Resource Dependence – Review

January 25, 2012 § Leave a comment

RESOURCE DEPENDENCE

Pfeffer and Salancik (78) define resource dependence as the ability to control critical resources.

Resource dependencies create situations where external forces control an organization.

Power is assumed to be the opposite of dependence.

Grandori (87) suggests that analysts use perception of goals to determine the type of theoretical perspective.

The resource dependence model should be adopted when there are multiple conflicting objectives of interest groups.

 

Power is relational, situational and reciprocal not just individual but a social relation property.

Power is a function of dependence, a product of structure and individual characteristics.

Natural systems such as resource dependence emphasize informal power structures.

Power is a function of the exchange relationship and varies by situation.

In zero-sum situation one party gains power and the other loses, however in a bigger pie situation overall power increases through interdependence via bridging strategies.

 

Symbiotic interdependence is the exchange of unlike resources and power is created as the importance of the exchange increases between groups.

Competitive interdependence causes two groups to compete for the same resources of a third party (Scott 03). Exchange theories are applicable among various resources and levels ranging from individuals to orgs.

Individuals seek to maintain power greater than dependence or else seek out a coalition (Thompson 67).

 

Thompson (67) introduced the power-dependency model, followed by Walmsley and Zald’s (70;73) political economy model.

Pfeffer and Salancik’s (78) resource dependency model proposes that orgs exchange resources with the environment as a condition for survival.

The need for resource acquisition creates dependencies between orgs that cause political problems requiring political solutions.

Orgs adapt and increase chances for survival if managers can acquire resources without dependencies that reduce power.

 

Dimension affecting dependence are munificence-scarcity, concentration-disperson, and coordination-non-cordination. Organizations can manage their task environment through buffering or bridging strategies.

Buffering protects the technical core from environmental disturbances through coding, stockpiling, leveling, forecasting and adjusting scale.

Bridging creates flexible boundaries through bargaining, contracting, co-optation, hierarchical contracts, mergers, joint ventures, associations, and government connections.

 

Bridging strategies are the most common solution to interdependence problems (Pfeff Salancick 78).

Mergers are when two orgs combine and vertical integration is a merger of firms at different stages of the production process (Pfeff 72).

Joint ventures are when two or more firms pursue a common interest and require less pooling of resources and usually occur when competition is high and event horizons are short.

However, the definitional operational activities either spatial, temporal or the outcome of interaction frequency makes joint venturing difficult.

 

Resource dependency theorists stress that orgs have coalitions of interests apart from the personal goals of those in power.

Weber’s (68) bureaucratic structures are ideal types of rational structures and Crozier’s (64) normative perspective focuses on the progressive acceptance of discretion away from intentions towards abuse of power.

Both bureaucratic and normative perspectives are functional approaches with resource dependence effects.

Functions of establishing culture, norms and legitimacy are not defined economically but organizationally.

Brown’s (78) political cultural model focuses on power from a framework that defines meaning of actions and decisions similar to symbolic management and neo-institutionalism (Pfeff Sal 78, M&R 77; P&D 91)

Institutional Theory – Review

January 19, 2012 § Leave a comment

INSTITUTIONAL THEORY

Institutional theory examines the conventional, standardized patterns of behavior or states of being in and across organizations and taken-for-granted beliefs that arise within and across organizational groups and delimit acceptable and normative behavior for members of those groups (Jepperson 1991; Elsbach 2002). Merton’s (1936) old institutionalism was the realization that officials orient actions around rules to the point that conformity interferes with the achievement purposes of the organization. Merton’s student at Columbia, Selznick, is considered the founder of institutional theory. “The most important thing about organizations is that, though they are tools, each nevertheless has a life of its own” (Selznick 1949). Selznick (1957) viewed the structural expression as an adaptive system where goals and procedures achieve a value-impregnated status becoming institutionalized, infused with value beyond the technical requirements of the task at hand.

Institutional theorists argue that formal structures can never conquer the non-rational dimensions of organizational behavior because individuals bring other commitments to the organization that restrict rational decision-making (Scott 2003). Procedures become valued as ends and structures adapt based on individual actions and environmental pressures. The institutional approach focuses on security and stability of relations, and homogeneity of outlook. Institutional theory proposes that many environmental forces are not based on efficiency but social and cultural pressures to conform. Selznick’s students (Clark, 1956, 1970; Zald & Denton, 1963) studied how structure features change over time in response of the environment and identified goal drift to explain changes in an operative’s goals.

Meyer and Rowan’s (1977) “neo-institutional theory” suggests modern societies have institutionalized rules to provide a framework for the creation and elaboration of formal organizations; rationalized myths believed but not testable, originated and sustained. Social fitness is proposed as conforming to social myths. Neo-institutionalists define institutionalization as a process which actions are repeated and given similar meaning by self and others. Symbolic interactionists such as Zucker (1977) developed the micro-foundations of neo-institutional theory based on cognitions; focus on micro-processes within organizations.

DiMaggio and Powell (1983; 1991) coined “isomorphism” as a constraining process that forces population resemblance. A contingency argument is that organizations structured by the environment, become isomorphic. DiMaggio and Powell (1983; 1991) define three kinds of institutional isomorphism – coercive, normative, and mimetic. Coercive or regulative pressures are to adopt structures or rules. Mimetic, or culture cognitive pressures force organizations to copy others, often because of uncertainty. Normative pressures are to adopt forms. As the research focus moves from technical to institutional analysis, the key outcome moves from efficiency to legitimacy of social action.

There are agreements and differences between “old” and “neo” perspectives (Powell & DiMaggio, 1991). Both perspectives view the institutionalization process is non-rational action that signals dysfunction compared to a perfectly rational approach. Both old and neo focus on relationships between organizations and environment, but neither prevents the study of lower organizational aggregates. Both expect inconsistencies between formal organizational structure and reality and invoke concepts like culture as emerging factors of organizational life. The “neo” perspective complements rather than contradicts “old” institutionalism. A difference between perspectives is that conflict is a political process and constraints come from tradeoffs of vested interests in the old perspective, while “neodownplays the political process and constraints come from legitimacy and “common understandings” seldom explicitly articulated (Zucker, 1983; Hirsch, 1998; Scott, 1998). Another difference between perspectives is that the definition of environment is loose for the old, as local, multiples ties, and treaties, while the neo-perspective views the environment as non-local, at the whole sector or field level. Finally, the “old” perspective focuses on values where “neo” theorists prefer cognitive constructs.

Similarities and stability among organizations signal institutionalization processes at work through the effects of carriers such as culture, structures, routines, and stories. Institutional analysis depends on the elements analyzed, whether cognitive, such as deliberative processes, or normative such as organic, moral, or expectations constructs. Forms and effects of institutions occur in intra-organizational processes when protocols, procedures or routines obtain a “taken for granted” status (Elsbach 2002). The symbolic role of management has also been used to explain the emergence of institutions through the manipulation of job titles, classifications, and names of projects. Selznick (1957) observed that leaders infuse organization with values beyond the mere technical requirements by selecting the social base, central personnel, and determining the formalization of structure and procedures.

Neo-institutionalists argue that actors influence isomorphism through formal structures that reflect the myths of institutional environments instead of work activities (Meyer and Rowan 1977). Professions can either induce isomorphism or play the role of true reformers. Shenhav (1995) argued that the industrial engineer was a crucial role in Taylorist ideology, securing space for actors between labor and capital. Sutton (1994) found the HR profession used EEO laws to push for development of HR practices in modern organizations. Mobilized social groups are a class of social actors with capacity in institutional power, prevalent in political sciences. Stinchcombe (1965) noted that an institution as a “structure in which powerful people are committed to some value or interest“, could lead to searching for institutional effects in class analysis. Rao (1998) demonstrates the fight for control of a field through two different conceptions of organizations the success by one group defining the field.

Neo-institutionalists study the existence of institutional structure through diffusion, propagation, and changes in institutionalized field. Structural mechanisms that support institutional diffusion overlap with diffusion in social networks using cohesion, reflecting physical and social proximity. Haunschild (1993) studied imitation through board interlocks and found the mechanism was direct contact between actors. Factors capable of triggering institutional changes are performance failure, takeover threat, modernization, and demographic changes. When current science no longer accounts for a majority of the phenomenon observed, performance failure can result in “paradigm change” (Kuhn, 1970). Davis & Diekmann (1994) argued that the abandonment of the conglomerate form in the 1980s was triggered by performance failures and takeover threats. Haveman and Rao (1997) found various factors trigger institutional changes such as modernization and demographic changes.

Deinstitutionalization has been proposed through mechanical, functional, cognitive and cultural process. Zucker (1988) argued for mechanical reasons, using entropy, imperfect transmission, and the erosion of roles. Oliver (1992) argued for functional causes due to shifts in interest, power, social pressures, or group differences in beliefs. Davis & Diekmann’s (1994) analysis of conglomerate extinction found support for cognitive and language choices as mechanisms of deinstitutionalization. Meyer (1992) proposed that the success of the formal organization in institutionalizing and legitimating rationalization in societal definitions of person and action tend to lower the structural rationality of the formal organization. Oliver (1991) proposed “decoupling” as a response to pressures by isolating the technological core from the formal structure.

Social Networks, A Review

November 14, 2011 § Leave a comment

SOCIAL NETWORKS

Durkheim (1893) motivated the sociological concern for effects of social structure on individuals.

Social network theory has roots in sociometrics and graph theory (Moreno, 60; Erdös, 59).

Early social psychologists used social networks to study determinants of friendships such as spatial distance, balance theory and sociograms (Festinger et al., 50; Heider, 58).

The development of weak ties and centrality in the 70s brought a distinct identity to social network theory (Gran, 73; Freeman, 77).

 

Social network theory explores the body of knowledge relating organizational life to the topology of social structure. The use of social networks solely as a methodological tool triggered debate whether development was still theoretical in Popperian terms (Popper, 02).

However, the two approaches are not contradictory if the scientific objectives are clarified.

The classification of networks as either an analytical tool or phenomena of social structure focuses on governance.

 

Raider & Krackhardt (02) propose various levels of social structure such as the dyad, the ego network and the group network.

Borgatti (03) distinguishes explanatory goals as the performance or homogeneity effects of social structure using the mechanisms of diffusion or social capital.

Mechanisms of networks can focus on reach or demand effects.

Reach effects are consequences of social access to remote resources such as job opportunity and demand effects where actors are the object of relations such as status (Gran,73; Park & Podolny, 00).

 

Borgatti (03) focuses on structuralist and connectionist mechanisms where structuralist effects are the benefits of position and connectionist effects are the actual flows across structure (Cook & Emerson, 78).

Burt’s (92) structural holes paradigm analyzes both structuralist benefits where control advantages accrue at the broker position and connectionist benefits that have information advantages.

Podolny (01) proposed pipes and prisms model where brokerage resolves uncertainty through information flows and status is more efficient with minimal uncertainty.

In Borgatti’s framework classes of outcomes are structural or social capital through brokerage, environmental shaping, social access or contagion (Burt, 92a; Khanna & Palepu, 99; 01; Strang & Macy, 01).

 

Giddens (79) embeddedness perspective uses the social network as a reconciliation mechanism between structure and agency.

Granovetter (92) made a similar distinction between structural and network form and relational embeddedness. Organizations are embedded in network structures that constrain actions and provide opportunities to achieve goals.

A study of the NYC apparel industry viewed embeddedness as a form of governance contrasted to arm’s-length relations that generates outcomes independent of the narrow economic interest of the relationship (Uzzi, 96; 97).

 

Betweeness centrality identifies positions with the potential for control of communication (Freeman 77).

Burt (80; 92a; 92b; 01b) focused on structural holes and brokerage positions.

Brokerage, the disconnection between structural holes that lead to information and control benefits was reformulated as a source of social capital.

Social capital is a salient concept not matched to a topological definition similar to embeddedness.

 

Social capital is hypothesized as capital attached to belonging to a network of relationships human, economic, or cultural.

Bourdieu’s (86) social capital is the aspect of the social context that enables action, with value coming from trust, information, and norms (Coleman 88).

Status refers to ordering and argues status and structural holes have opposing effects if confronted by egocentric uncertainty (Podolny, 01).

High status benefits less from ego-uncertainty, and resolves alter uncertainty.

Burt (01a) found support for disadvantaged actors gain no benefit from playing broker, but they gain from closure around tight group of sponsors.

 

Structural preference is antecedent of social network analysis and assumes the existence of network relationships and examines consequences.

The origin of relations focuses on proximity and similarity (Newcomb, 43).

A homophilous tendency means that existing organizational demography influences social structure and future evolution (Blau 77; McPherson & Rotolo 96).

Barley (90) studied how technology shapes structures by the mediation of roles in different contexts and different social interactions.

Mehra and Kilduff (01) found that high self-monitors are likely to occupy central positions in social networks.

Organizational Ecology, A Review

November 12, 2011 § Leave a comment

ECOLOGY

Org ecology is an open natural systems model at the ecological level of analysis.

Open systems consists of coalitions of interest groups highly influenced by the environment and natural systems consist of collectivities seeking survival (Scott 03).

The ecological level of analysis examines relations of organizations to the environment or relations that develop between organizations (Selznick 49, Pfeff & Sal 78).

Resource dependence, Marxist theory, institutional theory and postmodern theory all operate at the ecological level.

Community ecology, inter/intra-organizational ecology and institutional ecology are different variants of the organizational ecology stream of literature but I will focus on population ecology (Astley 85; Zucker 89; HannnanFreem 77; Aldrich 79).

The difference between population, community and institutional ecology is primarily organizational grouping. Community ecology uses the areal organizational field level focusing on network relations between organizations in the same geographical area.

Institutional ecology uses the functional organizational field viewing the societal sector as a collection of orgs that influence the focal organization, and constitute a recognized area of organizational life (Scott Meyer 91, Di & Powell, 83).

Population ecology studies populations of orgs the key research question why some org forms survive over others and why there are some many kinds of organization (H&F 77).

H&F 89 describe org populations as having similar blueprints, unitary character and common dependence on the environment.

Natural selection theory of organizations contends that org forms best fit to the environment are selected and proliferate.

Baum & Amburgey (02) argue the field is based on 3 main observations: 1. Aggregates of orgs exhibit diversity, 2. Orgs are inert compared to environmental changes and 3. Orgs appear and disappear continuously.

Population ecology studies the birth and death rates of a population determined by variation, selection, and retention effects of the environment.

Population ecology assumes variations provide raw material for selection processes, but orgs find difficulty in identifying and replicating successful variations.

Org ecologists argue that environmental constraints don’t allow firms to adapt and that selection is more likely.

The question then becomes what underlying change mechanisms cause birth or death of organizations in a niche and how niches evolve.

Key mechanisms of org ecology are inertia, niche width, resource partitioning, population dynamics and density dependence.

Inertia theory (Carroll 85; H&F 84) assumes that individual firm do not change due to both internal and external constraints.

Internal constraints consist of core and peripheral characteristics, peripheral protecting the core.

Core characteristics such as goals, forms of authority, core technology, and market strategy are difficult to reflect and act on.

External constraints are the firm characteristics that are signaled to the environment when growing, such as reliability and accountability.

These characteristics develop routinization, preventing change.

Even pop ecologists that accept orgs can change argue legitimacy selects out orgs without reliability or accountability resulting in a population resistance to change.

Niche width theory describes a niche as a particular combination of resources required to support a given type of population (H&F77).

A niches is realized when the equilibrium of the system support optimal org forms into which all organizations are isomorphic.

Systems are rarely in equilibrium and niche theory attempts to predict what happens when the environment varies.

Generalists and specialists are a popular typology in niche theory; generalists feed on varied features of the environment, give priority to exploitation, while specialists exploit optimally narrow environmental resources.

Resource partitioning theory (Carrol 85) proposes that as markets increase, large generalists move to the center of the market, due to economies of scale, freeing peripherial resources for specialists to develop.

Carrol & Swam (01) supported the theory in the brewery market.

Population dynamics (Carrol & Dela 82) offer that given a population, previous founding or failure signal opportunity or threat to potential entrants and the effect is informational, however it has not been well supported empirically.

Density is the number of orgs present at a given time in the population.

Density dependence argues that at low densities the increase of density increases legitimacy in turn increasing resources available to the population resulting in a mutualistic effect.

However, at high densities, competition decreases legitimacy reducing the resources available to the population resulting in a competitive effect.

Competitive and mutual effects are added in the main prediction of density dependence.

H&F (89) found a curvilinear inverse U-shaped effect of density on births.

B&P (95) found a curvilinear U-shaped relationship of density on deaths.

Hannan et al’s (95) study on the automotive industry demonstrates range differences between legitimacy effects which are earlier and on a larger geographic scale as compared to competition.

ECOLOGY

 

Organizational Economics, A Review (2 of 2)

November 11, 2011 § Leave a comment

Economist identified three sources of principal-agent problems as moral hazard, adverse selection and asymmetric information (Akerlof 70; Spence 73; Arrow 85).

The delegation of decision making authority is problematic because interests diverge and the principal is unable to monitor the agent without cost.

The theory explores the issues of controlling and monitoring for the alignment of interests (Dalton et al, 03).

However, agents develop power bases and owners become dependent on expertise.

Labor wields power through union activity, strikes and slowdowns.

Individuals interfacing with suppliers and regulatory agencies also gain power.

Hickson et al (71) made three propositions about power based on Emerson’s (62) definition: 1. If you can cope with uncertainty, 2. Have low substitutability and 3. Have high centrality, through pervasiveness (degree) and immediacy (affect) then the greater the power.

 

Criticisms of governance models is the asocialized view of the actor as self-interested, atomistic, market oriented and uninfluenced by social relations. There is an unrealistic view of motivation as primarily financial gain, however behavioral research shows individuals are also motivated by things such as status and community (Hirsh et al, 90).

Guarding against opportunistic behavior can stifle initiative, creativity, entrepreneurship and innovation within firms (Davis et al, 97).

Critiques led to a more socialized version of agency theory on whether incentives have more symbolic than economic value, whether demographic similarities is a true determinant of incentives, and whether increased board control is balanced by the social influence of management (Westphal Zajac 94,98,02).

 

Resource based view is a competence based model that asks why firms are different and answers because firms own specific rents.

Penrose (59) first had the idea of resources shaping firm behavior and org growth over time.

RBV assumes markets host imperfections and was developed in response to structure-conduct-performance and firm performance in industrial economics (Bain 50; Porter 80; Barney 86).

RBV focuses on the continuing search for rent and ways that unique resources can be deployed in changing circumstance (Rumelt 74).

RBV argues that attributes of the firm that are hard to copy drive performance and competitive advantage (Rumelt 84,87).

Resources of interest are valuable, rare, inimitable and non-tradable (VRIN) (Barney 91).

 

There is a strong epistemological criticism that RBV is tautology (Priem Butler 01; Williamson 99).

The existence of resources is based on differential performance which is then used to predict …performance.

The view does not address when a resource is crucial if everything has a unique resource and more resources are always better than less.

Finally, the theory ignores the environment which weakens any predictions on developing resources that may become obsolescent with environmental variation.

 

Dynamic capability research explores how firms build and sustain competitive advantage in dynamic markets.

Dynamic capabilities derive from managerial processes and competence only generates rents if based on routines difficult to imitate and heterogeneity is an outcome of Schumpterian competition (creative destruction) (Teece Pisano 97).

Dynamic capability has a strong affinity with learning perspectives, sustained competitive advantages depend on effective manipulation of knowledge sources.

 

Eisenhardt & Martin (00) explained dynamic capabilities by its contrast to RBV:

  • RBV assets purchasable, DC assets deploy and recombine
  • RBV rents assets, DC rents transformation
  • RBV inimitable resource, DC inimitable processes
  • RBV specific assets, DC specific skills, acq, learning
  • RBV assets valuable, DC assets inimitable
  • RBV no isolation of rents, DC isolation of rents
  • RBV vs. SCP, DC vs. TCE

ECONOMICS

Organizational Economics, A Review (1 of 2)

November 10, 2011 § Leave a comment

ECONOMICS

Org economics began with Coase’s (37) challenge of economic assumptions of perfect markets.

Coase asked why are there firms if markets are efficient and if firms could be more efficient how is the market not one huge firm?

The common assumptions of org economics are profit maximization, bounded or perfect rationality and that competition is the major driving force. There are two major paradigms of organizational economics.

Governance models focus on the exchange dynamics of actors and consist of transaction cost economics (Will 75), agency theory (Jens & Meck 76) and property rights (Hart 89).

Competency models focus on internal factor of differentiation such as the resource based view (Penrose 59), dynamic capabilities (Teece 84) and industrial organization (Porter 79).

Behavioral theory of the firm is an info processing perspective (C&M 63) that uses cognitive constructs at the org level such as goals, expectations and choices constructed by processes where individual cognitions are in relationship.

The Carnegie School led by M,S&G (58) introduced bounded rationality to explain limited info processing abilities that lead to quasi-resolutions of contradicting goals made compatible by local rationality, satisficing, and sequential attention to goals.

Rules, programs, schedules departmentalization, hierarchy, delegation and micro-coordination are coordination mechanisms organizations use to increase info processing. Organizations group tasks to minimize coordination, or transaction, costs and focus on efficiency.

Transaction cost analysis is an open rational system model studying orgs at the ecological level whether to make or buy a material or product.

In transaction cost economics there are two main governance structure, the market and the organization.

Transactions, the unit of analysis, are exchanges negotiated by contracts where parties are assumed to operate in self-interest.

Transaction cost economics has two key behavioral assumptions 1. Bounded rationality prevents the ability to see all possible consequences of the contract and 2. Opportunism prevents the possibility of relying on promises.

However those two factors alone are not enough to prevent proper contracting if the market operates with perfect information and competition. Williamson formalized three conditions that prevent reliance on contracts: 1. Uncertainty regarding unfolding events pertaining to the contract, 2. Asset specifity where the investment required for a contract is tied to it and 3. Frequency of the transactions is expected with regularity.

Market failures framework explains Williamson (85) fundamental transformation that predicts situations where bringing exchanges into the firm is better than leaving them in the marketplace.

In situations where exchangers have good opportunities to cheat and there are few exchangers to choose from it is better to bring the exchange inside the organization.

Freeland’s (00) seminal example is of GM and Fischer Body who made a big investment to supply GM.

Fisher Body made the investment and GM’s difficult in replicating the investment rapidly and cheaply elsewhere led GM to acquire Fischer Body. Organizations supplant long-term open contracts among exchange partners, replaced by employment contracts where people sell the promise to obey command (Commons 24).

A criticism of transaction cost is that it only explains static arbitrage, not the dynamic emergence of a firm and has no predictive power regarding the performance difference between firms.

There are claims it overestimates the power of hierarchical controls and incentive systems and underestimates the extent economic behavior is embedded in a web of social relations (Milgrom Roberts 88; Uzzi 97).

Opportunism has been critiqued as an unnecessary assumption and questioned whether an independent cause or a consequence of context (Conner Prahalad 96; Ghoshal Moran 96).

Agency theory focuses on conflicts of interest intrinsic to corporate governance typically between principal and agent (Barney Hesterley, 96).

Positive agency theory is a theory of firm ownership capital structure that examines the power and politics of corporate control, assuming the rationality of actors and constraints of real governance situations (Jen & Meck, 76, Eisenhardt 89).

Property rights include ownership and control not just the principal-agent problem (Alchian Demsetz 72, Hart 89).

Agency theory claims firms do not have unity of action and that political arenas generate asymmetric info because principals and agents are boundedly rational, self-interested, opportunistic and risk averse (Allison 71).

ECONOMICS

Hierarchy and Boundaries, A Review

November 7, 2011 § Leave a comment

HIERARCHY AND BOUNDARIES

Fayol’s (1919) administrative theory is a guideline for structures and relationships.

Administrative theory is a guideline for decision-making that uses a formalizing rationalization and “top down” approach where jobs are antecedent to the worker.

Administrative theory was attacked as truisms or contradictory statements.

Bureaucratic theory by Weber (47) introduced an administrative structure with rational-legal authority where a belief in the legality of normative rules gives the elevated the right to issue commands.

Rational-legal is supplanting traditional authority due to the modern state, capitalism, and its technical superiority. Bureaucracy has subdivision functions that owner-managers originally did themselves such as the existence of administrative staff.

Rational Decision-Making by Simon (76) focuses on processes of goal specificity, formalization, and rational decision-making.

Simon proposed “administrative man” who pursues self-interests, though he doesn’t always know what they are, aware of some possible decision alternatives, but is willing to settle for an adequate over optimal solution.

Organizations simplify support by restricting ends so goals can be delegated, simplifying decision-making for participants.

Hierarchy is a centralized communication network promoting consistency of decisions and activities.

Hierarchy helps us understand how decisions of individuals and organization can be directed toward ultimate organizational goals.

Rational systems perspectives of organizations improve efficiency through division of labor, reduced transaction costs, more efficient information processing, and more effective monitoring.

Organizations help monitor and give incentives to agents doing coordinated, cooperative work.

Cooperative situations involving complex tasks give rise to hierarchical structures(Scott 03).

Mintzberg (79) states, “Every organized human activity gives rise to two fundamental and opposing requirements: division of labor into various tasks to be performed, and coordination of these tasks to accomplish the activity.”

Weber (57) noted hierarchical structure position implies roles with associated bases of power and legitimacy.

French & Raven (59) claim the “more legitimate the coercion the less it will produce resistance and decreased attraction”.

Pure hierarchical authority could be functional-exchange, associated with reward-punishment.

Boundary setting and boundary spanning consists of a collectivity bounded by a network of social relations governed by a normative order applicable to participants (Scott 03).

Boundaries are difficult to define because they are both diffuse and dynamic.

Hannan and Freeman (89) admit boundary definition of organizations is a variable that changes as technology and other environmental forces affect it.

Realists adopt boundary definitions used by participants and nominalist researchers choose boundaries that serve analytic purposes.

Network theorists look at interaction frequencies and locate boundaries where frequencies diminish.

Resource dependency theorists (Pfeffer and Salancik 78) focus activities that change when one moves across a boundary.

Most organizations define boundaries by differentiation of members and non-members via some criteria of recruitment. Rational theorists define organizational boundaries that contribute to organizational rationality.

CONTINGENCY. HIERARCHY-BOUNDARIES

 

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