On corporate tribes: the identity of an organisation (2)

In this article I will try to take you through the theoretical framework that we used to understand the Click Supply organisation.

1.Structure and power: On centralisation,  decentralisation, the nation state and the organisation

When moving from an individual to a group/organizational existence, structure and power naturally appear as a way to organize the manner in which people come together.  Structure and power both influence and shape each other as they aim to reflect the identity of the group that they are applied within. I will give below 2 organizational examples on how this mutual dynamic works.

In a centralised organisation power is concentrated at the top with the owners of the company. They define the structure and impose the roles on the people that will be hired to fill in the decided structure with the ultimate objective to increase the productivity and profitability of the organisation. There are rules and procedures set in place to protect the structure, the power dynamics and the expected positive financial results. There is an implied positive link in these types of organizations between power being held in rigid structures and productivity.

In a decentralised organisation power is also decentralised. The owners do not decide the structure but the structure emerges from below coming from the necessities of the business expressed through the specialised employees. In this situation power is concentrated with the specialised role. So employees have power to create structure based on the knowledge that they have of the necessities of the business. In these systems the role of the owners is to both formalise and guard the emerging structure as well as stimulate initiatives from below.

Of course these are 2 extremes and they have both been critiqued and challenged in the effectiveness to bring about productivity and quality of life for the group they are manifested within. A completely centralised organisation in the search for standardisation becomes disconnected from the reality of the “ground” and too rigid to adapt to changes. A complete decentralised organisation is chaotic and does not use synergies to move forward and make productive decisions. To understand the implications of both extreme approaches and theoretise a middle ground I would like to compare and contrast a business organisation to a higher organisation which is the state.

In “Seeing like a State” James Scott explores how the centralised state has failed to represent the common interests of its own people. He argues that high modernist Nation- state elites have used the increased powers of states to reshape society so that it functions as an enterprise whose goal is to maximise production. They have done so in the faith that they can thereby improve human lives. He identifies the central problem of statecraft and of government as one of legibility; the state must make its citizens and their activities readable before it can appropriate revenue and orchestrate any plan for the general welfare. The problem comes when this necessary evil is tied to (for example) an ideology of high modernism, an authoritarian central government, and a highly unresponsive civil society.  High modernism is a belief in a technocratic and scientific rationality; that there is one correct answer for every situation. But there is no such thing as a universal generalisation, every village, field, and person is a unique individual. The state’s attempts at improvement rapidly become an effort to standardise society, and make every unit of interest behave identically. This process of reducing reality to schematic agents and cadastral maps by force is one of violence, discarding generations of carefully accumulated local knowledge >metis in favour of the interests of the centre. Local people are inevitably coerced into conforming with the modern grid, since it is easier to make people fit the categories than categories fit the situation. Yet wherever these principles have been attempted the high modernist project has led to poverty, and sometimes it has produced human tragedy on a grand scale. (Scott gives the example of Nazi Germany as well as Russia and China to fundament this). Of course the centralised structure argued against by Scott came as a reaction to (post) industrialisation and the desire to improve the productivity of the feudalistic systems that existed before. He also argues that in our current society capitalism and globalisation take the centralised role of the state while the state takes on a more social role and acts as the safeguard of the civil society. Scott puts forward an idea that the centralised state needs to go back to acknowledging the local knowledge/metis of the people that it’s serving and to go through a process of partial decentralisation in order to maintain productivity.

Coming back to the original point I wanted to make with centralised and decentralised organisations the solution of a workable system could be neither in one or the other but in a combination of the two, meaning a structure that emerges from the negotiation between the power exerted – in mutual agreement -between the top (the owners) and the field/bottom (the knowledge/metis holders).

For this to happen the organisation needs:

  1. the official structure to recognize the necessity for the local knowledge >metis and
  2. the holders of the local knowledge > metis to come forward and make themselves visible to the structure

2. Understanding the official structure, the local knowledge & how they interact

To understand the official structure of the organisation we researched, we first looked into the previous experiences with management of the 2 owners of the company. Each individual in his/hers role as manager (especially the first time) carries and replicates both the lessons (good or bad) of his/hers past managers as well as their imaginarium of how they would want to behave as managers. We called this the “phantom” structure = the parent of the current official structure developed by the 2 owners. This “phantom” structure is at its strongest in influence in the  first years of the organisation. (which was the case of our research as the company was only 5 years old). Secondly we looked into how the official structure reflected & aligned to the purpose – as seen & defined by the 2 owners – of the organisation and to their personal management styles.

To understand the holders of the local knowledge we looked into each employee of the organisation. We tried to understand their skills and how they made use of them in the official role given by the structure. We also tried to understand what un-official roles they had and what un-official structure was created.

Afterwards we looked into the intersections between the official structure and the un-official one (when they worked together and when they clashed). In these intersections and the web of social relationships came forward the identity of the organisation. Once this was uncovered we also made recommendations on how the relationship of the 2 structures can be optimised in order for them to work together to advance the company on the path of achieving its objectives.


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