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ISSN: 2278-3369 International Journal of Advances in Management and Economics Available online at www.managementjournal.info RESEARCH ARTICLE The Theory of Formal Organization from the Perspective of Burrell and Morgan’s Paradigms Cibeli Borba Machado1, Nathália Helena Fernandes Laffin*2 1Universidade Federal de Santa Catarina, Brasil. 2Universidade do Estado de Santa Catarina, Brasil. *Correponding Author:Email:[email protected] Abstract Administration as applied social science had its theoretical origins with Taylor and Fayola, and went on with the theories of human relations, theory of contingency and all other theories that form the framework called General Theory of Administration (Teoria Geral da Admnistração - TGA) that are the basis to the administrative practice in organizations. However, the basis of such knowledge came before this definition of Administration as science. The science as conceived today came from a sequence of thoughts throughout history that are directly related to the social, economic and cultural context of each era. These thoughts are structured and formalized through the paradigms of science. According to Burrell and Morgan [2], in social sciences there are four basic paradigms present in the field of organizational studies: the functionalist, the interpretive, the radical humanist and the radical structuralist. The Theory of Formal Organization, one of the most famous - and current - administration theories was proposed by Chester Barnard and consists of a system of activities carried out by two or more people who, consciously coordinate, that communicate while pursuing a common benefit. Given the arguments presented, the aim of this study is to analyze which epistemological principle underlies the theory of formal organization proposed by Barnard. In this sense, through literature research, the aim is to relate the epistemological principle and the paradigm, so as to analyze their consistency. The conclusion of the research presents the functionalist paradigm as the epistemology that guides the actions foreseen in the theory of formal organization. Keywords: Theory of formal organization, Paradigms in social sciences, Functionalist paradigm. Introduction This work was organized from a seminar presented by the academic in May 2013 in the discipline of Administration and Science of the Master degree in Administration of the University of Santa Catarina State. The science of Administration in its context within the fields of knowledge is organized as an applied social science. Social because it involves situations and analogies that emerge from and result in the relations of society, whether at the individual level, or at the organizational level. Regarding the organizational level, the administration had its theoretical origins with Taylor and Fayol, and went on with the theories of human relations, theory of contingency and all other theories that form the framework called General Theory of Administration (TGA) and that are the background of the administrative practice in organizations. However, scientific studies show that the basis of this knowledge came before this definition of administration as science. The science, as conceived today, arose from a sequence of thoughts throughout history that are directly related to the social, economic and cultural context of each era. Also, they are related with their worldview and practices they perform. These relationships are structured and formalized through the paradigms of science, which are nothing more than a way of seeing social reality. Burrell and Morgan [2] define paradigms as a set of ideas that presents a worldview shared by a community of scientists. The authors identify, based on social sciences, four basic paradigms present in the field of organizational studies: the functionalist, the interpretive, the radical humanist and the radical structuralist. Fig. 1 illustrates these four paradigms and frameworks to their social assumptions. Every worldview is a different way to approach and study a shared reality, or worldview. Burrell and Morgan argue that the social theory in general and the theory of organizations - in particular - can be usefully analyzed in terms of four broad worldviews. Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 200 Available online at www.managementjournal.info Fig. 1: Four paradigms to the analysis of the social theory Source: Adapted from Burrell and Morgan [2] In order to explain the theory of formal organization in the light of the paradigms discussed by Burrell and Morgan, it was sought to answer the guiding question of this research, namely: what is the epistemological principle that underlies the theory of formal organization proposed by Barnard [1]? To do so, it will be explained why the theory analyzed belongs to such paradigm, indicating the relation between the construction of the text and the view of science shared by the paradigm. Research Methodology The objectives were analyzed from the exploratory point of view. Severino [7] seeks to "gather information about a particular object, thus delimiting a field of work” [7]. Regarding methodological procedures, the study is classified as a literature research, which Is done from the record available, due to previous research, [...]. It uses data or theoretical categories which have already been worked on by other researchers and duly registered. [...] The researcher works from the contributions of the authors of the analytical studies contained in the texts [7]. Data analysis was done through a qualitative approach, from which "it is not sought a statistical treatment and the establishment of probabilities, since the goal of the researcher is to understand the case - particular and specific - without bothering to seek any laws applicable to other similar reality” [6]. The context of the research lead to the creation of an analysis that made it possible to correlate the themes explored in this study. It is worthy to mention that the limitation of the work extends to the reference used [2], presenting here only a view of science and knowledge construction. Analysis of the Results The Paradigm The development of a scientific field always involves disputes between different schools of thought, which leads to an evolutionary view of science. Thus, there is the understanding that science evolves through theoretical revolutions that generate new commitments in groups of thought. Scientific knowledge, as seen today, emerges from the practice of the scientist. Thomas Kuhn, having the understanding of the operation, the practice and the mechanisms of science, determined that the evolution of the sciences occurs through paradigms. To the author, "paradigms are scientific achievements universally recognized that, for some time, provide problems and model solutions to a community of practitioners of a science" [4]. Paradigms are the pillars of science for the answers to the problems raised by the science itself and by the practice. Thus, the central idea of the author, talking about paradigms, is to determine that science is a product of the scientific communities and, accordingly, are formed as assumptions of science. According to the definition presented by Burrell and Morgan [2], paradigms lining organizational theories stem from the nature of the science, which can be objective or subjective; the social reality of the moment, where the emphasis is on the regulating or on the process of social change; and human nature, deterministic or non- Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 201 Available online at www.managementjournal.info deterministic. In this conception of science, are presented four paradigms established by Burrell and Morgan: interpretive, functionalist, radical humanist, radical structuralist. The Interpretive Paradigm The interpretive paradigm, as described by Burrell and Morgan [2], is organized in the sociology of regulation and presents a subjective view on the understanding of the fundamental nature of the social world and seeks to understand the day-to-day essence of the world, engaging with issues related to the nature of the status quo, the social order, the consensus, the integration and cohesion, and the solidarity and update. It discusses general sociological issues under four points of view: nominalism (the social world does not exist but by the individual's cognition), antipositivism (social science is seen as essentially subjective), voluntarism (completely autonomous man and possessed of free will) and ideographic (becomes closer to people’s subjective, exploring their life story). The interpretive paradigm was heavily influenced by the works of Dilthey, Husserl and Weber and, for the most part, can be considered as a twentieth-century phenomenon [2]. In this sense, it is characterized as a strong extension of the philosophical and sociological thought with which it shares the understanding of the social world explained from the point of view of the individuals directly involved in the social process, in which highlights that social reality has no existence out of the consciousness of any particular individual. Burrell and Morgan also consider four distinct categories of sociological organization that are related to the interpretive theory (and are distinguished by their subjectivity). They are: Solipsism, phenomenology, phenomenological sociology and hermeneutics. The Functionalist Paradigm The Functionalist Paradigm, originated in France in the first decades of the nineteenth century, was fundamental in the conduction of academic sociology and the study of organizations. Organized in the sociology of regulation, it uses objectivism to study its subjects and is characterized by an interest in giving explanations on the status quo, the social order, the social integration, solidarity, and the need of satisfaction and update. It addresses these general sociological issues from the point of view that tends to be realist, positivist, determinist and nomothetic [2]. Ontology regards to assumptions concerning the true essence of the phenomenon under investigation. The realistic view of the functionalist paradigm posits that the social world external to individual’s cognition is a real world consisting of concrete, tangible and relatively immutable structures. The social world exists independently of its appreciation for the individual. The epistemological nature, which reflects the way to understand how knowledge is generated, is positivist. Having approaches derived from the natural sciences, positivism seeks to explain and predict what happens in the social world by searching for regularities and causal relationships between its constituent elements. Considers knowledge as an essentially cumulative process, in which new findings are added to the existing load of knowledge and false hypotheses eliminated. Human nature regards the relationship between humans and their environment, the society in which they live. In a deterministic view humans respond, in a mechanical way, to situations found in their exterior world. It sees the man and his activities as being completely determined by the situation or the environment in which he is situated. The nomothetic methodology to social science emphasizes the importance of basing research on systematic protocol and technique, condensed into approaches and methods employed in the natural sciences that focus on the process of testing hypotheses according to the canons of scientific rigor. According to Burrell and Morgan [2], there are four theories of organizations that fall within the Functionalist Paradigm. They are: Theory of social system and objectivism; framework of action; theories of bureaucratic dysfunction; and pluralism1. The theory of the social system and objectivism is the most objective perspective in this paradigm and, according to Burrell and Morgan [2] is predominant in the field of contemporary organizational theories. 1 Free translation by the authors. Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 202 Available online at www.managementjournal.info The Radical Humanist Paradigm social and organizational arrangements [2]. The radical humanist paradigm, according to Burrell and Morgan [2], seeks to develop a sociology of radical change because it emphasizes the phenomena of alienation and false consciousness, seeking human emancipation, through freeing the human been from the restrictions that the social arrangements put on their development, therefore criticizing the status quo. From the perspective of this paradigm, the society is anti-human and its objective is to articulate means so that humans can transcend the ties that bind them to existing social patterns and thus reach their full potential. Moreover, such paradigm sees the creation of reality influenced by psychological and social processes and gives great importance to human consciousness, seeing the individual as the subject of the history. Thus, it is seen that the radical humanist paradigm puts emphasis on radical change, on the modes of domination, emancipation, potentiality and deprivation. The focus of the radical structuralism is to see society evolving through contradiction. It assumes that the world naturally presents conflicts of interest between those who hold power and those without power, being irreconcilable, resulting in radical changes. This paradigm is materialistic, having realistic, positivistic, determinist and nomothetic view [2]. It should be noted that such paradigm is based on the principles of social sciences and on organizational studies, which are critical theories inspired by the anarchism, the nationalism, the dialectic and the psychosociology. It should also be emphasized that the radical humanist paradigm has its roots in the German idealism and Kantian notion that the ultimate reality of the universe is spiritual, rather than material nature. The radical humanist studies consider both the subjectivity principle and the sociology of radical change, and has four main directions: (1) solipsism, considered the most extreme form of subjective idealism, since it denies that the world has any independent distinct reality; (2) French existentialism; (3) anarchist individualism; (4) critical theory, which is subdivided into Lukásciana Sociology, Gramscian Sociology and Frankfurt School. It is noteworthy that the central focus of the radical humanist paradigm is the creation of the individual world by each one, i.e., each individual creates the world in which he lives. The Radical Structuralist Paradigm The paradigm of radical structuralism is concerned in, not only understanding the world, but trying to change it. Its goal is to analyze the structural conflict, the existing modes of domination, contradictions and deprivations. It emphasizes the need for destruction or transcendence of the limitations imposed on the Studies guided by the radical structuralist perspective are based on the identification of conflicts inherent to social and organizational processes and how the various postures of domination influence them. This paradigm also emphasizes the pursuit of means that enable to overcome that domination, since organizations have their operation restricted by social forces that can only be modified by some form of tension through contradictions [2]. Within the radical structuralist paradigm there are three distinct approaches, but that intrinsically have some fundamental concepts in common. The three approaches that comprise the radical structuralism are: the Russian Social Theory, the Contemporary Mediterranean Marxism and the Theory of Conflict [2]. Theory of Formal Organization Within the perspectives assumed in the Functionalist Paradigm and according to the theories framed in it, it was chosen to discuss the Theory of Formal Organization, proposed by Chester Barnard in his book The Functions of the Executive. Contextualizing: 1961) Chester Barnard (1886- Chester Barnard was born in 1886 in the United States. He started working on a farm until he joined the Economics course at Harvard University. At that time, he supported himself by selling pianos and working as staff of a band which performed at parties. Later, he worked as a manager at American Telephone and Telegraph (AT&T) for over 30 years, starting as an employee of the Department of Statistics in 1909, and becoming president of the Bell Telephone Company of New Jersey in 1927. Subsequently, he had other public functions as President of the United Service Organization (USO) at the time of the World War II, General Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 203 Available online at www.managementjournal.info Counselor of Education, President of the National Science Foundation, Assistant Secretary of the U.S. Treasury and President of the Rockefeller Foundation. their action (3) for the accomplishment of a common purpose" [1]. For its survival, it is necessary the presence of organizational effectiveness or efficiency. Despite his great performance as a manager, he never put aside the academic vein, being a great student of organizations. His major works are: "The Functions of the Executive" (1938) and "Organization and Management" (1948). The author introduces the concept of efficiency and effectiveness used in formal organizations. According to Barnard [1], efficiency is understood as the adequation of individual goals to the company’s goals, and efficacy (effectiveness) as the focus on results. Barnard was one of the first to study the processes of decision making, the kind of relationships between formal and informal organizations and the role and functions of the executive. He developed theories of authority and incentives, being for this reason labeled as a behaviorist. Being contemporary of Hawthorne, Elton Mayo and Fritz Roethlisberger, and seeing the man as a social being that makes up the organization in a systematic cooperation, he is considered a thinker of Human Relations School. His works reflect his epistemological orientation in positivist thought and, at times, utilitarian. Barnard died in 1961 leaving a legacy on the theory of cooperation in organizations. The importance for the Administration, in a general perspective, is unquestionable, an example of this is the award received by the book The Functions of the Executive as the second most influential management book of the 20th century in a poll of the Fellows Group of the Academy of Management (only behind Taylor’s The Principles of Scientific Management). Barnard gave much more attention than the classical theorists to the role of individuals, their motivations and behaviors in organization, and much less attention to the problems of structure. For Dias [3], 2008 Barnard is considered a precursor of the merge of the approach systems to the study of organizations, since they are seen as cooperative systems that involve physical (equipment and materials), biological (individuals who need space), psychological (people with needs and expectations) and social elements (interactions, attitudes, beliefs). The Theory of Formal Organization Formal organization is a "system of activities or forces, of two or more people, consciously coordinated" [1] and comes into existence when "(1) there are people able to communicate with each other (2) who are willing to contribute with Efficiency means the willingness to sacrifice the control of its own conduct for the benefit of the coordination, and the continuity of willingness also depends on the conditions of satisfaction that are offered: if the satisfactions outweigh the effort, then there is continuity in the system of efficiency. "In summary, the initial existence of an organization depends upon a combination of these elements appropriate to the external conditions at the moment”, [1]. And more: the organization is sustained when there is a balance in the internal (proportion in the three elements) and external systems (efficiency and effectiveness). The elements vary according to the external systems and are interdependent: when one varies it is necessary a variation in the other so as to keep the balance. Analyzing the system as a whole, the three elements mentioned before must be interconnected. In this sense, to better conceptual organization, Barnard’s [1] text was divided into two main topics, namely: I-Willingness communication. II-Effectiveness organization. to of cooperate; cooperation; purpose; efficiency of The willingness to cooperate is related to the intensity of the connection with the organization's goal. Willingness means renunciation of personal conduct, depersonalize the action, and its effect is the joint effort by members of the organization. According to Barnard [1], "the activities cannot be coordinated unless there is first the disposition to make a personal act a contribution to an impersonal system of acts" [1]. The outstanding fact regarding willingness is the indefinitely large range of variation in its intensity among individuals. Most people have a negative willingness to contribute. Another fact is that the willingness of each individual cannot be Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 204 Available online at www.managementjournal.info constant in degree. I.e., for any formal organization the number of people with positive willingness to serve is always floating. However, "willingness to cooperate, positive or negative, is the expression of the net satisfactions or dissatisfactions experienced or anticipated by each individual in comparison with those experienced or anticipated through alternative opportunities" [1]. I.e., the willingness to cooperate is the net effect of inducements to do so in conjunction with the sacrifices involved, and then in comparison with the net satisfactions produced by the alternatives. From the point of view of organization it is the joined effect of objective inducements offered and burdens imposed. Therefore, the satisfactions depend upon the motives of individuals and the inducements that satisfy them. The purpose, in turn, is an objective of cooperation. A purpose incites cooperative activity to the point that it is accepted by those whose efforts will constitute the organization and, therefore, simultaneous acceptance of a purpose and willingness to cooperate. Therefore, it is important to note that each cooperative purpose has the cooperative aspect (the personal effort is not here in question, but what it means for the organization as a whole) and the subjective aspect (here the purpose is intangible, of sentimental character, what is believed by the contributors). Once the organizations are established, the unifying purposes may change during the lifetime of an organization due to the question of survival. Finally, in this first part communication is highlighted. It is through communication that a system of cooperative effort is established. "The method of communication centers in language, oral and written. On its crudest side, motions or actions that are of obvious meaning when observed are sufficient for communication without deliberate attempt to communicate; and signaling by various methods is an important method in much cooperative activity" [1]. Communication techniques are an important part of any organization and structure the form and the internal economy of organizations. From this perspective, it is noteworthy that a common purpose should be of common knowledge and, to be known, must be somehow communicated. And therein lays the importance of communication as a link between the other two features (elements) previously presented. The second big topic, deals with the effectiveness and efficiency of the organization from the perspective of the purpose and contribution, respectively. In this sense, the author points out that, in the first case, the generalization of purpose is what keeps the organization alive, and that this purpose can (and should) be defined and distributed by the day-to-day events. In the case of efficiency, it is worth noting that it occurs when there is an ability to provide effective stimuli in sufficient amount to keep the system in equilibrium. In organizations with material purpose, it is encouraged by material or monetary considerations in order to contribute to the cooperative effort of an individual and make him productively efficient. However, it is not only material productivity that keeps the organization alive, like the churches and patriotic societies, in which there are no tangibility. According to [1], "non-economic inducements are as difficult to offer as others in many circumstances". Maintaining peculiarities and preferences, as an attractive condition of employment, requires special care with regard to personal services offered, whether the standard of quality be high or low. And that's why organizations must devote considerable attention - and even money - for that matter. According to the explanations given, it is understood that the Theory of Formal Organization suggests the vitality of organizations as originating from a system of cooperation between the elements that constitute them, respecting and paying attention to internal and external systems so that they are in balance. Making a parallel of Barnard’s text with Burrell and Morgan’ text, the last ones believe that the theory of Barnard, along with Simon's theory, form what is called organizational theories of balance. Barnard's theory tended to emphasize the social aspects of organization, seeing organization as company. The theory proposed by Barnard represents one of the first systematic attempts to lay the foundations of a theory of organizations and was extremely influential in subsequent thought [3]. Identification Principle of Organization of the the Epistemological Theory of Formal The Theory of Formal Organization reflects an epistemological orientation in the positivist Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 205 Available online at www.managementjournal.info thought and, at times, utilitarian. The positivist epistemology, derived from the natural sciences, was inserted in the social sciences and in the context of the Administration through the "normal organization science", developed from the classical American thought [5]. Positivism admits as sole source of knowledge and criterion of truth, the experience, the positive data and the sensitive data. It presents as one of the features the search to explain and predict what happens in the social world, by searching for regularities and causal relationships between its constituent elements. Such feature can be identified in the theory of Barnard when he identifies organizations as social systems and explains points about it; predicts how an organization can function effectively, and, hence, survive (effectiveness and efficiency, by the cooperation of individuals); and predicts the functions the executive must perform in order to have the cooperation of his subordinates. Positivism creates an objective knowledge accepted as "truth", which can be transmitted in form of communication for solving social problems. It understands knowledge as something that can be acquired. In this sense, Barnard created a management theory that can be applied in any formal organization. The utilitarian bias of the Theory of Formal Organization is presented as benefit--reward for individuals advocated in the theory. According to Dias [3], one of the thesis defended in this theory is that a company cannot efficiently operate and survive if the interests of the organization and individuals are not in balance. Thus, people should pursue organizational goals while satisfying their individual needs. Conclusions The objective proposed in this study was to verify which epistemological principle underlies the theory of formal organization proposed by Chester Barnard [1]. In this sense, it explored issues related to paradigms, according to the view of Burrell and Morgan [2] and the organizational theory in perspective. In order to define paradigm it was presented the idea of Kuhn [4], which defined science as the product of scientific communities and the concept of paradigm as what members of a community share (beliefs, values, techniques shared by members of the scientific community: symbolic generalizations (laws), models and values). In this sense, it discussed the prospects of the paradigms listed by Burrell and Morgan [2]: interpretive, functionalist, radical humanist and radical structuralist. The theory of formal organization proposed by Barnard is, in the history of organizational studies, one of the first systematic attempts to lay the foundations of a theory of organizations and was extremely influential in the thought that involved subsequent theories. This theory was developed, as concluded in this study, under the assumptions of the functionalist paradigm. To better visualize the characteristics of each one of these themes, Table 1 was prepared. Table 1: Characteristics of functionalist paradigm and the theory of formal organization Functionalist Paradigm Theory of Formal Organization What is it? Explains the social world in the same way Explains the organization as a social system that the natural, seeking to produce useful and had the understanding that a company scientific knowledge. Emphasizes cannot operate efficiently and survive if the maintaining the status quo: balance, social individual and organizational interests are not integration, order, and stability. For the in balance. functionalist paradigm society has a concrete existence. How is it done? Faces essentially rational explanations of Extremely rational regarding the relations of social affairs. the organization. What is it used Predominates in this paradigm a systemic Predominates, in this theory, the idea of for? conception of the social world oriented to individuals with willingness to an end achieving goals. purpose. Example Theory of social systems. Contributor theory to the theory of social systems. Source: Prepared by the authors (2013) It should be noted, finally, the relevance of this study by presenting themes that have great value to current discussions, as they are concepts that, though opposed, argued, and disputed, remain to time, especially in discussions of administration science and organizational studies. Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 206 Available online at www.managementjournal.info As a suggestion for further research, it is recommended to explore other organizational theories aiming to unveil its epistemological conceptions and, thus, contribute to the development of new fields in organizational studies. References 1. Barnard Chester I (1971) As funções do executivo. São Paulo: Atlas. 2. Burrel G, Morgan G (1979) Sociological paradigms and the organisation analysis. London: Ashgate. 3. Dias, Reinaldo (2008) Sociologia das organizações. São Paulo: Atlas. 4. Kuhn Thomas S (1991) A estrutura das revoluções científicas. São Paulo: Perspectiva. 5. Marsden Richard, Towley Barbara (1999) Introdução: A coruja de Minerva – reflexões sobre a teoria na prática. In: Clegg Stewart, Hardy Cynthia; NORD, Walter (Org.). Handbook de estudos organizacionais: reflexões e novas direções. São Paulo: Atlas,. 2.v 6. Meksenas, Paulo. Pesquisa social e ação pedagógica: conceitos, métodos e práticas. 10. ed. São Paulo: Edições Loyola, 2002. 7. Severino, Antônio Joaquim. Metodologia do trabalho científico. 23. ed. São Paulo: Cortez, 2007. Cibeli Borba Machado & Nathália Helena Fernandes Laffin | Jan.-Feb. 2014 | Vol.3 | Issue 1|200-207 207