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the case for comparative organizational analysis

One of the key insights I picked up from Jerry’s book (see related posts here, here, and here) is that the large organization is no longer the central unit of society. By saying that a “society of organizations” is dead, Jerry is tackling Perrow’s thesis that large organizations can explain pretty much everything we see in social life. Here is a bit from Perrow’s 1991 paper “A society of organizations.”

I argue that the appearance of large organizations in the United States makes organizations the key phenomenon of our time, and thus politics, social class, economics, technology, religion, the family, and even social psychology take on the character of dependent variables. Their subject matter is conditioned by the presence of organizations to such a degree that, increasingly, since about 1820 in the United States at least, the study of organizations must precede their own inquiries….[I]n my grandest proposition I argue that organizations are the key to society because large organizations have absorbed society. They have vacuumed up a good part of what we have always thought of as society, and made organizations, once a part of society, into a surrogate of society (725-726).

He clarifies further (providing more fuel for Jerry’s fire):

By “large organizations absorbing society” I mean that activities that once were performed by relatively autonomous and usually small informal groups (e.g. family, neighborhood) and small autonomous organizations (small businesses, local government, local church) are now per- formed by large bureaucracies. This is the “pure” case of absorption – the large organization with many employees. As a result, the organization that employs many people can shape their lives in many ways, most of which are quite unobtrusive and subtle, and alternative sources of shaping in the community decline (726).

It is this last aspect that has changed the most. If public corporations have been broken up into their constituent parts, the large organization (i.e., the large employer), no longer exists as it once did. What is it replaced with?  While we know that businesses have become disaggregated into smaller units of larger supply chains, like interchangeable Lego parts, the characteristics of those organizations are fairly unexplored.

This is one reason why I think now is the perfect time to resuscitate comparative organizational analysis – the study of diversity in organizational forms and types. If organizations are experiencing dramatic changes in form (and if it’s true that the large organization no longer dominates), then we need to be more theoretically focused on explaining organizational heterogeneity. Dave Whetten, Teppo, and I make the case for this kind of comparative organizational analysis in the introduction to a new volume of Research in the Sociology of Organizations. Here is an excerpt from the introduction (downloadable here).

This volume is an attempt to reinvigorate interest in comparative organizational analysis. The tendency of contemporary organizational scholarship is to either treat organizations as all the same or as all unique (McKelvey and Aldrich 1983). The former approach is associated with generalizable theories that abstract away from the organization as a site of study and setting of interest, and the latter approach is associated with efforts at thick description and less generalizability.  Comparative analysis is a mode of study that sits somewhere in the middle of these extremes, developing theoretical explanations for variation in organizational behavior.  Comparative analysis is situated between inductive and deductive reasoning, theoretical abstraction and empirical description, and the organization and its context. Comparative work inherently focuses on the concurrent needs to theorize and understand differences in organizations and to identify the contextual limits of generalizability, thus allowing for the unexpected to move theory in new directions.

While comparative approaches have always been a part of organizational sociology, and in fact we will argue that they were foundational to the subfield, they have nonetheless been far less prominent in the last three decades.  The increasing sophistication of quantitative methods as well as the rise of more environmentally-focused theories of organizations in the late 1970s, have shifted the focus away from comparative analysis and the study of organizational heterogeneity.  The tendency instead has been for scholars to advance theories that prioritize explanations of homogeneity (e.g., DiMaggio and Powell 1983) or at least that are generalizable across cultural, industrial, geographical, and temporal contexts.  Indeed, the tendency has been to wipe away difference altogether and to prioritize abstraction over contextual specificity.  While we certainly agree with the idea that generalizable theories are valuable and contribute to the creation of dominant paradigms (Pfeffer 1993), we are concerned that the radical swing away from comparative analysis has caused organizational scholarship to lose some of its richness and even its organizational focus.  Lacking the methods and theories to describe and explain enduring organizational differences has distanced our research from the vast diversity of organizational life that characterizes the empirical world in which we live (although see Schneiberg and Clemens 2006). More importantly, the lack of a comparative program of organizational research has weakened our ability to explain how organizations differ from other collective entities in society.  While grand patterns and pressures for homogeneity certainly exist in organizational life (Drori et al., 2006), nonetheless organizations are also “purposefully constructed” and collective action is realized in an ever-growing variety of social forms (Coleman, 1991: 8). Understanding this variety of organizing and organizations is central for organization theory.

Thus, although we get there from very different starting points, I think Jerry’s thesis supports the view that an important undertaking of organizational theory is to explain variation in organizational life. Rather than just focus on “large organizations,” as Perrow was keen on doing, we should also be intent in explaining organizational heterogeneity and the consequences of this diversity for other phenomena.

Written by brayden king

September 21, 2009 at 10:44 pm

Posted in books, brayden, just theory

5 Responses

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  1. That above link did not seem get me there — so here’s a link that goes to all essays and papers in the volume: http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=4794D52FCC05D5D6AD2CEB7AEDAE2578?containerType=BookVolume&containerId=15001808

    Intro essays by Dick Scott, Howard Aldrich, Dave Whetten. And then some great empirical and theoretical papers by Lacey & Fiss, Chen & O’Mahony, Lizardo, Wohlgezogen & Hirsch, Rojas, and Caronna, Pollack & Scott. If your university has an institutional subscription to Emerald, you should be able to just download the essays.

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    tf

    September 22, 2009 at 1:59 am

  2. Yikes, talk about eerie–this was going to be one of the themes of my final post for orgtheory. Brayden’s supernatural powers are estimable.

    The field’s relative inattention to issues of design and structure in the past couple of decades has been highly unfortunate. Many business schools required organization design courses 25 years ago; almost none do now, at least in North America, which is part of why organization theorists migrate to strategy, where the jobs are protected by required core courses. A few of us valiantly spend a session of the core on functional vs. divisional vs. matrix forms, but this has almost no conceivable relevance to the work lives of our students.

    Arguably, the study of comparative organizations has migrated to two other fields. Financial economics has absorbed corporate governance (the study of the relations among boards, shareholders, and top management), which has a very comparative approach; it has also taken on compensation (how best to pay people to get them to do what the firm wants). In both cases, there is no fear of being prescriptive. And at the “enterprise” level, information systems (which goes under a variety of names in different schools) has taken over organization design in its own way, via ERP. (Everybody knows what ERP means, right?) If March and Simon’s main claim was that hierarchical bureaucracies are information processing and decision making structures, then ERP has largely taken on the functions of bureaucracy. That’s why Wal-Mart headquarters can automate merchandise ordering, employee scheduling, and even temperature control at individual stores from the mothership in Bentonville, while also tracking their supply chains to the ends of the earth.

    Meanwhile, we like to write neo-institutional exposees about how structures are de-coupled from the actual operations of organizations, adopted as cynical gestures to placate governments, investors, or other stakeholders. The potential presciptions from this are limited. Where is our “Museum of Organizational Natural History” with fossils of the diverse forms that have thrived at different times? Where is the thoughtful taxonomy of forms that McKelvey called for back before the orgtheory bloggers were born? (Note to ecologist friends: “newspaper” and “brewery” are not organizational forms, as there are many ways to organize to produce newspapers and beer.)

    A fruitful example of diversity: mutual funds. Fidelity is a free-standing private company 49% owned by the Johnson family. Vanguard is a traditional mutual owned by those that invest in its funds (like State Farm). Janus is a subsidiary of a Canadian financial conglomerate. Legg Mason is a public corporation. CREF is a non-profit organization. All are huge, long-lived, and pretty successful by the measures that matter for their industry; all take diverse approaches to fund management styles, levels of vertical integration, etc. Why hasn’t the best form won, inducing the others toward isomorphism?

    Later I’ll post about my secret future agenda for organization theory and rescuing neo-institutionalism from irrelevance.

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    Jerry Davis

    September 22, 2009 at 1:56 pm

  3. Great, my mind reading powers must be improving!

    There are, of course, many branches of neo-institutional theory, not all of which seem as irrelevant to the issues at hand. In my mind, the work of someone like Marc Schneiberg has tons of implications for the current era. He’s right there with you in conceptualizing forms as distinct ways of organizing (rather than thinking about form as equivalent to industry). His 2007 paper on “paths not taken” should be one of the founding papers enshrined in the Museum of Organizational Natural History.

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    brayden

    September 22, 2009 at 2:12 pm

  4. Thank you, Jerry, for the overt swipe at the ecologists –and for the slightly more subtle knock on one of the least useful concepts in the natural history: isomorphism.

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    REW

    September 22, 2009 at 5:46 pm

  5. […] Research in the Sociology of Organizations (Vol. 26) edited by Brayden King, Teppo Felin, and David Whetten […]

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