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Transformation in technology, organization and location : the case from the clinical laboratory system… Morrison, James Ian 1985

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TRANSFORMATION IN TECHNOLOGY, ORGANIZATION AND LOCATION: THE CASE FROM THE CLINICAL LABORATORY SYSTEM OF BRITISH COLUMBIA By JAMES IAN MORRISON M.A.(Hons), The U n i v e r s i t y of Edinburgh, 1974 B . P h i l , The U n i v e r s i t y of Newcastle-upon-Tyne, 1976 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY  in THE FACULTY OF GRADUATE STUDIES ( I n t e r - d i s c i p l i n a r y Program i n Urban Studies)  •We accept t h i s t h e s i s as conforming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA September  1985  ©James Ian Morrison, 1985  -6  In p r e s e n t i n g  t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the  requirements f o r an advanced degree a t the U n i v e r s i t y o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make it  f r e e l y a v a i l a b l e f o r reference  and study.  I further  agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying o f t h i s t h e s i s f o r s c h o l a r l y purposes may be granted by the head o f my department o r by h i s o r h e r r e p r e s e n t a t i v e s .  It is  understood t h a t copying o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l gain  s h a l l n o t be allowed without my w r i t t e n  permission.  Department o f  MMhl  StV^/eS  The U n i v e r s i t y o f B r i t i s h Columbia 1956 Main Mall Vancouver, Canada V6T 1Y3 Date  (3/81)  3 <hfob& (985  - ii-  AB5TRACT  ,  Multi-unit, multi-location organization i s one of the most salient characteristics of contemporary enterprise.  The transformation i n the  structure of enterprise from the independent, small-scale operation to the complex, multi-unit, multi-location system has been an integral part of wider societal change.  Yet the current functioning of these systems  and the processes underlying their transformation i s not well understood.  Particular deficiencies exist in our understanding of the  relationship among the technology, organization and location of multi-unit enterprise. A case study of transformation i n the British Columbia laboratory system between 1954 and 1984 shows that the spatial and organizational structure of enterprise i s not driven by any single variable and, in particular, technology i s not the "prime mover" behind structural change. The process of structural change i s a synergistic one in which external environmental factors and strategic choice have a more dominant influence on transformation than does technology.  Thus organizational  and location options are not dictated, rather they are perceived and selected as a purposeful response to environmental conditions.  This  conclusion i s reached from a c r i t i c a l evaluation of literature drawn from organization theory, decision-theory, cybernetics and the geography of enterprise; and from the case study. In particular, i t i s shown that in the 1950s and early 1960s, strategic decisions were taken that resulted i n relative decentralization of laboratory activity, organizationally (down the hospital hierarchy) and geographically (towards the periphery).  These decisions were taken  - iilin response to the changing p o l i t i c a l , social and medical environment. But these decisions clearly predate the availability of technologies that might encourage such dispersion, indicating that technology i s not a necessary and sufficient condition for structural change. Technology can have an impact on the degree of centralization in multi-unit enterprise.  In certain circumstances, the development and  deployment of specific technologies coincides with a strategic decision to either centralize or decentralize activity.  In such circumstances,  equipment embodied technology can make a powerful contribution in transforming the relative centralization or decentralization of the system, but i t does not determine the choice between centralized or decentralized.  Rather, i t amplifies the chosen direction.  These findings have policy and research implications for society, for the urban system, for enterprise, i n general, and for the future of the c l i n i c a l laboratory system of B.C., i n particular.  - iiilTABLE OF CONTENTS PAGE ABSTRACT  i i  TABLE OF CONTENTS  iiil  LIST OF TABLES  xi  LIST OF FIGURES  xiiii  ACKNOWLEDGEMENTS  xvi  PART I - THE GENERAL MODEL CHAPTER 1 - INTRODUCTION 1.1  INTRODUCTION  1  1.2  TRANSFORMATION 1.2.1 The 1.2.2 The 1.2.3 The  1.3  DETERMINISTIC APPROACHES TO THE STUDY OF TRANSFORMATION  1.4  SYNERGISTIC APPROACHES TO THE STUDY OF TRANSFORMATION  1.5  A MODEL OF MULTI-UNIT ENTERPRISE  11  1.6  RESEARCH STATEMENT  20  1.7  RESEARCH OBJECTIVES  24  1.8  CHAPTER SUMMARY  24  IN THE STRUCTURE OF ENTERPRISE: P r e - I n d u s t r i a l Enterprise I n d u s t r i a l Enterprise P o s t - I n d u s t r i a l Enterprise  A SYNOPSIS  2 2 3 5 6 8  CHAPTER 2 - PRECEDENTS FOR THE CONCEPTUAL FRAMEWORK 2.1  INTRODUCTION  26  2.2  THE FIVE PHASES OF DEVELOPMENT OF THE MODEL IN ORGANIZATION THEORY 2.2.1 The Technological Imperative 2.2.2 The Size Imperative 2.2.3 Technology and the Environmental Imperative  28 28 31 33  -  2.2.A 2.2.5  -  V  -  Technology and S t r a t e g i c Choice Technology and the Contingency Model  -  2.3  CRITICISMS 2.3.1 2.3.2 2.3.3 2.3.4 -  2.4  REFINEMENTS OF THE CONTINGENCY MODEL 2.4.1 Scott's Taxonomy of R a t i o n a l , Natural and Open Systems i n Organization Theory 2.4.2 TT Paterson and the Decision Band Method 2.4.3 S t a f f o r d Beer's 5 Systems 2.4.4 Amara and L i p i n s k i ' s S t r a t e g i c Planning Model 2.4.5 Summary and Conclusions  51 54 56 57 59  TRANSFORMATION IN OPEN SYSTEMS 2.5.1 Boulding's Nine System Types 2.5.2 Coming's Synergism Hypothesis 2.5.3 Hage's View on S t r u c t u r a l Transformation i n E n t e r p r i s e 2.5.4 Summary and Conclusions  61 61 62 65 66  2.5  OF THE DETERMINISTIC AND CONTINGENCY APPROACHES Causality Limited Environmental Analysis L i m i t a t i o n s i n the Concept of Technology Inadequate I n t e g r a t i o n of Geographic Phenomena  PAGE 36 38 45 45 46 46 47 50  CHAPTER 3 - CRITICAL PERSPECTIVES ON TRANSFORMATION OF ENTERPRISE 3.1  INTRODUCTION  67  3.2  PERSPECTIVES ON SOCIETAL TRANSFORMATION 3.2.1 B e l l , Habermas and T r i s t : Post I n d u s t r i a l i s m or Advanced Capitalism? 3.2.2 Reich: The Next American F r o n t i e r 3.2.3 Gottman and Hardwick: The Quaternary Sector 3.2.4 T o f f l e r : The Third Wave 3.2.5 C r i t i c i s m s of the A l t e r n a t i v e Views of S o c i e t a l Transformation 3.2.6 Conclusions from the C r i t i c a l Review a) From land through labour and c a p i t a l to knowledge b) From goods to s e r v i c e s and information c) Transformation i n the nature of work d) I n t e r n a t i o n a l i z a t i o n of the economy e) P l a c i d to a turbulent environment f ) Transformation i n managerial philosophy g) Transformation i n technology 3.2.7 Summary and Conclusion on S o c i e t a l Transformation  68 69 76 77 78 79 85 85 86 87 88 89 90 91 91  -  3.3  PERSPECTIVES ON STRUCTURAL TRANSFORMATION IN THE URBAN SYSTEM 3.3.1 3.3.2 3.3.3 -  3.3.A -  3.4  3.5  V I -  S t r u c t u r a l and S p a t i a l Transformations i n Demography S o c i a l Transformation i n the Urban System Economic and Technological Transformation i n the Urban System a) Economic r e s t r u c t u r i n g of the urban system b) O f f i c e l o c a t i o n l i t e r a t u r e c) Telecommunications and l o c a t i o n Summary and Conclusions on Urban Systems Transformation a) Rust bowl t o sun b e l t and the process of deconcentration b) Increased competition between nations, regions and c i t i e s c) Increased s p a t i a l d i v i s i o n of labour d) The two-tiered economy i n the urban system  PAGE 92 95 97 100 101 111 113 116 117 117 118 118  PERSPECTIVES ON THE TRANSFORMATION OF ENTERPRISE  119  3.4.1 3.4.2 3.4.3 -  119 127  Transformation i n the Environment of E n t e r p r i s e Transformation i n S t r a t e g i c Decision Transformation i n the Structure of M u l t i - U n i t Enterprise a) The R e l a t i o n s h i p Between Organization and C o n t r o l b) Environment, Organization, Control and Technology c) I n t e g r a t i o n of Location i n t o the R e l a t i o n s h i p Among the V a r i a b l e s  131 131 134 140  CONCLUSIONS  145  3.5.1 -  145 145 146 146  3.5.2 -  Methodological Conclusions a) S y n e r g i s t i c Models of S t r u c t u r a l Transformation b) Case Study Approaches Substantive Conclusions a) Transformation i s multi-dimensional and synergistic b) Technology i s Neutral c) Role of Environment and S t r a t e g i c Choice . d) Growth versus R e s t r a i n t  146 147 147 147  PART I I - CASE STUDY: TRANSFORMATION, TECHNOLOGY, ORGANIZATION AND LOCATION OF THE CLINICAL LABORATORY SYSTEM OF BRITISH COLUMBIA 1954-1984 PREFACE TO THE CASE STUDY  149  -  vii-  PAGE CHAPTER A - TRANSFORMATION IN THE ENVIRONMENT OF CLINICAL LABORATORIES 1954-8A A.l  INTRODUCTION  A.2  SOCIAL/DEMOGRAPHIC ENVIRONMENT  4.3  POLITICAL/ECONOMIC ENVIRONMENT A.3.1 Health Care and the Economy 4.3.2 Growth i n Laboratory Services and Costs  159 160 16A  A.A  MEDICAL ENVIRONMENT A.A.I Changing focus i n medicine 4.4.2 Changing f u n c t i o n a l focus of the laboratory A.A.3 P o l i c y and operational i m p l i c a t i o n s of the changing medical environment a) Growth, S p e c i a l i z a t i o n and C e n t r a l i z a t i o n U n t i l the 1980s b) Forces of Dispersion c) Changing Functions and Emerging Structures A.A.A Section Summary  17A 174 178  TECHNOLOGICAL ENVIRONMENT 4.5.1 A Model of Technological Development A.5.2 Development of Laboratory Technology 195A-198A A.5.3 Technological D i f f u s i o n at Each Time Horizon A.5.A P o l i c y and Operational Implications of the Changing Technological Environment a) P o l i c y Implications b) Operational Implications i) Automation, Computerization and Laboratory Tasks i i ) Automation, Computerization and the Impact on Decision-Making Levels i i i ) Automation, Computerization and Organizational Structure A.5.5 Section Summary  19A 195 199 202  A.5  A.6  CHAPTER SUMMARY  154 ,  156  183 183 186 188 192  205 205 208 208 212 216 220 221  CHAPTER 5 - CHANGING STRATEGIC PERCEPTION AND POLICY-MAKING FOR THE CLINICAL LABORATORY SYSTEM OF BRITISH COLUMBIA 195A-198A 5.1  INTRODUCTION  223  - v i LL5.2  A MODEL OF POLICY-MAKING FOR CLINICAL LABORATORIES 5.2.1 I d e n t i f i c a t i o n of S t r u c t u r a l I n t e r e s t s 5.2.2 Ideology of Medical Technology and the Objectives of the S t r u c t u r a l I n t e r e s t s a) Dominant Interests i) C l i n i c a l Physicians i i ) Diagnostic Service P r o f e s s i o n a l s i i i ) Academic Diagnostic P r o f e s s i o n a l s i v ) Corporate Technology Providers b) Challenging I n t e r e s t s i) Government i i ) H o s p i t a l Administrators c) Perplexed Interests 5.2.3 I n t e r a c t i o n o f the S t r u c t u r a l I n t e r e s t s : C o a l i t i o n s and Constraints 5.2.4 Section Summary  P/USE 224 225 230 230 231 232 233 234 234 235 235 236 237 250  5.3  POLICY DEVELOPMENT IN CANADA AND BRITISH COLUMBIA 5.3.1 Canadian P o l i c i e s f o r Laboratories 5.3.2 B r i t i s h Columbian Laboratory F"olicy a) Upgrading b) Regional Laboratory Service c) Technology d) Funding and Reimbursement e) Q u a l i t y and A c c r e d i t a t i o n Issues f) Cost and U t i l i z a t i o n  251 251 254 255 255 258 259 261 263  5.4  COMPARING THE SIMILARITIES AND DIFFERENCES IN THREE PROVINCES: ONTARIO, BRITISH COLUMBIA AND SASKATCHEWAN 5.4.1 General Patterns of Growth 5.4.2 S t r u c t u r a l Differences  265 265 269  5.5  5.6  TRENDS IN CLINICAL LABORATORY POLICY AND THE IMPLICATIONS FOR STRUCTURES 5.5.1 Reimbursement and Regulation a) Ontario: The For P r o f i t Commercial Model b) B.C.: P r o f e s s i o n a l l y Dominated Diagnostic Services c) Saskatchewan: A P u b l i c Systems View 5.5.2 Laboratory Technology: The Trends and Implications 5.5.3 Manpower and Management: Trends and Implications 5.5.4 Prospects f o r Control CHAPTER SUMMARY  270 271 273 274 275 276 277 278  • • a •  -  V i l l i  -  PAGE CHAPTER 6 - TRANSFORMATION IN THE STRUCTURE AND PERFORMANCE OF THE CLINICAL LABORATORY SYSTEM OF BRITISH COLUMBIA 6.1  INTRODUCTION  6.2  B.C. CLINICAL LABORATORIES IN THE 1950s: THE NEED FOR UPGRADING 6.2.1 Environment and P o l i c y Context 6.2.2 Technology, Organization and Location of Laboratories i n the 1950s 6.2.3 Performance of the System  6.3  THE SIXTIES - THE NEED FOR EQUITY AND ACCESSIBILITY 6.3.1 P o l i c y and Environmental Context 6.3.2 Technology, Organization and Location i n the S i x t i e s 6.3.3 Performance of the System  6.A  THE SEVENTIES - GROWTH, CONTROL AND RATIONALIZATION 6.4.1 Environment and P o l i c y Context 6.A.2 Technology, Organization and Location i n the Seventies 6.4.3 Performance of the Systems i n the Seventies  6.5  THE EIGHTIES - RESTRAINT AND SYSTEMS MAINTENANCE 6.5.1 Environmental and P o l i c y Context 6.5.2 Technology, Organization and Location i n the Eighties 6.5.3 Performance o f the System i n the E i g h t i e s  6.6  SYNTHESIS - TRANSFORMATION IN SPATIAL STRUCTURE OF THE B.C. LABORATORY SYSTEM 6.6.1 Approach 6.6.2 Regional D i s t r i b u t i o n o f Population and Laboratory A c t i v i t y i n 1961-84 6.6.3 Regional Dynamics of H o s p i t a l Laboratory Services 6.6.A Regional Dynamics of Private Laboratory Services  6.7  A SUMMARY OF TRANSFORMATION IN THE CLINICAL LABORATORY SYSTEM 195A-8A 6.7.1 Summary of the Stages i n Transformation 6.7.2 Summary of the Process of Transformation  CHAPTER 7 - TRANSFORMATION IN TECHNOLOGY, ORGANIZATION AND LOCATION: CHOICE OR CONSEQUENCE? 7.1  INTRODUCTION  7.2  GENERAL CONCLUSIONS 7.2.1 The Process of S t r u c t u r a l Transformation 7.2.2 Supply versus Demand  x 7.2.3 7.2.4 7.2.5 -  PAGE 359 361 362  C e n t r a l i z a t i o n versus D e c e n t r a l i z a t i o n The Role of Technology i n S t r u c t u r a l Change Central Control versus I n s t i t u t i o n a l Autonomy  7.3  GENERAL POLICY IMPLICATIONS 7.3.1 P o l i c y Implications at the S o c i e t a l Scale 7.3.2 P o l i c y Implications a t the Urban Systems Scale 7.3.3 P o l i c y Implications at the Level of Enterprise  363 363 364 367  7.4  FUTURE RESEARCH IMPLICATIONS 7.4.1 Implications f o r Future Theoretical Research 7.4.2 Implications f o r Future E m p i r i c a l Resarch 7.4.3 Implications f o r Future Applied Research  369 370 371 373  CHAPTER 8 - THE FUTURE OF THE CLINICAL LABORATORY SYSTEM IN BRITISH COLUMBIA 8.1  INTRODUCTION  375  8.2  FUTURE ENVIRONMENTAL CONDITIONS  375  8.3  POLICY OPTIONS FOR THE B.C. CLINICAL LABORATORY SYSTEM 8.3.1 The Free Enterprise Model 8.3.2 Medical Sub-Market Approaches 8.3.3 Adjusting the P u b l i c / P r i v a t e Mix of Laboratories 8.3.4 Restrained Autonomy 8.3.5 C e n t r a l l y Directed Systems  379 380 381 387 389 392  8.4  CONCLUSION  '  3  9  4  BIBLIOGRAPHY  397  APPENDICES  414  A - Data Appendix B - H i s t o r i c a l Review of Developments i n Laboratory Technology C - B.C. Laboratory R e f e r r a l s - Location of Lab Over Location of P a t i e n t , 1983 D - C l a s s i f i c a t i o n of Regional H o s p i t a l D i s t r i c t s According to Magnitude and D i r e c t i o n of Change i n a Laboratory Cost Index E - Hospital Laboratory Cost per Physician by Regional H o s p i t a l D i s t r i c t f o r B.C. 1974 and 1981 F - F i r s t Order Difference Model G - Reference Map of B r i t i s h  Columbia  414 419 433 435 438 439 441  -  XI-  PAGE TABLES 1.1  The structure of the environment of enterprise  3.1  A typology of transformation i n the environment of enterprise  125  3.2  Transformation i n o r g a n i z a t i o n a l design and c o n t r o l  133  4.1  Growth i n laboratory expenditures i n B r i t i s h Columbia 1970-1983, outpatient versus i n p a t i e n t by type of provider i n constant (1971) d o l l a r s per c a p i t a  172  Real laboratory cost per patient admission ( i n constant 1973 d o l l a r s ) , for a l l acute care admissions (ACA) and acute adult leukemia patients (LEUK) at Vancouver General H o s p i t a l , 1973-1979  180  Summary of developments i n the f u n c t i o n a l focus of medicine and the laboratory 1940-1980  182  A summary of t e c h n o l o g i c a l developments i n the c l i n i c a l laboratory 1950-1985  201  Estimated r e l a t i v e d i f f u s i o n of selected laboratory throughout North America by type of i n s t i t u t i o n  204  4.2  4.3 4.4 4.5 4.6  Costs of computerization  18  technologies  and automation for the c l i n i c a l  laboratory  207  4.7  A model of laboratory functions  209  4.8  Laboratory  210  4.9  Laboratory functions - estimated d e c i s i o n band of laboratory tasks S t r u c t u r a l i n t e r e s t s i n c l i n i c a l laboratory policy-making - ideology of medical technology, objectives and c o n s t r a i n t s  5.1  5.2  5.3  functions - impact of technology on tasks  Total MSC expenditures, share, 1970-1983  213 229  t o t a l laboratory and p r i v a t e laboratory  MSC expenditures on top ten laboratory fee items by sector i n constant d o l l a r s and as a share of a l l laboratory b i l l i n g s to MSC  241  245  - xilPAGE 5.4  MSC - number of d i f f e r e n t t e s t types b i l l e d by laboratory sector i n metropolitan regions, 1979/80 - 1983/84  246  Number o f laboratory physicians by p r a c t i c e s t y l e by region, 1984  249  5.6  Development of diagnostic s e r v i c e s p o l i c y i n Canada  252  5.7  Growth i n laboratory s e r v i c e s - average annual percentage change i n use and cost o f s e r v i c e s , Canada, Ontario, B.C. and Saskatchewan, 1961-1981  266  Legitimacy and f e a s i b i l i t y : between the provinces  268  5.5  5.8 6.1 6.2 6.3 6.4 6.5 6.6 6.7  s i m i l a r i t i e s and d i f f e r e n c e s  Federal laboratory and r a d i o l o g i c a l s e r v i c e s grant to B.C. 1953/54 - 1955/56  285  Development of B r i t i s h Columbia's r e g i o n a l laboratory system 1955-75  287  B.C. and Canada laboratory manpower by category f o r 1954 ( f u l l time personnel only)  291  H o s p i t a l laboratory costs f o r Canada and B.C. 1954-1962 by s i z e of h o s p i t a l  292  Pathology as an insured medical service - outpatient laboratory costs by type of i n s u r e r 1957-1983 (selected years)  294  Laboratory costs as a share of a l l h o s p i t a l costs 1962-1981/82 f o r a l l PGAS h o s p i t a l s i n B.C.  301  Laboratory costs per patient day ( i n currant d o l l a r s ) and share of a l l h o s p i t a l patient days by s i z e of h o s p i t a l 1962-1982  303  6.8  Total adjusted laboratory expenditures, h o s p i t a l laboratory expenditures ( t o t a l and teaching) and teaching h o s p i t a l ' s share of both t o t a l ajdusted laboratory expenditures and t o t a l h o s p i t a l laboratory expenditure, B.C. 1966-1981/82  6.9  Laboratory cost per c a p i t a and annual growth rates i n constant 1971 d o l l a r s by sector, B.C. 1970-1983/84  313  Estimated laboratory equipment a l l o c a t i o n to h o s p i t a l s by region i n B.C. i n constant 1971 d o l l a r s , 1973-1980  315  6.10  306  -  X l l i -  PAGE 6.11  6.12  6.13 6.14 6.15 6.16 6.17 6.18  6.19 6.20 6.21  Number o f chemistry instruments approved f o r B.C. h o s p i t a l s , by s i z e of h o s p i t a l - Type I instruments (major analyzers $50,000 and above) 1973-1980  316  Number o f chemistry instruments approved f o r B.C. h o s p i t a l s , by s i z e of h o s p i t a l - Type I I instruments (analyzers $20-50,000) 1973-1980  316  Number of hematology instrument approved f o r B.C. h o s p i t a l s , by s i z e of h o s p i t a l - automated c e l l counters 1973-1980  317  Outpatient laboratory costs - costs versus fees and the "apparent" p r o f i t margin, 1970-1983/84  325  Number o f chemistry instruments approved f o r B.C. h o s p i t a l s , by s i z e - o f h o s p i t a l - Type I instruments 1981/82 - 1984/85  327  D i s t r i b u t i o n of B.C. population by type of r e g i o n a l d i s t r i c t , for selected years 1961-1983  334  D i s t r i b u t i o n of h o s p i t a l and p r i v a t e laboratory a c t i v i t y i n B.C. by type of r e g i o n a l h o s p i t a l d i s t r i c t , selected years 1966-1981  336  Total p r i v a t e laboratory and h o s p i t a l outpatient laboratory fees by r e g i o n a l h o s p i t a l d i s t r i c t l o c a t i o n of physician over l o c a t i o n of patient f o r 1983-84 i n current d o l l a r s  338  Average menu of t e s t a v a i l a b l e on an outpatient basis by type of region i n B.C. 1979-83  339  Summary of r e l a t i v e changes i n r e g i o n a l laboratory cost index for the periods 1966-71, 1971-74, 1974-81  346  Regions with p r i v a t e laboratory a c t i v i t y i n constant 1971 d o l l a r s per c a p i t a and as a share of a l l adjusted laboratory costs i n the region-1979-1983  351  6.22  A h i s t o r i c a l synthesis of the development of the B.C. c l i n i c a l laboratory system, 1954-1984.  353  8.1  The environment of B.C c l i n i c a l l a b o r a t o r i e s i n 1995 - Possible trends and s t r u c t u r a l s h i f t s  377  8.2  P o l i c y options f o r the B.C. c l i n i c a l laboratory system i n 1995  384  - xiiii PAGE FIGURES 1.1  A model of m u l t i - u n i t enterprise as a d e c i s i o n and information hierarchy  n  2  1.2  M u l t i - u n i t enterprise and the i n t e r a c t i o n with i t s environment  15  1.3  Technology, organization and l o c a t i o n i n t h e i r s t r a t e g i c and environmental context  21  2.1  Synergy i n the r e l a t i o n s h i p among technology, organization and l o c a t i o n  27  2.2  Hierarchy  27  2.3  The f i v e phases of model development i n organization theory  29  2.4  John Child's model - the environmental imperative  35  2.5  John Child's model extended t o incorporate s t r a t e g i c choice  37  2.6  Montanari's contingency model  39  2.7  Mintzberg's f i v e o r g a n i z a t i o n a l components  42  2.8  Mintzberg's f i v e o r g a n i z a t i o n a l designs  43  2.9  Jackson and Morgan's model of posited r e l a t i o n s h i p s  of d e c i s i o n l e v e l s i n enterprise  with organization structure  48  2.10  Paterson and Hardwick's d e c i s i o n bands i n a decision hierarchy  56  2.11  Amara and L i p i n s k i ' s model of corporate s t r a t e g i c planning  58  3.1  A taxonomy of a l t e r n a t i v e views on s t r u c t u r a l transformation  70  3.2  Emerging o r g a n i z a t i o n a l designs  4.1  Health care spending as a percentage of n a t i o n a l income, Canada and the U.S., 1950-1982 Health, h o s p i t a l and medical costs by the B.C. p r o v i n c i a l government as a share of GPP, 1961-1980 H o s p i t a l and physician expenditures per c a p i t a , Canada and B.C., 1960-1982  4.2 4.3  136  161 163 163  - X V -  FIGURES continued A. A 4.5 4.6  A.7 A.8  PAGE  Vancouver General H o s p i t a l laboratory, number of t e s t s per patient day, 1957-1982  165  Laboratory growth i n Canada, h o s p i t a l laboratory use per patient day, 1961-1981  168  Laboratory growth i n Canada, h o s p i t a l laboratory cost per patient day, 1962-1981/82  168  B.C. pathology s e r v i c e s , r e a l per c a p i t a cost per annum, 195A-1983/8A  171  B.C. pathology s e r v i c e s , r e a l per c a p i t a cost per annum by sector, 1970/71-1983/8A  171  A.9  A model of t e c h n o l o g i c a l development i n the c l i n i c a l laboratory  197  5.1  A model of dominant, challenging and perplexed s t r u c t u r a l i n t e r e s t s i n policy-making f o r c l i n i c a l l a b o r a t o r i e s The changing p o l i c y agenda f o r l a b o r a t o r i e s i n B.C. - 195A-198G  5.2 5.3  Laboratory 1973-198A  eauipment expenditures i n B.C. - estimated  227 256  value, 260  9  6.1  Laboratory cost per patient day by s i z e of h o s p i t a l f o r PGAS h o s p i t a l s (excluding CCABC and Children's) i n B.C., 1966-1981/82  30A  6.2  Cumulative share of h o s p i t a l laboratory a c t i v i t y by rank of r e g i o n a l h o s p i t a l d i s t r i c t i n B.C., selected years 1966 to 1981  3A1  6.3  Rank s i z e a n a l y s i s 1966-1981. Hospital laboratory cost against rank of r e g i o n a l h o s p i t a l d i s t r i c t  3A1  6.A  H o s p i t a l laboratory cost per c a p i t a by type of region i n B.C., selected years 1966-1981  3A2  6.5  Annual growth rates i n h o s p i t a l laboratory cost per c a p i t a by type of region i n B.C. 1966-1981  3A2  6.6  H o s p i t a l laboratory cost per c a p i t a - core versus periphery 1966-1981  3AA  -  XVI -  ACKNOWLEDGEMENTS This project has been made possible because of the i n t e l l e c t u a l , l o g i s t i c a l and emotional support of a number of people and agencies.  The  i n t e r d i s c i p l i n a r y candidate i s p a r t i c u l a r l y dependent on h i s committee f o r guidance and support.  The author has been extremely fortunate i n having a  committee o f high academic a u a l i t y .  In p a r t i c u l a r , Professor W.G.  Hardwick  (Urban Geography) has acted as c h a i r f o r the committee and has been generous with h i s time i n providing c o n s t r u c t i v e c r i t i c i s m , i n t e l l e c t u a l s t i m u l a t i o n and much needed deadlines. Dr. Walter Hardwick has an impressive record of guiding "unusual" graduate students through the vagaries of i n t e r d i s c i p l i n a r y research:  the author i s fortunate t o be one o f them.  Professor R.G. Evans  (Economics) has contributed reasoned c r i t i c i s m ; has provided a f i n e example i n h i s s c h o l a r s h i p and has produced some e x c e l l e n t o n e - l i n e r s .  Professor J.D.  Forbes (Commerce) not only helped lead the author through the dark v a l l e y of technological determinism to greener pastures of s p e c i a l i n t e r e s t , but he provided good counsel when the t h e s i s and the author became unglued.  Finally,  the author wishes to acknowledge the s p e c i a l c o n t r i b u t i o n that Professor D.F. Hardwick (Pathology) made to t h i s undertaking.  Dr. David Hardwick reawakened  my i n t e r e s t i n academic work, provided a research environment i n which that i n t e r e s t could f l o u r i s h and gave c r i t i c a l perspective to t h i s study. I n t e l l e c t u a l c o n t r i b u t i o n s were made to t h i s study over the l a s t few years by colleagues, f a c u l t y and f r i e n d s .  In p a r t i c u l a r , the author wishes to  thank Dr. Ann Crichton (Health Care and Epidemiology), Dr. David Ley  - xvii-  (Geography),  Dr. John Milsum (Health Care and Epidemiology) and Dr.  Graham (Commerce).  Jill  The course work undertaken with these f a c u l t y i s r e f l e c t e d  both d i r e c t l y and i n d i r e c t l y i n t h i s study.  Many colleagues have commented on  e a r l i e r d r a f t s of t h i s and other r e l a t e d work, i n p a r t i c u l a r Paul Cassidy (VGH) and Jim Whitehead have provided i n s i g h t and encouragement. . The author wishes to thank a number of i n d i v i d u a l s and agencies f o r t h e i r support i n data c o l l e c t i o n , a n a l y s i s and document preparation. Larry Smook of the M i n i s t r y of Health's Equipment S e c r e t a r i a t ,  Mr.  facilitated  access to h i s t o r i c a l records and provided guidance with the data approval process.  Mr. Steven Kenney of the Medical Services Plan provided access to  data, and h i s s t a f f :  Glen N u t t a l l , Ramsey Handi and Bruce Hawks provided  invaluable e x p e r t i s e and support i n preparing data a b s t r a c t s and i n furnishing h i s t o r i c a l data.  Dr. K i t Henderson (Ministry of Health) provided approval f o r  access to h i s t o r i c a l data.  Dr. Morris Barer and h i s colleagues i n the  D i v i s i o n of Health Services Research and Development at UBC deserve s p e c i a l thanks f o r enabling computer access to h o s p i t a l data.  Margaret Hardwick was  of tremendous assistance with data entry and microcomputer analyses.  Jim  Munro cast a canny S c o t t i s h e d i t o r ' s eye over s e v e r a l d r a f t s of the manuscript and gave great encouragement.  The author must pay s p e c i a l t r i b u t e to Mrs.  Anne Bishop and her s t a f f i n the Department of Pathology f o r t h e i r c o n t r i b u t i o n to the preparation of t h i s manuscript.  In p a r t i c u l a r Laurie  Trarup and Penny Ma deserve s p e c i a l thanks for t h e i r s k i l l and patience.  - xviil-  F i n a l l y , s p e c i a l thanks are due to family and f r i e n d s who have endured t h i s process and helped me through i t . Nora deserves a medal f o r coping with a newborn and a t h e s i s at the same time, throughout a l l of which she d i d not lose her sense o f humour and she has learned to l i k e b i b l i o g r a p h i e s . David took my mind away from i t a l l , thanks.  Baby  -1 -  Doc. #1218F Arc. #009Oa  TRANSFORMATION IN TECHNOLOGY, ORGANIZATION AND LOCATION: THE CASE FROM THE CLINICAL LABORATORY SYSTEM OF BRITISH COLUMBIA  CHAPTER 1 - INTRODUCTION 1.1  INTRODUCTION M u l t i - u n i t , m u l t i - l o c a t i o n organization i s one of the most s a l i e n t  c h a r a c t e r i s t i c s of contemporary e n t e r p r i s e .  The transformation i n the  s t r u c t u r e of many enterprises from independent, simple, small scale  operations  to complex, m u l t i - u n i t , m u l t i - l o c a t i o n systems has been an i n t e g r a l part of wider s o c i e t a l change ( B e l l (1976), Reich (1983), T r i s t (1980)).  In recent  years, an increasing number of questions have been r a i s e d about the r o l e , v i a b i l i t y and performance o f m u l t i - u n i t e n t e r p r i s e .  F i r s t , the complex  m u l t i - u n i t enterprise i s facing greater uncertainty because of environmental turbulence associated with recession, deregulation, competition and technological change ( T r i s t 1980).  Environmental turbulence requires great  a d a p t a b i l i t y , but i t i s argued, many m u l t i - u n i t enterprises have been f a i l i n g i n t h i s regard (Peters and Waterman (1982), H a r r i s  (1981)).  A second and r e l a t e d matter i s that the current s t r u c t u r e of many m u l t i - u n i t enterprises has become d y s f u n c t i o n a l , not only because of a turbulent environment but because of inherent  'design flaws' i n organization.  In p a r t i c u l a r , analysts note the poor performance of some enterprises i n terms of e f f i c i e n c y , e f f e c t i v e n e s s , q u a l i t y of w o r k l i f e , s p a t i a l d i s t r i b u t i o n and lack of innovation (Schumacher (1973), Huber (1984), Harris (1981), Bluestone and Harrison (1982), Reich  (1983)).  - 2 -  T h i r d l y , there are problems i n complex e n t e r p r i s e s r e s u l t i n g from the explosion i n the a v a i l a b i l i t y of information technology.  Technological change  creates uncertainty, through widespread b e l i e f that information technology i s bringing about a transformation i n the way m u l t i - u n i t systems are structured i n o r g a n i z a t i o n a l and s p a t i a l terms (e.g., T o f f l e r (1980), Bjorn-Anderson (1979)).  P a r t i c u l a r l y , i t i s suggested that information technology has a  propensity to change the degree of c e n t r a l i z a t i o n / d e c e n t r a l i z a t i o n of a c t i v i t i e s and decision-making  within enterprise.  F i n a l l y , there are concerns i n academic c i r c l e s that the p o l i t i c a l , economic, o r g a n i z a t i o n a l and geographic approaches to the study of contemporary complex, m u l t i - u n i t e n t e r p r i s e lack both explanatory power and a b i l i t y to guide p o l i c y and management decisions i n any meaningful way Huber (1984), Goddard (1980), B e l l and K r i s t o l (1981), Kuttner  (e.g.,  (1985)).  This t h e s i s examines, i n general terms, the transformation i n the r e l a t i o n s h i p among the technology, organization and l o c a t i o n of m u l t i - u n i t enterprise over the past t h i r t y years.  I t draws together threads from  complementary sets of l i t e r a t u r e on technology, organization and l o c a t i o n and concludes about the r e l a t i o n s h i p s among these v a r i a b l e s that are emerging i n contemporary e n t e r p r i s e .  These conclusions are then tested i n a case study of  the c l i n i c a l laboratory system of B r i t i s h Columbia.  1.2  TRANSFORMATION IN THE STRUCTURE OF ENTERPRISE:  1.2.1.  A SYNOPSIS  The P r e - I n d u s t r i a l E n t e r p r i s e In the p r e - i n d u s t r i a l mercantile world, the s t r u c t u r e of most  enterprise was shaped by the p r e v a i l i n g methods of production and d i s t r i b u t i o n  - 3 -  and by the philosophies underlying those methods.  Thus the s i z e and  functioning of e n t e r p r i s e was shaped by trade g u i l d s , l o c a l trade c a r t e l s and by highly l o c a l i z e d market c o n d i t i o n s .  The most prevalent o r g a n i z a t i o n a l form  was a simple s t r u c t u r e with master and a r t i s a n working i n s m a l l , independent units.  S p a t i a l s t r u c t u r e at t h i s time conformed to the random d i s t r i b u t i o n of  resources and s i t e p o t e n t i a l and was r e i n f o r c e d by the patterns of s p a t i a l i n t e r a c t i o n that were prevalent i n simple agrarian systems (Mumford (1961)).  1.2.2.  The I n d u s t r i a l Enterprise With the advent of the i n d u s t r i a l age, there was a discovery of the  p r o d u c t i v i t y - i n d u c i n g p o t e n t i a l of the d i v i s i o n of labour.  This set the stage  for the enmeshing of technology and o r g a n i z a t i o n , i n which the s p e c i a l i z a t i o n of tasks and the coordination and synchronization of a c t i v i t i e s ( i . e . , organization) became c l o s e l y r e l a t e d to the emerging forms of technology, i n p a r t i c u l a r the machine.  Throughout the nineteenth and e a r l y twentieth  c e n t u r i e s , the theories and underlying values of economics and  mechanical  engineering p r e v a i l e d as the p r i n c i p l e s on which the s t r u c t u r e of organization was based (Reich (1983), B e l l (1976)).  This organizing p r i n i c i p l e was given  further embellishment and f o r m a l i z a t i o n with Taylor's i n f l u e n t i a l work on S c i e n t i f i c Management, Taylor (1911), i n which the engineering philosophy c a r r i e d to i t s l o g i c a l conclusion.  was  Widespread acceptance of S c i e n t i f i c  Management from the 1920s on had a major impact on e n t e r p r i s e i n North America and indeed i n the Soviet Union ( B e l l (1976)), that was r e f l e c t e d i n the r i g i d and h i e r a r c h i c a l "machine bureaucracy" enterprise (Mintzberg (1979),  (1983)).  i n large scale p u b l i c and p r i v a t e  - 4 -  From the 1930s on, Mayo and the Human Relations School provided i n s i g h t s about the need f o r human engineering i n large s c a l e e n t e r p r i s e (e.g., Roethlisberger and Dickson (1939) and Mayo (1949)).  The applied psychological  t r a d i t i o n that followed i n organization theory was j u s t as i n s t r u m e n t a l i s t i n philosophy  as S c i e n t i f i c Management i n i t s i n t e n t to improve e f f i c i e n c y , but  i t d i d help t o r a i s e questions about the complexity  of human behavior and  i n t e r a c t i o n i n the e n t e r p r i s e . Despite an i n t e r e s t i n the human side o f organization, machine bureaucracy continued as a common s t r u c t u r e of e n t e r p r i s e .  Indeed the  p r i n c i p l e s of economies o f scale and bureaucratic organization have been extended i n the s t r u c t u r e and management of the large d i v i s i o n a l i z e d , m u l t i - n a t i o n a l corporation (Taylor and T h r i f t (1983a), Mintzberg  (1983)).  In  many cases, management has been standardized and formalized to the point where i t can be superimposed throughout the diverse businesses and m u l t i p l e l o c a t i o n s of the m u l t i - n a t i o n a l conglomerate but with mixed r e s u l t s (Reich (1983). The influence o f economizing p r i n c i p l e s on i n d u s t r i a l organizations i s also p a r a l l e l e d i n l o c a t i o n a l patterns of e n t e r p r i s e .  Emphasis on economies  of s c a l e , minimizing costs of movement and maximizing the economic b e n e f i t s of agglomeration ( i . e . , s p a t i a l c l u s t e r i n g ) seems to have developed a s p a t i a l c a l c u l u s that dominated a n a l y s i s of, and decision-making about, the s p a t i a l s t r u c t u r e of the i n d u s t r i a l organization. The negative e x t e r n a l i t i e s of bureaucratic forms i n i n d u s t r i a l organizations have been long recognized  (even by Max Weber himself i n h i s  chapter on the Iron Cage (Weber 1947)) as they r e l a t e to questions of s t r e s s  - 5 -  and a l i e n a t i o n .  Over the l a s t twenty f i v e years however, a diverse range of  observers have questioned the economic and f u n c t i o n a l v i r t u e s of bureaucracy and large scale organization.  For example, the early work of Burns and  S t a l k e r (1961) i n organization theory, argued that 'mechanistic s t r u c t u r e s ' (bureaucracy) were appropriate  f o r r e p e t i t i v e operations  i n stable  environments but that i n more complex and dynamic environments, enterprise must adopt an 'organismic' form i f i t i s to be able to innovate and adapt. S i m i l a r l y the more recent popular management l i t e r a t u r e has questioned the e f f e c t i v e n e s s of bureaucratic s t r u c t u r e s for large corporations operating i n turbulent environments, e.g.,  Peters and Waterman (1982), N a i s b i t t (1982),  Deal and Kennedy (1982), and Huber (1984). anthropologist, i n h i s observations  Marvin H a r r i s , a c u l t u r a l  on 'America Now',  H a r r i s (1981) and  Schumacher (1973), an economist, i n h i s t h e s i s that 'Small i s B e a u t i f u l ' both, i n t h e i r own way,  question the performance of the l a r g e , mechanistic  i n d u s t r i a l enterprise.  1.2.3.  The P o s t - I n d u s t r i a l Enterprise Major changes i n e n t e r p r i s e have occurred since the Second World  but most s i g n i f i c a n t l y i n the l a s t two decades.  The increasing turbulence  War and  complexity of the environment and the explosion i n the c a p a b i l i t y and a v a i l a b i l i t y of information technology since the mid 1960s are c r i t i c a l components i n the transformation  of e n t e r p r i s e , p a r t i c u l a r l y f o r those  organizations whose p r i n c i p a l raw material i s information, e.g., business s e r v i c e s , education and health.  banks,  The r a p i d i t y of technological change  has stimulated i n t e r e s t i n i t s impact on the o r g a n i z a t i o n a l s t r u c t u r e of  - 6 e n t e r p r i s e , on the w e l l being of employees and on the s p a t i a l o r g a n i z a t i o n o f m u l t i - u n i t systems, e.g., the c o l l e c t i o n of essays i n Bjorn-Anderson (1982), Bannon et a l (1982), and Marstrand (1984). emerged.  (1979),  A number of views have  At one extreme there are those who argue that we are r e - c r e a t i n g the  factory of the past i n the o f f i c e of the future, Menzies (1981).  These  authors are determined to turn back the t e c h n o l o g i c a l t i d e and forgo any b e n e f i t s that technology can b r i n g , because they are convinced technology causes unemployment, " d e s k i l l i n g " (a neologism coined by a n a l y s t s to describe the reduction i n s k i l l reauirements brought about by automation) and c e n t r a l i z a t i o n of decision-making, e.g., Marstrand (1984), Mather (1980).  At  the other extreme, there are those who argue f o r b l i n d a p p l i c a t i o n o f technology, seeing t e c h n o l o g i c a l change as good i n i t s e l f .  A similarly  p o l a r i z e d l i t e r a t u r e i s developing with regard t o s p a t i a l auestions, some are arguing that advances i n technology l i b e r a t e remote settlements from the oppression of distance others argue that such technology increases the s p a t i a l c e n t r a l i z a t i o n of power, a c t i v i t y and opportunity (see Bannon et a l (1982) and Mandeville (1983) f o r reviews of these competing  1.3  positions).  DETERMINISTIC APPROACHES TO THE STUDY OF TRANSFORMATION The process of transformation i n the technology, o r g a n i z a t i o n and  l o c a t i o n of enterprise i s not w e l l understood.  E f f o r t s to date have suffered  from an undue focus on determinism. Four broad forms of determinism can be i d e n t i f i e d : a)  Technological determinism sees the r o l e of t e c h n o l o g i c a l change as paramount and normally concludes that t e c h n o l o g i c a l change causes the  o r g a n i z a t i o n a l and s p a t i a l s t r u c t u r e of e n t e r p r i s e to follow a particular trajectory.  Elements of t e c h n o l o g i c a l determinism can be  seen i n a wide range of work from Marx, through Woodward (1965) to computer s c i e n t i s t s and pundits, e.g., T o f f l e r (1970), (1980). b)  Organizational Determinism i s a term that could be applied to the widely held a s s e r t i o n that i n any given context, organizations should be structured a p a r t i c u l a r way i f they are to be e f f e c t i v e . (See s t r u c t u r a l contingency theory discussed i n Chapter 2 and Mintzberg (1983)).  This l i t e r a t u r e e x p l i c i t l y or i m p l i c i t l y regards s p e c i f i c  o r g a n i z a t i o n a l processes or environmental a t t r i b u t e s as the "prime movers" i n determining the r e l a t i o n s h i p among the technology, organization and s p a t i a l s t r u c t u r e of e n t e r p r i s e . takes a number of forms.  This determinism  Scale of the e n t e r p r i s e , p a r t i c u l a r  environmental c h a r a c t e r i s t i c s , s p e c i f i c technologies or s t r a t e g i c choices have each had t h e i r moment i n the sun as prime movers. c)  Geographic Determinism i s r e f l e c t e d i n the overwhelming emphasis placed on geographic f a c t o r s as determinants of o r g a n i z a t i o n a l and s p a t i a l structure.  S i t e and s i t u a t i o n a l factors may have had an important  influence on l o c a t i o n i n e a r l i e r times, but i n an age when the headquarters of many o f the l a r g e s t and most successful enterprises are located i n suburbs of medium s i z e d c i t i e s , the geographic d e t e r m i n i s t i c models become untenable, Pred (1977). d)  Economic Determinism i s the broad term that could be applied to both s t r u c t u r a l i s t explanation and n e o c l a s s i c a l economic a n a l y s i s of the organization, technology and l o c a t i o n of e n t e r p r i s e .  The patterns  that  - 8 -  emerge i n these models are determined e i t h e r by the i n e v i t a b l e clockwork of p o l i t i c a l economy or by the aggregate e f f e c t s of cost-minimizing and p r o f i t maximizing  agents.  Despite a host o f analyses, there i s no coherent body of o r g a n i z a t i o n a l , economic or l o c a t i o n theory that allows us to deal s a t i s f a c t o r i l y with the r e l a t i o n s h i p among technology, organization and l o c a t i o n i n m u l t i - u n i t enterprise  (Taylor and T h r i f t (1983a)).  r e l a t i o n s h i p s continue to be voiced.  Yet concerns about these  Indeed they have been brought to a head  by the economic turmoil of the early e i g h t i e s and by the increasing pervasiveness of information technology.  These changes create new challenges  and choices f o r the way enterprise i s t o be organized.  1.4.  SYNERGISTIC APPROACHES TO THE STUDY OF TRANSFORMATION Explaining the transformation i n the r e l a t i o n s h i p among technology,  organization and l o c a t i o n o f enterprise i s handicapped by the lack of t h e o r e t i c a l models l i n k i n g these v a r i a b l e s .  I n s u f f i c i e n t a t t e n t i o n has been  paid to the i n t e r a c t i o n between these v a r i a b l e s .  Yet enormous i n v e s t i g a t i v e  e f f o r t s have been made i n each and i n many cases there has been some i n s i g h t gained by i n t e g r a t i n g two of the three v a r i a b l e s .  For example, o r g a n i z a t i o n a l  theory and i t s subcomponent s t r u c t u r a l contingency theory, speaks to the l i n k s between technology and organization,'but completely ignores the s p a t i a l dimension, e.g., Mintzberg (1983).  S i m i l a r l y , o f f i c e l o c a t i o n theory has  attempted t o deal with e i t h e r the r e l a t i o n s h i p between technology and l o c a t i o n , e.g., Goddard and Pye (1977) or the r e l a t i o n s h i p between patterns of monitoring and c o n t r o l and l o c a t i o n , e.g., Daniels (1979), but i t r a r e l y  - 9 integrates technology, organization and l o c a t i o n . Much of the geographic l i t e r a t u r e s t i l l demonstrates minimal understanding of organization and confines i t s e l f to s i m p l i s t i c economic or s t r u c t u r a l i s t - f u n c t i o n a l i s t r a t i o n a l i z a t i o n s of the l o c a t i o n a l behavior of the f i r m .  (The precedents i n  t h i s l i t e r a t u r e w i l l be reviewed i n Chapters 2 and 3 ) . Technology, organization and l o c a t i o n are i n t e r - r e l a t e d phenomena.  Each  of these v a r i a b l e s has undergone transformation and the r e l a t i o n s h i p among these v a r i a b l e s has changed as a r e s u l t , yet the a l t e r n a t i v e approaches that have been put forward to understand these transformations; have suffered from an undue focus on determinism and c a u s a l i t y . In t h i s t h e s i s i t i s argued that transformation i n o r g a n i z a t i o n , technology and l o c a t i o n of enterprise i s an i n t e g r a l part of wider s o c i e t a l change.  The wider s o c i e t a l transformation, the transformation i n technology  and organization and the transformation i n the l o c a t i o n of enterprise are s y n e r g i s t i c i n t h e i r r e l a t i o n s h i p . For example, the environment has become more turbulent p a r t l y because of changes i n the s t r u c t u r e and performance of e n t e r p r i s e , which i n turn have been p a r t i a l l y mitigated by the turbulence i n the environment, the increase i n s c a l e and s p a t i a l complexity and by a s h i f t i n the purpose of e n t e r p r i s e .  of organization  There i s no s i n g l e cause, no  prime mover or u n i d i r e c t i o n a l force that i s governing the r e l a t i o n s h i p s among these v a r i a b l e s .  The complexity  o f these r e l a t i o n s h i p s does not mean that we  abandon any attempt at a n a l y s i s , rather i t requires that a more s y n e r g i s t i c and i n t e r d i s c i p l i n a r y approach be adopted i n the i n v e s t i g a t i o n of these relationships. There i s l i t t l e precedent f o r such an approach i n s o c i a l science.  We  - 10 -  have few coherent conceptual approaches for the d e s c r i p t i o n of transformation i n complex systems, l e t alone the t h e o r e t i c a l basis to e x p l a i n such phenomena.  Marxist l i n e s of a n a l y s i s can claim to have some elements o f  holism but they are by no means devoid of determinism and f i x e d d i r e c t i o n a l i t y (see Duncan and Ley (1982)).  Systems t h e o r e t i c approaches have made some  c o n t r i b u t i o n to the understanding of the s t r u c t u r e and processes operating i n complex systems, but i n t h e i r more mechanistic form they have become i n f l e x i b l e attempts at c a l i b r a t i n g the behavior of such complex systems (Crosby (1983)).  Cybernetics has a l s o provided a u s e f u l base for the  i n v e s t i g a t i o n of complex, s y n e r g i s t i c phenomena p a r t i c u l a r l y i n i t s i n c l u s i o n of the concept of steersmanship as a c e n t r a l v a r i a b l e i n the transformation of complex systems (Corning (1983)) Peter Coming's "Synergism Hypothesis" i s an impressive attempt to develop a non-deterministic, general theory of s o c i o - c u l t u r a l e v o l u t i o n , Corning (1983).  A theory that i d e n t i f i e s a number of s y n e r g i s t i c phenomena  pertinent to the process of transformation i n complex s o c i a l systems.  Corning  and other cybernetic views of e n t e r p r i s e , e.g., Beer (1966) can be applied to the process of s t r u c t u r a l transformation. When e n t e r p r i s e i s transformed, there i s a purposeful change i n behaviour (and s o c i a l and t e c h n o l o g i c a l organization) generated p a r t l y by innate s u r v i v a l i n s t i n c t s (what Corning terms teleonomic s e l e c t i o n ) and p a r t l y by the i n t e r a c t i o n of perceived environmental conditions and the expected u t i l i t y of transformation.  Thus there are elements of c a u s a l i t y and choice  operating i n the same process.  There i s a l s o an i n t e r a c t i o n between  sub-processes operating i n t e r n a l l y i n the organization and e x t e r n a l l y i n the environment.  - 11 -  In considering transformation i n complex systems then, a number o f v a r i a b l e s and dimensions must be integrated.  None of them can be  considered  as the necessary and s u f f i c i e n t c o n d i t i o n for transformation, although each of them may play a r o l e as a necessary c o n d i t i o n i n c e r t a i n circumstances.  These  factors are not neatly compartmentalized i n t o dependent and independent v a r i a b l e s rather they i n t e r a c t i n a non-linear, s y n e r g i s t i c fashion.  Such  complexity makes i t d i f f i c u l t to o p e r a t i o n a l i z e conventional forms of econometric or s t a t i s t i c a l a n a l y s i s . explanation i s sought.  In t h i s t h e s i s an a l t e r n a t i v e form of  A model of m u l t i - u n i t e n t e r p r i s e w i l l be  that describes the nature of the hierarchy i n complex e n t e r p r i s e .  presented This  "prototype" w i l l then be used as a baseline for evaluating s t r u c t u r a l transformation.  1.5  A MODEL OF MULTI-UNIT ENTERPRISE Figure 1.1 shows diagrammatically a model of the m u l t i - u n i t enterprise  as a system of d e c i s i o n - l e v e l s and information flows.  This model i s derived  from the work of Beer (1966) and Paterson (1981) i n management cybernetics and decision h i e r a r c h i e s ; from the open systems views i n organization theory Scott (1981), Mintzberg  (see  (1979), (1983)); from the new geography of e n t e r p r i s e  (see Taylor and T h r i f t (1983 a,b)) and from the emerging views of s o c i a l systems as non-linear d e c i s i o n systems, e.g., Crosby (1983), Prigogine (1977) or evolving cybernetic systems, Corning  (1983).  The roots of t h i s model w i l l be described i n more d e t a i l i n Chapter 2, but i t i s u s e f u l here to b r i e f l y describe the elements.  I t i s suggested that  enterprise operates w i t h i n the context of a multi-faceted environment.  The  - 12 -  FIGURE 1.1  A MODEL OF MULTI-UNIT ENTERPRISE AS A DECISION AND INFORMATION HIERARCHY  EXTERNAL ENVIRONMENT  STRATEGIC/POLICY LEVEL  1  STRATEGIC DECISION  I  ft  INTELLIGENCE FUNCTIONS  PROGRAMMING STRATEGIC/TACTICAL INTERFACE V GUIDANCE SYSTEMS ( MONITORING AND CONTROL 1 OPERATIONS LEVEL  \  /  FIRST-LINE MANAGEMENT  I \  j^T  INTERNAL ENVIRONMENT  OPERATIONS  DECISION FLOWS  t:  T FORMAL INFORMATION FLOWS  ^ INFORMAL INFORMATION I FLOWS  I  - 13 -  enterprise takes s t r a t e g i c decisions based on self-generated goals and on the perception of the environment held by senior decision-makers as i t i s conditioned by the scanning and probing a c t i v i t i e s of the organization's i n t e l l i g e n c e functions, Huber (1984).  These decisions are enacted through the  programming choices that are made as to the l e v e l of a c t i v i t y and funding required by the organization's sub-units to meet the goals of the e n t e r p r i s e . The guidance systems i n m u l t i - u n i t e n t e r p r i s e are defined as the systems involved i n " s t e e r i n g " the a c t i v i t i e s of the sub-units of the e n t e r p r i s e . These may or may not be d i r e c t l y r e l a t e d to the sub-units i n a geographic sense or i n a d i r e c t " l i n e r e p o r t i n g " sense.  The a c t i v i t i e s at each l e v e l of  enterprise are monitored and c o n t r o l l e d to conform to the parameters developed at the s t r a t e g i c and guidance l e v e l s .  The operations l e v e l may or may not  require d i r e c t f i r s t l i n e management depending on the nature of the enterprise under study. In a d d i t i o n to t h i s d e c i s i o n hierarchy there i s a range of information flows both formal and informal that may e x i s t i n d i f f e r e n t forms o f enterprise.  For example, the much vaunted "management by wandering around" i n  which s t r a t e g i c managers i n t e r a c t on a casual basis with operations people i s an informal information flow.  The d i r e c t transmission of d a i l y performance  reports from sub-units to the s t r a t e g i c d e c i s i o n - l e v e l (CEO or Board) i s a formal information flow. Exchange of information among a l l the l e v e l s can occur i n e n t e r p r i s e . P a r t i c u l a r l y , when the s i z e of the enterprise allows the number of linkages t o be manageable and the complexity o f tasks involved requires a high degree o f formal and informal coordination.  However i t i s more common f o r a r e s t r i c t e d  - 14 -  subset of information flows to occur i n e n t e r p r i s e , because of the bounded information handling c a p a b i l i t y of the i n d i v i d u a l s (March and Simon (1958), Williamson  (1975)).  Even where perfect and complete information e x i s t s , each  l e v e l w i l l view that information i n a s e l e c t i v e way. This basic model can be used as a prototype f o r examining the r e l a t i o n s h i p between each l e v e l of the d e c i s i o n hierarchy.  Figure 1.2 shows  that at each l e v e l , decisions are conditioned by the range and complexity  of  the environmental f i e l d (shown by the surfaces i n the diagram) that the decision-maker faces and by the executive c o n s t r a i n t s imposed from the l e v e l above.  (The exact model of decisions cascading down a d e c i s i o n hierarchy i s  drawn from Hardwick's (1982) extension of Paterson's Decision Bands, Paterson (1981) described i n more d e t a i l i n Chapter 2). Each l e v e l has some degree of i n t e l l i g e n c e functions that are involved with probing and scanning  the  external environment and a s s i m i l a t i n g these f i n d i n g s w i t h i n the executive constraints.  S i m i l a r l y each l e v e l i n t e r a c t s with the i n t e r n a l environment  through monitoring and c o n t r o l functions. The diagram shows that the environmental surfaces and the o r g a n i z a t i o n a l options become progressively more prescribed as the hierarchy i s descended. This, however, i s not a u n i v e r s a l t r u t h , rather i t depends on the nature of the e n t e r p r i s e under study.  Indeed i n many cases the environment being  by the guidance l e v e l s or even the operations l e v e l s may  faced  be more complex than  the l e v e l s above. This prototype can be used as a baseline case that can be examined i n order to evaluate the transformation i n the s t r u c t u r e of e n t e r p r i s e . hypothesized  It is  that the s t r u c t u r e of the m u l t i - u n i t e n t e r p r i s e i n s p a t i a l ,  .1.2  MULTI-UNIT ENTERPRISE AND THE INTERACTION WITH ITS ENVIRONMENT.  INTERNAL ENVIRONMENT  - 16 -  f u n c t i o n a l and o r g a n i z a t i o n a l terms i s a f f e c t e d by the r e l a t i o n s h i p among: a)  External Environment - Although by no means an independent v a r i a b l e , the external environment i n which enterprise operates i s one of the c r i t i c a l elements i n the s y n e r g i s t i c web of f a c t o r s shaping the s t r u c t u r e and performance of organizations.  The r e l a t i o n s h i p between environment,  s t r u c t u r e and performance i s neither c l e a r Nor c o n s i s t e n t .  Just as  s i m i l a r family and educational environments can "produce" junkies and Nobel p r i z e winners, so s i m i l a r o r g a n i z a t i o n a l environments can "produce" winners and l o s e r s . b)  S t r a t e g i c Decision - The r o l e of goal s e t t i n g , of purposeful action i s a c r i t i c a l v a r i a b l e recognized i n economics, organization cybernetics and p o l i t i c a l science.  theory,  Of a l l the v a r i a b l e s considered,  s t r a t e g i c d e c i s i o n f a c t o r s or "purposefulness"  seems to be the  one  necessary, but not s u f f i c i e n t , c o n d i t i o n that must e x i s t i f complex systems are to survive.  I t i s important to recognize that goals are  a r r i v e d at through a process of choice, they are not n e c e s s a r i l y imposed by some superstructure of s o c i e t y (as the marxists would have us believe) or by some overarching r a t i o n a l i t y (of economizing, profit-maximizing man  as the n e o - c l a s s i c a l economists i n f e r ) .  The  process through which goals are set i s a p o l i t i c a l one (e.g., Corning (1982)).  A v a r i e t y of informational inputs and performance c r i t e r i a  are  gathered, analyzed and synthesized by the i n t e l l i g e n c e function i n enterprise.  These inputs are incorporated i n s t r a t e g i c goal s e t t i n g and  i n the c r i t i c a l decisions made by the e n t e r p r i s e .  The c r i t e r i a used by  the s t r a t e g i c d e c i s i o n and i n t e l l i g e n c e functions involve what could be  - 17 termed the f i v e E's: e f f i c i e n c y , e f f e c t i v e n e s s , equity, employment and enjoyment (or w e l l being).  The r e s o l u t i o n of these c r i t e r i a and  i n t e r e s t s i s achieved through a p o l i t i c a l process i n which the power of i n t e r e s t groups plays a c r i t i c a l r o l e , c)  I n t e r n a l Organizational Environment - The operating aspects of an organization, i . e . , the functions, technology, a c t i v i t i e s , c u l t u r e and human f a c t o r s of o r g a n i z a t i o n a l behaviour, a l l contribute t o the transformation performance.  i n the s t r u c t u r e of enterprise and a f f e c t i t s Organization  theory, o r g a n i z a t i o n a l behaviour, cybernetics  and systems t h e o r e t i c approaches to organization have i n c e r t a i n cases defined the terms organization and o r g a n i z a t i o n a l s t r u c t u r e to include environment, goals and technology i n t h e i r d e f i n i t i o n s . For purposes of a n a l y s i s here, c e r t a i n a t t r i b u t e s of the i n t e r n a l o r g a n i z a t i o n a l environment have been separated out and the term o r g a n i z a t i o n a l s t r u c t u r e i s used t o describe the r e s i d u a l s e t of f a c t o r s and r e l a t e d measures. Table 1.1 shows the dimensions of the i n t e r n a l and external environment.  The i n t e r a c t i o n among these v a r i a b l e s i s s y n e r g i s t i c and i t i s  suggested that there are no causal chains that can be r e a d i l y drawn out.  It  i s also argued that the i n t e r a c t i o n between these environmental v a r i a b l e s i s mediated by s t r a t e g i c choice and by the c r i t i c a l decisions that are made at each l e v e l of the d e c i s i o n hierarchy. In attempting t o explore the transformation  i n the r e l a t i o n s h i p among  technology, organization and l o c a t i o n these three v a r i a b l e s are simultaneously,  f a c t o r s that influence s t r u c t u r a l transformation  and outcomes  - 18 -  TABLE 1.1 - THE STRUCTURE OF THE ENVIRONMENT OF ENTERPRISE  DIMENSION  EXTERNAL ENVIRONMENT  INTERNAL ENVIRONMENT  POLITICAL/ ECONOMIC  Degree of Turbulence A v a i l a b i l i t y of Resources Degree of Competition Degree of Regulation S t r u c t u r a l Interests  Size A v a i l a b i l i t y of Resources R e l a t i v e strength of power e l i t e s  SOCIO-CULTURAL  Demographic Factors S o c i a l Values C u l t u r a l Context  Organizational S t y l e Corporate Culture  TECHNOLOGICAL  Candidate technologies Change Rate R&D e f f o r t s  Technologies that are Deployed - Operations Technologies - Co-ordinative technologies  FUNCTIONAL  Candidate A c t i v i t i e s Market type  Task environment Size Product d i v e r s i t y  GEOGRAPHIC  Site Situation Markets  B u i l t Environment c o n s t r a i n t s P h y s i c a l space requirements  - 19 -  of that s t r u c t u r a l transformation.  For example, i f the term organization i s  thought of as the p r e v a i l i n g pattern of d i f f e r e n t i a t i o n and communication within the e n t e r p r i s e , then i t i s both a way of describing the functioning of the enterprise (a dependent v a r i a b l e ) and a set of circumstances c o n d i t i o n i n g change (an independent v a r i a b l e ) . S i m i l a r l y , i t seems c l e a r that technology can make a c o n t r i b u t i o n to the process o f transformation.  However, as Nathan Rosenburg (1982) has pointed  out, i t i s important to d i s t i n g u i s h between the mere existence of a technology i n the wider environment (invention) and the extent of i t s d i f f u s i o n , adoption and use i n the enterprise under study. enable system transformation.  I t i s technology i n operation that can  This requires a s y n e r g i s t i c combination of  appropriate conditions i n environment, organization and s t r a t e g i c d e c i s i o n to be present.  Furthermore, i t could be argued that the r e a l l y powerful  contributions that t e c h n o l o g i c a l change has made to the transformation of enterprise and s o c i e t y have been where c l u s t e r s of technology are involved. F i n a l l y , with regard to l o c a t i o n , i t seems c l e a r that the l i m i t s of the natural environment have lessened t h e i r c o n s t r a i n t s on the behaviour o f multi-unit enterprise.  Nevertheless, demographic and geographic f a c t o r s s t i l l  play an important r o l e where s e r v i c e s have to be delivered to people, where goods have t o be d i s t r i b u t e d and where the s p a t i a l c l u s t e r i n g of a c t i v i t i e s i s a necessity because of the need for face to face contact.  To a large degree  however, the s p a t i a l s t r u c t u r e of enterprise can be viewed as an outcome of the i n t e r a c t i o n of the other f a c t o r s . Technology, organization and l o c a t i o n operate as both independent and  - 20 -  dependent v a r i a b l e s i n the process of s t r u c t u r a l change.- Transformation i n the r e l a t i o n s h i p among these v a r i a b l e s can be viewed best by developing an understanding of the wider process that r e l a t e s e x t e r n a l environment, s t r a t e g i c d e c i s i o n and i n t e r n a l environment of e n t e r p r i s e . the hypothesized  r e l a t i o n s h i p among these elements.  Figure 1.3 shows  The o r g a n i z a t i o n a l  s t r u c t u r e , technology and l o c a t i o n o f enterprise are i n t e r a c t i n g sets of phenomena operating w i t h i n the wider i n t e r a c t i o n among the external environment, the i n t e r n a l environment and s t r a t e g i c choice.  1.6  RESEARCH STATEMENT In the beginning o f t h i s chapter some concerns were r a i s e d about the  structure and performance of m u l t i - u n i t enterprise and about the academic approaches to analyzing these problems.  In the course of t h i s study i t w i l l  be argued that the transformation that has occurred i n m u l t i - u n i t enterprise i s the r e s u l t of a complex, s y n e r g i s t i c process of change. u n i d i r e c t i o n a l force that i s shaping t h i s transformation.  There i s no Rather, there i s an  i n t e r a c t i o n among the broad v a r i a b l e s of environment ( i n t e r n a l and external) and s t r a t e g i c choice, that contributes to the changing r e l a t i o n s h i p of technology, organization and l o c a t i o n i n the m u l t i - u n i t e n t e r p r i s e . The l i t e r a t u r e i n t h i s area i s incomplete.  E i t h e r there has been an  overwhelming emphasis placed on s i m p l i s t i c causal modelling, or the a n a l y s i s f a i l s t o include a l l three components.  Technology has been s i n g l e d out by  many observers as the c r i t i c a l contextual v a r i a b l e of the post-war period. Consequently a good deal of geographic, economic and o r g a n i z a t i o n a l l i t e r a t u r e has placed an undue focus on t e c h n o l o g i c a l change as the necessary and  -  FIGURE  1.3  21  TECHNOLOGY, ORGANIZATION  -  AND L O C A T I O N I N  ENVIRONMENTAL C O N T E X T  INTERNAL  ENVIRONMENT  ITS  STRATEGIC  AND  - 22 -  s u f f i c i e n t condition for s t r u c t u r a l transformation.  I t i s true that  contemporary technology can enable a wide v a r i e t y of o r g a n i z a t i o n a l and l o c a t i o n a l options, but these options are not d i r e c t l y determined by technological c a p a b i l i t y .  I t i s hypothesized here that emerging  technologies  can enable both c e n t r a l i z a t i o n and d e c e n t r a l i z a t i o n w i t h i n the m u l t i - u n i t enterprise i n s p a t i a l and o r g a n i z a t i o n a l terms.  Indeed, i t i s further argued  that processes of c e n t r a l i z a t i o n and d e c e n t r a l i z a t i o n can occur simultaneously. The r o l e of environmental change, s t r a t e g i c d e c i s i o n and the p o l i t i c a l processes underlying the i n t e r a c t i o n of these v a r i a b l e s are suggested here as important contributory f a c t o r s that condition the r e l a t i o n s h i p among technology, organization and l o c a t i o n .  Although both contextual  f a c t o r s and  operational factors i n t e r a c t t o produce s t r u c t u r a l transformation, the contextual and s t r a t e g i c choice f a c t o r s are hypothesized as being the v a r i a b l e s that condition the d i r e c t i o n of s t r u c t u r a l change towards e i t h e r c e n t r a l i z a t i o n or d e c e n t r a l i z a t i o n .  Technological  and o r g a n i z a t i o n a l f a c t o r s  on the other hand, are hypothesized t o condition the magnitude of these effects. In the chapters that follow an attempt w i l l be made to describe and evaluate the changing i n t e r a c t i o n of these v a r i a b l e s over the l a s t 30 years and to Q u a l i t a t i v e l y and Q u a n t i t a t i v e l y assess the r e l a t i v e c o n t r i b u t i o n these factors have made.  C l e a r l y , i t would be overly ambitious to attempt a  comprehensive explanation  of transformation  l o c a t i o n for a l l types of e n t e r p r i s e .  i n technology, organization and  Therefore the evidence and a n a l y s i s  necessary to t e s t these hypotheses must be drawn from a s p e c i f i c case study. But i t would also be remiss t o evaluate transformation  i n one type of  - 23 -  enterprise without p l a c i n g such an a n a l y s i s i n i t s wider context. i s consequently  This study  d i v i d e d i n t o two main p a r t s .  In the f o l l o w i n g chapter the conceptual framework used i n t h i s study w i l l be developed from a c r i t i c a l review of i t s precedents.  In Chapter 3 the  l i t e r a t u r e dealing with transformation i n technology, organization and l o c a t i o n w i l l be evaluated t o t e s t broadly, the hypotheses o u t l i n e d above and to draw some general conclusions. In the second part of the study, the conceptual framework w i l l be focused on the transformation of one s p e c i f i c m u l t i - u n i t system: the c l i n i c a l laboratory system of B r i t i s h Columbia from 1954 to 1984. The c l i n i c a l laboratory system e x i s t s to provide information.  I t operates on a m u l t i - s i t e  b a s i s , i n a t e c h n o l o g i c a l l y complex and dynamic environment i n which a wide v a r i e t y of o r g a n i z a t i o n a l actors and i n t e r e s t s have been involved i n decision-making.  I t i s therefore representative of the complexity that i s  associated with many emerging p o s t - i n d u s t r i a l e n t e r p r i s e s .  Thus i n Chapters'  4,5 and 6 the general conclusions and c r i t i c i s m s of the l i t e r a t u r e w i l l be more thoroughly explored i n a case study of transformation i n the c l i n i c a l laboratory system o f B r i t i s h Columbia between 1954-1984.  In Chapter 7 the  conclusions from the case study w i l l be presented and the p o l i c i e s and research i m p l i c a t i o n s of the two l e v e l s of study w i l l be discussed.  In  Chapter 8 the conclusions that have been reached w i l l be incorporated i n the development and evaluation of a set of a l t e r n a t i v e futures for the c l i n i c a l laboratory system of B r i t i s h Columbia f o r 1995.  - 24 -  1.7  RESEARCH OBJECTIVES The s p e c i f i c research o b j e c t i v e s are:  1)  To describe the stages and c r i t i c a l l y evaluate the process o f transformation i n the r e l a t i o n s h i p among technology, o r g a n i z a t i o n and s p a t i a l s t r u c t u r e of m u l t i - u n i t e n t e r p r i s e .  2)  To assess the r e l a t i v e c o n t r i b u t i o n that environment, s t r a t e g i c d e c i s i o n , technology, organization and geography made i n shaping t h i s transformation*  3)  To focus s p e c i f i c a l l y on evaluating the apparently ambiguous r o l e that technology has played i n shaping the o r g a n i z a t i o n a l and s p a t i a l s t r u c t u r e of e n t e r p r i s e .  Thus t h i s t h e s i s i s concerned with the two challenges alluded to e a r l i e r i n t h i s study.  The f i r s t i s to develop a coherent framework f o r the  d e s c r i p t i o n of s t r u c t u r e s and s t r u c t u r a l transformation, i . e . , a typology of d i f f e r e n t types and stages.  The work of B e l l (1976), Reich (1983), T r i s t  (1980) and others can a s s i s t i n developing a typology of transformation. The second challenge i s to c r i t i c a l l y evaluate the process of transformation. Coming's work i s a u s e f u l s t a r t i n g point i n helping t o e x p l a i n the i n t e r a c t i o n of a number of v a r i a b l e s operating at a number of s c a l e s .  1.8  CHAPTER SUMMARY This chapter has introduced the t o p i c of transformation i n the  r e l a t i o n s h i p among technology, organization and l o c a t i o n of m u l t i - u n i t enterprise.  I t has been argued that the process of s t r u c t u r a l transformation  - 25 -  i s not w e l l understood and that analyses to date have suffered from an undue emphasis on determinism and s i m p l i s t i c causal modelling.  An a l t e r n a t i v e  s y n e r g i s t i c model has been proposed i n which transformation i s seen as a r e s u l t of the i n t e r a c t i o n of contextual and operational f a c t o r s .  It i s  hypothesized that technology acts as an enabling factor that can amplify the e f f e c t s of other contextual v a r i a b l e s , but technology does not d i c t a t e the choice between c e n t r a l i z e d and d e c e n t r a l i z e d systems.  I t has been proposed  that the process of s t r u c t u r a l transformation i n technology, organization and l o c a t i o n can be evaluated by a c r i t i c a l review of the l i t e r a t u r e and by the a p p l i c a t i o n of the model to a s p e c i f i c case study of the development of the c l i n i c a l laboratory system of BC from 1955-1985.  - 26 Doc. #1223F Archive 0023F CHAPTER 2 - PRECEDENTS FOR THE CONCEPTUAL FRAMEWORK  2.1  INTRODUCTION The conceptual  framework o u t l i n e d i n chapter 1 ( i n Figures 1.1, 1.2 and  1.3) i s derived from the open systems view i n organization theory, from cybernetics, from decision/theory, from the emerging geography of enterprise and from the work on s o c i o - c u l t u r a l evolution by Peter Corning. represented  diagrammatically  The approach  i n Figure 1.3 i s an attempt to redress the  inherent d e t e r m i n i s t i c bias i n many l i n e s of i n q u i r y i n t h i s area.  Before we  can j u s t i f y the s e l e c t i o n of t h i s form o f model i t i s necessary to review the evolution of research i n t o the r e l a t i o n s h i p among the v a r i a b l e s o u t l i n e d . This chapter c r i t i c a l l y reviews a wide range o f l i t e r a t u r e t o . demonstrate the precedents of the models o u t l i n e d i n Chapter 1.  The chapter  i s structured i n t o 6 sections. 2.1  Introduction  2.2  The Five Phases of Model Development i n Organization Theory  2.3  C r i t i q u e of the Deterministic and Contingency Approaches  2.A  Refinements of the Contingency Model  2.5  Transformation i n Open Systems  2.6  Chapter Summary  This chapter s t a r t s with a review of the work i n organization theory on the r e l a t i o n s h i p between o r g a n i z a t i o n a l factors and technology.  Criticisms  and refinements to the early p o s i t i o n s are made and these are then integrated w i t h i n an open systems framework.  - 27 -  This chapter reviews a wide set of l i t e r a t u r e .  In order t o increase the  coherence of the review the e a r l i e r phases of theory development are represented diagrammatically to r e f l e c t the emphasis of each p a r t i c u l a r phase of the l i t e r a t u r e . and Figure 1.3.  The two b a s i c diagram elements are drawn from Figure 1.2  These diagrams r e f l e c t the two c r i t i c a l concepts o f synergy  and hierarchy w i t h i n e n t e r p r i s e . Figure 2.1 below r e f l e c t s the notion of synergy between a number of v a r i a b l e s that was discussed i n Chapter 1.4 and was shown diagrammatically i n Figure 1.3.  Figure 2.2 r e f l e c t s the concept of  hierarchy and the i n t e r a c t i o n between l e v e l s of the e n t e r p r i s e , that was discussed i n s e c t i o n 1.5 and shown diagrammatically i n Figure 1.2.  - 28 -  2.2  THE FIVE PHASES OF DEVELOPMENT OF THE MODEL IN ORGANIZATION THEORY The research conducted i n organization theory over the l a s t three  decades i s a u s e f u l s t a r t i n g point i n i n v e s t i g a t i n g the r e l a t i o n s h i p among technology, o r g a n i z a t i o n and l o c a t i o n . through f i v e i d e n t i f i a b l e phases.  Inquiry i n t h i s area has developed  (See Figure 2.3).  The f i r s t phase i s that of the t e c h n o l o g i c a l imperative where technology i s theorized to be the primary v a r i a b l e that determines the s t r u c t u r e o f organization.  The second phase i d e n t i f i e s o r g a n i z a t i o n a l s i z e as a  determining f a c t o r i n the s t r u c t u r e of organizations ( e i t h e r as a s i n g l e determining f a c t o r or j o i n t l y with technology).  The t h i r d phase i d e n t i f i e s  environmental or contextual f a c t o r s as primary determinate v a r i a b l e s .  These  f i r s t three phases have been l a b e l l e d by Jackson and Morgan (1978) as the three imperatives.  The fourth phase introduces the idea of s t r a t e g i c choice  as a contributory f a c t o r i n determining o r g a n i z a t i o n a l s t r u c t u r e .  The f i f t h  phase i s the contingency model approach that recognizes the c o n t r i b u t i o n of a number o f d i f f e r e n t f a c t o r s . Each o f these phases w i l l be examined i n more d e t a i l . 2.2.1  Phase 1 - The Technological Imperative Most analysts o f organizations agree that technology i s an important  variable.  But there has been a considerable debate as to whether technology  i s the primary determinate or imperative that c o n t r o l s organization s t r u c t u r e and performance.  Before an a l t e r n a t i v e framework can be j u s t i f i e d , i t i s  important to review b r i e f l y the debate on the t e c h n o l o g i c a l imperative i n o r g a n i z a t i o n a l theory.  Gerwin (1979) has argued:  Phase 4 - Technology and Strategic Choice  Phase 5 - Technology and the Contingency Model  - 30 -  "the mid 1960's was probably the heyday of the t e c h n o l o g i c a l imperative i n organization theory. The works of G a l b r a i t h (1967), and M i l l e r and Rice (1967), Perrow (1967), Woodward (1965) appeared to have demonstrated the c r i t i c a l impact of technology upon organization. By the l a t e 1960's the b a t t l e with the a n t i - t e c h n o l o g i s t s have been joined and since then the t i d e seems to have turned i n t h e i r (the a n t i - t e c h n o l o g i s t s ) favour". Gerwin d i f f e r e n t i a t e s between o r g a n i z a t i o n l e v e l and job l e v e l research.  Organizational l e v e l research s t a r t s with the o r g a n i z a t i o n as the  u n i t of a n a l y s i s and considers the major product or s e r v i c e o f f e r e d .  This  leads to a focus on the dominant conversion technology ( i . e . , the p r i n c i p a l methodology f o r producing output) as the c h a r a c t e r i s t i c technology of the organization.  This technology i s then normally measured on a s c a l e such as  workflow i n t e g r a t i o n . Workflow i n t e g r a t i o n i s a composite measure of technology, developed by the Aston Group that includes such measures as the extent to which the workflow was automated, interdependent, measurable, and adaptable to other purposes.  This s c a l e , l i k e so many others i n t h i s school, i s r e a l l y focused  on the operations technology (which i s defined as the eauipping and sequencing of a c t i v i t i e s i n the workflow).  I t ignores other aspects of the technology  such as the materials used or the knowledge required (or t e c h n i c a l complexity) of the processes.  This type of o r g a n i z a t i o n a l l e v e l approach i s exemplified  i n the work of Blau and Schoenherr (1971), C h i l d and Mansfield (1972), Hickson et a l (1969), Pugh et a l (1969) and Woodward (1965). Job l e v e l a n a l y s i s on the other hand s t a r t s with the tasks performed by i n d i v i d u a l employees, which leads i t to consider the methods by which these tasks are accomplished.  Gerwin goes on to suggest that the weak explanatory  power of technological determinism at the o r g a n i z a t i o n a l l e v e l can be  - 31 -  a t t r i b u t e d to methodological i n c o n s i s t e n c i e s between studies and i n p a r t i c u l a r to a "lack o f a common conceptual d e f i n i t i o n of technology".  His a n a l y s i s of  studies at the job l e v e l , where there has been greater methodological and d e f i n i t i o n a l consistency, leads him to suggest that t e c h n o l o g i c a l determininism may s t i l l have some v a l i d i t y . Despite Gerwin's plea f o r a r e a p p r a i s a l of the t e c h n o l o g i c a l  imperative,  i t i s c l e a r that the mainstream o f the t e c h n o l o g i c a l imperative  literature  i . e . , the organization l e v e l s t u d i e s , has received considerable  criticism,  which has l e d to a search for f u r t h e r explanatory  variables.  The technological imperative simply stated that technology d i c t a t e s structure.  This view was moderated somewhat by the Aston group's findings  which d i d not r e p l i c a t e e a r l i e r r e s u l t s from the t e c h n o l o g i c a l school.  imperative  They concluded that,  "variables o f operations technology w i l l be r e l a t e d only to those s t r u c t u r a l v a r i a b l e s that are centred on the workflow. The smaller the organization, the wider the s t r u c t u r a l e f f e c t s of technology; the l a r g e r the organization, the more such e f f e c t s are confined to p a r t i c u l a r v a r i a b l e s and s i z e and dependence and s i m i l a r f a c t o r s make the greater o v e r a l l impact." Jackson and Morgan, 1978 p.182. (For more d e t a i l e d reviews o f the t e c h n o l o g i c a l imperative see Reimann and I n z e r e l l i (1981) and Scott  2.2.2  (1981)).  Phase 2 - T h e Size Imperative This leads i n t o the second phase studies where s i z e o f the organization  i s thought to determine s t r u c t u r e .  Mintzberg (1983) summarizes much of the  conventional l i t e r a t u r e on the s t r u c t u r a l e f f e c t s of o r g a n i z a t i o n a l s i z e : "The l a r g e r the organization, the more elaborate i t s s t r u c t u r e - that i s , the more s p e c i a l i z e d i t s tasks, the more d i f f e r e n t i a t e d i t s sub-units and the more developed i t s administrative component" Mintzberg (1983:p 124)  - 32 The f i r s t element of t h i s hypothesized  relationship, (specialization i s  r e l a t e d to s i z e ) was a p r i n c i p a l f i n d i n g of the Aston Group studies (Pugh, Hickson, Hinings (1969)).  Second, Blau (1970) argued that increased  s t r u c t u r a l d i f f e r e n t i a t i o n ( i . e . , increased number of l e v e l s i n the organization ( v e r t i c a l ) and increased d i v i s i o n s or departments ( h o r i z o n t a l ) ) was a f f e c t e d by s i z e .  Blau suggested however that d i f f e r e n t i a t i o n increases  more slowly as s i z e increases.  The t h i r d aspect of Mintzberg's  hypothesis  that s i z e leads to a more developed a d m i n i s t r a t i v e component, i s also derived from Blau's work.  Paraphrasing  both Mintzberg  (1983) and P f e f f e r (1983),  there are two causal arguments behind t h i s f i n d i n g .  F i r s t , with increased  s p e c i a l i z a t i o n ( d i v i s i o n of labour), there i s an increasing need for coordination between o r g a n i z a t i o n a l sub-units - hence more supervisory coordinating s t a f f .  and  The second argument suggests that with increasing numbers  of people to coordinate, d i r e c t supervision becomes problematic  and impersonal  methods of c o n t r o l , such as standardization through r u l e s and procedures have to be used.  Creation and maintenance of these r u l e s requires a l a r g e r  administrative component or techno-structure  as Mintzberg  terms i t .  This l a t t e r view i s accepted by Corning (1982), but i t can challenged.  be  I t seems c l e a r that t h i s s h i f t has occurred i n many enterprises  as they grow but whether i t i s necessary f o r the e f f e c t i v e operation of organizations or whether i t r e f l e c t s a broad s o c i e t a l desire to p a r t i c i p a t e i n administrative work i s not c l e a r .  Bertrand R u s s e l l f o r e t o l d of these changes  i n 1935 when he s a i d : "Work i s of two kinds,the f i r s t kind i s involved i n a l t e r i n g matter at or near the earth's surface, and the second i s involved i n t e l l i n g people to do so. The f i r s t i s unpleasant and poorly paid the second i s  - 33 pleasant and highly paid. The second i s capable of i n d e f i n i t e extension, there are not only those who give orders but those who give advice as to what orders should be given" The next s i z e hypothesis put forward by Mintzberg (1983:125) i s that the l a r g e r the organization the l a r g e r the average s i z e of i t s u n i t s .  Finally,  Mintzberg suggest that the l a r g e r the organization, the more formalized i t s behaviour.  The argument being that i n large organizations the s t a n d a r d i z a t i o n  of a c t i v i t i e s and the f o r m a l i z a t i o n of r o l e s , allows the organization to d e c e n t r a l i z e decision-making by p r e s c r i b i n g choices very c l o s e l y . In terms of any i n t e r a c t i o n between s i z e and technology, studies by C h i l d and Mansfield concluded that " s i z e has a much c l o s e r r e l a t i o n s h i p to the aspects of s t r u c t u r e (that were) measured, than does technology" (Jackson and Morgan (1978) p.184).  S i m i l a r l y Blau et a l (1976) i n reviewing other  size-technology studies as w e l l as summarizing t h e i r own study of New Jersey f a c t o r i e s stated that "organizational s i z e rather than production technology appears to exert the more s i g n i f i c a n t i n f l u e n c e on the d i v i s i o n of labour and the organization of work." (The size-technology debate i s s t i l l continuing and a more recent Japanese study (Marsh and Mannari (1981)) suggests there i s a r e v i v a l of support f o r the t e c h n o l o g i c a l imperative school of Woodward).  2.2.3  Phase 3 - Technology and the Environmental Imperative In the the t h i r d phase of theory development, the notion of  environmental factors or contextual c o n s t r a i n t s i s added to the s i z e and technology imperatives.  I t i s best i l l u s t r a t e d i n the model developed by  C h i l d (1973) shown i n Figure 2.4 and described below by Jackson and Morgan (p 185):  - 34 -  "In Child's model, increased s i z e , workflow i n t e g r a t i o n and contact with outside groups leads to increased complexity i n organizations. On the other hand increases i n the number of operating s i t e s ( i . e . , geographical or s p a t i a l d e c e n t r a l i z a t i o n ) tends to lower complexity. As complexity increases i t leads to increases i n f o r m a l i z a t i o n . Size also leads to pressure on top executives to d e c e n t r a l i z e a u t h o r i t y . D e c e n t r a l i z a t i o n and f o r m a l i z a t i o n are associated with each other i n a complementary way, r e i n f o r c i n g each other. Increases i n f o r m a l i z a t i o n are also encouraged by increases i n the s i z e of the owning group. As he himself i n d i c a t e s , C h i l d ' s model must be treated as hypothetical but i t i s one of the the f i r s t to show how s e v e r a l v a r i a b l e s might a f f e c t organizational structure." Other environmental determining  f a c t o r s have been l i n k e d to technology  by analysts such as Negandhi and Reimann (1979), who i d e n t i f i e d that the nature of an organization's concern f o r i t s consumers, employees, stockholders and government, had an impact on i t s o r g a n i z a t i o n a l s t r u c t u r e . V i r t u a l l y a l l of the imperative type studies mentioned to date focus on the operations technology of organizations.  However a l t e r n a t i v e views of the  r o l e and meaning of technology have been suggested.  For example, Thompson  (1967) argued that since organizations are r a t i o n a l e n t i t i e s operating i n an uncertain environment, they seek to buffer or protect t h e i r . " t e c h n i c a l core" from t h i s u n c e r t a i n i t y .  The t e c h n i c a l core i s defined as those parts and  processes an organization uses to transform the materials i t a l t e r s as i t s primary function. i)  Thompson (1967) i d e n t i f i e s three types of technology:  mediating (e.g., used by a bank as i t mediates between i t s customers and the s e r v i c e s i t provides)  ii)  i n t e n s i v e (e.g., used by a h o s p i t a l as i t performs a l l of the necessary functions f o r the care of i t s p a t i e n t s ) and  iii)  long-linked (e.g., used by a factory as various operations l i n k e d i n a sequence).  are  - 35 -  FIGURE 2.A JOHN CHILD'S MODEL - THE ENVIRONMENTAL IMPERATIVE  CHILD'S M O D E L OF RELATIONSHIPS BETWEEN CONTEXTUAL VARIABLES A N D ORGANIZATIONAL STRUCTURE. Source: John Child, "Predicting and Understanding Organization Structure," Administrative Science Quarterly 18 (June 1973):183. Context %  Complexity A  Bureaucratic Control .  K  Decentralization X  Size of organization-  Specialization of roles  Integration and automation + of technology  Specialization of functions  Number of operating sites  Level of specialist qualifications  Formalization: Standardization of procedures Documentation  Environmental Context Degree of contact across organizational boundaries: with other organizations, i.e., activities contracted out with owning group  Size of owning group  .  - 36 In Thompson's model i t i s suggested that both environment and technology are important determinants of s t r u c t u r e , but t h e i r impacts are d i f f e r e n t .  The  primary impact of technology i s upon e f f o r t s to c o n t r o l and coordinate the buffered " t e c h n i c a l core".  The environment has i t s primary impact on the  organization's s t r u c t u r e , i n those aspects of s t r u c t u r e that are created to respond to uncertainty.  For example i n order to respond to uncertainty, u n i t s  are created to monitor and survey what i s happening i n the environment, plan responses to i t , and develop a s t r u c t u r e that i s appropriate f o r the degree of uncertainty present i n the environment.  (The d i s t i n c t i o n Thomson makes  between the s t r a t e g i c l e v e l and the t e c h n i c a l core may e x p l a i n why  Gerwin  asserts that o r g a n i z a t i o n a l l e v e l research does not support determinism and job l e v e l research apparently does). This type of view, represents a departure from pure imperative type models and leads to the fourth phase where technology, s i z e and environmental factors are integrated w i t h i n a framework of s t r a t e g i c choice.  2.2.A  Phase A - Technology and S t r a t e g i c Choice C l a s s i c a l management t h e o r i s t s of the s c i e n t i f i c management school  recognized the c r i t i c a l importance of senior management i n determining organizational structure.  This view was l a r g e l y neglected u n t i l Chandler's  study i n 1962 of top US f i r m s , that concluded that an organization's s t r u c t u r a l c o n f i g u r a t i o n i s influenced by p r i o r s t r a t e g i c decisions of the top executive team, i . e . , s t r u c t u r e follows strategy. John C h i l d (1972) develops t h i s idea further to suggest a concept of s t r a t e g i c choice, i . e . , top executives have "freedom of maneuver" (or range of  FIGURE 2.5  JOHN CHILD'S MODEL EXTENDED TO INCORPORATE STRATEGIC CHOICE  Environmental Characteristics  Strategic Choice  Organizational Factors -  Size Technology Structure Human Resources  Organizational Effectiveness  J  - 38 d i s c r e t i o n ) with respect to o r g a n i z a t i o n a l f a c t o r s such as s c a l e o f operations, technology, s t r u c t u r e and human resources.  This range of  d i s c r e t i o n i s thought i n turn to be defined p r i m a r i l y by conditions present i n the firm's environment, as shown i n Figure  2.5.  Child's model i s somewhat d i f f i c u l t to o p e r a t i o n a l i z e as an e m p i r i c a l tool.  Anderson and Paine (1975) hypothesized that the response patterns of  p o l i c y makers i s influenced by t h e i r perceptions of uncertainty i n the environment and t h e i r perceived need f o r change. only when environmental  In r e a l i t y they found that  conditions are perceived as problematic do they  encourage s t r u c t u r a l responses by the executive. I t could be argued that C h i l d ' s conception i s i t s e l f a form of imperative.  However a study by Montanari (1976) found a codeterminant r o l e  for contextual and managerial d i s c r e t i o n f a c t o r s , i . e . , f o r c e r t a i n s t r u c t u r a l dimensions, managerial d i s c r e t i o n emerged as the dominant p r e d i c t o r , i n others i t was contextual f a c t o r s and f o r others i t was technology and s i z e . findings lead Montanari (1978 and 1979) and Mintzberg  These  (1979, 1983), among  others, to the development of the f i f t h type of model: the contingency model.  2.2.5  Phase 5 - Technology and the Contingency Model In one form of t h i s model (shown diagrammatically i n Figure  2.6)  Montanari (1979) extends s t r u c t u r a l determination theory (phases 1 to 3 above) on three f r o n t s : 1)  Incorporating managerial influences i n t o the model  2)  Proposing a moderating r o l e f o r technology  3)  E x p l i c i t l y recognizing the m u l t i dimensionality of organization structure  - 39 -  IGURE 2.6 MONTANARI»S CONTINGENCY MODEL  Causal  factors  Moderating' factors  Organizational structure  'Organization*! outcomos  Standard bureaucratic Contextual factors Size Environment  I  1. Vertical span 2. Span of control ^ 3. Formalization 4. Standardization 5. Vertical differentiation 6. Horizontal differentiation 7. Centralization 8. Integration 9. Administrative ratio 10. Structuring of activities 11. Specialization  Managerial factors  Locus of managerial decisions  Strategic choice  1. Delegation of authority 2. Autonomy 3. Centralization 4. Profcssionalization 5. Integration  Perceived power position  Organization unit performance  - 40 -  Montanari integrates the contextual f a c t o r s of s i z e and environment (phases 2 and 3) with the managerial f a c t o r s (phase 4) but he extends managerial f a c t o r s to include perceived power of managers. In t h i s framework Montanari sees technology as a moderating f a c t o r rather than a d e t e r m i n i s t i c one. The dependent f a c t o r s of o r g a n i z a t i o n a l s t r u c t u r e are those r e c u r r i n g measures i n the l i t e r a t u r e (see Montanari (1979) and P f e f f e r (1982)).  Montanari's contingency theory hypothesizes that:  "the causal f a c t o r mix and the strength of r e l a t i o n s h i p s (between causal and dependent v a r i a b l e s ) depend on which dimension (of o r g a n i z a t i o n a l s t r u c t u r e ) i s being analyzed. In a d d i t i o n the moderating e f f e c t of technology i s present f o r the standard bureaucratic dimensions but not for the managerial d e c i s i o n aspects of s t r u c t u r e . Managerial d i s c r e t i o n f a c t o r s ( i . e . , s t r a t e g i c choice) are proposed as the primary p r e d i c t o r s of the locus o f the managerial r e l a t e d dimensions (e.g., delegation of - a u t h o r i t y , autonomy)." This approach does have t h o e r e t i c a l appeal and preliminary e m p i r i c a l evidence offered by Montanari (1979), suggests i t has some operational validity. S i m i l a r l y , Mintzberg (1979 and 1983) t r i e s to i n t e g r a t e the findings from the s t r u c t u r a l contingency t r a d i t i o n i n o r g a n i z a t i o n a l theory i n h i s book "Structure i n Fives".  Mintzberg's approach i s very much i n the " i f - t h e n "  t r a d i t i o n of Burn and S t a l k e r (1961), C h i l d (1972), Jay G a l b r a i t h (1973), Montanari (1979) and others.  He asserts b a s i c a l l y that o r g a n i z a t i o n a l  structure can be "designed" t o best s u i t the environment of e n t e r p r i s e , the type of tasks i t has to accomplish and the type of resources (both human and technological) that i s employs.  He uses a very i n t e r e s t i n g o r g a n i z a t i o n a l  "logo" that i d e n t i f i e s the f i v e basic components of the organization. 2.7)  (Figure  - 41 i)  S t r a t e g i c Apex - This i s the board l e v e l functions of Beer (1979) or the S t r a t e g i c Decision (F Band) of Paterson  ii)  (1981).  Middle Line - The hierarchy o f middle management that mediates between the goal s e t t i n g " s t r a t e g i c apex" and the operation of the enterprise.  iii)  The Operating Core - Where the p r i n c i p a l a c t i v i t i e s of the enterprise are c a r r i e d out - the shop f l o o r , the p a t i e n t care ward, e t c .  iv)  The Technostructure  - Where the r u l e s and operating procedures of  the e n t e r p r i s e are designed and monitored. v)  The Support Structure - Where support a c t i v i t i e s , unrelated to the primary goals of the e n t e r p r i s e , are c a r r i e d out, e.g. p a y r o l l , c a f e t e r i a functions, mailroom, e t c .  Mintzberg uses these f i v e o r g a n i z a t i o n a l components and a host of other f i v e dimensional terms, that draw h e a v i l y on the Aston parameters o u t l i n e d e a r l i e r , to describe f i v e generic o r g a n i z a t i o n a l designs (Figure 2.8): i)  The Simple Structure - I s the common form of the s m a l l , owner/manager operation where the operating core i s supervised d i r e c t l y from the s t r a t e g i c apex with l i t t l e or no technostructure, support s t r u c t u r e or middle l i n e .  This s t r u c t u r e  i s preferred for small scale enterprise operating i n simple but dynamic environments. ii)  The Machine Bureaucracy - Where the enterprise i s broken down i n t o highly s p e c i a l i z e d but r o u t i n i z e d tasks and formalized through w r i t t e n r u l e s and procedures developed by the technostructure.  -  FIGURE 2.8  e)  43  -  MINTBERG'S F I V E ORGANIZATIONAL DESIGNS  Adtiocracy  - 44 This form of s t r u c t u r e , s i m i l a r to Weber's (1947) "bureaucracy" or Burn's and Stalker's (1961) "mechanistic s t r u c t u r e " i s deemed by Mintzberg to be f u n c t i o n a l for r e l a t i v e l y simple, stable and t e c h n i c a l l y uncomplicated environments. iii)  The P r o f e s s i o n a l Bureaucracy - Where highly s p e c i a l i z e d "operators" are co-ordinated  through educational and  requirements rather than r u l e s .  skill  This type of organization i s  compatible with complex but stable environments such as those i n health and iv)  education.  The D i v i s i o n a l i z e d Form - Is the c l o s e s t Mintzberg comes to addressing the issue of m u l t i - u n i t e n t e r p r i s e .  In t h i s form the  co-ordinating mechanism i s through standardization of outputs, e.g.,  p r o f i t performance.  Mintzberg sees t h i s form as:  "not so much an integrated organization as a set of quasi-autonomous e n t i t i e s coupled together by a c e n t r a l administrative s t r u c t u r e . " (Mintzberg  (1983:p  215))  The key linkage i s between headquarters and the middle l i n e managers i n each d i v i s i o n .  There i s a greater degree of  f o r m a l i z a t i o n and standardization than i f each d i v i s i o n completely autonomous.  was  This form i s " s u i t e d " for l a r g e ,  established, d i v e r s i f i e d enterprise both p u b l i c and p r i v a t e working i n r e l a t i v e l y s t a b l e environments. v)  Adhocracy - In t h i s o r g a n i z a t i o n a l form there i s a s o p h i s t i c a t e d operating core working i n loose a s s o c i a t i o n , e.g., f i l m company or consulting f i r m .  the think tank,  The adhocracy can be an  - 45 "operating adhocracy" which solves problems on behalf of i t s c l i e n t s or an "administrative adhocracy": an organization designed to innovate but one where the operating core i s truncated e i t h e r by contracting out (e.g., developers) or through automation (e.g., c e r t a i n hi-tech companies).  There i s a b l u r r i n g of r o l e s and  r e s p o n s i b i l i t i e s between s t a f f and l i n e i n the adhocracy.  It i s  best s u i t e d as an o r g a n i z a t i o n a l form to complex and dynamic environments.  This typology w i l l be used i n Chapter 3 when we  discuss the transformation  2.3  i n the s t r u c t u r e of enterprise.  CRITICISMS OF THE DETERMINISTIC AND CONTINGENCY APPROACHES Technology, s i z e , environment and s t r a t e g i c choice have been v a r i o u s l y  regarded as d r i v i n g v a r i a b l e s i n the development of research i n t o the determinants of o r g a n i z a t i o n a l s t r u c t u r e .  There are a number of flaws i n t h i s  l i t e r a t u r e that need a t t e n t i o n i f we are to apply s u c c e s s f u l l y any of these concepts i n t h i s study.  2.3.1  Causality Organizational s t r u c t u r e and operations technology are not i n some cause  and e f f e c t r e l a t i o n s h i p t o be proved or disproved by t e c h n o l o g i c a l determinists and t h e i r opponents.  But rather these two f a c t o r s are  complementary and to some degree s u b s t i t u t a b l e as a means to an end. The s e l e c t i o n of organization and technology w i l l be constrained by both s t r a t e g i c choice and by contextual or environmental f a c t o r s ( A l d r i c h (1979), Mintzberg (1983), Montanari (1979)) such as the economic, s o c i o - p o l i t i c a l or c u l t u r a l  - 46 factors acting f o r and against the adoption of p a r t i c u l a r forms of technology and/or organization.  Mintzberg's a n a l y s i s emphasizes the notions of design  and f i t , which draws on the e c o l o g i c a l idea that p a r t i c u l a r l i f e forms are better s u i t e d to c e r t a i n environments.  Although he attempts to avoid  d e t e r m i n i s t i c r e l a t i o n s h i p s , one i s l e f t with the impression that there i s c e r t a i n l y a best f i t , i . e . , tasks and environments v i r t u a l l y " d i c t a t e " form i f the designer i s r a t i o n a l (which i s a very major assumption, as P f e f f e r (1982), Weick (1979) and others suggest). 2.3.2  Limited Environmental A n a l y s i s The second major c r i t i c i s m that can be made of many of the s t u d i e s i n  t h i s body of "structure research" i s that the models use a l i m i t e d range of environmental f a c t o r s .  (The conventional study i s i n the form of regression  a n a l y s i s using t e c h n o l o g i c a l and environmental factors as independent v a r i a b l e s and measures of o r g a n i z a t i o n a l s t r u c t u r e as dependendent variables).  L i m i t a t i o n of environmental f a c t o r s to one s i n g l e scale such as  the "Lawrence and Lorsch Environmental Uncertainty Subscale" (Lawrence and Lorsch (1967)), may be methodologically convenient but i t seems t o suppress the range of environmental factors i d e n t i f i e d by Emery and T r i s t (1965), A l d r i c h (1979), Huber (1984) and others.  2.3.3  L i m i t a t i o n s i n the Concept of Technology The t h i r d major c r i t i c i s m i s i n terms of the methods used to c l a s s i f y  and categorize technology.  "Dominant technology" i s a phrase often used i n  the l i t e r a t u r e , r e f e r r i n g to the dominant operations technology the observers could i d e n t i f y i n an o r g a n i z a t i o n (or i n the t e c h n i c a l core o f an  - 47 -  organization).  To the analyst of information technology  focus for two reasons.  F i r s t , i t i s unusual f o r information technology  the "dominant technology" of an organization. information technology  t h i s i s an unhelpful to be  I t i s much more l i k e l y that  i s used i n a secondary r o l e , i . e . , for a subset of  tasks i n the organization.  Second, i t i s u n l i k e l y that information  w i l l always be used as an operations technology  technology  i n the true sense of the term  (although i n c r e a s i n g l y many i n d u s t r i e s can be viewed as involved i n information processing as a primary f u n c t i o n , e.g., and education).  f i n a n c i a l s e r v i c e s , health  A more common use of information technology  i s as a  co-ordinative technology, i . e . , as a means of enhancing the production communication of information i n an organization.  and  This has l e d some analysts  to add computer usage as a separate contextual factor i n models of the relationships affecting organizational structure.  (See Figure 2.9  from  Jackson and Morgan (1978)).  2.3.A.  Inadequate I n t e g r a t i o n of Geographic Phenomena The f i n a l c r i t i c i s m that can be l e v e l l e d at the " s t r u c t u r a l  research" i s that i s -does not adequately r e l a t e geographical o r g a n i z a t i o n a l phenomenon.  and  However there are signs that geographers and  others are encroaching on the middle ground between o r g a n i z a t i o n a l and s p a t i a l analysis.  For example, i n terms of the debate over the impact of information  technology on the s p a t i a l and o r g a n i z a t i o n a l s t r u c t u r e of e n t e r p r i s e , there has been considerable focus on the c e n t r a l i z a t i o n / d e c e n t r a l i z a t i o n question. Three broad areas of i n q u i r y are being undertaken. F i r s t , there are those who define c e n t r a l i t y p r i m a r i l y i n p h y s i c a l space  - 48 -  FIGURE 2.9  JACKSON AND MORGAN'S MODEL OF POSITED RELATIONSHIPS WITH ORGANIZATION STRUCTURE  Managerial Factors  Complexity  Context  Bureaucratic Control A.  .  A  .  Strategic business decisions  \ -Firm goals and plans  -Organization size-  Administration decisions and plans-  — S p a t i a l dispersion-  +  Sc  Specialization: roles and functions  +  Formalization: standardization and documentation  Level of specialist qvaliftcations  -Computer usage  Decentralization  + Values and cause/effect belief systems of the dominate coalition Environmental Context ' Degree of contact across organizational boundaries  Growth phase: growth: + decline:-  —Size of owning group —Autonomy 7  - 49 -  terms and who have focused on the tele-communications - transport t r a d e - o f f ("T* as i t i s sometimes c a l l e d ) , or the convergence of time and space, e.g., De Sola (1977), Abler (1975), Alber and Falk (1981).  This i n a u i r y has focused  freauently on developing abstract mathematical models of the dynamics of s p a t i a l i n t e r a c t i o n , e.g. Harkness (1973), Isard (1979). conclusion here i s that communications technology  The general  i n p a r t i c u l a r w i l l allow man  to overcome the "tyranny of distance" and lead i n e v i t a b l y to decentralization.  The evidence that i s c i t e d ranges from the increases i n  r e l o c a t i o n of head o f f i c e s of large corporations from l a r g e c i t i e s to small c i t i e s , to the p o s s i b i l i t i e s o f telecommuting, where communications w i l l be s u b s t i t u t e d for the journey to work (Mitre Corp (1978); Abler  (1975)).  The second school examines c e n t r a l i t y i n f u n c t i o n a l , o r g a n i z a t i o n a l and s p a t i a l terms.  The conclusions from t h i s group are l e s s c l e a r cut.  Some  argue that face-to-face linkages are of paramount importance i n many a c t i v i t i e s and therefore the d e c e n t r a l i z i n g impact of technology  w i l l be  l i m i t e d to a r e s t r i c t e d subset o f these a c t i v i t i e s and functions, Gad (1979), Goddard and Pye (1977).  Others have argued that i t i s necessary to recognize  the o r g a n i z a t i o n a l context o f l o c a t i o n a l d e c i s i o n s .  These researchers have  argued that the s t r u c t u r e of d e c i s i o n making w i t h i n an organization w i l l a f f e c t l o c a t i o n a l d e c i s i o n s , i . e . , the s t r u c t u r e or organizations i s represented  i n geography, Massey (1979), Pred (1977), Goddard (1980), Edwards  (1983), Taylor and T h r i f t (1983).  Pred (1977,1979) i n p a r t i c u l a r has argued  that i n advanced economies, the s p a t i a l hierarchy of many enterprises i s conditioned by the s t r u c t u r e o f decision-making.  Theoretical developments i n  the geography of enterprise w i l l be discussed f u r t h e r i n Chapter 3.  - 50 -  The t h i r d school of i n q u i r y (which i s being conducted by a broader group i n c l u d i n g economists,' o r g a n i z a t i o n a l t h e o r i s t s and management scholars) focuses p r i m a r i l y on the f u n c t i o n a l and o r g a n i z a t i o n a l context and i s to some extent a s p a t i a l .  This group i s more concerned with the c e n t r a l i z a t i o n of  decision making and c o n t r o l regardless o f l o c a t i o n .  As such i t deals with  questions of e f f i c i e n c y , autonomy, e q u i t y , and power, e.g., Simon (1979), Beer (1966), P f e f f e r (1981).  Much of t h i s work i s from a value laden p o s i t i o n that  states that c e n t r a l i z a t i o n i s bad (E.F. Schumacher (1973)).  For analysts from  t h i s t h i r d t r a d i t i o n , the impact of technology on c e n t r a l i t y i s viewed as a function of the d e s i r a b i l i t y o f c e n t r a l i z a t i o n on the one hand and the f e a s i b i l i t y on the other.  Simon (1979) has suggested that "any change i n  technology that makes i t cheaper and e a s i e r e i t h e r to c e n t r a l i z e or to d e c e n t r a l i z e d e c i s i o n s w i l l t i p the balance i n that d i r e c t i o n . "  (These three  schools w i l l be reviewed more thoroughly i n Chapter 3 when environmental and s t r u c t u r a l transformation i s discussed. The best conclusion that can be drawn at t h i s stage with regard to technology, o r g a n i z a t i o n , l o c a t i o n and the degree of c e n t r a l i z a t i o n i s provided by Goddard (1980) d i s c u s s i n g the o f f i c e sector: "Technological development i s a permissive f a c t o r - e.g., f a c i l i t a t i n g the growth of large e n t e r p r i s e s . I t i s a necessary, though not s u f f i c i e n t , c o n d i t i o n f o r l o c a t i o n a l change. In consequence the impact of new technology i n the o f f i c e sector needs to be seen i n the broader context of the f a c t o r s i n f l u e n c i n g o r g a n i z a t i o n a l s t r u c t u r e and strategy i n a s p a t i a l s e t t i n g ... In order to avoid naive t e c h n o l o g i c a l determinism i t i s necessary to consider the functions of the o f f i c e and the f a c t o r s i n f l u e n c i n g t h e i r geographical spread." 2.A  REFINEMENTS OF THE CONTINGENCY MODEL The f i r s t three concerns o u t l i n e d above ( i . e . , concerns with c a u s a l i t y ,  environmental a n a l y s i s and the d e f i n i t i o n of technology) r e f l e c t the more  - 51 -  general c r i t i c i s m s being voiced i n organization theory.  I t i s u s e f u l here t o  review b r i e f l y the change i n focus i n o r g a n i z a t i o n a l theory and the contributions that these c r i t i c i s m s have made t o r e f i n i n g our model.  Chapter  1 described the e a r l y roots o f organization theory i n the work of Weber on bureacracy  (Weber (1947)), Taylor (1911) on s c i e n t i f i c management and Mayo and  the Human Relations School (Mayo (1949)).  Over the l a s t three decades a  number o f conceptual developments have occured drawing from both the primary t r a d i t i o n s o f organization theory, sociology and psychology, and from secondary or emerging t r a d i t i o n s , systems/cybernetics, s o c i a l - e c o l o g y , economics, p o l i t i c a l science and d e c i s i o n theory. A number o f attempts have been made r e c e n t l y to synthesize, c l a s s i f y and c r i t i a u e what i s now an enormous l i t e r a t u r e .  Four u s e f u l syntheses are  presented i n the works o f Scott (1981), Hage (1980), Mintzberg P f e f f e r (1982).  2.4.1  (1983) and  The typology o f Scott i l l u s t r a t e s three competing p o s i t i o n s .  Scott's Taxonomy o f R a t i o n a l , Natural and Open Systems i n Organization Theory Scott (1981) attempts a "coherent i n t r o d u c t i o n to the s o c i o l o g i c a l study  of o r g a n i z a t i o n . " He has suggested that organization theory f a l l s i n t o three general t h e o r e t i c a l prespectives, 1)  A Rational Systems Perspective  2)  A Natural Systems Perspective  3)  An Open Systems Perspective  From a r a t i o n a l systems perspective:  - 52 -  "an organization i s a c o l l e c t i v i t y , oriented to the p u r s u i t o f r e l a t i v e l y s p e c i f i c goals and e x h i b i t i n g a r e l a t i v e l y highly formalized social structure." Within t h i s t r a d i t i o n f a l l S c i e n t i f i c Management, Simon's work on Administrative Behaviour and Weber's work on Bureaucracy among others. From a natural systems perspective: "an organization i s a c o l l e c t i v i t y whose p a r t i c i p a n t s are l i t t l e a f f e c t e d by the formal s t r u c t u r e o f o f f i c i a l goals but who share a common i n t e r e s t i n the s u r v i v a l o f the system and who engage i n c o l l e c t i v e a c t i v i t i e s i n f o r m a l l y structured to secure t h i s end." Within t h i s t r a d i t i o n f a l l Mayo (1949) and the Human r e l a t i o n s school, McGregor o f theory X and Y fame (1962), and Parsons (1951). Scott (1981, p 175) i d e n t i f i e s the e s s e n t i a l d i f f e r e n c e s between the two schools along a number o f dimensions. 1)  " R a t i o n a l i s t " analysts were u s u a l l y p r a c t i c a l men, p r a c t i t i o n e r s of management whereas "natural systems" analysts were focused more on academic i n q u i r y .  2)  They d i f f e r i n the case study focus o f t h e i r i n q u i r i e s : r a t i o n a l systems views p r e v a i l i n i n d u s t r i a l and bureaucratic environments. Whereas open systems views p r e v a i l i n not f o r p r o f i t , s e r v i c e and p r o f e s s i o n a l organizations, such as schools and h o s p i t a l s .  3)  I t has been suggested that the r a t i o n a l i s t systems view i s more s u i t e d to the s t a b l e environment whereas the n a t u r a l system view i s s u i t e d to dynamic environments.  4)  The moral viewpoint o f the o r g a n i z a t i o n a l p a r t i c i p a n t d i f f e r s i n the r a t i o n a l viewpoint where the employee i s viewed p r i m a r i l y as one who performs tasks, from the n a t u r a l systems viewpoint i n which the employee's functioning i s considered from a h o l i s t i c  perspective.  - 53 -  5)  The p h i l o s o p h i c a l t r a d i t i o n s underlying these views are d i f f e r e n t .  The  r a t i o n a l systems model stems from an i n s t r u m e n t a l i s t , mechanistic perspective.  The n a t u r a l systems perspective stems from an  a n t i r a t i o n a l , organic philosophy  of s o c i a l systems.  More r e c e n t l y , Scott points out, we have seen the development of an approach to organizations as open systems.  From an open systems perspective:  "an organization i s a c o a l i t i o n of s h i f t i n g i n t e r e s t groups that develop goals by negotiation; the s t r u c t u r e of the c o a l i t i o n , i t s a c t i v i t i e s and i t s outcomes are strongly influenced by environmental f a c t o r s . " (Scott (1981) p: 178) Within t h i s t r a d i t i o n Scott places cybernetic models or organization, contingency theory, n a t u r a l s e l e c t i o n models of organization, and K a r l Weick's theory of organizing  (Weick (1979)).  There have, according to Scott, been attempts at i n t e g r a t i n g these three perspectives on organization.  For example, E t z i o n i ' s (1958) s t r u c t u r a l i s t  model, Lawrence and Lorsch's contingency model (1967) and Thomson's Levels model.  The ideas of Thomson (touched on e a r l i e r ) can be u s e f u l l y integrated  with Mintzberg  (1983) and with some of the perspectives on decision-making and  organization put forward by TT Paterson (1981) and with the management cybernetics of S t a f f o r d Beer (1966, 1979). Scott (1982, p:127)provides a u s e f u l synthesis of Thomson's work: "Thomson's model i n a n u t s h e l l i s that organizations s t r i v e to be r a t i o n a l although they are n a t u r a l and open systems. I t i s i n the i n t e r e s t of administrators - those who design and manage organizations that the work of the organization be c a r r i e d out as e f f e c t i v e l y and e f f i c i e n t l y as p o s s i b l e . Since t e c h n i c a l r a t i o n a l i t y presumes a closed system, Thomson argues that organizations w i l l attempt to s e a l o f f t h e i r t e c h n i c a l l e v e l p r o t e c t i n g i t from e x t e r n a l u n c e r t a i n t i e s to the extent p o s s i b l e . Thus, i t i s at the l e v e l of the core technology - the assembly l i n e i n the automobile f a c t o r y , the patient care wards and treatment rooms i n the h o s p i t a l - that we would expect the r a t i o n a l  - 54 -  system perspective to apply with most force. At the opposite extreme, the i n s t i t u t i o n a l l e v e l , i f i t i s to perform i t s functions must be open to the environment. I t i s at t h i s l e v e l where the environment must be enacted or adapted t o , that the open systems perspective i s most relevant. In the middle i s the managerial l e v e l s , which i s required to mediate between the r e l a t i v e l y open i n s t i t u t i o n a l and closed t e c h n i c a l l e v e l s . To do so e f f e c t i v e l y requires the f l e x i b i l i t y that i s associated with the l e s s formalized and more p o l i t i c i z e d a c t i v i t i e s depicted by the n a t u r a l system t h e o r i s t s . I t i s a l s o the managers whose power and status are most i n t i m a t e l y l i n k e d to the fate of the organization - who have the greatest stake i n the s u r v i v a l of the organization as a system." Thomson's work provides a more complex view of the large organization, one i n which there i s an i d e n t i f i a b l e hierarchy of behaviour that i s both motivated and constrained by the f u n c t i o n a l needs and the nature of the sub-systems of the e n t e r p r i s e .  2.4.2  T.T. T.T.  Paterson and the Decision Band Method Paterson (1982) has developed a s i m i l a r h i e r a r c h i a l notion of  enterprise that suggests that v a r i a t i o n i n behaviour, r e s p o n s i b i l i t i e s (and thus pay) can be d i s t i l l e d down to one c r i t i c a l v a r i a b l e :  the d e c i s i o n .  Paterson suggests that there are four components of a d e c i s i o n , operating as a "decision making procedure" at 6 h i e r a r c h i a l scales i n e n t e r p r i s e .  The  decision making procedure comprises a four c e l l matrix i n which a l i n e a r sequence i s followed.  c + D +  i  1)  The Information Stage (I) - gathers data and recognizes hypotheses or problems.  - 55 -  2)  The Conclusion Stage (C) - c o n s i s t s of assessing a l t e r n a t i v e s for a c t i o n and r a t i n g them on an o p t i m a l i t y scale against a p a r t i c u l a r context or frame.  3)  The Decision Stage (D) - c o n s i s t s of examining the a l t e r n a t i v e s , s e l e c t i n g one and making a committment to achieve a p a r t i c u l a r l y end or objective.  A)  The Execution Stage (E) - c o n s i s t s of choosing the correct means of achieving the ends. Paterson argues that there i s "feed forward" from the E stage t o the I  stage i n which the executive implementers communicate the f e a s a b i l i t y of alternatives. Paterson asserts that these d e c i s i o n procedures are r e l a t e d through a cascade of decisions down a hierarchy of decision-bands.  The hierarchy o f  Decision Bands i s : Band  Administrative ( P o l i c y and Planning)  F  Policy-making decisions ( g o a l - s e t t i n g for the e n t e r p r i s e )  E  Programming decisions ("strategic planning")  D  Interpretive decision ("tactical Instrumental  planning")  (Operations)  C  Process decisions ( s e l e c t i o n of process)  B  Operations decisions (on operations)  A  Element decisions (on elements)  The cascade o f decisions r e f e r s to the l i n k s between the ends s e t by one l e v e l (E Box) as an input i n t o the conclusions (C Box) of the l e v e l below.  - 56 -  F i g . 2.10. This concept o f a cascade o f decisions was developed by Hardwick (1982) i n h i s notion o f co-management i n education. At a l l scales there i s i n t e r a c t i o n with the environment by the I Box, i . e . data i s gathered and synthesized i n the d e c i s i o n procedure.  FIGURE 2.10 PATERSON AND HARDWICK'S DECISION BANDS IN A DECISION HIERARCHY  F Policy  E Program  e  D I E  Interpretive  Environment  Operations Elements  2.4.3  S t a f f o r d Beer's 5 Systems S i m i l a r l y , S t a f f o r d Beer, i n h i s p h y s i o l o g i c a l l y - d e r i v e d , management  cybernetic models, argues that there are only 5 sub-systems i n e n t e r p r i s e or i n any complex system.  The 5 sub-systems i n a Beerian model are:  System 1) -  Operations  System 2) -  Management ( d i r e c t supervision and o r g a n i z a t i o n of operations)  System 3) -  Monitoring and Control Functions  - 57 -  System 4) -  The Development Directorate (responsible f o r "corporate planning" or " s t r a t e g i c planning" a c t i v i t i e s )  System 5) -  The Board Function (responsible f o r s t e e r i n g the e n t e r p r i s e by s e t t i n g the goals)  2.4.4  Amara and L i p i n s k i :  S t r a t e g i c Planning Model  F i n a l l y , Amara and L i p i n s k i (1983: p 39) o f f e r a u s e f u l corporate planning framework that i d e n t i f i e s 6 stages i n the planning process. "A number of s p e c i f i c features of t h i s framework should be noted: 1)  The upper (analyzing) h a l f of f i g u r e 2.11 includes the f i v e p r i n c i p a l stages of planning, stages 1 to 5; the lower (implementing) h a l f includes the b a s i c a l l y o p e r a t i o n a l loops, stage 0.  2)  From l e f t to r i g h t , the upper framework r e f l e c t s the three p r i n c i p a l components of any planning framework:  the probable (environment), the  p o s s i b l e (options), and the preferable (values); o r , a l t e r n a t i v e l y , what do we know, what can we do, what do we prefer? 3)  The management function i s the centerpiece of the framework, s t r a d d l i n g the l i n e between the upper " s t r a t e g i c " and lower " t a c t i c a l " h a l f of the framework.  This p o s i t i o n i n g g r a p h i c a l l y i l l u s t r a t e s the e s s e n t i a l unity  and i n s e p e r a b i l i t y of t a c t i c a l d e c i s i o n making and s t r a t e g i c planning. 4)  The i t e r a t i v e nature of the basic planning process i s i l l u s t r a t e d by lower t a c t i c a l and upper s t r a t e g i c feedback loops, j o i n e d w i t h i n the management function.  5)  The p r i n c i p a l flow between the upper and lower halves of t h i s f i g u r e i s information:  options that inform decisions or resource a l l o c a t i o n s from  - 58 -  FIGURE 2.11  AMARA AND LIPINSKI'S MODEL OF CORPORATE STRATEGIC PLANNING  •WHAT \ f  ^  P* *SO WHAT"  - 59 -  top to bottom, r e s u l t s that monitor the outcomes of decisions previously made from bottom to top. 6)  Symbolically, the upper s t r a t e g i c loop may  be viewed as representing  the  " l e f t b r a i n " r a t i o n a l component of management while the lower t a c t i c a l loop represents the " r i g h t b r a i n " i n t u i t i v e component. 7)  F i n a n c i a l l y , the upper h a l f of Figure 2.11  generally deals with  choices  that are l i k e l y to impact the balance sheet, the lower h a l f with decisions more l i k e l y to impact the p r o f i t - a n d - l o s s statement. 8)  Any r e a l decision-making s i t u a t i o n w i l l be an amalgam of the f i v e stages shown and described  2.4.5  Summary and  eariler."  Conclusions  Thomson, Beer, Paterson, and Amara and L i p i n s k i a l l view .organization to some extent as open systems.  The c o n t r i b u t i o n of Thomson's work for our  purposes i s i n the r e c o g n i t i o n of the p o l i t i c i z a t i o n of middle management behaviour and that d i f f e r e n t l e v e l s of the enterprise behave d i f f e r e n t l y . Thomson however underestimates the i n t e r a c t i o n with the environment that the lower l e v e l s of the hierarchy might have i n c e r t a i n types of e n t e r p r i s e ,  e.g.,  p r o f e s s i o n a l bureaucracy or s a l e s and marketing aspects of organization and h i s theory