Contribution signée Maddy Janssens (KU Leuven), Joost Luyckx (KU Leuven) et ToTran Nguyen (KU Leuven)

Analysis: insufficient attention to organizations and the way of organizing

Until now, the focus of the public debate regarding appropriate corona-measures is on either individuals or the government, whereas the level of the organization is absent. One discusses the well-being of individuals (e.g. combining telework and children, loneliness of social distancing, motivation to follow the lock down) and the responsiveness of government (e.g. suitability of its measures, clarity of decisions, degree of economic support). Although both attention levels are important, we argue that what is missing is a profound discussion on ‘organizations’ in our society and how a dominant approach to organizing has led to a lack of long-term vision, insufficient organizational resilience, and weakened organizational responsibility.

Organizations such as firms, banks, hospitals, schools, universities, and nursing homes make up society. They bring individuals together in entities that perform vital functions for society. How they are managed is therefore critical; yet there is currently no reflection on how the functioning of organizations have impacted our ability to manage the corona-crisis and how a rethinking of ways of organizing might be necessary for us to navigate the crisis and move forward, toward sustainability.

Our observation is that currently the dominant way of organizing is centered on the logic of efficiency. Efficiency refers to the optimal use and allocation of resources (“doing things right”). This has resulted in management focusing on cost reduction, budgets, just-in-time management, no slack of resources, etc. (Sturdy et al., 2019). Whereas this way of organizing is important for economic viability, there is the danger that, when this logic becomes too dominant, there is no or very limited space for other organizational logics such as quality, knowledge creation, and innovation which are (to different degrees) critical for organizations as well. Two tendencies explain this lack of space. First, one tends to evaluate other organizational logics according to efficiency criteria, not recognizing that other criteria are needed for other logics. In other words, efficiency has become the end, not the means (Alvesson & Willmott, 1999). Furthermore, often there is the implicit assumption that there is no limit to efficiency, as if further cost reduction would not affect the possibility to realize these other outcomes. This observation thus raises the fundamental question: Are our different organizations in society not only “doing things right, but also doing the right things”? Applying this to the case of nursing homes, one might wonder whether these organizations have been shaped too much by the logic of efficiency and not sufficiently by the logic of care.

More specifically, efficiency-driven organizations have three features that hinder their ability to serve society. A first shortcoming is a lack of a long-term vision. The short-term is prioritized; thus profits and costs guide decision-making. For example, destroying the inventory of millions of surgical masks without replacing them in a timely (and critical) manner should not be seen as a personal or government decision as such but the result of an organizational efficiency logic that consents to cost-saving decisions without considering the long-term.

Second, the organizational resilience of an efficiency-driven organization is low. As efficiency is achieved through strict task divisions and procedures that standardize behaviors, employees tend to perform narrowly prescribed jobs.There is no room for idea-generation, which (combined with the lack of slack resources) leads to organizations that can only perform well in conditions that are known and predictable. Third, there is a weakened sensitivity for organizational moral responsibility. The standardized procedures that drive employee behaviors neutralize their ‘moral impulse’; the test of responsibility is not linked to a dialogue among employees about the morality of the organization’s actions and outcomes, but rather linked to whether employees have conformed to the set rules and procedures, thus producing ‘morally-neutral’ organizations (Bauman, 1993).

Societal stakes: the ability of organizations to take actions that best serve society

If we do not start rethinking the way of organizing and do not start re-creating society,what is at stake is that organizations will be ill-equipped to navigate the current crisis and the uncertain future after the crisis. We need to begin working toward a more sustainable way of organizing, where multiple organizational logics and features can co-exist. The three shortcomings identified can serve as a starting point for the necessary shifts.

First, more sustainable ways of organizing require an increased focus on long-term decision-making that spans at least a decade, both in terms of organizational goal-setting and assessment of the potentially negative effects of organizational actions on stakeholders and society in general. The concern about “short-termism” was already raised multiple times in the aftermath of the recent 2008 Great Recession in the context of banks and multinational corporations, but the COVID-19 crisis shows that it also applies to public-sector organizations (Barton, 2011). To break free of the “tyranny of short-termism”–which plagues organizations of every sector in society to a certain extent–is a challenging endeavor for public sector organizations and will require substantial support from national and regional governments. All too often, politicians have tried to survive election after election, not paying sufficient attention to long-term problems in areas such as health and education.

Second, a more sustainable way of organizing is building in the capacity to be resilient. Resilience refers to the maintenance of positive adjustment under various challenging conditions such that the organization emerges from those conditions stronger and more resourceful (Vogus & Sutcliffe, 2007). Important in that respect is the continual availability of adequate levels of slack resources (a notion that refers to the amount of resources that remain, after the resource demands for organizational operations have been met). The idea of safeguarding some kind of critical stock is essential, because maintaining an adequate stock of resources is necessary for responding and adapting to unexpected events. Operating with too little for too long makes organizations vulnerable to external challenges. The capacity to adjust to challenging conditions further requires a flexible way of organizing, which can be achieved by creating networks that allow information to flow in multiple directions. Organizations thus need to have at a minimum: cross-functional task groups, horizontal communication channels, or temporary networks. If organizations fall back on ‘’business as usual”, then they will not be equipped to adequately respond to the challenges that will continue to emerge in the current crisis and futures ones.

Third, sustainable organizations need to develop the capability to reflect and act upon matters of organizational moral responsibility; this is a very complex notion that relates to the question of how the actions of an organization affect others and how the goals and results of those actions can be evaluated as good or wrong (Rhodes & Pullen, 2009). Today organizations in the private and public sector do not neglect the issue of moral responsibility, but they currently attempt to address their responsibility through implementing CSR-standards and CSR-reportingtools (that attempt to guarantee ethical organizational behavior).Organizational moral responsibility, however, is not something that can be fully governed by standards and reporting as it stops stimulating ethical questions, leading to complacency. Moral responsibility requires constant attention from executives and employees, where there is much more deliberation about what is moral and good behavior. Such reflections are not an easy task, as it raises the question to what extent organizations can be regarded as being responsible for their actions, as opposed to actions and effects that are beyond their control?

Recommendations

Although the current crisis requires urgent actions, this should not be addressed with reactive, short-term thinking. Rather, this crisis asks for vision-driven actions of which the rethinking of our organizations is a crucial aspect. Overall, we recommend an explicit public debate on the nature of our organizations that best serve society. We are not arguing that the logic of efficiency is no longer relevant but efficiency needs to be treated again as a means, not an end itself. There needs to be space for other organizational logics such as care, safety, solidarity, innovation… that better serve a sustainable society.

We recommend that the government, as part of the immediate exit strategy, starts organizing a public debate on the nature of organizations in our society: How do we assure that the shortcomings of the efficiency logics are avoided?What is the purpose of our organizations in different sectors and which (combination of) logics are therefore necessary? This debate needs to be held in the upcoming weeks and months to ensure that we review lessons from this crisis, and give organizations the right direction in starting back up.

Two conditions are crucial for this public debate to work (Habermas, 2006). First, all types of organizations in our society need to be able to participate so that the result will be accepted by all parties who are affected by it. This means a variety of actors–not only political parties, employer organizations and labor unions but also other civil society actors (universities, NGOs…) and the efficiency-driven sectors themselves (health, education, arts…) need to engage in this debate. Second, the media will play a critical role in facilitating this public debate in a democratic way. The media needs to ensure that the debate will not be colonized by actors that have traditionally dominated societal dialogue. They need to prevent that powerful actors start using persuading communication, imposing certain perspectives over alternatives and blocking reflections. Instead, the media should encourage a variety of informed views, perspectives and opinions so that a ‘real’ debate is possible, encouraging responsiveness of the public on this crucial matter of how we would like to organize our society for the future.

References

Alvesson, M. & Willmott, H. (1999). Critical Management Studies. London: Sage Publications.

Barton, D. (2011). Capitalism for the long term. Harvard Business Review, 89(3), 84-91.

Bauman, Z. (1993). Postmodern ethics. Oxford: Blackwell Publishing.

Habermas, J. (2006). Political communication in media society: Does democracy still enjoy an epistemic dimension? Communication Theory, 16, 411-426.

Sturdy, A., Heusinkveld, S., Reay, T., & Strang, D. (2019). The Oxford Handbook of Management Ideas. London: Oxford University Press.

Rhodes, A. & Pullen, A. (2009). Organizational moral responsibility. in S.R. Clegg & C.L. Cooper (eds.), The SAGE Handbook of Organizational Behavior. Volume II: Macro Approaches, pp. 340-355, London: Sage Publications.

Vogus, T. J., & Sutcliffe, K. M. (2007). Organizational resilience: towards a theory and research agenda. IEEE International Conference on Systems, Man and Cybernetics (pp. 3418-3422).