Theories of Practice: The Functions of the Chief Executive Officer

1. Theories of Practice:The Functions of the Chief Executive Officer MPA 8002 The Structure and Theory of Human Organization Richard M. Jacobs, OSA, Ph.D.

2. At a crisis in my youth, my father taught me the wisdom of choice: …to try and to fail is at least to learn …to fail to try is to suffer the inestimable loss of what might have been. Chester I. Barnard (1938)

3. For the greater part of the 20th century, the alleged objectivity associated with the assumptions and concepts of scientific management have guided most inquiry into human organizations.

4. Structural theories of practice, for example, rationalize human organizations and their functioning, emphasizing the proper alignment of people, process, and technology... …suggesting that there exists “one best way” to manage and lead all human organizations.

5. concepts including... the general social setting within which work is completed division of labor the particular work to be completed as part of an organic system of work functionalization the emphasis upon individuals and groups to contribute to the organic system of work specialization

6. For Chester Barnard, while structural theories of practice offer the promise of improving organizational functioning, other factors are absolutely essential to organizational survival...

7. …factors including: • the willingness to cooperate • the ability to communicate • the existence of and acceptance of organizational purpose

8. For Barnard, organizational survival is not dependent solely upon structure but more so upon maintaining a dynamic equilibrium in a continuously fluctuating environment of physical, biological, and social materials, elements, and forces. All of which calls for an individual who possesses an abiding awareness of the need to adjust the processes internal to the organization continuously.

9. The structural concepts of executive theory... • individual • cooperative system • organization • complex formal organization • formal organization • informal organization

10. individual: …a single, unique, independent, isolate, whole entity …embodying innumerable forces and materials past and present which are the physical, biological, and social factors …to which are superadded the limited power of choice which results in purpose and for which one bears personal responsibility

11. a “limitation” …the function of the total situation or the combination of physical, biological, or social factors when viewed by individuals from the standpoint of a purpose An organization’s design as a whole can only be changed by operating on one set of factors at a time (the “strategic factor”) and dealing with the impact this change will have on the other sets of factors.

12. …overcoming a limitation is a means to an end, inducing within an individual the necessity for cooperation with others …or, making the decision that one’s limitation cannot be overcome, the individual decides to drop that end Cooperation inculcates a shared “purpose” for engaging in organized activity towards an end.

13. cooperative system: …an amalgam composed of the impersonal, coordinated activities of human beings …the concrete social process by which social action is accomplished …a change in the relationship of one part to any or all of the others changes the cooperative system

14. the social contribution of one person is the primary factor in maintaining the system of cooperation... …this social contribution elicits physical energy from other participants in the cooperative system …the physical energy, in turn, is then converted into material at desired places.

15. For Barnard, then, it is not correct to impute to any individual a definite product. Rather, the increase (or decrease) of material product (the “value added”) results from the combination or coordination of efforts.

16. It is also not correct, in Barnard’s thought, to impute to any individual a particular contribution. The only statement that one can make about the significance of an individual’s particular contribution is in terms of its differential effect upon the entire cooperative system.

17. the survival of an organization is dependent upon its ability to create a surplus of cooperation …this reality illuminates the creative side of managing and leading human organizations …successful managers and leaders secure the appropriate combination of the elements of organization to produce utilities that allow the organization to endure

18. organization: …a system of consciously coordinated individual human activities or forces …the function of which is: • to create • to transform • to exchange …various personal and impersonal utilities

19. For Barnard, human beings not structures are the constitutive element of organization: 1) individuals capable of communicating with one another 2) each possessing a willingness to serve 3) each sharing a common purpose

20. However, it is not the individuals but rather the services, acts, actions, or influences of individuals that constitute organization... …that is, the willingness of individuals to contribute their efforts to the cooperative system …this is indispensable to an organization’s effective and efficient functioning and survival.

21. complex formal organization: …a cooperative system composed of physical, biological, and personal systems …which prescribes, guarantees, and limits the purpose and rights of subordinate organizations, upon whom the subordinate organizations are dependent

22. formal organization: …the concrete social process by which social action is accomplished …the system of consciously coordinated activities or forces of two or more persons

23. informal organization: …the aggregate of personal contacts and interactions and the associated groupings of people …provide a means of communication, of cohesion, and of protecting the integrity of the individual that is necessary to the operation of a formal organization

24. The emergence of organization... interests limits individual personal: needs free will the decision to cooperate purpose objectives organization impersonal : strategies projects goals

25. The dynamic concepts of executive theory... • free will • cooperation • communication • authority • the decision-making process • maintaining a dynamic equilibrium

26. free will: …a limited power of choice …presupposing the capacity for self-determination …preserving personal integrity …upholding personal, ethical, and legal responsibility for one’s choices

27. because of various limitations which constrict the choices available... …the exercise of free will requires individuals to develop a “purpose” …which, in turn, provides a “motive” or “rationale” to engage in cooperative ventures that make other choices possible

28. cooperation: …an expression of human will and purpose in a physical environment

29. communication: …the necessary ability to translate purpose into terms of the concrete actions required to effect it …reduces confusion and indecision as these relate to the timing of actions …creates the necessity for a leader

30. authority: …the character of a communication in a formal organization by virtue of which the communication is accepted by a contributor to or “member” of the organization as governing the action that individual contributes

31. authority may be a consequence of: the advantage of placement in the organizational hierarchy …position… the advantage of possessing the respect of individuals in the organization …leadership…

32. however, the determination of authority always remains with the individual... …objective authority cannot be imputed to persons in organizational positions unless subjectively they are first dominated by the organization as respects their decisions

33. authority, then, depends upon: • a cooperative personal attitude of individuals • a system of organizational communication …which fosters organizational effectiveness and efficiency as well as survival

34. the decision-making process: …the matter of discriminating important strategic factors ...and redefining or changing the organization’s purpose ...on the basis of an estimate of future results of action in the existing situation ...in light of history, experience, or knowledge of the past

35. the decision-making process first involves… personal decisions: decisions by the individuals affected whether or not to contribute to a cooperative effort as a matter of a personal choice D1 • external to the organizational system • not delegated to others

36. the decision-making process then involves… impersonal decision: a response made by individuals whose role and intent is to effect the organizational system as a whole D2 • internal to the organizational system • delegated to others

37. the responsibility for an organization decision is assigned positively and definitely to those located at the organization’s communication centers... …that is, the aptness of a decision depends upon those who possess the knowledge of facts and of organizational purpose

38. maintaining a dynamic equilibrium: …the ability to juggle subjective (personal) motives and objective (impersonal) purpose so as to develop a surplus of cooperation among the people whose social contributions constitute the organization

39. …this dynamic equilibrium is disturbed by false ideologies, particularly those held by managers/leaders, which... • vitiate experience from consciousness when dealing with organizational problems • reinforce personal predilections, prejudices, and interests in guiding organizational action False ideologies can become destructive factors, inhibiting further cooperation.

40. The fundamental concepts of executive theory... • efficiency • effectiveness • organization purpose • zone of indifference • strategic factor • organization economy • span of control • leadership density • responsibility

41. efficiency : individual : motives the maintenance of an equilibrium of organizational activities through the satisfaction of the motives of individuals sufficient to induce cooperative action

42. efficiency of effort depends upon the ability of the executive to secure and maintain the personal contributions of energy that is prerequisite to effect organizational purposes …that is, the executive capacity to offer effective inducements and in sufficient quantity to maintain organizational equilibrium

43. effectiveness : organization : purpose the appropriateness of the means selected under the conditions of the organization as a whole for the accomplishment of a specific desired end

44. effectiveness of cooperation is evident in the accomplishment of the recognized objectives of cooperative action …these objectives are impersonal, that is, these objectives aim at the system of cooperation as a whole

45. organization purpose: …the impersonal reason for which the formal organization exists Purpose is experienced as a belief that—as a consequence of one’s limitations and reduced choices and, then, through the exercise of will—it is better to cooperate in “trying” or “attempting” something impersonal to fulfill one’s personal motive than it is to drop that end.

46. purpose is not empty words or catchy phrases... …but the bridge between the past and the future which functions only as it rests upon the present …as all who contribute to the system of efforts accept and act upon a shared purpose

47. the challenge to managers/leaders is to foster those conditions wherein: …the aggregate of organizational actions are a consequence of decisions …decisions made by those “closest to the action” relative to the organization’s purpose and environment ...and resulting in closer and closer approximations in concrete acts

48. zone of indifference: …the willingness to accept orders specifying action because the individual feels indifferent about the order in so far as authority is concerned

49. The zone of indifference will be wider or narrower depending upon the degree to which the inducements exceed the burdens and sacrifices determining the individual’s adhesion to the organization.

50. strategic factor: …a limitation that, when controlled in the right form, at the right place, and at the right time, will establish a new system or set of conditions which meets the organizational purpose