The Equilibrium of the Organization: Types of organization participants

Organization members may be classified in other ways than in terms of the inducements they receive for their participation. They may be classified in terms of the types of contributions they make to the organization: specific services (a supplier of material); money or other neutral services that may be employed as incentives (customers); and time and effort (employees).

Still a third method of classification would distinguish those who control the organization—that is, have a right to f ix the terms on which the others will be permitted to participate in it—from the remaining participants. The various possible combinations of inducements, contributions, and control arrangements make for a considerable variety of organizational forms, and this variety must be taken into consideration in the succeeding discussion.

Most organizations are oriented around some goal or objective which provides the purpose toward which the organization decisions and activities are directed. If the goal is relatively tangible—e.g., making shoes—it is usually not too difficult to assess the contribution of specific activities toward it, and hence to evaluate their usefulness. If the goal is less tangible—like that of a religious organization—it becomes more debatable whether a particular activity contributes to the goal; and hence there may be considerable controversy, even among those who wish to work for the goal, as to how it is to be attained. Even where the goal is tangible there may be some activities whose relation to it is so indirect, though not necessarily any less substantial for that indirectness, that the problem of evaluation is difficult. It is much easier to budget, for example, for the production line than for the advertising department or for supervision.

It has been fashionable in the literature of business administration to debate whether “the” purpose of a business organization is service or profit. There really is no problem to debate about. Certain individuals, primarily the customers, contribute to the organization because of the service it provides; others, the entrepreneurs, because of the profits they may derive. When the system of organization behavior itself is examined, it is found that both service and profit aims influence decisions. It is for terminological convenience that the label of “organization objective” is here applied to the service aim.

1. Application to Specific Organization Types

In the case of the business organization the organization goal—the output of product—is a personal goal for individuals who are ordinarily not considered members of the organization, that is, the customers.49 In return for this product the customers are willing to offer money, which provides a principal inducement for the employees and entrepreneurs to participate in the group. The relation of customers to the organization is distinguished not only by the type of inducement they receive, but also by the fact that it is based on a contract or bargain for a specific product without, ordinarily, any assumption of permanence or continuity in the relationship.

In the case of a government agency the organization goal is a personal goal for the ultimate controlling body of the organization—the legislature— and for the citizen. The relationship here is in part the same as in a business organization, in that the legislators, viewed as “customers,” furnish the agency with its fimds. It is decidedly different in that, first, they retain final legal control over the organization, and second, their “personal” motivation is based, in turn, on their peculiar status as elected representatives. To examine the way in which legislators make value judgments in determining the policy of governmental agencies would lead away from the present study into a study of the whole legislative process.

In volunteer organizations the organization objective is ordinarily the direct inducement that secures the services of the organization members. The peculiar problems of administration in volunteer organizations derive from the facts that the contributions are often on a part-time basis, that the various participants may have conflicting interpretations of the organization objective, and that the organization objective may play such a modest role in the participant’s system of values that it offers only a mild inducement for cooperation. In this respect, the volunteer shares many of the characteristics of the customer of a business organization, although the former contributes services to the organization instead of money.

2. Adaptation of the Organization Objective

The organization objective is by no means a static thing. In order to survive, the organization must have an objective that appeals to its customers,3 so that they will make the contributions necessary to sustain it. Hence, organization objectives are constantly adapted to conform to the changing values of customers, or to secure new groups of customers in place of customers who have dropped away. The organization may also undertake special activities to induce acceptance of its objectives by customers—advertising, missionary work, and propaganda of all sorts.

Hence, although it is correct to say that organization behavior is oriented toward the organization objective, this is not the whole story; for the organization objective itself changes in response to the influence of those for whom the accomplishment of that objective secures personal values.

The modification of the organization objective usually represents a compromise of the interests of several groups of potential participants, in order to secure their joint cooperation where each group individually is unable to attain its own objectives unaided. Hence the organization objective will seldom coincide exactly with the personal objectives of even those participants whose interest in the organization lies in its attainment of its goal. The crucial issue for any such individual is whether the organization objective is sufficiently close to his personal goal to make him choose to participate in the group rather than try to attain his goal by himself or in some other group. As will be seen, this process of compro- mise takes place, whether the controlling group of the organization is itself directly interested in the organization objective, or whether the inducement it receives from the organization is of some other type.

3. Loyalty of Employees to Organization Objective

Although the organization objective is of greatest importance in relation to the behavior of those participants who have been called “customers,” almost all the members of an organization become imbued, to a greater or lesser degree, with the organization aim, and are influenced by it in their behavior. This has already been pointed out in the case of volunteer organi- zations; it is also true, although to a lesser extent, of governmental agencies and commercial organizations. It is one component, and a very important one, of organizational loyalty. If the objective has any appearance of useful’ ness, the organization members, whose attention is continually directed to it by their everyday work, will acquire an appreciation of its importance and value (often an exaggerated appreciation), and the attainment of the value will come, to that extent, to have personal value for them. It will be seen later that, in addition to this loyalty to the organization objective, there may also develop in employees a very different loyalty—a loyalty to the organization itself and an interest in its survival and growth.

Source: Simon Herbert A. (1997), Administrative Behavior, Free Press; Subsequent edition.

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