The literature on the sociology of organizations is vast and represents a refracted history of the study of bureaucracy. The object of study is variously labeled bureaucracy, complex organizations, and formal organizations, but the concept of organization and the notion of organizing principles subsume all these labels. Thus, according to Blau and Meyer (1987), “the concept of bureaucracy, then, applies to organizing principles that are intended to achieve control and coordination of work in large organizations” (p. 3). This vast literature will be reviewed by dividing the field into approaches distinguished by their organizing principles and discussed more or less in the chronological order of their emergence. This provides the reader with a context and addresses these organizing principles in readily digestible portions. However, the chronology does not imply that the field developed in a linear fashion, nor does the division into major approaches suggest that all scholarship fits neatly into distinct approaches. The discussion of each approach is followed by a critique, and the review concludes with speculation on the future of the sociology of organizations in the twenty-first century.
- Early Writing on Sociology of Organizations
- Organizational Sociology in The United States
- Developing Approaches to Sociology of Organizations
- Changing Context for Organizational Sociology
The study of organizations varies within sociology, between academic disciplines, and across the globe, limiting in-depth communication. Studies of political parties by political scientists, private-sector firms by economists, and employees by industrial psychologists and sociologists within the United States and abroad may claim to predate the sociology of organizations. However, according to Scott (2003:9), there are three defining features of the sociology of organizations: (1) Examination is empirical, not normative; (2) organization is considered sui generis, not the aggregate of its members; and (3) an effort is made to generalize the analysis beyond analysis of the specific form of organization studied. These criteria became institutionalized after the 1960s and will be used to explore its refracted development.
Early Writing on Sociology of Organizations
The Pyramids at Giza, the Roman conquests, and the spread of Christianity were accomplished through organizations and illustrate how the issues of organization stretch back in time. These large-scale organizational efforts represented attempts to grapple with the ambitions and stubborn facts of their day. The stability of societies was at stake, and their survival attracted powerful intellectual contemplation. As James March (1965) comments, “There is scarcely a major philosopher, historian, or biographer who has overlooked the management and perversities of organization. The church, the army, and the state had to be managed” (p. xi). After all, religions passed into obscurity, armies were defeated, and states fell. Impressive as an intellectual fascination and operational challenge, the term bureaucracy appears rather late in Western history.
The concept of bureaucracy appeared in the eighteenth century as a semantic partitioning of society and a new element in the stratification of society. The French term bureau, understood as table, took on the additional meaning of where officials worked. Bureaucracy represented a new group of rulers and a new method of government in contrast to monarchy, aristocracy, and democracy. The concept of bureaucracy began to refer to power over the population. By the nineteenth century, the theme of bureaucracy as a threat to democracy developed into ideas that democracy was the fundamental corrective to the routine, inflexibility, and power that came to characterize bureaucracy.
John Stuart Mill (1861) provided an interpretation of bureaucracy and democracy by comparing different types of governments and raising the question of the locus of decision making and power. Gaetano Mosca ( 1939) continued the theme of bureaucracy acquiring power relative to other forms of governance, classifying all governments as either feudal or bureaucratic. Bureaucracy was not an element of society but represented society. Robert Michels ( 1962) reversed the logic of nineteenth century thought by arguing that democracy was inconceivable without bureaucracy. He also viewed bureaucracy as a particular example of a more all-embracing category of social organization, and he investigated the generic features of this modern structure (Albrow 1970:36). In addition, Michels ( 1962) reasoned that if salaried officials were a necessary part of bureaucracy, oligopoly was the result, in his notion of the “iron law of oligarchy” or the tendency of organizational leadership to maintain itself. Yet a systemic treatment of the concept of bureaucracy was left to Max Weber.
Weber’s renowned work on bureaucracy is spread across his theoretical, comparative, and historical analyses but may be briefly sketched in the following themes. Similar to Michels, Weber built his analysis of bureaucracy on the generic concept of verband, a group whose task it was to maintain the organization, including a leader and staff and a distinctive set of rules. Verband was broader than bureaucracy and included such differing notions as the state, political parties, commercial enterprise, and the church. Bureaucracy simply meant an “administrative body of appointed officials” whose work and influence could be seen in all kinds of organizations (Albrow 1970:42).
Using bureaucracy as a generic administrative body, Weber developed the theme of the affinity between Western rationalization and the rationality of bureaucracy and its inevitable importance. Precision, continuity, discipline, and reliability made bureaucracy the most satisfactory form of organization, both for authority holders and for other interests (Weber 1958, 1968, 1981). Weber’s theoretical and empirical writings identify and develop key elements of government and profit-making organizations in Western society (Swedberg 2003). On the inherent tendency of bureaucracy to accumulate power, Weber advocated representative government as both a critical context and a training ground for leaders who could counterbalance the increasing power of bureaucracy.
Although his theory of organizations is much broader, Weber developed the ideal type of rational-legal bureaucracy as a methodological tool for his empirical work. Weber believed that rational bureaucracy was a major element in the rationalization of the modern world. Based on his position that legitimacy was fundamental to all systems of authority, Weber set out 5 related beliefs of legal authority, devised 8 propositions about the structuring of rational-legal authority, and then formulated 10 characteristics of the ideal-type bureaucracy. These include observing only professional duties, a clear hierarchy of authority, specification of functions of the office, appointment on the basis of contract, personnel selection on the basis of examination, graded salary positions, official’s post as sole occupation, a career structure where promotion is based on seniority or merit, no appropriation of position or resources, and the organization being subject to unified control and discipline (Albrow 1970:44–45). This ideal type was then used to identify the degree of bureaucratization and its explanation in historical and comparative work.
Weber’s theory of domination is based on a special type of power, authority, and the belief of the ruler to have the right to rule and the ruled to have an obligation to obey. This nexus of beliefs in the legitimacy of the administrative apparatus becomes fundamental for more specific discussions of rational-legal bureaucracy and the issues of domination, depersonalization, and exploitation. For Weber, bureaucratic power was both the cause and the consequence of the rise of capitalism and democracy in the West. Bureaucracy was the outcome of economic, political, and cultural features of the West, necessary for the development of democracy, and a tool of power affecting the rationalization of society and domination of its people. This broad intellectual canvas provided a rich legacy for the study of organizations.
Organizational Sociology in The United States
The sociology of organizations began in the 1940s with Robert Merton’s translation of a small portion of Weber’s work. Indicatively, Weber’s work that is typically cited in organizational sociology is “Bureaucracy” in Gerth and Mills’s (1946:196–244) From Max Weber, representing a small excerpt from Weber’s (1968:956–1002) Economy and Society. This pagination illustrates how Weber’s work on organizations was narrowly and selectively imported into the American academic scene. At that time, Merton was promoting the application of his “empirical functionalism” to “theories of the middle range” that circumscribed an emerging definition of organizations by focusing on elements of ideal-type bureaucratic structure as a self-perpetuating, legally recognized entity with goals and clearly defined and defended boundaries (Scott 2003).
However, this dating of the origin of organizational sociology overlooks sources of the key conceptions of organizations provided by Chester Barnard (1938), Philip Selznick (1943, 1948, 1949), and Herbert Simon (1957). Barnard’s work was the first comprehensive theory of an organization as a unit of analysis as a “cooperative system” (Perrow 1986:53). He develops a behavioral theory of organizations that includes coordination and decision making, rather than the legalistically and formally based theories. Influenced by a biological system heuristic and the Human Relations School, Barnard’s theory emphasizes the social aspects of organizations conceived as social systems seeking stability and equilibrium of its internal and external relationships. The organization was a cooperative system, with interdependent elements (workers/ management, organization/environment) that must be consciously structured to address the maintenance needs of the organization and to obtain resources from the environment and use them in order to induce contributions from organizational members (Barnard 1938:73). Although in different forms, these themes are repeated in subsequent approaches to the sociology of organizations.
Selznick pioneered a structural functional theory of organizations, establishing the (old) institutional approach. Merging Weber’s rational-legal elements of bureaucracy with Barnard’s social elements of a cooperative system, Selznick stresses how formal structure never completely succeeds in conquering the social elements of organizational behavior. Therefore, Selznick emphasizes the importance of normative controls of values and norms that are both internalized by actors and enforced by others in social situations. Out of the dynamic interaction of human features and structural elements, Selznick developed a goal-oriented theory of adaptation for organizational survival. The adaptive interaction of human action and formal organizational structure is shown to produce unanticipated consequences, establishing the “exposé’” tradition associated with the institutional school.
At about the same time, an important interdisciplinary development was under way at Carnegie Institute of Technology (Carnegie Mellon University), where Herbert Simon had gathered political scientists, economists, engineers, and psychologists to focus on a decision-making theory of administration. Simon combined rational aspects with social factors in his view of organizations as decision-making entities. He proposed a “boundedly rational” theory of decision making, based on the limitations and biases of individual decision making, in reaction to economic assumptions of rational maximizing models. People are intentionally rational but have structural and cognitive limits on their information. This leads to the notion that the search for alternative choices, rather than free, represents increasing costs, so that decision-makers settled for “satisfactory” rather than continuing to search for optimum solutions. Bounded rationality and satisfactory solutions lead to incremental decision making and the use of rules, standard operating procedures, routines, and habitual patterns of behavior (Pfeffer 1982:6–7). As in Barnard, organizational equilibrium represented a balance between the contributions of members and their organizational rewards. Later, the decision-making scholars recognized that organizational policies were the outcome of multiple and competing objectives of organizational participants and people who controlled the organization represented a coalition of interests that affected the organizational structures and processes (Cyert and March 1963). Later approaches adopt this view that human problem-solving processes determine the basic features of organizational structures and functions.
By the 1960s, the master features of organizational sociology were becoming institutionalized through the publication of textbooks, handbooks, and a new journal, Administrative Science Quarterly, emphasizing the interdisciplinary character of the study of organizations. The new field of study underwent a conceptual transformation: The central features of organizational structural elements turned into dependent variables, rather than independent variables, whose variation became the focus of explanation (Scott 1975:2). Within this causal transformation, the field shifted back and forth between various approaches, with some emphasizing the causal import of a purposive organization involving goals, decision making, and strategies, while others emphasized a more passive organization shaped by its environment (Hall and Tolbert 2005).
Developing Approaches to Sociology of Organizations
Prior to 1980, several approaches emerged in the sociological study of organizations. They questioned the presumed tight linkage between actions and outcomes and instead postulated a looser relationship between the organization form, its members, and its environment. The approaches identify economic and social factors that disrupt tight interrelationships, causing problems of organizational performance. To manage these problems, each approach is distinguished by the adaptive mechanisms offered that change organizational structure, strategies, and practices that are designed to improve organizational performance. These approaches include strategic contingency, resource dependency, and neo-institutional and transaction cost analysis. The population ecology approach represents an exception to this pattern by assuming that individual organizations cannot change or change too slowly, so where problems of organization-environment interdependency occur, some organizations must fail.
The strategic contingency approach was popularized in the late 1960s and became prominent as a loose framework for synthesizing the principal notions of organizations as open systems with objectivist empirical research. The organization represents a configuration of strategies, structures, and processes, and the structural features that best fit the demands of environmental and internal contingencies are by definition the most efficient. Similar to economic models, the contingency approach emphasizes efficiency, but like sociology models, it contends that the structure of the organization depends on various environmental and strategy contingencies (Donaldson 1996). Environmental contingencies include firm size and the complexity, predictability, and interdependence of technological and market changes.
Strategy and environmental factors are the contingencies affecting organizational structure, and efficiency is found in the fit or alignment of the environment and strategies with organizational structures. Strategies are considered part of the normative culture of the organization, with a presumption of an efficiency-seeking orientation among managers. The notion of fit between the organization and its environment resides somewhere in management perception, interpretation, and action. Managers are constantly surveying their environments, interpreting “strategic contingencies” that affect corporate performance (Child 1972). Having perceived such contingencies, they would, for example, create new programs or specialized departments or adjust administrative rules or structures to adapt to these contingencies.
The contingency approach moved the sociology of organizations away from notions of a tight relation between the organization and the environment and that there was one best way to organize toward the notion that the better way to organize depended on the particular environmental contingencies confronting the organization. However, critics question the tautological character of organization-environmental fit and the capacity of managers to perceive and change organizational structure (Pfeffer and Salancik 1978). Also unspecified are the internal dynamics that affect managerial strategies and the notion that the perception of environment contingencies may be social and political constructions rather than objective facts (Pfeffer 1982).
The resource dependence approach emerged in the late 1970s, in part as a reaction to the structural contingency approach. The environment was now the “task environment,” including customers, suppliers, competitors, creditors, and regulators (Dill 1958), with increasing emphasis on the structures and processes of organizational operations sensitive to resource flows, such as information, raw materials, markets, and credit. Resource requirements forced exchanges with other organizations, not for efficiency but for survival, and the scarcity and importance of a resource supplied by another organization determined the degree of power/dependence between the two organizations. These resource requirements entangle the organization in patterns of power-dependence relationships. Similar to the contingency approach, the emphasis on economic or technological resources implicitly orients the framework toward private firms.
Managers are responsible for gaining favorable exchanges and avoiding debilitating dependencies. They seek discretion to maintain their own power and to permit subsequent adaptations to new environmental dependencies. The distribution of power within the organization is seen as an outcome of environmental dependencies. Thus, decision making is a function of the internal power structure, which interprets and defines the most critical dependencies and the choices of strategies to address them. The actors’ position in the internal power structure depends on their ability to control and solve dependencies (Pfeffer and Salancik 1978) through their positions within the firm, their specialized knowledge, or their links to the outside world (Fligstein 1987). Management mediates the relationship between the environment and the organization by adapting the organizational structure, negotiating favorable terms of exchange, and using a range of strategies from stockpiling supplies to joint ventures and mergers. Organizations are seen as loosely connected to the environment, so managers are capable of “enacting the environment” by defining environmental dependencies and the practical options to address them. The sheer capacity to enact an environment implies that the resource dependency model is most appropriate for large, powerful, and dominating organizations.
The resource dependency model focuses greater attention on internal organizational decision making and the efforts of managers to strategically adapt to the environment. However, the larger pattern of asymmetrical relations in which the focal organization is enmeshed is left largely unexplored.
The neo-institutional approach began with the work of Meyer and Rowan (1977). Building on the earlier institutional school of Selznick, this approach represents a reaction to economic contingency and resource dependency models that postulate that organizational structure is the result of technical and economic contingencies in the environment. Instead, this approach presumes that many sectors and even parts of organizations are free of these technical and economic constraints and that organizational structure is more the result of efforts to fulfill normative expectations in the environment. The emphasis is on how organizational decision making is shaped, mediated, and channeled by normative institutional arrangements (DiMaggio 1991), where these arrangements take the form of routines, operating procedures, and standard ways of perceiving the environment and agreed-on value priorities. Broadly shared patterns of beliefs and habitual practices mitigate problems of uncertainty, leading to emphasis on the role of ideas and belief systems in supporting and structuring organizations. Thus, organizations involve established procedures and rule-bound and standardized behaviors, and researchers attend to the process of infusing such procedures and behaviors into the organization as regularized and stable features (Jepperson 1991).
Isomorphic mechanisms infuse the organizations’ structures with normative expectations of reference group organizations or the generalized expectations of the environment. Organizational structures become similar as organizations interact and formal or informal rules emerge to govern these interactions. Once institutionalized, or taken for granted, these rules exert powerful normative effects on subsequent organizational interactions, and changes in organizational structure result more from issues of legitimacy than from rational adaptation or efficiency. DiMaggio and Powell (1983) contend that the primary institutionalizing mechanism is imitation, which also works through coercive and regulatory mechanisms of the state and professions that disseminate and elaborate sets of beliefs and rules about appropriate organizational structure and practices. Their point is that modern organizations cannot be adequately understood in terms of efficiency and adaptations to technical and economic contingencies because of the often contradictory demands of maintaining organizational effectiveness and legitimacy. One solution to this dilemma is for organizations to “decouple” their formal structure from their everyday operations. They adopt formal structures that are legitimate, while informal everyday activities pursue effective operations, independent of the formal structure.
The institutional approach is more applicable to public sector organizations because of its greater sensitivity to issues of normative expectations and legitimacy. The approach is criticized as tautological in the sense that outcome is the evidence for the cause and there is a lack of specification of what practices, procedures, and behaviors are institutionalized and which ones are freer to vary (Hall and Tolbert 2005). Also, the emphasis on normative features deflects attention from issues of interests, power, and conflict (Perrow 1986) and the technical and economic challenges to the organization.
The population ecology (or natural selection) approach began with the works of Hannan and Freeman (1977) and Aldrich and Pfeffer (1976) and presumes a tight relationship between the organizational form and the environment by stressing the impact of the environment on organizational survival. In contrast with approaches that explain organizational change through adaptation of individual organizations, population ecology scholars emphasize selection processes such as competition embedded in the environmental or ecological conditions of a population of organizations. This approach operates at the level of groups or populations of organizations that carry out similar activities, compete with each other, and are dependent on similar resources within the same ecological niche. They examine the birth or death rates of types or forms of organizations to identify the survival rates of a particular form. Organizational form changes not as a result of adaptation of existing organizations but through the replacement of one form of organization with another (Hannan and Carroll 1995:23). There is no commonly accepted definition of organizational form, but rather, it represents a “heuristic” generally based on the interests of the researcher (Romanelli 1991:81–84).
The research objective is to explain the variation in form, the longevity of that form, and its birth rates and death rates (Hannan and Carroll 1995). Three evolutionary processes are viewed as the mechanisms linking the environment with the survival of the organizational form or activity. Variation in forms and activities of organizations may occur in a “planned or unplanned” manner. Some organizational forms or activities are selected over alternatives as a result of better fit in a given environment or “niche” (Aldrich and Pfeffer 1976). Researchers explain this selection based on characteristics of the niche representing a distinct combination of resources and density of organizations as a kind of organizational ecology. Narrow niches have been shown to support specialized forms of organizations, while broader niches support a more generalized form of organizations. Finally, the selected forms or activities are retained through some type of reproduction process, and reproduced forms generate variations that begin a new cycle of selection and retention.
The emphasis on ecological niche adds to the present knowledge of specific industries, and their longer time frame of analysis provides a historical perspective absent in other approaches (Hall and Tolbert 2005). However, the source of the initial variation or mutation is not specified. The notion of “fit” between organizational forms and environment resources is left unspecified, representing a tautology similar to that of the contingency approach. The logic of this approach suggests that large, powerful public and private organizations and government sponsorship of certain environments neutralize the selection process by enacting their environments, thus limiting the applicability of the approach. Finally, focusing on the selection effects of competing organizations directs attention away from more symbiotic and cooperative interorganizational arrangements (Scott 2003).
The transaction cost approach is the economic approach best known to sociologists and has become an important foil for their arguments. Oliver Williamson (1975, 1981) has promoted an approach focused on the creation and changes in governance structure to explain organizational efficiencies. Organizational governance structures are arrangements for establishing and safeguarding economic exchanges of the firm. The approach postulates two broad governance structures of economic exchanges: markets and organizations. Markets represent immediate exchanges, but when exchanges involve future transactions, the market becomes less useful for securing satisfactory exchanges. Organizations appear as an alternative to markets as a governance structure for exchanges, and the structure of the organization varies by the types of exchanges to be governed.
This approach attends to the efficiency of autonomous firms and the cost of exchanges of goods and services within the organization and between the organization and the market. It assumes that actors are boundedly rational, based on the limits of information, and opportunistic in that they will lie, cheat, and steal. The issue is that not all eventualities can be anticipated in contracts and that actors may deceive. One solution is to bring transactions inside the organization to control opportunism through authority relations. Then, firms respond to issues of bounded rationality by subdividing operational problems, making simpler decision guidelines, channeling information, and creating standard operating procedures. Bounded rationality and opportunism present transaction cost problems for the firm when contracting outside the organization, where tasks are difficult to specify and monitor. Transaction costs include searching for information on quantity, quality, and price; negotiating and monitoring agreements; and providing incentives for cooperation and resolving disputes. Organizations may respond by writing contingent contracts and creating auditing and controlling systems to safeguard the efficiency of exchanges. Opportunism is aggravated when firms have few exchange partners representing transaction disadvantages such as monopoly prices. The emphasis on transaction costs shifts analysis toward the governance structures as the organizational form created and adjusted to search, create, and monitor exchanges. Thus, the form of the organization is a function of the transaction costs to which it needs to adapt.
Transaction cost scholars’ attention to “small numbers bargaining” provides a notion of the greater leverage of large, powerful firms in their interorganizational relations. Also, since the theory can be applied to both interfirm and intrafirm exchanges, it provides a fertile link between the nature of markets and intra-organizational relations (Swedberg 2003). However, the fact that an organizational form (governance structure) reduces transaction costs does not explain its creation. All organizations that exist are not, by this fact, efficient. In addition, the arguments about efficiency ignore power and goal ambiguity, and therefore the analysis of decision making is simplistic. Finally, the approach neglects the extent to which search, creation, and monitoring of economic behaviors are embedded in social relations (Granovetter 1985).
Changing Context for Organizational Sociology
Since the 1980s, organizational sociologists have recognized the theoretical importance and practical effectiveness of groups of organizations, leading to the development of new approaches. Recognition was sparked by the worldwide competitive successes of East Asian firms that rely on network forms of organization (Hamilton and Biggart 1988) and the limits of economic theory in restructuring the economies of the former Soviet republics (Stark 1996). Also, changes in technology, labor markets, and laws governing rules of competition and cooperation in the United States contributed to a rethinking of organizational processes (DiMaggio 2003). The global movement and management of money also led to conceptual questions about coordinated activities among groups of organizations (Davis and McAdam 2000). Furthermore, sociologists began to use economic theories as a foil for their arguments because of the overwhelming dominance of economists in discussions of corporate and industrial policy and their theoretical vulnerability from simplistic assumptions about organizations (Biggart 2002).
Sociologists used the concept of a network of organizations as a way of analyzing the cooperative interconnections among groups of firms. This shift in attention to interactions among organizations in level of analysis from the single firm to a collection or network of firms represents a substantial theoretical shift. Furthermore, the recognition of how collective meaning among network firms makes a difference provided a new sense of organizational culture and took the form of attention to “organizational fields.” In addition, the success of East Asian economies and a careful historical analysis of Western development led to new questions of how the state shaped organizational environments. These responses reconnect the organizational sociology literature with a Weberian framework for studying organizations by moving from the internal and external interactions of autonomous organizations to how groups of organizations fit within the social organization of society.
Network approaches represent a synthesis of strategic contingency recognition of the complexity and uncertainty of the environment with a resource dependency framework of relations among suppliers, customers, competitors, and regulators. Some network approaches move to groups of organizations as the unit of analysis and reorient the framework to confront economic theories of efficiency. These approaches deal with the types and patterns of relationships and the causes and consequences of those types and patterns. Networks represent “any collection of organizations that pursue repeated, enduring exchange relations with one another and lack a legitimate interorganizational authority to arbitrate and resolve disputes that may arise during the exchange” (Podolny and Page 1998:58–59).
The causes of network formation are technical and environmental complexity, speed of market change, bounded rationality of decision making, need for efficient and reliable information, and defense against a hostile environment. Networks foster access to resources (Powell and Smith-Doerr 1994), mutual interests and defense (Gerlach 1992), legitimacy or public approval (Galaskiewicz 1985), and better and quicker response to external demands (Uzzi 1996). The interdependence of products, services, and flexible resources and the specialization of member firms provide the conditions and adjustment mechanisms for networks of organizations. Additional factors facilitating the formation of networks include geographical proximity of customers and suppliers (Saxenian 1996) and products whose value is not easily measured and whose members have an orientation to innovation (Powell 1990). Network analyses on groups of private firms tend to look at outcomes of efficiency and product quality, while analyses in the nonprofit sector typically look at outcomes of status, legitimacy, integration, and coordination.
At the level of networks, structural patterns include the centrality and structural equivalence of firms in the network (Nohria and Eccles 1992). The interactions among the organizations in a group representing the pattern and form of the network are adaptive mechanisms of networks. However, there is less agreement on the nature or type of relations that constitutes the network that represents these adjustments. Some authors emphasize the normative context and affective elements of network relationships, including reputation, identity, trust, loyalty, mutuality of orientation, friendship, and altruism. Others focus on the behavioral issues. For example, networks of organizations represent multiple owners that manage a specific subset of resources, leading to increasing decision-making participation, greater specialized niche seeking, customized production, forms of “relational contacting” (Dore 1984), and organizational learning (Saxenian 1996). Boundaries between the organization and the network are often vague, and familial traditions and societal obligations provide social norms that substitute for formal controls. Identities, norms, and actions define an informal boundary between organizations in the network.
Network analysis points to areas of the network that may be buffered from dependencies on other organizations, density of relations in different parts of the network, and stratification of the organizations within the network. Yet criticisms include the lack of clear specification of the social mechanisms of adjustment to changing contingencies of the network. There is also neglect of the role of interests that would provide a mechanism of change (DiMaggio 1988), and it is not clear whether managers’ perceptions and intervention or emergent properties of network relations affect network configurations. Finally, there is a bias toward viewing networks as positive, and the constraints and dysfunctions of network membership are underexamined.
The field approach developed, in part, in reaction to the network approach’s exclusive focus on the interactions of firms and its relative neglect of the roles of normative beliefs, politics, and the strategies of member organizations. This approach attempts to synthesize organizational goals and strategies with the articulation of the environment. DiMaggio and Powell (1983) define the field as “those organizations that, in the aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services and products” (p. 148). Invoking Weberian concerns for rationalization and the bureaucratization of organizational behavior, these authors contend that firms within a field are defined through their objective practices and the perceptions of managers as to the reference group for their firm. Different authors posit isomorphic mechanisms of imitation, coercion, and regulation or conflict and struggle as the adaptive mechanisms of organizations within the field.
The field is formed as the interdependence among organizations, competition for resources, and monitoring of the behavior of other organizations become increasingly intense, elaborating a strategic vision and tactical maneuvering on the part of managers to the point where the practices of the organization take on the characteristics of a game with goals, rules, and players. The very ground is in motion, and the goal of each organization is to stabilize its relationships and institutionalize its existence (Emery and Trist 1965; Warren 1967). This field dynamic represents a melding of the destiny of the organization with that of the field members, in which the organization’s goals cannot be defined independently of the fate of the field (Martin 2003).
DiMaggio and Powell (1983:148) contend that the field develops its structural elaboration through the emergence of interorganizational relations of domination and coalitions among groups of organizations that are involved in mutual enterprise. The patterning of the field is the result of both direct and indirect relationships. Even hostile firms that do not share direct linkages may be drawn closer together because they share suppliers, distributors, competitors, and regulators. In addition, DiMaggio and Powell provide agents of alignment among groups of organizations by identifying the state and professions as the social mechanisms facilitating the homogenization of forms, practices, and perceptions of the organizational field.
Fligstein (1996, 2001) further develops the notion of field by emphasizing conflict and struggle among firms as the adaptive mechanisms of the field and elaborates its political and cultural components. He highlights the organizations’ motivation to produce a system of domination and the elimination of competition. This system of domination and competition is supported by a local culture rendering a cognitive map of the role position of the organization in the field. The cognitive maps define social relationships and help managers interpret the organization’s location in the field and status expectations in a set of social relationships; and these interpretations are reached through political processes. The field is stratified between dominant firms, which benefit the most from current arrangements, and subordinate firms, which benefit less. Dominant firms seek a set of collective understandings that allow for accommodation in the field and legitimation of those understandings by the state. Once in place, the interaction in the field becomes “games,” where dominant firms use the accepted institutional rules to reproduce their power.
The field approach provides a corrective to the normative and structural deterministic notion of the organizational environment by linking the analysis to the struggles that produce those structures and cultures (Swartz 1997:119). However, some contend that the field itself is not directly measurable and its existence can be proved only by its effects (Martin 2003:8–9). Furthermore, some suggest that seeing life as antagonistic games ignores the myriad interactions that are not strategic but altruistic, civil, and “downright pleasant” (Martin 2003:33) and may limit application of this approach to certain competitive sectors. Also, the transformation of the field relations and adaptation mechanisms of the field are underdeveloped.
The organization and state approach is reminiscent of Weber’s work because it highlights the distinctive power of large corporations in the context of the development of capitalism and the state. This approach raises both historical and functional questions, including how large industrial organizations emerged in Western countries (Dobbin 1994; Perrow 2002) and how private corporations, markets, and industries produce stable arrangements for economic exchanges (Colignon and Usui 2003). Scholars examine how states shape the environment of organizations, affecting their emergence and decline, form, and effectiveness, and how large organizations, in turn, affect the patterns of interactions and the subsequent policy directions of the state. Some work includes organizational goals, strategies, choices by managers, and how they are linked to alliances and antagonisms involving state and societal interests (Colignon 1997).
The organization-state approach takes up key elements of Weber’s work by linking powerful organizations to the interactions of markets and the state, material and ideal interests, and how large organizations dominate state policy patterns. Historical studies focus on the emergence of large, dominating organizations that reflect and define the corporate and government policy directions of their countries. Researchers identify critical historical moments and potential policy alternatives that not only define practical policy possibilities involving the passage of laws, wars, and legislation but may also involve the less formal interventions of state actors. Some studies identify those actors promoting and resisting different alternatives, their capacities, alliances, and good fortune (Colignon 1997; Roy 1998).
Another strand of the organization-state approach asserts that states and societal actors negotiate property rights, governance structures, and rules of exchange that function to define the market environment for organizational operations. Property rights are rules defining ownership and control over the means of production, such as partnership forms, patents, and credentials. Governance structures are rules and regulations defining relations of competition and cooperation among firms and how firms should be organized, such as corporate hierarchies and industrial associations (Campbell and Lindberg 1990). Fligstein (2001:34–35) adds rules of exchange that define who can transact with whom and the conditions under which transactions are carried out, such as setting standards of weights, enforcement of contracts, and setting health and safety standards. These features direct attention to an interface between government agencies and the economy contested by organizations, industrial associations, government, labor, and consumers that varies across sectors, country, and time providing a framework for comparative analysis of the political struggles among institutions, organizations, and interests and the historical conflicts.
Although this approach resonates within developed countries, it is not clear how it fits with developing countries, where legal and administrative instruments are not as well developed. Furthermore, there is an underdevelopment of the specific mechanisms of change and the importance of changing state structures to the deinstitutionalization of old organizational forms and the institutionalization of new forms (Guillen 2003).
The information explosion at the end of the twentieth century generated new organizational forms that are flatter, networked, nimble, and global (Castells 1996). These new organizations created enormous wealth, while mergers, acquisitions, restructuring, and bankruptcies have transformed the nature of decision making and employment. At the same time, government organizations played important roles in the development of these new organizational forms and the deinstitutionalization of older forms of organization. The passage of laws, allocation of resources, changing regulatory frameworks, and provision of failure protection (bankruptcy protection and assuming medical and pension obligation) changed organizational environments and advanced the interests of some organizations. While these changes are taking place in industrialized countries, the gap between technologically rich and poor countries has widened with little attention. In the face of these changes, what does organizational sociology have to offer for the twenty-first century?
This article sketched different approaches to the sociology of organizations implying a few theoretical and empirical programs for the twenty-first century. Theoretically, there is the need to examine the broad landscape of organizational theory as well as to attend to the more rigorous and nuanced application of the different approaches. Some approaches are more applicable to public or private organizations by emphasizing normative expectations or, alternatively, the technical and market contingencies of the environment. The performance of some organizations is determined by normative attitudes and expectations, while for others it is the result of technology and markets. Furthermore, some approaches are more applicable to large, dominant, monopolistic organizations, whereas other approaches are better suited to smaller, weaker, competitive, or “trivial” organizations (Perrow 1986). Some approaches view organizations and environments as so tightly linked that failure is imminent, while other approaches assume the linkage is so loose as to remove organizational failure as an outcome. Both distinctions, public versus private and dominant versus trivial, suggest a decoupling of the study of different types of organizations from the pursuit of a general theory of organizations. Ironically, both distinctions are evident in Weber’s historical and comparative work (Swedberg 2003).
All too often organizational theory is overdrawn and analytic subtlety is lost. There is a tendency to present differences between approaches in oppositional terms, such as legitimacy versus markets or dominant versus subordinate organizations, but these differences are more complex. For example, public and private firms face constraints of both markets and legitimacy. Multiple approaches may be relevant in explaining markets for the funding of public organizations and issues of legitimacy for the forms and practices of private organizations. Similarly, the mechanisms of adjustment for dominant and subordinate organizations may be not only qualitatively different but also a matter of degree. Small organizations may gain flexibility in ways similar to large organizations but are restricted to their local environments. The theoretical effort should be to unravel the ways in which the contingencies of markets and legitimacy are intertwined for both public and private and dominant and subordinate organizations.
The defining features of organizational sociology may limit the capacity of sociologists to address issues of organization in the twenty-first century. The master features of organizational sociology that were institutionalized after the 1960s may hobble the abilities of sociologists engaged in explaining social developments surrounding new organizational forms and environments in the twenty-first century. As organizational sociologists institutionalized these defining features, they reduced their analyses to the impact of the environment on the organization and failed to locate the organization in the broader role structure of industry and society. Empirical examination of distinct types of organizations, public and private, dominant and subordinate, fell within the drive for a universal theory that would fit all organizations.
The approaches of organizational networks, fields, and state-organization relations circumvent this problem by substituting a view of organizations as a relational process inseparable from their interactional context (Weick 1995), rather than sui generis structures, and moving up levels of analysis to incorporate the location of the organization in its group, industry, or society. This allows them to incorporate issues of interests and power and examine the consequences of organizational actions. These approaches combine normative and instrumental elements reminiscent of Weber’s work. Their general applicability and flexibility regarding goals, environments, interdependencies, and mechanisms of change provide the possibility for a more unified theoretical development. Yet even these new approaches suggest that variation in industry and societal location may create and enforce substantially varied environments that require comparative analyses.
All the approaches reviewed in this article may benefit from comparative analysis across social situations and between different theories. Many of these theories have developed in specific sectors or national contexts. For example, the concept of “opportunism” is central to both transaction costs analysis and resource dependency, but its meaning varies by social situation, which has rarely been addressed. In addition, empirical work tends to concentrate on variables identified with a particular theoretical approach. Research does not so much test the applicability of different approaches as illustrate the application of a particular approach. Consequently, it is difficult to assess the viability of pursuing a general theory for the sociology of organizations. For example, neo-institutional and ecological approaches, which minimize interests and strategy, would be well served by comparative hypothesis testing across sectors with variables from other approaches, including decision making, transaction costs, structural contingency, and resource dependency, which share the key assumption that strategic adaptation matters in organizational performance.
The examination of the relationship between people and organizations is another area of neglect that followed from the institutionalization of organizational sociology in the 1960s. Empirical work on decision making and employment experience was neglected as the approaches to organizational sociology increasingly focused on the correspondence between organizational structures, strategies, and the environment. Favored approaches in organizational sociology pay minimal attention to the changing internal dynamics, such as agency, voice, power, and resistance practices. These approaches describe relations between environmental changes and organizational forms by relying on near-tautological explanations instead of examining the social mechanisms of human interaction that mediate the effects of the environmental changes and changing forms of organization. The neo-institutional perspective would benefit from a deeper and more fine-grained analysis of decision making and work activities to specify the processes of institutionalization and the conditions under which institutionalization takes place (Tolbert and Zucker 1996).
The future of organizational sociology depends on practical application of key assumptions and more rigorous comparative and longitudinal examinations of key concepts and relationships to better address the organizational forms and environments of the twenty-first century. Otherwise, it stands to relinquish its academic birthright to scholars from disciplines that are less encumbered by these assumptions. For at least 30 years, organizational sociologists (trained in sociology departments) have been taking positions in business schools to provide them with analytic rigor in the study of organizations. This has created a situation where scholars with an institutional location outside of sociology contribute considerably to the development of the sociology of organizations. A review of the top organizational books over the last several decades and a casual examination of the editorial boards of journals and handbooks of organizational studies reveal the extent of the interdisciplinary nature of the field of organizational sociology.
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