The Inherent Limits of Organizational Structure and the Unfulfilled Role of Hierarchy: Lessons from a Near-War
Michael G. Jacobides
London Business School
July 5, 2005
Drawing on the Carnegie tradition, this paper examines how the Greek government and its military apparatus handled an incident involving the islets of Imia, which led to a near-war with Turkey in 1996. This came about not merely as a result of escalating circumstances: there were failures in strategic decision making resulting from the organizational structure, which shaped identities, defined repertoires of action, sustained routines, filtered and interpreted information, and provided the platform for interaction between organizational actors. Organizational structure, I observe, shapes the political economy of an organization and affects individual and collective action. Individuals react according to their positions in the organization, rather than to the actual problems encountered; the division of labour within an organization inevitably imposes a set of local responses which, while being cognitively economizing, are not always well calibrated. Hierarchy potentially offers some relief from this excessive compartmentalization, through control over which routines are enacted and the way a problem is framed. Hierarchy and management might, therefore, yield benefits inasmuch as they can help re-frame issues, intervene in the setting in motion of inappropriate routines, or design new routines. In our case-study, these safety valves were not effective; information relevant to framing the issue was neglected; responses were local and disaggregated; each partial reaction worked to worsen the problem; senior decision-makers failed to re-frame the issue, or alter the routinized repertoire of actions; all of which led to the militarization of this crisis.
Number of Pages in PDF File: 56
Keywords: organizational decision-making, organizational structure, routines, frames, political economy, hierarchy
JEL Classification: L20, L23,L14,L22,D20,D21,D22,D51,D52,D92,K1,M2,O3working papers series
Date posted: December 28, 2005
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