The Palgrave Encyclopedia of Strategic Management
Mie Augier; David Teece
ISBN: 9781137294678
DOI: 10.1057/9781137294678
Palgrave Macmillan
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Definition
Selznick’s major focus is on the normative functions of
organizational leaders. He insisted that the ‘critical
decisions’ they make craft the organization’s ‘character
structure’: shaping its distinctive competence. His focus was
primarily on the ways in which organizations contribute to
their larger communities and societies.
Philip Selznick (1919–2010) was a leading scholar in
the sociology of both law and organizations. He was a
major founding figure in the ‘law and society’ school
of research, making significant contributions to the
sociology of law, with application to both private and
public organizations. In addition, he developed a
distinctive version of INSTITUTIONAL THEORY which,
over time, has generated productive linkages with
evolutionary economic and resource-based theories
of organizations – strands of work feeding into
management strategy.
Based on his early research on public and political
organizations – the Tennessee Valley Authority and
Leninist associations (Selznick, 1949, 1952) – Selznick
observed how, over time, organizations made adaptive changes in their structures and practices in
response to both internal forces, such as the changing
composition of members, and external forces,
including powerful exchange partners. In his treatise
Leadership in Administration (Selznick, 1957), he
crafted these ideas into a theory of the institutionalization of organizations. Selznick argued that,
although organizations begin as technical systems
designed to achieve specific goals, over time, as
commitments to internal and external constituencies
accumulate, they become ‘institutionalized’ – ‘infused
with value beyond the technical requirements of the
task at hand’ (Selznick, 1957: 17). These collective
commitments come to comprise the organization’s
‘character structure’, reflecting both its ‘distinctive
competence’ as well as its specific forms of
inadequacy.
Unlike the related concept of ‘organization identity’, which is more concerned with how the organization is perceived as ‘object’ by others, ‘character
structure’ deals with the organization as ‘self ’ – as
actor (Carlsen, 2009). Selznick viewed the formation
of organization character as a historical and dynamic
process – one which was open-ended and pragmatic.
The organization acquires its distinctive competence
and its commitment to particular values as a result of
its struggle to adapt to its internal and external
environment in a purposive and reflexive manner.
While organizations can acquire their character
structure through inadvertence and drift, this structure can also be more deliberately crafted. Elite
groups, in particular ‘institutional leaders’, can define
and foster the advance of general goals and associated
values. Unlike managers, who attend to the coordination of technical functions in order to improve
efficiency of operations, an institutional leader ‘is
primarily an expert in the promotion and protection
of values’ (Selznick, 1957: 28). Leaders are concerned
with defining, protecting and promoting the moral
values the organization embodies, ‘from the standpoint of the people whose lives it touches as well as
that of the larger community’ (Selznick, 1992: 238).
The scope afforded to institutional leaders varies
across organizations: the broader the goals it serves,
the larger is the need for and opportunity provided to
institutional LEADERSHIP.
This conception of leadership within organizations
is not unique to Selznick. Many of the ideas were
foreshadowed by Mary Parker Follett (1941) and by
Chester I. Barnard (1938), and Selznick’s lead has
been followed by more recent scholars, such as those
developing a ‘stewardship theory’ of management
(Davis, Schoorman and Donaldson, 1997). In addition, scholars working in relatively distant areas,
including evolutionary economics and resourcebased theories of organizations, have advanced related conceptions of organizations and the role of their
leaders.
The institutional economist Edith Penrose (1959)
recognized that the most important asset a firm
possesses is its specialized use of resources, including
work skills, and its capability to mobilize them as
required in new and diversified combinations. As
developed in evolutionary economics (Nelson and
Winter, 1982) and in resource-based theories of the
firm (Barney, 1997; Teece, Pisano and Shuen, 1997),
these approaches resonate with and expand on, but
can still learn from, Selznick’s work on institutionalized capabilities – attending to both their strategic
advantages and the constraints they impose on
organizational adaptation (Knudsen, 1995).
In the final analysis, Philip Selznick’s concern was
to improve the functioning not only of organizations
but of communities and societies. He urges strategic
leaders of organizations to recognize and embrace
their moral functions as influential members of these
r Palgrave Publishers Ltd
10.1057/9781137294678 - The Palgrave Encyclopedia of Strategic Management, Edited by Mie Augier and David Teece
1
Copyright material from www.palgraveconnect.com - licensed to University of Toronto - PalgraveConnect - 2016-11-26
Selznick’s approach to strategy
wider communities. He asks them to attend less to
improving the ‘bottom line’ and more to advancing
the ‘higher values’ they can protect and serve (Kagen,
Krygier, and Winston, 2002).
W. RICHARD SCOTT
See also
INSTITUTIONAL THEORY; LEADERSHIP; ORGANIZATION COMPETENCIES; PATH
DEPENDENCE IN TECHNOLOGIES AND ORGANIZATIONS
References
Barnard, C. I. 1938. Functions of the Executive. Cambridge,
MA: Harvard University Press.
Barney, J. B. 1997. Gaining and Sustaining Competitive
Advantage. Reading, MA: Addison-Wesley.
Carlsen, A. 2009. After James on identity. In The Oxford
Handbook of Sociology and Organization Studies: Classical
Foundation, ed. P. S. Adler. Oxford: Oxford University Press.
Davis, J. H., Schoorman, F. D. and Donaldson, L. 1997.
Toward a stewardship theory of management. Academy of
Management Review 22, 20–47.
Follett, M. P. 1941. Dynamic Administration: The Collected
Papers of Mary Parker Follett, ed. M. Metcalf and L. Urwick.
Bath: Management Publications Trust.
Kagen, R. A., Krygier, M. and Winston, K. eds. 2002. Legality
and Community: On the Intellectual Legacy of Philip Selznick.
Lantham, MA: Rowman & Littlefield.
2
Knudsen, C. 1995. The competence view of the firm: what can
modern economists learn from Philip Selznick’s sociological
theory of leadership? In The Institutional Construction of
Organizations: International and Longitudinal Studies, ed.
W. R. Scott and S. Christensen. Thousand Oaks, CA: SAGE.
Nelson, R. R. and Winter, S. G. 1982. An Evolutionary Theory
of Economic Change. Cambridge, MA: Harvard University
Press.
Penrose, E. 1959. The Theory of the Growth of the Firm.
Oxford: Oxford University Press.
Selznick, P. 1949. TVA and the Grass Roots. Berkeley, CA:
University of California Press.
Selznick, P. 1952. The Organizational Weapon. New York:
McGraw-Hill.
Selznick, P. 1957. Leadership in Administration: A Sociological
Interpretation. New York: Harper & Row.
Selznick, P. 1992. The Moral Commonwealth: Social Theory
and the Promise of Community. Berkeley, CA: University of
California Press.
Teece, D. J., Pisano, G. P. and Shuen, A. 1997. Dynamic
capabilities and strategic management. Strategic Management
Journal 18, 509–533.
r Palgrave Publishers Ltd
10.1057/9781137294678 - The Palgrave Encyclopedia of Strategic Management, Edited by Mie Augier and David Teece
Copyright material from www.palgraveconnect.com - licensed to University of Toronto - PalgraveConnect - 2016-11-26
Selznick’s approach to strategy