In a broad intellectual tour, Phin Upham takes us through a set of theories of organizations using the core propositions contingency theory, resource-dependence theory, transaction-cost theory, institutional theory, and organizational population ecology. Using these intellectual frameworks be looks as organizational structure and its functions, authority, the environment. Lastly, Phin asks what, if anything, do organizations maximize?
Organizational theories are divided into many, many schools of thought. These schools posit different tenants, take on different simplifying assumptions, and use very different methodologies. Given that there are these divides in the field, it is an interesting question to ask why? One possible explanation is that they are not mutually contradictory, but that they deal with different sorts of organizations and that they are thus a jigsaw puzzle of the truth – neither contradicting each other nor stepping on each others toes. But while many organizational views focus on different domains, this happy state does not seem to hold (at least not always). It does seem that theories posit different, conflicting, or at least mutually exclusive, causal inferences, basic driving forces, etc. Thus, we might hope, different schools are each pursuing a different facet of organizations, viewing reality through differently colored glasses. Thus, one might argue that they each illuminate a different aspect of reality, perhaps sometimes overstating its importance, but nevertheless all valuable. This is a possibility I will discuss. Lastly, we could view this multiplicity of views, this quagmire of predictions, this tangle of tenants as indicative of some fundamental inscrutability of reality, some fundamental limitation of the field. If organizations are either 1) enormously, hopelessly complex or 2) societal embedded reality – where organizations exist – is not neatly or easily partitioned into cause-effect or static models (i.e. changes over time) then this provides a reason for the lack of unity of organizational theories. Is this quilt work of theories is a good thing for the field of organizational theory, or at least necessary for the field. Other fields, such as physics, for example, are neater and more universal with their theories (though complexities and conflicting theories emerge there too so it is hard to say whether this is a type of token distinction!). So we will explore “what is it about organizational theory that produces conflicting or non-complementary theories?” and “what effect does this have on the field?”. While each of the above points could be a book (or a library of books) I will attempt to begin an exploration into these questions. While answering these questions, I will draw on contingency theory (Thompson, Lawrence and Lorsch), resource-dependence theory (Pfeffer, Burt), transaction-cost theory (Williamson), institutional theory (principally Selznick, Scott, Meyer and Rowan, DiMaggio and Powell), and organizational population ecology (Carroll and Hannan) in order to attempt to reify these theoretical considerations with specific examples.
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Phin Upham has a PhD in Applied Economics from the Wharton School (University of Pennsylvania). Phin is a Term Member of the Council on Foreign Relations. He can be reached at phin@phinupham.com