Organizations are ultimately the result of people doing things together for a common purpose. The basic relationship between the individual and the organization can, therefore, be thought of as the most fundamental cultural dimension around which to build a typology because it will provide critical categories for analyzing assumptions about authority and intimacy. One of the most general theories here is Etzioni’s (1975) fundamental distinction between three types of organizations that exist in every society:
- Coercive organizations: The individual is essentially captive for physical or economic reasons and must, therefore, obey whatever rules are imposed by the authorities. Examples include prisons, military academies and units, mental hospitals, religious training organizations, prisoner of war camps, cults, and so on. The cultures that evolve in such organizations usually generate strong counter-cultures among the participants as defenses against the arbitrary authority.
- Utilitarian organizations: The individual provides “a fair day ’s work for a fair day’s pay” and, therefore, abides by whatever rules are essential for the performance of the organization. Examples include business organizations of all sorts. As has been found in most such organizations, they also develop countercultural norms so that employees can protect themselves from exploitation by the authorities.
- Normative organizations: The individual contributes his or her commitment and accepts legitimate authority because the goals of the organization are basically the same as the individual ’s goals. Examples include churches, political parties, voluntary organizations, hospitals, and schools.
Authority in the coercive kind of organization is arbitrary and absolute; in the utilitarian system, the typical business, authority is a negotiated relationship in the sense that the employee is presumed to accept the method by which people in higher ranks have achieved their status. In the normative system, authority is more informal and more subject to personal consent in that the employee or member can exit if he or she is not satisfied with the treatment received.
This typology is important because type of organization supercedes many of the macrocultures that exist in the world. For example, in a high power distance culture, we expect the authority system to be coercive, but if it is a business organization, there might be strong pressures toward more negotiated utilitarian kinds of management structures. One of the main problems of globalism is that some of the western utilitarian management styles simply don’t work in macrocultures that are more coercive. And to make matters worse, the western managers believe that their authority system is the correct one, forgetting that no one culture is more correct than any other culture. In many Asian or Latin countries, businesses cannot be effective unless they are coercive, and the authoritarian structure is accepted by both management and the employees because it fits the larger macrocultural norms.
Assumptions about peer relationships and intimacy are also illuminated by this typology. In the coercive system, close peer relationships develop as a defense against authority, leading to unions and other forms of selfprotective groups that develop strong counter-cultures. In the utilitarian system, peer relations evolve around the work group and typically reflect the kind of incentive system that management uses. Because such systems are often built around task performance, close relationships are discouraged on the assumption that they might get in the way of clear task focus. In the normative system, relationships evolve naturally around tasks and in support of the organization. In such organizations, more intimate relationships are typically seen as aiding the members in building strong motivation and commitment to the goals of the organization. For this reason, some businesses attempt to be normative organizations by involving employees in the mission of the organization and encouraging more intimate relationships. Professional organizations such as law firms or service organizations that consist of groups of “partners” combine some of the elements of the utilitarian and normative (Jones, 1983; Shrivastava, 1983: Greiner and Poulfelt, 2005).
The value of this typology is that it enables us to differentiate the broad category of utilitarian business organizations from coercive total institutions such as prisons and mental hospitals, and from normative organizations such as schools, hospitals, and nonprofits (Goffman, 1961). The difficulty, however, is that within any given organization, variations of all three authority systems may be operating, which requires us to rely on still other dimensions to capture the uniqueness of a given organization. To deal with variations of authority within an organization, a number of typologies have been proposed that focus specifically on how authority is used and what level of participation is expected in the organization: (1) autocratic, (2) paternalistic, (3) consultative or democratic, (4) participative and power sharing, (5) delegative, and (6) abdicative (which implies delegating not only tasks and responsibilities but power and controls as well) (Bass, 1981, 1985; Harbison and Myers, 1959; Likert, 1967; Vroom and Yetton, 1973).
These organizational typologies deal much more with aggression, power, and control than with love, intimacy, and peer relationships. In that regard, they are always built on underlying assumptions about human nature and activity. Thus a manager who holds the assumptions of Theory X, namely that people cannot be trusted, would automatically go toward the autocratic management style and stay there. On the other hand, the manager who holds the assumptions of Theory Y, namely that people are motivated and want to do their job, would select a management style according to the task requirements and vary his or her behavior. Some tasks require autocratic authority as in carrying out a military mission while others should be totally delegated because the subordinates have all the information (McGregor, 1960; Schein, 1975).
The arguments that managers get into about the “correct” level of participation and use of authority usually reflects the different assumptions they are making about the nature of the subordinates they are dealing with. Looking at participation and involvement as a matter of cultural assumptions makes clear that the debate about whether leaders should be more autocratic or participative is ultimately highly colored by the assumptions of a particular group in a particular context. The search for the universally correct leadership style is doomed to failure because of cultural variation by country, by industry, by occupation, by the particular history of a given organization, and, most importantly, by the actual task to be performed.
Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4th edition.