So, how do all these elements work together as a system, is the next question? Fortunately, Richard Scott's review of organizational research not only identifies organizational elements. But it also describes how theories and different eras focused on certain organizational elements over others. and characterized their inter-relation in certain patterns. In short, he recognized three classes of organizational theory. The earliest class of theories regarded organizations as rational systems. Here are the theories characterized in organization as a collective that was oriented toward the pursuit of specific goals. And whose behavior exhibits a formalized structure. These theories tend to focus on the administrative units of organizations. And their efforts at rational decision making to optimize and solve problems. An ensuing class of organizational theories characterized them as natural systems. Here, the theories related an organization as a collectivity whose participants pursued multiple interests. And these interests were forged in conflict and consensus. However, the participants recognized the value of perpetuating the organization as an important resource. So therefore, they wanted the organization to survive. As an actual system, the organization's unplanned and it has emergent relations and coalitions that matter. For example, things like the informal structure of relations that develop among participants. Is more influential in guiding behavior than the formal structure's role expectations and guiding principles. So the formal organizational chart is less important than the informal organization that emerges in-between it. So this class of theories is regarded as an organization, as an adaptive organism. As opposed to as a rationally administered one. Most recently, organizational theorists have come to characterize organizations as open systems. And here, organizations are conjures of intermittent flows and activities. Linking shifting coalitions of participants embedded in wider material resource and institutional environments. This class and theory focuses more on the environment than any other organizational feature. Hence, the shift goes from a rationally administrative unit of the rational act review. To a natural system of informal emergent processes and inconsistent preferences within an organizational environment. To the wider environment in influencing the actual organization itself and being the primary concern. So, let's review what we've covered and what I'm going to do now is, just walk through this table here. The three systems we have are rational natural and open systems and what I'm going to do is, first look at the primary unit of analysis. Here we have a single organization with the rational system view and as a single organization, the focus is on the administrative unit. Or, the brain of an organization typically and it views the organization as a unitary actor. For the natural system, we see a single organization again, but with multiple actors and divisions. The organization's more of a coalition or a loose federation than a unitary actor. And then finally, with the open system view the unitive analysis shifts to an organizational field. We have multiple organizations. Next we have our organizing concepts and as you recall, these organizing concepts were actors or participants. The social structure, the goals, the technology or tasks and finally, the environment. So for actors and participants, let's take each theory again. For the rational system, we see that the key actors that are focused upon are the leaders of the organization, the administrative unit. The natural system, the focus is on participants across roles and in the direct environment. The immediate environment around the organization. Then finally, for the open system view, we focus on stakeholders, employees and even mass consumers in wider society. For the social structure here we have another organizing concept, it also varies across rational natural and open. So for social structure, we see that in a rational system, it's formal in plan. It's a hierarchical kind of organization. In the natural system, it tends to be more of an informal and emergent kind of system. And it's more important than the formal in plan. The external kind of seeps in here with norms as well. With the open system, we see that the external world permeates the internal organization. So beliefs form outside, resource dependencies form outside. All of those matters start to greatly affect the way in which an organization relates to other organizations and survives in this environment. Third, we have goals and for a rational system, the goals are specific missions or objectives, right? For a natural system, the goals aren't so clear. They're multiple and conflicting and then for an open system, it tends to be a goal of survival and legitimacy in the environment. So with each of these theories, you notice that each kind of system from rational, natural, and open. We see a shift in how these organizing concepts are being related and described by these prevailing kinds of types of theories. So for example, with technologies and tasks. We again, see with rational act reviews, that there's an effort to maximize decisions to have decision trees. And to identify standard operating procedures and the like. In a natural system, we see contingent decisions or decisions that have unintended outcomes. So here, efficacy is kind of a concern of tasks and then finally, we have the open system. And here, the tasks or technology, is less about decision and more about environmental determinism and legitimation from the environment. Where it dictates if your organization fits conceptions of what that type of organization should be. For example, what school should look like. You therefore, survive and acquire resources and finally, we have different notions of environment across these different types of theories. So for example, with a rational actor view, the environment is almost entirely ignored. In a natural system view, it tends to have kind of a minor role, albeit it's there. And then finally, with the open systems view, the environment is pretty much everything in great part. It's the key variable that drives the behavior of an organization. So we have these three theories, rational, natural and open. That kind of are general frameworks for how our concepts or analytic features relate and combine. Now, one could argue that these theories reflect the organizations of their day, but I'm not sure that's the case. And by this we mean, that rational systems were early theories, that you had for tailorism. When people tried to organize things and plan everything and have administrators. Find the most efficient decision trees they could entail, in designing a workplace. To later in modernist times, after the industrial revolution. We had more of these natural system kind of views. To finally today, we have this open system perspective in a global economy. Where organizations are highly dependent on their environment to survive. Now, we could say that that's some kind of historical shift, but it may also be that most organizations always entail these features. It's just that scholars and the kind of information we collected, we just shifted what we focused on. As we learned more and more how to study them. So,we have three classes of organizational theories or three metanarratives about organizational theories. From rational to natural to open system views and each of these theories has been argued to reflect the organizations of their day. So, that the rational system view reflected early kinds of organizations in the industrial revolution. Where people tried to make factory lines very efficient and administrators planned everything. And had decision trees with rational action being the word of the day but then later, in the Modernist time or era. We had more of these kinds of natural systems where organizations were rife with conflict and lacked consensus. And it was this kind of dynamic and emergent process of organizing, to what we had today. Which is where in a global economy, we have organizations maybe that are highly contingent on relations in the environment to survive. Now, one could argue that this is kind of a historical progression, but I'm not so sure that's the case. Most organizations still entail all the features and the processes that a rational, natural, and open system perspective entail. So, I think we'll gain a lot by learning these different kinds of perspectives in the course. Another view could be that organizational theories have expanded their focus. As our understanding of firms and instrumental social groups has grown. All these features have likely always been there within organizations and they've perhaps shifted some in salience. But to this day, rational, natural, and open system qualities persist in many organizations.
