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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

CHAPTER 4

Chapter 4 Objectives
To understand how various dimensions of organizational social structure
(differentiation, integration, specialization, centralization etc.) interrelate and affect
organizational effectiveness.
To examine two models of structural change: the organizational lifecycle and the
open systems model.
To explore symbolic-interpretive approaches to social structure: routines and
improvisations, institutionalized practices, and organizations-as-communities.
To explore postmodern alternatives to social structure.

Teaching Notes

Students, especially if they have little work experience, often find it difficult to grasp the
dimensions of organizational social structure and their interrelationship. The concepts
of differentiation and integration can be particularly perplexing, partly because of the
terminology. Its therefore helpful to have examples of organization charts to illustrate
each of the dimensions.

Key Points include:

1. The nature of bureaucracy (Classical Management, one best way). Bullet points
on page 91 summarise the main characteristics of Webers ideal bureaucracy:
The division of labour - how work is divided up in order to achieve goals (e.g., by
function, product, activity); Seen as divisions and departments in an
organization chart.
The hierarchy of authority what positions and at what level in the organization
specific decisions can be made, what positions reports to what positions;
Seen as levels in an organization chart.
Formal rules and procedures explicit written rules, policies, procedures, job
descriptions etc.
Students often have experiences as a customer, if not an employee, of a bureaucratic
organization such as the Department of Motor Vehicles, the Postal Service, maybe a
hospital. These experiences can be used to discuss the pros and cons of bureaucracies.

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

For example, up to the mid 1990s ,the defence procurement system of US Department of
Defence was characterized by a rule-bound bureaucracy resulting in cost overruns,
technical problems, and systemic deficiencies. William Perry (under Clinton) led system-
wide defence procurement reform to streamline the process. Examples of streamlining
the bureaucracy included:
a) The Armed Forces had a library of military specifications and standards prescribing
every aspect of weapon development containing over 30,000 documents. This covered
what & how to build it now covers what only.
b) It used to take the Defence Personnel Support Center in Philadelphia, 60 days to
deliver supplies to DoD mess halls, commissaries & hospitals - this was cut to less than
72 hours1.

2. The dimensions of organization structure (Modernism, including contingency)


table 4.1 on page 95.

Differentiation - Horizontal, the division of labour.


Vertical, the number of levels in the hierarchy
(pulls the organization apart).

Integration - Coordinating effort towards goals, across departments


and hierarchical levels (pulls the organization together).
Talk about examples of integrating mechanisms and ask
students for examples from their own experience (e.g., A
hospital patient may have a cross-functional team
including a nurse, consultant, physical therapist,
dietician, and administrator).

Centralization - Where decisions are made, services located.

Standardization - Standard procedures or high amounts of discretion.

Formalization - The degree to which rules, policies, operating


procedures, job descriptions etc are defined and in
writing.

Specialization - Is work narrowly defined and are specialists in particular


fields employed, or do employees carry out a range of
activities?

1
See Transforming Organizations M. A. Aramson & P. R. Lawrence (2001) Maryland:
Rowman & Littlefield.

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

A useful way of thinking about these dimensions is that each is a piece of a jigsaw puzzle,
and all the pieces have to fit to get the whole picture of the organization completed.
Managers have to balance considerations in each dimension and weigh the pros and
cons, for example, standardization means that people will perform to rules and
procedures, which forms a basis for identifying deviations (and therefore controlling
performance), but often means new or unique situations and problems are difficult to
handle as employees are unable to use their discretion. There is also little creativity and
innovation. So what is required in a particular organization conformity or creativity?

A university could provide a good example for undergraduates why might


standardization, specialization, and formalization be important from a student perspective?

Its helpful to use real examples to illustrate the dimensions, e.g., compare McDonalds to a
dot.com. Ask how they might differ along each of these dimensions. Relate these
examples to whether the organization might be organic or mechanistic (Burns & Stalker)
and to the degree of environmental uncertainty facing each (Lawrence & Lorsch).

I find it helpful to link the dimensions to Organizational Design (Chapter 9) because


decisions about the dimensions impact design. You may or may not want to assign the
relevant section of Chapter 9 with Chapter 4. (See notes for Chapter 9).

3. Structuration theory - Structuration is an interesting way of thinking about


organizational social structure because it introduces the idea that there is a relationship
between structure and agency (knowledgeable actors). Structural theories (above) ignore
this relationship while organizational behaviour often focuses on agency (people) rather
than structures. Managers today really need to consider both Enron is an excellent
example in that blame for the scandals has mainly focused on individuals but what role
did structure play in influencing employee behaviour? If you are rewarded for getting
contracts at all cost, how will this system influence your behaviour? Giddens is
essentially saying that structure (social and institutional) can influence and constrain
behaviour, and yet is created by that behaviour. So structure both determines and is
produced by behaviour and communication. Take McDonalds as an example: there is
structure a recognizable building, technology, an organization chart, an operations
manual, resources (financial, food, a counter with employees on one side and customers
on the other) etc. These structures are produced, reproduced, and changed by
employees agents in their actions and interactions (see Figure 4.4, page 111). This
structure was created by people (the operations manual was written by people) and is also
reproduced in employees actions. Agents follow the required actions in the operations
manual: serve customers, clean the building, cook the burgers etc. So structures are not
stable, but change in human actions and practices.

It is sometimes difficult to see the differences between structuration theory and


Institutional theory (Chapter 3) both see institutions being created, reproduced, changed
by, and influencing interaction. Institutional theorists often take Berger & Luckmanns
assumptions (hence their location in the S-I perspective) to explain how organizations
reflect institutional rules and norms; become similar as they copy other organizations; and
in doing so reproduce those institutional norms (see Powell & DiMaggios work in Chapter
3). Structuration theory draws on Giddens work to focus on the process by which this

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

occurs, i.e. looks at social practices, recognises the influence of actors, and often takes a
more micro perspective (see Orlikowskis work cited in this chapter). 2

4. The Symbolic-Interpretive Perspective - focuses on organizing rather than


organization, i.e., the emphasis lies much more on process and how people coordinate
their activities, rather than on structure. Two main approaches are:

a) Routines and improvisations see the Sept/Oct 1998 Organizational Science


special issue (Vol. 9: 5) on Organizational Analysis as Jazz and Improvisation for further
information.

b) Organizations as communities of practice and language see IBM as an


example, and Cunliffe (2001, 2002)i. The power point slide relating to language
communities contains excerpts of my conversations with managers from a small
manufacturing organization. Students can be asked what metaphor they think may
underlie this way of talking (a battlefield), and how this language might influence what
employees do, how they see and talk about the organization. See excerpt below:

Of course, some of these features are not literally real in the sense of being
independent or experienced in exactly the same way by those involved. I saw no
casualties, wrestling or potholes as I walked around the Plant, but his way of
talking created an image of a chaotic organizational life; an image of darkness I
still carry with me when I recollect my visits. Such imagery can be very powerful
in shaping meaning and has its impact in how others respond and whether they
take up similar ways of talking. Vince is perhaps trying to deal with the chaotic
welter of impressions by constructing features (casualties, priorities) to talk
around. In asking tell me about all the casualties..., Vinces language may
influence and be responsive to (intentionally or unselfconsciously) the talk of
other organizational members as conversational participants construct themes
around which organizing activity can take place. In this way, through a shared
metaphor, a common sense may develop. This sense of a shared imagined
emerged in my conversation with Dave, the Production Manager in the same
company. I came away with the same impression of darkness:

Dave: You plan to use this machine and have to use that, and some
weeks this breaks and then that breaks - so its very difficult .... You plan
something then Boom! something happens.... thats one of the dark tunnels.

His language also gave me an impression of a chaotic battle with machines, of


reacting to unpredictability. (Cunliffe, 2001: 359)

4. Postmodern Perspectives - are concerned with knowledge and ways of


theorizing about organizations as well as modernist concepts of organizations, their goals
and practices. They criticise techno-rational ideals and managerial prerogatives. They
suggest that organizational theories (in this case about structure) are not about what is

2
For further discussion see Barley, S. R. & Tolbert, P. s. (1997) Institutionalization and
structuration: Studying the links between action and institution. Organization Studies, 18: 93-118.

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

really out there (because there is no thing really out there) but just the constructions of
academics working from within their own language game.

Three alternative ways of thinking about organizations are suggested:


- De-differentiation: self-management and self-coordination
- Feminist ways of organizing: blending the need for bureaucratic
characteristics and responsive ethical communication/ways of acting.
- Anti-administration: embracing reflexivity questioning assumptions,
ideologies, tensions, and diffrance when policy-making and managing.

Discussion Questions

1. Do bureaucracies still have a role to play in todays society?


2. Think of an organization you work for/are familiar with. Using Burns & Stalkers two
management systems, what are its characteristics (mechanistic or organic)? Are these
appropriate and why?
3. Think of an organization you work for/are familiar with. Using Lawrence & Lorschs
ideas is it highly differentiated? Why? What integrating mechanisms are used?
4. What are examples of support, maintenance, and adaptive activities (Katz & Kahn) in a
hospital?
5. Give examples of routines and improvisations in your organization (your own, your
department, at the organizational level). Why do these occur?
6. What structural issues would you need to consider to make de-differentiation work
effectively?
7. What are the advantages and disadvantages of tall and flat organizations from
management/employee/customer perspectives?

Suggested Class Activities

1. Discussion of the dimensions of organization structure using:


organization charts from the internet and/or;
examples from students own organizations;
prior to class, ask students to think about examples from TV e.g. Holby City, The
Sopranos, Mad Men, Star Trek.

Discuss:
- How activities are grouped (division of labour)
- Degree of horizontal and vertical differentiation (is organization tall or flat)

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

- What integrating mechanisms are/might be used?


- are activities de/centralized, formalized, specialized?
- does the organization have mechanistic or organic characteristics?
- are these appropriate (relate to Burns & Stalker and Lawrence & Lorsch)

2. Prior to class, ask students to identify language, metaphors, jargon, phrases, images,
etc within their organization. Discuss how these ways of talking might help construct and
enact features of the organization.

3. An exercise to integrate ideas from Chapters 3 and 4.


Taking McDonalds as an example, what are/do you think are the dimensions of
organizational structure and how do these relate to the environment? Do you think
McDonalds has mainly organic or mechanistic characteristics and are these appropriate?

4. It can be helpful to reinforce the differences between the perspectives by asking


students to complete the following:

A SUMMARY OF THE PARADIGMS

Modernist Symbolic-Interpretive Postmodern

Ontology

Agency

Epistemology

Form of
Explanation

Language

Conflict/Order

Goals

Organizations
are:

Structure

Managers Role

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

A SUMMARY OF THE PARADIGMS (suggested answer)

Modernist Symbolic-Interpretive Postmodern

Ontology Objective, external reality, Subjective, socially Reality as linguistic


independent of experience. constructed realities, convention, no real world
language, symbols etc. referents, simulacra,
influence meaning making. discursive/contested realm.
Shared.

Agency A thinking, rational, reflecting Self-constructed by language Linguistic node. Decentered,


self. Think -> act. and interaction, social actor. fragmented.

Epistemolog - Scientific method. - A narrative, relative - Questions and contests.


y - Discovery of facts. knowing - Destabilizes truth
- Represent the world. - Sense making. - Fiction
- Objectivity. - stories of the world - Linguistic relativism
- Subject/object distinction. - subjectivity, multi- - Intertextuality, all authors
- Concerned with theory interpretations - Fictionalize, destabilize,
generation, models, laws. - Many interpretative acts. irony, fun.
- Legitimacy by objectivity, - No subject/object - Question metanarratives.
validity, accuracy, facts. distinction. - Destabilize knowledge &
- Metanarrative, progress, - Unbounded, intuitive, fluid power relations.
generalizability. knowledge.

Language Represents reality, used to Dialogue and speech acts Everything is language /
express inner thoughts. privileged. language is everything.

Conflict/Ord Order and progress. Some shared sense along with Contested realities,
er multiple interpretations interpretations

Goals Rational common goals Subjective, experienced and No common goals or


provide direction for common enacted differently. agreement on goals. Goals
action and progress. are a form of control and
Necessary to maximize hegemony
efficient & effective operation
of org. and society.

Organizatio Ready formed systems of Constructed continually by Systems of power relations,


ns are: rational action and efficiencies. members through oppression, irrationalities, and
Impersonal. symbolically-mediated communicative distortions
Techno-rational. interaction

Structure Fixed and concrete. Structure is fluid, emerges in Power relations & inequalities.
Represented in charts. Aims interaction and symbols. Discourses vying for control.
at prediction, functional Roles, authority are Hegemonic stories of
control and efficiency. negotiated. oppression.
Hierarchical relationships. Communities of sub cultures. Silences voices.
Managerial authority. Ongoing constructions. Gendered.
Clear lines of control and Collaboration.
accountability.
Clearly defined roles,
relationships, authority.
Expertise & authority at levels.

Managers Guiding society & determining Actions geared towards Self-interest.


role public interest. bringing about. Shared Subjugation of the masses.
Maintaining social order and meanings. Control via definition and

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

guiding economic Actors intersubjectively classification.


development. constructing meaning and Determined by linguistic
Socializing others and coordinated actions through conventions.
enforcing uniform & conversation and symbols. Deconstruct, consider other.
equitable rules. Collaborative action. Develop Ironic detachment.
Enforcing decisions & policies. new and humane solutions. Unsettle taken-for-granted
Conforming to managerial & Understand different meanings practices.
organizational norms. & interpretations

5. The Isosohedron Exercise


(With thanks to Richard Thorpe, Leeds University, based on an exercise by Stafford Beer)

Use: To illustrate differentiation and integration in organizations and as a basis for


discussing differentiation and integration in the groups constructing the structure.

Students are shown a completed isosohedron (a 20-sided shape), asked to figure out how
to construct one, and then to actually construct one in their groups.

Materials:
30 kebab/cocktail sticks
12 fruit pastilles or jellied candy

1. Discuss Lawrence and Lorschs differentiation and integration and the tension between
the two.
2. Talk about Richard Buckminster Fuller (1985 1983), a U.S. inventor and
mathematician who invented the geodesic dome. This is a structure composed of
triangles, made of lightweight material but very strong. The U.S. exhibit at Expo 67 in
Montreal was housed by a geodesic dome and is still standing. This method allowed
larger domes to be built using the principles of compression and tension. Fuller used the
term tensegrity (tensile and integrity) to express the combination of continuous tension
and compression which can also be used to describe the relationship between
differentiation and integration in an organization. See
http://en.wikpedia.org/wiki/Geodesic_dome
3. Show groups the finished isosohedron and give them the materials and have them
figure out and build their own.
4. Isosohedrons look flimsy but in combining triangles, compression and tension provide
strength.
5. Link to integration and differentiation:
- how do organizations create strengths through integrating differentiated elements
- how are tensions of differentiation managed
- integrating mechanisms used by organizations
- link to matrix structures (Chapter 9 if covered)
6. Process: How does this relate to the way they worked in their groups (division of
labour, integration, common goal)?

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

Isosohedron Construction:

1. Select two pastilles and push five cocktail sticks into each. These need to be evenly
spaced around the pastel (like the spokes of a wheel) and angled about 50% to make a
'shallow' cone shape. When you have done two identical ones you need to push a pastille
on the end of each of the cocktail sticks i.e. the ends of the spokes. You will have now
used up all 12 pastels and 10 of your 30 cocktail sticks.

3. The next stage is to join up the two identical cones. This is best achieved by two people
(otherwise you will run out of hands!). Place the cones facing each other until the five
pastels on each cone touch. Then give a half twist so that the pastels are exactly halfway
between each other. Now take the other 20 cocktail sticks and begin to work around the
sphere joining the two halves up making small triangles. Firstly join up the edges of the
cones, then use some of the sticks to go diagonally across between the ends of one
pastel of one cone to another pastel on the other cone. It will look as if it is diagonal
because of the half twist you have created. Carry on until all the gaps between the pastels
are joined up. You will have then used all 30 sticks.

Photo courtesy of Richard Thorpe

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Hatch with Cunliffe: Organization Theory, 3rd edition, Chapter 4

Web Links

1. Article (structural change):


http://pdic.tamu.edu/maroon/casco2.pdf

2. Good resource page (sociologically-based):


http://www2.pfeiffer.edu/~lridener/DSS/socstruct.html

Chapter Assignments

1. You are the owner of a company making high class chocolates. You employ around
100 people and have grown rapidly over the last 5 years. You are reviewing your
organizational social structure as a basis for further growth. What design choices do you
think are appropriate and why (e.g., degree of differentiation, what integrating
mechanisms will you introduce, de/centralization etc)?
(You may want to refer students to Tables 4.3 page 105 and figure 4.2 page 106, Greiner
and Mintzbergs models)

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i
Cunliffe, A. L. (2001) Managers as practical authors: Reconstructing our understanding of
management practice. Journal of Management Studies, 38, 351-371.
Cunliffe, A. L. (2002) Social poetics: A dialogical approach to management inquiry. Journal of
Management Inquiry, 11, 128-146.