Organizational Failures Framework

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= From William Ouchi’s article about clans as an alternative to bureaucracies and markets


Graphic at http://3.bp.blogspot.com/_u1GIE0NHH8g/ShNtFBndzaI/AAAAAAAAACc/OTSN6dKn9cQ/s400/ouchi.jpg


Commentary

David Ronfeldt:

"Ouchi is a management professor and strategist. This table (p. 137) summarizes his proposal (p. 132) that: “Markets, bureaucracies, and clans are therefore three distinct mechanisms which may be present in differing degrees, in any real organization.” With this, the paper offers a rare early effort to add clans — a variant of tribes — to the established transaction-cost view that hierarchies and markets are the key alternatives. Accordingly, clans may, under some conditions, offer a better way to create efficiencies and avoid organizational failures from a transaction-cost perspective. The conditions Ouchi identifies are where harmony is essential — i.e., where teamwork and a strong sense of community are needed, and individualistic opportunism must be avoided — more so than is the case with hierarchies and markets. His concept of clans draws on Durkheim’s concept of organic solidarity, and he notes how common this was in preindustrial enterprises. But his focus is its rising significance in modern high-tech industries, notably in Japan." (http://twotheories.blogspot.com/2009/05/organizational-forms-compared-my.html)

Source: http://gspa.grade.nida.ac.th/pdf/Dr_Nutta/PA600PP601/No3/PA600_3-5_Nutta.pdf