Organization Theory: Compiled, Edited and Presented by Suleman Anwar

Students think that something they have been taught is ‘too theoretical’ or ‘it’s just a theory’, only to
then hear in reply to the question ‘Well, what do you mean by theory?’ the response ‘I don’t know . . .
it’s so academic!’

Firstly, organization theory helps us to reflect upon and understand who we are and why we are ‘who we
are’. Secondly, organization theory is about us and how we interact with others during our encounters in
a vast array of different, often deceptively ordinary and mundane, social contexts that we take for
granted because we cannot see or imagine any alternative to how things appear to be.

Theories help us describe and understand what has happened as well as predict what will happen in
different circumstances. In part, therefore, a theory entails describing and conceptualizing the
phenomenon in which we are interested.

Now the important point here is that any theory, including those about organizations, uses our common
sense ability to lump together phenomena in terms of their perceived similarities and differences to
make sense of the world.

All theories link abstract concepts together in order to explain the occurrence, variation in or non-
occurrence of some phenomenon. Central to this process of theoretical explanation is the notion of
cause and effect: theories stipulate why things happen in terms of putting forward a causal relationship
between different phenomena. Here the behaviour of something is seen as causing the behaviour of
something else to happen. Simultaneously, theories specify when and where this effect may (or may not)
happen, thereby limiting the scope or applicability of the theory to particular circumstances.

Nevertheless, such theories not only allow us to explain what might be going on but also allow us to
predict what should happen if we were to intervene and change things. This is because if we think that
something is causing a particular problem or issue to arise, it follows that acting to change that causal
factor should simultaneously impact upon the problem that has arisen. Therefore, theory is at the heart
of how we attempt to understand and change aspects of our lives. In other words, theories help us to
intervene and try to assert control over the events that affect us.

In sum, as we can see from our explanations, theories do the following:

1. Theories are linguistic, conceptual devices that try to tell us things about the world by representing it
in a causal manner. In the case of any social science theory, including organization theory, this is to do
with the behaviour of people in various social contexts.

2. Theories define, classify or categorize aspects of the world – the what of that which we are studying.

3. Theories propose reasons in the form of cause-and-effect relationships that explain the variation of a
particular phenomenon in terms of the effects of the action of, or the variation in, another phenomenon
– the why and the how.

4. Theories identify the situation(s) or contexts when these causal relationships will or will not operate,
and thereby set the boundaries to where they are applicable.
5. Based upon this what, why, how, when and where analysis, theories then can guide our actions
because they enable predictions and hence potentially enable us to anticipate and try to influence or
even control events. By intervening and changing the explans (or independent variable), the explanadum
(or dependent variable) should also change in a manner predicted by the theory, provided that the
theory holds.

6. Theories are not divorced from our everyday lives and behaviours. Indeed, we regularly deploy theory
often in the form of ‘common sense’ in order to make sense of our experiences and to guide our actions,
but this process is usually tacit because the use of theory remains unnoticed.

7. Theories matter because they influence what happens to people; they are used to describe, explain
and, equally significantly, justify the things that we do and how we do them. Therefore, we need to be
very careful about the theories we use to make sense of what it is we think is going on, particularly when
people present things as ‘there is no alternative’.

So it is evident that theories are a means by which we generate expectations about the world; often they
are derived from what we have perceived to have happened before and thus they influence (tacitly or
otherwise) how we set about future interactions with our world(s). Moreover, it is also evident that if we
have the expectation that by doing A, B will happen, then by manipulating the occurrence of A we can
begin to predict and influence the occurrence of B. In other words, theory is clearly enmeshed in
practice since explanation enables prediction which in turn enables control (Gill and Johnson, 2002, pp.
32–33).

As we shall see, just the idea that there is a world ‘out there’ awaiting our unbiased inspection is, in
itself, a major philosophical assumption that influences how we operate. Perhaps our acts of perceiving
and observing create much what we assume to be ‘out there’ rather than report what ‘is’ – a very
different philosophical stance.

In sum, theories are highly influential upon what we do and why we do it. Theories allow us to see the
world in particular ways. In doing so, they guide our reasoning and our actions.

Here, for instance, the very word corporation metaphorically invokes an image of the body corporate in
which the leaders of the organization are similar to the brains of the human body. This entails what is
called anthropomorphization, literally meaning the ascription of human form, qualities and attributes. As
we shall see, a great deal of organization theory deploys concepts that anthropomorphize aspects of
organizations, thereby treating them as if they were human individuals with individual qualities, rather
than seeing them as social collectivities.

This particular form of anthropomorphization has resulted in several significant consequences:

• The corporation has no interest in serving the interests of wider society, indeed the corporation is
obliged, in a self-interested manner, to export onto others as many of the social, environmental and
economic costs of making profits in order to preserve profit margins.

• Backed up by a wide range of evidence concerning how corporations regularly transgress the wider
public interest in the immoral pursuit of competitive advantage and profits, Bakan shows how the whole
notion of the corporation being socially responsible to a wider set of interests beyond those of
shareholders is a logical and practical impossibility. For Bakan, the concept corporate social responsibility
is an oxymoron. For Bakan, the corporation is not a natural individual entity. It only has a right to exist
because society gave it one, and it is time for us to remake legally the corporation so that this pervasive
phenomenon begins to serve wider society’s needs rather than continue a relentless pursuit of
competitive advantage regardless of the social and environmental costs. Similar dangers may lie in
defining organizations in terms of having a goal unless all members freely agree to that goal.

At this point, it is important to summarize the debate so far regarding organizations. As we have argued,
organizations are social entities created and sustained by collective human interaction. In this,
organizations enable people to achieve objectives and satisfy needs that could not be attained or
satisfied through the efforts of individuals alone. However, despite this mutual dependency and
consequent synergy, this does mean that every member of an organization shares or is even aware of
the objectives and needs of others. To talk of organizations as having goals, as if they exist independently
of the people who make up the collectivity, can be misleading because it creates an aura of consensus
regarding those matters that might not exist. Moreover, whose goals are being accorded priority in such
a definition?

However, organizations do involve some groups attempting to ensure that their particular purposes for
the organization are imposed upon, or influence, the organizational behaviour of others. The pursuit of
these particular purposes usually entails the exercise of power and control by some members as they try
to influence what other members do and how they do it. This, of course, can lead to covert and overt
forms of conflict: people might resist these attempts at controlling, coordinating, and influencing their
behaviour in particular directions whilst simultaneously trying to pursue their own purposes with regard
to their involvement with the collectivity.

The relationship between organization theory and human activities:

Theory . . . becomes a material force once it has gripped the masses (Karl Marx, [1844] 1975, p. 251).
There is nothing so practical as a good theory (Kurt Lewin, 1951, p. 169).

The relationship of any type of social science theory, such as organization theory, and its subject matter
is always problematic. This is because its subject matter consists of knowledgeable beings who are self-
aware, aware of others’ behaviour and who have the power of sensory perception and are capable of
feeling. In other words, social science theory is concerned with the behaviour of sentient human beings.
Because social science theory attempts to understand and explain all aspects of human behaviour,
including organizational phenomena, a key issue is that those theories can impact upon and change the
very behaviour that constitutes the social scientist’s focus precisely because those theories are
irrevocably part and parcel of that human domain: they are created by it, they are investigated in it, they
are disseminated in it and they can change it!

We looked at how we might define the phenomenon ‘organization’. We have shown that organizations
are often defined in terms of being purposeful goal-seeking entities. However, there is a danger here that
we inadvertently incorporate the goals of particular powerful organizational groups in our definition,
which can be misleading because it confers an aura of consensus that may not exist. It can also give us a
very slanted view of organizations because the goals of the powerful are accorded a privileged status
over those of other members. Perhaps if we want to incorporate the notion goal into our definition of
organization, it is better to be very cautious by seeing that organizations may entail certain social groups
trying to impose their particular goals for the organization upon others during organizational activities, a
process that might be understandably resisted and therefore lead to some form of conflict. As the
double hermeneutic suggests, we need to be very careful how we use definitions in our theories and
how we formulate those theories because we can influence actual practice through their dissemination
to organizational audiences. The ideological ramifications of even how organizations are sometimes
defined as entities that pursue common goals are only too evident. As we have tried to show,
organization theory is a highly contested disciplinary area, especially with regard to whether or not it
should adopt a managerialist perspective. Similar to any body of social science theory, organization
theory matters because it can influence how we understand our experiences and how we might then
behave in our organizations. Hence, the form that organization theory takes, the perspective that is
adopted and its assumptions about social science itself are important and should be always interrogated
and subjected to critical scrutiny rather than just being taken to be self-evident and incontestable.
Inevitably, any organization theorist makes choices about how he or she engages with the subject of
interest.