Rack BB3 — Organizational Behavior (Macro-Org/System)

TAOP Resources Library -- Aisle B (Theories)

Resources: Main Page | Research Methods (A) | Major Theories (B) | Issues and Contemporary Topics (C) | Professional Education (D)

Jump to: Importance | Theories | Research Areas | TAOP Episodes | References

What is Organizational Behavior (OB) and Where Does the Behavior of Organizations and Systems Fit?

Organizational Behavior (OB) is a broad interdisciplinary field that explores how people interact within organizational settings. It examines the behavior of individuals and groups within organizational contexts and draws from multiple disciplines, including psychology, sociology, anthropology, economics, and management science, to understand how people think, feel, and act in workplace environments.

Because many of the classic texts we cover fall under OB’s broad umbrella, we saw fit to divide our episodes by levels of analysis. This rack contains resources devoted to understanding OB at the organization and system (macro) level while other racks cover the individual (micro) level and the groups and teams (meso) level.

This level of analysis looks at the whole organization or groups of organizations (such as an “industry”) and how they behave as full entities. Organizations very clearly desire to improve their own productivity and maintain their competitive advantages in the workplace. Researchers have been exploring how organizations set their workplace cultures, design organizations to improve cross-functional collaboration or manage their corporate knowledge base. And of course, organizational leaders continue to experience tremendous pressures to exercise change, so there is great interest in what contributes to successful change implementation and mitigating barriers to it.

Some (and only some) of the practical questions that OB studies at the macro-level might help answer include the following: How do organizations structure themselves? What are the political mechanisms within organization and how do they manage or distribute power? How do organizations undertake change (or how are they caught up in changes from outside) and adapt or transition? What is the organization’s culture — the way “we do things around here” — and how can that drive behaviors at the individual or group level?

What are Some OB Theories at Macro Level?

This is a short list. Several of these have already been covered in this program (Episodes are linked and also available in the resources below). Some overarching themes include the impacts of digital transformation on organizational structures.

Resource Dependence Theory. This theory focuses on how organizations manage critical resources and external dependencies in order to ensure their own survival. In presenting this theory, Pfeffer & Salancik (1978) took open systems to its logical conclusion – that organizations were dependent on the environment (especially for resources needed), that the environment often included social actors who sought control over organizations, and that managerial decisions sought in turn to mitigate or respond to that control. Key observations of this theory include that organizations are open systems relying on external resources, that power in inter-organizational relationships depends on resource control, and that organizations develop strategies to minimize external uncertainties. We covered Pfeffer & Salancik’s work in Episode 116.

Population Ecology Theory. Hannan & Freeman (1977) first presented Population Ecology Theory as a way of understanding organizational survival and evolution at an industry-wide level. The main principles are that organizations within an industry are competing for limited resources, only some organizational designs survive, evolutionary mechanisms ensure that environmental selection determines organizational success, and that there are roles for diversity and adaptation. In essence, organizations must adapt or face extinction, meaning that an organizational form will disappear. Their paper (which was later expanded into a book in 1989) includes theories of competition (Section V) and the special cases of adaptation toward occupying a unique subsector within an industry (“niche theory,” Section VI).

Institutional Logics Perspective. The Institutional Logics Perspective explores how broader societal institutions shape organizational behavior (Friedland & Alford, 1991). There are traditionally four institutional logics at play in the organization’s external environment and these logics are not only imposing themselves on the organization (through various public or private actors), they compete with each other for dominance over societies as wholes. The logics are market (principally driven by competition and profits), bureaucracy or state (driven by regulatory compliance, public service, and conceptions of fairness and equity), professional (driven by expertise, knowledge, and ethical standards), and community (driven by social movement).

Organizational Learning Theory. This theory explains how organizations create, retain, and transfer knowledge. Argyris & Schoen (1978) introduced several foundational concepts including single-loop learning (identification and correction of errors), double-loop learning (questioning and modifying underlying assumptions — perhaps as an outcomes of dealing with large quantities of errors), organizational memory (how to preserve and leverage an organization’s collective knowledge), and knowledge management systems (structures and technologies to formally capture and preserve such collective knowledge).

Meanwhile, Leavitt & March (1988) expanded upon this and other streams in organizational learning up through the 1980s to produce a seminal literature review on organizational learning (we covered this in Episode 42). Topics include learning from experience, organizational memory, ecologies of learning, and organizational intelligence. Of particular interest is how organizational learning was defined as not an outcome but a process of translating the cumulative experiences of individuals and codifying them as routines within the organization.

Also see: Contingency Theory (Rack BC) and Institutional Theory (Rack BI). These two theories are conceptually related to the macro level of organization behavior theories, as we uncovered during several of our episodes, so we mention them here but placed them in different parts of the Library.

Contingency theory argues that there is no “one best way” to organize or manage, and we have had numerous episodes on this theoretical stream and that organizational effectiveness depends on matching the organization’s structure to its specific context. Some of the dimensions explored are environmental uncertainty (where more complex environments may require more flexible structures), technological impacts (where different technologies demand different organizational designs), size (where larger organizations may need more formalized structures), and strategies (where organizational designs must align with strategic objectives).

Institution theory explains how organizations are shaped by broader societal expectations and norms. Some of the core concepts include institutional Isomorphism (how organizations tend to become similar in order to survive), legitimacy (that organizations adopt practices to be seen as credible and acceptable), and mimetic processes (such that organizations copy successful models from their industry). For example, why do most banks look structurally similar? Institutional theory suggests they conform to societal expectations and proven organizational models, even though those models may actually not be the most effective in some circumstances.

Contemporary Research Areas

Macro-level OB research is highly active and there are many practical applications and concerns, including some of the “hot topics” in Aisle C. We have also covered several case studies where macro-OB has been applied.

Diversity and Inclusion Ecosystems. Also see Rack CI. Moving beyond surface-level diversity initiatives, contemporary research in this area takes a sophisticated, multilayered approach to understanding organizational inclusivity. Researchers are developing nuanced frameworks that recognize the complex, interconnected nature of identity and organizational dynamics, moving beyond simplistic representation metrics. At the macro-level, there is considerable focus on how to systematically eliminate exclusionary and discriminatory behaviors in the workplace to make all feel welcome and able to contribute. The challenges are that some exclusionary practices are systemic and not the result of any individual’s actions — in fact, there may be no one doing anything intentional or unintentional, but the effect remains. Moreover, there are challenges with establishing and communicating clear policy guidelines due to natural ambiguities and complexities that complicate their implementation (we covered this in Episode 110 on the legal difficulties of implementing US civil rights law).

Research at the macro-level focuses heavily into the development, implementation, and assessments of comprehensive strategies for meaningful diversity and inclusion; identification and elimination of structural and systemic barriers to genuine workplace equity, and measuring and implementing meaningful organizational change. Studies have shown that organizations that prioritize diversity and inclusion are more innovative and better equipped to meet the needs of diverse customers (Anlesinya & Susomrith, 2020). This area of research examines the systemic barriers to inclusion and the strategies organizations can implement to create equitable environments that foster engagement and performance.

Employee Well-being and Mental Health Frameworks. Also see Rack CE. This research stream represents a holistic approach to understanding and improving the employee’s experiences with the organization, usually programmatically. Researchers are interested in how comprehensive mental health support strategies can be developed and implemented, more effective work-life integration models that recognize individual complexity, organizational approaches to psychological resilience, systemic interventions for preventing workplace burnout, and overall designing work environments that support psychological health. The research goes beyond traditional wellness programs, examining the fundamental relationship between organizational practices and individual psychological experiences.

Sustainability and Organizational Purpose. Also see Rack CS. Researchers are investigating how organizations can integrate broader societal and environmental considerations into their core strategic frameworks. These include alignment of organizational purpose with employee values, developing sustainable business practices that extend beyond traditional corporate social responsibility, and pursuing environmental consciousness as a strategic organizational competency. This research area recognizes that modern organizations should consider their broader societal and environmental impact as a fundamental aspect of their operational strategy, but it also recognizes that there may barriers (e.g., competing institutional logics) that must be overcome.

Ethics Across Organizations. Although much of the research on ethical and unethical conduct is at the micro-level of OB, there is some attention being paid to how industry-wide and societal factors contribute to the institutionalization of unethical practices, which in turn trickles down to the individual level. Thus, there is interest in examining macro-level ethical decision-making frameworks, the efficacy of leadership integrity and trust mechanisms, corporate governance frameworks, and accountability and transparency strategies. While ideally, organizational integrity would be tied to performance and workplace commitment, this is an open question and the decoupling of an organization’s official statements and its actions may impact its culture and climate, not to mention its stakeholder relationships.

One area of research focuses on the impact of scarcity experiences on unethical behavior. Yang et al. (2022) investigates how feelings of scarcity can lead to unethical actions as a means of compensating for perceived resource limitations. Their findings suggest that scarcity can induce self-interested behaviors, thereby increasing the likelihood of unethical conduct. Another example is research by Thiel et al. (2020) that is looking at moral disengagement in facilitating unethical behavior, based on findings that individuals may rationalize unethical actions through cognitive reappraisal processes, allowing them to engage in misconduct without feeling guilty.

Organizational Change Management. Also see Rack BG. This is an important area of research as organization’s seek to be adaptive and responsive to the environment but implementing change is difficult. Scholars are developing advanced approaches to understanding organizational adaptability and a more nuanced approach to understanding resistance to change. Among the topics of interest are the increasing complexity of change management strategies, organizational responses to systemic disruption and uncertainties in the environment, agile and flexible organizational design principles, and addressing the psychological dimensions of organizational transitions.

Related TAOP Episodes, Events, and Notes

121: Rhetoric vs. Reality — Mark Zbaracki

This month we explore a renowned multiple-case study commonly assigned as foundational readings in organization studies programs. Mark Zbaracki’s “The rhetoric and reality of Total Quality Management” chronicled the development and introduction of Total Quality Management (TQM) into the corporate environment, only to find that in many cases its implementation did not align with the promises made by leaders about process improvements nor did firms fully exercise all the practices and activities that TQM required. The question that Zbaracki posed was more than to what extent did this rhetoric-reality unfold, but why?

117: Economic Sociology & Valuation – Marion Fourcade

Economic sociology bridges economics and sociology, exploring questions such as how social environments explain and influence economic activities. Of interest for this episode is the subfield of economic valuation, in which researchers have been studying how the monetary worth of something is formed or constructed. One influential work is Marion Fourcade’s “Cents and Sensibility: Economic Valuation and the Nature of ‘Nature’,” published in the American Journal of Sociology in 2011. The article explores the economic valuation of peculiar goods, things that are intangible or otherwise cannot be exchanged in a market yet have a social value, and uses a case study of the legal proceedings following oil spills in the US and France to explain why the monetary awards were calculated so differently from each other.

116: Resource Dependence Perspective — Pfeffer & Salancik

Resource Dependence Theory (RDT) represented a significant departure from extant literature on management and organization studies in the 1970s. Prior to the publication of Jeffrey Pfeffer and Gerald’s The External Control of Organizations: A Resource Dependence Perspective in 1978, the social context and environment surrounding organizations were little studied. In the book, Pfeffer & Salancik argued that the behaviors or organizations and their managers were driven by the context, because of the need for resources in order to survive. Thus, managerial decisions were based far more on how to manage interdependencies with external social actors than what would presumably lead to objectively better outcomes. They believe RDT explains more accurately the kinds of managerial behaviors observed and how organizations chose (and fired) their executives than other theories of the time.

110: Organizations and Law – Lauren Edelman

In this episode, we explore two articles from Lauren Edelman, “Legal Ambiguity and Symbolic Structures: Organizational Mediation of Civil Rights Law” from 1992 and “The Endogeneity of Legal Regulation: Grievance Procedures as Rational Myth” from 1999. These studies showed a wide variety of organizational responses to the enactment of civil rights legislation, but that certain responses were legitimated due to their success in symbolically showing effort in addressing discrimination and thus institutionalized across other organizations.

109: Emergence of Mental Health Professions – Abbott

In this episode, we return to Andrew Abbott’s The System of Professions: An Essay on the Division of Expert Labor from 1989 to study in depth one of his case studies that may illuminate the present-day mental health crises gripping many nations from the COVID-19 pandemic. “The Construction of the Personal Problems Jurisdiction” chronicles how social changes from the Industrial Revolution led to the maladjustment and isolation felt by many newly industrialized workers who could no longer reach back to the stable social structure from whence they came. As a result, several professions emerged and competed for jurisdiction over the diagnosis and treatment of personal problems.

104: Social Structure & Organizations — Stinchcombe

In a famous chapter in James G. March’s 1965 book, Handbook of Organizations, Arthur L. Stinchcombe laid out a case for expanding the study of organizations outward to include social structure bringing attention to innovation as well as imprinting and inertia. He posited that societies had significant effects on how organizations emerge and operate and that organizations, in turn, impact relations among groups in society. He presented his arguments in three parts. First, that social structures had an imprinting effect on the formation of new organizations, such that these initial forms often persisted despite efforts to change them. Thus, to the second point, each type of organization reflected the history of its creation both in terms of the organization and social structures that dominated at the time. Finally, organizations also reflect the social divisions in society, such as between higher and lower classes.

95: Labor-Management Relations – Tom Lupton

This month, we discuss examine Lupton’s famous study of worker-management relations, “On the Shop Floor: Two Studies of Workshop Organization and Output” published in 1963. Tom Lupton spent 12 months as a factor worker in two different settings examining why workers intentionally worked at a level below management expectations. He found that social structures formed that protected workers from overuse or abuse by management and ensured a stable pay. These structures discouraged workers from working too hard or not hard enough. In Part 1, we will examine the cases in depth and present Lupton’s findings.

92: Organizational Secrecy — Case of the Manhattan Project

We are examining organizational secrecy using the Manhattan Project during World War II as a case study. The Manhattan Project came about following the discovery of nuclear fission in 1938 and the understanding that Nazi Germany was trying to develop a powerful weapon that could change the course of the war. Naturally, the American effort had to be kept secret to hide both the existence of the project and, failing that, any information about progress and potential employment. How did they do it and what challenges did they face? What could we learn about maintaining secrets in contemporary organizations?

86: Networks and Network Theory — Mark Granovetter

Granovetter’s 1973 article, “The Strength of Weak Ties,” introduced whole new ways of thinking about seemingly simple and straightforward topics and changed the direction of social research. He showed how “weak” ties, occasional connections between individuals among different networks, were powerful means for providing opportunities and new ideas not otherwise available. He also charted a way for researchers to connect micro-level interactions with macro-level patterns. Given how social networking has changed so much between social media and the pandemic, we decided to give this article a fresh look.

78: Patterns of Bureaucracy — Alvin Gouldner

We discuss a classic 1954 book by Alvin Gouldner titled, Patterns of Industrial Bureaucracy. This describes the results of an ethnographic study conducted at a gypsum processing plant that included both a mine and a production line for construction materials. Gouldner and his team uncovered three distinct patterns of bureaucratic rules based on the acceptance and compliance of bureaucratic rules by workers and management – patterns still relevant today.

68: Globalization and Culture Clashes — “American Factory” (Documentary)

For this episode, we cover a documentary that presents a compelling picture about culture clashes in the workplace. American Factory is an important and powerful documentary, telling the story of cultural clashes and labor-management relations as a Chinese firm re-opened and re-purposed a close automotive plant in Ohio.

67: Professions & Professionalism — Andrew Abbott

The text for this episode is Andrew Abbott’s 1989 book The System of Professions: An Essay on the Division of Expert Labor. This book is a watershed in our understanding of professions and their work. While previous literature had a focus on distinctive occupational groups and their professionalization projects, Abbott invited us to think more systemically about the interdependencies and how professions compete with each other over “jurisdictions,” claims of ownership and responsibility over expert knowledge and its applications.

60: Contingency Theory — Joan Woodward

Joan Woodward was a pioneer in organization theory, and in this episode we explore her seminal work Industrial Organization: Theory and Practice, originally published in 1965. The book presents the results of an extensive longitudinal study of the technologies, processes, and systems used by over one hundred industrial firms concentrated in southeast England over a ten year period.

58: Contingency Approach – AOM 2019 Workshop LIVE

This professional development workshop focuses on the contingency approach as exemplary of classic scholarship in organization and management theory. We focus on the historical context of the contingency approach, the main ideas of authors and traditions associated with it, and their connections with contemporary research.

Aisle B – Major Theoretical Perspectives and Schools

Curated list of resources regarding major theories and schools of thought in organization studies. Groups a wide range of theoretical perspectives in line with common categorizations; other perspectives are welcome.

Rack BA — Classic Organization and Management Theory

Curated list of resources regarding the major “classical” theories that initiated the field of organization studies, beginning with Taylorism and scientific management and continuing with the theories Fayol, Weber, and others.

Rack BB1 – Organizational Behavior (Micro-Individual)

Curated list of resources regarding the major theories of organization behavior such as emotions, sensemaking, socialization and organizational climate, and many others.

Rack BB2 — Organizational Behavior (Meso-Groups and Teams)

Curated list of resources regarding theories on groups, teams, and other small collections of individuals within an organizational context, from the worker level to top management teams.

Rack BB3 — Organizational Behavior (Macro-Org/System)

Curated list of resources on open systems theory and its many descendents such as general systems theory, cybernetics, and organizational ecology

Rack BC — Contingency Theory

Curated list of resources regarding the major theories regarding the organizational context and how particular situations influence organizational structures, behaviors, and so on. Includes classic contingency theories and pragmatism.

Rack BD — Organizational Design

Curated list of resources on theories related to organizational structures and design, including control structures, power, and job design

Rack BG — Organizational Development and Change

Curated list of resources regarding various theories regarding the external environment in organizations, such as labor relations, resource dependence theory, and others.

Rack BH – Human Dimension – Culture, Climate, Identity

Curated list of resources regarding sustainability and corporate social responsibility such as sustainable business practices, responses to climate change, sociomateriality, and ethical considerations

Rack BI — Institution Theory

Curated list of resources on theories related to strategic management, including competitive forces models, resource-based perspectives, and organizational strategies and strategic change

Rack BL — Leadership Theories

Curated list of resources on theories related to leadership in organizations including classic trait theory, behavioral theories of leadership, and transactional / transformational leadership

Rack BM – Modern Management Theories

Curated list of resources regarding the major schools of thought and the theoretical perspectives they established. Includes the Carnegie-Mellon School, Aston School, and others.

Rack BQ — Postmodern and Critical Theories

Curated list of resources on postmodernist views of organizations and organizing and contrasting them with the modernist view. Includes critical management studies and complexity theory

References

Anlesinya, A. and Susomrith, P. (2020). Sustainable human resource management: a systematic review of a developing field. Journal of Global Responsibility, 11(3), 295-324. https://doi.org/10.1108/jgr-04-2019-0038

Argyris, C., & Schon, D. (1978). Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley.

Friedland, R., & Alford, R. R. (1991). Bringing society back in: Symbols, practices, and institutional contradictions. In Powell, W. W. & DiMaggio, P. J. (eds.), The New institutionalism in organizational analysis, 232-266. Chicago: University of Chicago Press.

Hannan, M. T., & Freeman, J. (1977). The population ecology of organizations. American journal of sociology, 82(5), 929-964.

Levitt, B. & March, J. G. (1988). Organizational learning. Annual review of sociology, 14(1), 319-338.

Pfeffer, J. & Salancik, G. R. (1978). The external control of organizations: A Resource dependence perspective. New York: Harper & Row.

Scite. (2024). What are the major theoretical streams in organizational behavior at the macro level; What is the foundational text regarding the institutional logics perspective and how is it relevant to organizational studies; What are the top five contemporary areas of research into the macro-level of organizational behavior; How are researchers exploring the emergence of unethical behaviors across industries; What are the foundational theoretical perspectives related to open systems theory and complexity theory; Where does Thompson’s “Organizations in Action” fit in the above streams. Scite (April 2024 version) [Large Language Model].

Thiel, C., Bonner, J., Bush, J., Welsh, D., & Pati, R. (2020). Rationalize or reappraise? How envy and cognitive reappraisal shape unethical contagion. Personnel Psychology, 74(2), 237-263. https://doi.org/10.1111/peps.12387

Yang, Y., Liu, L., Mou, K., Kong, S., & Wang, Y. (2022). Effect of scarcity experience on unethical behavior: the mediating role of consideration of future consequences. Current Psychology, 42(35), 31495-31504. https://doi.org/10.1007/s12144-022-04166-9

The inclusion of external links and resources does not necessarily constitute endorsement by TAOP or any of its members.

Jump to: Importance | Theories | Research Areas | TAOP Episodes | References

Resources: Main Page | Research Methods (A) | Major Theories (B) | Issues and Contemporary Topics (C) | Professional Education (D)

Rack BB3 — Organizational Behavior (Macro-Org/System)

TAOP Resources Library -- Aisle B (Theories)

Jump to: Importance | Theories | Research Areas | TAOP Episodes | References

What is Organizational Behavior (OB) and Where Does the Behavior of Organizations and Systems Fit?

What are Some OB Theories at Macro Level?

Contemporary Research Areas

Related TAOP Episodes, Events, and Notes

Available Resource Pages

References

Jump to: Importance | Theories | Research Areas | TAOP Episodes | References