Principles of Management: Emergent Processes

Principles of Management: Emergent Processes in Organizations

• Lecture Objectives:
  • Understand the significance of emergent processes in organizations.
  • Analyze specific forms of emergent processes in organizations.
  • Analyze the potential and limits of managing emergent processes.

Basic Puzzle: Formal Structure vs. Emergent Processes

• Multiple foci of organizational theories:
  • Formal organization (lecture 3)
  • Observable and measurable features (lectures 4 & 5)
  • Individuals (lecture 6)
• What about processes that unfold beyond formal structures and rules?

Roadmap for the Lecture

• The nature of emergent organizational phenomena
• Organizational decision processes beyond hierarchical structures
• Group processes in organizations
• Organizational culture

The Discovery of the Informal Organization

• Hawthorne experiments (lecture 4): Evidence of emergent processes beyond formal structures.
• Definition of emergent organizational phenomena: Cannot be explained by organizational structures, and outcomes are unpredictable.
• Practical and theoretical questions regarding emergent processes: Desirability, controllability, and their impact on organizations.

How Does Decision Making in Organizations Work?

• Rational-choice perspective: Individuals are rational decision makers, maximizing efficiency based on complete information. Organizations are rational systems, with hierarchy as the sole explanation for decisions.
• Reality: Outcomes are often unintended/suboptimal. Individuals are satisficers (aiming for sub-optimal outcomes), while emergent processes shape organizational decisions.

Emergent Decision Making in Organizations (1): Organizational Differentiation

• Organizations as complex systems: Departments are specialized sub-systems with unique rules and perspectives of the environment.
• Example: Conflicts arise between departments (e.g., marketing vs. finance) due to differing goals and perceptions.
• Division of labor implies departmental conflicts and priorities.
• Organizational decisions are the result of interplay between various departments and actors.

Emergent Decision Making in Organizations (2): Micropolitics

• Organizational decisions are influenced by the interplay of groups/individuals with differing interests (career, power, prestige).
• Limited resources in organizations lead to conflict and struggles for resources.
• Organizational decisions are the result of power dynamics (manipulation, compromise).

Emergent Decision Making in Organizations (3): Organized Anarchy

• Decision process as a "garbage can" where various problems intersect.
• Decision process is shaped by independent streams: Problems, Participants, Solutions, and Choice Opportunities.
• Organizational decisions result in oversight (formal decision, unresolved core problem), flight (formal decision, unresolved core problem to a different arena), and resolution (less likely).

Groups in Organizations

• Groups as sub-units of organizations.
• What is a group: 2 or more persons interacting repeatedly over time with common activities/goals, and a sense of belonging.
• Formal vs informal groups: Formal groups are focused on specific tasks, while informal groups are based on personal goals and sympathy.

Cohesion of Groups

• Cohesion (stability) increases with group homogeneity.
• Conformity increases with cohesion.
• More attractive groups lead to higher convergence of opinions, goals and norms.
• Non-conformity leads to rejection, influenced by group cohesion.
• Cohesive groups are less likely to accept new members that deviate from their goals, norms, and standards.

Emergent Behavioral Patterns in Groups (1): Risk Taking

• Groups tend to take more risk-filled decisions than individuals.
• Reasons: Diffusion of responsibility, leadership, and risk as a social value (avoiding an impression of timidity or hesitation).

Emergent Behavioral Patterns in Groups (2): Groupthink

• Cohesive groups strive for unanimity, suppressing autonomous critical thought.
• Symptoms of groupthink: Illusion of invulnerability, belief in morality, rationalization, stereotyping outsiders, self-censorship, group-censorship, "brain-guards", and illusion of unanimity.

Emergent Behavioral Patterns in Groups (3): Avoiding Groupthink

• Leaders encourage doubt expression
• Leaders avoid premature statements
• Teams discuss various alternatives
• "Devil's advocate" for challenging ideas

Wrap Up (1)

• Emergence as a key feature in organizations.
• The assumption of rationality is challenged, and organizational decisions often arise from limitedly rational and emergent processes.
• Groups influence organizational dynamics through their emergent properties.
• Group processes are significant sources of unintended (and potentially irrational) outcomes.

Organizational Culture

• Departing from other perspectives, the focus is on organisations as cultural systems akin to tribes or foreign cultures.

• Definition: Historically developed patterns of values and thought that shape organisational activities and feelings.

Main Features of Organizational Culture

• Implicit: Shared assumptions influencing daily activities.
• Collective: Shared patterns of orientation and values.
• Cognitive: Culture frames and provides meaning, orientation and makes sense.
• Emotional: Culture as a holistic framework beyond cognition, encompassing values, appreciation, acceptance and aversion.
• Historical: Culture as a product of organisational history, developing and shaping the organisation and its operations.

The Structure of Organizational Culture

• Three layers: Artifacts and symbols (visible elements require interpretation), espoused values and beliefs (partly visible and partly sub-conscious), underlying assumptions (invisible and largely unconscious).

The Layers of Organizational Cultures (1): Artifacts and Symbols

• Stories and legends communicate the organisation's critical values.
• Rituals such as admission, monthly employee awards, and Christmas parties exemplify shared values.
• Symbols include architecture, logo, dresscode, and language (jargon).

The Layers of Organizational Cultures (2): Espoused Values and Beliefs

• Unwritten moral principles and behaviours are shared, although not always explicitly or uniformly across members.
• For instance, is criticism of colleagues acceptable? What about discrimination of women?
• Value statements are attempts to codify essential norms but often are not fully lived.

The Layers of Organizational Cultures (3): Basic Assumptions

• Underlying philosophies about environment, rationality, perception of truth, time and its use, nature of humans, superior characteristics and actions, as well as interpersonal relations (competition or cooperation, emotive display)

Typologies of Organizational Cultures (1)

• Difficult to characterize cultures.
• Deal and Kennedy typology: Work hard/play hard (sales), Tough guy/Macho (advertising), Bet your company (pharma/construction).
• Typologies are limited, not exhaustive, and present simplified versions of the complexities within organizations.

Typologies of Organizational Cultures (2): Dysfunctional Cultures

• Kets de Vries and Miller typology: Identifies dysfunctional patterns, often linked to personality traits of leadership.
• Paranoid, Depressive, Dramatic, Compulsive, Schizoid cultures.

Effects of Organizational Cultures

• Positive Effects: Clear actions, effective communication, fast decisions, low control, high motivation.
• Negative Effects: Tendency towards closure, undervaluing new approaches, barriers to change, focus on tradition.

Changing Organizational Cultures (1)

• Approaching cultural change through cultural engineering and culturalism.
• Cultural engineering: Planned and managed.
• Culturalism: Organisational culture is a lifeworld, hard to manage.

Changing Organizational Cultures (2)

• "Course correction": A middle ground between cultural engineering and culturalism, recognising limitations but providing leverage points for change.
• Diagnosis (understanding existing culture)
• Assessing need for change (what is problematic)
• Changing through re-orientation (e.g., through value statements, destruction, development).

Wrap Up (2)

• Organisational culture extensively influences organisations.
• Changing organizational cultures is a complex and difficult process with clear limitations.

Explore the significance of emergent processes within organizations in this quiz. Analyze the impact of informal structures and the nature of group dynamics that unfold beyond traditional hierarchical frameworks. Test your understanding of the complexities involved in managing these processes.