The Importance of Organizations

THE IMPORTANCE OF ORGANIZATIONS.

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THE IMPORTANCE OF ORGANIZATIONS Ubiquity. There is no need to belabor the assertion that ours is an organizational society-that organizations are a promInent, ifnot the dominant, characteristic of modern societies. Organizations were present in older civilizations-Chinese, Greek, Indian-but only in modern industrialized societies do we find large numbers of organizations engaged in performing many highly diverse tasks. To the ancient organizational assignments ofsoldiering, public administration, and tax collection have been added such varied tasks as discovery (research organizations), child and adult socialization (schools and universities); resocialization (mental hospitals and prisons), production and distribution of goods (industrial firms. wholesale and retail establishments). provision of services (organizauons 'd isp e n sin g assistance ranging from laundry and shoe repair to medical care and investment counseling), protection of personaland financial security (police departments, insurance firms, banking and trust companies), preservation of culture (museums, art galleries, universities, libraries) , communication (radio 31)_d television studios, telephone companies, the U.S. Postal Service), and re-creation (bowling alleys, pool halls. the National Park Service, professional football teams). Even such a partial Iistmg testifies to the truth of Parsons's statement that "the development of organizations is the principal mechanism by which, in a highly differentiated society, it is possible to 'ge t things done,' to achieve goals beyond the reach of the individual" (1960: 41). 3 4 An Introduction to Organizations Until very recently.ieven highly developed societies such as the United States did not keep accurate records on organizations. We kept close, watch of the numbers ofindividuals and the flow of dollars, but gave less scrutiny to organizations. It was not until the 1980s that the U.S. Bureau of the Census launched a Standard Statistical Establishment List for all businesses, distinguishing between an establishment-an economic unit at a single location-and a firm or company-a business organization consisting of one or more domestic establishments under common ownership. In 1997, the U.S. Census Bureau reported the existence of "more than 5.3 million single-establishment companies and about 210,000 multi-unit forms representing another 1.6 million establishments, for a total of 6.9 million establishments and 5.5 million firms" (Knoke, 2001: 77). Impressive as these numbers are, they do not include public agencies or voluntary associations, which may be almost as numerous. The first attempt to create a representative national survey of all employment settings in the United States was carried out during the early 1990s by a team of organizational researchers (Kalleberg et al., 1996). To conduct this "national organizations study," Kalleberg and associates developed an ingenious design to generate their sample. Because no complete census of organizations existed, they began by drawing a random sample of adults in the United States who were asked to identify their principal employers. As a second step, data were gathered by telephone, from informants in the organizations named as employers, regarding selected features of each ofthese employment settings, in particular, human resources practices. This procedure resulted in a random sample of employment organizations (establishments), weighted by size of organization (Kalleberg et al., 1996; chap. 2). Their results indicate that, as of 1991, 61 percent of respondents were employed in private sector establishments, 27 percent in the public sector, and 7 percent in the nonprofit sector (1996: 47). Even though organizations are now ubiquitous, their development has been sufficiently gradual and uncontroversial that they have emerged during the past few centuries almost unnoticed. The spread of public bureaucracies into every arena and the displacement of the family business by the corporation "constitutes a revolution" in social structure, but one little remarked until recently. Never much agitated, never even much resisted, a revolution for which no flags were raised, it transformed our lives during those very decades in which, unmindful ofwhat was happening, Americans and Europeans debated instead such issues as socialism, populism, free silver, clericalism, chartism, and colonialism. It now stands as a monument to discrepancy between what men think they are designing and the world they are in fact building. (Lindblom, 1977: 95) Organizations in the form that we know them emerged during the nineteenth century in Europe and America, during the period of economic expansion occasioned by the industrial revolution. Not only did organizations rapidly increase in number and range of applications, but they also underwent a transformation of structure as formerly "communal" forms based on the bonds of kinship and personal ties gave way to "associative" forms based on The Subject Is Organizations 5 contractual arrangements among individuals having no ties other than a willingness to pursue shared interests or ends (Starr, 1982: 148). Source ofsocial ills? The increasing prevalence oforganizations in every arena of social life is one indicator of their importance. Another, rather different index of their significance is the increasing frequency with which organizations are singled out as the source of many of the ills besetting contemporary society. Thus, writing in 1956, C. Wright Mills pointed with alarm to the emergence of a "power elite" whose members occupied the top positions in three overlapping organizational hierarchies: the state bureaucracy, the military, and the larger corporations. At about the same time, Ralf Dahrendorf (1959 trans.) in Germany was engaged in revising and updating Marxist doctrine by insisting that the basis ofthe class structure was no longer the ownership ofthe means of production but the occupancy of positions that allowed the wielding of organizational authority. Such views, which remain controversial, focus on the effects of organizations on societal stratification systems, taking account of the changing bases of power and prestige occasioned by the growth in number and size of organizations. A related criticism concerns the seemingly inexorable growth in the power of public-sector organizations. The two great German sociologists Max Weber (1968 trans.) and Robert Michels (1949 trans.) were among the first to insist that a central political issue confronting all modern societies was the enormous influence exercised by the (nonelected) public officials-. the bureaucracyover the ostensible political leaders. An administrative staff presumably designed to assist leaders in their