University Of California Berkeley Faculty

"It is procedure that governs the routine internal and external relationships - between one individual and another; between one organizational unit and another; between one process and another; between one skill or technique and another; between one function and another; between one place and another; between the organization and the public; and between all combinations and permutations of these. It is by means of procedure that the day-to-day work of government is done-mail sorted, routed and delivered; deeds recorded; accounts audited; cases prosecuted; protests heard; food inspected; budgets reviewed; tax returns verified; data collected; supplies purchased; property assessed; inquiries answered; orders issued; investigations made; and so forth endlessly."

"Among organization theorists general, if not universal agreement obtains that it is proper to view the development of organization theory as divided into three periods. Conventionally, this "history" is regarded as beginning early in this century; and the three periods are customarily are designed by the terms classic, neo-classic and modern... The classical period has its beginning, in the conventional view, with Frederick W. Taylor and Henri Fayol... [and] reaches its high point in the thirties with the work of James Mooney and of the editors and authors of the Paper in the Science of Administration. The neo-classical wave is seen as beginning with the Hawthorne experiments in the late twenties. These experiments challenge the formality and rationality of classical theory with the "discovery"of human relations."

"Organisations are technical instruments; designed as means to definite goals... they are expendable. Institutions... may be partly engineered, but they have also a “natural” dimension. They are the products of interaction and adaptation; they become the receptacles of group idealism; they are less readily expendable."

"Running an organisation... generates problems, which have no necessary (and often an opposed) relationship to the professed or "original" goals of the organization. The day-to-day behaviour of the group becomes centered around specific problems and proximate goals, which have primarily an internal relevance. Then, since these activities come to consume an increasing proportion of the time and thoughts of participants, they are-from the point of view of actual behaviour – substituted for the professed goal."

"There seems to be little doubt that the factor of sheer size is a very important element in concrete bureaucratic structures. However, because of the patterns exhibited in the behavior of agents in small organized groups and because of the implications for greater generality, the formulation used here does not make the factor of size crucial for the existence of bureaucratic behavior patterns."

"Leadership, pure and simple, is the assumption of responsibility for the pursuit of excellence in group life."

"The action of the officials tends to have an increasingly internal relevance , which may result in the deflection of the organization from its original path, which, however, usually remains as the formally professed aim of the organization."

"[Even if established procedures exist for replacing leaders,] they are relatively harmless to the entrenched leaders (because functionless) so long as the ranks fear the consequences of using them"

"Trade unions, governments, business corporations, political parties, and the like are formal structures in the sense that they represent rationally ordered instruments for the achievement of stated goals."

"The term “leadership” connotes critical experience rather than routine practice."

"It has been well said that the effective leader must know the meaning and master the techniques of the educator."

"The art of the creative leader is the art of institution building, the reworking of human and technological materials to fashion an organism that embodies new and enduring values."

"Institutionalization is a process. It is something that happens to an organization over time, reflecting the organization’s own distinctive history, the people who have been in it, the groups it embodies and the vested interests they have created, and the way it has adapted to its environment."

"To institutionalize is to infuse with value beyond the technical requirements of the task at hand. The prizing of social machinery beyond its technical role is largely a reflection of the unique way in which it fulfills personal or group needs. Whenever individuals become attached to an organization or a way of doing things as persons rather than as technicians, the result is a prizing of the device for its own sake. From the standpoint of the committed person, the organization is changed from an expendable tool into a valued source of personal satisfaction."

"The institutional leader, then, is primarily an expert in the promotion and protection of values."

"Selznick's early fascination was the paradox that organizations are created for rational action, but that they never quite succeed in conquering non-rational elements of organizational behavior because they are "inescapably embedded in an institutional matrix" (Selznick, 1948, p. 25)."

"The relations outlined on an organization chart provide a framework within which fuller and more spontaneous human behavior takes place. The formal system may draw upon that behavior for added strength; it will in its turn be subordinated to personal and group egotism."

"The most important thing about organizations is that, though they are tools, each nevertheless has a life of its own."

"Cooptation is the process of absorbing new elements into the leadership or policy- determining structure of an organization as a means of averting threats to its stability or existence."

"Whereas some consequences of our actions occur as planned, others are unanticipated; social actions are not context-free but are constrained, and their outcomes are shaped by the setting in which they occur. Especially significant are the constraints on action that arise from commitments enforced by institutionalization. Because organizations are social systems, goals and procedures tend to achieve an established, value impregnated status. We say that they become institutionalized."

"The formal administrative design can never adequately or fully reflect the concrete organization to which it refers, for the obvious reason that no abstract plan or pattern can—or may, if it is to be useful—exhaustively describe an empirical totality. At the same time, that which is not included in the abstract design (as reflected, for example, in a a staff and-line organization chart) is vitally relevant to the maintenance and development of the formal system itself."

"An organization is a group of living human beings. The formal or official design for living never completely accounts for what the participants do. It is always supplemented by what is called the “informal structure,” which arises as the individual brings into play his own personality, his special problems and interests. Formal relations co-ordinate roles or specialized activities, not persons."

"[Formal structures of formal organizations] never succeed in conquering the non-rational dimensions of organizational behavior."

"Roughly speaking, Lundberg argued that Gunnar Myrdal's work has been enormously important, and noted that there was local pressure on the Nobel Prize Committee to recognize him, but wondered how it would be received abroad if this was done. (Remember that the Prize was then rather new, and Lundberg had to be careful about its reputation.) Giersch's reply was that the quality of the work surely merited the award, but maybe the politics of it would be easier if there was a joint recipient who was neither Swedish nor shared Myrdal's views – what about Hayek? That's it – is this where Hayek's prize came from, or was he already high on the list, or what?"

"I did, and still do, think that New Classical Economics has quite a bit in common with the Austrians (so did Robert Lucas, and I am surprised to find that I did not refer to this in the early 1980s, so I was either careless or did not know about it until a bit later)."

"Organizational theories have three origins: Max Weber’s original work on bureaucracies which came to define the theory for sociologists, a line of theory based in business schools that had as its focus, the improvement of management control over the work process, and the industrial organization literature in economics. Unlike many fields in sociology, organizational theory has been a multidisciplinary affair since World War II, and it is difficult to understand its central debates without considering its linkages to business schools and economics departments."

"Neil Fligstein is one of the most productive empirical researchers in economic sociology. His new book [The Architecture of Markets, 2001] can be interpreted as an attempt to answer the questions just mentioned, among others. He argues that “the sociology of markets lacks a theory of social institutions” (p. 8) and “needs to be clarified theoretically” (p. 9). The book’s aim is to give an outline of new theoretical foundations of a sociology of markets. Fligstein points out that “there are real differences in theoretical assumptions” between institutional economics and his version of a sociology of markets (p. 10). The first major part of the book is devoted to an explication and elaboration of a specifically sociological approach to markets called the “political-cultural approach.” In the second part, Fligstein applies this approach to various empirical cases and data of twenty-first-century capitalist societies."

"Organizational theory is one of the most vibrant areas in sociological research. Scholars from many subfields, (medical sociology, political sociology, social movements, education) have felt compelled to study organizational theory because of the obviously important role that complex organizations play in their empirical research. But scholars who do not do organizational theory are often struck at how arcane the debates are within organizational theory. They also think most of organizational theory is about firms and thus, the theory does not seem to have much application to other kinds of social arenas."

"Organizational and not financial or ownership embeddedness is likely to be a more important cause of actions of firms than anything else in the case of United States. This means efforts should concentrate on specifying models of relations between firms that focus on intra- and interorganizational processes, such as the construction of strategic action and the cultural frames by which such a construction makes sense."

"The key argument is that managers and owners in firms search for stable patterns of interaction with their largest competitors. Once stable patterns prove to be both legal and profitable, firms set up organizational fields that tend to produce and reproduce those patterns."

"State building can be viewed as the historical process by which groups outside of the state are able to get domains organized by the state to make rules for some set of societal fields. These rules reflect the interests of the most powerful groups in various fields. Politically oriented social movements are, by definition, outside of some established field of a given state. They are oriented toward either creating a new domain where they will have power, or taking over and transforming an existing domain or even the entire state. At any given moment, there are political projects in the fields that make up states (i.e., “normal politics”) and social movements oriented toward altering incumbents’ ability to set rules."

"The main problem actors face is uncertainty caused by difficulties in finding suppliers and customers and in controlling their own firm."

"The key insight of the approach is to consider that social action takes place in arenas, what may be called fields, domains, sectors, or organized social spaces... Fields contain collective actors who try to produce a system of domination in that space. To do so requires the production of a local culture that defines local social relations between actors."

"Conceptions of control refer to understandings that structure perceptions of how a market works and that allow actors to interpret their world and act to control situations. A conception of control is simultaneously a worldview that allows actors to interpret the actions of others and a reflection of how the market is structured. Conceptions of control reflect market-specific agreements between actors in firms on principles of internal organization (i.e., forms of hierarchy), tactics for competition or cooperation, and the hierarchy or status ordering of firms in a given market. The state must ratify, help to create, or at the very least, not oppose a conception of control."

"Initial formation of policy domains and the rules they create affecting property rights, governance structures, and rules of exchange shape the development of new markets because they produce cultural templates that determine how to organize in a given society."

"[Institutional entrepreneurs must] size up the condition of the organizational field and figure out what kinds of action make sense."

"I use the metaphor "markets as politics" to create a sociological view of action in markets. I develop a conceptual view of the social institutions that comprise markets, discuss a sociological model of action in which market participants try to create stable worlds and find social solutions to competition, and discuss how markets and states are intimately linked. From these foundations, I generate propositions about how politics in markets work during various stages of market development-- formation, stability, and transformation. At the formation of markets, when actors in firms are trying to create a status hierarchy that enforces noncompetitive forms of competition, political action resembles social movements. In stable markets, incumbent firms defend their positions against challengers and invaders. During periods of market transformation, invaders can reintroduce more fluid social-movement-like conditions."

"The basis of social skill is the ability to relate to the situation of the ‘other.’ This means that whereas a given strategic actor has interests, he or she must take other people’s interests into account… to imaginatively identify with the states of others."

"The farther afield mergers were, the less likely antitrust authorities were to intervene. Growth through mergers required that finance-oriented managers choose their targets carefully. They sought profitable and growing industries where their capital would earn higher rates of return and avoided mergers where the threat of antitrust prosecution might exist."

"The forms of social organization produced the market, not the reverse... Instead of markets calling forth efficient forms of social organization, political and social interactions produced the structuring of sociologically effective markets."

"The social structures of markets and the internal organisation of firms are best viewed as attempts to mitigate the effects of competition with other firms."

"The firm-as-portfolio model implies both a practice (growth through diversification) and a form (the conglomerate). Unrelated diversification entails buying businesses in industries that are neither potential buyers, suppliers, competitors, or complements to the firm’s current business."

"The notion that advertising was a sort of corporate luxury, to be indulged in where there are no demands left over, now seems archaic and quaint. Businessmen are increasingly inclined to view the appropriation as a true capital investment – as much so as a new plant."

"The Celler-Kefauver Amendment to Section 7 of the Clayton Act has now been made effective by judicial ratification. The Supreme Court has said that the Act means exactly what it says... It prohibits acquisitions, either stock or assets, where competition in any line of commerce in any section of the country may be substantially lessened."

"Property rights, governance structures and rules of exchange are arenas in which modern states establish rules for economic actors. States provide stable and reliable conditions under which firms organize, compete, cooperate and exchange. The enforcement of the laws affects what conceptions of control can produce stable markets. There are political contests over the content of laws, their applicability to given firms and markets, and the extent and direction of state intervention into economy. Such laws are never neutral. They favor certain groups of firms."

"The marketing director in each department reported directly to the department head and controlled market research and sales. More important, the marketing manager was also responsible for new product development, requesting production schedules, and controlling finished goods inventory."

"A leading firm that controlled a large portion of the output of a given organizational field operated as a price setter. To set prices, the actors in that firm had to control their suppliers and marketing in order to increase their own efficiency and have the potential to cut off other firms from supplies or customers."

"The experiences of the war changed both Baruch’s and Wilson’s attitude toward the large firm. Following the war their anti-firm rhetoric was replaced with praise for the large firm’s patriotism and contribution to progress."

"... did not set out to destroy the large corporation. Instead, each attempted to protect the legitimacy of the system by using existing law against the worst offenders or proposing new laws to change the rules of the system."

"The leaders of the large firms dominated by the manufacturing conception saw the key problem as low prices. This meant that they were intent on controlling prices by cutting production. But once prices were stabilized, they were cautious about increasing production for fear that prices would again collapse. Since their competitors had roughly equal production capacities and costs, all would lose by too rapid an increase in production."