Exhibit 1. A twitter fragment reflects the opinion that Organizational Theory ‘dictates mostly top-down’ while ‘Social Media is Chaos Theory.’

Conclusion. Organizational Theory is now obsolete.

Exhibit 2. A gentleman writes a blog, which quickly goes viral, regarding what he sees as a ‘generational war’ between Knowledge Management and Social Media.

Conclusion. Knowledge Management is now (thankfully) obsolete.

Exhibit 3. I knew there was water on Mars before you did. Chances are. Why? Because the Mars Phoenix whispered it to me back in June.

Conclusion. Typical approaches to Government are now obsolete.

All done in by Social Media. Huzzah.

There is something to be said for assertions in the presence of minimal context. I forget the precise saying, but everyone has one and they can stink. Permit me a few slightly contrarian viewpoints:

  1. What if, instead of ‘social media’ replacing approaches to How We Organize, it simply represents a new tool-set that reflects approaches to organizations that date back almost 60 years?
  2. What if Knowledge Management leaders actually embrace notions of complexity, natural science, and the distributed nature of organizational thought?
  3. And what if approaches to Government actually… actually, I’ll get to that one last. Because there is a pony in that pile.

I’ll offer some ideas on these over the next few undefined units of time.

First up:

Has social media slain organizational theory?

Organizational Theory Cliff Notes – A Selection of Thoughts

The study of organizational theory is the examination of how humans organize for a common objective. The forum is the firm, the organizational units devoted to business activities, and the common objective of greater wealth accumulation within a capitalist economy. The assumptions include freedom of mobility for labor, access to capital, and a market within which to trade products and services for remuneration. The central question for organizational theory: Why do people organize, and how can organizational objectives be effectively and efficiently attained, given the determinants of human behavior?

There has been a tension between a mechanical approach to organizational management – dating back to Taylor’s (1911) scientific management theory and Ford’s embracing of it – and an organic one, which emerged in the 1950s. The former presents humans as driven primarily by economic incentives. The employee is compensated, and this is considered sufficient to provide for his maximum prosperity – this characterization of the employee is referred to as the “economic man,” driven only by wages. Taylor’s framework for organization included a clear delineation of hierarchical authority, management by exception, and task specialization. The firm was seen as a machine, and by setting the right incentives and optimized processes in place, management would only have to maintain anomalies within the structure.

Henry Ford developed the principle of mass production by applying Taylor’s theory to an industry that had previously been one of craft production. By establishing task specialization and the innovation of the assembly line, Ford created the first miracle of U.S. production in the 20th century. His reaction to the resulting labor-friendly market, where workers could move between automakers easily due to a shortage of skilled labor, was to double the going wage to $5 per day. This was an effort to exploit the “efficiency wage”, which aimed to provide an incentive for the employee to stay with Ford – even if non-compensation issues were preferable elsewhere.

It’s important to stop here and note two truths.

  1. This is but one approach in the field of organizational theory.
  2. This particular approach has been relatively unpopular (outside of factory work) for a very long time.
  3. Bonus truth: Scientific management theory is one reason why “Six Sigma” makes sense to some managers, despite the evidence of great harm to natural work processes, innovation, creativity, etc.

A Few Challenges to Taylor and Scientific Management

The organic approach appeared soon after WWII, with explorations into systems science (sometimes called ‘soft systems methodologies’) and decision theory that together began to explore a more radical description of the nature of the firm. Yes, our friend chaos theory entered the scene way back in 1927, later popularized in 1963 when Edward Lorenz first noticed the possibility that minor changes to initial conditions could lead to enormous changes in weather prediction models. (Further popularized by Jeff Goldblum in 1993, but I digress.) It didn’t take long before chaos (and the parent field of complexity) found its way into organizational thinking – cementing the observation that human organizations also demonstrated non-linearity, co-evolution, emergent behaviors, etc. Chaos theory has actually been a part of organizational theory for longer than most social media evangelists have been alive.

In 1947′s Administrative Behavior, Nobel Prize winner Herbert Simon criticized the Taylor scientific management approach, by revisiting how we make decisions and exploring the limits of rationality. The economic man theory assumed the ‘man’ had access to perfect information and could therefore behave according to rational choice theory. Simon renamed the employee as “administrative man,” arguing that decisions are made with incomplete and imperfect information. How can you manage a workforce as if they had all the information they needed within the firm, and made decisions based on an economically rational assessment of their choices?

In 1960 Douglas McGregor developed alternative notions of employee motivation – beyond the efficiency wage – in his work on Theory X and Y (The Human Side of the Enterprise). Theory X, perhaps a direct reference to Taylor, relied on an authoritarian approach to management, while Theory Y he termed a participative management style. “The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed in the population.”

And so on. Recent work in value networks and organizational network analysis reveals that the organization obviously is more than the employees, and is best understood, examined, and managed as an ecosystem.

So-Social Media?

So if organizational theory has contained inside its hallowed halls the ideas that 1) people’s imperfect decision processes matter more than management edicts or high wages for success; and that 2) organizations are more ecologies than machines, so you’re better off gardening than engineering… what does this say about the effect of social media on organizational theory?

How about: social media represents an affirmation of the organization as ecosystem? It introduces diverse voices into the value network. Yes, it challenges the hierarchical delivery of information we use to manage our work lives – but that is a challenge to hierarchy, not to organizational theory. And before you declare the death of hierarchy, consider that this is an artifact of our sociology. It will take more than twitter to reverse the anthropological and sociological imperatives of hierarchy.

Conclusion

Social media is another in a series of challenges to hierarchy, not organizational theory. It also provides a remarkable tool for the detection of weak signals in a decision environment, while challenging our cognitive ability to pay attention – but I’ve run out of pixels for today.

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