Managing Organizational Demands: Organizational Compliance

Management of environmental demands does not in itself imply that the organization should rush to comply with them. There are times when compliance, although important for maintaining an immediately critical exchange relationship, may not be in the long-term interests of the organization.

Compliance is a loss of discretion, a constraint, and an admission of limited autonomy. To the extent that the focal organization is subject to successful external influence attempts, it places itself in a situation in which its long-term survival may be threatened. Kahn et al. (1964) found that persons who were influenced in their role behavior once, tended to be subjected to relatively more influence attempts. Thus, one’s vulnerability can increase as it is exploited. An organization is likely to confront additional interorganizational influence at- tempts after being influenced once. As a consequence, organizational autonomy may be lost progressively as behaviors and decisions are increasingly constrained by the context in which the organization operates. The power of the OPEC oil cartel grew in just such a manner. Although the cartel had been organized for years, it was not until 1970 that the first test of its power was successfully accomplished. The Persian Gulf countries and Libya made a few price increases; the United States State Department convened a meeting of the importing countries and they agreed to allow the price to rise, primarily because the OPEC move was interpreted as a threatened embargo. Emboldened by this success, the 1971 Tehran and Tripoli agreements were made, granting large increases in the price and setting the tone for diminished control by the oil companies (Adelman, 1972).

The fact that organizational behavior is constrained by the demands and influences of’ extemal groups and organizations has consequences both for the later actions of the focal organization and for the development and growth of influencing organizations. Moreover, influence attempts are more likely to be made when they have a greater probability of success. One indicator of success probability is the past history of influence attempts in the interorganizational rela-tionship. Organizations can, however, develop prior estimates of their expected success in interorganizational influence and use these estimates to decide whether or not they will make demands on the focal organization. To the extent that the discussion of factors affecting constraints on behavior is correct, then variables are also provided that can be used to predict when demands and influence attempts will actually be voiced. Influencing organizations will develop and will articulate demands, we would argue, when the factors are propitious for them to successfully influence their targets.

Source: Pfeffer Jeffrey, Salancik Gerald (2003), The External Control of Organizations: A Resource Dependence Perspective, Stanford Business Books; 1st edition

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