organizational analysis, in management science, the study of the processes that characterize all kinds of organizations, including business firms, government agencies, labour unions, and voluntary associations such as sports clubs, charities, and political parties. Any organization is a social unit with three properties: (1) it is a corporate (or group) actor, (2) it claims a special and limited purpose (such as making profits or providing medical care), and (3) its creators intend it to last beyond the accomplishment of a single action, if not indefinitely.
Modern cultures are marked by an increase in the importance, influence, and power of organizations. Consequently, contemporary studies in social science and management have emphasized the analysis of organizations. Yet much of the research is narrowly focused on the properties associated with particular types of organizations, such as hospitals, prisons, government agencies, businesses, schools, and churches. While many of its findings are associated with business management, the field of organizational analysis is far more general: it studies the processes that apply to all kinds of organizations. One goal of such inquiry is the identification of more-effective management strategies. See also business organization.
Leif GeigesContemporary organizational analysis and management science owe much of their early development to the German sociologist Max Weber (1864–1920), who originated the scientific study of organizations. In work examining the relationship between bureaucracy and modernization (eventually published as Theory of Social and Economic Organization; 1947), Weber attributed the rise of organizations to the expansion of markets, to developments in the law, and especially to changes in the nature of authority.
The term authority applies to situations in which one person willingly accepts the direction of another. Until modern times, authority was inherited, meaning that princes begat princes and peasants begat peasants. Weber identified the institutional structure of a new “rational-legal” authority, observing that rights of control increasingly derived from expertise rather than lineage. He documented the ways in which this development, which he called rationalization, underlay the rise of the modern state bureaucracy. According to Weber, organizations were able to develop unparalleled calculability and efficiency by combining two structures: (1) a system of explicit rules, upheld by clearly marked jurisdictions between offices and by permanent files documenting the processing of cases, and (2) a unique division of labour. The latter structure gave rise to the modern bureaucrat—a person who was required to be an expert in the relevant rules and who had to be shielded from inappropriate influences to guarantee fairness and objectivity. This shift away from tradition and inheritance permanently changed the nature of organizations. Weber thought that these two structures would cause organizations to follow, invariably and automatically, the objectives set down by political authorities.
One of Weber’s contemporaries, the German-born Italian sociologist Robert Michels, vigorously disputed Weber’s claim that organizations would pursue official objectives in machinelike fashion. According to Michels’s “iron law of oligarchy,” the top leaders of organizations—even those that are member-controlled—tend to develop a strong personal interest in maintaining their powers and privileges. Michels held that self-interest prevents such leaders from doing anything that would risk the survival of the organization—even if this means subverting the organization’s original goals and principles. Michels made this claim in an attempt to explain why the leaders of the officially internationalist and antiwar German Social Democratic Party strongly supported Germany’s declaration of war in 1914.
The essential point of the Weber-Michels debate has not been settled; questions persist over the degree to which the pursuit of official goals characterizes organizational action. Does the cr