The concept of scarce resources suggests that politics will be more salient and intense in dif”cult times. Schools and colleges, for example, have lived through alternating eras of feast and famine related to peaks and valleys in economic and demographic trends. Whenmoney and students are plentiful (as they were in the 1960s and again in the 1990s), administrators spend time designing new buildings and initiating innovative programs. Work is fun when you’re delivering good news and constituents applaud. Conversely, when resources dry up, you may have to shutter buildings, close programs, and lay off staff. Con!ict mushrooms, and administrators often succumb to political forces they struggle to understand and control.
Differences and scarce resources make power a key resource. Power in organizations is basically the capacity to make things happen. Pfeffer de”nes power as “the potential ability to in!uence behavior, to change the course of events, to overcome resistance, and to get people to do things they would not otherwise do” (1992, p. 30). Social scientists often emphasize a tight linkage between power and dependency: If A has something B wants, A has leverage. In much of organizational life, individuals and groups are interdependent; they need things from one another, and power relationships are multidirectional. From the view of the political frame, power is a “daily mechanism of our social existence” (Crozier and Friedberg, 1977, p. 32).
The “nal proposition of the political frame emphasizes that goals are not set by edict at the top but evolve through an ongoing process of negotiation and bargaining. Few organizations have a unitary apex. Who, for example, is at the head of a public company? The CEO? This is the structural view, but the CEO reports to the board. The board, in turn, is elected by and accountable to shareholders. And the shareholders are typically a large and scattered group of absentee owners. They have little time, interest, or capacity to in!uence the organization in which each has a sliver of ownership. But if a corporate raider or a hedge fund acquires a major ownership stake, the stage is set for a contest for control of the company.
This political view of organization might seem strange in light of traditional assumptions of control from the top. Yet the same dynamics of con!ict, coalitions, and power are found at every level of human affairs. Mann (1986, 2013) tells us that’s how society works. Society is not a cohesive unit but is “constituted of multiple, overlapping and intersecting networks of power” (1986, p. 1). David Eagleman says that the same is true of the human brain. He presents data from psychology and neuroscience to show that almost all of our mental activity takes place outside awareness. Here’s what he says is going on politically inside your brain: “Small groups are constantly making decisions and sending out messages to other groups. Out of these local interactions, emerge larger coalitions. By the time you read a
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mental headline, the important action has already transpired, the deals are done. You have surprisingly little access to what happened behind the scenes. Entire political movements gain ground-up support and become unstoppable movements before you ever catch wind of them as a feeling or intuition or thought that strikes you. You’re the last one on the chain of command to hear the information” (Eagleman, 2011, p. 6).
Multiple constituents jockey for in!uence at every level, from the individual brain to global society. This is especially apparent in the public sector. When Xi Jinping came to power as head of China’s Communist Party in November 2012, his “rst public speech made no mention of Marx or Mao but emphasized the need to solve the problem of “corruption [and] being out of touch with the people” (Demick, 2012). Xi understood that corruption represented a potentially fatal threat to the party’s continued dominance. But the party elite he hoped to in!uence included more than 80 billionaires (Anderlini, 2013; van Kerckhove, 2013), perhaps the largest concentration of wealth the world has ever seen.
Those superrich included both successful entrepreneurs and members of the so-called black collar class, Communist of”cials whose sway over business created opportunities to trade power for cash. Xi knew that something had to be done about rampant corruption, but he was up against formidable opposition from party and government of”cials who were in no hurry to change a system that was making them and their families rich. When Xi launched a new austerity campaign in 2013, ordering the elite to cut back on lavish banquets and similar luxuries, a new catchphrase became popular in Chinese of”cialdom, “Eat quietly, take gently and play secretly” (Jacobs, 2013).
The challenges Xi faced in “ghting corruption mirrored those that had hindered China’s efforts for more than a decade to protect intellectual property. When it joined the World Trade Organization in 2001, the Chinese government promised to get serious about protecting intellectual property, ensuring that products carrying brands such as Coca-Cola, Microsoft, Sony, and Rolex were authentic. The central government passed laws, threw the book at the occasional unlucky offender, blustered in the media, and put pressure on local governments. Yet 15 years later, name-brand knockoffs and pirated music continued to be sold all over China and Western tourists in Beijing still encountered a steady stream of vendors offering “Rolex” watches at amazing prices (Powell, 2007).
Why have the antipiracy efforts had limited impact? The Chinese government is far from monolithic and is only one of many players in a complex power game. Newly af!uent Chinese consumers want foreign brands. Businesses understand that a homemade carbon- ated !uid can fetch a better price if it carries an American brand name. The problem has been so widespread that Coca-Cola’s Chinese af”liate found itself not only raiding factories
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but also chasing pirates who slapped Coke labels on bottles in delivery trucks while on route to retail outlets.
Pirates are often local businesses with plenty of guanxi (connections) who share the loot with local government and police of”cials. As one New York Times reporter discovered when he was imprisoned for several hours in a toy factory, “Factory bosses can overrule the police, and Chinese government of”cials are not as powerful as you might suspect” (Barboza, 2007, p. 4–3). Moreover, the concept of intellectual property rights is new to many Chinese. They “nd it hard to see the merit of punishing a hard-working Chinese entrepreneur in order to protect a foreign corporation. In short, multiple power centers and continuing divisions have limited of”cials’ ability to translate intention into action.
ORGANIZATIONS AS COALITIONS Academics and managers alike have usually assumed that organizations have, or ought to have, clear and consistent goals set at the top. In a business, the owners or top managers set goals such as growth and pro”tability. Goals in a government agency are presumably set by the legislature and elected executives. The political frame challenges such views. Cyert and March articulate the difference between structural and political views of goals:
To what extent is it arbitrary, in conventional accounting, that we call wage payments “costs” and dividend payments “pro”t” rather than the other way around? Why is it that in our quasigenetic moments we are inclined to say that in the beginning there was a manager, and he recruited workers and capital? . . . The emphasis on the asymmetry has seriously confused the under- standing of organizational goals. The confusion arises because ultimately it makes only slightly more sense to say that the goal of a business enterprise is to maximize pro”t than to say that its goal is to maximize the salary of Sam Smith, assistant to the janitor (1963, p. 30).
Cyert and March are saying something like this: Sam Smith, the assistant janitor; Jim Ford, the foreman; and Celestine Cohen-Peters, the company president are all members of a grand coalition, Cohen-Peters Enterprises. All make demands on resources and bargain to get what they care about. Cohen-Peters has more authority than Jones or Ford and, in case of disagreement, she will often win—but not always. Her in!uence depends on how much power she mobilizes in comparison with that of Smith, Ford, and other members of the coalition. Xerox had a close brush with bankruptcy in 2001 under a CEO who had come
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from the outside and never mastered the politics at the top of the organization. The “rm was adrift, and the captain lost control of his ship. His successor, Anne Mulcahy, was a canny insider who built the relationships and alliances she needed to get Xerox back on course.
If political pressures on goals are visible in the private sector, they are blatant in the public arena. As in the Challenger incident, public agencies operate amid a welter of constituencies, each making demands and trying to get its way. The result is a confusing multiplicity of goals, many in con!ict. Consider Gazprom, Russia’s biggest company and the world’s largest producer of natural gas. Gazprom supplies most of the natural gas in Eastern Europe and 25 percent or more in France, Germany, and Italy. It began as a state ministry under Mikhail Gorbachev, became a public stock company under Boris Yeltsin, and then turned semipublic under Vladimir Putin, with the Russian government the majority stockholder.
Many observers felt that Gazprom functioned as an extension of government policy. Prices for gas exports seemed to correlate with how friendly a government was to Moscow. “If people take us for the state, that doesn’t make us unhappy,” said Sergey Kouprianov, a company spokesman. “We identify with the state” (Pasquier and Chevelkina, 2007, p. 43). Russian President Vladimir Putin returned the sentiment. Gazprom produced a quarter of Russia’s government revenues, and Putin saw hydrocarbons substituting for the Red Army as a lever to project Russian power. At the same time, Russian consumers got their gas at about 20 percent of market price. When the company tried for a domestic price increase in 2006, it was blocked by a government that was thinking ahead to the next presidential election. Was this giant in business to bene”t customers, management, stockholders, the Kremlin, or Russian citizens? All of the above and more, because all were participants in the grand and messy Gazprom coalition.
Greatest Hits from Organization Studies Hit Number 3: Richard M. Cyert and James G. March, A Behavioral Theory of the Firm (Upper Saddle River, NJ: Prentice Hall, 1963)
Coming in at number three on the scholars’ lists of greatest hits is a 40-year-old book by an economist, Richard Cyert, and a political scientist, James G. March. Cyert and March de!ned their basic purpose as developing a predictive theory of organizational decision making rooted in a realistic understanding of how decisions actually get made. They rejected as unrealistic the traditional economic view of a !rm as a unitary entity (a corporate “person”) with a singular goal of maximizing pro!ts. Cyert and March chose instead to view organizations as coalitions made up of individuals and subcoalitions. This view implied a central idea of the political frame: goals