Who or What Does Make a Difference?
If individuals are not responsible for corporate actions, if the Man in the Grey Flannel Suit couldn’t change the purpose of his ad agency, if the concentration camp guard could only contribute to the killing and couldn’t stop it, then we need to move on to look at something else. We need to try and name whatever can make the difference. If we, through our individual or even group moral actions, can’t change the course of our wild ride toward the cliff, who or what can?
I have pointed toward the large organizations where many of us go to work – the companies, ad agencies, armies, and national and state agencies, for example – as the effective actors in reducing environmental damage. So now I have to ask: what is the most informative way to approach them? What questions can we ask about organizations to which we don’t already know the answers – we or social scientists who have studied them?
One approach would be to start with the question we ordinary people ask so many times, usually while shaking our heads in unison at some blunder on the part of a public agency or a corporation caught in the headlights of a scandal. The best, most precise way it has been posed in my experience was by economist Robert Gibbons:
“What makes an organization seem less rational than its members?”1
What indeed makes an organization less intelligent that the people who work in it? And the question doesn’t end there. It raises a paradox, for in some ways organizations are superior to individuals. They are, after all, able to accomplish important things that we individuals could not dream of doing on our own. Case in point: inventing and manufacturing computers.
So I feel a need to expand the conversation to include the opposite but related question that Gibbons also posed further along in his discussion.
“… That is, instead of asking, ‘What makes an organization seem less rational than its members?’ one might instead … ‘What makes an organization seem at the same time less and more rational than its members?’ (i.e., “How can an organization orchestrate the acquisition and communication of information and the allocation of decision-making among its members so as to produce a tolerable outcome when the members are boundedly rational?”). 2
Since I am starting from the urgency that I feel about avoiding the end of civilization, my basic question really seeks to know how large organizations work so as to be both less intelligent than the people who make them up and more rational than all of us gathered together in a room? And then I’ll shamelessly use whatever we discover in answering those question to approach the one that really matters: are there ways in between their extremes of clumsiness and high achievement that enable them to change quickly?
But framing the argument is not simple. Since March and Simon in the 1960s, most social scientists have focused on the political analysis of how decisions are made – in both government and private firms. That path has failed to yield the answers we need. Decisions are made by political negotiations among individuals or groups that manage an organization, often based on information that is collected and analyzed in routines.
But, as we have seen the in managers and committees are often constrained in their decisions by the work of the organization. Stray far from the traditional mission, and the organization casts you out. There are other reasons as well, and I’ll bring some of them up further along.
At this beginning stage, I believe, we will discover more if we focus instead on the day-to-day operations of organizations, and with the routines with which they carry on their operations.
In the next entry I’ll dive into that.
- Source: R. Gibbons (2013) , “Cyert and March (1963) at Fifty: A Perspective from Organizational Economics,” Prepared for NBER Working Group in Organizational Economics, SIEPR, April 12-13, 2013, p. 2. Downloaded September 2017 from http://web.mit.edu/rgibbons/www/Gibbons%20CM%20at%2050%20v6.pdf
- Ibid., p.5