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.
Models of organizational management tend to be complex because they need to address two difficult issues at the same time: (1) the technical task of organization; and (2) establishing, maintaining, and justifying a system of authority. While the leaders who rule the business firm no longer own it, they arrange working conditions for their employees (who must obey), as well as decide how to distribute the income from producing and selling goods and services. Broadly stated, the problem of organization entails implementing both an ideology to support the system of authority in the firm and the techniques that enable the organization to meet its goals. The ideology and the techniques tend to reinforce each other. In practice, organizational models need to address the problems of complexity, bureaucratization, diversification, labor unrest, and competition, both domestic and international.1
Models are useful to managers because they interpret the problem and provide practical guidelines for action. The way in which managers perceive, assess, and interpret problems is partially shaped by some ideology, i.e.,
1. For a historical and comparative analysis of the dual problem of organization, see:
M.F. Guillén, Models of Management: Work, Authority, and Organization in a Comparative Perspective (Chicago, Illinois: University of Chicago Press, 1994);
R. Bendix, Work and Authority in Industry (Berkeley, California: University of California Press, 1974); and
J. Child, British Management Thought (London, England: George Allen & Unwin, 1969).
2. The organization literature agrees on the importance of these three models. See:
W.R. Scott, Organizations (Englewood Cliffs, New Jersey: Prentice-Hall, 1987), pp. 31–116;
M. Burawoy, “The Anthropology of Industrial Work,” Annual Review of Anthropology 8 (1979): 231–266;
C. Perrow, Complex Organizations (New York: Random House, 1986); E.H. Schein, Organizational Psychology (Englewood Cliffs, New Jersey: Prentice-Hall, 1988), pp. 50–72, 93–101; and
A. Etzioni, Modern Organizations (Englewood Cliffs, New Jersey: Prentice-Hall, 1964), pp. 20–49.
3. A more detailed account of cross-national variations can be found in Guillén (1994).
4. Guillén (1994).
5. R. Dore, British Factory, Japanese Factory (Berkeley, California: University of California Press, 1973), pp. 234, 277, 401–402, 408; and
G. Hofstede, Culture’s Consequences: International Differences in Work-Related Values (Newbury Park, California: Sage, 1980), pp. 21, 131–133, 181–187, 236–238, 293–296.
6. Guillén (1994).
7. W.M. Fruin, The Japanese Enterprise System: Competitive Strategies and Cooperative Structures (Oxford, England: Clarendon Press, 1992); and
M.L. Gerlach, Alliance Capitalism: The Social Organization of Japanese Business (Berkeley, California: University of California Press, 1992).
8. For a review of the impact of these mentalities and intellectual movements, see:
9. For example, see: R.M. Kanter, The Change Masters (New York: Simon & Schuster, 1984), pp. 44–47;
R.T. Pascale, Managing on the Edge (New York: Simon & Schuster, 1990), pp. 16–23;
A. Huczynski, Management Gurus (London, England: Routledge, 1993), pp. 276–296;
Scott (1987), pp. 20–24; and
S.R. Barley and G. Kunda, “Design and Devotion: Surges of Rational and Normative Ideologies of Control in Managerial Discourse,” Administrative Science Quarterly 33 (1992): 24–60.
10. See William G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge (Reading, Massachusetts: Addison-Wesley, 1981);
T.J. Peters and R.H. Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Harper & Row, 1982), pp. 4–6, 99;
T.E. Deal and A.A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Reading, Massachusetts: Addison-Wesley, 1982), pp. 5, 8–19, 22, 129–139;
R.T. Pascale and A.G. Athos, The Art of Japanese Management: Applications for American Executives (New York: Simon & Schuster, 1981), pp. 49–52, 86, 125–129;
“Corporate Culture,” Business Week, 27 October 1980, pp. 148–160; and
B. Uttal, “The Corporate Culture Vultures,” Fortune, 17 October 1983, pp. 66–72.
One of the best analyses of ideologies and corporate cultures is:
G. Kunda, Engineering Culture: Control and Commitment in a High-Tech Corporation (Philadelphia, Pennsylvania: Temple University Press, 1992), pp. 50–91.
11. The classic study of this phenomenon is:
D.E. Westney, Imitation and Innovation: The Transfer of Western Organizational Patterns to Meiji Japan (Cambridge, Massachusetts: Harvard University Press, 1987).
12. M.A. Cusumano, The Japanese Automobile Industry: Technology and Management at Nissan and Toyota (Cambridge, Massachusetts: The Council on East Asian Studies and Harvard University Press, 1985), pp. 137–185;
K. Dohse, U. Jürgens, and T. Malsch, “From ‘Fordism’ to ‘Toyotism’? The Social Organization of the Labor Process in the Japanese Automobile Industry,” Politics & Society 14 (1985): 115–146; and
M. Kenney and R. Florida, Beyond Mass Production: The Japanese System and Its Transfer to the U.S. (New York: Oxford University Press, 1993), pp. 27–33.
13. J.P. Womack, D.T. Jones, and D. Roos, The Machine That Changed the World: The Story of Lean Production (New York: Harper Perennial, 1991); and
Kenney and Florida (1993), pp. 27–33.
14. Dohse et al. (1985), pp. 126–133; and
S. Kamata, Japan in the Passing Lane: An Insider’s Account of Life in a Japanese Auto Factory (New York: Pantheon, 1982).
15. J.J. Fucini and S. Fucini, Working for the Japanese: Inside Mazda’s American Auto Plant (New York: Free Press, 1990), p. 39.
16. Dohse et al. (1985), p. 141;
C. Berggren, Alternatives to Lean Production: Work Organization in the Swedish Auto Industry (Ithaca, New York: ILR Press, 1992), pp. 28–32.
17. P.S. Adler, “Time and Motion Regained,” Harvard Business Review, January–February 1993, pp. 97–108;
Dohse et al. (1985), pp. 126–129.
18. Womack et al. (1991), pp. 92, 99–103; and
Berggren (1992), pp. 34–49;
U. Jürgens, T. Malsch, and K. Dohse, Moderne Zeiten in der Automobilfabrik (Berlin, Germany: Springer-Verlag, 1989), pp. 36–45.
19. Berggren (1992), p. 35.
20. Womack et al. (1991), pp. 192–222.
21. Womack et al. (1991), p. 278.
22. Dohse et al. (1985), p. 140.
23. Cusumano (1985), pp. 27–72.
24. Berggren (1992), pp. 31–32, 40–43, 46–49, 53–55;
R.E. Cole, Work, Mobility, and Participation: A Comparative Study of American and Japanese Industry (Berkeley, California: University of California Press, 1979), pp. 201–204.
See also the more positive evaluation of the NUMMI transplant in:
P.S. Adler and R.E. Cole, “Designed for Learning: A Tale of Two Auto Plants,” Sloan Management Review, Spring 1993, pp. 85–94.
25. Lean Production: Idee-Konzept-Erfahrungen in Deutschland (Cologne, Germany: Institut für angewandte Arbeitswissenschaft, 1992), pp. 11–16, 119–120, 126–127, 134, 201–206; and
S. Park, U. Jürgens, and H.P. Merz, eds., Transfer des japanischen Managementsystems (Berlin, Germany: Express Edition, 1985).
26. M.A. Cusumano, “Japanese Technology Management: Innovations, Transferability, and the Limitations of ‘Lean’ Production” (Cambridge, Massachusetts: MIT Sloan School of Management, WP 3477-92/BPS, 15 October 1992);
“Japan Discovers Openness,” The Economist, 16 October 1993, pp. 67–69; and
E. Terazono, “Feeling the Pinch,” Financial Times, 23 November 1993, p. 14.
27. Kenney and Florida (1993), pp. 263–300; and
Berggren (1992), pp. 52, 252.
28. Cusumano (1985), pp. 305–307;
Dohse et al. (1985), p. 127;
Kamata (1982); and
Berggren (1992), p. 252.
29. R.E. Cole, Strategies for Learning: Small-Group Activities in American, Japanese, and Swedish Industry (Berkeley, California: University of California Press, 1989), pp. 79–104; and
A.G. Robinson and D.M. Schroeder, “Training, Continuous Improvement, and Human Relations: The U.S. TWI Programs and the Japanese Management Style,” California Management Review, Winter 1993, pp. 35–57.
30. S.P. Waring, Taylorism Transformed: Scientific Management Theory Since 1945 (Chapel Hill, North Carolina: The University of North Carolina Press, 1991), p. 131;
P. Blumberg, Industrial Democracy: The Sociology of Participation (New York: Schocken, 1973), pp. 77–78, 244 n. 7;
Cusumano (1985), pp. 320–373;
A. Gabor, The Man Who Discovered Quality: How W. Edwards Deming Brought the Quality Revolution to America (New York: Times Books/Random House, 1990), pp. 40–42; and
W. Edwards Deming, Out of Crisis (Cambridge, Massachusetts: MIT Center for Advanced Engineering Study, 1986).
31. Malcolm Baldrige National Quality Award: 1992 Award Criteria (Washington, DC: U.S. Department of Commerce, 1991), pp. 12–13;
G.S. Easton, “The 1993 State of U.S. Total Quality Management: A Baldrige Examiner’s Perspective,” California Management Review, Spring 1993, pp. 32–54;
R.E. Cole, P. Bacdayan, and B.J. White, “Quality, Participation, and Competitiveness,” California Management Review, Spring 1993, pp. 68–81; and
M.J. Price and E.E. Chen, “Total Quality Management in a Small, High-Technology Company,” California Management Review, Spring 1993, pp. 96–117.
32. Cole et al. (1993), p. 79.
33. Does Quality Work? A Review of Relevant Studies (New York: The Conference Board, 1993);
P. Osterman, “How Common Is Workplace Transformation and Who Adopts It?” Industrial and Labor Relations Review 47 (1994): 173–188;
T. Li-Ping Tang et al., “Differences Between Active and Inactive
Quality Circles in Attendance and Performance,” Public Personnel Management 22 (1993): 579–582;
P. Castorina and B. Wood, “Circles in the Fortune 500: Why Circles Fail,” Journal of Quality and Participation 11 (1988): 40–41;
“Quality: The Key to Growth for Small Companies and for America,” Business Week, 30 November 1992, pp. 66–75;
R.M. Grant, R. Shani, and R. Krishnan, “TQM’s Challenge to Management Theory and Practice,” Sloan Management Review, Winter 1994, pp. 25–35;
P. Taylor, “Why Customers Must Come First,” Financial Times, 26 October 1992, p. 8;
T. Dickson, “Quality Street Cred,” Financial Times, 20 October 1993, p. 10;
G.J. Grenier, Inhuman Relations: Quality Circles and Anti-Unionism in American Industry (Philadelphia, Pennsylvania: Temple University Press, 1988).