Organic Systems and Clans
Burns and Stalker (1961) studied firms in England and noticed two types
of management style -- mechanistic and organic. Mechanistic styles were
found in more stable environments -- managers broke down tasks into specialisms
with precise job descriptions and hierarchical interaction with management.
Organic systems were used in unstable systems -- in this situation workers
had to perform their job in "light of their knowledge of the tasks
of the firm as a whole". Job roles are redefined continuously through
interaction with co-workers. Communication occurs laterally than through
Ouichi (1981) defines this as a clan system. Paralleling Williamson's transaction
cost explanation that organizations form when transaction costs are too
high, clans replace hierarchies when transactions reach levels of extreme
complexity and uncertainty. The clans are not necessarily kinship based
but created with commmon internalized goals and strong feelings of solidarity.
The clan system emphasizes long-term employment, which allows for a different
type of control system. The employee links their career prospects with the
success of the company (like in Japanese companies). These are conditions
for the development of elaborate internal labor markets.