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3 Making sense of the phenomena: realism, relativism and idealism
34 Chapter 2 Thinking about strategy and organisational change
for this position is foundationalism, that is, that all thinking proceeds from a fixed
foundation of a given reality. The ancient mathematician Archimedes is reputed to
have said that if he could find a fixed point he could move the world, and it is from
the idea of a fixed point that many realist arguments proceed.
The opposite position to realism is relativism or scepticism, nowadays known
as postmodernism or anti-foundationalism. Here the categories into which people
classify their experiences are held to exist only in their minds, not out there in reality.
Any explanations they come up with are, therefore, simply projections of their own
minds. Those who hold this position maintain that there is no pre-given reality outside of humans. There is no reality, only the stories we tell each other and, according
to those who take this position to the extreme, one story is as good as another.
Another position avoids the extremes of both realism and relativism/scepticism
and this is idealism. Here, too, it is held that it is in the ways we think that the patterning of our experience arises. However, idealists do not believe that this means
that our entire sense-making activity is purely relative but that it is connected to the
reality we are trying to comprehend. Chapters 3 and 12 will explore idealist ways of
making sense in more detail. Chapter 3 will describe Kant’s transcendental idealism,
in which it is argued that humans inherit mental categories and understand their
world in terms of them. Understanding is then not relative at all, but determined
by pre-given categories in individual minds. Chapter 12 will briefly review Hegel’s
absolute or Romantic idealism according to which human understanding is a social
process that avoids relativism by assuming that human thinking is part of the world
it is trying to understand and that the categories by which we understand it also
evolve. This is what is known as a post-foundationalist position, which assumes neither a fixed reality waiting to be discovered, nor that there exist only our ideas about
reality. Both our understanding of reality, and the categories which we develop to
understand it, evolve over time informed by our experience of living in the world
and in debate and contestation over what we take that experience to mean.
There are also more recent views that might be understood as variations on idealism. The pragmatist tradition of American philosophy, for example, which figures prominently in this book through the work of George Herbert Mead and John
Dewey in particular, was concerned to bring together objects in the world with our
attempts to understand them. In this way they were post-foundationalists. Pragmatism emerges from radical doubt rather than from the scepticism of the postmodern
position: the father of pragmatism, Charles Sanders Peirce argued, contra Descartes,
that we cannot doubt everything all of the time, but rather that doubt is triggered by
practical problems which confront us in our daily lives. In developing these ideas,
Dewey (1929/2008) argued that there are not objects in the world on the one hand
and individual minds contemplating them on the other: he was keen to overcome the
taken-for-granted split between the subjective observer and the object under scrutiny, assuming instead that both formed, and were formed by, the other. He thought
that our engagement with and participation in the world increased our capacity to
understand it, and led to the development of new methods for doing so. Pragmatists
try to avoid the split between reality and the human experience of it, between theory
and practice, the particular and the general. Dewey argued that there is no obvious
method to understand reality, nor fixed categories by which it can be understood.
Just as reality is always in flux and change, so also should be our methods of comprehending it. We take up pragmatist thought more extensively later on in the book
Chapter 2 Thinking about strategy and organisational change 35
because it is concerned with practical problems faced by particular groups of people
in specific organisations at particular times negotiating how they will go on together.
Meanwhile constructivists (see Chapters 5 and 7) hold that, because of biological
evolution, humans are capable of perceiving the world in one way but not others
(Maturana and Varela, 1987). For example, the human visual apparatus receives
light waves on three channels; it is trichromate. Some other animals have dichromate
(two channels) or quatrochromate (four channels) vision. Each type of creature,
therefore, sees the world of colour in a different way, in effect, through biological
evolution, selecting aspects of reality for attention. It is impossible for one type of
creature to see the world of colour that another type sees. Similarly, constructivists would point to limitations on human capacity to perceive reality imposed by
the evolved nature of the human brain. By its very nature, the human brain selects
aspects of reality to pay attention to. This position has something in common with
realism in that it supposes a reality that exists outside of the human organism and is
not simply the result of the mind’s projection. Unlike realism, however, this is not an
unproblematically pre-given reality but, rather, an individually constructed, enacted
or selected reality.
Another position taken on the nature of the human capacity to explain experience
is that of social constructionism (Gergen, 1985), which is a form of idealism and has
some overlaps with pragmatism which we sketched out in brief above. Some social
constructionists adopt the sceptical position, holding that there is no reality out
there, but others tend towards an idealist position in which social reality is socially
constructed in language. The contemporary pragmatist Richard Rorty (1999) would
be close to this second position. Here, reality is not a pre-given world determining
our explanation but, rather, our explanation is being socially constructed in our
encounters with each other in the world. It is close to some forms of pragmatic
thought and similar to constructivism but with a very important difference. While
constructivists focus upon the selective nature of the individual human being, social
constructionists and pragmatists point to social interaction, particularly in conversation, as the selecting process. The constructionist position is this: every explanation people put forward of any phenomenon is a socially constructed account, not
a straightforward description of reality. If this view is held, then it is impossible to
adopt the role of the independent, objective observer when trying to explain any
phenomenon. Instead, one can only come up with an explanation through participation in what one is trying to explain.
Social constructionists and pragmatists hold that it is impossible to take the position of objective observer and that those who claim to do so are simply ignoring
the impact of their own participation or lack of it. This leads to the closely related
notion of reflexivity (Steier, 1991). Reflexive entities are entities that bend back upon
themselves. Humans are reflexive in the sense that any explanations they produce
are the products of who they are, as determined by their histories. For example, we
are trying, on these pages, to explain the different ways in which humans explain
their experience. If we hold the reflexive position then we cannot claim any objectively given truth for our way of doing this. Instead, we have to recognise that the
approach we are adopting is the product of who we are and how we think. This,
in turn, is the distillation of our personal histories of relating to other people over
many years in the particular communities we have lived and do live in which also
have histories. If we accept the argument about reflexivity, we can never claim to
36 Chapter 2 Thinking about strategy and organisational change
stand outside our own experience, outside the web of relationships that we are a
part of, and take the role of objective observer. Instead, we have to take the role of
inquiring participant (Reason, 1988). Furthermore, reflexivity is not simply an individual activity dependent on that individual person’s history alone. This is because
we are always members of a community that has a history and traditions of thought.
Reflexivity, therefore, involves being aware of the impact on how one thinks of both
one’s personal history and the history and traditions of thought of one’s community.
It is for this reason that Chapters 3 and 12, particularly, give brief accounts of the
central traditions in Western thought.
The individual and the group
The move to an idealist, reflexive, social constructionist or pragmatic position is
very significant in terms of what is being assumed about the relationship between
the individual and the group. Realist, transcendental idealist and constructivist positions are all presented in terms of the capacities and limitations of the autonomous
human individual. The individual is thought to come first, being both primary and
prior to the group. Groups can then only be seen as consisting of individuals. On
the other hand, some social constructionists see the group as prior and primary.
Individuals are then the products of the group in some way. Other perspectives,
mostly derived from idealism, are paradoxical in that neither the individual nor
the group is primary. One forms and is formed by the other at the same time. This
question of how to think about the individual and the group is central to the reviews
of ways of thinking about strategy and organisational change explored in this book.
So, there are a number of different, contradictory ways of explaining how human
beings come to know anything. Furthermore, there is no widespread agreement as to
which of these explanations is ‘true’ or even most useful. The realist position probably commands most support amongst natural scientists and those social scientists,
probably the majority, who seek the same status for their field as is accorded to
the natural sciences. Social constructionists point to a significant difference between
natural and social phenomena. Humans interpret natural phenomena, those phenomena do not interpret themselves. However, when it comes to human phenomena,
we are dealing with ourselves, phenomena that are already interpreting themselves.
Many constructionists hold, therefore, that while the traditional scientific approach
might be applicable in the natural sciences it is not in the human sciences. Pragmatists are keen to identify those aspects of scientific method, contestation for example,
which are common to both natural and social sciences.
At this point, you might be wondering why we have apparently moved so far away
from the central concern of this book, namely strategy and organisational dynamics.
The reason is this: any view you take of the nature of strategy and change in organisations immediately implies a view on how we come to know the world in which we
live. If you think that an organisation’s strategy is the choice made by its chief executive, following a rational process of formulation, then you are assuming a realist,
transcendental idealist or perhaps constructivist position. You are implicitly assuming
that the individual is primary, and that this individual takes the position of the objective observer of the organisation. Since this tends to be the dominant approach to
explaining what strategy is, it is quite easy to take it for the truth. However, what we
have been trying to show in the above paragraphs is that this would be a completely
Chapter 2 Thinking about strategy and organisational change 37
unwarranted assumption. Just how human beings know anything, and whether the
individual or the group is primary, are hotly contested issues with no clear truth.
Simply going along with today’s dominant views on strategy, without questioning the
foundations upon which they are built, amounts to shutting one’s eyes to other possibilities which might make more sense of one’s experience. For example, if one shifts
perspective and considers that an organisation’s strategy might emerge from conversational processes in which many participate, then one would be moving towards a
social constructionist position and assuming that the group is primary, or to some
kind of idealism where neither the individual nor the group is primary. Perhaps this
might assist in making more sense of the experience of life in organisations.
Different theories of strategy and organisational change imply different ways of
explaining how human beings know or do anything. If one wants to understand
just what the differences are between one explanation of strategy and organisational
change and another, then one needs to understand what assumptions are implicitly
being made about how humans know anything. Another key aspect distinguishing
explanations of human knowing is the way they treat the relationship between the
individual and the group. In the rest of this book, we will be reviewing how various
ways of understanding strategy and organisational change differ. We will be pointing
to how some of the most important differences are related to the implicit assumptions made about human knowing and the relationship between the individual and
We now want to move on to another extremely important aspect of how we make
sense of the world and this has to do with the nature of causality.
The nature of causality
One way of thinking about the relationship between cause and effect in Western culture is linear and unidirectional. There is some variable Y whose behaviour is to be
explained. It is regarded as dependent and other ‘independent’ variables, X1, X2 . . .
XN, are sought that are causing it. Linear relationships mean that if there is more
of a cause then there will be proportionally more of the effect. This is the efficient
‘if . . . then’ theory of causality.
For example, in organisations, a frequent explanation for success is that it is
caused by a particular culture, a particular management style, or a particular control
system. The more that culture, style or control system is applied, the more successful the organisation will be. Opposition parties always say that the government of
the day has caused recession and inflation. More of the government’s policies will,
they say, lead to more recession and more inflation. All of this is what is meant by
straightforward unidirectional, linear connections between cause and effect.
Many scientists, both social and natural, are increasingly realising that this view
of the relationship between cause and effect is far too simplistic and leads to an
inadequate understanding of behaviour. They hold that greater insight comes from
thinking in terms of mutual or circular causality. The demand for a product does
not depend simply on customer behaviour; it also depends upon what the producing
firm does in terms of price and quality. In other words, the firm affects the customer
who then affects the firm. Management style may cause success but success affects
the style managers adopt. The government’s policies may cause recession and inflation, but recession and inflation may also cause the policies they adopt.
38 Chapter 2 Thinking about strategy and organisational change
When organisms and organisations are thought of as systems, complex forms of
causality to do with interconnection and interdependence become evident, where
everything affects everything else. In addition to the circular causality and interdependence of systems, there is also nonlinearity. This means that one variable can have
a more than proportional effect upon another. Nonlinear systems then involve very
complex connections between cause and effect. It may become unclear what cause
and effect mean. The links between them may become distant in time and space and
those links may even disappear for all practical purposes. If in these circumstances
one proceeds as if simple linear links exist, even if one does not know what they are,
then one is likely to undertake actions that yield unintended and surprising results.
How one thinks about causality, then, will have an important impact on how one
thinks about strategy and organisational change. This is a matter to which subsequent chapters will pay a great deal of attention.
Closely linked to the matter of causality is that of contradiction and paradox. We
have already said that how different theories deal with contradiction is an important
distinguishing feature, so it is important to be clear about what ways there are to
think about contradiction.
Dealing with contradictions
There are a number of different ways in which we deal with the contradictions we
encounter in our thinking. The first is to regard them as a dichotomy, which is a
polarised opposition requiring an ‘either . . . or’ choice. For example, managers faced
with the need to improve quality, requiring an increase in costs, may also be faced
with the need to cut costs. If they think in terms of a dichotomy then they choose
one or the other of these opposing alternatives. Secondly, they could think of the
choice facing them as a dilemma, which is a choice between two equally unattractive alternatives. Improving quality is unattractive because it increases costs,
and cutting costs means destroying jobs, which is unattractive for humanitarian
reasons. Dilemmas also present ‘either . . . or’ choices. Thirdly, a contradiction may
be thought of in terms of a dualism or a duality. For example, managers may be
faced with the need to customise their products to meet localised customer requirements, but they may also be faced with the need to standardise their products to
meet global competition. If those managers think about this in dualistic terms then
they might come up with the resolution or elimination of the contradiction through
‘both thinking globally and acting locally’. The mode of thinking in dualistic terms
has a ‘both . . . and’ structure. Instead of choosing between one or the other, one
keeps both but locates them in different spaces or times. So, in the above example,
one pole of the contradiction is located in thinking and the other in acting. The
‘either . . . or’ thinking of dichotomies and dilemmas and the ‘both . . . and’ thinking
of dualisms/dualities all satisfy a precept of Aristotelian logic, which requires the
elimination of contradictions because they are a sign of faulty thinking.
Finally, one might think of a contradiction as a paradox. There are a number
of different definitions of a paradox. First, it may mean an apparent contradiction,
a state in which two apparently conflicting elements appear to be operating at the
same time. Paradox in this sense can be removed or resolved by choosing one element
above the other all the time or by reframing the problem to remove the apparent
contradiction. There is little difference between paradox in this sense and dualism/
Chapter 2 Thinking about strategy and organisational change 39
dualities and this is the meaning of paradox that is usually taken up in the literature
on systemic views of organisations.
However, paradox may mean a state in which two diametrically opposing forces/
ideas are simultaneously present, and which are co-constituting: the one suggests
and defines the other, neither of which can ever be resolved or eliminated. There is,
therefore, no possibility of a choice between the opposing poles or of locating them
in different spheres. Instead, what is required is a different kind of logic, such as
the dialectical logic of Hegel (see Chapter 12). As it is used in this book, the word
paradox means the presence together, at the same time, of self-contradictory, mutually constituting, essentially conflicting ideas, neither of which can be eliminated or
There are many examples of paradoxes in organisations. Each individual in an
organisation has a paradoxical desire for freedom and the excitement that goes with
chance and uncertainty, while at the same time fearing the unknown and wanting
order and discipline. Organisations have to control what their employees do, but
they have to give them freedom if they want to retain them and if they want them to
deal with rapidly changing circumstances.
Many theories of organisation emphasise either/or choices. They prescribe either
stability and success, or instability and failure. They usually do not recognise paradox as fundamental and, when they do, they prescribe some kind of harmonious,
equilibrium or balance between the choices. In this way the paradox is in effect eliminated; its existence is a nuisance that is not fundamental to success. Alternatively
they argue that paradox can somehow be harnessed for the good of the company,
again assuming that managers or leaders can take up a position outside the paradox
and manipulate it to given ends.
The way one perceives paradox says much about the way one understands organisational dynamics. The idea that, for success, paradoxes must be resolved, and that
the tension they cause must be released or harnessed, is part of the paradigm that
equates success with the dynamics of stability, regularity and predictability. The
notion that paradoxes can never be resolved, only lived with and explored, leads to a
view of organisational dynamics couched in terms of continuing tension-generating
behaviour patterns that are both regular and irregular, both stable and unstable and
both predictable and unpredictable, all at the same time, but which lead to creative
2.4 Four questions to ask in comparing theories of organisational
strategy and change
In the previous sections of this chapter, we have been describing what we think
the phenomena are that we are trying to explain when we talk about strategy and
organisational change. Those phenomena are populations of organisations of various kinds and populations of people and groupings of people that make up each
of those organisations. These populations of organisations and people are continuously interacting with each other in ever-changing but also repetitive ways. We have
also been talking about how human beings come to know the phenomena of their
worlds, including those of populations of organisations and people dynamically
40 Chapter 2 Thinking about strategy and organisational change
interacting with each other. In the course of describing the phenomena and how
one might come to know them, we have listed a number of factors that we want to
use to distinguish between various theories of strategy and organisational dynamics.
These factors are:
• How the dynamics are understood.
• How contradiction is presented and explained.
• What ontological states and what degree of descriptive detail are focused upon –
macro or micro.
• What part emotion, power and politics are seen to play.
• How the interactive/relational nature of the phenomena are conceptualised.
• How causality is understood.
• Whether the theory assumes a pre-given or a constructed reality.
• Whether the theory takes the methodological stance of the objective observer or
the reflexive, participative inquirer.
• What theory of human knowing and behaving it assumes, particularly how it
deals with the relationship between individuals and groups.
We now want to pull these factors together into four questions that we will put to
each of the theories to be considered in the chapters that follow. The questions are:
1.What theory of human psychology – that is, ways of knowing and behaving – does
each theory of strategy and organisational change assume? Do they assume that
the individual is autonomous or interdependent? We will be focusing particularly
on how each theory deals with the relationship between individual and group and
the extent to which they are concerned with questions of emotion and power.
2.How does the theory understand the nature of human action and interaction? We
will consider how each theory understands the role of human beings in stabilising or
changing organisations – the organisational dynamics in the title of this book – and
what this assumes about causality.
3.What methodology underlies each theory of strategy and organisational change?
We will be asking where along the spectrum of realist through to social constructionist we may locate a particular theory, asking whether, for example, it takes
the position of objective observer of a pre-given reality or whether it takes the
position of the reflexive, participative inquirer seeking to understand a constructed reality.
4.How does each theory of strategy and organisational change deal with the contradictions which present themselves in our thinking about the relationship between
individuals and groups, or particular choices which face us? We will ask whether
the theory sees opposing ideas as dichotomies, dilemmas, dualisms/dualities or paradoxes and whether it understands organisational success in terms of equilibrium.
In the chapters that follow we are going to classify different explanations according to the answers they give to the above four questions. What we are trying to do is
to tease out strands of thinking in order to expose assumptions and reasoning processes for comparison. Additionally, and in keeping with a book which encourages
the reader to take a reflective and reflexive stance, we will conclude each chapter
Chapter 2 Thinking about strategy and organisational change 41
with some reflections of our own on our experience of encountering a particular
theory when it is taken seriously in an organisation, including some of our direct
If you wish to enquire more deeply into how various views of the individual and various ways
of thinking have evolved, you could read Taylor (2007) and Taylor (1989) for a history of the
ways in which our sense of self has developed. The German sociologists Hans Joas and
Wolfgang Knöbl give a comprehensive overview of how a variety of twentieth-century
sociologists and philosophers have dealt with theories of action, and explanations of social
stability and change. Patrick Baert and Filipe Carreira da Silva (2009) cover some similar
ground from a pragmatic viewpoint including some very contemporary theory.
Questions to aid further reflection
1. What are the phenomena that are being talked about when the terms ‘strategy’ and
‘organisational change’ are used?
2. How do we make sense of ‘strategy’ and ‘organisational change’ and in what traditions of thought is such sense making located?
3. How does a particular perspective on reality affect the way we might undertake strategy and organisational change?
4. How do you think individual and group are related to each other?
5. What is your understanding of the concept of system?
Systemic ways of
thinking about strategy
The purpose of Part 1 is to explore the ways of thinking reflected in the dominant
discourse about organisations and their management as well as the most prominent
critiques of this discourse to be found in organisational and management literature.
What the chapters that follow will be trying to do is tease out the taken-for-granted
assumptions being made in the dominant discourse and the critiques of it.
The dominant discourse promotes the taken-for-granted assumption that organisations are systems. This is also partly true of some of the critical and alternative
views of organisational strategy and change, but in general they are more nuanced,
as we will explore below. It is now usual, amongst both organisational practitioners
and organisational researchers and writers, to talk about organisations as entities
that actually exist outside human interaction. Human individuals with minds inside
them are located at one level of existence, while organisations as things called
‘systems’ which actually exist are located at another level of existence. Human
individuals are thought to create organisations as systems in their interaction with
each other and these systems are then thought to act back on individuals as a
cause of their behaviour. The dominant discourse, therefore, reifies organisations,
sometimes regarding them as mechanistic things and sometimes claiming that they
are living things, organisms, with purposes and intentions of their own. We have
come, then, not only to reify organisations but also to anthropomorphise them. It
is widely assumed that individuals, as leaders and managers, can take the position
of objective observers of such organisational systems and design them to achieve
purposes ascribed to them or at least intervene in them and influence the direction
they take. The dominant discourse thus reflects an implicit and powerful ideology to
do with managerial control. Chapters 4, 5 and 6 will explore just how these takenfor-granted assumptions are expressed in the dominant theories of strategic choice,
organisational learning and psychodynamic systems.
The prevailing assumption that organisations are actually existing things,
whether mechanistic or organic, has not gone unchallenged. Chapter 9 will explore
a particularly coherent critique presented within the tradition of second-order systems thinking by soft and critical systems thinkers. Writers in these traditions hold
that organisations are not actual systems to be found in the real world. Instead, they
argue that organisations are to be thought of ‘as if’ they are systems; indeed some of
these writers hold that human thinking is innately systemic. This critique, therefore,
represents an important movement in thought from a realist to an idealist approach
in which organisations as systems are mental constructs. However, this does not
44 Part 1 Systemic ways of thinking about strategy and organisational dynamics
amount to a movement away from the idea of system. An organisation is to be
thought of ‘as if’ it is a system in order to structure organisational problems in the
interest of finding more effective solutions. It continues to be taken for granted that
organisational phenomena are at a different level to human individuals who can
design, intervene, influence and solve systemic problems. However, here too there is
a challenge to the dominant discourse and its ideology of managerial control. This
flows from the recognition that individuals cannot simply be objective observers
external to an organisational system, because they are also participants in it. This
leads to an emphasis on participation, social interaction, politics, culture and ethics
in what amounts to an ideology of improvement, emancipation, democracy and
respect for the plurality of points of view. However, the fundamental assumptions
to do with systems and the primacy of the individual remain intact in the critique
mounted by second-order systems thinking.
Other critiques of the dominant discourse have also been presented and some of
these will be considered in Chapter 7. One outstanding critique has been presented to
the taken-for-granted assumption in the dominant discourse that managers are rational decision makers. This critique has pointed to the considerable limitations placed
on the possibility of rational decision making by the economic costs of gathering and
analysing data, the information-processing capacity of the human brain, the influence
of cognitive frames of reference on what people pay attention to, the interpretations
people make of their situations and the impact of emotion, fantasising and unconscious processes (see Chapter 6). Linked to this major critique are the descriptive studies of what managers actually do, which reveal how idealised an image the dominant
discourse presents of managers as rational planners. This critique points to how messy
actual decision making is and how at least some major aspects of strategy simply
emerge, which is understood as occurring by chance as opposed to intention. Then
(reviewed in Chapter 8) there are the relatively few studies of whether the prescriptions of the dominant discourse do actually achieve what they are supposed to. Taken
together, these studies are inconclusive at best and tend to point to how ineffective the
prescriptions of the dominant discourse prove to be. However, mostly these critiques
again make the same fundamental assumptions as the dominant discourse to do with
the systemic nature of organisations and the primacy of the individual, the latter being
reflected even when social interaction is taken into account.
Another critique is also important, and this relates to the nature of organisational
process. In a reaction to the focus on that content of strategies which will lead to
successful performance, some writers have called for a focus on how strategy is
formed: that is, on strategy process rather than strategy content (see Chapter 7).
However, the process field continued to think about organisations as a whole, at
the macro level, and took a macro view of the strategy process. Over the last few
years there has been a reaction to the macro perspective, taking the form of a call
for focusing attention on the micro level of what people actually do on an ordinary,
daily basis when they strategise. This is known as the strategy-as-practice school.
This leads to a concern with conversations, ways of sense making, politics, emotion
and identity. However, once again and in general this critique mostly continues to
be based on systemic thinking about organisations and individual-focused cognitivist, constructivist and humanistic psychologies.
Finally, in Chapter 9 Part 1 will consider social constructionist approaches which
move away from the assumption of the autonomous individual to place all the
emphasis on social interaction and critical management theory which has moved