabbing and infighting.

3) Paranoia freezes the organization; everyone lies low.

4) Focuses on internal turf wars; the external customer is a nuisance.

Eventually, the early bureaucratic stage blossoms into the full bureaucratic stage. In this stage, the company does not generate sufficient resources of its own. It justifies its existence not by the fact that it is functioning well, but by the fact that it exists. It can hold off death only through artificial life support systems. The bureaucratic organization is characterized by the following:

1) It has many systems with little functional orientation.

2) It disassociates from its environment and focuses on itself.

3) There is no sense of control.

4) In order to work effectively with the organization, customers must develop elaborate approaches to break through or bypass the system.

Adizes says that bureaucracies are kept alive by the monopolies that they hold on many activities. Pulling the governmental plug would put many of these bureaucratic organizations out of business. The health of a full-fledged bureaucracy is very delicate. What appears to be a dangerous monopoly may actually be relatively easy to destroy. Those that appear to be hard to change may be rotten in the center and any sudden change will ruin them. Bureaucracies that are forced to reorganize quickly often do not survive the effort.

Bureaucratic organizations may survive a protracted coma. This happens when they are able to operate in an isolated environment. Examples include monopolies and government agencies. Unions or political pressure may help keep them alive, because no one want to eliminate an organization that provides employment. This results in a very expensive, artificial prolonging of life.

Organization death, itself, may take a number of years. It occurs when no one is committed to the organization anymore. It can happen before bureaucratization occurs if there is no viable political commitment to support an industry or a company. In a bureaucracy, death is prolonged because the commitment is not to the organization’s clients, but to political interests that keep the organization alive for political reasons. If the organization depended on clients, it would have already died, because clients would have deserted it.

Gordon Lippitt, in his book Organizational Renewal, also talks about organizational growth in terms of human physiological changes. These are birth, youth, and maturity, which are similar to the pioneering, integrating and differentiated phases of Lievegoed.

At each stage of evolution, an organization faces one or more issues that are crucial to that phase of development. If those issues remain unresolved, the organization will enter decline.

At the infant stage, if the organization is to survive, its creators have to decide what to create, in a creative and organizational sense, and what to sacrifice, in financial and emotional terms. If the decisions are made inappropriately, the enterprise will die in its infancy.

If the organizers are able to get through the first stage and progress to the youthful phase, they will need to turn into scientific managers. In that role, they will be seeking much greater stability, as well as a solid and lasting reputation. If management fails to plan, organize and control effectively, the company will be over reactive to immediate stimuli and dominated by short-term crises.

As the organization enters its mature phase, its critical concerns also evolve. It now aims to achieve uniqueness and adaptability and to contribute to society. The manager’s focus is now long-, as opposed to medium- or short-term. The key issues to be resolved are how to change and adapt, and how to share business and management with others. The lack of such a developmental orientation leads to an unnecessarily defensive or aggressive attitude, to a narrowness of approach and to an overall failure to adapt.

Larry Greiner, writing in an article called “Evolution and Resolution as Organizations Grow,” which appeared in Harvard Business Review, talks about three phases that are very much like Lievegoed’s three phases. However, he indicates that growing organizations move through five distinguishable phases of development. Each phase contains a relatively calm period of growth that ends with a management crisis. He calls the calm period of growth evolutionary, and the period of crisis revolutionary. The main task for management in each revolutionary period is to find a set or organizational practices that will become the basis for managing the next period of evolutionary growth. These new practices eventually sow their own seed of decay and lead to another period of revolution.

Thus, a major solution in one time period becomes a major problem in another. The extent and duration of a stage of development is not only a function of the age and size of an organization, it is also related to the market environment of its industry.

In phase one, creativity, the emphasis is on creating a product or service and a market. The company’s founders are usually technically or entrepreneurially oriented and they dislike management activities. Their physical and mental energies are devoted to producing and selling a product or service. Communication among employees is frequent and informal. Long hours of work are rewarded by modest salaries and the promise of ownership benefits. Control over activities comes from immediate marketplace feedback as customers react. Eventually, though, the founders find themselves burdened with unwanted management responsibilities. A leadership crisis occurs, which requires a management revolution.

Next comes phase two, direction. Those companies that survive the first phase by installing capable management usually enter a state of sustained growth under able leadership. A functional organizational structure is introduced to separate operations from marketing activities, and job assignments become more specialized. Incentives, budgets and work standards are introduced. Communication becomes more formal and impersonal as a hierarchy of titles and positions builds up. The new management takes on most of the decision-making responsibility. This works well until the second revolution occurs, the autonomy revolution. There is increasing demand for autonomy at lower levels. This crisis needs to be resolved through appropriate delegation, which is phase three.

The delegation phase results in a more decentralized structure. Much greater responsibility is given to managers of individual operations and territories. Profit centers and bonuses are used to stimulate motivation. Top executives at the center confine themselves to managing by exception, based on periodic reports from the field. Senior management may acquire new companies, or enter into joint ventures, to supplement the existing, decentralized units.

A major crisis eventually emerges as top management begins to sense that it is losing control over a highly diversified operation. Freedom breeds not only autonomy, but parochialism. Revolution begins as management seeks to regain overall control. This attempt to reassert centralized control is destined to fail, though, given the emerging complexity of the operation. Those companies that resolve the crisis discover a new form of coordination, which is phase four.

This phase calls for a new and subtle form of coordination. This may involve:

1) Previously decentralized units being merged into newly formed product groups.

2) Formal planning procedures being installed.

3) The hiring of staff personnel at headquarters to Initiate company-wide technical, commercial and organizational review programs.

4) Introducing stock options and company-wide profit-sharing schemes to encourage Individuals and divisions to Identify with the company as a whole.

Of course, a crisis is not far behind as a lack of confidence builds up between line and staff and between headquarters and the divisions. The proliferation of systems and procedures begins to turn into too much of a good thing. A red-tape crisis looms. The next revolution has begun.

This leads to phase five, which is collaboration. It emphasizes strong interpersonal collaboration to overcome the red-tape crisis. Focus is now on problem solving through group interaction. Teams are combined across foundations. A matrix system is often created, linking up temporary projects and permanent functions. Headquarters staff is reduced in number and combined into interdisciplinary teams. Experimentation is encouraged throughout the organization. It is not clear what crisis will emerge out of this phase. Greiner suggests the prospect of psychological saturation through which employees burn out. He indicates that there is perhaps the need for more reflection at this time. Apparently, Greiner is unable to come to grips with the challenges of and opportunities for genuine integration and maturation. His own final phase does not have a real element of maturity to it because he is not completely in touch with the emerging technological and social developments of the time.

Building a Better Organization: Dealing with Transition and Change.

Some of the best-known work on designing an effective or better organization has been done by Thomas Peters and Robert Waterman. In their book, In Search of

Excellence: Lessons from America’s Best Run Companies, they note that the excellent companies were, above all, brilliant on the basics. Tools didn’t substitute for thinking. Intellect didn’t overpower wisdom. Analysis didn’t impede action. Rather, these companies worked hard to keep things simple in a complex world. They persisted. They insisted on top quality. They fawned on their customers. They listened to their employees and treated them like adults. They allowed their innovative product and service champions long tethers. They allowed some chaos in return for quick action and regular experimentation.

Successful companies, say Waterman and Peters, have a bias for action. The best companies tend to be very action-oriented, even if they do favor careful analysis. There is no paralysis by analysis. When a problem arises, small groups, which may be drawn from throughout the company, get together to plan and implement a quick response. Such a task force is made up of volunteers, operates for a limited period of time, has no formal charter, no permanent staff and no obligation to document its every move. Teams that operate that way tend to be successful, and this approach also encourages real experimentation through the company on a regular basis.

The best companies also stay close to their customers. They distinguish themselves by giving excellence service, even if it means having to charge prices that are higher than their competitors’. These companies typically have an obsession with the quality and reliability of their products and services, and most tend to view themselves as service companies, even if they are manufacturers. Salesmen and other staff people may call on customers simply to listen to their complaints and suggestions. Indeed, some companies find that their best new products evolve out of suggestions from existing customers. Some of these companies have a goal of addressing every customer complaint within 24 hours.

The best companies also tend to emphasize autonomy and entrepreneurship. Even the largest corporation can do this by encouraging a system that allows employees to become product champions. Champions can take a product idea and enthusiastically push it through the system until it becomes a reality. One factor that encourages autonomy is an informal, but very intense, approach to internal communications that encourages people in entire departments to stay in touch with each other. These companies also have a reasonable tolerance for failure. They prefer risking the development of a new product or service that ultimately does not work out to be so cautious that they overlook opportunities in the name of fiscal conservatism. Managers of such companies believe that a certain number of mistakes or failures is a sign of a vibrant healthy company.

Peters and Waterman also indicate that the most successful companies believe in productivity through people, not through increased capital spending. Managers believe workers are the best source of quality and productivity improvements. Consequently, managers strive to create a harmonious working environment, and avoid having an adversarial relationship with employees. Workers are treated with great respect and are seen as a source of good ideas, not simply as pawns who follow orders. Many such companies avoid having a rigid chain of command in order to facilitate communication, and they tend to see themselves as being an extended family. A certain emphasis on informal communication allows ideas to flow freely among departments and various layers of the company. These organizations also emphasize rewarding employees with recognition, as well as financial bonuses.

Managers of successful businesses take a hands-on approach, and are driven by the company’s basic values. The content of the basic values or statements of a company’s mission tend to be brief, and typically include several key factors. These companies want to have the best in their particular field. They believe in the importance of the details of execution. The companies emphasize the importance of individuals. They believe in superior quality and service, and they do not simply talk about it. Managers believe that most people in the company should be viewed as innovators or potential innovators, and they give employees enough leeway to learn from occasional failures. Most excellent companies emphasis informality of communication. Also, there is generally an explicit belief in the importance of long-term economic growth and profits.

Successful companies do what Peters and Waterman call sticking to the knitting. They generally do not acquire businesses that they do not know how to run, and shy away from becoming conglomerates. Most acquisitions, even relatively small ones, tend to take up an enormous amount of top management’s time, and the investment made in learning the ways of a new industry could be better spent on the company’s core business. The healthiest companies are those that branch out, either through internal diversification or acquisitions, but stay very close to their original focus. After that group, the most successful companies are those that expand into related but separate fields. The least successful companies are usually those that get into completely unrelated businesses.

Successful companies have simple organizational forms and lean staffs. The underlying forms tend to be simple, and many huge companies have fewer than 100 people on their corporate staffs. Organizations with very complicated structures tend to get paralyzed, because so many people have to approve changes. Among successful companies, the structural form tends to emphasize a particular focus in an overriding way, either product lines or geographical areas or a particular function. Yet successful companies tend to have a way to manage three key areas: stability, entrepreneurship and overall change. In the area of change, companies can reorganize regularly, change priorities and form experimental units. Stability comes from a simple underlying structure. Entrepreneurship is encouraged through the creation of small units and problem-solving groups.

Excellent companies have simultaneous loose-tight properties. These companies encourage real autonomy among product development teams and assembly line workers. Yet there are core values that everyone adheres to and understands.

Phil Crosby, in his book The Eternally Successful Organization, has an approach that is broken down into just a handful of key parts. He indicates that just the right combination of theory and application, with the goal of preventing rather than fixing, is the solution. The first important aspect is people. To Crosby, people are the core, the heart and soul of organizations. They have to be treated, managed, organized, directed and nurtured like a family. Subsequently, and at the same time, management should base decisions on the idea that what is good for the family is good for the company. The difference between a mediocre career and an outstanding experience is the concept of doing the job properly, says Crosby. And the way one does the job properly is to have a zero defects system. Crosby offers four absolutes of quality management:

1) Quality means conformance to requirements;

2) Quality comes from prevention;

3) Quality performance standard Is zero defects;

4) Quality measurement Is the price of nonconformance.

Probably the most important ingredient in the eternally successful organization is company pride, says Crosby. To have company pride, the organization has to have clear goals and objectives that the employees can respect. Secondly, the management has to be consistently dedicated to having everyone understand and be able to meet the requirements that will cause the organization to reach those goals and objectives. There must be continuous education and communication that lets the employees know what is happening and forces management to listen to both employees and customers. Fourth, there must be an awareness that is positively reinforced, showing that this organization is worthy of pride.

The next important aspect of creating an eternally successful organization is growth, how to achieve steady ongoing profits. Crosby indicates that there are five key aspects of growth:

1) Grow where the business Is; don’t try to make a market where none exists.

2) Keep close to the customers’ needs.

3) Don’t assume a good manager can run anything.

4) Don’t load the producing people down with nonproductive chores like administrative reports.

5) Debt is not your friend.

An eternally successful organization also requires market savvy, how to recognize what one’s customers really want. That means knowing who the customers are, and keeping track of them as their resources, feelings and attitudes change. Sometimes, the change is due to the company becoming difficult to communicate with, or when it begins to show signs of arrogance. Sometimes, it is due to the fact that people customers have been dealing with have gone away. It is important to remember that relationships determine success.

The fourth aspect in creating an eternally successful organization is change, how to approach it without fear and why it’s a must for corporate health. He puts forth several keys aspects about change:

1) The world keeps on going around, whether we want it to or not. ft is Important to keep looking ahead.

2) Not every change is good for us and not every change Is bad. Each needs to be evaluated subjectively.

3) Managing change means that everyone has to be involved enough to know what he or she will have to do about it.

4) Watch out for changes recommended eagerly by those who would profit from it.

One of the most talked about approaches for dealing with organizational change is that of Peter Senge in his book The Fifth Discipline: The Art and Practice of the Learning Organization. He describes the five essential disciplines necessary to corporate success as personal mastery, mental models, building shared visions, team learning and systems thinking, which is the fifth discipline.

Creation of a learning organization involves developing certain core disciplines. The first is personal mastery, which is a key discipline because organizations learn through individuals who learn.

Another core discipline is the recognition and developmental models that shape perceptions of situations. Most mental models or underlying assumptions function subconsciously. Bringing them to the surface and testing them allows for the destruction of inaccurate models and the creation of new ones that are more effective for evaluating a situation. A manager’s effectiveness is related to the constant sharpening of his or her mental models.

Shared vision is an important discipline in that it creates a common caring that lifts people’s aspirations. Shared visions tend to emerge from personal visions, and ideally spring from deep within the organization, rather than being created at the top. Once a vision has taken hold, the key is to enroll an increasing number of people in it. The shared vision includes an image of the future that the organization wants to create, a larger sense of purpose beyond the bottom line, and core values, such as integrity and honesty.

Team learning is the fourth of the core disciplines, and is the process of aligning and developing the capacity of a team to create the results that its members want. Team learning has three critical dimensions:

1) A need to think insightfully about complex issues;

2) A need for creative, coordinated action;

3) The role of team members on other teams, through which decisions are carried out.

Prototype learning organizations, says Senge, should have a number of characteristics. One is a radical openness of discussion and thought that liberates the organization from internal politics, and enables employees to take advantage of shared vision in a way that uses it as a foundation for eradicating overzealous self-interest. Localness is another important characteristic, because learning organizations have to move toward extending the maximum amount of power and authority as far down from the top as possible.

Managers in learning organizations should set a good example by using some of their time to truly reflect on the issues they face, instead of always being so busy that they only have time to think on their feet. Organizations should also strive to create a better balance between work and family by making it acceptable for people to discuss family issues, as well as work issues.

Learning organizations have a new view of leadership, says Senge, in which leaders are designers, teachers and stewards. The traditional view of leadership as a role that focuses almost exclusively on energizing and directing people is inappropriate in learning organizations.

Senge believes that the five disciplines constitute a critical mass that helps to make the creation of learning organizations an attainable goal. Mastering the five disciplines creates great improvements in an organization, and will allow it to take on new disciplines as needed in the future.

Systems thinking includes both detail complexity, which involves many variables, and dynamic complexity, where cause and effect are not necessarily closely linked in time and space, and interventions do not always produce expected outcomes. The language used in systems thinking helps to shape and organize perceptions of reality in new ways that allow people to see both linear relationships and systems interrelationships.

Senge indicates that the fifth discipline, the last discipline, systems thinking, is the one that ties all the others together. It is vital to his book and to learning organizations on two different levels. First it offers a critical set of tools for understanding complex policy and strategy issues. Second, systems thinking is vital as a philosophy and a set of principles that integrates all the learning disciplines and keeps them from being just a list of favorite ideas and clever techniques. The more one understands the systems perspective, the more one can begin to practice the other disciplines.

He indicates that there are several laws of the fifth discipline:

1) Today’s problems come from yesterday’s solutions.

2) The harder you push, the harder the system pushes back.

3) Behavior grows better before it grows worse.

4) The easy way out usually leads back in.

5) The cure can be worse than the disease.

6) Faster is slower.

7) Cause and effect are not closely related in time.

8) Small changes can produce big results, but the areas of highest leverage are often the least obvious.

9) You can have your cake and eat it, too, but not all at once.

10) Dividing an elephant in half does not produce two small elephants.

11) There is no blame.

Russell Ackoff, in his book Creating the Corporate Future, indicates that there has been a shift in our concept of the world from the analytical style of thinking that was common during the machine age to systems thinking, which is focused more on synthesis of information that yields true understanding. The concept we hold of the corporation is changing, as well, evolving from a mechanistic view to one that is organizational. The key to development and improved quality of life is enabling individuals to plan and measure progress for themselves. Corporations can make participative planning possible for employees by moving toward more democratic planning methods.

Ackoff then discusses how our concept of planning has changed. He describes the weaknesses of various planning models, such as the reactive approach. He indicates that reactive planning is bottom-up tactically oriented planning. The strategy it contains is implicit, a consequence of numerous independently made practical decisions. Reactive planning is deficient because it is based on the mistaken assumption that if one gets rid of what one does not want, one gets what one wants. In addition, reactive planning is carried out in parts of an organization independently of other parts at the same and higher levels.

He also discuses the shortcomings of pre-active planning, which is top-down strategically oriented planning. Objectives are explicitly set, but tactics are left to individual units. The effectiveness of pre-active planning depends on the accuracy of its forecasts. Unfortunately, such forecasts are almost always wrong.

Ackoff then proposes a system of interactive planning that draws from information provided by people throughout the corporation. In this system, the role of the professional planner is to facilitate the process. The author describes the interactive concept of planning as the design of a desirable future and the invention of ways to bring it about. The participative principle is critical to interactive planning, because process is seen as the most important product of such planning. Other critical factors in interactive planning include continuity, which guarantees that managers continuously monitor, evaluate and modify plans. Also important is a holistic approach that involves close coordination and integration of planning at all levels of the organization.

Ackoff elaborates on and carries the concept of interactive planning much further in a second book, A Guide To Controlling Your Corporation’s Future. Ackoff co-authored the book with two other scholars. The second work was designed to facilitate use of interactive planning. It is much more of a how-to approach than was the earlier book.

Ackoff indicates that interactive planning is directed at gaining control of the future. lt is based on the belief that an organization’s future depends at least as much as what it does between now and then as on what is done to it.

There are three operating principles of interactive planning. First is the participative principle. The most important benefit of planning is not derived from use of its product, but from engaging in its production. In interactive planning, process is the most important product. By engaging in this process, participants come to understand their organization and its environment and how their behavior can improve performance of the whole.

The next principle is the principle of continuity. All plans are based on a large number of assumptions. An assumption is a predisposition that we treat as though it were true. Because organizations and their environments change over time, planners should formulate as many as possible of their relevant assumptions about what will, will not, can, and cannot change. These assumptions should be monitored on a regular basis.

The third operating principle of interactive planning is the holistic principle. It has two parts, the principle of coordination and the principle of integration. Coordination has to do with the interaction of units at the same level, integration with the interaction of units at different levels. The principle of coordination asserts that all parts of an organization should be planned for simultaneously and independently. The principle of integration asserts that planning done independently at any level of an organization cannot be effective. All levels should be planned for simultaneously and independently.

Ackoff and his co-authors indicate that there are five phases of interactive planning. The first is what they term formulation of the mess. This is a determination of what problems and opportunities face the organization that is being planned for, how they interact, and what obstructs or constrains the organization’s doing something about them. The output of this phase takes the form of a reference scenario.

The second phase of interactive planning is ends planning. This is a determination of what is wanted by means of an idealized redesign of the system planned for. Goals, objectives and ideals are extracted from this design. Comparison of the reference scenario and the idealized redesign identifies the gaps to be closed or narrowed by the planning process.

The third phase is means planning. This is a determination of what should be done to close or narrow the gaps. This requires selecting or inventing appropriate courses of action, practices, projects, programs and policies.

The fourth phase is resource planning. This is a determination of what types of resources and how much of each will be required by the means chosen, when they will be required, and how they will be acquired or generated.

The final phase is implementation and control. This is a determination of who is to do what, when it is to be done, and how to assure that these assignments are carried out as expected and produced the desired effects on performance.

Carol Sanford and Pamela Mang, in their article, “A Work in Progress at Dupont:

The Creation of a Developmental Organization,” included in the book The New Paradigm in Business, talk about building a developmental organization. A developmental organization is one in which every employee is a source of creativity, and in which all employees are self-organizing and working together to create a self-organizing business. The foundation for achieving this goal is a systemic set of four interwoven capabilities:

1) Self reflection, being able to see in any situation and at any point in time the patterns that dominate one’s thinking and interactions, and to understand their source. This is the essential first step toward the development of self-accountability.

2) Evolutionary systems thinking. This is being able to hold in one’s mind, while engaged in one’s daily activities a picture of oneself as one of a series of evolving dynamic systems. Each of these systems constitutes a different level of systems that is nested within the next. Furthermore, each is continuously engaged, directly or indirectly, in a multitude of complex interaction and associations with other levels. Thus, one sees oneself as part of a team whose performance and well-being one impacts and one is impacted by. One’s team impacts and is impacted by the business unit within which it is nested and which, in turn, is within the plant, which is within the corporation, and so on out in ever-widening spheres of influence. Within this context, one can understand and appreciate the implication and significance of one’s patterns of thinking and interacting. Through that, one can take a second step toward self-accountability.

3) Integration of personal development and performance improvement. That is, being able to utilize every effort to improve business performance as an opportunity to develop oneself and vice versa.

4) Holographic approach to work. This means being able to bring to every decision-making process a total perspective that holds within it a reflection of all the critical elements which make up the whole of the business and the systems of which it is a part.

The prescription for change indicated by Rosabeth Moss Kanter in her book Men and Women of the Corporation is straightforward. She presents a theory of the structural determinants of behavior in complex organizations. The three most important factors in predicting behavior are opportunity, power and the proportions of different kinds of people in a corporation. She indicates that work is not an isolated relationship between actor and activity, and what happens to people in the course of their work is largely determined by the structural setting in which work takes place. Behavior in organizations tends to be adaptive, and if behavior reflects a reasonable response to the organizational setting, then changes in the structure will bring about changes in how employees act.

Kanter then suggests a number of organizational changes that can improve the quality of work life and improve efficiency. She proposes policies that empower employees and enhance opportunities for them, and balance the numbers of socially different kinds of people with the corporations. Policies such as job rotation and flex-time can increase opportunities, while empowerment strategies include flattening the corporate hierarchy and creating more autonomous work units.

Dennis Jaffe and Cynthia Scott also focus on empowerment in their book, Empowerment: Take This Job and Love It.. They describe an empowered environment as one in which people at all levels feel directly responsible for results, and learn and develop their skills on a continuous basis. They feel the trust to share their best ideas and work together in teams that contain many leaders, not just one.

Empowerment means that the organization shifts from limiting the power to determine its future and how it will get there to a few top executives to include every level of the organization in the process. This organizational work style, which mobilizes the inner capacity of all employees to contribute to the organization, has become the core of organizational development in the 1990’s. Human capital has become the key to success of organizations. Organizations have of late become compelled to develop environments which foster the fear and voluntary exchange of human resources in a continuously renewing interchange.

The authors’ model for moving toward empowerment notes that change must occur on three levels. It has to be built into the organizational structure, not just into individuals.

The first level is individual mind sets. The authors ask:

1) Do the Individuals in the organization believe they are capable of making changes and of being the source of creativity and innovation?

2) Do they listen to themselves?

3) Do they seek new ways?

4) Do they believe In what is or what can be?

Level two is personal and intergroup relationships. The authors ask:

1) Are people willing to behave in self-responsible, self-managing and accountable agreements with each other.

2) Have people learned the skills of collaboration, trust, communication, shared problem-solving, conflict resolution and mutual respect?

3) Do they know how to create a learning team?

4) Do people create informal links between groups and communicate and cooperate across groups within the organization?

Level three is organizational policies and structures. The authors ask:

1) Do policies and procedures support and encourage individual and team empowerment?

2) Is the culture, mission, value, and vision clear and accepted by everyone?

3) How can people make input into these policies?

4) Is security and fair treatment guaranteed?

The authors then go on to indicate some common factors that underlie large organizational transformation. These include:

1) Incongruence.

2) Emotional illiteracy.

3) The “I don’t have to change, they do” feeling.

4) Not giving up control.

5) Isolation.

6) No models of new behavior.

7) Impatience.

8) Middle management entrenchment.

9) Failure to understand people’s needs for psychological security.

In Reinventing the Corporation, John Naisbitt and Patricia Aburdene incorporate many of the thoughts of the preceding writers as they talk about the process of reinventing the corporation. They indicate that there are at least ten considerations to bear in mind:

1) The best and brightest people will gravitate toward those corporations that foster personal growth.

2) The manager’s new role Is that of coach, teacher and mentor.

3) The best people want ownership– psychic and literal— in a company; the best companies are providing it.

4) Companies will increasingly turn to third party contractors, shifting from hired labor to contract labor.

5) Authoritarian management is yielding to a networking people style of management.

6) Entrepreneurship within the corporations – intrapreneurship — is creating new products and new markets and revitalizing companies inside out.

7) Quality will be paramount.

 8) Intuition and creativity are challenging the “it’s all in the numbers” business school philosophy.

9) Large corporations are emulating the positive and productive qualities of small business.

10) The dawn of the Information economy has fostered a massive shift from infrastructure to quality of life.

Phyllis Schlesinger and other authors in Organization: Text Cases and Readings in the Management of Organization Design and Change, talk about the necessary principles for adaptive organizational cultures. Adaptive cultures require:

1) Managers who can balance core values with flexible organizational designs.

2) Organizational designs that are flexible.

3) Designs that fit with the environment and the mission of the firm.

4) Leaders who promote leadership qualities in others.

5) The establishment of cultures and processes that enable the emergence of leaders at all levels.

Adizes, whose corporate lifecycles were discussed earlier, also offers a prescription for managing organizational change. He indicates that there is a sequence of activities or interventions that must take place in an organization if it is to move from one phase of the lifecycle to another. Other steps may be necessary if the company has specific problems. Of course, the steps utilized depend upon the organization’s location in the lifecycle. There are eleven basic steps in his method, which are designed specifically to produce organizational change. These therapeutic processes must be applied to a certain sequence and with the proper amount of emphasis to produce the desired results.

Unfortunately, Adizes spends the bulk of his book talking about how and why corporations grow and die, and very little talking about what to do about it. In addition, the eleven steps that he outlines are sufficiently complex and require such sensitivity in application that is seems almost necessary to secure the services of Adizes in attempting to apply them to one’s organization.

Perhaps that is the author’s intent as the head of an institute and as consultant to more than 400 companies around the world that have applied his methodology to increase effectiveness and efficiency.

His first step is an organizational diagnosis, a systemic audit of the organization and its managerial process. Second comes team-building or functional problem solving. This is followed by implementation, follow up and the starting of a structural bottom-up channel of communication. The fourth phase is mission definition. The fifth phase is departmentalization, organizational structure. Sixth comes the creation of a responsive accountability system. In phase seven, the first six phases are reapplied to lower organizational levels. In phase eight, Adizes talks about identifying opportunity for excellence and stretching. By stretching he means reaching for peak performance. Phase nine refers to the allocation of scarce resources, whether financial, human or physical. In phase ten, a plan is made determining when each phase will be introduced into each phase of the organization so that the process is integrated and reinforces the process of continuous change. The last phase of his methodology establishes incentive systems.

Adizes indicates that his eleven-phase method is significantly different than those used by traditional management consultants or behavioral scientists.


Bringing It All Together

There is much to appreciate in current business theory that advocates flatter, less-hierarchical organizational structures. It is my philosophy that one’s business should have three aspects. These are marketing, fulfillment and production, which are supported on a platform known as operations. Operations is the part of one’s infrastructure that supports the continuation and or expansion of one’s ongoing business objectives. It’s the engine that drives one’s business.

My belief is that any business operated well can be profitable. A critical part of operating well is keeping one’s business as simple and streamlined as possible. It doesn’t make sense to cause things to be more complicated than they have to be. There is no reason to appoint a committee when one person can do the job.

I think of operations as the skeleton that holds the other components of one’s business together. There is nothing inherently valuable about operations, though. Marketing earns money by communicating with customers so they are prompted to buy. Fulfillment services earn money through the distribution and delivery of one’s product. Production earns money by creating the product marketing sales. Operations, by contrast, never earn money. They only cost money.

Operations are only valuable to the extent that they support the three major aspects of one’s company, that is, marketing, fulfillment services and distribution. It is important to build a solid foundation based on sound business principles. In that way, one will come as close to failure-proofing one’s business as is possible.

One’s operational infrastructure can be nothing more than a desk, or typewriter or personal computer in the spare bedroom of one’s home. It can be nothing more than a part-time clerk who answers the phone and takes orders five hours a day. Or, it can be a factory or warehouse or employees. Whatever it is, it is pure cost.

Operations do not produce value. The value of one’s business is in marketing, fulfillment and production. That’s an essential to keep in mind as one allocates resources and energy.

In operations there are three primary concerns. These include one’s legal structure, one’s financial structure, and one’s operational structure. The operational structure is the element most specifically linked to the present study, and it is there that the emphasis will be placed.

The operational structure needs to be clearly defined to avoid confusion. At the same time, it needs to be flexible enough to allow for growth and unexpected circumstances, especially since change and turbulence are unending and common elements of the present business environment.

When setting up one’s operational structure, one should consider the following:

1) Who is responsible for what? Titles are necessarily important, but even staffers in small companies should have clearly defined job descriptions to avoid friction and misunderstandings.

2) Where do we operate — at home, in a commercial office, in a warehouse?

3) What equipment and supplies are necessary to maintain one’s infrastructure, as minimal as that might be? Usually, this includes office furniture and administrative materials. Will used equipment be adequate or must you have new?

4) How many employees do you need? Should they be actual employees of the company, or independent contractors? Vt~4ll they work in your office ,or at some other location?

5) What type of communications equipment do you need? How many telephones and lines are necessary? Do you need a cellular phone or pager? If your customer base extends beyond the local calling area, should you install a toll-free number? If you have a computer, should you also have a modem? Do you need a fax machine, and, if so ,how elaborate does it need to be?

6) How will purchasing be handled? Who has the authority to spend money, and how much can they spend without someone else’s approval? What systems will you use to assure the best value for the least price?

One of the most important aspects of a business, and one which will quickly show the difference between an amateur and a professional business person, is communication. Telecommunications technology has made transmitting information over short or long distances faster and easier that ever before. Because it is so easy to pick up the phone, it has become equally easy to forget important details. One should never rely solely on one’s memory. It is preferable to write everything down and also to send a copy to anyone affected by the conversation. Not only does doing so prevent a possible conflict in how things are recollected, but one is creating a record that will provide one with an audit trail if it should become necessary.

There are three organization theorists whose approaches I find most useful and applicable to my own work. These are Peters and Waterman, in their book In Search of Excellence: Lessons From America’s Best Run Companies, Phil Crosby, in his book The Eternally Successful Organization, and Peter Senge, in his book The Fifth Discipline: The Art and Practice of the Learning Organization.

The set of eight principles proposed by Peters and Waterman is absolutely excellent. They say that the best-run American companies use eight basic principles to stay on top of the heap. I find them to be applicable in virtually every aspect of my business. In fact, the recommendations are so useful that I have included them in a handout that has been distributed to my entire staff.

I especially like the energy that is inherent in point number one, a bias for action. The standard operating procedure of do it, fix it, try it, is certainly alive and well here.

Their second point, being close to the customer, is something that we practice each and every day. We are very aware that there is a close connection between sales, customer service and public relations. The comments people make about you and your company contribute to your public image and can affect future revenue. The customer is of primary importance.

In my opinion, of almost equal importance is the staff of the company. That is why another of Peters and Waterman’s points, productivity through people, is so important. They emphasis respect for the individual. That certainly is the policy here. We learned long ago the importance of what Peter Drucker called the “employee society” in his book Managing in Turbulent Times. One’s employees should feel that they have a future with the company. It is important to establish a promote-from-within policy, and give everyone a shot at every job opening.

To make this system work, it is necessary to take time to write detailed job descriptions and requirements. Also, it is important to make sure that those requirements are truly necessary. Training is another important aspect of human resource development. No matter how skilled an employee is, he or she will require some training to get up to speed in one’s organization. And it is important not to overlook the value of ongoing training. Training comes back to one in a variety of ways. It builds individual self-esteem and employee loyalty. It reduces turnover. It enhances both individual and group skill, and maximizes productivity of existing workers. It is truly an investment in the future of one’s company.

I also believe very strongly in Peters and Waterman’s point number five, that of being hands-on and value-driven, insisting that executives keep in touch with the firm’s essential business. Even though I delegate, I am familiar with the broad aspects of all of the business deals in which we are involved. This is enhanced by the fact the we do stick to the knitting, in Peters’ and Waterman’s words. More and more, I have concentrated on this business, The Open University, in which we deal with a tremendous amount of educational material.

Finally, we follow precisely what Peter and Waterman suggest in terms of a simple form and lean staff. This is in keeping with the support I expressed earlier for a non-hierarchical, flatter organizational structure. There are few administrative layers. And there are few people at the upper levels. This, in my opinion, helps to foster the climate Peters and Waterman describe in which there is dedication to the central values of the company, combined with tolerance for all employees who accept those values. Those values are very clearly expressed, and, because the structure is flat, there is easy and clear communication between all levels. Communication is a two-way street. Workers need a vehicle to let one know their feelings and concerns. When they believe that the company cares about them, they will care in return.

Crosby says essentially the same thing with his emphasis on people, growth, market savvy and change. As I said before, we especially emphasize the importance of the employee. This is essential in building company pride. As Crosby indicates, company pride is perhaps the most important ingredient in an eternally successful organization. Organization has to have clear goals and objectives that the employees can respect. The management has to be consistently dedicated to having everyone understand and be able to meet the requirements that will cause the organization to reach those goals and objectives. There must be continuous education and communication that lets employees know what is happening and forces management to listen to both employees and customers. And there must be awareness, positively reinforced, that shows that this is an organization worthy of pride.

A similar effort applies to dealing with the market and dealing with growth. It is important to grow where the business is. It is important to keep close to the customers’ needs. Good communication can help one to recognize what one’s customers really want.

Of course, because the world is constantly changing, all of this is happening in an environment of rapid movement. As Crosby says, the world keeps on going around whether we want it to or not. Therefore, it is important to keep looking ahead. Managing change means that everyone has to be involved enough to know what he or she will have to do about it.

Finally, Senge’s view of the learning, adaptive organization seems extremely realistic to me — much more so than the cyclical approach to organizations discussed by Adizes and others above. A learning organization, by definition, adapts as its environment changes, therefore obviating the need to proceed through various stages ending, ultimately, in organizational death. We already embrace parts of Senge’s approach, including shared vision, and the others are well worth applying.

A Critique of the Organization of Community Colleges and Their Delivery of Education to Adults



In an attempt to correlate this KAM with my central area of interest, the adult learning process, I have decided to examine the capability of the present community college system to satisfy the delivery of adult-education needs.

The junior, or community, college is essentially a 20th century phenomenon. Starting in the early years of the 1900s, private institutions known as junior colleges, which offered two years of academic work — much of it career-oriented — were established throughout the United States. Initially, these junior colleges were regarded as finishing schools for the social elite. They still don’t enjoy full academic respectability.

The much more common public community college, which emerged after the second World War, provides education on a regional basis for students, recent high school graduates through adults, who may not wish to pursue or who cannot afford a four-year education.

According to The Encyclopedia of Education, the community colleges have become one of the chief instruments with which the nation has democratized higher education. By definition, they are educational and cultural centers for the communities that they serve. State laws and municipal ordinances creating community colleges seek to make these institutions financially and geographically accessible to all students who can make use of their services. They typically are commuter institutions; tuition and fees are usually low.

Community colleges also provide adult education through their community service programs. These programs may include courses for the teaching or upgrading of job skills, courses for general cultural enrichment, community concert or lecture series, or other activities which use the resources of the college for the community’s benefit. A typical community colleges offers a broad range of these programs, often in cooperation with other corn m unity organizations.

Community colleges tend to have a diverse student population. Because of the wide range of transfer and occupation courses, as well as community service programs offered, student counseling and guidance services have become a key part of the community college program.

Lewis Mayhew, writing in Colleges Today and Tomorrow, underscores the importance of community colleges in providing the first two years of a four-year college program, technical-vocational education at a sub-professional level and general education. In addition, the adult-education courses offered by community colleges is impressive. Some idea of the magnitude of the adult evening program, says Mayhew, is illustrated by the fact that in California, which operates about ten percent of all community colleges, the typical evening enrollment is more than twice the size of the typical day enrollment. Courses range from beginning French, taken by adults about to go abroad, to recent real estate law, as well as printing, shorthand, computer science and life drawing.

James Thornton in The Community Junior College argues that the junior college should offer any subject for which there is sufficient public demand, a reasonably organized body of knowledge, and a qualified teacher.

Nell Eurich, writing in The Learning Industry: Education for Adult Workers, agrees about the importance of the community college in adult education. She indicates that a look inside the established educational system for its contributions to workers’ training reveals the community college as the major provider. The least traditional and newest child on the block, with a 50-year history of astounding growth, is the most important contributor to adult learning for job-related purposes. She indicates that while total enrollment at four-year institutions remained about the same over the decade prior to 1986, two-year colleges grew phenomenally to an enrollment approaching five million. An equal number attended on a noncredit basis, so their grand total was nearly ten million adults, most of who were in studies directly applicable to the work force.

Eurich goes on to point out that the public two-year institution, which is situated within community distance for most of its students, offers postsecondary education to many adults for whom other doors are closed. Those who lack time or money or sometimes academic strength find opportunities in the community college. Generally speaking, they have added remedial and developmental courses as necessary to compensate for failures in the lower school system. They are more flexible in scheduling course hours and welcoming part-time students of all ages.

Most community college students don’t transfer to four-year institutions, but go directly into the work force, usually in entry-level jobs. Without more advanced training their futures in this technological age are limited, though, they are more apt to be in single-skill jobs that become dead ends.

Still, says Eurich, community colleges are doing the yeoman’s job for the work force. And many older adults are reversing direction as they return to school from the workplace. Their choice of subjects and skills is extensive, from database management to many technical fields and liberal arts. Overall, however, just over 25 percent take their associate degrees in business and management. The pattern of choice reflects that of graduates of four-year institutions and suggests that the work force is getting an inordinate number of people schooled in business. Other popular subjects are computer and information sciences, engineering technology and health sciences.

In addition to training individuals for entry-level positions, community colleges have further expanded their mission to serve local community needs by acting quickly to cooperate with business and industry in their areas. They are providing customized training for employees, tailoring courses to fit the particular company’s needs.

John Naisbitt and Patricia Aburdene take a similar tack in their book Re¬inventing the Corporation. They indicate that in the new information society, where the only constant is change, we can no longer expect to get an education and be done with it. There is no one education, no one skill, which lasts a lifetime now.

Whether we like it or not, the information society has turned all of us into lifelong learners who must from time to time upgrade our marketable skills and expand our capacity for knowledge. During the industrial era, say the authors, to have one’s job become obsolete was like the end of the world. Over the next decade, job obsolescence will become increasingly common, and people might even welcome the opportunity to have four or five different careers of the course of a lifetime.

Indeed, it’s already happening. The economic and political mega-shifts of the past decade have brought a tidal wave of adults back into the classroom. These new lifelong learners include would-be career changers, upwardly mobile MBA types, engineers and technicians in fast-changing fields, homemakers reentering the job market, executives, and former workers in the auto and steel industries.

For college administrators, say Naisbitt and Aburdene, it couldn’t have happened at a better time. The baby bust — that generation which is about to create a seller’s market in labor because of their small numbers — recently entered their college years. The sharp drop-off in the number of student could have brought extremely rough financial times for colleges and universities.

Then came the adult boom, though. And the schools which made the most of the change by catering to today’s thirty-something collegian turned a demographic challenge into a profitable opportunity. Instead of restructuring themselves to handle fewer full-time students, they geared up to handle many more students — but on a part-time basis.

That approach demonstrates the adaptability of community colleges and their willingness to learn new roles as the environmental demands change. They are not all successful, however. About a dozen community colleges closed in 1993, the victims of a variety of problems, including populations shifts.

Naisbitt and Aburdene say that adult education, which once was dismissed as second or third-rate in academic circles, is gaining a new respectability. One-third of the nation’s colleges will accept for credit the nearly 2,000 training programs offered by businesses and government — which was unheard of a decade ago.

Community colleges are in the midst of the movement. They cite a piece that appears in The Chicago Tribune on the issues:

“Community colleges in Illinois and the nation are shedding their image as glorified high schools’ to become leaders in the retooling of American society for a postindustrial, high technology economy. Low tuition, accessibility, flexible hours and innovative job training programs have made the nation’s 1,231 community colleges magnets for a record number of job-hungry students.”

The Case for Community Colleges

A compelling case for the role of community colleges in educating adults appears in Peterson’s Two-Year Colleges 1994. In an article titled “Returning to School: A Guide for Adult Students,” Sandra Cook argued persuasively about why adults should choose community colleges.

She indicates that many adults think about returning to school for a long time without taking any action. Her piece is aimed at helping them to make some decisions by examining what is keeping them from action. Also, she is straightforward in telling adults that they will encounter problems in returning to school, but then provides ways for them to cope with the challenge.

She indicates that about six million adult students are presently enrolled in higher education institutions, representing about 45 percent of total higher education enrollments. And the majority of adult students are found at two-year colleges.

Cook says there are many reasons why adult students choose to attend a two-year college. Studies have shown that the three most important criteria that they consider when choosing a college are location, cost, and availability of the major or program desired. Most two-year colleges are public institutions that serve a geographic district, making them readily accessible to the community. Costs at most of these institutions are far less than at other types of higher education institutions. For many students who intend to pursue a bachelor’s degree, completing their first two years of college at a community college is an affordable means to that end. If one is interested in vocational or technical programs, two-year colleges excel in providing them.

Cook says there are three different stages in the process of adults returning to school. The first is uncertainty. They ask themselves if they really want to go back to school. They wonder if they can compete with 1 8-year-olds. They wonder if they are too old. The second stage is choice. Once the decision has been made, one must choose where to attend. There are many criteria involved in making this decision. The last stage is support. One is adding another role to an already busy life.

In terms of dealing with uncertainty, Cook says one must ask why one is thinking of returning to school. Is it to:

* fulfill a dream that had to be delayed?

* become more educationally well-rounded?

* fill an intellectual void in one’s life?

If so, the one is returning to school to focus on personal growth.

If one is returning to school to:

* meet people and make friends

* attain and enjoy higher social status and prestige among friends, relatives, and associates

* understand/study a cultural heritage, or

* have a medium in which to exchange ideas,

Cook says that one is interested in social and cultural opportunities.

Finally, if one wants to:

* quality for a new occupation

* enter or reenter the job market

* increase earnings potential,

* quality for more challenging positions In the same field of work, one is, like most adult students, seeking career growth.

Cook says that understanding the reason why one wants to return to school is an important step in setting one’s educational goals and will help in establishing some criteria for selecting a college.

Assuming that one agrees that additional education is the answer, what keeps one back? Any number of things, which Cook dismisses as excuses. She says that one can make school a priority or not. The more one understand one’s motivation for returning to school and the more one understands what excuses are keeping one from taking action, the easier the task becomes.

Cook then proceeds to discuss how one can take a time-management workshop to be able to deal with adding another role to one’s busy schedule. If cost is the problem, she underscores how low community college tuition is, and also mentions financial aid programs. If one’s excuse is age, she says it’s pure myth that one is too old to learn. In fact, she notes that many studies show adult learners perform as well as or better than traditional-age students.

If one is concerned about what friends will think, she says not to worry. If one is concerned that teachers and students will be younger than oneself, she says it’s not a problem. The age differences that may be apparent in other settings evaporate in the classroom. If anything, an adult in the classroom strikes fear into the hearts of some students because adults have been known to be prepared, to ask questions, and to be truly motivated to learn.

Cook says that the list of excuses is endless. But she says that’s just a device to release one from the obligation to make a decision about one’s life. The thought of returning to school can be scary, she admits, but that’s the case anytime one ventures into unknown territory.

Once one has decided to go back to school, the next task is to decide where to go, says Cook. If one’s educational goals are well-defined, then one’s task is a bit easier. But even if they are still evolving, it shouldn’t deter one’s return.

Most students who attend a public, two-year college choose the community college in the district in which they live. This generally is the closest and least expensive option if the school offers the programs one wants. If one is planning to begin at the community college and transfer to a four-year school, Cook says there are advantages to choosing one’s four-year school early. Many community and four-year colleges have articulation agreements that designate which credits from the two-year school will transfer to the four-year school.

Every institution of higher education is distinction, says Cook. One’s goal in choosing a college is to come up with the best student-institution fit — matching one’s needs with the offerings and characteristics of the institution. The first step in choosing a college is to determine what criteria are most critical to attaining one’s educational goals. Some questions to ask include:

1) Does the school have a commitment to adult students and offer appropriate services, such as child care, tutoring, and advising?

2) Are classes offered when one can take them?

3) Are there academic options for adults, such as credit for life or work experience, credit by examination, credit for military service, or accelerated programs?

4) Is the faculty sensitive to the needs of adult learners?

Once one has made the decision to return to school and has chosen the institution that best meets one’s needs, it’s important to take some additional steps to ensure one’s success during one’s crucial first semester. Cook suggests:

1) Plan to participate In any orientation program.

2) Take steps to deal with any academic weaknesses.

3) Look into adult reentry programs.

4) One may find that one needs to develop a new support system.

5) One can incorporate one’s new status as student Into one’s family.

6) Make sure one takes a reasonable course load in one’s first semester.

7) There may be times that test one’s limits; faculty, advisers, and student affairs personnel are there to help.

Opportunities to Share the Stage with Community Colleges

Of course, it’s relatively simple for a community college to assert that it is able to fulfill all of the needs of adults, as outlined in Cook’s argument above. The reality, however, is likely to be very different. That’s not to say that community colleges don’t have a role to play in the delivery of education to adult learners; they undoubtedly do. Moreover, because of their relatively low cost and massive presence, it would be unrealistic to suggest that their influence in the future will be anything but significant.

However, as Naisbitt and Aburdene indicate, the most revolutionary aspect of the new adult education boom, and the most interesting, is where and, in some cases, where all this new learning is taking place. They say that we are re-inventing education for adult lifelong learners by scheduling courses at the convenience of the student, not the school. In that sense, the community college has a lot of flexibility, but there are limits.

To make the most of today’s educational renaissance, schools must go where the students are: in the office, in front of television sets, in the Silicon Valleys of America — even on commuter trains.

The adult education programs that will be most successful, say Naisbitt and Aburdene, are those that have decided, in re-conceptualizing what business they are in, to be in the learning on the run business. Today’s adult student will sign up for the course that helps him or her balance work, family and school. The best way to attract that student’s educational dollar is to make it as convenient as possible to go to school.

The authors note that more than 700 students go to the Illinois Institute of Technology without ever leaving their offices. The institute televises courses in computer science, engineering, finance, and management to a group of some 24 Chicago-area companies. In Philadelphia, 150 employees of CIGNA Corporation study for their liberal arts degrees every day on the job site from 4:30 to 7:10 p.m.

Another way to go where the students are is by decentralizing, opening branches in areas like Silicon Valley, which are filled with upwardly mobile employees who are potential students.

Naisbitt and Aburdene detail the specific case of Henry Ford Community College in Dearborn, Michigan. It established its Center for New Directions to serve the needs of small-business people like the merchants at Fairlane Town Center.

The store managers at the Dearborn shopping mall had been promoted from sales jobs and had no formal training in management. Small-shop owners had a dilemma: how to train their managers without cutting into store hours.

The center responded with what it called Sunrise Seminars — informal breakfast meetings in a mall restaurant where managers could discuss their needs and problems in a non-threatening environment and learn management techniques. All this could be done before stores opened.

As a result, the Dearborn mall’s seminars cut costs, increased profits, and created a network among store managers and increased community involvement. This program was so successful that it already has been replicated at more than twenty malls throughout the country. More than 18 colleges and 3,200 retail stores have participated.

This example is just one way in which community colleges are evolving. Naisbitt and Aburdene say they have to become more businesslike. The combined forces of higher costs, less federal assistance, and increased competition for fewer students mean colleges have to think in terms of specialization, market niche, and strategic planning — just as businesses do. It’s not simply a matter of offering courses and waiting for students to arrive.

In the process of becoming more businesslike, some colleges are showing they recognize the importance of entrepreneurship. Many institutions have created entrepreneurial incubators, which offer inexpensive rental space and business services to hundreds of prospective new businesses, along with the opportunity to collaborate with other entrepreneurs. The authors say that as colleges become more like corporations, and companies evolve into lifelong universities, the two institutions are also growing more interdependent.

Still, the community college isn’t likely to be able to do it all. One critique has been posed by Meyer M. Cahn, writing in The Changing College Classroom. He indicates that at the community college, there is a classroom atmosphere that falls short of providing effective communication. At least in the university, lectures often consist of ideas, facts, summaries and issues which the student can condense into notes, and later discuss with classmates. In the community college, though, the student is often far from ready to perform these tasks. His aptitude for college work, as shown on national tests, is low. Many have severe reading problems. Further, that many of the students are not truly motivated to do college-level work is of great concern.

In such an environment, the adult student might not focus so much on Cook’s point that he or she will possibly strike fear into the hearts of the younger classmates. Instead, it may well be the case that the level of understanding is so low that the instructor may be forced to seek a very modest common ground in which the adult student isn’t able to deal with a subject in as sophisticated a manner as might otherwise be true. Some adults may find a challenge in helping to lead the pack, but for others, whose main goal is to learn — especially if the goal is career enhancement – the shortcomings of classmates could be a big burden.

In addition, the adult learner is simply different from many of the young people that are found in community colleges, and has to be accommodated differently. As William Draves notes in How to Teach Adults, the adult’s mental learning state is not a blank chalkboard on which the instructor can write as he or she wishes. Neither is the adult learner’s head an empty pail for one to fill with knowledge and ideas. The adult learner’s chalkboard already has many messages on it; his mental pail may be almost full.

One’s job as instructor is not to fill a tabula rasa, but to help adult learners reorganize their own thoughts and skills. Absolutely key to helping adults learn is to understand how they learn.

Draves continues that adults’ emotional states are inextricably tied up in their ability to learn. To learn, an adult must be emotionally comfortable with the learning situation. Indeed, some educators have gone so far as to equate a good emotional state with learning.

In helping a person learn, the instructor must be able to help create a positive emotional climate, and the key to that is one’s self-image. Although the majority of adults come to a class mentally ready to learn, at the same time they may be inhibited from learning by a poor self-image. It may be incorrect and irrational, but it still exists.

A shy person, for example, may feel unable to participate to meet the expectations of others in the class. A manager who has been turned down for several promotions may feel trapped in a dead-end job and doubt the value of learning anything. A homemaker who has stayed at home with the kids for many years may feel she is not current or informed enough to converse on an adult level again. Someone who has been out of school for decades may feel unable to study any more, and may fear being left behind other students.

Physical characteristics also are important. Adults are more attuned to comfortable surroundings, more sensitive to discomfort. That’s why it’s so important for the learning setting to be comfortable. Older people chill more easily, and one’s sense of warmth may not coincide with that of one’s group.

Also, notes Draves, all adults in one’s class, even the younger ones, are declining physically. Everyone is aging, even those who won’t admit it. One’s physical state affects one’s capacity to learn. To compensate for visual difficulties of learners of all ages, it’s necessary to think carefully about how to make words, charts, etc. clear to all participants.

Just as important as seeing well is hearing well. Inability to hear well, either because of one’s own capability or because of the setting, can make learners feel insecure, less intelligent, isolated and far less willing to participate.

Draves then turns to mental characteristics. He indicates that adults are eager to learn; otherwise they would not be there. Several aspects of adult learning mentality relate to one’s helping them to learn:

1) a readiness to learn

2) problem orientation

3) time perspective.

Most adults come ready to learn. Part of that readiness may be a natural growth process in which true learning is more welcome after one’s formal schooling or education ends. Even the 16th century master of self-study, Montaigne, wrote about his education: “At thirteen I had completed my course, and in truth, without any benefit that I can now take into account.” Whether their experiences in school were beneficial or not so positive, adults want to view their adult learning experiences as separate from more formal schooling, and will approach them differently.

In addition, adult learning is more problem-centered, as opposed to subject centered for children. Adults want to learn to solve or address a particular problem, and are more satisfied with their learning if it applies to their daily experiences, is practical or is current.

Adults are well oriented toward problem-solving, says Draves, because they are faced with certain developmental tasks stemming from the roles they assume, or want to assume, in their families, work and society. These tasks and roles demand a great deal of adjustment, accomplishment, and learning.

Another impetus for problem-orientation in adult learning is that an adult’s time perspective is different from that of younger people. Time for the child is a vast quantity. Increasingly, as one becomes older, time becomes less expendable and more limited. As time becomes more limited, it becomes more important. In the learning situation, says Draves, adults prefer what can be learned today or in the near future to what can be learned over a longer period. The adult’s interest in solving problems within an older time perspectives make the adult more concerned with specific, narrow topics of relevance, rather than broad, generalized or abstract subjects.

A readiness to learn, problem orientation, and specific time perspective contribute to an internal motivation in the adult to learn.

Finally, Draves deals with social characteristics. The most important social characteristic of the adult learner is an abundance and variety of experiences. This, alone, makes teaching adults different from teaching children or typical college-age students.

One’s participants will come from different backgrounds, occupations, types of upbringing, ethnic heritages, and parts of town. Each one will have a different mix of experiences and previously formed perceptions when entering the class.



The preceding offers just a taste of the differences one encounters in teaching adult students. It would be rare to find community college instructors on a regular basis who would take the background of adult learners into full consideration in the teaching of their courses. Nor should this be expected, because one then might risk not tending to the needs of other students.

It seems evident that the community college has geared up in many ways to deal with the challenge of educating people in today’s ever-changing, turbulent environment. There plainly have been many successes. At the same time, it would be unnecessarily restrictive to suggest that the community college possesses all the answer to the educational needs of adult students. It can’t possibility offer all the courses that adult students seek, at the time they seek them, and under the conditions that are best for adult learners.

Therefore, it seems fair to say that, at the very least, the community college will have to share the stage with other delivery systems for adult learning. In fact, Naisbitt and Aburdene note that, despite the corporate training boom and changes, including in the way community colleges approach their roles, no one is arguing that this fast paced information society is blessed with all the training and education that it needs. Millions of workers are out of a job today because there were not adequately trained or retrained. What appears most important is delivering what adult students want, when and where they prefer to have it delivered. That opens the door to a variety of possibilities for innovation in adult education.


Original writing date: October 2003