lists to take part in the utility’s decision-making process, TVA managers put themselves in a better position to handle public criticism of the TVA’s mission.
Contingency theory, an approach that grew out of the Carnegie tradition, gained in popularity during the 1960s and ’70s. Contingency theorists disputed the assumption that a single form of organization is best in all circumstances. Instead, they claimed that the most appropriate form is the one that is best suited to the kinds of action the organization undertakes. For instance, Weber’s model of bureaucracy is an appropriate design for an organization that processes a high volume of routine transactions—a common characteristic of large government organizations, for example.
Organizations differ greatly in their modes of production. In Industrial Organization: Theory and Practice (1965), the English management scholar Joan Woodward argued that an organization’s methods are determined by the class of “core technologies” that characterize its work: small batch (where the work must be adapted to the peculiarities of the current batch—e.g., emergency medical care and residential construction), large batch (such as automobile manufacturing), or continuous processing (as in petroleum refining). Working within Woodward’s definitional framework, American sociologist James D. Thompson showed that, because the characteristic forms of task uncertainty vary by type, so also does optimal organizational design. Representing the high point in the development of contingency theory, Thompson’s thesis, published in Organizations in Action (1967), holds that good organizational designs are those that buffer core technologies from disturbances, such as interruptions in scheduling or inventory shortages.
Two subsequent schools of research took issue with the claim of contingency theorists that organizational designs are shaped by internal constraints. The school known as neoinstitutionalism revived the institutionalist view that the key organizational problem is that of gaining and maintaining support from external constituencies. An important current in the institutional revival, represented in the work of the American sociologist John W. Meyer, argued that organizational designs, especially those aspects that are observable to outsiders, play an important “ceremonial” role. By adopting the organizational designs favoured by experts (such as professors of management, management consultants, and professional bodies), an institution signals its conformity to the prevailing norms, thereby gaining approval from influential external groups. The designs favoured by experts, however, often fail to support the details of the work that organizations must accomplish, because the reality of work is invariably more complicated than what can be recognized in simplified organizational designs. According to Meyer, organizations therefore face a choice between using designs that fit internal needs and using those that meet the standards dictated by external groups. This theory thus explains the characteristic discrepancy between “informal” and “formal” organizational structures.
Much of the research inspired by neoinstitutionalism examines the diffusion of organizational design elements such as quality circles (continuous quality improvement), incentive compensation (e.g., motivational programs or bonuses), affirmative-action policies, deconglomeration (the breakup of large corporations into independent entities), and so forth. This research shows that the adoption of design elements within an organization is influenced less by considerations of internal contingency than by social factors. This is consistent with the ceremonial perspective mentioned above. Organizations tend to adopt design elements from two sources: influential external groups, such as competing firms, and other institutions to which the organization may be tied (e.g., through shared board members).
The second major environmentalist school, organizational ecology, builds on parallels with bioecology and evolution—especially in its ap