Information processing view of organizations:
The view of organizations as information processing systems facing uncertainty serves as a transition between systems theory.
The information processing view makes three major assumptions about organizations. First, organizations are open systems that face external, environmental uncertainty (for example, information technology or the global economy), and internal work related task uncertainty. The task is defined as the task uncertainty as the difference between the amount of information required to perform the task and the amount of information already possessed by the organization. The organization must have mechanisms and be structured such that it can diagnose and cope with this environmental and task uncertainty. In particular the organization through its knowledge management (KM), must be able to acquire, store, interpret and use the appropriate information to reduce the uncertainty.
Thus, the second assumption is as follows: Given the various sources of uncertainty a basic function of the organization’s structure is to create the most appropriate configuration of work units (as well as the linkages between these units) to facilitate the effective collection, processing and distribution of information. In other words organizations in this view become networked information processing systems.
All the modern organization theories focus on the environment, including the open systems and information processing views. However the contingency, ecological and learning organization theories treat the environment differently. Contingency theories are proactive and are analogous to the development of contingency management as a whole they relate the environment to specific organization structures. More specifically the contingency models relate to how the organization designs adjust to fit with both the internal environment such as work technology and processes, and the external environment such as information technology (including the Internet) and globalization.
Some organization theorists feel that contingency theory should be replaced by an ecological view. This approach is best represented by what is called population ecology. Very simply this population ecology approach can be summarized as follows:
It focuses on groups or populations of organizations rather than individual ones. For example, for the population of grocery organization after World War II there was an even split between mom-and-pop stores and supermarket. The environment selected out the small mom-and- pop operations because they were not efficient and only the supermarkets survived.
Organizational effectiveness is simply defined as survival:
The environment is assumed to be totally determining. At least in the short or intermediate term, management is seen to have little impact on an organization’s survival.
The carrying capacity of the environment is limited. Therefore, there is a competitive arena in which some organizations will succeed and others will fail.
Obviously, this ecology theory represents a much different view of organizations and even whole industries than the classical or even more modern approaches. A more rational, proactive approach to management that is able to adapt the organization structure to fit the changing demands of the environment is more accepted and practical than environmental determination. Yet, in recent years many organizations have not been able to keep up with the dramatic changes they are facing.
Almost unnoticed by the public and almost totally ignored by the business press and financial analysts, is that the real boom has been in alliances of all kinds, such as partnerships, or in marketing, joint ventures, and often handshake agreements with few formal and legally binding contracts behind them.
These alliances and the significant impact of interconnected information technology and globalization constitute a new paradigm for organization understanding and design. All these factors have impeded scientific progress in organization.
The study of organizations is arguably paradigmatically not well developed in part because of values that emphasize representativeness, and theoretical and methodological diversity. The learning organization represents the latest thinking in organization theory and is compatible with and most directly relevant to the new paradigm environment facing today’s organization.
The organization portrayed as a learning system is not new. In fact, at the turn of the last century Fredrick W Taylor’s learnings on scientific management were said to be transferable to workers to make the organization more efficient. However, the beginning of today’s use of the term learning organization is usually attributed to the seminal work of Chris Argyris and his colleagues.
Single loop learning involves improving the organization’s capacity to achieve known objectives. It is associated with routine and behavioural learning. Under single loop the organization is learning without significant change in its basic assumptions.
Double loop learning re-evaluates the nature of the organization’s objectives and the values and beliefs surrounding them. This type of learning involves changing the organization’s culture. Importantly, double loop consists of the organization’s learning how to learn.