Problems in Environmental Enactment of Organizations

Although organizational decisions and actions are determined by the enacted environment—that set of definitions of the world constructed by the organization’s attention process—organizational outcomes can be affected by parts of the environment not noticed or heeded. There! are several types of problems that may arise in the process of enacting the environment which may adversely affect the organization’s adaptation to the environment and its prospects for continued survival and success. Problems may arise because the organization misreads its situ- ation of interdependence, or it misreads the demands being made on it. Organizations also face problems arising from a commitment to the past and from the necessity to balance conflicting demands. Each of these lcinds of problems will be considered in turn.

1. Misreading Interdependence

The first type of problem an organization confronts arises when it does not perceive correctly all the external groups it depends “on or the relative importance or potency of each. This is especially likely when new organizations are developing that are interested in the activities of the focal organization or when the focal organization itself enters a new field of activity. There are many examples of organizations which had difficulty because of a failure to recognize important external groups or to attribute enough potency or importance to certain groups. Certainly, the lack of concern with safety and pollution matters demonstrated by the automobile industry in the early 1960s and the subsequent problems the industry faced, illustrate well the type of problem involved.

Cordtz (1966) has nicely summarized both the problem and the consequences. Focusing particularly on General Motors, Cordtz points out that “G. M. officials . . . are products of a system that discourages attention to matters far outside the purview of their jobs” (1966:118). Because of the insensitivity to the demands of various external groups and organizations for increased product safety, the automobile industry was “saddled with the one thing it most abhors: government instructions on how to build cars” (1966:117). Cordtz further provides evidence to indicate that there was some advance warning of coming problems, but that the company either put aside such warnings or was ignorant of them.

To a company with a sharp ear cocked, there have been two decades of warnings of possible trouble to come on safety. As early as 1946, a national traffic safety conference called by President Truman recommended that “motor vehicles should be progressively designed and constructed for safer operation and maximum protection from injury in an accident.” But the manufacturers—and G. M. most of all—concentrated on “safer operation” and for years ignored “protection from injury.” By 1949, the Indiana State Police and the University of California had undertaken independent studies of the nature and causes of injuries in auto accidents and discovered that many of the manufacturers’ assumptions about how to build safe cars were very questionable indeed (1966:206).

Subsequently, the automobile industry was also burdened with demanding regulations concerning the pollution produced by the vehicles being manufactured. One must conclude, after looking at a history of the industry, that the problems and demands were recognized, but the industry grossly underestimated the ability of the various organizations to mobilize public support and enforce their demands on the companies.

While the automobile industry is the subject of this particular example, few industries have completely escaped being caught by surprise when suddenly confronted by demands and influences of a group, or organization, which in reality had more power than was previously believed. In addition to misreading the potential potency of a particular interest group, organizations may have poor knowledge about their vast and often complex effects on the rest of the world. In many instances the activities of the organization actually have effects which contradict their own stated goals and purposes. Consider organizations involved in the control of drug abuse. One of the major problems of illegal drug use is that the expensive habit is supported through other illegal activities, such as robbery. Drugs follow the laws of supply and demand like other commodities. When a major police raid reduces the flow of drugs, the likely outcome is a rise in price. These higher prices translate into the addict’s need to commit more crimes to raise the additional funds needed to support a habit. To the extent that demand for drugs is inelastic, a reasonable assumption, restrictions in supply may actually increase the related crime activity.

Thus, there are two components to the first problem, misreading interdependence: Organizations may underestimate their dependence on, or the potency of, various external groups or organizations; and, organizations may not even perceive the complex relationships their activities have on other groups and organizations in the environment.

2. Misreading Demands

The second kind of problem occurs when a group or organization is recognized as being potent, but the focal organization misreads the criteria or demands being made. The misunderstanding frequently involves a response stressing greater efficiency and missing the point that the output itself is being questioned. This condition describes many American universities today. Whether rightly or wrongly, the products and services themselves have been called into question by organiza- tions and segments of the American population. During the antiwar rallies of the late 1960s and early 1970s, there were many Americans who believed that universities were training revolutionaries. Students themselves frequently complained that the universities were committed to the rigorous pursuit of irrelevancy. Budgets, enrollments, and alumni contributions fell, and universities characteristically responded by tightening managerial controls and reevaluating program costs, attempting to do the same things at less cost. Producing revolu- tionaries more efficiently was not what was being requested, and the relevance of irrelevant education was not increased by doing the same thing for less money. Demands for changes in output were read as demands for more efficiency.

Misunderstanding the requests being made of an organization arises from the mechanism of selective perception we have already discussed. Information filters leave out some information and alter other information; people in organizations focus on what they have been trained to notice and on those things relevant to their jobs. When problems originate outside the organization, subunits within the orga- nization will use these problems as opportunities to demonstrate their own capabilities, and the external problems are perceived in a form which supports the pet positions of groups within the organization. Accustomed to examining only certain information and limited in information, individuals attend to the subproblem they can deal with even when it is not the source of the difficulty. Thus, universities, which are well equipped ¿o provide cost-student data, defined the problems in these terms. Information about service rendered to various groups is less easily obtained. That which is measured is attended to, and that which is not measured is ignored. Most formal organizations generally have very good internal reporting systems, while they are relatively weak in attending to changes in the environment. It is, therefore, not surprising that the first reaction to organizational problems typically involves solutions focusing on efficiency dimensions, for fre- quently, that is about the only thing the organization can measure.

Organizations differ in the speed with which they notice changes in the environment. Few major shifts come about all at once, and ample cues indicate that important components of the environment are changing. The difficulty is that these cues may exist in a part of the environment that is not being watched, or that they may be filtered or • distorted in the process of being assimilated into the organizations’ information system. To the extent that information systems are closed and well structured, novel or different information is not as likely to be correctly perceived. Thus, the dilemma between structure and flexibility noted by Weick ( 1969 ) with respect to the organizing process is also apparent in the enactment and attention process—if the organization attends to everything, it will be swamped with information and will be unable to function; if the information system is so tightly structured that environmental changes are consistently missed, the organization will be unprepared to face threats to survival.

3. Commitment to the Past

A further limitation on organizational adaptation derives from a commitment to doing things a certain way. Organizations differ in their commitments to the past. Some become superstitious, believing that what worked in the past will work forever. Most build up traditions, mythologies, and rituals. More than mere psychological recalcitrance is involved in commitment. In many instances, the beliefs and successes of the past become entrenched in physical and managerial structures. When they do, they are nearly impossible to change. The railroads were not entirely surprised when trucks emerged as major competitors in the 1940s. But, the railroads were stuck with a commitment to fixed networks of track and were prohibited for a long time by regulatory authorities from diversifying. Sometimes commitments may be more a matter of preference than of necessity, as in the case of Henry Ford and his early commitment to providing only a single model and color of automobile.

Commitments build in the relationships within the organization. Changes which dislodge personnel or disrupt power structures are likely to take a long time to implement. From observations about the speed with which computer technologies were introduced into organizations, Whisler (1970) noted that an important source of resistance to change was the fact that some people would gain and some would lose as a result of the change.

John Tuthill, a former American ambassador to Brazil, learned about commitments to the past during an uphill battle to reduce the staff of the embassy (1973). Because of growing nationalism in Brazil, the ubiquitous American presence was becoming an irritation. Seeking to reduce a staff of over 900 personnel to about half that size, Tuthill sought approval from Secretary of State Dean Rusk in 1966. Although Rusk gave immediate approval, it took Tuthill three years to bring about even a 20 percent reduction in his office and another three years to achieve a similar reduction in the other United States missions. The greatest opposition came from the lower bureaucratic levels in Washington because these were the people who sent the instructions and chose the personnel to staff the foreign missions. The personnel that Tuthill wanted to cut were the home-front bureaucrats’ reason for existence and an important source of their power and status.

4. Conflicting Demands

Another problem in adapting to demands of external groups is the problem of balanoing the demands of many organizations or groups simultaneously. The organization, in responding to one set of pressures, may set in motion actions that will turn some previously satisfied group into a very unhappy one. To overlook satisfied interest groups is easy for an organization because demands that are currently being well met are not as likely to be strongly voiced. It is, therefore, imperative for the organization to consider the implications of any given action or decision on all the groups and organizations with which it is interdependent.

Pittsburgh Brewing makes and sells Iron City beer. It was the beer of the working man and had been the top selling brand in Pittsburgh for twenty years. As reported in the Wall Street Journal, sales fell about 15 percent from February to June and twice that much in some blue-collar areas. The fall in sales was explained by the Journal:

And everyone knows the reason. They say the trouble started when Pittsburgh’s black community ended an 11-month boycott against the beer.

That’s right, when the boycott ended. Iron City, it seems, is the victim of barroom backlash, a boycott by whites who don’t like what they’ve heard about the agreement Pittsburgh Brewing signed with black tavern owners and the National Association for the Advancement of Colored People. “People more or less want to punish the brewery for the settlement,” one Iron City salesman laments (Harris, 1972:30).

In a settlement with the black community, Pittsburgh Brewing agreed to hire two blacks for each white put on the payroll during the next two years and thereafter to hire one of every two new employees from the black community until the proportion of blacks employed was 25 percent, about equal to the representation of blacks in the Pittsburgh community. The company also agreed to advertise in more black- oriented media and to hire a black marketing assistant. The settlement aroused the opposition of other groups.

The biggest booster of the boycott has been Harvey F. Johnston, a McKees Rocks, Pa., real estate salesman and white supremist who heads a group called the National Association for the Advancement of White People. He has given the anti-iron campaign top billing in the last four editions of the newspaper he publishes (claimed circulation: 75,000), and has put out 100,000 circulars in western Pennsylvania bars blasting the beer.

The problem of striking a balance between the conflicting demands of various groups and organizations is exacerbated when the organization has not engaged in any type of planning. Unintended repercussions are completely unanticipated. Under the not-so-secure blanket of ignorance, the solutions to one set of problems create the conditions for new difficulties.

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

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