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that holds no guarantee of optimal rationality. Organizations simplify the environment to reduce the demands on limited information-processing and decision-making capacities. They simplify by developing “programs”—standardized routines for performing repetitive tasks. Once a program is in place, the incentive is to stay with it as long as the results are marginally satisfactory. Otherwise, the organization is forced to expend time and energy to innovate. Routine tends to drive out innovation because individuals !nd it easier and less taxing to stick to programmed tasks (which are automatic, well-practiced, and more certain of success). Thus, a student facing a term-paper deadline may !nd it easier to “fritter”—make tea, straighten the desk, text friends, and browse the Web—than to struggle to write a good opening paragraph. Managers may sacri!ce quality to avoid changing a familiar routine.
March and Simon’s book falls primarily within the structural and human resource views. But their discussions of scarce resources, power, con”ict, and bargaining recognize the reality of organizational politics. Although they do not use the term framing, March and Simon af!rm its logic as an essential component of choice. Decision making, they argue, is always based on a simpli!ed model of the world. Organizations develop unique vocabulary and classi!cation schemes, which determine what people are likely to see and respond to. Things that don’t !t an organization’s mind-set are likely to be ignored or reframed into terms the organization can understand.
When it is hard to identify a guilty individual, a second popular option is blaming the bureaucracy. Things go haywire because organizations are sti!ed by rules and red tape or by the opposite, chaos resulting from a lack of clear goals, roles, and rules. One explanation or the other usually applies. When things aren’t working, then the system needs either more or fewer rules and procedures, and tighter or looser job descriptions.
By this reasoning, tighter “nancial controls could have prevented the subprime mortgage meltdown of 2008. The tragedy of 9/11 could have been thwarted if agencies had had better protocols for such a terrorist attack. But piling on rules and regulations is a direct route to bureaucratic rigidity. Rules can inhibit freedom and !exibility, sti!e initiative, and generate reams of red tape. The Commission probing the causes of 9/11 concluded: “Imagination is not a gift associated with bureaucracy.” When things become too tight, the solution is to “free up” the system so red tape and rigid rules don’t sti!e creativity and bog things down. An enduring storyline in popular “lms is the free spirit who triumphs in the end over silly rules and mindless bureaucrats (examples include the cult classics Of!ce Space and The Big Lebowski). But many organizations vacillate endlessly between being too loose and too tight.
A third fallacy attributes problems to thirsting for power. Enron collapsed, you can say, because key executives were more interested in getting rich and expanding their turf than in
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advancing the company’s best interests. This view sees organizations as jungles teeming with predators and prey. Victory goes to the more adroit, or the more treacherous. You need to play the game better than your opponents—and watch your back.
Each of these three perspectives contains a kernel of truth but oversimpli”es a knottier reality. Blaming people points to the perennial importance of individual responsibility. People who are rigid, lazy, bumbling, or greedy do contribute to some of the problems we see in organizations. But condemning individuals often distracts us from seeing system weaknesses and offers few workable options. If, for example, the problem is someone’s abrasive or pathological personality, what do we do? Even psychiatrists “nd it hard to alter character disorders, and “ring everyone with a less-than-ideal personality is rarely a viable option. Training can go only so far in ensuring semi-!awless individual performance.
The blame-the-bureaucracy perspective starts from a reasonable premise: Organizations exist to achieve speci”c goals. They usually work better when strategies, goals, and policies are clear (but not excessive), jobs are well de”ned (but not constricting), control systems are in place (but not oppressive), and employees behave prudently (but not callously). If organiza- tions always operated that way, they would presumably work a lot better than most do. In practice, this perspective is better at explaining how organizations should work than why they often don’t. Managers who cling to logic and procedures become discouraged and frustrated when confronted by intractable irrational forces. Year after year, we witness the introduction of new control systems, hear of new ways to reorganize, and are dazzled by emerging management strategies, methods, and gurus. Yet old problems persist, seemingly immune to every rational cure we devise. As March and Simon point out, rationality has limits.
The thirst-for-power view highlights enduring, below-the-surface features of organiza- tions. Dog-eat-dog logic offers a plausible analysis of almost anything that goes wrong. People both seek and despise power but “nd it a convenient way to explain problems and get their way.Within hours of the 9/11 terror attacks, a senior FBI of”cial called Richard Clarke, America’s counterterrorism czar, to tell him that many of the terrorists were known members of Al Qaeda.
“How the fuck did they get on board then?” Clarke exploded. “Hey, don’t shoot the messenger. CIA forgot to tell us about them.” In the context of its chronic battles with the CIA, the FBI was happy to throw the CIA
under the bus: “We could have stopped the terrorists if CIA had done their job.” The tendency to blame what goes wrong on people, the bureaucracy, or the thirst for
power is part of our mental wiring. But there’s much more to understanding a complex situation than assigning blame. Certain universal peculiarities of organizations make them especially dif”cult to understand or decipher.
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PECULIARITIES OF ORGANIZATIONS Human organizations can be exciting and challenging places. That’s how they are often depicted in management texts, corporate annual reports, and fanciful managerial thinking. But they can also be deceptive, confusing, and demoralizing. It is a big mistake to assume that organizations are either snake pits or rose gardens (Schwartz, 1986). Managers need to recognize characteristics of life at work that create opportunities for the wise as well as hidden traps for the unwary. A case from the public sector provides a typical example:
When Bosses Rush In
Helen Demarco arrived in her of!ce to discover a clipping from the local paper. The headline read, “Osborne Announces Plan.” Paul Osborne had arrived two months earlier as Amtran’s new chief executive. His mandate was to “revitalize, cut costs, and improve ef!ciency.”
After 20 years, Demarco had achieved a senior management position at the agency. She had little contact with Osborne, but her boss reported to him. Demarco and her colleagues had been waiting to learn what the new chief had in mind. She was startled as she read the newspaper account. Osborne’s plan made technical assumptions directly related to her area of expertise. “He might be a change agent,” she thought, “but he doesn’t know much about our technology.” She immediately saw the new plan’s fatal “aws. “If he tries to implement this, it’ll be the worst management mistake since the Edsel.”
Two days later, Demarco and her colleagues received a memo instructing them to form a committee to work on the revitalization plan. When the group convened, everyone agreed it was crazy.
“What do we do?” someone asked. “Why don’t we just tell him it won’t work?” said one hopeful soul. “He’s already gone public! You want to tell him his baby is ugly?” “Not me. Besides, he already thinks a lot of us are deadwood. If we tell him it’s no good,
he’ll just think we’re defensive.” “Well, we can’t go ahead with it. It’ll never work and we’d be throwing away money.” “That’s true,” said Demarco thoughtfully. “But what if we tell him we’re conducting a study
of how to implement the plan?” Her suggestion was approved overwhelmingly. The group informed Osborne that they were
moving ahead on the “implementation study” and expected excellent results. They got a substantial budget to support their “research.” They did not say that the real purpose was to buy time and !nd a way to minimize the damage without alienating the boss.
Over time, the group assembled a lengthy technical report, !lled with graphs, tables, and impenetrable jargon. The report offered two options. Option A, Osborne’s original plan, was presented as technically feasible but well beyond anything Amtran could afford. Option B, billed as a “modest downscaling” of the original plan, was projected as a more cost-effective alternative.
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When Osborne pressed the group on the huge cost disparity between the two proposals, he received a barrage of complicated cost-bene!t projections and inscrutable technical terms. Hidden in a fog was the reality that even Option B offered few bene!ts at a very high cost. Osborne argued and pressed for more information. But given the apparent facts, he agreed to proceed with Option B. The “Osborne plan” was announced with fanfare and widely heralded as another instance of Paul Osborne’s talent for revitalizing ailing organizations. Osborne had moved on to work his management magic on another organization by the time the plan came online, and his successor had to defend the underwhelming results.
Helen Demarco came away with deep feelings of frustration and failure. The Osborne plan, in her view, was a wasteful mistake, and she had knowingly participated in a charade. But, she rationalized to herself, she had no other choice. Osborne was adamant. It would have been career suicide to try to stop him.
You might have noticed that Helen Demarco’s case is more than a little similar to the scandals at Volkswagen in 2015 andWells Fargo in 2016. At the Geneva International Motor Show in 2012, VWCEOMartinWinterkorn proclaimed that by 2015 the company would cut its vehicles’ carbon dioxide emissions by 30 percent from 2006 levels. It was an ambitious goal that would have beat the targets set by European regulators to combat global warming.
But just like Paul Osborne, Winterkorn had set the bar too high. The engineers saw no way to meet the boss’s goals, but no one wanted to tell him it couldn’t be done. So, they cheated instead. There was a precedent because VW’s cheating on diesel emissions had started back in 2008, and observers reported that “an ingrained fear of delivering bad news to superiors” (Ewing, 2015, p. B3) was a feature of VW’s culture.