Organizations in Action: The Propositions by James D. Thompson (Part I)

James D. Thompson’s 1967 book, Organizations in Action: Social Science Bases of Administrative Theory, published by McGraw-Hill, ranks as one of the all-time classics regarding organizations. This is my most favourite book in the field of Organisational Management Theory. At the time, Thompson was Professor of Business Administration and Professor of Sociology at Indiana University. His book is noteworthy for the many propositions it sets forth about organizations. Those propositions are listed below along with an excerpt from the closing paragraphs of Chapter 1. They are worthy of study.

Chapter 1 – Strategies for Studying Organizations

Most of our beliefs about complex organizations follow from one or the other of two distinct strategies. The closed-system strategy seeks certainty by incorporating only those variables positively associated with goal achievement and subjecting them to a monolithic control network. The open-system strategy shifts attention from goal achievement to survival and incorporates uncertainty by recognizing organizational interdependence with environment. A newer tradition enables us to conceive of the organization as an open system, indeterminate and faced with uncertainty, but subject to criteria of rationality and hence needing certainty. With this conception the central problem for complex organizations is one of coping with uncertainty.

Chapter 2 – Rationality in Organizations

2.1: Under norms of rationality, organizations seek to seal off their core technologies from environmental influences. 2.2: Under norms of rationality, organizations seek to buffer environmental influences by surrounding their technical cores with input and output components. 2.3: Under norms of rationality, organizations seek to smooth out input and output transactions. 2.4: Under norms of rationality, organizations seek to anticipate and adapt to environmental changes which cannot be buffered or leveled. 2.5: When buffering, leveling, and forecasting do not protect their technical cores from environmental fluctuations, organizations under norms of rationality resort to rationing.

Chapter 3 – Domains of Organized Action

3.1: Under norms of rationality, organizations seek to minimize the power of task-environment elements over them by maintaining alternatives. 3.2: Organizations subject to rationality norms and competing for support seek prestige. 3.3: When support capacity is concentrated in one or a few elements of the task environment, organizations under norms of rationality seek power relative to those on whom they are dependent. 3.3a: When support capacity is concentrated and balanced against concentrated demands the organizations involved will attempt to handle their dependence through contracting. 3.3b: When support capacity is concentrated but demand dispersed, the weaker organization will attempt to handle its dependence through coopting. 3.3c: When support capacity is concentrated and balanced against concentrated demands, but the power achieved through contracting is inadequate, the organizations involved will attempt to coalesce. 3.4: The more sectors in which the organization subject to rationality norms is constrained; the more power the organization will seek over remaining sectors of its task environment. 3.5: The organization facing many constraints and unable to achieve power in other sectors of its task environment will seek to enlarge the task environment. Chapter 4 – Organizational Design 4.1: Organizations under norms of rationality seek to place their boundaries around those activities which if left to the task environment would be crucial contingencies.

4.1a: Organizations employing long-linked technologies and subject to rationality norms seek to expand their domains through vertical integration.

4.1b: Organizations employing mediating technologies, and subject to rationality norms seek to expand their domains by increasing the populations served.

4.1c: Organizations employing intensive technologies, and subject to rationality norms seek to expand their domains by incorporating the object worked on. 4.2: Multicomponent organizations subject to rationality norms will seek to grow until the least-reducible component is approximately fully occupied. 4.3: Organizations with capacity in excess of what the task environment supports will seek to enlarge their domains. Chapters 5-10 will be dealt with in the upcoming posts.