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Simon,+Administrative+Behavior+ch+6+140-64 - CHAPTER VI The...

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Unformatted text preview: CHAPTER VI The Equilibrium of the Organization N CHAPTER V SOME MECHANISMS WERE DESCRIBED that permit the behav— Iior of the individual to be integrated with that of the rest of the organiza» tion of which he is a part. These mechanisms do not explain, however, why the individual is willing to participate in the organized group at all, and to submit his personal aims to the established organization objectives. An organization is, after all, a collection of people, and what the organiza— tion does is done by people. The activities of a group of. people become organized only to the extent that they permit their dec1sions and their behavior to be influenced by their participation in the organization. IN DUCEMENTS The clue to the participation of individuals in organization lies in the remarks made in Chapter I regarding the organized group as a system in equilibrium. Individuals are willing to accept organization membership when their activity in the organization contributes, directly or indirectly, to their own personal goals. The contribution is direct if the goals set fo; the organization have direct personal value for the indiviiliual—churp1 membership is a typical example of this. The contribution is indirect if tide organization offers personal rewards—monetary or other—to the inCliVI la ual in return for his willingness to contribute his actiVity to the organir zation. Employment in a business concern is a typical example of this. Sometimes these personal rewards are directly related to the Size and growth of the organization—as in the case of the stockholders of a busi' ness; sometimes, not very directly—as in the case of most wage earners. The characteristics of these three bases for participation are sufficrently dis» tinct to make it worth ,while to consider them separately: personal rewards deriving directly from the accomplishment of the organization objective; personal inducements offered by the organization and closely related to its size and growth; and personal rewards derived from inducements offered by the organization but unrelated to the organization size and growth. Organi— zations are ordinarily made up of three groups of indiViduals, in each of 140 The Equilibrium of the Organization 141 which one of these types of motivation prevails; and it is the presence of these three groups that gives administration its specific character. The phrase “personal goals” which is used here should be understood in a broad sense. It is by no means restrictedto egoistic goals, much less to economic goals. “\World peace" or “aid to the starving Chinese” may be just as much a personal goal for a particular individual as another dol— lar in his pay envelope. The fact that economic incentives frequently predominate in business and governmental organizations should not obscure the importance 'of other types of inducements. Nor should intan— gible egoistic values, such as status, prestige, or enjoyment of organiza— tion associations, be forgotten. In Chapter I it was explained that in business organizations the “cus~ tomers” are a group that has, predominantly, the first type of motiva— tion—direct interest in organization objectives; employees, the third type; and the entrepreneur the second type. This is true, of course, only to a very rough approximation, and the necessary qualifications will be set forth later in the chapter. The members of an organization, then, contribute to the organiza» tion in return for inducements that the organization offers them. The contributions of one group are the source of the inducements that the organization offers others. If the sum of the contributions is sufficient, in quantity and kind, to supply the necessary quantity and kinds of inducer ments, the organization survives and grows; otherwise it shrinks and ultir mater disappears unless an equilibrium is reached.1 TYPES OF ORGANIZATION PARTICIPANTS Organization members may be classified in other ways than in terms of the inducements they receive for their participation. They may be classified in terms of the types of contributions they make to the organization: specific services (a supplier of material); money or other neutral services that may be employed as incentives (customers); and time and effort (employees). Still a third method of classification would distinguish t control the organization—that is, have a right to fix the terms on which the others will be permitted to participate in it—from the remaining participants. The various possible combinations of inducements, contri— butions, and control arrangements make for a considerable variety of organizational forms, and this variety must be taken into consideration in the succeeding discussion. hose who ‘Thi's idea of an equilibrium is due to C. I. Barnard. See his The Function: of the Executive (Cam- bridge: Harvard University Press, 1938), pp. 56—59 and chaps. xi and xvi. .142 ADMINISTRATIVE BEHAVIOR ORGANIZATION GOALS AS INDUCEMENTS Most organizations are oriented around some goal or objective which pro/ vides the purpose toward which the organization decisions and activities are directed. If the goal is relatively tangible—e.g., making shoes—it is usually not too difficult to assess the contribution of specific activities toward it, and hence to evaluate their usefulness. If the goal is less tangi/ ble—like that of a religious organization‘it becomes more debatable whether a particular activity contributes to the goal; and hence there may be considerable controversy, even among those who wish to work for the goal, as to how it is to be attained. Even where the goal is tangible there may be some activities whose relation to it is so indirect, though not neca essarily any less substantial for that indirectness, that the problem of evaluation is difficult. It is much easier to budget, for example, for the production line than for the advertising department or for supervision. It has been fashionable in the literature of business administration to debate whether “the” purpose of a business organization is service or profit. There really is no problem to debate about. Certain individuals, primarily the customers, contribute to the organization because of the service it provides; others, the entrepreneurs, because of the profits they may derive. When the system of organization behavior itself is examined, it is found that both service and profit aims influence decisions. It is for terminological convenience that the label of “organization objective" is here applied to the service aim. Application to Specific Organization Types In the case of the business organization the organization goal—the output of product—is a personal goal for individuals who are ordinarily not con; sidered members of the organization, that is, the customers.Z In return for this product the customers are willing to offer money, which provides a principal inducement for the employees and entrepreneurs to participate in the group. The relation of customers to the organization is distinguished not only by the type of inducement they receive, but also by the fact that it is based on a contract or bargain for a specific product without, ordinarily, any assumption of permanence or continuity in the relationship. In the case of a government agency the organization goal is a personal ZBarnard, in The Functions of the Executive, was perhaps the first writer to insist that the customers must be considered as a part of the system of organization activity in any theory of administration. His views on this point have still apparently not gained wide acceptance among writers on adminis tration. As pointed out earlier, the important question here is not how “organization membership” is to be defined but whether or not the behavior of customers is to be included in the analysis of the organization. The Equilibrium of the Organization 143 goal for the ultimate controlling body of the organization—the legisla— ture—and for the citizen. The relationship here is in part the same as in a business organization, in that the legislators, viewed as “customers,” fur— nish the agency with its funds. It is decidedly different in that, first, they retain final legal control over the organization, and second, their “per, sonal" motivation is based, in turn, on their peculiar status as elected repa resentatives. To examine the way in which legislators make value jung ments in determining the policy of governmental agencies would lead away from the present study into a study of the whole legislative process. In volunteer organizations the organization objective is ordinarily the direct inducement that secures the services of the organization members. The peculiar problems of administration in volunteer organizations derive from the facts that the contributions are often on a part—time basis, that the various participants may have conflicting interpretations of the orgav nization objective, and that the organization objective may play such a modest role in the participant’s system of values that it offers only a mild inducement for cooperation. In this respect, the volunteer shares many of the characteristics of the customer of a business organization, although the former contributes services to the organization instead of money. Adaptation of the Organization Objective The organization objective is by no means a static thing. In order to sur» vive, the organization must have an objective that appeals to its cus~ tomers,3 so that they will make the contributions necessary to sustain it. Hence, organization objectives are constantly adapted to conform to the changing values of customers, or to secure new groups of customers in place of customers who have dropped away. The organization mav also undertake special activities to induce acceptance of its objectives by cus— tomers—advertising, missionary work, and propaganda of all sorts. Hence, although it is correct to say that organization behavior is one ented toward the organization objective, this is not the whole story, for the organization objective itself changes in response to the influence of those for whom the accomplishment of that objective secures personal values. The modification of the organization objective usually represents a compromise of the interests of several groups of potential participants, in order to secure their joint cooperation where each group individually is unable to attain its own objectives unaided. Hence the organization objective will seldom coincide exactly with the personal objectives of 3 y a W i . , . . r . . . The word customer’ is used in a SECTICI’IC Sense here to refer to any indivrdual—customer, legislator, or volunteer—for whom the organization objective has personal value. 144 ADMINISTRATIVE BEHAVIOR even thOse participants whose interest in the organization lies in its attainment of its goal. The crucial issue for any such indiVidual is whethfr the organization objective is sufficiently close to his personal goal to mlabc him choose to participate in the group rather than try to attain his goa y himself or in some other group. As will be seen, this process of compro’ mise takes place, whether the controlling group of. the organization is itself directly interested in the organization objective, or whether the inducement it receives from the organization is of some other type. Loyalty of Employees to Organization Objective Although the organization objective is of greatest importance relation to) the behavior of those participants who have been called customers, almost all the members of an organization become imbued, to a greater or lesser degree, with the organization aim, and are influenced by it in their behavior. This has already been pointed out in the case of volunteer organir zations; it is also true, although to a lesser extent, of govemmental agencres and commercial organizations. It is one component, and a very important one, of organizational loyalty. If the objective has any appearance .of usejfu — ness, the organization members, whose attention is continually directe t3 it by their everyday work, will acquire an appreCiation of its importance aIn value (often an exaggerated appreciation), and the attainment of the va ue will come, to that extent, to have personal value for them. It will be seen later that, in addition to this loyalty to the organization objective, their may also develop in employees a very different loyalty a loyalty to t e organization itself and an interest in its surVival and growth. INCENTIVES FOR EMPLOYEE PARTICIPATION To an employee of a non’volunteer organization the most obvious per— sonal incentive that the organization offers is a salary or wage. It is a peculiar and important characteristic of his relation With the organiza« tion that, in return for this inducement, he offers the organization nolga specific service but his undifferentiated timeland effort. He places t is time and effort at the disposal of those directing the organization, to be used as they see fit. Thus, both the customer relation (in the commercial organization) and the employee relation originate in contract, but {In contracts of very different sorts. The employment contract results in t e creation of a continuing authority relation between the organization and ee. the 31:32:03,311 this be? Why does the employee sign a blank check, so to speak, in entering upon his employment? First, from the viewpomt of the The Equilibrium of the Organization 145 organization, nothing would be gained by offering an inducement to the employee unless the latter’s behavior could be brought into the system of organization behavior through his acceptance of its authority. Second, from the viewpoint of the employee, the precise activities with which his time of employment is occupied may, within certain limits, be a matter of relative indifference to him. If the orders transmitted to him by the orga’ nization remain within these limits of acceptance, he will permit his behavior to be guided by them. What determines the breadth of the area of acceptance within which the employee will accept the authority of the organization? It certainly depends on the nature and magnitude of the incentives the organization offers. In addition to the salary he receives, he may value the status and prestige that his position in the organization gives him, and he may value his relations with the working group of which he is part. In setting his task, the organization must take into consideration the effect that its orders may have upon the employee’s realization of these values. If the employee vale ues white~collar status, for example, he may be completely unwilling to accept assignments that deprive him of that status even when the work he is asked to perform is not inherently unpleasant or difficult. There is great variation among individuals in the extent to which opportunities for promotion act as incentives for participation. Promo~ tion is, of course, both an economic and ‘a prestige incentive. Burl Gardner has pointed out the importance for administrative theory of the presence in organizations of certain highly “mobile” individuals, i.e. indir viduals who have a strong desire for advancement. It would be a mistake (which Gardner carefully avoids) to assume that these desires provide a strong incentive in all individuals.4 We find, then, that those participants in organization who are called its employees are offered a variety of material and nonmaterial incen~ tives, generally not directly related to the attainment of the organization objective nor to the size and growth of the organization, in return for their willingness to accept organization decisions as the basis for their 'ior during the time of their employment. The area within which organization authority will be accepted is not unlimited, and the bound- aries will depend on. the incentives that the organization is abl vide. In so far as these incentives are not directly dependent upon the organization objective, modification of that objective will not affect the Willingness of employees to participate, and hence the latter group will exert little influence in the determination of the objectives. eigh e to pro 4On this and other aspects of the problem of incentives see Burleigh B. Gardner, Human Relations in Industry (Chicago: Richard D. Irwin, 1945), particularly chaps. i and viii. I46 ADMINISTRATIVE BEHAVIOR VALUES DERIVED FROM ORGANIZATION SIZE AND GROWTH The third type of incentive that induces individual participation in orga’ nization derives from the size and growth of the organization. These might be referred to as “conservation” values. Most prominent in the group for whom these values are important is the entrepreneur. It is true that the entrepreneur, to the extent that he is an economic man, is interested in profits, and not in size and growth. In practice this objecr tion is not serious: first because profits usually are, or are thought to be, closely related to size and growth; and secondly because most entreprer neurs are interested in nonmaterial values, such as prestige and power, as well as profit. This attachment to conservation objectives is even more characteristic of the professional managerial group who exerCise the active control of most large business enterprises. Conservation objectives may provide important values, also, for the other employees of the organization as well, particularly those who are mobile. An organization that is growing and prospering offers greater opportunities for prestige and advancement than one that is static or declining. Conservation values are not, therefore, completely indepen— dent in practice from values of the second type, though for purposes of analysis there is some advantage in considering them separately. ' Interest in conservation of the organization prOVides the basis for an organizational loyalty distinct from that previously mentioned. The individual who is loyal to the objectives of the organization will reSist modification of those objectives, and may even refuse to continue his participation if they are changed too radically. The individual who is loyal to the organization will support opportunistic changes in its objec— tives that are calculated to promote its survival and growth. Loyalty to the organization itself is perhaps the type of loyalty most characteristic of commercial organizations, but both Sp€ICICS prevail widely in both public and private administration, commetCial and non, commercial. Some of the most striking manifestations of conflict between these two types of loyalty are to be found in religious and reform organizations, where there is often controversy as to the extent to which organization objectives shall be modified to insure survival. This was c:a tainly one basis for the StalinistaTrotskyist rivalry. As preViously in i» cated, the motives of the opportunists in such a controversy may, of course, be tactical rather than egoistic. The opportunist, assessmg unfa’ vorably the chances of survival without adaptation, may prefer half a loaf to no bread, while the “idealist” may assess the chances of survival more optimistically, or may consider that the concesSion in objectives more The Equilibrium of the Organization 147 than outweighs the improvement in survival chances. Both types of by alty will be discussed more fully in a later chapter. ORGANIZATION EQUILIBRIUM AND EFFICIENCY The basic value criteria that will be employed in making decisions and choices among alternatives in an organization will be selected for the organization primarily by the controlling group—the group that has the power to set the terms of membership for all the participants. If the group that holds the legal control fails to exercise this power, then, of course, it will devolve on individuals further down the administrative hierarchy. Whatever group exercises the power of determining the basic value criteria will attempt to secure through the organization its own personal values—whether these be identified with the organization objective, with the conservation objectives, with profits or what not. But their power of control does not in any sense imply that the control group exer« cises an unlimited option to direct the organization in any path it desires, for the power will continue to exist only so long as the controlling group is able to offer sufficient incentives to retain the contributions of the other participants to the organization. No matter what the personal objectives of the control group, their decisions will be heavily influenced by the fact that they can attain their objectives through the organization only if they can maintain a positive balance of contributions over inducements, or at least an equilibrium between the two. For this reason the controlling group, regardless of its personal val» ues, will be opportunistic—will appear to be motivated in large part at least by conservation objectives. It may be worth while to illustrate this more fully in the case of widely different organization types. Equilibrium in Commercial Organizations In business organizations, the control groups can ordinarily be expected to be oriented primarily toward profits and conservation.5 They will attempt to maintain a favorable balance of incoming contributions over outgoing incentives in two ways: first by modifying the organization objective in response to customer demand; and second, by employing the resources, monetary contributions, and employees’ time and effort in such a manner 5This may be less true in recent years than formerly, and less true in businesses “affected with a pub— lic interest" than in others. In some areas of enterprise, particularly. the public utility field. :i " trustee- ship“ concept has grown up that leads the active control group to identify itself—to what degree the writer is nor prepared to estimate—with the organization objective. 148 ADMINISTRATIVE BEHAVIOR as to attain a maximum of inducement to employees, and a maximum of attainment of organization objectives with these resources. A detailed examination of the way in which this is accomplished leads to the the Cry of what the economist calls “the economics of the firm.” Such an examination cannot be undertaken here. One point does require notice, however: the second type of adjustment—that of using the given resources as effectively as possible in the light of the organization objec’ tive—makes efficiency a basic value criterion of administrative decision in such organizations. It might be asked why most commercial organizations, if their basic adjustment is opportunistic, do tend usually to maintain fairly stable objeca tives. The answer to this is threefold. First, there are “sunk costs" which make immediate and rapid adjustment unprofitable even from the stand; point of conservation. Second, the organization acquires know—how in a particular field—really an intangible sunk cost, or more properly, “sunk asset.” Third, the organization acquires goodwill, which is also a sunk asset that may not be readily transferable to another area of activity. Stated difz ferently, a change in organization objectives ordinarily entails decreased efficiency in use of resources (sunk costs and know—how) and a loss of incentives otherwise available to maintain a favorable balance (goodwill). Equilibrium in Governmental Agencies In the governmental agency the “customer,” i.e., the legislative body, is the ultimate controlling group. Since this group can contribute to the organization whatever funds are necessary to attain the organization objective, it is less obvious on casual examination that such an organiza tion is a system in equilibrium. It may be expected, also, that opportunis— tic modification of the organization objective is less prominent in such organizations than in commercial organizations. Closer examination tends to reduce the importance of these differ; ences. First, the legislature and the electorate to which it is responsive have changing tastes and objectives. Second, the control of the legislative body over the public agency is usually of a relatively passive and general nature, and the real initiative for the formulation of objectives often—per— haps almost always—lies in the top administrative group. This group may be strongly imbued with the organization objectives, with conservation aims, or both, and, within the limits of its discretion, may play very much the same role as the management group in commercial organizations. In any event, efficiency comes forth again as a basic criterion of decia sion in the public organization, since the controlling group will attempt The Equilibrium of the Organization 149 to attain a maximum of organization objectives, however these be deter» mined, with the resources at its disposal. Equilibrium in NonvProfit Private Organizations The nonprofit organization (a professional association, or a private school, for example) is likely to differ from the ordinary business organi’ :ation in several respects. For one thing, there is not a conflict—aTways possible in business organizations—between profit aims and the other types of objectives discussed. Moreover, the control group is likely to be identified closely with the organization objective, and hence oppor— tunism, though an important element in the equilibrium ofsuch orgniza’ tions, is likely to be of the type previously described as “tactical.” On the other hand, the criterion of efficiency will play the same role in these organizations as in the others that have been described. Elements in Common These illustrations will perhaps serve to suggest the wide variety of possi‘ ble organization forms. The reader undoubtedly can suggest other forms from his own experience and is aware of the numerous modifications these forms can undergo, particularly with respect to the motivation of the control group. The same analysis can be applied to segments of organizations, the departments, divisions, and sections of which they are built. The adminis— trators directing these segments, within the limits of discretion permitted them, behave in a fashion quite comparable to the groups that control autonomous organizations. These illustrations indicate that there are at least two elements com; mon to all organizational forms. They all have some equilibrating mecha— nism or mechanisms; and in all of them efficiency is a basic criterion of administrative choice. The Criterion of Efficiency The criterion of efficiency is such an important element in organization decision/making that an entire chapter will be devoted to it. Before leav- ing the present discussion, however, it may be well to give the term a more precise definition. The criterion of efficiency demands that, of two alternatives having the same cost, that one be chosen which will lead to the greater attainment of the organization objectives; and that, of two 150 ADMINISTRATIVE BEHAVIOR alternatives leading to the same degree of attainment, that one be cho sen which entails the lesser cost. Where resources, objectives, and costs are all variable, organization decisions cannot be reached purely on the basis of considerations of effir ciency. Where the amount of resources and the organization objectives are givens, outside the control of the administrator, efficiency becomes the controlling determinant of administrative choice. CONCLUSION The organization has been described in this chapter as a system in equi’ librium, which receives contributions in the form of money or effort, and offers inducements in return for these contributions. These inducements include the organization goal itself, conservation and growth of the orga— nization, and incentives unrelated to these two. The organization equilibrium is maintained by the control group, whose personal values may be of various kinds, but who assume the responsibility of maintaining the life of the organization in order that they may attain these values. The remaining chapters of this volume will contain a development of the topics introduced thus far. The authority relationship will be examined more closely, the concept of efficiency will be analyzed, a study will be made of organizational loyalties, and the mechanisms of organization influ— ence over the individual will be discussed in some detail. With this mate rial at hand, it will be possible to draw a comprehensive picture of the anatomy of organization and the processes of decision in administration. COMMENTARY ON CHAPTER VI THE EQUILIBRIUM OF THE ORGANIZATION wo MAIN TOPICS ARE DISCUSSED in this commentary: first, the distinca tions among “motives,” “goals,” and “constraints,” and their respec’ tive roles in the decision process; and second, the kinds of work environ, ments organizations typically offer to their employees, and how work in an organization interacts with employees’ personal motives and lives. ON THE CONCEPT OF ORGANIZATION GOAL6 In Chapter VI, the survival and success of organizations was discussed in terms of organizational goals and two kinds of personal goals (obtaining rewards associated with organizational growth and success, and earning wages and other rewards not so associated). Viewed as forces motivating individuals to participate in the organization’s activities, organizational goals (i.e., the production of goods and services) are of most direct interest to cus« tomers, the first category of personal goals to stockholders and top execu~ tives, and the second category to the other employees. Although this is a great simplification, it indicates roughly how organizations form a collabora» tive endeavor by drawing upon a great diversity of individual interests. There is some ambiguity in this terminology, however. We call one set of goals (those of most direct interest to customers) “organizational,” and the other two sets “personal.” For clarity, we need, instead, to distina guish between (1) the motives for individuals’ participation in an organi— zation and (2) the goals and constraints that enter directly as premises into organizational decisions.7 Chapter VI is addressed to the former, and says little about the latter. In this commentary, we will use the term 6These comments represent a substantial revision of my paper of this title, published in the Adminix’ native Scwnce Quarterly, 9: 1—22 (1964), and used with permission. I am grateful to Herbert Kaufman for helpful comments on the manuscript. 7The present discussion is generally compatible with, but not identical to, that of my colleagues, R. M. Cyert and J. G. March, who discuss organizational goals in chap. 3 of A Behavioral Thcm‘y of the Firm (Englewood Cliffs, N): PrenticevHall, 1963). 151 152 ADMINISTRATIVE BEHAVIOR “motives” to refer to the aims of individuals (customers, employees, and owners) and the terms “goals” and “constraints” to refer to premises used in organizational decision processes. On the basis of legal powers, we might suppose that the motives of own ers and top managers would be the major determinants of the goals that enter into an organization’s decisions. But we often observe that the goals that actually underlie the decisions do not coincide fully with these motives but have been modified by managers and employees at all echelons. Must we conclude, then, that it is the motives of the latter—of subordinate managers and employees—that govern organizational behavior? Presumably not, because the kinds of behavior taking place are not those we would expect if the managers and employees were consulting only their personal motives. Multiple Criteria for Decisions The first step toward clarification is to enforce the distinction just made between goals, on the one hand, and motives, on the other. By goals we mean value premises that can serve as inputs to decisions. By motives we mean the causes, whatever they are, that lead individuals to select some goals rather than others as premises for their decisions. As a starting point, we will examine how goals enter into a complex decision, ignoring for the moment the organizational setting. An Example. In recent years we have learned to build formal operations research models for reaching “optimal” decisions. Our example employs a linear programming model to describe the decision situation. English translations are provided for the equations, so the example can be fol; lowed with or without attention to the algebra.8 The optimal diet problem is a typical linear programming problem. We are given a list of foods, and for each, its price, its calorie content, and its mineral and vitamin contents. Then we are given a set of nutri— tional requirements, which may include minimum daily intake of miner— als, vitamins, and calories, and may also limit maximum intake of some or all of these. The diet problem is to find the sublist of foods and their quantities that will meet the nutritional requirements at the least cost. The problem can be formalized as follows: Let the various foods be numbered from 1 through N, and the vari— 5’There are a substantial number ofelcmentary discussions of linear programming in the management science literature. For a treatment that develops the point of view proposed here, see A. Chames and W. W. Cooper, Management Models and Industrial Applications of Linear Programming (New York; Wiley, I961), chap. 1. See also Charnes and Cooper, “Deterministic Equivalents for Optimizing and Satisfying Under Chance Constraints,” Operations Research, 11:18—39 (1963). The Equilibrium of the Organization 153 ous nutritional components from 1 through M. Let x, be the quantity of the 1th food. 1n the diet, 3,. be the total quantity of the j th nutritiOnal component in the diet, and p, the price of the ith food. Let av. be the amount of the jth nutritional component in a unit quantity of the ith food; let b, be the minimum requirement of the jth nutritional compo! nent, and c, the maximum allowance. (Some of the bj’s may be zero, and some of the cj’s infinite.) Then: zialjxi=yhforj:17"‘7M; that is, the total consumption of the jth nutritional element is the sum of the quantities of that element for each of the foods consumed. The nutri‘ tional requirements can be stated: cj2yj2bj,forj=l,---,M; ' (2) that is, the total quantity of the jth element must lie between b}. and c}- The quantity of each food consumed must be non—negative, although it may be zero: x,-ZO,i=I,...,N. (3) Finally, the total cost of the diet is to be minimized; we are to find: Min zi'xipi' . (4) A diet (the solution is not necessarily unique) that satisfies all the relations (2), (3), (4) is called an optimal diet. A diet that satisfies the inequalities (2) and (3) (called constraints), but that is not necessarily a minimum cost diet, is called a feasible diet. What is the goal of the diet decision? We might say that the goal is to minimize the cost of an adequate diet, for we are minimizing the con; dition (4). This criterion puts the emphasis on economy as the goal. Alternatively, directing our attention primarily to the nutritional requirements (2), we might say that the goal is to find a nutritionally sat— isfactory diet that is economical. Although we still mention costs, the primary goal has now become good nutrition. The relation between the criterion function (4) and the constraints (2) can be made even more symmetrical. Let us replace (4) with a new constraint: E1.) Xipi —<- k (5) 154 ADMINISTRATIVE BEHAVIOR That is to say, the total cost of the diet must .not exceed some constant, k. Now the set of feasible diets has been restricted to those that satisfy (5) as well as (2) and (3). But since the minimization condition has been removed, there is apparently no basis for choosing one of these diets over another. Under some circumstances, we can, however, restrict the set of acceptable diets to a subset of the feasible set. Suppose that all the nutri' tional constraints (2) are minimal constraints, and that we would always prefer, ceteris paribus, a greater amount of any nutritional factor to a smaller amount. We will say that diet A is dominated by diet B if diet B costs no more than diet A, and if diet B contains at least as much of each nutrient as does diet A, and more of at least one. Economists call the set of diets in the feasible set that is undominated by other diets in that set the Pareto optimal set. Our preference for one or the other of the' diets in the Pareto optimal set will depend on the relative importance we assign to cost in comparison with nutrients, and to the relative amounts of these nutrients. If cost is the most important factor, then we will again choose the diet that is selected by criterion (4). On the other hand, if we attach great importance to nutri' ent j, we will generally choose a quite different feasible diet—one in which the quantity of] is as great as possible. Within the limits set by the con straints, it would be quite reasonable to regard as our goal whatever crite— rion led us to select a particular member of the Pareto optimal set. But if the constraints are strong enough, so that the feasible set and, a fortiori, the Pareto optimal set is very small, then the constraints will have as much or more influence on what diet we finally select than will the cost minimization goal. For example, if we set one or more of the nutritional requirements very high, so that only a narrow range of diets also satisfy the budget constraint (5), then introducing cost minimization as the final selection rule will have relatively little effect on what diet we choose. Under such circumstances it might be well to give up the idea that the decision situation can be described in terms of a single goal. Instead, it would be more reasonable to speak of a whole set of goals: the whole set of nutritional and budgetary constraints that the decision—maker is trying to attain. To paraphrase a familiar epigram: “If you let me deter, mine the constraints, I don’t care who selects the optimization criterion.” Multiple Criteria in Organizations. To see the organizational relevance of our example, suppose that the occasion for decision has arisen within a business firm that manufactures commercial stock feeds, that the nutria ents are requirements for hogs and the prices those of available feed ingredients, and that the finished feed prices facing the firm are fixed. Then minimizing the cost of feed meeting certain nutritional standards is The Equilibrium of the Organization 155 identical with maximizing the profit from selling feed meeting those standards. Cost minimization represents the profitamaxirnizing goal of the company. We can equally well say that the goal of the feed company is to pro—1 vide its customers with the best feed possible, in terms of nutrition, at a given price. Presumably this is what industry spokesmen mean when they say that the goal of business is not profit but efficient production of goods and services. If we had enlarged our model to convert some of the prices to constraints, instead of fixing them as constants, we could have intro! duced other goals, for example, the goal of suppliers’ profits, or, if there were a labor input, the goal of high wages? Summarizing the discussion to this point: In the decisionamaking site uations of real life, a course of action, to be acceptable, must satisfy a whole set of requirements, or constraints. Sometimes one of these requirements is singled out and referred to as the goal of the action. But the choice of one constraint from many is to a large extent arbitrary. For many purposes it is more meaningful to refer to the whole set of require— ments as the (complex) goal of the action. This conclusion applies both to individual and organizational decision-making. Search for a Course of Action In Chapter V, we saw that in most real/life situations, possible courses Of action must be discovered, designed, or synthesized. In searching for a satisfactory solution, the goals—that is, the constraints—may play a guiding role in two ways. First, they may be used to synthesize proposed solutions (alternative generation). Second, they may be used to test the satisfactoriness of a proposed solution (alternative testing). The former set of constraints will generally appear to us the more goal—like.10 A bank officer who is investing trust funds in stocks and bonds may, because of the terms of the trust document, take as the goal increasing the capital value of the fund, and thereby consider buying common stock in firms in growth industries (alternative generation). But the trust offi’ cer will check each possible purchase against other requirements: that the firm’s financial structure be sound, its past earnings record satisfac— tory, and so on (alternative testing). All these considerations can be 9See “A Comparison of Organization Theories,” in my Models of Man (New York: Wiley, 1957), pp. 170—182. “For further discussion of the role of generators and tesrs in decision'making and problem’solving, see A. Newell and H. A. Simon, “The Processes of Creative Thinking,” .in H. E. Gruber, G. Terrell, and M. \Vertheirner, eds, Contemporary Approaches to Creative Thinking (New York: Atherton, 1962), particularly pp. 77-91. 156 ADMINISTRATIVE BEHAVIOR counted among the goals in constructing the portfolio, but some of the goals serve as generators of possible portfolios, others as checks.11 Designing courses of action introduces an important asymmetry between the “goaHike” constraints that guide synthesis and the con straints that test potential solutions. In general, the search will continue until one decision in the feasible set is found, or, at most, a very few alternatives. Which member of the set is discovered and selected may depend critically on the order of search, that is, on which requirements serve as generators and which as tests. In a multiperson situation, one person’s goals may be another’s con— straints. The feed manufacturer may seek to produce feed as cheaply as pos' sible, searching, for example, for possible new ingredients. The feed, how» ever, has to meet certain nutritional specifications. The hog farmer may seek the best quality of feed, searching, for example, for new manufactur» ers. The feed, however, cannot cost more than available funds allow; if it is too expensive, quality or quantity must be cut. A sale will be made when a lot of feed meets the requirements of both manufacturer and farmer. Do manufacturer and farmer have the same goals.7 In one sense, clearly not. The farmer wishes to buy cheap, the manufacturer to sell dear. But if a bargain can be struck that meets the requirements of both, then, in another sense they do ha 'e a common goal. In the limiting case of perfect competi— tion, the constraints narrow down the feasible set to a single point, deter— mining uniquely the quantity of goods they will exchange and the price. The neatness and definiteness of the limiting case of perfect competi— tion should not blind us to the fact that most real’life situations do not fit this case at all closely. Typically, generating alternatives (e.g., inventing, developing, and designing products) is a laborious, costly process. Typir cally, also, there is a practically unlimited sea of potential alternatives. A river valley development plan that aims at the generation of electric power, subject to appropriate provision for irrigation, flood control, and recreation, will look quite different from a plan that aims at flood control, subject to appropriate provision for the other goals mentioned. Even though the plans generated in both cases will be examined for their suit— ability along all the dimensions, quite different plans will almost certainly be devised and proposed for consideration in the two cases, and the plans finally selected will represent quite distinct points in the feasible set. Later, we will state why the total sets of constraints considered by decisionamakers in different parts of an organization are likely to be simir lar, although different decision'makers are likely to divide the constraints between generators and tests in quite different ways. Under these circumr “G. P. E. Clarkson, “A Model of Trust Investment Behavior," in Cyert and March, op. Cit. The Equilibrium of the Organization 157 stances, if we use “organization goals” broadly to denote the constraint sets, we will conclude that organizations do, indeed, have goals (widely shared constraint sets). If we use the phrase narrowly to denote the gene erators, we will conclude that there is little communality of goals among the several parts of large organizations and that subgoal formation and goal conflict are prominent and significant fearures of organizational life. It is important always to make explicit which sense of goal is intended. Motivation for Achieving Goals As motivation means whatever it is that causes someone to follow a par— ticular course of action, every action is motivated. But the relation between motives and action is not usually simple; it is mediated by a whole chain of events and surrounding conditions. If asked about goals, the investment trust officer whose behavior we considered earlier could answer: “I am trying to select a stock for this investment portfolio.” “I am assembling a portfolio that will provide retirement income for my client.” “I am employed as an investment trust officer.” Now it is the step of indi— rectness between the second and third answers that has special interest for organization theory. The investment trust officer presumably has no “personal” interest in the retirement income of the client, only a “profes- sional” interest in his or her role as trust officer and bank employee. The trust officer does have, on the other hand, a personal interest in main— taining that role and employment status. Role Behavior. In real life the line of demarcation between personal and professional interests is not sharp, for personal satisfactions may arise from performing a professional role competently, and both satisfactions and dis, satisfactions may result from innumerable conditions that surround the employment. Nevertheless, it is important to distinguish between the answers to two questions of motive: “Why do you keep (or take) this job?” and “Why do you make this particular investment decision?” The first question addresses the personal motives of the occupant of the role, the second question, the goals that define behavior appropriate to the role. Corresponding to this separation of personal motives from goals defined by a role, organization theory is sometimes divided into two sub— parts: (I) a theory explaining the decisions of people to participate in and remain in organizations; and (Z) a theory of decision—making within organizations comprised of such people.12 Chapter VI deals with the first “For further discussion and references, see G. March and H. A. Simon, Organizations (Cambridge: Blackwell, 2nd ed., 1993), chap. 4. 158 ADMINISTRATIVE BEHAVIOR subpart: the inducements and contributions of organization members, and their effects on organizational equilibrium. In separating organizational role’enacting behavior from personal motivation, we are abstracting from the complexities of real life. A good deal of the significant research on human relations and informal organi— zation, which has contributed heavily to our understanding of organiza‘ tional behavior, has been concerned specifically with the phenomena that this abstraction excludes. Desire for power and concern for personal advancement mingle personal goals with organizational role, as do the social and craft satisfactions and dissatisfactions associated with work. However, this abstraction is often useful. First, many organizational deci— sions hardly affect personal motives at all. As a trivial example, the secre— tary’s inducement’contribution balance is generally unaffected by the choice between typing a letter to A or a letter to B or by the content of the letter. Second, personal motives may enter the decision process as fixed constraints (only courses of action that satisfy the constraints are considered, but the constraints have no influence on the choice of action within the set). Thus, the terms of the employment contract may limit work to a forty‘hour week but may have little to say about what goes on during the forty hours.13 The (partial) separation of organizational role from personal goals is consonant with human bounded rationality. Of all the knowledge, atti’ tudes, and values stored in a human memory, only a very small fraction are evoked in any given situation. Thus, an individual can assume a varir ety of roles when these are evoked by appropriate circumstances, each of which may interact only weakly with the others. At one time a person may be a father, at another a machinist, at another a bridge player. The dayrto«day organizational environment evokes from memory quite differ’ ent associations from those evoked when one is considering a change of jobs. To the extent this is so, one’s “personal” system of inducements and contributions will not affect one’s “organizational” decisions. The ability of an individual to shift from one role to another as a function of the environment thus helps to explain the extent to which organizational goals become internalized, that is, are automatically evoked and applied during performance of the role. No matter how one was originally motivated to adopt the role, the goals and constraints appropriate to it become a part of the decision»making program, stored in memory, that defines one’s role behavior. Interpersonal Differences. Differences among individuals can, however, affect substantially their behavior in roles that are identical from an orga; '3 See “A Formal Theory of the Employment Relation,” in ModeLs of Man, op. cit. The Equilibrium of the Organization 159 nizational standpoint. A role is not a specific, stereotyped set of behaw iors but a process for determining courses of action, While we may cone ceive of an ideal type of role having only organizational goals among its premises, actual roles in organizations invariably incorporate both orga’ ' ' al and ersonal oals. . mzallrffemersorsal differegnces in role behavior go far beyond differrfiilces in personal goals; they arise also from differences in knowledge; 1:, particular professional training provides an indiVidual With speCi 1c tlec niques and knowledge for solving problems (accounting techniques, ega techniques, and so on), which are then drawn upon as part of the prlt: gram evoked by the role. A chief executive With an accounting'bac' / ground may find different problem solutions from a chief executive, in the same position, with a legal background. An indiVidual may inCOYva rate in the role not only a professional style but also apersonal style, bringing to the role habits and beliefs that provide crucral prerpises fqu handling interpersonal relations. An authoritarian persona ity wi behave quite differently from a more permissive person when both are1 in the same organizational role and pursuing the same organizational goa s. The leeway for expressing individual differences lS commonly narrow; est in handling matters that come to the role occupant at the initiative of others and broadest in exercising initiative and in selecting the agenda or discretionary matters. Premises supplied by the organization generally control alternative selection more closely than alternative generation. The Organizational Decision—Making System What are the implications of factoring behavior into its personal and its us to assemble the dCCISIOU'mak' together with the connecting flow of communication, into a composite description of the organizational decr— sionrmaking system. In the simplest case, of a small, relatively unspepial‘ ized organization, we are back to something like the 'optimal diet prob pmci The language of “goals, requirements,” “constraints that we app ie there is equally applicable to simple organizational Situations. In more complicated cases, abstracting out personal motives does not remove interrrole differences from the decisionrmaking process. For when many persons in specialized roles participate in making an organizations deg! sions, individuals will differ in the communications they receive and e parts of the environment from which they receive them. They will di er in their search programs. Hence, even if we neglect personal motives, we find many causes for differential perception and subgoal formation. (See Chapter X and its commentary, below.) organizational components? It perm ing programs of all the participants, ’7 fl 160 ADMINISTRATIVE BEHAVIOR Consider, for example, a system for controlling factory inventory and production. Decisions have to be made about (1) the aggregate rate of production (the work force and the hours employees will work), (2) the allocation of aggregate production among products, and (3) scheduling the sequence in which the individual products will be processed by the machines: the aggregate production decision, item allocation decision, and scheduling decision, respectively. The three sets of decisions may be made by different roles in the organization; in general, we would expect the aggregate decision to be handled at more central levels than the oth/ ers. The real’world situation will always include additional complica— tions, for it will involve decisions about shipments to warehouses, about warehouse inventories, and many others. Now we could conceive of an omniscient Planner (the entrepreneur of classical economic theory) who, by solving a set of simultaneous equa— tions, would make each and all of these interrelated decisions. But we now know a great deal about the mathematical structure of the problem, and we know in particular that discovering the optimal solution of a complete problem of this kind is well beyond the powers of existing or prospective computational equipment. In actual practice, no one tries to find an optimal solution for the whole problem. Instead, various particu— lar decisions are made by particular units of the organization. In making their decisions, the specialized units find a “satisfactory” solution for one or more subproblems, where some of the effects of the solution on other parts of the system are incorporated, as constraints, in the-definition of “satisfactory.” For example, standard costs may be set as constraints for a manufactur— ing executive. Finding that operations are not meeting those constraints, the executive will search for ways of lowering costs. Longer production runs may be proposed, but these can be achieved only if the varietyof products is reduced, so product standardization may be proposed as a solu' tion to the cost problem. Presumably, before implementing the solution it will be tested against constraints introduced by the sales department— objections that refusal to meet special requirements of customers will lose sales. Anyone familiar with organizational life can multiply examples of this sort, where different problems come to attention in different parts of the organization, or where different solutions are generated for a prob lem, depending on where it arises in the organization. We do not have to postulate conflict in personal goals or motivations in order to explain organizational conflicts or discrepancies. They could and would equally well arise if each of the organizational decision/making roles were being enacted by computers. in a total absence of the usual sorts of nersnnal The Equilibrium of the Organization 161 limits on acceptance. The discrepancies arise out of the cognitive inabil— ity of the decisionrmaking to deal with the entire problem as a set of simultaneous relations."i In virtually all organizations, the kinds of aggregative decisions that are made at high levels of the organization are separated from the kinds of specific, itemrbyeitem decisions that are made at low levels. When executives at high levels make decisions about total inventory, this fac— torization already involves radical simplification and approximation. For example, there is no single, well—defined total cost associated with a given aggregate of inventories. Different costs will be associated with each kind of item (for example, different items may have different spoilage rates or obsolescence rates), and different probabilities and costs will be associated with stock’outs of each kind of item. Thus, an aggre— gate inventory will have different costs depending on its composition. Designing a system for making decisions about the aggregate work force, production rate, and inventories requires an assumption that the total inventory will never depart very far from a typical product mix. The assumption required for aggregation is like that made for measuring the temperature of a tank of water with a single thermometer: it works if you stir well. If decisions are made on this approximate basis about aggregate work force, production rate, and inventories, then these decisions can serve as constraints on detailed decisions made elsewhere about the inventory or production of particular items. If the decision has been reached to make one million gallons of paint next month, then other decisions can deter mine how much paint of each kind to make, subject to the constraint that the individual items should add up to one million gallons.” This simple example suggests how the whole mass of decisions that are continually being made in a complex organization can be viewed as an organized system. Particular decisionemaking processes aim at finding courses of action that are feasible or satisfactory in the light of multiple goals and constraints; and decisions reached in any one part of the orga— nization enter as goals or constraints for the decisions being made in other parts. In this loosely coupled system, there is no guarantee that the decisions will be optimal with respect to any specific goal. Nevertheless, HFor some empirical evidence, see the section on “Evidence for Cognitive Mechanisms in Identifi— cation” in the commentary to chap. x, below. ISA system of this kind is developed in detail in “Determining Production Quantities under Aggre— gate Constraints,” in C. Holt, F. Modigliani, J. Murh, and H. A. Simon, Planning Production, Int-ento— Ties, and Work Force (Englewood Cliffs, NJ; Prenticerl-Iall, 1960). Compare the discussion of com— nusite decision in Chan. xi. hplnw 162 I ADMINISTRATIVE BEHAVIOR the results of the overall system can be measured against organizational goals, and changes can be made in the decision—making structure when these results are adjudged unsatisfactory. The decision’making structure in an actual organization is usually put together in such a way that the decisions made by spec1alized units will take cognizance of the more general goals. Individual units are linked to the total system by production schedules, systems of rewards and penalties based on cost and profit goals, inventory limits, and so on. The loose coupling among the parts permits specific constraints in'great variety to be imposed on subsystems without rendering their deCiSion» making mechanisms complex beyond practicality. Inducements and Contributions, and Organizational Behav10r We have seen that the system of personal inducements and contributions imposes constraints that the organization must satisfy if it is to retain its members and survive; while the constraints incorporated in the organiza- tional decision'making system are imposed in the course of concervrng and adopting actions. There is no necessary logical connection between these two sets of constraints. After all, organizations sometimes fail to survive, and their demise can often be attributed to failure to incorporate all the important motivational concerns of participants among the con; straints in the organizational decision—making system. I I For example, a major cause of small business failure is working capital shortage, a result of failure to constrain actions to those that are COnSIS' rent with creditors’ demands for prompt payment. Similarly, new prod— ucts often fail because incorrect assumptions about the inducements important to consumers shaped the constraints that gUided product design. (Some of the major troubles of the Chrysler Corporation in the post—World War II period stemmed from the deSign premise that car pur— Chasers were primarily interested in buying a good piece of machinery.) In general, however, there is a strong empirical COnnection between the two sets of constraints, for the organizations we usually observe— those that have survived for some time—are precisely those that have developed organizational decisionrmaking systems whose constraints guarantee that their actions maintain a favorable balance of inducements to contributions for their participants.16 Thus, the functional requiSites for survival can usually give us good clues for predicting organizational “‘The relation between the functional requisites for survival and the actual constraints of the-operat' ing sysri-m is H central concept in W. R. Ashby's notion of a multi—stable system. See his Drsag‘n for a Brain (New York: Wilt-y, 2nd ed, 1960). The Equilibrium of the Organization 163 goals; however, concordance is empirical, not definitional. The goals must be inferred from observation of the organization’s decisionamaking processes, whether these processes be directed toward survival or suicide. Conclusions We can now summarize what is meant by “organizational goal.” First, decisions are seldom directed toward a single goal; rather, decisions are concerned with discovering courses of action that satisfy a whole set of constraints. It is this set, and not any one of its members, that is most accurately viewed as the goal of the action. Sometimes we select a con— straint for special attention because of its relation to the motivations of the decision—maker, or because of its relation to the search process that is generating or designing particular courses of action. When we come to organizational decisions, many of the constraints that define a satisfactory course of action are associated with an organiza— tional role and hence only indirectly with the personal motives of the individual who assumes that role. We may use the phrase “organization goal” for sets of constraints imposed by the organizational role, which has only this indirect relation to personal motives. As an organizational deci— sion»making system generally contains constraints that reflect virtually all the inducements and contributions important to various classes of participants, courses of action that are inimical to survival tend to be removed from consideration. In view of the hierarchical structure of most formal organizations, we usually employ “organizational goal” to refer particularly to the conr straints and criteria of search that define roles at the upper levels. Thus we speak of conservation of forest resources as a principal goal of the US Forest Service, or reducing fire losses as a principal goal of a city fire department. For high—level executives in these organizations will seek out and support actions that advance these goals, and subordinate employees will tailor their choices to constraints established by the higher echelons with these ends in View. Finally, as there are large elements of decentralization in the deci~ sionrmaking in any large organization, different constraints may define the decision problems of different positions or specialized units. For example, “profit” may not enter_directly into the decision—making of most members of a business organization. This does not mean that it is meaningless to regard profit as a principal goal of the business. It simply means that the decision’making mechanism is loosely coupled, so that the profit constraint enters into most subsystems only in indirect ways. Most business firms are directed toward profit making. subiect to side 164 ADMINISTRATIVE BEHAVIOR constraints that introduce many gross approximations into the search for profitable courses of action. Furthermore, the goal ascription does not imply that any employee is motivated by the firm’s profit goal, although some may be. This view of the nature of organization goals leaves us with a picture of decisionrmaking that is not simple. But it provides us with an- opera, tional way of showing, by describing the structure of the organizational decision—making mechanism, how and to what extent overall goals, like “profit” or “conserving forest resources,” help to determine the actual courses of action that are chosen. THE ORGANIZATION AS WORKPLACE: SATISFACTION17 The central thesis of Chapter VI is that the survival and success of organi’ zations depend on their providing sufficient incentives to their members to secure the contributions that are needed to carry out the organizations’ tasks. Monetary rewards are, of course, important; but willingness to do the work and the enthusiasm with which work is done may depend very much on how pleasant or unpleasant workers find the job and its physical and social environments. Many cultures, including our own, cherish a myth of an earlier Golden Age, in which life was delightful and men and women were happy. During the eighteenth century, the Age of Reason, such myths flourished. “Man,” said Jean Jacques Rousseau, “was born free, but every! where he is in chains.” The ideal of a Golden Age has not died. In our own day, we cast nostalgic eyes on the past, imagining that we see there simpler and happier times that have been taken from us by the complexie ties and confusions of our present industrial society. This section of the commentary will examine some of our present dise contents that center on the workplace, to assess their severity and to ask how far they differ from the discontents of the past. Are our modern fac— tory, office, and shop fit places for human beings to work in and live out their days? In particular, are the changes taking place in the workplace— changes resulting from the continuing advance of technology, or from rise ing levels of education in our society, or from our responses to resource scarcities and environmental pollution—arethese changes improving the quality of life in the workplace, or causing it to deteriorate? Of course the conditions of some people may have improved, of oth— ers deteriorated. We may have something different to say about the life of “This section draws upon On the Alienation of Workers and Management, The Zucker Lectures, Hamilton, Ontario: McMaster University, 1981. The Equilibrium of the Organization 165 the executive and the life of the blueecollar or clerical worker. Moreover, the quality of life has many dimensions. We may observe progress along some of them, regress along others. I will focus on levels of work satisfac— tion: people’s attachment to or alienation from their work. I will begin with executive work. The Work of the Executive Forty years ago we learned from William H. Whyte a new phrase, “the Organization Man.”18 The Organization Man was an executive who had sold his soul to the Corporation. He dressed as it wanted him to, married as it wanted him to, and thought as it wanted him to. But most impor~ tant, the Organization Man was a member of a gr0up. He was loyal to the group, conformed to the group norms, and made his decisions and did his work through group processes. It was no part of his role to express his individuality, to innovate in solitude, or to dissent from the group cone sensus. Whyte’s argument has been widely interpreted as an attack on mod— ern business institutions and industrial society. It was no such thing. It was an expression of nostalgia for an individualistic ethic—the Protesr tant ethic, as it is often called—which Whyte thought was rapidly being displaced by a social ethic.19 We may share Whyte’s sympathy for the rugged individualists of the past#the Henry Fords and the Andrew Camegies, but we must remem' bet that there was generally room for only one of those individualists in any single company. Henry Ford could be an individualist because he could hire many organization men to work for him. Second, we must not imagine that there is no place for individualists in the business and industrial world today. Their main opportunities arise, as they have always done, in the spawning of new industries and companies. I can think, offhand, of a dozen examples in the electronics industry alone—men like William Hewlett of Hewlett»Packard, Pat Hag! gerty of Texas Instruments, or Bill Gates of Microsoft. Moreover, these contemporary individualists seem often to have acquired a managerial style that allows them to work effectively with others. They seem to have I5New York: Simon & Schuster, 1956. I9Iliid., p. 17. “By social ethic I mean that contemporary body ofthought which makes morally legit— imate the pressures of society against the individual. Its major propositions are three: a belief in the group as the source of creativity; a belief in ‘belongingness’ as the ultimate need of the individual; and a belief in the application ofscience to achieve the belongingness.” By “science,” Whyte meant sneeifimllv mrial nwrl-mlnav a: annliarl m human rnlqrinnc ...
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