Organisations are synonymous with modern day society, structures – entities created by humans to organise behaviour and direct it towards common goals, in the definition of Edgar Schein (Organisation Psychology, 1965) ‘ the rational coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labour and function, and through a hierarchy of authority and responsibility’. The interlocking arrangement of goal – labour and authority create an entity under the scrutiny of this essay.
In furthering our understanding of organisations, a number of theorist have presented an analysis of the way organisations function, in essence, likening the workings of organisation to a number of analogies. As with any conjecture in the realm of social science, every premise has its strengths and weaknesses – where one theory works another dismantles, however, it should be stated that contributions made by every theorist should not be viewed as alternative models per se but as complimentary contributions to our insight into organisational analysis.
Generally, there are two polar schools of thought on the analysis of organisations, the forces of light and the forces of darkness. The forces of darkness are represented by the mechanical school of organisational theory that treat the organisation as a machine such as the Bureaucratic Model of Weber and then there is the forces of light which encompass the human relations school that emphasizes people rather than machines that work with precision. This includes the natural system model (The organic theory) which shall be the perspective analysed in this essay.
After covering a short description of what the theory entails, an analysis of its strengths and weaknesses shall be discussed. The central tenet of the organic theory is basically that If humans are individually living systems with needs that must be satisfied, then as groups, in organisations, they continue to function as a living system with needs that must be satisfied. In light of the analogy, the organisation is deemed as systems made up of interdependent parts, each part functioning so that the entire system survives over time.
The system draws its energy, in order to satisfy needs, from the external environment and has built in mechanisms for maintaining and regulating the relations between its component parts. This is what signifies it as an open systems approach in that organisations are ‘open’ to the business environment in which they must integrate. The open system can be seen as a continuous cycle from input (raw materials) to transformation of goods to output to feedback (where one element of experience influences the next), the exchange made from the environment to the internal functioning of the system is paramount in this analogy of an open system.
With so many exchanges taking place each subsystem must be interrelated. Just as in the organism we have the journey from a molecule that makes up a cell, many of which make an organ that entails in the living organism, the organisation parallels with the individual that makes up a group and further groups into a department that is part of a division which makes an organisation. The management of relations between these departments is as important as the brain is to the functioning of the whole body optimally.
Over time, this system develops and grows, becoming increasingly complex. Each subsystem adjusts to the offerings of the other parts so that a form of homeostasis is achieved. By homeostasis we mean self-regulation and the maintenance of a steady rate of exchange with the environment. To exist, organisations must continue the aforementioned cycle from input to output and while doing so a control system overlooks any deviations that may occur and thus, through negative feedback, adjust them.
In the context of organisations, managers take aboard this hypothalamic role and thus prevent entropy of the organisation by importing energy from the external environment (nourishment) otherwise known as corporate strategy. This calls forth an extension of the natural system model in the form of the contingency approach, which dealt with adapting organisations to the environment. Burns and Stalker (‘The management of innovation’, 1961) looked at the organisation-environment relationship based on the Scottish Electronics Industry during the post war period.
With rapid technological change and turbulence in the surrounding business environment, many firms were experiencing volatile market conditions. Out of this, the distinction between mechanistic and organic structures were embarked upon. Organic structure were flexible, informal and showed a strong sense of direction and commitment which embraced all the personnel and was thus able to adapt well to change and uncertain environments. Research showed firms that survived the period of rapid change in the electronics industry tended to be ones with organic structures.
In continuation of the Contingency theory, Lawrence and Lorsche (1967) brought the focus on the internal structures for dealing with the external environment. Two key variables were distinguished – Differentiation and Integration. Differentiation involves the levels of division between management bodies caused by specialisation. These can vary from highly hierarchical formations to flattened pyramids where management is closer to workers. Integration involves the manager’s capacity to act coherently and basically the manager’s leadership style.
In summary, their work showed that the degree of required differentiation in managerial and organisational styles between departments varied according to the nature of the industry and its environment and that an appropriate degree of integration was also needed to tie the differential parts together. Complex organisational systems are more differentiated with specialisation of function therefore require more complex systems of integration to maintain the system as a whole.