Expert Humans or Expert Organizations?

Organization Studies, Spring, 1999 by Frank Mueller, Romano Dyerson

There has been a gradual recognition that appropriating the added value emanating from the employment relationship is a task subject to uncertainty and tensions, especially during periods of technological change. The problem for the organization is that this added value is made up of a bundle of explicit and internal components difficult to fully specify in a contract or authority relation (Williamson 1985). There are two ways of interpreting this, one psychological and the other, organizational. At a psychological level, the explicit part of the contract is in constant tension with the implicit one. However, at an organizational level, formal organizational goals are continuously challenged by emerging informal parochial interests, which are subject to analyses in terms of organizational politics and/or industrial sociology. In more simple terms it can be put as:

'When information is the primary unit of organizational currency, we should not expect its owners to give it away.' (Davenport et al. 1992)

This is sometimes neglected by those who analyze 'organizational learning systems', such as top management, informal networks, problem-specific, and department- specific OLSs (Shrivastava 1983: 21) without discussing the appropriation issues involved. To put it bluntly, innovation may be used for predominantly 'private' purposes. This might create an obstacle when specialist managers and niche professionals need to integrate their different types of expertise. An organization can never fully rely on the complete co-operation of its members, because individuals retain a degree of discretion to deviate from official goals, norms and policies (Crozier and Friedberg 1980). An organization's ability to access its employees' skills and knowledge is thus continually challenged. This is a theme that has been analyzed in remarkably similar terms by both organizational theorists and economists. Schein (1983) pointed out that increasing complexity in both technology and the economic and socio-cultural environment has made organizations more dependent upon the fullest possible contributions from their employees. In a situation of mutual dependency, a long-term relationship is in the interests of both sides, because no one wants to become subject to 'hostage-taking' (Wilkins and Ouchi 1983; Williamson and Ouchi 1981; Ouchi 1980). As dependency increases, 'perfunctory co-operation', i.e. just fulfilling the basic formal contract, is not sufficient, and 'consummate co-operation' becomes necessary, i.e. showing loyalty and commitment on both sides (Williamson 1985).

However, it is the same 'external environment' which - seemingly paradoxically - makes the continuing co-operation of internal staff both more necessary but also less certain. Indeed, in the changed environmental context of the 1990s, the firm is confronted by a 'post-entrepreneurial career logic' by which employees take their revenge on the re-engineering and downsizing organization:

'The benefits of new ideas are often retained by the person ... "Free time" for learning, creating, or inventing is channeled toward ends that enhance the person. It is uncertain whether any of this is channelled back to the organization.' (Kanter 1990: 331)