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WHAT ARE
ORGANISATIONS?
When you have read this chapter, you will be able to:
x analyse and critique definitions of organisation x evaluate potential conditions for an organisation to be said to exist.
DEFINING ‘ORGANISATION’ IN TERMS
OF MEMBERSHIP
The most fundamental question in any philosophical enquiry into organisations and management is: what exactly is an organisation? We can distinguish the two following senses of this question:
What is it for something in general to be an organisation? How can we decide whether a specific ‘thing’ is an organisation or not?
Although the two questions are clearly related, it may be possible to answer the first and not be able to answer the second. I may accept that an organi- sation possesses features a , b, c , d , but not be able to find out whether some particular collection of people has all of these features. Or I may see fea- tures a, b, c and d all present, but not be sure that they all attach to the same identified entity. When we talk about an organisation, it goes beyond the physical manifes- tations − we do not mean just the buildings, or the people. Take away the buildings and you have an operational problem – but the organisation has not ceased to exist. Take away the people, leaving the rest, and you have a bigger problem, but arguably there is still an organisation there, something waiting to be re-populated. The ‘organisation’ is somehow abstracted from its people and its buildings – just as it would be from the machinery, the legal documents, the goods and services it produces and delivers. It ‘exists’ – but we do not seem to be able to explain how in terms of its components. Each of the things mentioned above are part of something being an organisation,
10 THE ‘WHAT’ OF MANAGEMENT
but no specific cluster of them represents ‘the’ organisation. None is neces- sary, and none on its own is sufficient – even a set of legal documents defin- ing a company is not enough for us to say that an organisation exists. Some cluster of these elements must be sufficient for us to say that an organisation exists, but it is difficult to pin down exactly which. Let us start by looking at a couple of ‘standard’ definitions of an organisation, as given in Box 1.1.
BOX 1.
DEFINITIONS OF ‘ORGANISATION’
Business Dictionary (online) A social unit of people, systematically structured and managed to meet a need or to pursue collective goals on a continuing basis. Oxford English Dictionary An organized group of people with a particular purpose, such as a busi- ness or government department
As this indicates, one well known attempt at a definition of an organisation is that it is a collection of individuals somehow associated with the achievement of certain goals. The first example of this kind of definition makes clear that these are somehow ‘collective’. One would presume that this indicates that they are commonly agreed amongst that group of people. But this on its own is not enough – a group of protesters demonstrating in the street will often have a set of commonly agreed goals, but they will not comprise an organisation. Both of the definitions given above also include some aspect of control – in one the idea of the group being ‘systematically structured’ and in the other of being ‘organised’. But again our protesters might be system- atically structured – one group is set up to go to the palace, and another to the government buildings – without that making them an organisation. Some definitions of ‘organisation’ include the idea of being self-consciously structured and purposive, but again a group of protesters might be fully aware of what they are doing, how and why, without this making them an organisation. We might turn this around and ask what are the differences between a collection of people such as a group of protesters, and an organisation? One presumably is that there is a formal process of including someone in an organisation – it possesses recognised members , which the protesters would generally not have. Another might be that it is has a degree of longevity that a group of protesters would not have, these having come together often almost spontaneously for a specific and defined event.
12 THE ‘WHAT’ OF MANAGEMENT
It may matter more than appears at first sight. If we cannot give a clear definition then we will not know how to deal with new cases. Today some organisations have very small physical manifestations, being mainly organ- ised around internet networks. If I have a problem with a particular organi- sation, where do I go for redress? If there is a building then it is clear where I go. But some organisations nowadays are what are called ‘shell’ companies, with no physical office, and perhaps just a website to indicate their presence to me. Similarly, in so-called group structures, where there is a holding com- pany and a number of subsidiaries, it is often extremely difficult to sort out which is the ‘real’ company from a legal pyramid of cross-holdings and so- called ‘paper’ companies. So what exactly is ‘the’ organisation can in some cases become confusing, even though in many other cases (e.g. a small store in our local area) we can see and know clearly that it is an organisation. Furthermore, as we have indicated above, some collections of people may form quickly and without the supporting manifestations of offices, legal contracts etc. that we usually look to as signs of an organisation.
DEFINITIONS IN TERMS OF AGREEMENT
So we see that there are problems with the membership aspects of standard definitions. There are further issues with what counts as ‘agreed’ or ‘common’ goals, as well as with who exactly are the people who might be counted as ‘members’ of an organisation. Consider what makes something an agreed goal of an organisation. Does this mean that everyone in the organisation agrees to it? Hardly – it is well known that many employees do not share the official goals of their organi- sation. So is it a majority accord that is necessary? One problem with this is that we might not actually know what proportion of the workforce agrees with the official goals of the company: people often do not admit to their doubts over corporate goals, in case this might adversely affect their posi- tion in the organisation. Another is that it would seem odd to say that one group of people with, say 51 percent agreement, with goals, is an organisa- tion, whilst another, with say 48 percent agreement, is not. And whatever percentage one specified, a similar argument would apply. So is agreement with corporate goals not necessary at all for something to be an organisation? Remember that here we are trying to understand what it is for something to be an organisation at all, not whether an organisation is well run, or healthy, or effective. Consider the opposite case: suppose there were a collection of people, systematically structured in their activity, where no one actually agreed with corporate goals. It might be unusual but it would seem plausible to say it is an organisation – perhaps someone once set the organisa- tion up with certain goals in mind, set these out in a codified form, and no one has ever questioned these, even though no one now really accepts them.
WHAT ARE ORGANISATIONS? (^) 13
So it looks like ‘common’ goals in our definition of an organisation is not exactly the same as ‘agreed’ goals. But we would presumably still want to have some sense in which the goals that people are working towards have some connection. A group of individuals, however systematic in their behaviour, who are working towards completely different goals is not an organisation in the sense of an economically or socially relevant collective activity. So we presumably will need to include in our definition some idea that people are working towards similar or common goals. Exactly how many people, and exactly how similar, may be difficult to establish. That a few people are work- ing against corporate goals would not mean that the collective was not an organisation. And in many cases there may not be an exact identity between people’s understanding of what the corporate goals are. Various departments in an organisation will often have their own slant on what is being done – the marketing department of a car manufacturer may talk of meeting the custom- ers’ needs for new and reliable vehicles, whilst the HR department may talk of enabling staff to have the right skills and rewards for the efficient produc- tion of cars. Producing cars is central here, so variations between different departments’ or individuals’ understanding of this may not matter. However, a couple of unusual cases may clarify this aspect of our defi- nition. Firstly, consider a group of scientific experts, called together by their government to work on a certain project; in reality the government wants to spy on them to see if any of them are likely to reveal state secrets to a foreign power. Now, here there is a structure, and there are common goals. But these goals are not the reason why the ‘organisation’ was set up. This seems to be on the fringes of what we might regard as a genuine organisation – we might say that it was an organisation with deceptive official goals. Now change this example a little – each expert is told a dif- ferent story about the project, so that each of them has a different under- standing of what it is about, and is instructed that under no circumstances must they reveal this to any of their fellow project workers. So we have a whole collection of people, working in a structured way, but all with a different idea of what they are doing. 3 Again this is odd, but probably we would still say that it is an organisation – the scientists are working in a concerted way towards a goal, though it is not actually one that any of them knows about, still less accepts. So maybe we can discard the idea of commonly agreed or shared goals. What is important is not whether the members of the organisation share or agree the goals, so much as that there is some goal towards which all are in some way working, even if they do not actually know what that is. So ‘common’ goal
(^3) Perhaps this is less far fetched than it might at first sight seem. Governments, espe-
cially when they are developing military technology, may not wish to entrust their scientists with the knowledge of what is being done, in case one of them might violate security and reveal the nature of the project to outsiders.
WHAT ARE ORGANISATIONS? (^) 15
x Someone formally associated with the organisation needs to have a goal that relates to the activity of the collective. x The activities of members/participants need by and large to be co-ordinated, or to have the possibility of being co-ordinated.
What is interesting about these points is that they do not actually refute the two definitions given in Box 1.1. They do place them in context, clarifying especially the ideas of collective goals and of co-ordination. The arguments on which they are based do, however, turn on our instinctive, intuitive ideas about what we would be prepared to call an organisation, and some- one might simply challenge such intuitive responses. Certainly, at some points the decision as to whether a case was one of an organisation or not, seemed to be if not arbitrary at least rather close. Maybe, however, we are searching for too much. Up until now we have been trying to answer both of the questions we stated at the start of this chapter; not only what we mean by the idea of an organisation but also how we would decide in any particular case that something was or was not an organisation. The Austrian philosopher Wittgenstein suggested that we understand meaning differently. He said that the totality of examples of a word or term is not always exhaustively set by an existing explanation of its meaning – this is one of the consequences of his argument about not being able to predict a whole series of steps when following a rule after being given a series of examples. He said instead that when faced with a fresh case that raised a question of whether it might count as an example of the term or not, we would make decisions based on a range of features. Each new example that we accepted would have a family resemblance to other examples already accepted, but there would not necessarily be a specific set of properties that they absolutely had to have. In our case, we might say that the family resem- blances would cluster around ideas of collective activity, of co-ordination, of a collective outcome or purpose. But arguably the examples we have encountered suggest that there is no specific interpretation of these that is the determining factor in whether or not something is an organisation.
HOW DO ORGANISATIONS EXIST?
At this stage we will move away from the issue of defining an organisation (not that we have settled the matter) and look at the other question we posed ourselves in this section: in what way would we say that an organisation exists? When does one come into being, and when would it cease? When can we say that there is one organisation or many present in a situation? We can see that our discussion of definitions helps us to understand some of the issues about the existence or otherwise of organisations. We could say that an organisation exists when some of those features identified in what
16 THE ‘WHAT’ OF MANAGEMENT
we called the standard definition are present. But this is easier said than achieved. For one thing, we have argued that whilst some aspect of co- ordinated objective is involved, it does not seem to be connected directly with the conscious intentions of any individual. So it would be difficult in some of our more extreme examples to detect whether there really was an organisation present or not – in some cases there may be a collection of people without anyone consciously having a structured plan as to what they are doing, and yet their behaviour looks very similar to another group where in fact someone did have such an intention. Box 1.2 indicates a puzzling example of this issue.
BOX 1.
THE SHORT LIFE OF AN ORGANISATION
The High Fields Arts Collective was the idea of Johan Roers, a retired theatre manager. He realised that in his local rural community there were several people who had some connection with the performing arts. He contacted 16 people and suggested that they form an amateur arts group serving the community. Several were interested in such a move, although they mostly expressed some kind of reservation: one said that they would be ready to support the initiative so long as there were sufficient other supporters with professional experience, to ensure that it was of a good standard. Mr Roers felt that this was good encouragement, and wrote a short business plan, sought and obtained a small degree of funding from the local council, hired a space for rehearsals and with an office, printed leaf- lets and notified local media. An inaugural meeting was set for a specific date and Mr Roers contacted everyone who had expressed some interest, inviting them to this. No one arrived for that meeting. When Mr Roers contacted each of the invitiees, the message was the same – they thought it was a good idea but wanted to see how much interest there was before they would make a com- mitment to joining. Regretfully, Mr Roers cancelled the room hire and returned the council grant. No more was heard of the High Fields Arts Collective. Did this organisation exist at all? If so, for how long? If not, what did it lack?
There are however further potential problems with the existence of an organisation. Generally speaking if one can talk about an ‘it’ one should be able to identify an example. Now in one sense this is very clear – we can give lots of examples of organisations. But could we point to one? I can
18 THE ‘WHAT’ OF MANAGEMENT
HOW DO ORGANISATIONS COME
INTO BEING?
If we look at the other end of the life of an organisation – when it comes into being – there are parallel areas of uncertainty. Clearly there are some points at which we can definitely say that an organisation exists, for example when it has been constituted by legal deed. However, although that may mark the beginning of the legal existence of an organisa- tion, it is clear that it may have already existed for some time already, outside of a legal definition in effect. Suppose two people start doing something together, working out a sys- tematic division of activity between them, with a common purpose. Has an organisation come into being? If they intend to carry on then one might be tempted to say that it has. Suppose, though, that the two people do not intend to work together for more than one event (perhaps they are organis- ing a street party for example) and yet afterwards they decide they will – when did an organisation come into being? When they decided to carry on working, or when they started working together originally? Either answer seems plausible. If we were to say that it was when they first started work- ing together, this would have the odd conclusion that some such ‘organisa- tions’ come into being and then pass away without anyone ever noticing this – when, say, these two people started organising a street party together but never decided to do anything else. On the other hand, if we say that an organisation exists when two people decide that they will work together on an ongoing basis that would seem to suggest that the critical feature is someone’s intention to work collectively. But what if one person of the two decides that they want to do this and the other does not, and then eventu- ally the first person persuades the second to work together – did the organi- sation come into being at that time or at the earlier time when someone first thought of this? In practical terms it may not look as if an answer to this matters, but it is extreme and unusual cases like this that probe our understanding of what we mean by talking of an organisation existing. Certainly there are many anecdotes of successful visionary entrepreneurs who had an idea and then had to persist in overcoming opposition and apathy before anyone took them seriously. Suppose one of these had a clear idea of what they wanted to do, and how the organisation that they wanted to set up would operate. Do we identify the beginning of the organisation as the point at which someone else agrees to work with the entrepreneur, even though the entrepreneur already has a clear picture of how the organisation will work? Look back at Box 1.2 – it is tempting to say that there never was an organisation in this case, but presumably if just one person had turned up to the inaugural meeting we would probably conclude that the organisation did in fact exist.
WHAT ARE ORGANISATIONS? (^) 19
Related to this is the question of whether there can be such a thing as a single-person organisation. A two-person organisation where one per- son leaves is presumably still an organisation, and there are after all many one-person companies. So if our entrepreneur decides that s/he will run a business in such and such a way, even though later on they will need other people to help them, once they have thought of this then it would seem that we have to agree that an organisation has already come into being. But what about bright ideas of this kind that never reach the light of day? Are these organisations that never started, organisations that started in some- one’s mind but never got any further, or are they not organisations at all unless they eventually gained some kind of physical manifestation? The lat- ter, though reasonable, would make it possible that two people might have exactly the same idea, with the same conception of how to operationalise it, and yet one of these is the beginning of an organisation (because it does eventually turn into a real organisation) whilst the other is not (because it never goes any further). Puzzles also appear with the idea of how we identify or individuate organ- isations. The typical modern multinational company is in reality a cluster of legally separate companies, for example each national subsidiary may have a distinct legal status, the ‘only’ connection being that a holding company back in the home country owns a controlling share in the subsidiary. Some conglomerate corporations own companies that they have no intention of absorbing into their main operations, and hold others that they are trying to fully merge into the main firm. One or many organisations? This is indeed a practical issue as we need to know exactly who is finally accountable for the actions of a subsidiary, and there have been cases where a holding company has avoided being taken to task for illegal or unethical behaviour specifically because they deny direct responsibility for a subsidiary’s actions. Further, when one person starts working with someone else, and then decides to do something separately, when is this a different organisation? A famous example concerns the social networking company Facebook – the originator of this, Mark Zuckerberg, was associated with three co-students who later claimed that Zuckerberg had agreed to work with them on developing their version of a social networking website.^4 Whatever the specifics of this particular case, it is clear that in some cases we might regard someone as working as part of an organisation by assenting to do so, and therefore whatever is so developed could in principle be regarded as the property of the original ‘organisation’. These examples indicate that especially in the case of business start-ups, where there is often a degree of fluidity about what is being done and on
(^4) Which they called HarvardConnection.com. The three co-students were Cameron
Winklevoss, Tyler Winklevoss, and Divya Narendra. The story was dramatised in the movie The Social Network.
WHAT ARE ORGANISATIONS? (^) 21
with specific boundaries in space and time (when does it start? where is it? and where does it stop?). Once we focus on the essence of an organisation relating to intentions then these go away, for this makes the essence of an organisation more of an idea than an object, and ideas do not have begin- nings and endings, or insides and outsides. Note that we said ‘more of ’ – organisations would not be purely ideas: they have physical aspects, such as the people, documents, buildings etc. referred to previously. But following Aristotle’s style of thinking, we might say that these are accidental aspects, and the underlying reality of an organisation is its idea. Where have we got to in this discussion, then? We have seen that there are many puzzles if we regard an organisation as basically a kind of object. An Aristotelian kind of account, one that identifies the essence or form of an organisation as related to its intention, ducks these prob- lems. This is not, though, to suggest that such an account is absent from its own problems. As we have seen – whose intention? And also when do these intentions come into play? Several of the puzzles previously considered come into play all over again, and other fresh ones may also become apparent (e.g. how to account for changes in the intentions of key individuals within the organisation). However, we have seen enough to recognise some at least of the issues involved in considering how an organisation may be said to exist. The key lessons we have learnt from this chapter are:
x The definition of what it is for something to be called an organisation appears to rest on the idea of an intention. x The existence of an organisation also involves reference to intentions though there are problems with this. x An approach such as Aristotelianism provides partial answers to these issues, though in doing so they tend to make clearer the problems, rather than provide definitive final answers.
In the next chapter we will again try to establish definitions – in that case, looking at what work is.
QUESTIONS FOR REFLECTION
1 If two people decide to form an organisation, but then never do anything about it, has an organisation ever existed? If so, how long does it exist for? If not, what needs to happen for us to say it has come into being? 2 In what circumstances could you have a fake organisation – one that someone makes out exists when it does not at all? What if someone is fooled by this and genuinely starts ‘working’ for this fake organisation?
22 THE ‘WHAT’ OF MANAGEMENT
FURTHER READING There is a massive literature on Aristotle’s metaphysics. Interested readers are advised to start with an introduction such as the Routledge Philosophy Guidebook to Aristotle and the “Metaphysics”, by V. Politis (Routledge, 2004). An interesting alternative view of criminality and organisation (a topic which will be referred to again in the next chapter) may be found in Alternative Business: Outlaws, Crime and Culture by M. Parker (Routledge, 2011)
