Distinctive Competence Approach

Leaders Help Organizations Become Institutions

Leadership in Administration was written at a time when, according to the sociologist W. Richard Scott, there were two major perspectives on organizations: the rational-system perspective and the naturalsystem perspective. The rational-system perspective considered organizations to be no more than formal systems of rules and roles with a fixed set of goals. Organizations were consequently viewed as technical instruments for mobilizing human resources in order to reach given goals. The most important job within such an organization was to secure the best possible allocation of resources; that is, the focus was on obtaining static efficiency. From this perspective, organizations were seen as mechanical systems and therefore studied as if they were entities without any history.

Selznick felt that seeing organizations in that light limited one's understanding of them. Besides being formal systems, organizations are also informal social systems. They may therefore also be studied from what Scott calls a natural-system perspective. The natural-system perspective acknowledges that people in an organization are “whole persons” who have a broader repertoire of behavior than is called into play by the expectations associated with their formal roles in the organization. In most organizations, social relationships emerge alongside formal ones.

In Leadership in Administration, Selznick distinguished mere organizations, that is, entities that function at Scott's rational-system level, from institutions, which are more complete, natural-system entities. In setting up his distinction between an organization and an institution, Selznick made a corresponding distinction between managers and management on the one hand and leaders and leadership on the other. Managers would assume that the goals of an organization are something that they should take as given; leaders, by contrast, are those who [Page 350]define the goal of the organization by defining what type of organization it will be, what identity it should have, and what mission it should pursue.

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