HIERARCHIES, CLANS AND THEORY Z

Ouchi, W. G., Price, R. L. (1978), Hierarchies, Clans, Theory Z : A new perspective on organizational development, Organizational Dynamics, AMACOM, 25-43

The research paper starts with the introduction of bureaucratic hierarchies which is defined as the use of legitimate authority in which employees grant their superiors the rights to tell them what to do which is not as indispensable to industrialized settings as is commonly assumed. Secondly, organizational development (OD) has been discussed. In fact, the industrialized organizations share many of the properties of the organizations described by Elton Mayo, Chris Argyris, Douglas Mc-Gregor and Rensis Likert, the founding fathers of humanistic organizational development.

The OD programs rely on small group techniques especially T-training and team building. OD is people and a process oriented approach and is not reliable as per Porres and Berg. The theories by the four authors mentioned are as follows. Elton Mayo: The Social Problems of an Industrial Civilization (1945) which included Hawthorne studies at western electric company. He stated that in simple communities, there is a stability of the social order that has ceased to characterize highly developed industrial centers. Chris Argyris: Integrating the individual and the organization (1957, 1964) which focuses on the psychology of the individual. He stated that psychological success and effectiveness is not possible in a pyramidal structure. Douglas Mc Gregor: Human side of the enterprise. He suggested three basic means, which include the development of; a) A climate or philosophy that leads to the humanistic utilization of a hierarchy, b) Interpersonal skills through the use of T-groups, c) The improved effectiveness of small working groups (the inevitable basic links between interdependent individuals in organizations). Rensis Likert: The human organization. Likert maintained it is the consistency with which the parts mesh together that is more important the character of any of the specific techniques of management or organization. He promoted common culture and matrix organisation. He also suggested that highly productive organizations are tightly knit social systems.

A lack of clarity in the relationships among industrialization, hierarchy, alienation, and small group formation when all these four theories are considered. After these theories are covered, the social organization mechanisms are considered which includes markets, bureaucratic hierarchies and clans. Bureaucratic hierarchies are said to overshadow the markets and the clans. Types of organizations have been discussed including Type Z (Long-term employment, Slow evaluation and promotion, Moderately specialized careers, Consensual decision making, Individual responsibility, Implicit, informal, Holistic concern) and Type A organization (Short-term employment, Rapid evaluation and promotion, Highly specialized careers, Individual decision making, Individual responsibility, Explicit, formal control, Segmented concern). Striking example of Japan has been taken to make the understanding of Type Z organization. 

Lastly, the solution to the industrialised settings is given in the form of organizational philosophy (OP) which is defined as primarily a mechanism for integrating an individual into an organization and linking individual goals to the organizational goals which can ultimately help in decision making of the companies. The companies do not use it because of little incentive or benefit to itself. People do not have the luxury to start a company themselves. OP should be formed at the top organisational unit which is autonomous. OP has to be practiced when it is in the context of long term goals whilst taking care of the short run changing conditions and when it can be practically implemented.

Submitted by: Srijana Singh, OBD group