Many academics and practicing managers believe that there are principles for organizing and managing firms that can form a general theory of organization. The quest for the organizational “holy grail” has a long and tortuous history punctuated by bold promises and great disappointments. As in the Wagnerian operatic dramas, stories and theories about how organizations work or ought to work are repeated and revisited endlessly, with different characters telling different stories. In this article, I suggest that the history of organizational thought and practice can be summarized according to three basic models: scientific management, human relations, and structural analysis. We can then better understand and assess such current managerial trends as lean production or total quality management if we see them as outgrowths of the three basic models of organization, that is, as eclectic models. At different times, managers and firms in different countries and industries have used the three models to tackle various combinations of problems. The adoption of models, however, has rarely occurred automatically but is shaped by institutional circumstances. Therefore, rather than trying to determine the best organizational model, the “best practice,” or the soundest organizational principles, we should try to understand how the managers and workers who find themselves in particular institutional circumstances at the country, industry, and firm levels prefer certain ways of organizing.
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