Accueil » 29-4 ( 1974) » Pour qui, pour quoi les organisations existent-elles?

Pour qui, pour quoi les organisations existent-elles?

Roger Gosselin

Résumé

Cet article tente de dresser un inventaire des positions prises par de nombreux auteurs sur la nature des buts poursuivis par les organisations et sur le processus suivi dans la formulation de ces buts.

Abstract

What is the Raison d’Être of the Organization?

At first, this appears to be a trivial question. Organizations ought to exist for somebody or something. Organizations, as well as individuals ought to have goals so that they can generate alternatives, test them and measure performance. Theoretical discussions and empirical researches do not arrive at such a simple acknowledgement. For example, in 1961, Perrow wrote : « Social scientists have produced a rich body of knowledge about many aspects of large-scale organizations, yet there are comparatively few studies of the goals of these organizations ».

A decade later, Georgiou (1973) concluded his study of the literature on goals by stating : « Evidence for a goal paradigm is readily available. Even a cursory examination of the literature on organizations illustrates, irrespective of the theory or model utilized, the primary of organizational goals, but at the same time the extremely restricted scope of the study of goals. Rarely are analysts concerned with the question of whether organizations can be said to have goals ; their existence is an unquestioned and unquestionable assumption ».

The difficulty seems to arise from the fact that our way of looking at organizational goals, and theorizing about organizational behavior consistent with them, diverges in three basic ways. Borrowing concepts and findings from economies, psychology, social psychology, political sciences and sociology, we can perceive the organization either as aninstrument aimed at achieving one or a few goals, or a set of goals, or anincentive system, or anarbitrarily defined focus of interests.

THE ORGANIZATION AS AN INSTRUMENT

Any instrument designer always considers at least the following three aspects : (1) its purpose, mission, finality or goal, (2) the user and his relevant characteristics, (3) the composite parts.

Similarly an overview of the litterature allows us to distinguish along these aspects, three models of goals as related to the user's characteristics and composite parts.

                    Goal                    User (s)                        Composite parts

A- profit maximization           - the entrepreneur               - one single entity

B- profit and other goal        - the entrepreneur              - one single entity

(following a preferen-          - several decision-makers    - several decision-makers

ce function)                        within the organization         uniformly directed by

                                                                                    formal guides.

C- Society needs              - the entrepreneur               - several decision-makers

                                       - multiplicity of decision-         uniformly directed by an

                                         makers within and outside   identical value system.

                                         organizations.

Model A is the familiar model of the theory of the firm. The assumption of the firm acting as a single entrepreneur to maximize one goal (profit) is basic to the classical microeconomic view under ideal competitive situations. Cyert and March (1963) criticize the model mainly saying that the « firm » of the theory of the firm has very few characteristics we have come to identify with actual business firms.

A number of economists (cf. Papandreou, 1952, Baumol, 1959) have at-tempted to release the theory of the firm from some of the confining simplifications. It was suggested, for example, to look at the firm as anorganization seeking to maximize sales subject to a profit constraint.

The suggestions of the economists themselves led to Model B where organizational goals are more diversified but arranged along a preference function. The user may still be a single entrepreneur, but is more likely to be a hierarchy of decision-makers guided by policies and programs (i.e. generalized procedures established by top managament). Model B raises two issues which are still largely discussed in the literature : ( 1 ) what is the « utility » of each goal in the set of goals considered by the preference function and how do they change over time ? (2) Who should be the user(s) of organizations? The following authors particularly stress both aspects: Newton, 1957; Etzioni, 1960 et 1964; Perrow, 1961; Mechanic, 1962; Blau and Scott, 1963; Williamson, 1963; Cyert and March, 1963; Starbuck, 1965; Galbraith, 1967.

The critique and widening of the hypotheses concerning goals and users gradually let to Model C where the ultimate raison d'être of organizations is to fill society's needs. Hence user are located both outside the organization (e.g. government, supplier, community, etc) and within the organization (hierarchy of decision-

makers and employees), (cf. mainly Parsons, 1956; Thompson and McEwen, 1958). According to this model all users and composite parts work in a consistent manner toward the goal through an identical value system.

Throughout these models, organization is viewed as a mechanistic system which is planned and controlled by the legitimate authority of management. Primary emphasis is upon increasing efficiency through structuring and controlling the human participants. One of the major criticisms of the classical theory is that it employs closed-system assumptions about organizations. Management should plan, direct and control the activities of the work group. Authority has its source at the top of a hierarchy and is delegated downward. Principles are established to guide managerial practices.

Barnard's (1938) theory greatly contributed to the opening of organization both to the environment (by including as organization participants: government suppliers, clientele, etc) and to itself (by offering its employees inducements in exchange of contributions).

THE ORGANIZATION AS AN INCENTIVE SYSTEM

This view contains two elements. The first pertains to the participants to be included in the system; the second considers the type of incentives offered to each in exchange for his contribution.

Most of the literature on organization theory concentrates on the participantsinside the organization proper. (March and Simon, 1958; Cyert and March, 1963). Organizational goals as discussed above should be viewed as a means of responding to each participant's needs.

The human relations movement (1930's) showed that employees were motivated by other things than strict economic incentives. Human rapports, chances of development, free communications, etc were also found to be important as inducements. About two decades later, the behavioral science movement further enlarged these views by showing that human behavior was significantly affected by the social structure of organization, technology, decision-making system, etc. The movement was paralleled in management sciences which emphasized the establishment of normative models of managerial and organizational behavior for maximizing efficiency.

One central assumption, however, was more or less challenged throughout this development: managerial hierarchy was still seen as responsible for establishing goals defining and controlling the result. Why was the assumption criticized? For two reasons. Since the organizational goal was now perceived as a means of responding to participants' needs, particular attention was paid to the goal formation process i.e. how decisions are reached with respect to goals and what are the roles of goals in making further decisions (cf: Simon, 1964). Secondly once these decisions are made, it appeared essential to verify to what extent the inducements offered and the psychological environment created, produced the desired consequences.

The assumption was investigated on two grounds: one group of authors, particularly Simon (1947, 1958) argue that decision makers are limited in their rationality; another group (Merton 1940; Selznick, 1949; Gouldner, 1954 and 1958) investigated the unanticipated consequences of the use of the machine model.

Findings of both groups of authors tended to prove that, due to the bounded rationality of decision makers the organizational decision making system is a loosely coupled one in which the goals of every unit and every individual's goals constitute constraints to decisions. It was also found that in striving to induce people to participate and contribute to the organization, the latter had to compete with several factors beyond his control.

The door was opened, so to speak, to seeing the organization as a market-place where several participants are striving to negotiate some incentives or side payments in exchange of contributions they can offer.

THE ORGANIZATION AS AN ARBITRARILY DEFINED FOCUS OF INTERESTS

In organizational life, every issue that deals with goals and choice (decision) does not bear the same importance for everyone. Some are more relevant to a particular group, at a particular time. Thus the issues at stake indicate the composition of the coalition formed either to fight the issue or to earn it.

To explain the phenomenon, Cyert and March go beyond the traditional administrative theorists and the newer tradition represented mainly by Simon's views. They ask more questions about how an organizationactually defines organizational goals, expectations, and choice; how one reduces the discrepancy between executive choice; how the decisions are implemented by those below the executives assuming organizational control.

Cyert and March explain that coalitions first determine their own objectives and through power will strive to force the organization to accept them not only as side payments, but as policy commitments. Coalitions establish their own objectives through inside bargaining; once recognized, those are stabilized and further elaborated through internal organizational process of control. Finally through experience acquired, coalitions adjust to new environmental data.

How do coalitions acquire power to force organizational compliance to their goals? Numerous studies of power have been conducted on how anindividual actor exercises power over another. March (1959, 1966) and Wrong (1968) provide useful summaries. But as Perrow (1970) notes, those studies always look at power related to individuals or as a socio-psychological phenomenon. Hickson et al. (1971) are about the first authors to look at thestructural sources of power.

Their theoretical model (which has been largely proved recently, 1974) hypothesizes three sources of power for a subunit: its capacity to cope with un-certainty, its non substitutability and its centrality. By gaining access to them a subunit gradually controls the strategic contingencies faced by other subunits. Therefore it will always strive to cope more successfully with uncertainty (1) by routinizing processes at the input, throughput or output stages, (2) taking opportunities to enter area of high uncertainty (3) avoiding substitutability and (4) simultaneously extending work links pervasively.

This reasoning points out the arbitrary character of the power acquisition process. More fundamentally (cf: Cyert and March, 1963, chapter 6) this organizational behavior is explained by the fact that several variables affect the goal dimension and aspiration level of coalition members, their expectations and their choice of action deemed appropriate under various circumstances.

CONCLUSION

The purpose of this article was to examine what does organization theorists have to say about the raison d'être of organizations. We have attempted to reconcile many apparently divergent views from related disciplines. The approach suggested here is to view the organization in a gradually larger and more realistic setting.

This article may leave the reader with the impression that it describes a historical evolution of developing organizations, or worse, that all organizations are now at the third step. This is not a realistic conclusion.

A more realistic conclusion would be that depending on certain organizational variables (e.g. age, size, sector of activity, nature of product or service, major categories of employees, unionization, etc) existing organizations can be characterized either as an instrument, an incentive system or an arbitrarily defined focus of interest.

The analytical frame of reference provided here may be helpful toward a better understanding of why and for whom do organizations exist, hence what type of organizational behavior can be predicted.