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STRUCTURAL CONTINGENCY THEORY

STRUCTURAL CONTINGENCY THEORY. Structural contingency theory was a major organization studies perspective in 1960-1970s, but has since faded from the center.

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STRUCTURAL CONTINGENCY THEORY

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  1. STRUCTURAL CONTINGENCY THEORY Structural contingency theory was a major organization studies perspective in 1960-1970s, but has since faded from the center. An open system view how environmental conditions shape internal organizational structures, SCT emphasizes how a tighter fit between structure and context increases org’l performance & survival chances Coalignment: Efficiency of an org’l design depends on its contexts • Jay Galbraith’s (1973:2) two principles: • There is no one best way to organize • Any way of organizing is not equally effective (Consonance hypothesis) • By implication: • Best way to organize is contingent on the environment

  2. Environment-Structure Fit As organizations adapt their structures to fit their contexts, a close coupling evolves (in OET, a congruence between niche & form) Variations among org’l forms reflect their diverse environments: • If environment is: • Placid, Predictable, • Homogeneous, Stable, • Resource Munificent • If environment is: • Turbulent, Uncertain, • Complex, Unstable, • Resource Scarce • Then structural form is: • Mechanistic, Bureaucratic, Centralized; • Clear Goals • Then structural form is: • Organic, Informal, Networked; • Ambiguous Goals

  3. Overview of SCT ORG’L STRUCTURES: Formalization Differentiation Vertical Horizontal Size of admin. component Centralization Complexity Span of control Specialization ORG’L SIZE TECHNOLOGY Production Information ENVIRONMENT Uncertainty Resource munificence Degree of competition STRATEGY Defender, Reactor, Analyzer, Prospector SOURCE: Adapted from Pfeffer (1982:149 & 157)

  4. Technological Determinism? SCT hypothesizes that structural complexity of org’s core production & information technologies (a.k.a. the “task environment”) are primary constraints on internal division of labor and performance outcomes TECHNOLOGY “the physical combined with the intellectual or knowledge processes by which materials in some form are transformed into outputs” (Hulin & Roznowski 1985:47) English researchers such as Joan Woodward (1958) and the Aston group (Hickson et al. 1971), linked variations in the core organizational technologies, such as batch vs continuous production, to systematic differences in organizations’ work group structures, managerial & employee behaviors, and outcomes.

  5. Critique of SCT • Imprecise concepts & propositions: “more an orienting strategy or metatheory” than a falsifiable system of theoretical propositions • Empirically, environment-technology & structures “loosely coupled”: equifinality – a multiplicity of org’l forms can thrive in identical environmental conditions  complex environ’l-form interactions • Emphasizes managerial adaptation to environ’l constraints, but underspecifies how managers can/should respond to particular external forces when redesigning internal organizational structures • John Child’s (1972) strategic choice explanation that managers are not highly constrained by environments & technologies, but may exercise substantial choice (agency) in shaping their orgs’ structures • By obtaining sufficient political power resources to cope with uncertainties threatening their orgs, managers may overcome environmental-technical constraints on org’l survival and performance

  6. RESOURCE DEPENDENCE THEORY As no org is self-sufficient, all must obtain resources from their environs. Power originates in social & economic exchanges, under uncertain conditions, when orgs seek to acquire vital resources but avoid dependence on orgs that supply those resources. (Pfeffer & Salancik 1978) RESOURCES(money, participants, legitimacy) must be obtained from an org’s environments POWER DEPENDENCE– an actor controlling crucial resources can set advantageous exchange rates and create recipient dependency Powerlessness = dependency on others for resources Organizational power accrues to actors able to cope with others’ uncertainties, in absence of substitutable alternatives. Crozier’s (1964) famous example of tobacco factory maintenance workers, who kept no repair records & destroyed the manuals, hence making the firm dependent on them to keep routine production going.

  7. Some RDT Propositions • Macro-structural conditions affecting inter- & intraorg’l dependencies: • How critical is a resource to org or subunit’s operations? • What control do others exercise over the resource’s allocation? • Are substitutes or alternative sources available? • P1:Greater org’s dependence on external source for critical resources, the more it complies with source’s demands about structures & actions • EX School curricula shaped more by state legislators or by local voters? • P2:Coalitions of external stakeholders shape org’l practices & policies • EX 1980s campaign demanding that colleges & foundations divest their stocks of corporations doing business with apartheid South Africa • P3: Org’l subunits acquiring critical resources have more internal power • EX Why do business school & law professors make much higher salaries than social work & women’s studies teachers?

  8. Power is Relational Power in organizations is inherently the property of a relationship between actors. Max Weber’s two famous definitions explicitly asserted that power (Macht) is not the resources held by an actor, but occurs during situated interactions involving actors with potentially opposed interests and goals. ‘Power’ is the probability that one actor within a social relationship will be in a position to carry out his own will despite resistance, regardless of the basis on which that probability rests. (1947:152) We understand by ‘power’ the chance of a man or a number of men to realize their own will in a social action even against the resistance of others who are participating in the action. (1968:962) Some power is based on force (coercion). But, if actors willingly assent or consent to obey another’s commands, power becomes legitimate authority (Herrschaft), which may be based on actors’ traditional, charismatic, or rational-legal beliefs in the rightness of their relationship.

  9. Social Exchange: Power & Dependence Peter Blau and Richard Emerson theorized that unequal social exchanges generate power dependencies within dyads Power is a structural relationship, inverse to the cost that one actor willingly pays to another for an exchange. If actor B accepts a higher cost than actor A, then B has a greater dependence on A. “A’s power over B is (1) directly proportional to the importance B places on the goals mediated by A and (2) inversely proportional to the availability of these goals to B outside the A-B relation.” (Emerson 1962) • If you need a service from a more powerful person (e.g., a professor), you face four alternatives: • 1. Coerce her to give the service [use physical threats or blackmail] • 2. Supply her with a service/good she needs in exchange, resulting in relative equality • 3. Find the needed service from another source • 4. Do without the service • If none of these alternatives is possible, then you’re dependent on the powerful person and must exchange deference in order to receive the needed service. (Blau 1964:118-119)

  10. Power Bases & Tactics French & Raven’s classic typology (1960) of five bases of power: Coercive – Forced against will: Boss demands you wash her car Reward – Play for pay: Boss promises you a rai$e for good work Legitimate – It’s right to do: Boss asserts she has authority to act Referent – Personal charisma: Boss is a legend in her own mind Expert – Know-it-all: Boss hangs her CSOM diplomas on wall • Behavioral tactics for the most profitable use of power resources (Kipnis et al. 1980): • Assertiveness Ingratiation • Rationality Exchange • Upward appeal Coalition formation

  11. References Child, John. 1972. “Organization Structure, Environment, and Performance: The Role of Strategic Choice.” Sociology 6:1-22. Blau, Peter M. 1964. Exchange and Power in Social Life. New York: Wiley. Emerson, Richard M. 1962. “Power-Dependence Relations.” American Sociological Review 27: 31-40. French, John P. R. Jr. and Bertram Raven. 1960. “The Bases of Social Power.” Pp. 607-623 in Group Dynamics edited by D. Cartwright and A. Zander. New York: Harper and Row. Hickson, D.J., C.R. Hinings, C.A. Lee, R.E. Schneck and J.M. Pennings. 1971. “A Strategic Contingencies’ Theory of Intraorganizational Power.” Administrative Science Quarterly 16:216-229. Hulin, Charles L. and M. Roznowski. 1985. “Organizational Technologies: Effects on Organizations’ Characteristics and Individuals’ Responses.” Research in Organizational Behavior 7:39-85. Kipnis, D., S.M. Schmidt and I. Wilkinson. 1980. “Intraorganizational Influence Tactics: Explorations in Getting One’s Way.” Journal of Applied Psychology 65:440-452. Galbraith, Jay. 1973. Designing Complex Organizations. Reading, MA: Addison-Wesley. Pfeffer, Jeffrey. 1982. Organizations and Organization Theory. Cambridge, MA: Ballinger. Pfeffer, Jeffrey and Gerald R. Salancik. 1978. The External Control of Organization: A Resource Dependence Perspective. New York: Harper and Row. Woodward, Joan. Management and Technology. London: HMSO.

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