Understanding Organizations: Theories & Images


Udo Staber

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    This book has both an intellectual and a personal history. Its intellectual history comes from my experience with sharing my academic insights about organizations with a wide variety of students from different age groups and social and national backgrounds. The students constantly reminded me that there is no single understanding of a given organizational phenomenon and that context matters a great deal in understanding. This book's personal history stems from my practical involvement, as a worker, consumer, and consultant, in many different types of organizations and in many different countries. I have observed how organizations struggle with various types of problems. In many cases, these problems were structural in nature, but were experienced as personal failures. Ineffective solutions were often not the result of deficient skill training on the part of organizational participants, but were caused by deep-seated misunderstandings, stemming from differences in personal disposition or social background. I have written this book with a view to the value of pursuing alternative interpretations of organizational phenomena, hoping that the analysis helps readers better connect abstract theoretical concepts to “facts” as they may apply to their own life experiences. A practical test of this book's value is whether it helps readers view organizational matters more clearly, or at least differently.

    When writing this book, I also had Bernard Mandeville's Fable of the Bees in mind. The structure of an aggregate like an organization is the result of the actions of individuals who may or may not have some larger collective goal in mind, but, in the end, these individuals are what they are: self-interested, but also sociable; competitive, but also cooperative; dependent, but also controlling; and vulnerable, but also resilient. Moral sentiments aside, and metaphorically speaking, organizational participants behave like bees, busily constructing a place for themselves, in an uncertain environment filled with natural enemies and potential cooperators. There is an important difference, however. Like bees, they “dance to each other,” but, unlike bees, they also reflect about their dancing, in search for better understanding.

    This book is aimed at advanced undergraduate and graduate students in the fields of organization theory and organizational behavior, with applications in areas like human resource management, strategic management, and small business and entrepreneurship. It should also be of interest to students in sociology, psychology, economics, political science, public administration, social anthropology, and history. It is intended to provide readers with an up-to-date and accessible resource for study, debate, and inspiration regarding a broad range of phenomena in organizations, large and small, in business, government, and the non-profit sector. To make the most of this book, readers should have a basic understanding of the principles of social science analysis and the kinds of questions addressed by social scientists.

    I want to thank the many friends, colleagues, and anonymous reviewers who have taken the time to comment on drafts of various parts of this book. I am also grateful to the editors at Sage who have helped me through the long process of writing and revising. My eternal thanks go to my wife, Rosemarie, who selflessly organized much of my non-professional life and buffered my workspace from the pressures of an often unpredictable environment.

  • Glossary


    are discrete entities capable of practice, such as individuals, groups, and organizations. In network analysis, actors also include non-human entities, such as events or ideas.

    Administrative school

    is a subfield of “classical management” approaches, summarizing a small number of administrative principles of governing an organization, such as division of labor and unity of command.


    refers to the ability to make a difference in a social situation and to affect the circumstances in which one finds oneself.


    is the legitimate right to exercise control over others. The effective exercise of authority requires the endorsement of those who are subject to it.

    Boundary spanner

    is a person connecting the organization or organizational unit with individuals in other units or in the organization's environment. Boundary spanners may specialize in such roles as liaison positions, investor relations, public relations, or supplier relations.


    is a specific form of organization characterized by a strict division of labor, a focus on formal rules and discipline, and an orientation to rationality based on a clear relationship between means and ends.

    Causal agent

    is a basic unit of action that makes things happen. The properties of the agent bring about outcomes.

    Competitive advantage

    is conferred by structures and practices that make an organization more successful than rival organizations. Organizational forms that are distinct, valuable, and difficult to imitate can be a source of competitive advantage.


    is an abstract mental construct that represents some aspect of the world in a simplified, general form.


    is an epistemological approach based on the premise that social actors are capable of reflection, creating their own biographies.

    Contingency analysis

    specifies the conditions under which something happens. In organization studies, the contingency approach suggests that there is no one best way to organize a system. The “best” organizational form depends on the situation in which the system exists.

    Core competency

    is the set of skills that are regarded as central to an organization and in which the organization has a relative advantage in performing them.


    is an approach that emphasizes constraints on choices and argues that the future of an entity, like an organization, is preordained to unfold in fixed ways.

    Dual economy

    refers to the distinction between a core sector of the economy, dominated by large corporations with significant political and market power, and a periphery sector, populated by small businesses facing intense competition.


    refers to the distribution of resources in a system and the terms on which they are available to the members of the system.


    refers to a process by which some collective phenomenon is created through the actions of an entity at a lower level, but the outcome is not reducible to only these actions. A property of a collectivity (e.g., group sociability) is emergent if its existence depends on an entity at a lower level (e.g., individual disposition) without being fully predictable from the properties of this lower-level entity.


    researchers use formal modeling and statistical procedures of data interpretation. They apply such procedures to organizational phenomena that are immediately observable and measurable.


    is what exists outside the boundaries of an organization. This includes resources exchanged in product markets, financial markets, and labor markets. It also includes the demands and expectations that external actors like governments and social movement organizations have of organizations.


    addresses questions about the nature of knowledge and how to obtain knowledge, such as the question of generalizability of findings from samples and cases.

    Focal organization

    is the organization seen from the perspective of those who study it, work in it, invest in it, or relate to it in some other meaningful way.


    is an approach based on the premise that phenomena exist to fulfill some function. Consensus on functional goals is often presumed to be the natural state of affairs.


    refers to an experience-based technique of problem solving. In organizations, heuristic devices are often used in decision-making situations where an exhaustive search for optimal solutions is impractical or too time-consuming.

    Human capital

    refers to attributes with economic value for individuals, such as education and work experience.

    Human Relations

    is a school of thought based on the premise that people have social needs. A key argument is that organizational structures, which are oriented to workers’ social concerns, have motivating effects.


    refer to the relationship between what organizational members receive in return for their investments in the organization.


    refers to established rules and patterns of activity, fulfilling functions considered indispensable. Institutions persist over the long term, shaping what people do and how they interpret what they do.

    Instrumental rationality

    refers to the deliberate calculation of the means available to achieve a given goal. In an organizational setting. It usually refers to calculated activities related to task accomplishment.

    Intended rationality

    includes limitations in the human capacity to collect and process information. Humans intend to be rational in their decision-making but are constrained by the availability of information and the inability to process all information correctly.


    refers to an individual's wish to improve his or her well-being. Interest is socially constructed, based on the individual's interpretation of his or her social, political, and economic situation.

    Interlocking directorate

    is a form of inter-organizational coordination in which organizations share one or more external representatives on their governing board.

    Internal labor market

    denotes an exchange system in organizations for allocating individuals to jobs, using incentives in the form of wages, training opportunities, and career routes as mechanisms to match individuals and jobs.

    Inter-organizational network

    refers to the set of ties connecting a group of organizations. Network ties may be in the form of exchange relations based on personal friendship, information, or contractual authority.

    Labor process

    refers to the complex of relations between labor and management regarding the design, control, and monitoring of tasks, and the opportunities available for workers to resist or evade managerial controls.


    is a set of principles or mutually enhancing rules used in discourse and decision-making. One may distinguish, for example, between a market logic based on economic criteria and a cultural logic based on ethical criteria.

    Matrix design

    is an organizational structure that arranges work simultaneously by different criteria, such as functional (e.g., marketing, research, finance) and product criteria. (e.g., fiction and non-fiction books, commercial and military aircraft)


    refers to a causal force that regularly brings about certain outcomes. Mechanisms are the driving forces connecting initial conditions to outcomes.

    Mechanistic structure

    emphasizes stability and control. Mechanistically structured organizations have a highly specialized division of labor within which each individual performs a precisely defined task, and they employ formal rules for enforcing expected behaviors.


    is a term used to describe an unfamiliar entity in terms of a familiar entity. For example, characterizing an organization as a brain allows one to see the organization as if it were a brain, suggesting features normally associated with a brain, such as complexity, flexibility, and adaptability.

    Moral hazard

    exists in social situations, such as an employment relationship, if there is a risk that individuals will not put forth the agreed-upon effort or will not comply with the terms of a contract.


    are story-like accounts of experiences in the form of texts and conversations. They are an integral part of meaning construction.


    is what is commonly accepted as normal or appropriate in a given situation. Social norms denote the regular expectations that people hold in society.


    refers to claims about the existence of some entity. The question is: What is there to know?

    Organic solidarity

    is a concept Emile Durkheim used to describe the interdependence between actors with different but complementary interests or competencies. In a dynamic organization, organic solidarity is often seen as a source of integration.

    Organic structure

    emphasizes adaptability rather than adaptation, and emergence rather than imposition. In organic structures, rules, processes, and relationships evolve in line with the changing contexts in which they exist.


    describes an evolving activity system, oriented towards collective goals and struggling to maintain a more or less distinct identity in an uncertain resource environment.

    Organization science

    is the study of organizations based on the systematic observation of organizational actions and of human behavior in organizations.

    Organizational culture

    refers to the shared values, beliefs, and expectations of the members of an organization.

    Organizational field

    refers to populations of resource interdependent and functionally related organizations in a specific domain. The organizations are bound together by an orientation to shared norms and rules.

    Organizational form

    refers to the complex of structural characteristics and practices of organizations in a given context.

    Organizational inertia

    is a condition, rooted in structures and practices, reflecting the inability of an organization to adjust rapidly to new conditions in the environment.


    is an ongoing process of adapting the organization to changing circumstances. It involves activities related to planning, coordinating, and evaluating, and so on.


    refers to a distinct way of studying a given subject matter, based on a coherent set of assumptions about the nature of the subject and the methods for studying them. Paradigmatic consensus exists when researchers agree on the central questions, concepts, and methodological approaches.


    is a situation or condition that implies contradiction. Things are paradoxical if they contain elements that cannot both be true, such as the argument that creativity is both spontaneous and regulated.

    Path dependence

    refers to a developmental feature in organizations, industries, technologies, and social relations, suggesting that choices made in the past constrain possibilities for the future.


    refers to the actions that people engage in to accomplish things, without necessarily following deliberate plans and strategies. Practice involves agentic creativity and is bound by structural constraints.

    Property right

    is a judicial and sociological concept denoting the right to ownership of tangible and intangible things, and the right to deal on the basis of ownership.


    and rationality refer to the logic adopted by individuals who act to maximize their personal interests, whatever these may be. Economic versions of rationality refer to the calculus of costs and benefits, while sociological versions of rationality include substantive values.

    Rational choice theory

    is based on the premise that people are essentially self-interested and goal-oriented individuals. They choose between alternative options based on the information available to them and the incentives provided in the setting in which they exist.


    refers to the application of principles to a particular situation, for example to explain or justify behavior in that situation.


    refers to a sense of obligation in a situation where two individuals return a favor. When reciprocity expectations are strong, they can govern mutual behavior even without the intervention of a third party.


    is the connection between elements of a system. From a relational perspective, an organization is a web of relations between different units, rather than a set of attributes. Actors derive social meaning from their position with respect to one another, and not from their intrinsic characteristics.


    is behavior that is learned, repetitious, and highly patterned. Organizational routines are evident in standards, rules, procedures, programs, habits, and conventions.


    is a device denoting possibilities for interpretation and action. Behavioral rules (“You must always be on time”) link individual action to expectations in a given context. Cognitive rules (“Pay most attention to what you heard last”) provide frames for action by filtering external cues.

    Scientific management

    is a school of thought that emphasizes the systematic selection and training of workers, based on the premise that people are rational and respond to monetary incentives.

    Social capital

    is the value a person, group, or organization derives from the close contacts and understandings of mutually oriented actors. Social communities rich in social capital are often referred to as clans, clubs, or cliques.

    Social construction

    describes the process by which people actively and creatively shape their own reality, in interaction with salient others. To the extent that each participant in this process has somewhat different ideas about what reality should be, social construction involves contestation and negotiation.

    Social fact

    is a term used for patterns and occurrences that have an objective reality beyond the interpretations of individuals. People experience social facts as conditions shaping their lives and decisions.

    Social legitimacy

    is the generalized perception that the actions of an entity, such as a person, group, or organization, meet social definitions of desirability and acceptability.

    Social network

    is a set of regular connections or contacts between individuals through which resources are exchanged.


    refers to mutual awareness in a group of individuals, potentially leading to solidarity and joint action.


    is the process by which individuals develop an understanding of social expectations in the social unit of which they are members. Organizational socialization is the process by which members take on the beliefs and values of the organization through such mechanisms as instruction, evaluation, and promotion.


    is an individual or group of individuals with a strong interest in the performance of an entity, such as an organization or a project.


    theorists argue that the opportunity constraints in a system, such as an organization, industry, social class, or kinship network, are grounded in the structure of relationships and may be so strong that they leave no meaningful room for individual variation.


    refers to the patterned arrangement of things, reflected, for example, in chains of events or in regularities in behavior.


    is an item used to stand for or represent another item. Texts, signs, actions, names, and so on can all have symbolic meanings.

    Task technology

    refers both to the knowledge that is embedded in a task and to the techniques by which the performance requirements of a task are executed.

    Theoretical pluralism

    refers to sets of theories that retain their distinctive-ness, yet all contribute to debates and discussions about issues and phenomena.


    is a coherent system of statements about how, why, and under what conditions the entities under investigation are related.


    refers to a form of classification that involves grouping entities according to mutually exclusive themes or dimensions.


    refers to a characteristic of an entity that varies in the degree to which it is present. Variables that change in response to an independent variable are called dependent variables.


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