Organizations in Modern Societies

Organizations in Modern Societies

by: Yudo Anggoro, University of North Carolina at Charlotte

The role of organization in shaping the society has been increasing in modern era. Scott and Davis (20007) indicate that organizations are the dominant characteristics of modern society, and they perform every function in a society. Previously, the role of organization in the society has been ignored and it was not until 1980s when the US Census Bureau distinguished between an establishment –an economic unit at a single location-, and a firm –a business organization consisting of one or more domestic establishments under common ownership. Organizations in modern era have transformed their form from “communal” forms into “associative” forms. It means that organizations are managed with sets of vision, rules, and goals to keep organizations stay on their track.

Since the role of organizations in modern societies got more attention from the public, some issues related to organization appeared. Organizations are criticized as the source of ills in the society. Some people accused organizations as causing the damage of the personalities of people; such as alienation, over conformity, and prohibit normal personality development. As the size of organization is increasing, organization is said to be rule bound, cumbersome, and inefficient (Mises, 1994 in Scott and Davis, 2007). In my opinion, it is the responsibility of people inside the organization to keep organization agile and adapt to its environment. It is not the fault of the organization per se; it is the people-especially leaders- who need to set vision, goals, and evaluate performance of the organization.

As the size of organizations increases, they need more rules, laws, and regulations; the characteristics of organizations will be more bureaucratic. As Weber (1968) mentions about the characteristics of bureaucratic structure, all the regular activities required for the purpose of the bureaucratic governed structure are distributed in a fixed way as official duties. Organizations will be governed by the authority that has full control over the organizations through hierarchical structure. Officials are appointed by higher authority. Some advantages of bureaucratic structure are maximizing precision of decision, speed, unambiguity, knowledge of the files, continuity, reduction of friction, and unity.

In regard to bureaucratic structure, some issues have been growing concerning on whether individuals may maximize their creativity in bureaucratic structure. In bureaucratic structure, individuals will look like a small cog in a big moving machine. Individuals are chained to sets of structure, rule, and regulation in the organization. At the other side, individuals need to have enough freedom to exploit their creativity. In my opinion, flat and collegial structure of organizations is more appropriate for those who need to develop and maintain their creativity. It depends on the nature of organizations and the environment where the organizations belong to. Organizations in a fast moving and high technological business are more appropriate to apply flat and collegial structure, while government organizations are best suited for bureaucratic structure.

I find three organization perspectives from Scott and Davis (2007) are interesting. Those three perspectives -the rational, natural, and open system- seem to align with Marx’s theory of the class structure and the centrality of class struggle.  While rational theory views organizations as highly formalized collectivities pursuing specific goals, so does the class structure in Marx’s term. Marx views human production is by nature collective rather than individual, and this view align with the natural perspective; which views organizations as social systems, forged by consensus or conflict.

Reference:

Scott, W.R., and Davis, G.F. (2007). Organizations and Organizing: Rational, Natural, and Open System Perspectives. Pearson, Upper Saddle River: NJ.