A paradox from 1978

It was 2017 when I had the opportunity to personally meet Jeffrey Pfeffer – a management theorist, professor at Stanford in Organizational Behavior. Author of numerous books, but one in particular that still serves as a guide to much of the essential thinking in Public Affairs: The External Control of Organizations: a resource dependence perspective (1978) – an essential book to understand why the need to work in the Public Affairs area in organizations.

“External control of organizations”: still, in the XXI century, a controversial concept for some managers, not fully accepted, although well understood by the fact that the environment does have a strong influence in the organization.

Several authors, with numerous theories, have written about how the exterior affects and influences the organization. Such as Burns (1963) who wrote the Contingency Theory who claims that there is “no best way” to manage an organization, and explains how the organizational structure (organic or mechanistic) can influence the way the company will adapt or react to the contingencies imposed by the exterior; or the Population Ecology, Hannan and Freeman (1977), which describes how relevant the conditions of the environment are for the survival (or death) of the organizations and how diverse the organizations can become; or the Stakeholder theory credited to Freeman (1984) who argues that other parties beside the shareholders exist, are involved and should also be taken into consideration by the organization; or, also, the Institutional Theory from DiMaggio and Powel (1993) and their references to the pressures exercised specifically by the rules, norms and values over the organizations.

In resume, the environment matters – that’s undeniable.

One could suspect that due to the fact that the book of Pfeffer (and Salancik) was written 43 years ago, it might be outdated, but, paradoxically, instead of leading the reader to some doubts related to how much the world might have changed over the years, the ideas and statements have survived over time and are still actual today.

The book starts by showing how the context of the organization is the outcome of the relations of the different social actors and how dependent one is from them. The book shows managers how the organization can “influence these others as a means of determining one’s own environment”. Giving meaning to the title “external control” and “resource dependence”. Shows us the relevance of the manager being able to address the level of dependence of the organization vis-à-vis the exterior and how the obvious uncertainty can be reduced over time.

One of the strengths of the book is the good explanation of the concept of enacted environment, and how useful is to fully understand the idea of external control. Weick (1969) stated “the human creates the environment to which the system then adapts. The human actor does not react to an environment, he enacts it”. Meaning that the environment of an organization is in fact what one’s decrees and/or recreates (with his own interpretation, given by his own perception of the reality).

With the support of Weick’s thoughts, Pfeffer also helps us to understand that what gets measured in an organization is in fact what will drive one’s activity and behavior and so, once more, the concepts of enacted environment and external control tend to become clearer.

In one of the most stimulating chapters in the book (chapter 8), the authors explore the idea of the organization as a political actor. The sentence “environment is not only a given, to be absorbed, avoided, or accepted. It is itself the dynamic outcome of the actions of many formal organizations seeking their own interests. The political environment is one important means by which the organization links into the social system (…). The political context is a place for formally institutionalizing the survival of the organization, guaranteeing it access to the resources it needs” summarizes in a perfect way the importance of the relations between both social actors, the organizations, and the political decision makers, and how those relations can be used to reduce the uncertainty and foster success.

One special remark for the page 213 and 3 paragraphs about the organization as a political actor that could have been written in 2017. Sentences as “…political activity of organizations is not considered [in textbooks of management] because it is not taken to be a normal and legitimate administrative function.” are impressively actual and show that there’s still a long way to go in order to achieve an effective and efficient equilibrium in between those two actors.

Despite the paradox previously mentioned this book is still a powerful, visionary and well organized contribution and a “must-read” for those who want to be called Managers.

References:

Burns, T. & Stalker, G. M. (1966). The Management of Innovation. 2nd edition London Tavistock Publications.
Freeman, R. Edward (1984). Strategic Management: A stakeholder approach. Boston: Pitman.
Hannan, M.T. & Freeman, J. (1977). The population ecology of organizations. American Journal of Sociology, 82, 924-964.
DiMaggio, P.J. & Powell, W.W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147-160.
Weick, K. E. 1969. The Social Psychology of Organizing. Reading, Mass.: Addison-Wesley.