GIMA – Module 3 Statement Explanation I

By: Sandra van Wijngaarden, Fabiola Padilla and Ivo Visser

Statement
‘In the 1960s the adoption of the standard assumption from management science that organisations
could be treated as if they were instrumentalities, goal-seeking machines, seemed not unreasonable.
But in the 1980s such an assumption seemed increasingly dubious. Why not treat organisations as if
they were not goal-seeking machines but discourses, cultures, political battlegrounds, quasi-
families, or communications and task networks?’
Checkland, P. and Scholes, J. 1990, Soft Methodology in Action, (Chichester: John Wiley).

Statement Explanation

1. Terms and Concepts to clarify:

(1) An organization is a social arrangement pursuing collective goals, controlling its own
performance and has some sort of a border line separating it from its boundaries. Organizations are
also defined as entities with an actual purposeful structure within the social context. In management
studies organizations are means used to achieve goals.

(2) The term instrumentality is usually employed as a kind of tool or “shorthand” applied to define
organizations created by, controlled by, or affiliated with governments and institutions to fulfill
special purposes (i.e.: charity, etc).

(3) Morgan (1986) proposed several metaphors for different ways of understanding organizations
one of such metaphors refers them as the goal-seeking machines with interchangeable parts. This
metaphor should not be considered as an academic curiosity but as a way of seeing the organization
of those deeply concerned with its real roles and interests.

(4) According Drucker. P., the most respected management thinker of all time, business enterprises
have two -and only two- basic functions: marketing and innovation. Marketing and innovations
produce results; all the rest are costs (Padilla A., 2007). This appreciation can be extended
nowadays to all kind of organizations.

Innovation creates uncertainty, which is reduced through communication with trusted peers in ones
communications and task network, especially those who have had experience with such innovation
(Rogers, 1995). Network behavior can provide legitimization, training and support to spread out
and improve trustful strategies and results.

2. Problem Definition

The prevalent economic model applied by governments and international organizations have
changed the way general market agreements and social and economic policies have influenced
managerial strategies and planning of their specific activities. The previous use of organizations as
simple tools or instruments to achieve goals and provide practical measurable results has being
transformed to strategically involving such organizations in political and institutional networks, as
the money has been replaced by knowledge from the position of the fundamental source of power.

3. Problem Analysis
GIMA – Module 3 Statement Explanation I

By: Sandra van Wijngaarden, Fabiola Padilla and Ivo Visser

Dialectically, we have defined as the problem the change in the source of power – from money to
knowledge – as a main result of a metamorphosis that characterizes the “third wave of the industrial
revolution” we are witnessing, frequently recognized as the information society.

In situations where the source of power is money, this power can easily be concentrated in one
person within the organization. As money is usually concentrated too, the power is also
concentrated. For an organization this means that it is most likely to have a hierarchical structure.
The culture of the country plays a part in the organization structure of a company as well, but will
not dramatically change the influence of the source of power.

As the source of power changes from money to knowledge, the power within a company is in a way
decentralized. The need for knowledge implies the need for experts. Because knowledge is always
partly subjective, it is likely that a company needs more experts to be successful in a particular
domain. This situation will then result in the need to communicate and build consensus. People who
accepted similar discourses are more likely to agree between each other and therefore are prone to
come to a state of consensus; it thus not happens between people with opposing “world views”.
According to Healey (2006) a world view or culture is created based on the environments one
encounters and lives in. Following Healey’s line of reasoning experts from various backgrounds are
very likely to disagree, not only because different interests but also due to opposing world views.
Within organizations particular cultures happen to exist as well.

When knowledge is the source of power, the management of an organization will have to rely on
communication between expert domains. Within an expert domain experts use the same terms and
the same world view, though interests might differ. An expert domain functions as a sort of
paradigm, i.e. as views and terms with its own culture are shared (Healey, 2006). Therefore the
challenge is to bridge the gap in language, attitude and terminology between expert domains. To do
it so some sort of negotiations or consensus seeking arena is to be created.

The only way to get good results in a project, process or organization is to take into account and use
what those views have in common in order to arrive at some sort of communicated truth and to
motivate the experts (i.e. the “keepers of knowledge”) to work together towards finding a solution
to a problem. The risk of this kind of solution, is that it will not consist in a real solution as it value
becomes smaller as the diversity of the world views increases. Hopefully this situation leads to a
higher objectivity (inter-subjectivity) of the communicated truth and will therefore be a closer
approximation to the truth as it exists in the outside world.

The main field of discussion is the role of the management of information in building up
knowledge, where information is a stage of the evolution of “managing data”. In this sense, the
object of study and discussion is information management itself.

In relation with the role of the management information, Drucker, P. (1999) points out: “The truly
revolutionary impact of the Information Revolution is just beginning to be felt. But it is not
"information" that fuels this impact. It is not "artificial intelligence." It is not the effect of computers
and data processing on decision-making, policymaking, or strategy. It is something that practically
no one foresaw or, indeed, even talked about ten or fifteen years ago: e-commerce—that is, the
explosive emergence of the Internet as a major, perhaps eventually the major, worldwide
distribution channel for goods, for services, and, surprisingly, for managerial and professional
jobs. This is profoundly changing economies, markets, and industry structures; products and
services and their flow; consumer segmentation, consumer values, and consumer behavior; jobs
GIMA – Module 3 Statement Explanation I

By: Sandra van Wijngaarden, Fabiola Padilla and Ivo Visser

and labor markets. But the impact may be even greater on societies and politics and, above all, on
the way we see the world and ourselves in it”1.

One type of the structures that suffered profound changes due to this information revolution are
those organizations directly related with data processing and information management, especially
those based on the revolution of “telematics”, the association of informatics and the modern
techniques of communication, the so called new Information and Communication Technologies
(ICT).

Our hypothesis of such deep evolution is that the change of money as a source of power and welfare
is responsible for the political, economical and organizational situation of the human society since
the accelerated development of electronics and communication. As ICT are basic for information
management, we can consider that the “information society” is just a state of transit to the
“knowledge society”. This explains that organization evolution and transformation is just starting,
especially for those organizations related with data and information management.

4. Model of the Problem

Figure 4.1. summarizes an iconic organizational evolution model where the concepts and relations
resumed in the previous paragraphs are shown in a self-explicative way.

The model can help to understand why the transformation of our civilization by the information
society results in the fact that organizations can be seen as basic units of such cultures, political
battlegrounds and quasi families mentioned on the statement.
As information becomes available to all workers in an organization, the power has a possibility of
being less hierarchically distributed. This may sound socially interesting, but as people on the work
floor get more power, there is always the risk that they can use and misuse it.

1
http://www.theatlantic.com/doc/prem/199910/information-revolution
 GIMA – Module 3 Statement Explanation I

By: Sandra van Wijngaarden, Fabiola Padilla and Ivo Visser

5. Learning Issues

1. There are reciprocal relationships between social, economical and political changes and
those are mainly the result of the value that our present society gives to information.
2. A triad seems to explain the complicated relations ruling our “knowledge society”
equilibrium: information – knowledge – money.
3. Organizations should be considered as basic cells where the new capital good: knowledge,
fuels the economic machine and where human brain is now considered as a direct “labor force”.
4. Those facts supports that we are living a new an advanced stage of the “Industrial
Revolution”. The last one?

Deadline to submit this Statement explanation I to Jaap Zevenbergen: 6 April 2007.

REFERENCES

Drucker F. P. 1999. Beyond the Information Revolution. The Atlantic Monthly. October 1999,
Volume 284, No. 4; 47-57.
GIMA – Module 3 Statement Explanation I

By: Sandra van Wijngaarden, Fabiola Padilla and Ivo Visser

Healey, P. 2006. Collaborative Planning: Sharing places in fragmented societies. New York:
Palgrave MacMillan.

Morgan G. 1986. Images of organizations, SAGE. Beverly Hills, C.A.

Padilla A. 2007. Methodology of the academic research. Higher Education Diploma Course,
Lecture Notes, Univalle, Trinidad, Bolivia.

Rogers, E. M. 1995. Lessons for guidelines from the diffusion of innovations. The Join Commission
Journal on Quality Improvement. 21 (7), 324-327.