Organization and Management in the Embrace of Government - Book Review

Administrative Science Quarterly,  Dec, 2002  by Dean Tjosvold

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Jone L. Pearce. Mahwah, NJ: Lawrence Erlbaum, 2001. 162 pp. $75.00, cloth; $39.95, paper.

Governments not only shape their country's economy but also their culture and penetrate deeply into the dynamics of organizations. Organizations must be understood within their larger context, in particular in terms of their dependence on government. Unfortunately, like friendship and many other values in life, effective governments are most noticed by their absence, such as in Eastern Europe and China in their transition from Communism. Jone Pearce makes these points with discipline, evidence, and feeling.

Pearce proposes that facilitative governments are supportive of independent organizations, operate through predictable laws and regulations, and are strong, whereas nonfacilitative governments are hostile, erratic, and weak. Organization and Management in the Embrace of Government shows that nonfacilitative governments require managers to accommodate to complex dependencies. Chinese managers in private companies, unsure how to cope with many vague and contradictory laws, indicated that they were dependent upon the good graces of government officials more than established state-owned enterprises (SOEs). Hungarian managers reported that personal relationships were especially important in the early years of transition as their government became more unpredictable. These managers must bargain with disparate government officials to obtain needed resources and information. Confronting ongoing challenges, they often become highly skilled bargainers and relationship developers. But their skills and energy are diverted into coping activities, not used to build organizations that deliver value to customers.

Pearce develops the insight that the patterns of currying favor with the powerful replicate themselves within organizations. To reduce their own uncertainty, employees work to develop personal relationships with their bosses by informing on coworkers, doing personal favors, and gift giving. Employees soon learn that helping their bosses cope with unpredictable governments, not their contribution to an effective organization, is the basis of personnel decisions. The documented results are devastating: mistrust, obsequiousness, injustice, cheating by coworkers, and lower job satisfaction and commitment. The irony is that the need for personal relationships with government officials results in fragmented, distrustful relationships within organizations as well as between managers and government officials. Nonfacilitative governments sabotage performance-oriented, meritocratic organizations that people with facilitative governments take for granted.

Governments also have an impact on cultural values and ways. Pearce theorizes, for example, that the centuries-old need to bargain and develop personal relationships has reinforced Chinese values of harmony and paternalism and the practices of gift giving and subordinate passivity. The possibility then is that reforming governments produces significant cultural change. Researchers, Pearce urges, should move away from assuming that cultural values are immutable and determinant to documenting how government practices reinforce and modify cultural values.

Pearce has creatively combined organizational behavior and historical methods to develop and substantiate her arguments. As a history and social psychology graduate, I appreciate her ability to do this well. She and her Hungarian, Lithuanian, Chinese, and American colleagues have used structured and unstructured interviews as well as survey methods to compare organizational dynamics in countries with relatively facilitative and nonfacilitative governments. These studies established that organizations in countries with nonfacilitative governments have similar dynamics despite many other differences. Pearce has broken out of the traditional boundaries of organization research methods; it is as if the world is her laboratory. She also draws bold, broad implications for researchers as well as governments. Bounded by their own limited experience with facilitative governments, economists recommended market incentives to reform the post-Communist Eastern European economics, an approach that proved ineffectual. Without facilitative governments, managers still had to protect themselves and their organizations.

Organizational researchers are also bound by their limited experience. Assuming a facilitative government context, they neglect how distant forces such as governments affect dynamics within organizations. Mainstream researchers deplore bureaucracy as dehumanizing and extol the virtues of personal relationships and bargaining. But research in organizations with nonfacilitative governments highlights the value of bureaucracy and reveals the seamy side of personal relationships. Bureaucratic, meritocratic organizations, with their predictable, clear rules, empower and reassure employees. Personal relationships are often motivated by fear and vulnerability; they can corrupt people and result in fragmented relationships. Although conflict can be highly constructive, bargaining with nonfacilitative governments greatly distracts organizations from serving customers.