Abstract of Conference by Eric Gaynor Butterfield, Buenos Aires 2002, organized by The Organization Development Institute International within the framework of the Conference: “Authors who link Organizational Development with the Economy” (www.theodinstitute.org)
During this Conference Eric Gaynor Butterfield made reference to the following main authors who should not be ignored by all those consultants and specialists interested in the processes of change and organizational development.
Boulding, Kenneth E.
Kenneth Boulding was born in England at the beginning of the 20th century (year 1910). He was a Quaker and as such devoted much of his effort to studying the relationship between organizations and moral values. For Boulding everything that happens on the planet has more and more to do with organizations that manifest themselves as companies, unions, political parties, voluntary organizations, the national, provincial and municipal government and different Business Chambers both in the industrial sector, as in the primary. This type of paradigmatic change has been called by Kenneth “Organizational Revolution”.
Kenneth Boulding ("The Organizational Revolution"; Harper - 1953) points out that the revolution is motivated by the fact that people have new habits and needs, but that above those habits and needs what has really impacted more on the "Organizational revolution" are the changes that have occurred in the techniques, procedures, techniques and methodologies of how it should be organized.
The sustained growth of organizations has left its marks, since there are members who belong to the internal organization and other members who are outside the organization. And, according to Boulding, this creates an ethical dilemma that cannot be solved within the 10 Commandments or given the Sermon on the Mount. In addition, the ethical dilemma has to do with the different levels of the organizational hierarchy, since upper management may have to respond to several fronts, in addition to having to respond to society as a whole.
From the moment that companies are subjected to the market - which has more to do with (financial) business than with companies - and the market does not necessarily respond to competitive and specialization rules, the organizational revolution conflicts with ethical component due to super-monopolies and conglomerates under rules of economy of scale both productive and financial. This necessitates the existence of a market economy that is regulated and that it is through political representation, which can be achieved through social democracy.
Burnham, James
He was an interesting character since he started as a member of the Trotskyist party and ended his days struggling to support his basic hypothesis that society would move towards being run by "managers", which he called "managerial revolution". E. Whyte in his well-known book entitled "Organization Man" remains within the line of Burnham.
According to James Burnham (“The Managerial Revolution”; Peter Smith - 1941) even in the communist countries there was a managerial force that was the ruling class, since for example the Soviet Union did not make movements towards socialism but neither did capitalism. People in managerial roles must have the power, privileges, and resources, and therefore would end up being the ruling class.
In order to discriminate with respect to the different profiles of individuals and organizational units, Burnham develops a typology made up of four characters: shareholders who have a totally passive role within the company, financiers who have an interest only in the financial aspects of the company, and It is totally independent of what the company does the executives who establish the organizational vision and mission, are interested in the strategy and closely follow the profits and return on investment as main indicators as well as the progress of the income of the people who they have to do with the organizational processes and the day-to-day functioning of the organization, which deal with effectively integrating financial, material, technological and human resources,whom James Burnham calls managers.
According to James Burnham, only those included in the fourth category are those that play a vital role in the production process, and suggests that evidence of this is found both within the Soviet Union and in the growth of large corporations in other countries. And this is because managers have a self-confidence that exceeds that of bankers, owners, workers, farmers, and merchants. It goes as far as to suggest that in many "civilized" countries Parliament is being replaced by administrative offices.
It is not by chance that a person educated in England (Oxford) arrives at these conclusions. Nor is it by chance that John M. Keynes (“The general theory of employment, interest and money”; London: Macmillan - 1936) has developed an economic theory where business and financial activity are privileged over the company, productive activity. We believe that Joseph Schumpeter ("Capitalism, Socialism and Democracy"; New York: Harper - 1942). Through his "innovative entrepreneur" theory, he is much closer to the needs of developing countries as well as those that have a higher degree of development.
Galbraith, John Kenneth
Despite being born in Canada, JK Galbraith spent most of his life in the United States of America. She has spent most of her life striving to demonstrate that capitalism in the United States of America has undergone very important transformations and therefore traditional economic theory has no practical utility. She suggests that despite the fact that in the beginning companies seem to compete hard, over time this situation is disrupted by the existence of very few organizations, presenting a situation that is known under the name of oligopoly.
Galbraith suggests that there are no significant differences between organizations in different countries, both in terms of their structure and related to planning, decision-making and control mechanisms. When the company begins to circulate near the limits of a (financial) business, the requirements of equipment, machinery and capital will almost always privilege the large corporation, which in turn, will depend on the government (which is always attentive to its operations and profits).
Large corporations have greater and better advantages over small and medium-sized companies, given that due to their volume and economy of scale they are better able to dedicate financial resources to research and development. These types of organizations are better able to satisfy the technological requirements by strengthening the relationship between the organization - the market - and the government.
Galbraith suggests that there are six fundamental aspects that arise in the process by which organizations gain in size and size.
The first of them, according to John Kenneth Galbraith, suggests that the period of time that elapses between the idea of a product and its final manufacture is increasing (something with which we do not totally agree). Secondly, we must bear in mind that as the capital dedicated to production increases, more investment is required.
Third, consideration must be given to the fact that once we have committed so much time, money, and energy, our chances of backing down diminish.
Fourth, large corporations require a professionalized techno-structure, and fifth, organizations gain in complexity through matrix organizational arrangements and beyond them, which in turn make it more necessary to develop coordination and cooperation mechanisms between they distance more and more from each other.
Finally, and sixthly, the above requirements increasingly put more and more pressure on planning needs. All these requirements together show that the typical “industrial system” of large corporations is the only one that can make use of the benefits of new technologies that arise in contexts under risk situations.
In reality, for Galbraith, the greater planning of large corporations is really oriented towards "replacing the role of the market" rather than reducing uncertainties and risks, and companies can have greater control over the consumer by making it dependent on the organization - such as through advertising - or by having only one customer (such as when the government becomes the Customer).
Under both situations, there is a tendency for the company to be nothing more than a small administrative apparatus of the government, as when it acts as a tax collector. Sooner or later companies will have to grow and transform into businesses in order to survive market forces, and finally they will be dependent bodies of the government that has too much free time to choose what exact portion of the cake (taxes) it must demand.
As additional reading material we suggest accessing:
- John K. Galbraith: “The affluent society”; Hamilton - 1958
- John K. Galbraith: "American Capitalism"; Houghton Mifflin - 1962
- John K. Galbraith: The age of uncertainty ”; André Deutsch - 1977.
Perrow, Charles
Charles Perrow is a sociologist and part from a very different point of view than most experts in organizational behavior and organizational development. For Charles what counts are "structure, technology, context and objectives" and that is why these factors are what he has emphasized in his book: "Organizational analysis: a sociological view", Tavistock Publications, 1970. To further strengthen his position on organizational behavior, he points out that other variables such as "leadership, interpersonal relationships, morale and productivity" have been given less importance.
It is their opinion that if the focus of our interest is placed on organizations, then the structural focus that characterizes sociology is superior to the focus that prioritizes the individual or group processes. He suggests that efforts to change the personality and attitude of organizational participants in order for behavioral changes to occur are not something that can be achieved "reasonably" and even more so efforts to do so put an extra burden on the company since Such efforts are really expensive.
In the first chapter of his book (mentioned above) he points out that what some people "would see" as problems at the organizational member or organizational group level, is actually (according to Perrow) a problem of structure.
In the second book, it addresses a question that almost all practitioners, academics and researchers in the field of organizations have asked about the possibility of identifying different organizational typologies, since only when the manager identifies "another organizational type" is he able to understand your own.
And in relation to this important question, Charles Perrow suggests that saying “that there is no one best way to organize” is not enough and does not lead us anywhere; Furthermore, this phrase is partially valid because there really are systematic differences between organizations and also systematic similarities between them that lead us to different degrees of efficiency for different organizational arrangements.
And this is where he suggests that instead of developing principles of administration (Henry Fayol: "General and industrial management"; Pitman - 1949) and more recent authors such as "The 7 Habits of Effective People" (Stephen Covey) "it is better to dedicate our energies to identify patterns of variation - in organizational arrangements - that will later help us to predict and explain organizational phenomena.
For Charles Perrow, bureaucracy is a very good mechanism that reduces the impact of influences "from outside the organization", and on the other hand, as a consequence of a high degree of internal specialization based on the expertise of the organizational members, it allows to control and reduce uncertainties regarding the company's processes and products / services. What has happened in the context in the last 60 years has had a strong impact on companies and that is where the bureaucratic organization has started to have problems.
The risk factor appears as inherent to every company, and this risk factor, with its consequent uncertainties and some out-of-control variables, makes it necessary to operate in a different way from what we had in mind regarding the bureaucratic organization.
In fact, the bureaucracy privileges "routinizing everything routinizable" but not even the strongest proponent of bureaucratic organization is going to be so foolish as to accept that within the organization all units must carry out their tasks and activities routinely.
In any organization, "someone" has to be thinking about a new market, a new product, a new way of marketing the product, and how to provide a new and better service; And, of course, this requires a unit (which may be Development and Research) where both people and tasks are not routine.
Taking into account this new need to take into account the risk variable that has been accelerating over time, especially in developed countries (countries that consume rapidly the natural resources of the least developed countries and above what they can continue to generate) and their impact on organizations, they have to develop within their limits with the context different types of "buffer units" that must necessarily be flexible as work groups and, within these groups, it is necessary to have highly creative and innovative people.
So, according to Charles Perrow, not only do there need to be both routine and non-routine units, tasks, activities and processes, but it is also very possible that the differences between them have to be ever greater. And then it goes on to expand further on this concept, distinguishing particularities that had not been previously taken into account, identifying two different types of dimensions on the basis of technologies or techniques (technology being a way of transforming material resources into products and services).
degree of routinization of the “search” or “non-analyzable search procedures”. Of course machinery and equipment are not the technology of the company, but rather are simple tools. Here Perrow observes what happens to an organizational participant when he receives an order or a signal, which he generalizes under the name of stimulus. When a stimulus hits a person, they start a search (which they call "search behavior") where even "not appreciating the stimulus" is also a certain type of response. Now, the stimulus that the person receives may be "analyzable" since it has already been presented in some way in the past and is familiar to him or her, but instead, what the participant initiates is a process that Charles Perrow calls "procedures of non-analyzable search ”(which has not occurred in the past).This variable would have to do with "the number of exceptions that the person faces".
degree of "stimulus variability". When confronted with the task, people may consider it as a great variability of problems that lead us to a “behavioral search.” Sometimes the variety of stimuli is very large and each task can be seen as of a magnitude that requires magnitude of important search. On other occasions the stimulus is not very variable or different in terms of its magnitude and the participant is confronted with a situation where the situations are familiar to her and others are new. And Perrow cites the case of the automotive industry where every year a new car model with different parts comes out but the variability of these new stimuli becomes familiar to different people.
From the combination of these two variables, four possible options are presented, which are named by Charles Perrow as:
non-routine artisanal engineering
routines
The bureaucratic organizational model contemplates only two possible options; the ones we have mentioned under b. and c. only. Under this conception Charles Perrow identifies two types of organizational arrangement additional to the Max Weber scheme. And to show the differences of these different organizational types within a specific area, choose the educational one. Located in quadrant c. (routine) to custodial institutions, and within quadrant b. (non-routine) to an elite psychiatric agency. The two mixed types, where knowledge in one dimension shows ignorance in the other, are those under quadrant a. (artisanal) as is the case of socializing institutions, while in quadrant d. (Engineering) places schools with scheduled instruction.
It is interesting to note that this particular vision of Charles Perrow questions some myths of organizational life, as is the case of individual creativity as something generalized. Perrow points out that not all people prefer to have non-routine activities that are continually modified, for which there are no clear results or feedback; not even the general management in companies prefers to operate in this type of situation. And for this reason “the bureaucratic model can even be - for routine situations - not only the most efficient model but also the most humane.
In addition to paying attention to the organizational structure as a result of the prevailing technology, Perrow considers that the context is also of singular importance and does not hesitate to make it known that "what appears as competence is often not" (in oligopolistic situations and in the At the top of their respective different companies, leaders have more in common with their competitor than those that are not). And in addition to technology, context and structure, it takes into account the organizational "objectives" variable, for which it is suggested that the reader turn to Drucker's work in relation to direction by objectives (MBO). See Peter Drucker: “The practice of management”; Harper & Row - 1954.
Finally, it pays some consideration to the individual variable “by suggesting that the transcendence of the organizational leader is achieved when he takes into consideration aspects such as the organizational mission, its character and its degree of response from the authoritarian bureaucratic organization that appears as something inevitable within a supposedly democratic society. ”
Schumacher, E. Fritz
Fritz Schumacher had a very interesting career in his life. He studied economics in England and the United States of America, and in recent years devoted himself to agriculture - becoming President of an organic agricultural organization - and journalism.
His thoughts distance themselves from that of economists and political science professionals. For Fritz Schumacher “small is beautiful” (“Small is beautiful: A study of economics as if People Mattered”; Blond and Briggs - 1973); to go after the great is to approach destruction ”, which makes it clear what he thinks about large corporations and large conglomerates. Some of Schumacher's main postulates are described below:
- It is not possible to solve the problems of man on the planet through industrial and / or mass production It is important to create small decentralized units that bring people together In those situations where it can only be produced on a large scale to be competitive, in any case it is can achieve "work from the small even within the big" Organizations need to work two-dimensionally focusing on both order and the exercise of freedom Using intensive technology in third world countries makes absolutely no sense Intermediate technologies should replace "technologies gigantic ”The change with intermediate technologies can be done in a smooth and moderate way,especially in third world countries where people are not used to a "high" transformational rate of change Organizations must settle where people live Large urban centers are not the best places for people to spend an important part of their lives working Not It is reasonable for managers in organizations to have to move themselves and their families every three to five years as a result of promotion or lateral displacement. The creation of small and medium-sized entities that require very little capital investment to launch should be facilitated. in companies, it must mainly take into account those materials that are easily obtained within the context in which the organization operates. “Human-faced” technology is needed,“A non-violent technology” where there is no abuse of resources or people It is necessary to move away from the current production scheme where industrialized countries consume resources at very high rates
As a consequence of its postulates and conceptual scheme, E. Fritz Schumacher is encouraged to develop five principles for managing large corporations in order to direct them towards relatively autonomous business centers. They are:
- to. the principle of the subsidiary function held in the fact that no task should be carried out at a higher hierarchy than where it is possible to be performedb. the principle of revenge where the subsidized unit must be protected against all kinds of reproachc. the principle of identification where the results of each of the results centers should be visible d. the principle of motivation that suggests that all efforts should not be directed towards replacing personal work with computer equipment or automated. the principle of the axiom of the medium that sustains it is not beneficial to try to achieve compliance by one of two extremes: persuasion or detailed instructions.
E. Fritz Schumacher is a strong supporter of small organizations since participatory schemes can be developed in them, efforts can be related to rewards, and the owner develops his role naturally and equitably. In medium-sized companies many of these virtues begin to dilute and their contributions are not visible. Finally, in large corporations, the entity itself is nothing more than a fiction since it allows shareholders to live like parasites, preying on what others work. There is no doubt that above all for Schumacher "small is really beautiful". See also: G. McRobie "Small is possible", Harper & Row - 1981.
Whyte, William H.
William H Whyte was born in 1917 and has been a journalist and a "curious" person about how people live in society.
There is no doubt that his lucidity in observing organizational phenomena allows him to elucidate some of the dilemmas that people experience - especially the professional, managerial and directive body - within organizations. For Whyte, managers and executives experience the conflict resulting from the traditional Protestant ethic and a new social ethic, which can lead to neurosis. Some characteristics that the management and management group experience are:
They begin to climb the pyramid as a result of their professional expertise, but over the years they must experience the frustrations of committee meetings. They hear that they must be sociable as they climb the organizational pyramid. But this is not always valid for your family and your group of friends take work home which negatively affects your relationship with your family, while during the day you spend a lot of time efficiently doing many things that are not necessary
they realize over time that it is difficult to have a balanced life as one makes progress in the organizational pyramid they want to control their own destinies (they are characterized by having plans for "independence"… that they do not even start when they retire or withdraw them) are actually controlled by the organization… but they must appear to be acting freely
They dedicate more and more hours at work and at work, since it is from there that they derive their greatest and best satisfaction through the prevailing social ethic - which contrasts with the Protestant ethic - the management team believes that it is pursuing their interests when in fact the only interests to satisfy are those of the organization the organization predominates over people always seeking consensus very close to mediocrity
They are recruited based on their creativity and initiative but then they are parameterized in their behaviors, transforming them into "repetitive" and, if they are not lucky, they have to be fired - paradoxically - for their lack of initiative and innovation that they obviously lost as a result of their Daily coexistence within the company
These characteristics emerge largely due to social ethics that are opposed to Protestant ethics, this being the one that provides an explanation and also justification for the pressures that society exerts on individuals.
For William H. Whyte "The Organization Man"; Simon & Schuster - 1956) social ethics is made up of three basic propositions that complement and strengthen each other: scientism, belonging, and "acting together". Social ethics means that students in the process of graduating from universities gradually move away from Protestant ethics and by the time the time comes to join a company, the influence of the company deals the final blow to Protestant ethics. You are looking for a person who is "fully rounded" under social ethics.
Personnel managers in companies and universities with business administration programs no longer require professionals to kill themselves working. Now they can play golf and you don't have to work as hard; even more so if they work long hours they are likely to be branded as inefficient. The Protestant ethic is dead and a new ethic that Whyte calls social emerges.
Management has to start learning to live with these conflicts because if they do not do so, their career may be interrupted and negatively affected (for further details, it is suggested that the reader turn to the book by Dr. Donald Cole and Eric Gaynor entitled " Professional Suicide or Organizational Murder ”.
