Organisational Mechanics of Voice and Exit

“Every major organization will have to learn how to maintain its identity, the quality of its products and service, and its customer relationships, while being prepared to give up everything else”[1]. The continual transformation of markets, economies and organisations signals the increasing need for work patterns and communication strategies to be on the edge of adaptivity, responding intelligently to change and flux. The organisational changes of the past century show a move away from Taylorist production systems and work by standardised process toward more flexible methods of organisation that focus on functional units and teamwork. The centralised methods of GM and Ford and their in-house units, hierarchical structure and strict control over knowledge pathways[2] gave way the Kanban system of long-term subcontractor relations, decentralised teams and dialogic methods of understanding and reforming work patterns (as through Toyota’s Operations Management Consulting Division and their workshop-based quality circles[3]). In this change, “the need for collaboration in which all parties share a goal – so that they all profit from complementary innovations – but they are not so tightly integrated that as to lose the competitive spirit to innovate”[4] is paramount.

“There is a comprehensive shift in organizational orientation from standardized function to project work”[5]. This shift signals a need to recognise organisational adaptivity in modern contexts as work patterns and knowledge pathways become increasingly flexible and modular, less dependent on centralised direction. The increasing importance of human and intellectual capital means a need to focus on the needs of stakeholders/clients rather than taking a uniform approach. A team-based style helps cope with this adaptivity, as organisations can develop bespoke responses to specific changes/challenges that more bureaucratic, less flexible organisations can’t.

Looking at Mintzberg’s six elements of an organisation[6], we can see all of them shifting toward more modular operations as work-by-rote and standard procedures are out-innovated by client-specific, decentralised operations that emphasise project-based, heterarchical methods of work and communication. The ideology of an organisation (values, culture, vision) has grown in importance to define a loose set of parameters through which each working group and/or team operate within its specialised field. Toyota has its system of dialogue and collaborative groups; Amazon its emphasis on becoming the backbone of online commerce; W.L. Gore and its emphasis on team autonomy[7]. These are beyond standard operating procedures and instead attempt to create a holistic perspective through which work and knowledge are channelled. This then influences the extent to which the operating core, support staff and technostructure are separate entities.

With the development of team-based functions and project work, these parts are integrated into teams, combined with their initial functions so that standardised rules don’t get in the way of adaptive methods that add to the overall ideology. Further, the strategic apex and middle line are then transformed, moving management away from authoritative direction to dialogic and supporting techniques. This transformation shows a direction away from machinic bureaucracies to concepts of mutual adjustment, where autonomous teams and the managerial apex negotiate across the organisation, rather than hierarchically dictating. The team in this sense becomes the central system of organisation, with focus laid on developing communication and information pathways both within it (through dialogue and minimising bottlenecks like chains of command or top-down regulation) and between teams through formal and informal methods of transmission.

In becoming more team reliant, organisations need to ensure strong working relationships that encourage the sharing of information and the ability to innovate without stifling levels of oversight. This means different functional elements working in sync to ensure projects are completed and stakeholder needs met. Unexplored information or methods can begin to be explored as autonomous teams are given the space necessary to succeed and fail. Team members can explore each other’s mind-sets, receive feedback and collaborate by combining strengths and weaknesses, developing shared expectations by understanding shared desires and needs and conceiving cooperative patterns of behaviour that allow goals to emerge from these exploratory processes. From there, job allocation can be accomplished, conflicts managed, differences acknowledged, responsibilities clarified and productivity maintained as team members are recognised for the individual elements they bring to the whole. Developing these ties is important in creating cohesive units.

This is exemplified by weak and strong ties as they demonstrate the way innovation and knowledge are diffused throughout organisations between different teams and groups. In highly cohesive settings where ties are strong and a sense of community is felt, information can be shared effectively and strong relations between team members can be developed, integrating individuals into a holistic unit. However there is potential for information and work to ossify in such situations as divergent information or critique cannot penetrate the walls strong ties create. Weak ties that bridge different teams together into an organisation then can more effectively spread information and innovative practice across an organisation. More connections can be developed that link marginal individuals in the organisation to those centrally connected. Different methods of innovation can be amassed as marginal individuals with weak ties to surrounding teams are more likely to adopt divergent, risky innovations (that take more time with large risk/reward ratios) and central individuals with strong ties within teams can adopt safer innovations (that instead of revolutionising operations instead reform things and move organisational adaptation at a steadier pace). Studies of “public health innovations show that when a new program is thought relatively safe and uncontroversial, central figures lead in its adoption; otherwise marginal ones do”[8].

A feed-forward relation can be seen, with marginal members making riskier innovations palatable, leading to central figures implementing more widespread adoption. Here the importance of working relations can be seen, as combining strong and weak ties within and between teams creates an environment where various methods of innovation can be experimented with, and where adaptation to change can take different paces depending on the team structure. Some teams with weaker ties and decentralised functions are more capable of quickly adapting to changing circumstances and new innovations, while others (with settled relations and strong ties) need more time to adapt their functions to changing realities. Thinking of it in terms of Hirschman’s voice and exit[9], both are necessary to the proper functioning of teams in wider settings, as it allows for both the development of voice within teams that creates cohesion and shared understanding (strong ties), but also allows for the exit of information throughout the setting, permeating the walls of teams and moving (in terms of the Johari window[10]) from blindness and unknowing to openness in the way teams organise and interact.

Recognising the need for balance between strong and weak ties also shows the need for a balance between different skillsets and behaviours within a team. Two that need balancing are those of competitive and cooperative behaviours. Both are required in functioning teams as the former encourages innovation and adaptation through seeking improvements, earning prestige and reward, while the latter encourages teamwork and the sharing of resources and knowledge for collective betterment. Too much competition leads to winner-take-all contests that discourage those who lose out while too much cooperation can stifle divergent voices and lead to homogeneity in work and thought. Haier seem to have struck such a balance through their ZZJYT system[11]. ZZJYTs combine various roles of Mintzberg’s organisational structure into decentralised functional units. These have found great success in connecting product design and marketing directly to consumer needs by eliminating the silos of traditional organisations in favour of cohesive teams that combine various roles based on company projects. They combine a competitive ethos with cooperative behaviour by encouraging participants to apply for specific work projects they’re interested in, gaining access through the quality of their experience and ideas and how those mesh with the current team/project. Once organised, ZZJYTs are given functional autonomy to establish cooperative relations amongst its team members and between its various teams, encouraging innovation which leads to further projects and further autonomous team-working.

Another behavioural balance to be struck is that between formal and informal hierarchies. While nearly all organisations have some form of official hierarchy in place (whether this be one tier of management or multiple tiers of managers, supervisors and leaders), many also contain informal hierarchies that permeate teams within an organisation. These include status or prestige hierarchies, peer pressure and limited access to knowledge within teams. Due to the formal nature of teams being collections of individuals brought together to match skills and develop a project, they are nominally non-hierarchical. However the realities of communication and surrounding pressures (promotion opportunities, recognition, social status) mean that hierarchy is an ever-present reality.

The ability for hierarchical and dominative structures to develop in informal contexts then requires a good mixture of voice and exit mechanisms as mentioned earlier. Voice and exit here aren’t total concepts but relative. Exit in this sense is strong levels of autonomy and freedom to work on chosen projects or ideas rather than having everything determined either by top-down structures or informal leadership. Voice is the capacity to determine work patterns or influence wider organisational culture. Teams are a method of developing these mechanisms, as through them transversal processes can be inculcated that distribute power informally away from hierarchical communication lines and organisational charts, developing nodal connections that help create innovative ways of working and organising and preventing maladaptive practices. The balance must be struck between formal methods of control and informal ones, so that neither can fully determine social relations and conceive rigid or permissive hierarchies.

Finding this balance requires a strong element of openness and transparency to interrogate the strength of the work a team is doing and recognise any dysfunctions, such as overly competitive behaviours and the setting in of informal hierarchies that discourage team members. Looking again at Haier, they’ve achieved this by maintaining a second and third tier set of ZZJYTs that monitor the work and provide guidance to the project-based units. Similarly, W.L. Gore & Associates contain a level of executive support that steps in to take the projects autonomous teams have developed to market[12]. “Ways of organizing work, social status, image and prestige, even factual access to resources, current prerogatives and future opportunities, need to be clarified and negotiated in social interactions on an almost constant basis”[13]. In team-based work, this level of clarification means that balancing priorities between competitive behavior (which can develop informal hierarchies and toxic relationships) and cooperative behavior (which can limit heterogeneity, develop convergence and dampen the innovative behaviour that peripheral ties bring) requires direction and oversight so as to open up teams to scrutiny and prevent situations where team members are undermined, informal communication devolves into rumours and/or teams become glorified cliques.

Analysis of social networks has shown that there is a limit to the number of nodes an individual can cogently deal with and there is a fine balance between too few and too many structural holes[14] i.e. having one central node in a network that connects each member vs. having many nodes that provide multiple transversal connections. In striking this balance, “employees report greater affective commitment when they are embedded in a cohesive network structure that generates fewer structural holes” and “employees who enjoy a moderate level of centrality sustain their job autonomy and have access to information and social support from other coworkers”[15]. Thus limiting situations where networks grow too large and become reliant on one or two key information hubs is important in maintaining a dynamic organisation and developing strong behavioural characteristics within teams like transparency, openness and multiple means of communication for affective feedback and knowledge sharing. As networks grow within organisations, communication grows both vertically as new structures are built to formalise information and horizontally as networks route around ossified organisational systems.

Teams are a liminal element in organisations, between the tacit knowledge of individual stakeholders and the explicit knowledge of management directives and centralised information. They exist at the crossroads of informal and formal communication. This mixture of communication methods means that organisational culture (and its formal knowledge pathways) can be integrated into diverse situations while at the same time feeding back into the organisation’s culture and formal information structures by making them adaptable and responsive to changing environments and unpredictable situations.

We can see this in the intuition, interpretation, integration and institutionalisation (4I) framework[16]. The 4I feedback loop is an example of the importance of both formal and informal methods of work administration, as it allows for knowledge to transfer upwards into the organisation’s central nervous system of information (through interpreting and integrating organisational knowledge with team knowledge), but also disperse across constituent teams and groups as informal practices both help organisational culture adapt (preventing ossification) and allow for work-arounds that move beyond bad practices and outdated operations. Information in this feedback loop can be both positive and negative as team practices that are decentralised make their way up the organisational chain, slowly influencing the wider culture and set of functions that define the central mission. As it is interpreted and formalised it can both expand the creative capacities of constituent teams and inhibit them depending on informal practices already taking place. Here the importance of both voice and exit to influence this feedback loop and change its direction (making it more flexible and contextual) is important to establishing effective working relationships and patterns that are neither centralised methods of dictation nor organisational anarchies with no direction or purpose.

The importance of informal communication is key as it means that information isn’t just shared hierarchically but also horizontally across an organisation’s teams and units. Looking at informal communication and networks (or unofficial teams) within organisations, we see a variety of working relationships based around not just executives and/or managers but knowledge brokers who can share information across groups and individuals. “Brokers who serve as bridges across a number of subgroups within networks are often quite influential. “Bridging” relationships uniquely position brokers to knit together an entire network and often make these interactions the most efficient means of gathering and disseminating information in a high-touch way”[17]. Informal networks for the sharing of knowledge are important in allowing a team to function, making sure that things aren’t concentrated in one area and making work patterns operate in the face of inefficiencies or bottlenecks.

Affective communication across boundaries and outside formal structures is important in making units collaborate and understand their roles. Without it, central formalised direction can ignore festering problems in the way work is done or information is developed and shared. Looking at the example of the US Defense Intelligence Agency, breaking down silos was fundamental in transforming their culture from ossified, outdated methods of intelligence gathering to collaborative methods that emphasised teamwork, knowledge sharing and integrated peripheral members of the agency[18]. An effective team then is defined by affective communication that can circumvent bottlenecks and produce decentralised solutions, adding holistically to the overall organisational culture by developing innovative methods of making organisational knowledge adaptable and responsive rather than allowing it to homogenise and ossify.

As teams are liminal structures that develop communicative methods bridging the gap between individual innovation and competition and organisational systems of centralised knowledge collation, they can be contrasted with more formal organisational forms like groups where there is greater emphasis on distributing the organisation’s goals and vision to individual members and decentralised teams/units. One way of looking at this, particularly considering Hirschman’s concepts of voice, exit and loyalty, would be to see groups and teams as dendritic and rhizomatic organisational forms respectively.

Within groups that are part of formal communication lines within an organisation chart, we witness a tree-like structure where each group member reports to a supervisor/manager, who then reports up the chain to a centralised leadership. Simon conceives groups as elements in the planning process, whereby multiple distinct visions are collated into one method of doing/working[19]. This means they formalise tacit knowledge and add it to the organisational chart/system. Teams, who exist along more informal communication lines, have a rhizomatic structure that transverses the organisational chart. They spread horizontally like rhizomes spreading from node to node. While the tree-like chain of communication places importance upon loyalty to the wider culture or institutional vision and the structuring of a specific voice that fits in that culture, the rhizomatic teams emphasise greater autonomy and a desire to create links between nodes of an organisation rather than just going up the chain, creating a degree of exit from organisational rigidities and linking teams horizontally across the institution. One such organisational context where this can be seen is in Amazon’s corporate structure, where it is split between geographically based groups that focus on local markets and functional teams that traverse this geographic structure, enabling “Amazon.com to facilitate successful e-commerce operations management throughout the entire organization”[20].

Universities are another organisational form that sit within this milieu of voice and exit. They consist of a functional distribution of subjects into colleges and schools with a central administrative core where communication is a basic two-way conversation from core to periphery (school administration) and back again. However it also consists of administrative teams and autonomous units that sit awkwardly between the core and periphery. As different groups have different service delivery needs, the capacity to set targets and meet organisational goals becomes increasingly complex as choices search for issues and solutions aren’t brought forth linearly from problems, leading to “organised anarchies”[21]. Both organisational types demonstrate the tensions between innovative potentiality and organisational formality, with teams the liminal element between this as they express directorial values while attempting to adapt to changing conditions and avoid ossification. This means moving institutional knowledge through the 4I feedback loop, adding formal knowledge and adapting it by opening up bottlenecks and exposing weaknesses.

The ability to develop cohesion amongst a group of people is fundamental from moving a group of disconnected individuals into a team which shares functions, understands each other’s strengths and weaknesses and distributes functions based on choice, ability and communication more than quantitative mechanisms like organisational charts and ambiguous objectives. One of the main ways of doing this as mentioned earlier is the inculcation of informal communication structures that translate organisational objectives and culture into team objectives and move beyond the bottlenecks of organisational anarchy.

The Johari Window presents a model that recognises this communicational utility. As Luft describes, the initial pieces in team formation are almost entirely unknown[22]. Thus teams begin in a blind area, slowly developing collective understanding by integrating individual personalities into a coherent team structure that can then interrogate avoided areas and unknown activity, the other parts of the window. The latter two represent things not discovered about team-members capabilities or skills until team work matures and advances on objectives and those things that constitute parts of the wider organisation that are unknown until experienced directly, such as bottlenecks and redundant processes and objectives that the wider organisation still maintains/enforces. As teams develop capabilities to work on their given areas of expertise, cultivating best practice and new knowledge pathways, they move their competences from conscious to unconscious processes, making them part of the collective team function and something that defines their work rather than something they work on, and they move incompetencies from unconscious awareness to a conscious level by developing holistic understandings of where individual’s skillsets match up and where strengths and weaknesses lie. There are similarities with the 4I feedback loop, as the Johari window is not a static model but instead ebbs and flows as new information is added and new members join a team. Integration is required both horizontally and vertically as new individual strengths are added and new organisational imperatives are imposed.

As flexible methods of corporate organisation grow and human and intellectual capital define knowledge pathways, the team as a complex within the feedback loops of information discovery and innovation conceives new mechanisms of voice and exit within organisations. The variable, elastic nature of human capital means institutional walls are dissolving as new work patterns and service delivery requirements evolve, from personal customisation in manufacturing to the decentralisation of services from centralised administration onto the internet. Network organisation sits in tension with traditional corporate and managerial forms, creating cooperative and competitive avenues. As the Taylorist methods of production overtook craft methods, and service and logistical organisation overtook industrial, nationally based economies and institutions, networks and team-based methods will define new modes of communication and knowledge production with the potential to overtake existing systems. “Major companies in the creative industries are able to thrive partly because they draw upon a pool of minor organizations and individuals who supply them with product. As the major companies become increasingly concerned with distribution, their reliance on an informal or “independent” producing sector becomes more pronounced”. As smaller units in the distribution chain spread out beyond institutional moorings, going into “smart mobs” and adhocracies due to “enhanced data processing and communications technologies”[23], the variety of organisational form and by extension methods of voice and exit increase.

[1] https://www.strategy-business.com/article/00323?gko=f6212

[2] Michael J. Piore & Charles F. Sabel, The Second Industrial Divide: Possibilities for Prosperity

[3] Steven Spear & H. Kent Bowen, Decoding the DNA of the Toyota Production System

[4] Michael J. Piore & Charles F. Sabel, The Second Industrial Divide: Possibilities for Prosperity

[5] Timothy E. Dolan, Revisiting Adhocracy: From Rhetorical Revisionism to Smart Mobs

[6] Timothy E. Dolan, Revisiting Adhocracy: From Rhetorical Revisionism to Smart Mobs

[7] https://www.fastcompany.com/51733/fabric-creativity

[8] Mark Granovetter, The Strength of Weak Ties

[9] Albert O. Hirschman, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations and States

[10] Joseph Luft, The Johari Window: A Graphic Model of Awareness in Interpersonal Relations

[11] https://www.strategy-business.com/article/00323?gko=f6212

[12] https://www.fastcompany.com/51733/fabric-creativity

[13] Thomas Diefenbach & John A.A. Sillince, Formal and Informal Hierarchy in Different Types of Organization

[14] Jooho Lee & Soonhee Kim, Exploring the Role of Social Networks in Affective Organizational Commitment: Network Centrality, Strength of Ties, and Structural Holes

[15] Jooho Lee & Soonhee Kim, Exploring the Role of Social Networks in Affective Organizational Commitment: Network Centrality, Strength of Ties, and Structural Holes

[16] Mary M. Crossan, Henry W. Lane & Roderick E. White, An Organizational Learning Framework: From Intuition to Institution

[17] Robert L. Cross, Salvatore Parise & Leigh M. Weiss, The Role of Networks in Organizational Change

[18] Robert L. Cross, Salvatore Parise & Leigh M. Weiss, The Role of Networks in Organizational Change

[19] Herbert Simon, Administrative Behavior

[20] http://panmore.com/amazon-com-inc-organizational-structure-characteristics-analysis

[21] Michael D. Cohen, James G. March & Johan P. Olsen, A Garbage Can Model of Organizational Choice

[22] Joseph Luft, The Johari Window: A Graphic Model of Awareness in Interpersonal Relations

[23] Timothy E. Dolan, Revisiting Adhocracy: From Rhetorical Revisionism to Smart Mobs

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