Contingency Theory: Characteristics of Viable Organizations

The viable organizations we are projecting for the future will have reasonably mastered the ability to organize work that ranges from basic scientific endeavors to highly standardized and routine production. They will have learned to operate all over the globe and to link these operations together. They will be able to move repeatedly into new product lines with a sure-handed grasp of markets and technologies. They will, in this way, be able to organize effort toward the achieve-ment of human purposes that are not now even conceived. Such “multi-organizations” would be able to undertake and effectively perform assignments in what is currently defined as the public, as well as the private, sector. They could engage in tasks that are now impossible to perform.

The process of creating such potent organizations will generate a good deal of experimentation and ferment. We will probably see a period in which our rapid technological change is matched by rapid organizational change. After these organizations have taken shape as highly differentiated and highly integrated entities, however, the pace of organizational change can be expected to slacken, even while these same organizations speed up the rate of technical change.

For the individual, life in these multi-organizations will not necessarily resemble the stereotype of the grey-flanneled organization man in the crystal palace. Instead the great diversity of required roles can give meaningful scope to the potentialities and career aspirations of a fairly wide variety of people. Procedures should be more effective in helping people find the succession of assignments that meet their developing needs and personal abilities. The organization will serve as a mediator or buffer between the individual and the full raw impact of technological change by providing continuing educational opportunities and various career choices. The multiorganization will be highly rationalized, but not in the old- fashioned sense of everything being programmed into rules. The reliance on detailed programming will vary greatly among the different parts of the organization. The differentiation of parts of the organization will guarantee the continuing existence of conflict, but the aura of rationalization of the new type can make these conflicts less personalized. Since more diverse opportunities will be available, there will be less justification for strictly person-to-person fight- ing for career survival, with its brutality and human waste.

We may find a division of labor based more on cultural differences emerging in these organizations. The different countries have traditionally divided labor partially on the basis of control of raw materials and, more recently, on technical and organizational capabilities. These sources of an international division of labor may be supplemented in the future by one based on differences in values. Basic cultural values are among the slowest-changing aspects of human life. These values prepare people to play some occupational roles better than others. Perhaps our multi-organizations will be able to build on these differences, to design a division of labor around them, and to reduce the present strong trend toward a universal culture of industrialized man.

We have been presenting the ways in which the emergence of multi-organizations could make it possible to achieve results that most people would consider desirable. Clearly, these organizations also have potentials for evil. In many current works of literature and art the organization is cast as the villain that oppresses the free spirit of the individual. There are undoubtedly certain real dangers that the development of multi-organizations could result in a greater concentration of power in a few over the working lives of the many. One important guarantee against such misuse of the multi-organization seems to lie in the study and understanding of their functioning. Such understanding can contribute to an informed public opinion, which is the foundation of any effective countervailing power, whether it be channeled through labor unions, government, or some new institutional arrangement.

Perhaps another important countervailing power resides within the organization—its leadership. Too often those who criticize existing organizations and are concerned about their constraining effects on individuals seem to suggest that organizations have a will and purpose of their own. Even the best-designed organization, now and in the future, is but a tool, albeit a complex one, for the achievement of human pur- poses. Organizations are and always will be run by people. They are infused with purpose and meaning only through the imagination and will of people—by acts of leadership. As Chandler emphasized, organization design and structure must follow from and be subservient to strategy—human purposes formulated into organizational goals.12 It is by these revitalizing acts of leadership that organizations remain useful tools, not stultifying masters. Leadership, then, is a crucial issue, because it provides one safeguard against the risks of multiorganization. Since this book has been primarily addressed to the managers who are or will be leaders of these organizations, we shall conclude by examining the implications of this study for leadership behavior in the effective organization of the future.

Source: Lawrence Paul R., Lorsch Jay W. (1967), Organization and Environment: Managing Differentiation and Integration, Harvard Business School.

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