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To illustrate his argument, Granovetter critiques another in”uential perspective: Oliver Williamson’s analysis of why some decisions get made in organizational hierarchies and others are made in markets (Williamson, 1975, number 12 on our list of scholars’ hits). Williamson proposed that repetitive decisions involving high uncertainty were more likely to be made in hierarchies because organizations had advantages of information and control—people knew and had leverage over one another. Granovetter counters that Williamson underestimates the power of relationships in cross-!rm transaction and overemphasizes the advantages of hierarchy. A central

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point in Granovetter’s argument is that relationships often trump structure: “The empirical evidence that I cite shows . . . that even with complex transactions, a high level of order can often be found in the market—that is, across !rm boundaries—and a correspondingly high level of disorder within the !rm. Whether these occur, instead of what Williamson expects, depends on the nature of personal relations and networks of relations between and within !rms” (p. 502).

INTERPERSONAL DYNAMICS In organizations, as elsewhere in life, many of the greatest highs and lows stem from relations with other people. Three recurrent questions about relationships regularly haunt managers:

• What is really happening in this relationship?

• What motives are behind other peoples’ behavior?

• What can I do about it?

All were key questions for Anne Barreta. What was happening between her and Harry Reynolds? Did he really start the rumor? If so, why? How should she deal with someone who seemed so dif!cult and devious? Should she talk to him? What options did she have?

To some observers, what’s happening might seem obvious: Harry resents a young minority woman who has become his peer. He becomes even more bitter when she rejects his demand to !re Mark and then seeks revenge through a sneak attack. The case resembles many others in which men dominate or victimize women. What should Anne, or any woman in similar circumstances, do? Confront the larger issues? Thatmight help in the long run, but a woman who initiates confrontation risks being branded a troublemaker (Collinson and Collinson, 1989). Should Anne try to sabotage Harry before he gets her? If she does, will she kindle a mêlée in which everyone loses?

Human resource theorists maintain that constructive personal responses are possible even in highly politicized situations. Argyris (1962), for example, emphasizes the impor- tance of “interpersonal competence” as a basic managerial skill. He shows that managers’ effectiveness is often impaired because they overcontrol, ignore feelings, and are blind to their impact on others.

Argyris and Schön’s Theories for Action Argyris and Schön (1974, 1996) carry the issue of interpersonal effectiveness a step further. They argue that individual behavior is controlled by personal theories for action—

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assumptions that inform and guide behavior. Argyris and Schön distinguish two kinds of theory. Espoused theories are accounts individuals provide whenever they try to describe, explain, or predict their behavior. Theories-in-use guide what people actually do. A theory- in-use is an implicit program or set of rules that speci!es how to behave.

Argyris and Schön discovered signi!cant discrepancies between espoused theories and theories-in-use, which means that people aren’t doing what they think they are. Managers typically see themselves as more rational, open, concerned for others, and democratic than others see them. Such blindness is persistent because people learn little from their experience. A major block to learning is a self-protective model of interpersonal behavior that Argyris and Schön refer to as Model I (see Exhibit 8.1).

Exhibit 8.1. Model I Theory-in-Use.

Source: Adapted from Argyris and Schön (1996), p. 93.

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Model I Lurking in Model I is the core assumption that an organization is a dangerous place where you have to look out for yourself or someone else may do you in. This assumption leads individuals to follow a predictable set of steps in their attempts to in”uence others. We can see the progression in the exchanges between Harry and Anne:

1. Assume that the problem is caused by the other side. Harry seems to think that Mark and Anne cause his problems; Mark is insulting, and Anne protects him. Anne, for her part, blames Harry for being biased, unreasonable, and devious. Both are employing a basic assumption at the core ofModel I: “I’mokay, you’re not.” So long as problems are someone else’s fault, the other, not you, needs to change.

2. Develop a private, unilateral diagnosis and solution. Harry de!nes the problem and tells Anne how to solve it: !re Mark. When she declines, he apparently develops another, sneakier strategy: covertly undermine Anne.

3. Since the other person is the cause of the problem, get that person to change. Use one or more of three basic strategies: (1) facts, logic, and rational persuasion (tell others why you’re right); (2) indirect in”uence (ease in, ask leading questions, manipulate the other person); or (3) direct critique (tell the other person directly what they are doing wrong and how they should change). Harry starts out logically, moves quickly to direct critique, and, if Steve’s diagnosis is correct, !nally resorts to subterfuge and sabotage.

4. If the other person resists or becomes defensive, that con!rms that the other person is at fault. Anne’s refusal to !re Mark presumably veri!es Harry’s perception of her as an ineffective troublemaker. Harry con!rms Anne’s perception that he’s unreasonable by stubbornly insisting that !ring is the only suf!cient punishment for Mark.

5. Respond to resistance through some combination of intensifying pressure and protecting or rejecting the other person. When Anne resists, Harry intensi!es the pressure. Anne tries to soothe him without !ring Mark. Harry apparently concludes that Anne is impossible to deal with and that the best tactic is sabotage. He may even believe his rumor is true because, in his mind, it’s the best explanation of why Anne got promoted.

6. If your efforts are less successful than hoped, it is the other person’s fault. You need feel no personal responsibility. Harry does not succeed in getting rid of Mark or Anne. He stains Anne’s reputation but damages his own in the process. Everyone is hurt. But Harry is unlikely to see the error of his ways. The incident may con!rm to Harry’s colleagues that he is temperamental and devious. Such perceptions will probably block Harry’s promotion to a more senior position. But Harry may persist in believing that

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he is right and Anne is wrong, because no one wants to confront someone as defensive and cranky as Harry.

The result of Model I assumptions is minimal learning, strained relationships, and deterioration in decision making. Organizations that rely too much on this model are rarely happy places to work.

Model II How else can a situation like Anne’s be handled? Argyris and Schön’s Model II offers basic guidelines:

1. Emphasize common goals and mutual in”uence. Even in a situation as dif!cult as Anne’s, developing shared goals is possible. Deep down, Anne and Harry both want to be successful. Neither bene!ts from mutual destruction. At times, each needs help and might learn and pro!t from the other. To emphasize common goals, Anne might ask Harry, “Do we really want an ongoing no-win battle? Wouldn’t we both be better off if we worked together to develop a better outcome?”

2. Communicate openly; publicly test assumptions and beliefs.Model II suggests that Anne talk directly to Harry and test her assumptions. She believes Harry deliberately started the rumor, but she is not certain. She suspects Harry will lie if she confronts him, another untested assumption. Anne might say, for example, “Harry, someone started a rumor about me and Steve. Do you know anything about how that story might have been started?” The question might seem dangerous or naive, but Model II suggests that Anne has little to lose and much to gain. Even if she does not get the truth, she lets Harry know she is aware of his game and is not afraid to call him on it.

3. Combine advocacy with inquiry. Advocacy includes statements that communicate what an individual actually thinks, knows, wants, or feels. Inquiry seeks to learn what others think, know, want, or feel. Exhibit 8.2 presents a simple model of the relationship between advocacy and inquiry.

Model II emphasizes integration of advocacy and inquiry. It asks managers to express openly what they think and feel and to actively seek understanding of others’ thoughts and feelings. Harry’s demand that Anne !re Mark combines high advocacy with low inquiry. He tells her what he wants while showing no interest in her point of view. Such behavior tends to be seen as assertive at best, dominating or arrogant at worst. Anne’s response is low in

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Exhibit 8.2. Advocacy and Inquiry.

both advocacy and inquiry. In her discomfort, she tries to get out of the meeting without making concessions. Harry might see her as unresponsive, apathetic, or weak.

Model II counsels Anne to combine advocacy and inquiry in an open dialogue. She can tell Harry what she thinks and feels while testing her assumptions and trying to learn from him. This is dif!cult to learn and practice. Openness carries risks, and it is hard to be effective when you are ambivalent, uncomfortable, or frightened. It gets easier as you become more con!dent that you can handle others’ honest responses. Anne’s ability to confront Harry depends a lot on her self-con!dence and interpersonal skills. Beliefs can be self-ful!lling. If you tell yourself that it’s too dangerous to be open and that you do not know how to deal with dif!cult people, you will probably be right. But tell yourself the opposite, and you may also be right.

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