Organizations Review

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Organizations ReviewThis book has become a classic in management science, or more specifically with the branch of the discipline that concentrates on explaining organizational behavior. It was published in 1958, and although the authors deemed it fit to deserve a second edition, it heavily bears the mark of its time. The word 'network' is not mentioned even once; instead, organizations are seen as hierarchical structures that impose strong pressures on the physical abilities, the motivational drives and the cognitive processes of individuals. Still, it remains an often quoted and useful scholarly reference.
The recognition of the role of organizations was relatively new at that time. Then, as now, organizations were everywhere. But as the two authors point out, "the ubiquitousness of organizations is not their sole or principal claim for attention. As social scientists we are interested in explaining human behavior." And organizations strongly shape behavior, giving birth to what was identified around the same period by David Riesman as "the organization man".
According to March and Simon, the classical view of the organization man oscillates between two extreme figures. The first is the reification of the employee into a mere instrument, capable of performing work and accepting directions, but not initiating action or exerting influence in any significant way. It is the model adopted by the first administration science theorists, who tried to derive optimal operation processes through time and motion studies or mathematical formulas. They postulated that there was any given task could be decomposed into simple elements and that there was a one best way to perform it. They believed that employees could be motivated through simple carrots and sticks approaches, and that there was to be a strict separation between conception and execution.
Perhaps their greatest failure, according to the authors, is that they did not confront theory with evidence. As a first foray into the field, "classical" administrative science barely deserves the title of science, and figures mainly as a bogus against which later approaches were constructed.
The second conception of the organization man that management science opposes is the vision of the rational agent developed by neoclassical economics. This is a much tougher nut to crack: for economics has developed its own approach to organization that now poses a formidable challenge to competing theories. The argument used by the authors is that perfectly rational decisions require computational abilities that are much beyond the power of the average individual, who is usually more driven by emotions and habits than by rational considerations.
Another argument that the authors can advance for their defense is that economics, as well as game theory, was much less developed at the time they wrote their essay. These disciplines still considered organizations as essentially black boxes that could be proxied by a representative agent. But to claim, as they do as their introduction to the second edition written in 1993, that their conception of bounded rationality has become more or less standard in modern theories of decision-making, seems to me as self-serving wishful thinking. Most decision theorists who have discussed bounded rationality have not really followed March and Simon's ideas about it. Rather, they have either developed expanded versions of rational choice theory to account for seemingly irrational behavior, or they have used the laboratory to conduct experiments on how people actually make decisions.
Perhaps the greatest achievement of March and Simon's Organizations was to provide a vocabulary through which they and others could develop organization theory further. Oppositions such as bounded vs perfect rationality, of satisficing vs maximizing, or of procedural vs substantive rationality, have now become textbook references. Other notions such as the absorption of uncertainty through delegation of power, of deadlines as a tool for fostering non-routine activities, or of the optimal level of stress that can provide the impetus for innovation, can still offer fresh insights to modern researchers. But any social scientist that would set himself the task of offering a general theory of organizations would come today with a very different book.Organizations Overview

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