Organization Theory and Governance for the 21st Century

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Sandra Parkes Pershing & Eric K. Austin

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    Foreword

    Organization theory is one of the most interesting, useful, and dynamic fields in the broader fields of public administration and its cousins in business, education, healthcare, and social work administration. No student of any form of administration should complete their degree without at least one course in organization theory. Yet many undergraduate and graduate students think about organization theory as a field that died or at least went dormant in the second half of the 20th century with giants such as Herbert Simon (1946), J. D. Thompson (1967), and Douglas McGregor (1957)—if not all the way back in the eras of Max Weber (1922), Frederick Winslow Taylor (1911), and Luther Gulick (1937). Certainly no theories as old as these can be of more than historic interest in today's world of fluid, rapidly changing, and electronically connected organizations. Obviously, the authors of Organization Theory and Governance in the 21st Century, Sandra Pershing and Eric Austin, and I disagree.

    Interestingly, the older organization theories remain vital and useful in today's world because of the solid understanding of organizations as stable institutions provided to us by the likes of Weber, Taylor, Gulick, Simon, Thompson, McGregor, and their contemporaries. They continue to serve as foundational models in theory and practice in different ways. Sometimes these early theories are useful as models of what might be or what might have been, while at other times they can provide a basis of comparison for more fluid alternative models of organizations that fit better with the current environment in the 21st century. In both instances, these legendary theories remain rock-solid points of departure for today's exciting, newly emerging organizational forms and functions—in practice as well as in theory.

    Therefore, the early theories should not be ignored. Neither should they be used as constraints against trying creative new forms. Organizations are means, not ends. Organizations should be designed to serve people and societies. They are vehicles for accomplishing coordinated activities that lead to desired ends whether the ultimate end is profit, effective and efficient delivery of services, or enabling individuals to collectively challenge the status quo. Older notions of organizations need to be adapted to the times. As the title of John Meyer and Brian Rowan's (1977) article aptly states: “Institutionalized Organizations: Formal Structure as Myth and Ceremony.” In many respects, the older theories are not much more than myths and artifacts. Certainly Max Weber never considered government agencies that deliver essentially all of their services through contracted nonprofit organizations. Whereas Chester Barnard (1938) focused on chief executives holding their organizations together by creating an environment or culture of cooperation and collaboration among employees, consider how different this challenge is when employees are only temporary—engaged only for the duration of a project—and are spread around the globe (DeSanctis & Fulk, 1999). They never meet in person, for relatively short periods of time, and only through electronic communication systems. What provides the basis for member collaboration or loyalty? I propose that it is often inaccurate to even use the word “employee” with many of today's organizations. It is completely misleading. Barnard provided the foundation, but it is also time for alternative theories.

    Thus, new theories of organization that deal with today's world are needed and are emerging rapidly. New post-positivist theories are addressing types of issues the founding giants of organization theory could not possibly foresee. They are keeping organization theory interesting, useful, dynamic—and relevant—in the 21st century. Whereas J.D. Thompson (1967) is widely credited with introducing the notion of organizations as “open systems,” theorists today are wrestling with boundary-less organizations where organizations are integral elements of their community. Therefore, corporate social responsibility is an essential element of an organization's mission, purpose, and business model—not a public relations ploy (Carroll & Buchholtz, 1989). Likewise, many nonprofit organizations today borrow their organizational models from the for-profit world of business but employ them for completely different purposes. They are not seeking profits as a business does but instead are seeking supplements for the inadequate charitable contributions needed to finance their public benefit works. This explains why over the past several decades organizational models have evolved that blend profitability from entrepreneurial ventures with social consciousness (Light, 2008).

    As Pershing and Austin state in the Preface, countless other texts are available to introduce readers to the field organization theory. So why should students and instructors choose Organization Theory and Governance in the 21st Century? There are several sound reasons. First, Pershing and Austin do a better job of blending theory, historical foundations, and current contextual influences than any text I have seen in recent years. They weave together the influences of the early giants with the fluidity of the current context. Second, the volume remains true to the authors' stated purpose of making organization theory practical. Pershing and Austin bring strong academic credentials and decades of administrative experience in the public sector to this volume. The chapters bring theories to life through the authors' well-internalized understanding of organizations and organizational life, case studies, and contemporary expressions. Theories are applied and operationalized. Third, Pershing and Austin are unapologetic proponents of public organizations. In the current environment of unrelenting bureaucracy-bashing, Pershing and Austin focus on the often unnoticed strides that have been made and are being made to realign old-style government bureaucracies with today's political, social, and economic complexities and fluidities. Public bureaucracies serve vitally important purposes grounded in the Constitution of the United States, the constitutions of individual states, and the practice of democratic governance, but they are relatively ineffective institutions for accomplishing many of the tasks and responsibilities assigned to them today. Pershing and Austin do a superb job of balancing between traditional and post-positivist assumptions and epistemologies, and they do so with an elegant writing style.

    In short, Organization Theory and Governance in the 21st Century is worthy of your intellectual investment. It will make you a better manager for the public benefit, whether you are employed or contracted by a government agency, a nonprofit organization, or a responsible for-profit business. I hope you enjoy it.

    J. Steven OttUniversity of Utah

    References

    Barnard, C. I. (1938). The functions of the executive. Cambridge, Mass: Harvard University Press.
    Carroll, A. B., & A. K. Buchholtz (1989). Business and society: Ethics and stakeholder management. Boston, Mass.: South-Western.
    DeSanctis, G. & J. Fulk, eds. (1999). Shaping organization form: Communication, connection, and community. Thousand Oaks, Calif.: Sage.
    Gulick L. (1937). Notes on the theory of organization. In L. Gulick & L. Urwick, eds., Papers on the science of administration (pp. 334). New York: Institute of Public Administration.
    Light, P. C. (2008). The search for social entrepreneurship. Washington, D.C.: The Brookings Institution Press.
    McGregor, D. M. (1957). The human side of enterprise. Management Review, 46, 8892.
    Meyer, J. W., & B. Rowan. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83, 340363.
    Simon, H. A. (1946), The proverbs of administration. Public Administration Review, 6, 5367.
    Thompson, J. D. (1967). Organizations in action. New York: McGraw-Hill.
    Weber, M. (1922). Bureaucracy. In H. Gerth & C. W. Mills, eds., Max Weber: Essays in sociology. Oxford, UK: Oxford University Press.
    Taylor, F. W. (1911). The principles of scientific management. New York: Norton.

    Preface

    Organization theory is a large, diverse, and expansive field of study that has connections to a range of academic disciplines including public administration, political science, business, sociology, psychology, economics, and others. Organization theory is a central area of study in these fields in no small part because organizations are the setting in which the bulk of political, social, economic, interpersonal, and other activities occur. In order to understand and effectively navigate the world today, a reasonably sophisticated sense of organizations and their operations is crucial. For students and practitioners interested in public administration and governance, organizations are likely to be both the venue and mechanism by which they can positively affect the world around them. More broadly though, nearly everyone who lives in nations with fairly developed economies spends their working lives, and much of the rest of their lives, in and directly interacting with formal organizations. We believe that it's not entirely hyperbole to suggest that, because so much of our lives are spent formally in and informally interacting with organizations, developing some level of understanding of their structure and function enables us to be more successful.

    At this point, there are probably at least as many text books introducing organization theory as there are theories to explore. Why then, do we need another book on this topic? Based on several decades of combined managerial, teaching, and research experience in the field, we have sought to craft a survey of organization theory in a way that balances theory, history, and contextual influences such that students can position themselves to be effective in applying concepts in the jobs they have now and in the immediate future, but also over the longer arch of their careers as they move through different roles and levels of the organizations they occupy.

    In pursuit of that balance, this book has a number of features that, in combination, make it unique. Making sense of organizations' actions in the abstract has value, but we have strived to select and describe theories so that they are applicable and actionable. To start, we conduct our examination of organization theory in a way that presents the heterodox and sophisticated range of influential ideas contextualized such that students can explore and develop ways to operationalize organization theory. This book embraces a conscious and thoughtful awareness of the history, political events, social and cultural dynamics, and technological changes that coincide and contribute to the evolving nature of organizations.

    Much of the work that surveys organization theory leaves its own internal—and more broadly, the discipline's—epistemology and ontology implicit and assumed. These underlying assumptions have implications in practice—which courses of action are selected, which are avoided, and moreover, which are never even given consideration in the first place. In illuminating the epistemological and ontological assumptions, we both explore their consequences in practice and open a space in which we consider the consequences of these embedded assumptions for both organizational practice as well as democratic governance.

    Over the span of the book we combine emerging perspectives and theories with their historic roots and, recognizing the critical intersection between theory and practice, with an emphasis on prescriptive theory and practical application for the effective transfer of learning. To support students' ability to find the applicability of theory, the text is developed to provide students' experiential perspective from which to analyze organizational settings and take effective action in the unique setting of contemporary governance. We have included a wide range of case studies and contemporary expressions and applications of the theories we cover, in order for students and instructors to explore the sorts of concrete steps needed to move from theory to practice.

    Throughout the text, we pose a series of reflection questions that support class and group discussion of the ideas and their application, and also encourage students to pause and ponder the operationalization of ideas on their own.

    There are a number of areas that we believe have come to have a significant influence on public administration and governance, but could receive more extensive treatment in their relationship to organization theory. One set of works that we feel deserves significantly more attention are economic theories of organization, especially agency theory and transaction cost economics. These areas are particularly important because beyond being underexplored in most survey texts, there's been little treatment of how these theories are implicit in important management initiatives like new public management and its expression in policies and programs like the National Performance Review and the Government Performance and Results Act.

    Although they remain both controversial and challenging, since the late 1960s a range of new theory has emerged from Continental philosophy, social theories that have slowly made their way into organization theory. Currently, many of the treatments of post-positivist thinking are quite brief and superficially lump together a substantial volume of heterodox material. Our approach to this collection of work is intended to reveal several important attributes of the theory. First, we show that many of the ideas of precedents in “mainstream” organization theory aren't radically different in concept or practice. Second, one of the justifiable critiques of post-positivist theory is that it is difficult and too little operationalized to be of use to practitioners. In part by examining the conceptual links to mainstream theory, but also by focusing on practices that already have the potential to embody the assumptions of post-positivist theory, we show that these concepts not only can be used, but that they can be used to support organizational effectiveness in unique conditions of governance and democratic public administration.

    In total, then, what we aspire to is a book that draws students into the study of organization theory in ways that reveal the breadth, sophistication, and, indeed, elegance of our thinking about organizations. We hope to have done this in a way that grounds students' thinking about organizations in both contextual and conceptual ways that will remain with them beyond the end of a class. Finally, we envisage that our approach enables them to use and apply that theory to craft courses of action that help them be more effective, support the efficacy of their organizations, and ultimately contribute to the good life of citizens in their communities.

    As with all projects of this size, this book could not have been completed without the help of a number of people. First and foremost, our editors Nancy Loh and Libby Larson at CQ Press have been invaluable in helping facilitate the process of writing the book, and has shown extraordinary patience and encouragement throughout. We received valuable feedback and recommendations from several anonymous reviewers, which significantly improved the content and clarity of the book. We also benefited enormously from the help of three graduate students in Montana State University's MPA program: Lisa Hammer, Jennifer Avery, and Kelly Mildenberger. Last, and definitely not least, we want to thank our families for their support and encouragement through what has been a longer and windier road than we expected at the outset of this journey.

  • About the Author

    Dr. Sandra Parkes Pershing is the Assistant Vice President of Engagement, and a professor in the Master of Public Administration program at The University of Utah. Her work focuses on organizational behavior, leadership, and change. Prior to her current position, Dr. Pershing served as the Assistant Vice President of Continuing Education and Program Manager for the Master of Public Administration Program at the University of Utah. Dr. Pershing also works as an organizational consultant and trainer to public and non-profit organizations to assist them in maximizing their potential. Dr. Pershing co-edited Classic Readings in Organizational Behavior (2008) with J. Steven Ott and Richard Simpson, and Classics in Public Administration (2003) with Jay Shafritz and Albert Hyde.

    Dr. Eric K. Austin is an Associate Professor of Political Science and Coordinator of the Master of Public Administration program at Montana State University, where he teaches courses including organization theory, public management and administrative ethics. His research focuses on inter and intra organizational processes of decision-making in contentious environments, and his work has appeared in Public Administration and Management, Administrative Theory and Praxis, The Journal of Public Affairs Education and elsewhere. Dr. Austin's professional career prior to completing his PhD at Virginia Tech included managing program units in both public and non-profit organizations. Dr. Austin has and continues to work as a trainer and consultant providing technical support and capacity building for organizations ranging from large, federal agencies to small, volunteer based non-profits.


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