Management Sample Case Study on Organizational Theory

Organizational Theory

Organizational theory gives insight into the process of organization and how organizations should be studied. It states an organization’s aims and activities and the utilization of knowledge in the interaction of individuals within the association. It is based on four constructs; modernist, critical theorist, symbolic interpretivism, and postmodernist. These perspectives differ on how organizational management should be approached. Computing services solutions portrays numerous organizational traits that are herein discussed. These include; communities of practice, institutional logics, organizational culture, managerialism, communicative rationality, the agency problem, technological imperative, and organizational effectiveness. This paper discusses how the four perspectives have been used by Computing Services Solutions in their quest to revamp their business.

Organizational culture and Institutional Logics

The organizational culture is a scheme of pooled beliefs and assumptions governing the behavior of people in an organization. It is also the habitual way of making decisions and presenting oneself. For Computing Services Solutions, the culture involves management making decisions and then implementing them without consulting the employees. Management assumes that the decisions it makes will be beneficial to the company as well as employees. It is well aware that employees have to be brought onboard the mission statement and takes measures to do so. When the company is faced with change such as in this case with the mergers and acquisition and a change in the business strategy, management looks to culture to inform the change and adoption of the new vision. Some of the beliefs are; technology empowers employees, learning communities are beneficial, and that leadership is key to success. For the company, the culture is strong enough and is being used to respond adequately to the changes.

Institutional logics is similar to organizational culture, institutional logics is the socially constructed values, rules, and material practices by which individuals shape their social reality. For Computing Services Solutions, this includes forming communities of practice around critical subject areas.

Modernists characterize culture as a variable that can elicit change by getting people to agree. Computing Services Solutions management is objective and rational in the way it approaches the change initiative. It attempted to bring a change in culture by establishing a unified culture of success. Management institutes rules and guidelines by which the organizational culture was to be achieved. This was done by reorganizing the office layout to create proximity, openness, and accessibility. It also entailed creating a knowledge management culture. This encompassed: establishing a unified corporate culture, empowering communities of practice, supporting knowledge workers, and having “knowledge champion’ accreditations.

The critical theorist posits that organizational culture cannot be controlled or easily controlled by management. Computing Services Solutions recognizes that culture is ideological and attempting to control it is manipulation. Management thus lets employees dictate the culture by establishing the intranet and communities of practice through which employees can establish their own culture. Management, however, fails in this endeavor as it institutes unpopular measures such as making content submission compulsory in the communities of practice. The culture management drive leads to the lack of consensus on whether the knowledge capture incentives worked. Management should focus on improving management procedures and processes rather than managing culture.

Symbolic interpretivists realize that culture is real, but recognize it only when they understand it and deem it reasonable. In Computing Services Solutions, both the management and employees try to construct their own culture based on their intuition and emotion. Management prioritizes the initiative of instituting a knowledge management culture. They thus put knowledge facilitation in place. They appoint a management representative who had credibility, change the office layout to allow for proximity and sharing, and establish an intranet that accelerated the location and delivery of the knowledge to employees. On the other hand, employees have their own culture and continue with it, leading management to question whether their knowledge management incentives had the desired effect.

Postmodernists, however, stress that organizational culture is unreal. To them, the notion that organizational members share culture is an illusion. Under the postmodernist approach, therefore, the attempt by Computing Services Solutions to institute a knowledge management culture is pointless. Postmodernists seem to be vilified as management encounter difficulties in their attempt to force a culture upon the employees. Even with the rewards of promotion, there was still controversy on whether the knowledge capture mechanism worked, reinforcing the belief that the company might not have a culture.

Communities of Practice

A community of practice is defined as an assortment of persons who participate on an ongoing basis in some shared endeavor. They emerge in response to a common interest and provide an accountable link between the individual, the group, and the broader social order. They are characterized by a commitment to shared comprehension and experience over time. The Computing Services Solutions communities of service are formed around critical subject areas where experiences and best practices are shared. They enable lessons to be learnt and knowledge shared, and also offer a directory of expertise enabling workers to publish their areas of expertise and competencies.

Modernists deem communities of practice key to improving performance as ‘organizational memory.’ They provide a direct link between learning and performance. Computing Services Solutions management recognizes the need for employees to take collective responsibility for managing the knowledge they need and offer a directory of expertise that enables workers to learn from one another. By integrating these communities with the intranet, they allow for successful knowledge creation, dissemination, and application. By decentralizing the organizational structure, the employees are responsible for what they share and learn. The success of these communities is evident via the intensification of knowledge capture, sharing and reuse as evidenced by the number of knowledge gurus being accredited.

Critical theory stipulates that communities of practice are used by elites to exploit workers. This is through the furtherance of popular discourse on issues. Computing Services Solutions management attempts to channel power into practice and discourse by dictating how these communities will operate. Management does not recognize that learning takes place in different trajectories and influences the content and discourse of the communities by making content submission compulsory. By appointing a management representative who is popular with the other workers, management seeks to further the knowledge sharing culture within the communities. The decision is a move to exploit the communities for senior management benefit.

Symbolic interpretivists opine that everyone belongs to a community of practice, unless they are socially isolated.  Communities are not restricted by formal structures. Besides the formal communities instituted by management, Computing Services Solutions already has informal communities of practice. The management representatives are popular with the other workers because they were promoted from the ‘shop floor’ where they had interacted with the other workers. These interactions endeared them to the rest of the workers hence earning them credibility. The Chief Operating Officer could not connect with the workers personally as he did not belong to the same informal communities like them. In the company, therefore, there are the formal communities created by management and the socially constructed communities based on intuition and emotion.

The postmodernist approach states that the shared repertoire reflects inequalities within communities. In the company, there are positions of subordinate and superordinate authority coded and legitimated through the implicit and explicit use of language. Management, for example, forces community members to submit content and has to implement rewards in order to assure participation. Management also institutes middle and lower level managers as the heads of the communities. If Computing Services Solutions were egalitarian, some members would not have to be forced to participate, or have decisions made by some middle-level managers appointed by senior management

Communicative Rationality

Also referred to as the communicative reason. It describes rationality as a key ingredient of successful communication. It dwells on the norms and actions that need clarification for consensus to be reached. Its main goal is to transform knowledge about personal conduct in the realm of moral reasoning. It thus refers to the utilization of knowledge in action and language. Computing Services Solutions management recognizes that workers need managers with more credibility to rally them towards the new vision and thus appoints management representatives promoted from the ‘shop floor.’ Moreover, it is easier and more rational to have the workers disseminate knowledge among themselves hence the creation of the communities of practice as well as the launch of the intranet for easier sharing.

Modernists identify communicative rationality as an origin of competitive advantage. Computing Services Solutions management utilize knowledge innovatively through exportation and to search for novel options. The company relies on the reality of knowledge in action. The knowledge is rational, collected from the entire industry, well analyzed, and utilized to inform their evaluation and renewal of the company’s business strategy. Management also uses process maturity models to inform the use of the knowledge management strategy. Aided by the procurement of appropriate knowledge IT systems, the management is able to institute and popularize the model that has tangible benefits in the end. Lastly, management creates guidelines and rules on how this knowledge will be collected, disseminated, and utilized. Management even institutes a feedback mechanism to measure how effective the company has been in sharing the knowledge. The feedback mechanism, however, draws mixed results.

Critical theorists use an inductive process of observation and interpretation to make a subjective outlook of the organization. For Computing Services Solutions, the communicative rationality is not real as management decides what to communicate in the furtherance of their objectives. The decision to engage a management representative was informed by observing the organizational culture and realizing that the workers would best rally towards the new vision by having a credible superior talk to them. Management thus manipulates the resources it has to communicate a culture that the employees have no say in developing. Moreover, rationality alone does not result in cooperation. Management had to institute a reward scheme and also make compulsory some things such as content submission.

Symbolic interpretivists are guided by intuition and emotion. For communicative rationality to have been real, management should have left employees to their own to comprehend the issues facing them, rather than articulating it to them. By communicating amongst themselves and learning from each other, employees were better positioned to understand the new vision and decide whether it was good for them. The use of the intranet with searchable content and the communities of practice was also a step towards communicative reality. Management intuitively let the employees share the knowledge amongst themselves. It also recognized that employees would be better geared towards sharing the knowledge by having a popular management representative drawn from their ranks do the talking. It is, however, unclear whether communicative reality was achieved as the feedback mechanism bore mixed results on the outcome of the knowledge sharing culture.

Postmodernism rebukes the notion that communicative rationality is real. For consensus to occur, intellectual capabilities, natural resources, and physical inputs have to be used. Computing Services Solutions instituted several IT systems to collect, interpret and disseminate knowledge within the organization. Management also required the help of intranet with searchable content to accelerate location and delivery of knowledge to employees. Moreover, they had to let employees decide the suitability of the new vision for themselves in the communities of practice.

Managerialism

It is the belief in a bureaucratic organizational construct where the enterprise is tightly managed through layers of hierarchy. It dwells on the notions of managerial power, control, and conflict. Computing Services Solutions believes that leadership is a key to success. As such, the Chief Operating Officer established new ways to connect with his staff with his leader development vision.

Modernists believe that power is real, and organizational studies inform enterprises on how to best maintain their authority within organizations. Computing Services Solutions has bureaucratic channels that are geared towards legitimizing authority and improving organizational efficiency and effectiveness. These hierarchies of power begin with the senior management, then middle-level management, and finally lo-level management. Top management focused on major strategic decisions while middle and lower level managers were delegated decision-making authority over issues like communities of practice.

Critical theorists analyze the exploitation and alienation of workers by managers. Computing Services Solutions managers maintain legitimate, coercive, reward, and expert power that they use to influence employees. They utilize coercive power where a management representative of the same stature as the employees is appointed to rally workers towards the new vision. Reward power is used where promotion requires one to be a knowledge guru, and rewards are implemented in staff performance measurement plans. Management also has the power to force employees to do things, for example, making it compulsory to submit content in the communities of practice.

The postmodern construction rejects the reality of bureaucracy as central organizational effectiveness. To them, power is a contested and shifting network that shapes all relations and cannot be reduced to any single dimension. While management has reward power and can force employees to participate in the communities of practice, they still require the employees to decide for themselves what is right. They cannot strong arm the employees to accept the new vision, implying that the employees also hold some power.

Technological Imperative

It is the belief that novel technologies are inevitable and pertinent to organizational performance and as such should be embraced and developed. Technology is an objective reality that exists independent of our knowledge of it. Computing Services Solutions has a lot of technology, including the new internet platforms. The firm also procures some knowledge IT systems, databases, and other process flow systems.

Modernists believe that technology is a reality and is a consequence of management strategic choice as well as organizational structure. In the case study, the Chief Operating Officer stresses the importance of new internet platforms such as Web 2.0. Moreover, ICT systems are used in knowledge focus, learning communities, and in the promotion of the organizational culture.

Symbolic interpretivists regard technological changes as being socially engineered. They reject the modernist notion that technology determines the organizational design and is developed according to a particular logic. For Computing Services Solutions, it was imperative that the company introduce the new technology, not because the industry required it, but because the social forces (workers and clients) necessitated it. The intranet was necessary for the workers to use it to learn from each other and share knowledge.

Critical theorists acknowledge that technology exists but see it as a threat to workers. To them, employees have turned into machine extensions, and have no control over the production process. Technology is thus a subversive force detrimental to employee security. For Computing Services Solutions, it is evident that the organization is technology driven. The Chief Operating Officer argued that technology empowered employees in the information age. The communities of practice would not exist without the support of ICT systems. The IT systems is used to capture solutions to commonly encountered client problems, a job previously done by employees. The IT systems is also used in creating awareness of context specific knowledge, and without it only a few employees could be exposed to the tacit and explicit knowledge sources.

The postmodern conception is that technologies are used to control workers, and in cyborganizations such as Computing Services Solutions, employees serve technology instead of technology serving them. The change mechanism was centered on the new technology, and management initiated measures to ensure that the employees were on board without question.  The lessons learnt as knowledge are submitted through automated forms and used in performance measurement plans. Technology is thus used to monitor and control employees.

Organizational Effectiveness

Refers to how effective an enterprise is in meeting its goals and objectives. The objectives of Computing Services Solutions were to fully meet client expectations for services and offer consultancy services to the Australian government. Moreover, it wanted to improve performance, innovate, and gain a competitive advantage.

The modernist approach recognizes the reality of knowledge and develops guidelines and rules that ensure organizational effectiveness. These guidelines included establishing a unified corporate culture, empowering communities of practice, supporting knowledge workers, and instituting ‘knowledge champion’ accreditations.

Critical theorists opine that for efficiency to be achieved, the truth has to be unmasked and bureaucratic systems broken down. After instating the guidelines outlined, Computing Services Solutions was able to achieve significant tangible benefits. These include: knowledge capture, reuse and sharing, efficiency savings of $2.5 m, reusability and reduction in reinvention, and a rise in customer satisfaction.

Postmodernists challenge what the organizations goals and objectives are. As such, it is hard to decipher how effective an organization is in meeting disputed goals.

Agency Problem

Refers to a conflict of interest between management and stakeholders. The Chief Operating Officer acts as an agent for various stakeholders, and as such are required to make decisions that maximize stakeholder satisfaction.

In the modernist construction, the reality is that as an agent of shareholders, management has a duty to maximize shareholder wealth. Decisions and company actions should thus be seen to do this. The Chief Operating Officer recognizes this and takes the necessary steps, beginning with an evaluation and renewal of the business strategy. He argued that the knowledge strategy was important for the company to achieve its wider mission: “To maximize technologies and develop effective services that maximize return for investment….”

The postmodernists argue that shareholder wealth maximization is not the primary concern of organizations. Management was promoting inequality and abusing power by imposing their will on the employees who are seen to have no decision-making authority whatsoever.

Conclusion

Organizations exist and persist through diverse perspectives. The concepts and theories utilized in analyzing factors of organizational theory also differ and yield different outcomes when utilized. It is thus challenging to define fully these perspectives or gain a single construct as organizations are dynamic and change over time.