Organizations as Interpretation Systems

When I was in business school, I took a number of Human Resource Management classes, and one of the primary faculty there was Dick Daft, an organization theorist.  His class gave me my first exposure to classics/basics of organization theory, and Vanderbilt's MBA program is small so I felt like I knew him at the time.   He did one article on the relationship between information richness and the use of media that I found very useful and would copy for people later, and I used the syllabus from one of his higher level classes on org theory to guide my post-MBA reading. 

Move the clock forward--God help me--30 years.  I'm back in an org theory class, and my new org theory guru Billie Sandberg points me to Karl Weick's work on sensemaking.  And Weick co-authored several things with Daft and cites him a bunch.  A circle closes.  

There is a big random element to academic life.  Most people pick schools early on in their academic career based on pretty minimal information.  I went to Vanderbilt because of circumstances of my personal life, not in search of a particular scholar.  Daft's work did register with me, and some of his observations about the complexities of communication made sense to me with my humanities background engaged with complicated texts and interpretations. It does make sense that years later I gravitate back into this area. 

The article I'm looking at today is one by Daft and Weick called "Toward a Model of Organizations as Interpretation Systems."  Often, maybe too often, a title itself will catch my eye and get my mind running before I've even read a word.  In this case the idea of an organization as an interpretation system intrigues me.  I've referred to organizations as information processing systems, and used that idea as the basis for some of my consulting.  An interpretation system grabs me because of the connection with the hermeneutical work of the humanities, and to my seemingly disconnected art writing, where I interpreted visual art or music.       

In this 1984 article Daft and Weick built a 2x2 matrix of interpretation modes depending on assumptions about the environment (unanalyzable or analyzable) and the role of the organization--passive or active in shaping its environment.  So that first dimension is all about whether the organization operates in an environment it considers stable, "concrete," and predictable, or in an environment that is none of those things.  There are many org theory constructs that depend on differentiating environments, or periods, of stability from those with higher uncertainty.  Every time I run across one of those, it occurs to me that we are in a period where stability is gone--the only environment is a changeable, difficult to predict one.  When I got to business school in the 1989, we were starting to see that unravel.  We had come off the oil shocks and inflation of the 70s, the economic retrenchment of the 80s, and the emergence of global competition that put everything up for grabs.  Change and crisis seemed the order of the day, and in a business school we were scrambling to catch up with the Japanese.  Things never let up after that.  Soon it was the dot.com bubble, the WTC attacks, a huge recession, and whatever it is we have today. 

What's more, I am very suspicious of the notion of periods of stability.  Something is always in motion.  If you read enough history, you will find someone making the case for any decade you name as a period of great transformation and critical turning points.  Also, stability in the West (or maybe it was only the US) was built on power that bore down on other parts of the world.  I think any stability has been bought by violence. 

So I'm prepared to collapse Daft and Weick's 2x2 matrix in a 1x2 row.  The other dimension is whether the organization itself acts upon the environment or responds to it more passively.  Since the rise of a technology-based economy, all the attention goes to businesses and groups that act on the environment.   That "disrupt" markets.   The idea that you can sit in the environment passively, scan it and respond seems foolish.  Every market (and field of endeavor) is open to organizations who would shape it, and they will own it.    

In the current business environment, which to a great extent drags along other sectors, an analytical black hole forms and this analytical structure collapses in on itself to the point where there is only on relevant mode for these organizational interpretive systems.   Daft and Weick describe the exploratory activities of the quadrant containing active firms operating in an uncertain environment: "They gather information by trying new behaviors and seeing what happens.  They experiment, test, stimulate, and they ignore precedent, rules and traditional expectation." They "may leap before they look, perform trials in order to learn what an error is, and discover what is feasible by testing presumed constraints."  Sounds like A-B testing, Agile development, and "move fast and break things."  We seem well on the way to this being all there is.