Organizations’ understanding of their environment is often distorted or imperfect (because organizations act on only the information they’re geared to collect and know how to interpret).
• Organizations confront multiple constituents whose demands are often inconsistent.
Organizations comply where they have to, but they also look for ways to increase their autonomy by making their environment more predictable and favorable. They may merge to gain greater market supremacy, form coalitions (alliances, joint ventures) to gain greater in”uence, or enlist government help (by seeking subsidies, tax breaks, or protective tariffs, for example). But there is a dilemma: every entanglement, even as it garners greater in”uence over a part of the environment, also produces erosion of the organization’s autonomy. There’s no free lunch.
Pfeffer and Salancik describe three roles for managers, two political and one symbolic: (1) a responsive role in which managers adjust the organization’s activities to comply with pressures from the environment; (2) a discretionary role in which they seek to alter the organization’s relationship with its environment; and (3) a symbolic role arising from the widely accepted myth that managers make a difference. If a team is losing but you can’t change the players, you !re the coach, creating the appearance of change without actually changing anything (an important idea that we address in the next chapter).
Do sophisticated consumer marketing “rms create and control consumer tastes, or do they simply react to needs created by larger social forces? Critics like Korten (1995) are
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convinced that the advantage lies with the corporations, but Pfeffer and Salancik (1978) see it the other way around, as do many proponents of “the marketing concept”:
The marketing concept of management is based on the premise that over the longer term all businesses are born and survive or die because people (the market) either want them or don’t want them. In short, the market creates, shapes, and de”nes the demand for all classes of products and services. Almost needless to say, many managers tend to think that they can design goods and services and then create demand. The marketing concept denies this proposi- tion. Instead, the marketing concept emphasizes that the creative aspect of marketing is discovering, de”ning, and ful”lling what people want or need or what solves their life-style problems (Marshall, 1984, p. 1).
Proponents of this view note that even the most successful marketers have had their share of Edsels—products released with great fanfare and huge marketing budgets that !uttered brie!y and then sank like stones. Consumers, in this view, are in charge because they can buy what they want and walk away from what they don’t want.
Slee (2006) provides a contrary view. He uses game theory and the concept of market failures to argue that, even though consumers generally make rational choices in terms of the options they have, their collective behavior can lead to a world that is worse for everyone. If, for example, Walmart opens a store on the outskirts of a medium-sized community, consumers may !ock to it for the low prices and wide variety of merchandise. At “rst everyone is happy. But then, downtown merchants who can’t match Walmart go out of business, throwing employees out of work and making the town center bleak and empty. Not all the newly unemployed can get jobs atWalmart, and those who do get paid less. Some of the wealth that used to circulate in the community now !ies away to Walmart headquarters in Arkansas. The community as a whole may be worse off, even though everyone still likes Walmart’s low prices.
Are large multinational corporations so powerful that they have become a law unto themselves, or are they heavily constrained by the need to respond to customers, cultures, and governments? An ecological view suggests that the answer is some of both. Ecosystems and competitors within them rise and fall. Power relations are never static, and even the most powerful have no guarantee of immortality. Of the top twenty-“ve U.S. companies at the beginning of the twentieth century, all but one had dropped off the list or vanished altogether when the century came to a close. The lone survivor? General Electric.
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Fishman frames both sides of this issue in the case of Walmart:
The easiest response to the Walmart critics comes from people who shrug and� say, the United States economy is capitalistic and market-based. Walmart is� large and ubiquitous—and powerful—because it does what it does so well.� Walmart is winning for no other reason than personal choice: Customers vote� for Walmart with their wallets; suppliers vote for Walmart with their products.� Any consumer, any businessperson who doesn’t care for the way Walmart does� business is free to buy and sell products somewhere else.�
Theproblemis that this free choicehasbecomean illusion. Inmanycategories� of products it sells,Walmart is now30percent ormore of the entiremarket. It sells� 31percentof thepet foodused in theUnitedStates, 37percentof the freshmeat, 45� percent of the of”ce and school supplies bought by consumers, and 24 percent of� the bottled water. That kind of dominance at both ends of the spectrum—
dominance across a huge range of merchandise and dominance of geographic� consumer markets—means that market capitalism is being strangled with the� kind of slow inexorability of a boa constrictor. It’s not free-market capitalism;� Walmart is running themarket. ThenewlymergedProcter&Gamble andGillette� has sales in excess of $64 billion a year—not only bigger by far than any other� consumer products company, but bigger than all but 20 public companies of any� kind in the United States. But remember: Walmart isn’t just P&G’s number-one� customer; it’s P&G’s business.Walmart is bigger than P&G’s next nine customers� combined. That’s why businesspeople are scared of Walmart. They should be.� And if a corporation with the scale, vigor, and independence of P&Gmust bend� to Walmart’s will, it’s easy to imagine the kind of in!uence Walmart wields� over the operators of small factories in developing nations, factories that just� want work and have almost no leverage with Walmart or Walmart’s vendors � (Fishman, 2006, p. 20. Copyright ! 2006. Academy of Management).�
Walmart’s clout remains formidable, but its future is less clear. After years of embattled, slow growth, in 2016 Walmart’s sales and pro”ts declined for the “rst time in decades. Will it grow and prosper in the future? Or will it follow companies like Sears into a long downhill slide from the pinnacle it now commands? Whatever happens to Walmart, the battle over corporate power will continue on a global scale.
In recent years, across industries and around the globe, wealth and power have been increasingly concentrated in a shrinking number of very large “superstar” “rms. This is not
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always good news for workers because as industries becomemore concentrated, the share of the economic pie that goes to labor shrinks (Autor et al., 2017). The power of large multinational companies has continued to grow, but they must still cope with the demands of other powerful players: governments, labor unions, investors, and consumers. In a cacophonous global village, this is the biggest political contest of all.
CONCLUSION Organizations are both arenas for internal politics and political agents with their own agendas, resources, and strategies. As arenas, they house competition and offer a setting for the ongoing interplay of divergent interests and agendas. An arena’s rules and parameters shape the game to be played, the players on the “eld, and the interests to be pursued. From this perspective, every signi”cant organizational process is inherently political.
As agents, organizations are tools, often very powerful tools, for achieving the purposes of whoever controls them. But they are also inevitably dependent on their environment for needed support and resources. They exist, compete, and coevolve in business or political ecosystems with clusters of organizations, each pursuing its own interests and seeking a viable niche. As in nature, relationships within and between ecosystems are sometimes “ercely competitive, sometimes collaborative and symbiotic.
A particularly urgent and controversial question is the relative power of organizations and society. Giant multinational corporations have achieved scale and resources unprecedented in human history. Critics worry that they are dominating and distorting politics, society, and the environment. Optimists argue that organizations retain their clout only by adapting to larger social forces and responding to the needs and demands of customers and constituents.
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PART F I V E
The Symbolic Frame
When the Catholic Church changed the liturgy from Latin to English many parishioners rebelled even though the change made sacred tenets more accessible. For many it was the !rst time that they could grasp and grapple with the sacred values of their faith. InHunger of Memory, one parishioner describes vividly his reaction to the change:
But now that I no longer live as a Catholic in a Catholic world, I cannot expect the liturgy—which re”ects and cultivates my faith—to remain what it was. I will continue to go to the English mass. I will go because it is my liturgy. I will, however, often recall with nostalgia the faith I have lost . . . The church is no longer mine (Rodriguez, 1997, p. 107).
In 1995 The Coca-Cola Company changed its 99-year-old recipe for its “agship soft drink. Pepsi, the company’s chief competitor, was making inroads into Coke’s market share; and in a series of blind taste tests, the new recipe was consistently preferred over Pepsi. This gave the company executives con!dence that a new product would corner the market. The New Coke was launched with an elaborate advertising campaign.
Public reaction was swift and unanticipated. Some consumers !lled their basements with the original Coke. Protest groups popped up across the country. Songs were written to
Reframing Organizations: Artistry, Choice, and Leadership, Sixth Edition. Lee G. Bolman and Terrence E. Deal. ! 2017 by John Wiley & Sons, Inc. Published 2017 by Jossey-Bass.
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honor the old taste. Protestors at an event in Atlanta carried placards: “We want the real thing,” “Our children will never know refreshment.” Other reactions carried the same sentiment.
Both the Latin liturgy and Coca-Cola are laden with symbolism. Symbols carry powerful intellectual and emotional messages; they speak to the heart and the soul. They are embedded in myths which are truer than true. “It is through myths that men are lifted above their capacity in the ordinary, attain powerful visions of the future, and realize such visions” (Berger, 1974, p. 26).