What is Organization Theory?
theorist /’ ΙərΙst/ n. a holder or inventor of a theory or theories.
theorize/’ ΙəraΙz/ v. intr. (also -ise) evolve or indulge in theories.
theory /’ ΙərΙ / n. (pl. -ies) 1 a supposition or system of ideas
explaining something, esp. one based on general principles
independent of the particular things to be explained (opp.
HYPOTHESIS) (atomic theory; theory of evolution). 2 a speculative
(esp. fanciful) view (one of my pet theories). 3 the sphere
of abstract knowledge or speculative thought (this is all very
well in theory, but how will it work in practice?). 4 the exposition
of the principles of a science etc. (the theory of music). 5
Math. a collection of propositions to illustrate the principles of
a subject (probability theory; theory of equations). [LL theoria
f. Gk theo–ria f. theo–ros spectator f. theo–reo– look at]
Oxford Encyclopedic English Dictionary
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Why Study Organization Theory?
Organization theory is not an easy sell. Unless you are naturally drawn to the abstract, you
probably expect this subject to be dry, unconnected to practical matters and perhaps a little
boring. Even if you are enthusiastic about abstractions, it can be daunting to confront as
many of them at one time as organization theory asks you to do. So why would anyone sign
up to study this complex and difficult subject matter?
There are many different answers to this question. For some, studying organization
theory is motivated by curiosity. They wonder what it would be like to think like an organization,
to get inside organizing processes far enough to reveal the intricate organizational
patterns that make organizations understandable. Others are motivated by the attraction
of stretching their minds in new ways. For example, organization theory draws on the sciences,
the humanities and the arts, and so presents the intellectual challenge of thinking
in interdisciplinary ways. Some turn to organization theory in the hope that it will improve
their chances of becoming successful executives in business, government or non-profit
organizations. Table 1.1 lists some of their specific reasons. For me, it was something else
entirely. I came to organization theory reluctantly when it was foisted upon me as a requirement
of my doctoral program. To say that I did not appreciate organization theory when I
first encountered it would be putting it mildly.
In a way, my initial disaffection with organization theory inspired this book. Once I
began using organization theory, my experiences convinced me that this field of study is
not only valuable—it is interesting! Organization theory has helped me time and again to
analyze complicated situations in the organizations with which I have worked, and to discover
or invent effective and creative means for dealing with them. It has opened my mind
to many aspects of life both inside and outside organizations that I previously took for
granted, and it has given me both mental discipline and a wide-ranging knowledge of
many different subjects. My amazement at how relevant and valuable organization theory
can be caused me to reverse my initially low opinion of the field and find great enthusiasm
for it. It is this change in my perception that led me to write this book. Through it I hope to
share my insights and enthusiasm with you as you discover the benefits and attractions of
organization theory for yourself.
Whether you come to organization theory out of curiosity, a desire to improve your
chances of success in life, or simply because somebody made you do it, there are three interrelated
things I can tell you that will ease your way into this complex subject. The first involves
theories and theorizing, the second concerns abstraction and its place in theory development,
and the third explains why you need to study organizations from multiple perspectives. I will
introduce you to each of these topics in the following sections of this chapter.
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Theories and Theorizing Organizations
You might be surprised to learn that you use theory everyday, and so does everyone else.
Take for example any old adage that seems true or wise to you. One of my favorites is ‘You
can lead a horse to water, but you can’t make it drink.’ Old sayings like this one are filled
with common sense (e.g., about what you can and cannot do for others) and common
sense is a theory about how to understand and negotiate life. More generally, whenever you
create your own meaning or grasp someone else’s, you make things, feelings, ideas, experiences,
values and expectations into ideas or concepts. In doing this you explain yourself
and your world and this constitutes theorizing. Organization theorists specialize in developing
this human capacity to make and use theory. They hone their theorizing skills by
refining conceptual distinctions and using them to create sophisticated explanations
4 WHAT IS ORGANIZATION THEORY?
Table 1.1 Some applications of organization theory
Strategy/Finance Those who want to improve the value of a company need to know how to
organize to achieve organizational goals; those who want to monitor and
control performance will need to understand how to achieve results by
structuring activities and designing organizational processes.
Marketing Marketers know that to create a successful corporate brand they need to
get the organization behind the delivery of its promise; a thorough
understanding of what an organization is and how it operates will make
their endeavors to align the organization and its brand strategy more
feasible and productive.
Information technology The way information flows through the organization affects work processes
and outcomes, so knowing organization theory can help IT specialists
identify, understand and serve the organization’s informational needs as
they design and promote the use of their information systems.
Operations Value chain management has created a need for operations managers to
interconnect their organizing processes with those of suppliers, distributors
and customers; organization theory not only supports the technical aspects
of operations and systems integration, but explains their socio-cultural
aspects as well.
Human resources Nearly everything HR specialists do from recruiting to compensation has
organizational ramifications and hence benefits from knowledge provided
by organization theory; organizational development and change are particularly
important elements of HR that demand deep knowledge of organizations
and organizing, and organization theory can provide content for executive
Communication Corporate communication specialists must understand the interpretive
processes of organizational stakeholders and need to address the many
ways in which different parts of the organization interact with each other
and the environment, in order to design communication systems that are
effective or to diagnose ways existing systems are misaligned with the
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(theories) that far outstrip common sense. As they do so they participate in the invention
of new ways of looking at experience and its phenomena. The basic difference between
common sense theorizing and the theorizing academics do is the added care academics
take to specify their practice, correct its errors and share their theories with others, thereby
contributing to systematic knowledge-building efforts.
Theories are built from abstractions known as concepts. One concept—called the
phenomenon of interest—is selected from all the others as a focus for theorizing and then
related concepts are defined and used to explain that one. Consider Albert Einstein’s theory
that E mc2. Energy (E) was Einstein’s phenomenon of interest and he explained it
using the concepts of mass (m) and a constant representing the speed of light (c). The
squaring of c, and its multiplication by m, specify how these explanatory concepts are
related to the phenomenon of interest and form Einstein’s theory about the relationship
between energy and matter. In a nutshell, E mc2 shows what theory is—a set of concepts
and the relationships between them proposed to explain the phenomenon of interest.
Sometimes the explanation of a phenomenon is too complex for precise specification
using a mathematical formula. This is the usual case for phenomena involving human
behavior because human behavior is notoriously unpredictable, except under tightly
constrained conditions like those psychologists create in laboratories where the ordinary
influences of everyday life can be controlled. For this reason explaining organizations
where humans are at work often demands the use of statistical probabilities rather than
precise formulae. Alternatively, researchers turn to metaphor or analogy to explain their
phenomena. Sometimes theorists do not even attempt to explain phenomena; instead
they develop understanding and appreciation or give practical guidance. You will meet all
of these kinds of theorizing in the pages that follow as we wend our way from theories of
organization that take physical science as their model, to those that find their foundations
in the humanities and the arts.
Given the volume and variety of organization theories, you may find it somewhat
ironic to call this field of study organization theory. While the name suggests that there is
only one—a single, integrated, overarching explanation for organizations and organizing—
in fact there are many organization theories and they do not always fit neatly together.
Some people see this diversity as a stumbling block for an academic discipline because, in
their view, if there is no agreement on what a field has to offer then it probably has little to
offer at all. Others try to excuse the situation arguing that organization theory is a young
field that will eventually work out its differences and come around to the singular perspective
that they believe defines a mature academic discipline.
I take an altogether different view. Along with a number of other organization theorists,
I believe that organization theory always has and always will embrace multiple perspectives
because it draws inspiration from a wide variety of other fields of study, and
because organizations will remain too complex and malleable to ever be summed up by any
single theory. In my view the diverse theoretical base of organization theory is something
to celebrate, not only because it offers a broad perspective on organizational life that
encompasses scientific explanation, human understanding and artful appreciation, but
because it creates more possibilities for effectively designing and managing organizations.
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6 WHAT IS ORGANIZATION THEORY?
Semiotics and Hermeneutics
Von Bertalanffy (1950)
Trist and Bamforth (1951)
March and Simon (1958)
Burns and Stalker (1961)
Lawrence and Lorsch (1967)
Berger and Luckmann (1966)
Clifford and Marcus (1986)
Lash and Urry (1987)
1960s and 1970s
Figure 1.1 Sources of inspiration for organization theory
The boxes show the four major perspectives on organizations used as a framework for this book. The dates inside the boxes indicate the decade when
the perspective became recognizable within the field. Contributing disciplines are indicated above the boxes and some of their influential thinkers are
listed below. Notice that some contributions pre-date their influences on organization theory considerably, indicating the lag in communication between
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Figure 1.1 will give you appreciation for the ambitious reach of organization theory.
The figure displays the many academic disciplines from which organization theorists have
drawn inspiration. The top part of the figure shows the academic disciplines that have contributed
to organization theory while the bottom part names some major thinkers from
these disciplines whose ideas have shaped the field. Be sure to notice that the contributing
disciplines range from the natural and social sciences to the humanities and arts.
Now look at the middle part of Figure 1.1. The first box, labeled prehistory, represents
sources of ideas about organizations that occurred before anyone considered organization
theory to be a discipline in its own right. Thus the authors listed below the prehistory box
did not theorize organization from a single perspective nor did they intend to create the
field of organization theory; they had their own disciplinary communities, shown at the
top of the figure, to which they were oriented when they wrote. Nonetheless the authors
grouped in the prehistory category provided organization theory with its formative concepts
and their ideas served as reference points around which the perspectives of organization
theory later developed. When you become familiar with these authors, you will hear
echoes of their words in the many concepts and theories that make organization theory
what it is today, and you will recognize how their work contributed to one or more of the
three perspectives that form the remaining boxes in the middle of Figure 1.1.
The order of the boxes from left to right in the middle of this figure gives a sense of
how the field has changed over time (don’t panic, you will get more information about the
multiple perspectives of organization theory in a minute). But it would be a mistake to think
that newer perspectives have replaced older ones; perspectives accumulate in organization
theory and over time they influence one another as organization theorists take in more and
more of the ideas this field of study offers.
To get a grip on what I mean by perspectives, you may find it helpful to compare them
to literary or film genres (e.g., drama, romantic comedy, horror), styles of painting (e.g.,
classical, impressionist, post-impressionist, cubist) or types of jazz (Big Band, Bebop, Cool
Jazz, Fusion). Just as these genres encourage certain forms of artistic expression, theoretical
perspectives encourage certain ways of thinking and speaking. And not unlike genre in the
arts, it is only after the appearance of a critical mass of theories using similar underlying
logics and vocabularies that anyone identifies them as having come from the same perspective
and articulates what the assumptions underpinning that perspective are.
Thelonious Monk, among others, was playing Bebop before anyone acknowledged this as a
new type of jazz or gave it a name. Similarly Max Weber, Émile Durkheim and Karl Marx
were writing about bureaucracy and authority before organization theory was known by
this name. Thus, the different perspectives on organization theory developed at different
times and continue to develop in reaction to one another. Today their proponents form
communities within organization theory whose members think and do research in similar
ways that you will soon learn to distinguish from one another.
Interplay among the perspectives of organization theory produces continuous
change in each of them, which is one reason why it can be difficult to make a case for one
particular way of sorting through the ideas of organization theory, including the one
diagramed in Figure 1.1. However, if you are a newcomer to the field, you will probably
appreciate a little order; most people find it useful to hear about how others have come to
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terms with the diversity of organization theory. But please feel free to rearrange, change or
even abandon any of the schemes presented throughout this book when you are ready to
create your own. In Part III I will introduce you to the organization theorists who are currently
challenging the dominant perspectives by inventing new concepts and theories.
Eventually some of them will combine their work into new perspectives that will stand
alongside those that provide the framework for this book. But before you are ready to tackle
all these current issues in organization theory, you need to know something about what
organization theory is and where it came from. Let me start you off with some basics
concerning theory and theorizing.
Concepts and Abstraction in Theory Development
Concepts provide mental categories for sorting, organizing and storing experience in
memory. They are ideas formed by the process of abstraction. Webster’s New World
Dictionary defines abstraction as the ‘formation of an idea by mental separation from particular
instances.’ This means that you build concepts in your memory on the basis of your
acquaintance with instances that are familiar to you, either as the result of personal experience,
or based on what others tell you. For example, your concept of dog is built upon your
personal encounters with representatives of this class of animal such as dogs you have
owned or that have bitten you; upon stories you have heard others tell about their experiences
with dogs; and upon encounters with non-dogs that, when you were a young child,
helped you to build this concept by teaching you what a dog is not (‘No, that’s a cat’).
Think of your concepts as empty baskets to be filled with experience. If you first
encounter concepts through academic study, you will likely experience it as empty. This is
one reason why organization theory appears to many as dry and boring when they first
encounter it. To enrich your concepts you must fill them with meaning by relating personal
experiences to them in much the same way you did when you learned the concept of
dog as a young child. That is, you must gather specific examples that fit each concept until
it is more or less fully formed. Of course you can continue enriching your concepts for the
remainder of your life, like experts do. For example, a person who trains dogs learns more
about them all the time, just as an organization theorist continually seeks different ways of
understanding and explaining organizations. This means that, at least for experts, some
concepts will be continually expanding. There is no end to the subtlety you can develop by
enriching your concepts and, of course, by adding new concepts to your knowledge base.
The trick is to get the process of abstraction going.
It is important to remember that, in this book, you will mostly encounter other
peoples’ concepts. Your task will be to relate these concepts to your own experience and
other knowledge that you have stored in your memory. I will present the concepts of organization
theory in ways designed to trigger associations with experiences you have had so
that you can fill your concepts with your own meanings. With each new concept you
encounter, try imagining what it is that you have personally experienced that might relate
to it. Keep a journal of these ideas with different sections dedicated to describing the
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examples you relate to each concept. Be playful. Do not feel constrained to obvious associations;
also challenge yourself to consider experiences you only intuitively sense are applicable.
As you do this you will begin to embed concepts in your own experience as well as
placing your experience in the context of your conceptual knowledge. Comparing your
examples to those of your classmates, colleagues, or others you know who are interested in
organizations will also expand your understanding and hone your conceptual abilities.
As your pool of concepts and theories expands, you will find yourself analyzing your
experiences in new ways, for instance, by relating experiences that you never before
thought of as related, or by seeing hidden or disregarded aspects of a situation in which you
were involved. In other words, use your personal experience to develop concepts with
which you can understand or build theories, and then use your concepts and theories to
better understand your experiences. This sort of give and take between theoretical understanding
and personal experience is essential to the development of your theorizing skills
of abstraction, reasoning and application as well as to your knowledge of organizations and
Although concepts are associated with specific examples, a concept is not a simple
aggregation of all the information you remember about specific examples. A concept is
much more compact than this. To form a concept, ignore the unique elements or features
you associate with specific examples and focus on only those aspects that are common to
all the instances to which the concept applies. Thus, the concept dog is associated with four
legs, a tail, a cold wet nose when it is healthy, and two ears, but not black spots, big paws, or
a habit of jumping on strangers, which are features of particular dogs, but not all dogs.
Seen in these terms, abstraction is the process of removing the unique details of particular
examples so that only their common aspects remain. Of course abstraction does not
happen in one move; learning is involved in the movement from multiple concrete
examples to an abstraction.
You may wonder why you would want to drop all the interesting details out of your
daily experiences in order to build concepts. One reason is that abstraction gives you an
increased ability to process more information and/or to process information more quickly.
When you encounter a new example of a well-developed concept, you have numerous bits
of information about that object or idea at your fingertips. If you recognize an object as a
dog, you may instantly be aware of the possibility that it will growl if it feels threatened.
This information has immediate practical value. Concepts also make it possible to communicate
knowledge to others. For instance, once your children know what a dog is, you can tell
them that some dogs bite and so they should not reach out their hands to a strange dog
until they are confident it is friendly.
In addition to giving you the ability to communicate with others, abstraction gives you
enormous powers of thought. It allows you to associate volumes of information with a single
concept and thereby to process this information rapidly whenever you think of, or with, the
concept. You can see the importance of this aspect of abstraction in terms of the psychological
process known as chunking. Cognitive psychologists tell us that humans have the
capacity to think about, roughly, seven pieces of information (plus or minus two) at one time.1
This means that you can think about seven different dogs and nothing else, or, through
chunking larger portions of your knowledge, you can think about all the dogs in the universe
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and six other kinds of animal as well. You can even think about the entire animal kingdom
and have room to think about six more things besides. Chunking illustrates the power of
abstraction—using concepts allows you to consider large blocks of knowledge at once, a
handy capacity to have when your daily activity demands that you understand and stay
abreast of developments within a complex entity such as an organization.
Chunking makes an important contribution to theorizing—it permits us to relate
large bodies of knowledge to each other. Remember, a theory is an explanation rooted in
the specification of the relationships between a set of concepts (e.g., E mc2). When the
concepts upon which a theory is built are defined at very high levels of abstraction, the
theory becomes very general which means that it applies across many situations with few
or no limiting conditions. Of course this is part of the danger with theory; by leaving out so
many of the details of specific circumstances and meanings as we ascend the heights of
abstraction, we can be lulled into thinking that we understand everything. If we assume
our knowledge is more general than it is, we may apply it to the wrong situations or be willing
to impose our beliefs on others when it is inappropriate or misleading to do so.
Therefore, be sure to notice that there is both something gained and something lost when
you use abstraction. You gain the ability to think about numerous instances, but you lose
the rich detail that the individual cases contain and the depth of knowledge these details
As a theorist, you will want to learn to use abstraction because it permits you to
communicate and understand general ideas about complex subjects, such as organizations.
This will enable you to see day-to-day issues in a larger perspective that expands your
thinking and gives you ready access to accumulated knowledge. But you should also
remember that abstract reasoning alone will not provide the important details that you will
confront in your role within a specific organization. Applying theory, which is wedded to
abstract reasoning, demands that you be able to add critical details back into your formulations
after you have analyzed and understood the more abstract aspects of the situation at
hand. You will want to develop both concepts and theorizing skills with a broad base of
personal experience and then translate your abstractions back into specific understanding.
I believe a great deal of the frustration with organization theory that many students