Understanding Organizations

"Management can only be learnt, and learnt, even now, in the school of experience. But experience, guided and enlightened by understanding, is likely to be a gentler experience for everyone and to lead to a shorter learning cycle."

- Understanding Organizations, loc. 171

Along with Peter Drucker and Henry Mintzberg, Charles Handy is considered one of the most influential management thinkers. Handy’s work focuses on the changing shape of work and organizations, and what this might mean for our futures. Understanding Organizations catalogues conceptual frameworks that are useful in the interpretation of organizational phenomena, and discusses their application to particular types of organizational problems.

Taking the premise that organizations are micro-societies, then those who lead them have to understand the needs and motivations of the people in them. To this end, part one covers the concepts: motivation to work, roles and interactions, leadership, power and influence, the workings of groups and the cultures of organizations. Part two discusses the application of those concepts in the workplace, covering: organizational structure, work design, environment, politics, change, management and the future of organizations. Ultimately, this book provides a better understanding of how human communities work.

In reading this book, I recognized aspects of organizational life; gaps were filled in by having a well-described and thorough lists of organizational concepts. Building on these foundational elements, Handy offers valuable insights regarding the impacts and implications of decisions that are made around individual roles, leadership styles, motivation, structure, environment and politics—and the behaviours and actions that are fostered by these organizational decisions.

The Big Idea

The Big Idea: The biggest takeaway from the book

The Culture You Create will Determine Your Results

"Many of the ills of organizations stem from imposing an inappropriate structure on a particular culture, or from expecting a particular culture to thrive in an inappropriate climate."
- Understanding Organizations, loc. 3532

Handy describes four main types of culture, and the structures and systems appropriate to that culture:

  1. Power Culture: reliant on a central, controlling power source. The quality of these central individuals is of paramount importance for the organization as these cultures put a lot of faith in the individual. They judge by results and are tolerant of means.
  2. Role Culture: often stereotyped as bureaucracy; structure, logic and rationality rule. In this culture, the job description is often more important than the individual who fills it. The role culture succeeds as long as it can operate in a stable environment.
  3. Task Culture:  job or project oriented. Emphasis is on getting the job done, relying on the capacities of individuals working within a network. Teamwork, which thrives on integration, creativity and sensitivity, prevails in this extremely adaptable, albeit difficult to control, culture.
  4. People Culture: an unusual culture in which the individual is the central point. Rarely do organizations exist with this type of dominant culture. What you may find is individuals who operate with this orientation in a more typical organization; with very little allegiance to the employer, these employees are not easy to manage.

Each can be a good and effective culture.

Handy describes a normal trajectory for an organization: most start as power cultures; time and success leads to growth and the need for a role culture; the role culture is next confronted with the need for greater flexibility; hence, the task culture and need for greater diversity.

Finding the right cultural diversity is aided by an analysis of activity types, which can vary in different parts of the organization: steady state (routine), innovation (change), crisis (dealing with the unexpected), and policy (overall guidance and direction of activities). The suggestion is made that if the appropriate culture prevails where that set of activities prevails, then that part of the organization will be more effective. “Organizations that are differentiated in their cultures, and who control that differentiation by integration, are likely to be more successful,” he writes.

For my own work, I took this as a caution to ensure that the systems and roles we have in place, the relationships and networks, values, leadership styles, and even the information we collect, should all match and support our desired collaborative culture.

Insight #1

An actionable way to implement the Big Idea into your life

Cultivating Change

"To ‘manage change’ is wishful thinking, implying as it does that one not only knows where to go and how to get there, but can persuade everyone else to travel there. To ‘cultivate change’ is something different, suggesting an attitude of growth, of channelling rather than controlling, of learning not instruction. A changing organization is one that uses differences to grow better, that treats politics as a bonus and people as individuals who are rightly different and usefully different."
- Understanding Organizations, loc. 5784

This framing of change really articulates for me how change can happen at a deeper level – and I love the creativity it implies as change unfolds organically, yet with intent. Genius!

One simple change in words makes a whole shift in mindset: you are not the manager of change, but the cultivator of change. Simply change your mindset, and consider this: “Perversely, organization theory would suggest that more trust and less control, more diversity and less uniformity, more differentiation and less systematization might be the ways that organizations should move.”

Insight #2

An actionable way to implement the Big Idea into your life

Illegitimate Use of Power

"Negative power is the capacity to stop things happening, to delay them, to distort or disrupt them."
- Understanding Organizations, loc. 2542

Don’t know about you, but I’ve certainly experienced these tactics in the workplace! It can happen when someone doesn’t agree with the decisions or actions legitimately made by others in the organization – or it could be that they didn’t go about it the way someone thought it should be done. And yet these are the joys of working with other people who bring their own ideas and experiences to the organization.

Releasing others’ energy in the organization can place managers in the uncomfortable position of letting go of control. Next time you are tempted to use your power to control decisions made by others in your organization, give some thought to whether you are supporting the goals and growth of your organization, or yourself. Keep in mind that discontented, low-utilization organizations bring out negative power; the use of negative power breeds lack of trust. Successful, high morale organizations see little negative power.

While part one in particular reads like a textbook, what it provides is a language. The array of concepts, sets of categories, and various pieces of jargon, all contribute to the development of a vocabulary from which to interpret experiences, learn from others’ experience, and link concepts and knowledge. Part two shows us how this language can be used to help with better understanding the problems that are encountered in all organizations. As Handy says, “It is not a managerial cookbook but an exploration of the art and problems of cooking given what we know of the materials and the processes.”

That said, many valuable resources and toolkits are included in the book. I’ll be using some of Handy’s tools with my management team to analyze the cultures and structures within our organization. I expect this will provoke deep conversations about how that’s working, and where we may need to make changes, or pay more attention in differentiation and integration.

Understanding Organizations, a classic, first published in 1976, is now in its fourth edition. Forty years later, this book stands the test of time; its concepts are timeless and, perhaps surprisingly, incredibly relevant to today’s work environment with all its pressures to change, and constraints in which to produce.

In your leadership practice, what organizational elements could use some analysis for improvement? What practices do you employ to cultivate change?

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Jacqueline van Dyk

ABOUT Jacqueline van Dyk

As a chief librarian, I'm passionate about libraries, collaboration and life-long learning. Life brings serendipity; I started out as a visual arts major...
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