Philippine Journal of Public Administration, Vol. XLII, Nos.

3 & 4 (July· October 1998)

Globalization, Organizations,
and Public Administration
MA. OLIVA Z. DOMINGO*

Largely facilitated by advances in telecommunications,

globalization is a potent and irresistible force that is shaping the
current forms and contexts of organizations. To cope with the changing

• demands of the global environment, organization structures and

designs, which were unimaginable before, have emerged. Thus,
contemporary organizations now take the following forms: teams in a
network (network organization); autonomous business units or self-
managed teams akin to cells interacting with other cells to form a more
competent organization (cellular organization); and ad hoc mini
organizations set up for a particular purpose / set of activities rather
than units within an office or building (virtual organizations). Other
new organizational forms include joint ventures, strategic alliances,
modular corporations, and linear chains, among others. These changes
pose real challenges to the relevance of existing organization theories in
particular, and to the theory and practice of public administration in
general.

,. Introduction

Despite our greatest fears about globalization, we cannot alter the fact
that it is now happening and is changing the shape of economies, political and
social institutions, and culture. It is also providing the impetus for
strengthening civil society and the growth of alternative social movements
(Briones 1997: 2-4). It is a potent and irresistible force that is having
tremendous impact on people, nation-states, and organizations.

To respond to the challenges and seize opportunities in an increasingly

• integrated world economy, organizations are currently undergoing radical

transformations facilitated, to a large extent, by advances in tele-
communications and information technology. Business enterprises, necessarily,
have been quick to adapt and there is increasing pressure on public sector
organizations to respond accordingly. Viewed from this context, organizations
appear to be at the receiving end of globalization. The relationship between
organizations and globalization, however, may be viewed as a two-way process

*Assistant Professor and Doctor of Public Administration student, College of Public

Administration, University of the Philippines.

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because the "combined activities of all kinds of organizations stimulate,

facilitate, sustain, and extend globalization" (Parker 1996: 484), thereby
instigating global change.

Globalization is here and we are now experiencing its impact. This article
focuses on organizations and the transformations that are occurring as they
face the challenges of a global market economy; it does not argue about the
benefits and hazards of globalization. The first part describes the changes in
organizational structures, behavior, and processes. The second part is a brief
presentation of theories of organization and their prospects vis-a-vis

•
globalization. Finally, the challenges of these developments on public sector
organizations are examined. '

Globalization and Changing Organizational Forms and Contexts

The dismantling of economic barriers and the liberalization of trade are

evolving new forms of transacticns-e-among producers, suppliers, and
consumers-which provide opportunities for organizations or firms of various
sizes and shapes to participate (Alburo 1997). Whereas international trade
used to be the domain only of the large transnational corporations, global

.,
economic integration has opened possibilities even to small players through
easy access to markets. Naisbitt (1994: 16) describes this "global paradox,"
thus:
As the world integrates economically, the component parts are
becoming more numerous and smaller and more important. At once,
the global economy is growing while the size of the parts are shrinking.

Organizations are social institutions that have planned activities and

interrelationships logically drawn up to undertake specific objectives. The
global organization is not a well-defined concept. The tendency is to study large
organizations despite the fact that the potential to engage in global activities
are not necessarily confined to large organizations. Sometimes the focus is on
organizations involved in the movement of goods, capital, and services from one
country to another, a perspective that would fall more within the limited view
of internationalization rather than globalization. •

The international/transnational/multinational organizations of yesteryears

are not necessarily equivalent to the organizations operating in today's global
village. Though this distinction may be discernible, the exact nature of the
global organization is "far less clear and particularly less clear to practitioners"
(Parker 1996: 489). Parker cites studies attempting to distinguish international
organizations from multinational firms and transnational enterprises and how
these differ from or are similar tc what may be considered as global
organizations. The use of different terminologies, however, has resulted in

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further confounding the search for meaning. This is a reflection of the complex
changes occurring all over the globe. Parker's distinction between international
organizations and global organizations is instructive. She characterizes an
international organization as one whose headquarters are almost always based
in a single country, although it might establish partial or complete operations
elsewhere. Its culture and organizational structure are consistent with the
practices and norms of the home headquarters country. It adopts standardized
technologies and business processes throughout its operations, regardless of
where they are located, and it relies on similar policies, especially regarding
human resources, worldwide (Parker 1996: 488).

• Global organizations, on the other hand, engage in different set of

activities and create additional responsibilities for organizations than
international firms. They operate in a nationless and borderless world where
people, capital, and goods move about freely. They may be described as those
that have the following characteristics (Parker 1996: 490-491):

• they establish a worldwide presence in one or more businesses;

• they adopt a worldwide strategy, i.e. they combine worldwide

standards with local responsiveness;

• they are able to cross external boundaries of nations, as well as

boundaries internal to the organizations such as: (1) the less
tangible boundaries like culture, thought, or the relationship
between the organization and others, and (2) those that pertain
to functional assignment, task, rank, role, or attitude;

• except for a few standardized policies, its people, processes,

policies, structures, and technologies are diverse.

Toffler was prescient in his 1979 book Future Shock, when he described
the shape that organizations would take in the future. These radical
transformations among organizations, whether they operate in the global
village or not, are most discernible in terms of their structure and the behavior
• of individuals within them. These changes are discussed in the succeeding
sections.

Organization Design and Structure

The bureaucratic organization popularized by Weber used to be the

dominant structure for organizations. Characterized by hierarchy,
centralization, division of labor, authority, dominance of rules, and impersonal
relationships, it is criticized for its rigidity and red tape. Its promise of

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stability, order, precision, and predictability of results, however, has made it a
rationale choice for organizational design and has led to what is sometimes
referred to as a TINA tendency (There Is No Alternative) for organizational
structure (Clegg and Gray 1996: 296). While the bureaucratic structure is still
very much evident, more dynamic and responsive organizational forms are
emerging.

Global competition demands speed and flexibility. It demands that

organizations deliver high quality goods and services, be responsive to their
customers, offer nonstandardized services, and be able to adapt swiftly. The
rigidity of traditional structures render organizations helpless in the face of
turbulence, uncertainty, and worldwide competition and are therefore giving •
way to more flexible forms. The "flex-firm" concept refers to a variety of ways of
organizing people and activities other than the bureaucratic structure (Toffler
1991: 182). ~

In order to survive, companies are dismantling their bureaucracies.

"Economies of scale are giving way to economies of scope, finding the right size
for synergy, market flexibility, and above all, speed" (Naisbitt 1994: 14).
Organizations have been downsizing operations through what Naisbitt
described as the "ODD effect" or outsourcing, delayering, and deconstruction.
Terms like rightsizing, acquisitions, takeovers, mergers, restructuring, or
reengineering have become so familiar and commonplace. This trend began as
early as the 1980s and has since spawned a variety of organizational forms that • ~
we see today. Organization structures have gone beyond the so-called "modern
designs" such as the project structure or matrix designs. The emerging designs
"totally abandon the classical, hierarchical, functional structure" (Luthans 1995:
486) and have evolved into the network, cellular, and virtual designs.

Rather than performing the entire sequence of functions (from planning, '1
researching, designing, manufacturing, and marketing a product), organizations l
are linking with other organizations with critical expertise for specific projects.
This modular organizational architecture allows firms to operate as teams in a
network (Luthans 1995: 487). The network organizations provide the most
efficient service at the different stages. By relying on their partners, network
organizations are able to leverage their core competencies. Some firms are not •
simply utilizing the expertise of their partners but have even gone beyond this
to embrace them as full partners. This allows for free flow of technical and
market information, which ensures lower costs and the satisfaction of the
individual organizations' goals as well as those of the network as a whole
(Allred et al. 1996: 19-20).

Networks may exist simply for the purpose of exchanging information or

may actually be involved in joint activities. There are advantages of this type of
structure. It allows resources to be shared, avoids duplication of independent

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 GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 161

effort, and spreads out the risks. It is more flexible than the traumatic and
costly alternatives of takeovers or mergers, and more appropriate for products
with short life-cycle (Clegg and Hardy 1996: 9-10). Business enterprises and
nongovernmental organizations have discovered the merits of networking many
years back.

Information, communication, and transportation technology have

effectively reduced if not eliminated the constraints of distance and time, thus
enabling the component parts of a network organization to function as one
wherever they may be located and allowing them to respond more readily to

• competition and other global challenges.

Another form that global organizations are taking is the so-called cellular
organization which acts more as a facilitating mechanism, rather than
employer. It is analogous to the living organism, the cell, which can perform all
the functions of life alone but, by acting with other cells, is able to do more
complex functions. A cellular organization is made up of autonomous business
units or self-managed teams, etc., that interact with other cells rather than
exist on their own in order to become a more competent organization. An
example of this would be an organization that provides equity capital and
expertise in exchange for ownership of product rights; another firm (or
customer) which provides cash by placing an advance order in exchange for
rights and input into the development process; and still another firm acting as
the project leader. Under this arrangement, the funding, expertise, as well as
information about the demand for the product are all obtained (Allred et al.
1996: 22). The project leader may involve other cells or organizations with
appropriate expertise in the development process.

Technological advances are taking organizational structures even

further-into the realm of the virtual organization. The term "virtual" does
not come from the popular "virtual reality" but from "virtual memory" which is
used to describe the computer's memory capacity that can be made to appear
bigger than it actually is (Luthans 1995: 487). E-mail, mobile phones,
computers, fax modems, and video conferencing no longer require people to be
together in the same place at the same time. The organization is made up of ad
• hoc mini organizations set up for a particular purpose. They exist more as
activities rather than units within an office or building. Charles Handy (1995:
42) predicts that the office of the future "will be more like a clubhouse: a place
for meeting, eating, and greeting, with rooms reserved for activities, not
particular people." With a telephone line, computer, modem, or other
equipment, an office worker can perform his/her functions without physical
presence in an office. They can do their work anywhere they choose to, and
during their convenient hours. In fact, a sizeable number of contemporary
entrepreneurs now have office addresses that are usually located in prestigious
business districts or buildings that may appear impressive in business cards but

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are actually only virtual offices that perform as mail forwarders or message
centers.

The key attributes of the virtual organization are: (1) technology, which
links partners by informational networks based on electronic contacts;
(2) opportunism, where temporary, less formal network of firms come together
to exploit fast-changing opportunities; (3) absence of borders which allows them
to operate in any environment; (4) the importance of trust between and among
companies that must rely on each other; and (5) excellence, or the possibility of
creating the "best-of-everything" because the companies bring in their
respective core competence (Luthans 1995: 487-488).

A distance education program, like the University of the Philippines Open

University (OU), operates like a cellular and a virtual organization. Its
•
academic programs and policies are implemented with minimum face-to-face
interaction among parties involved. Academic programs are developed
individually or jointly by academic degree-granting units from the different
autonomous universities (in Diliman, Manila, Los Banos, and Visayas) and
students need not relocate on campus to attend residential classes. There are
no fixed faculty, very few personnel, and the site of operations is not fixed in
one place. The University is thus able to reach a. wider public and provide
learning opportunities with the least dislocation and disruption to career,
community, or family life of the learner. There is great reliance on
communications technology and multimedia resources to enrich the learning
process. Students receive their learning modules upon enrollment and read
their lessons and perform class exercises in the luxury of their homes or offices.
They can fax their application forms and their class exercises, or e-mail their
tutors. Their face-to-face interaction with the University is limited to the very
few (three or four times a semester) "tutorial" sessions and examinations.
Thus, faculty members assess the performance of students and give them
grades while students are able to complete their degree programs through a
"virtual" relationship.

Other terminologies for the new organizational forms include joint

ventures and strategic alliances, which are cooperative arrangements that
adopt a collective strategy enabling organizations to enter new markets, both •
domestic and global. Then there are the modular corporations which
subcontract all non-core activities, like computer operations and cafeteria, to
outsiders. They are equivalent to what Charles Handy refers to as "shamrock
organizations." They maintain a small core of permanent professional workers
who are guardians of the core competencies, on one hand, and, on the other,
several independent contractors usually composed of part-timers and temporary
staff to whom much of the organization's work is outsourced (Handy 1989: 70-
92). A number of government agencies in the country have adopted this design
through contracts for security (or blue guard) and janitorial services. Linear

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\ chains, are more recent forms that involve connecting disparate organizations
where the lead company imposes strict quality controls on subcontractors and
subsubcontractors, who may in turn pressure management to improve
innovation (Clegg and Hardy 1996: 9).

Regardless of the structure adopted, the trend is toward flat

organizational structures and less hierarchy.

Developments in electronic and communications technology-linking

telephones, computers, and cables lines; wireless technology such as satellite

•
microwave; new messaging units; improvements in cellular phone technology;
personal telecomputers which can be programmed to receive television and
radio signals as well as telephone transmissions; more powerful personal
computers (PCs) and the new network computer technology being developed in
• the West-open a whole range of other possibilities. Access to these is not
limited to the large organizations because affordable models allow the small
enterprises to benefit from these technologies as well. For Kenichi Ohmae
(1995: vii), modern information technology has such tremendous impact that "no
traditional strategy, no familiar line of policy, and no entrenched form of
organization can stand untouched or unchanged."
f
Together with the challenges of a globalized market economy and advances
in technology, the changes in the structure of organizations have brought about

r corresponding changes in behavior, processes, and culture within organizations.

Organizational Processes, Behavior, and Culture

The demand for flexibility is manifested not only in the new organizational
designs but in the processes that occur therein. Developments in technology are
facilitating work processes and standardizing equipment allowing for more
flexible personnel arrangements. For instance, the best pharmaceutical
companies in the world have virtually the same critical activities of drug

.
discovery, screening and testing, such that scientists can move from one
laboratory to another without experiencing any problems. They will find the
equipment familiar, often supplied by the same manufacturer as the equipment
they have used before. In the semiconductor industry, the machines, methods,
software, and work stations have become "quite similar throughout the
developed world" (Ohmae 1989: 154).

The workforce has become more mobile and more autonomous. Regular
work hours and office restrictions are no longer acceptable givens and are
viewed as dysfunctions. Flexible work schedules and assignments are, thus,
becoming popular. This, too, is a response to the growing number of dual
career households where both husband and wife seek jobs to support family

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needs. There is a wide range of alternatives to the traditional 8-hour workdayl 'J.
40-hour workweek which includes flexitime, compressed workweeks, and time
sharing. Flexible opening and closing hours allow employees to factor in
personal circumstance in choosing their office hours, provided a common core
time for all employees is observed. Compressed work weeks and longer
weekends provide them with opportunities for child care, community service,
volunteer work, or the need to transact business with another organization on a
regular work day and not having to be absent from work. Job sharing enables
two people to share a single full-time job, either to expand work opportunities to
more people or to accommodate those who cannot offer their full-time services.
Output contracts do not require an employee's physical presence but simply sets
a deadline for completion of a specific output. Telecommuting allows employees
to do part of their work at home, send their output to the office through
electronic means, and come to office only on specific days. Work and family
•
responsibilities demand greater flexibility.

While such arrangements enable organizations to reduce the number of

people who are in an office or building at any specific time and thus reduce the
amount of office space needed to accommodate all the employees, there will be
more complex problems of coordination or work.
Electronic data interchange which allows computer-to-computer
1

,
communication between and among organizations-providers of goods and
services and their suppliers, customers, and manufacturers-has other
implications on human resources. Some jobs are being eliminated; remaining
jobs have to be redesigned or revamped; and the employees who remain may
have a feel of a growing sense of insecurity. While technology can reduce
operating time, employees need reskilling and retooling to be able to cope with
it. This will have implications on recruitment and selection policies and
procedures, rewards and incentive systems, supervision, performance
evaluation, motivation, and training and development. Employers must develop
their less-skilled employees and managers must become more responsive to the
needs of their skilled employees in order to keep them and deter them from
being pirated by the competitor.
The composition of the workforce is also changing to reflect demographic
trends. Even as aging workers continue until they are involuntarily retired,
organizations are hiring younger employees. Because finding a job has become
very competitive and also because there are wider opportunities for specialized
training and graduate education, many of the young recruits are highly
educated and better qualified. Aside from the need to bridge the generation
gap, older employees may resent being supervised by the younger, but more
qualified ones; while younger employees may see the older ones as a threat to
their authority or as potentially difficult subordinates (Dressler 1994; Gomez-
Mejia et al. 1995: 103-104).

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• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 165

As organizations restructure, the tendency is for human resources to

decrease in quantity but increase in quality and in their value to the
organization. But restructuring is also changing the concept of work as a
lifelong career which has implications on employee commitment and loyalty.
Career paths will need to undergo an evolutionary shift. And for all employees,
but more especially for non-core employees, career planning will necessarily
become more of a do-it-yourself project.

As organizations form alliances, become networks, and cells, the

boundaries that formally circumscribed them are getting blurred. Just like
nation-states, globalization is creating boundaryless organizations. These
• modern and "postmodern" organizations have very decentralized structures
where responsibility for decisionmaking and quality control is brought down to
lower levels. Interaction and coordination is no longer based on hierarchy but
on horizontal relationships.

The development of new technologies that allow for the free and fast flow
of information is eliminating many inefficiencies in the processes of
organization and management. Simultaneously, it provides workers knowledge
about how other workers in the global village are treated. For instance,
information on compensation and benefit packages can be shared across borders
leading to problems of equity and morale. These may cause tensions within
organizations.

r
New organizational structures, new technologies, processes, and flexible
work arrangements are changing the nature of employee relationships and
behavior. Networks, cellular forms, and virtual structures which dismantle
hierarchies demand greater versatility and diplomacy from workers. The
decline in personal transactions as a result of greater reliance on electronic
communication have profound implications on how workers behave in terms of
performance levels, accountability, motivation, commitment, loyalty, and even
socialization skills. In this setup, workers are more motivated by results and
opportunities for creation, learning, participation, and flexibility. Operating in
the global village likewise demands increased sensitivity to varied cultures and
practices.

• Emerging Boundaries in Boundaryless Organizations

As the traditional boundaries of hierarchy, function, and geography

disappear, a new set of boundaries take over. These are more psychological
rather than organizational for they do not appear on the organization chart but
on the minds of its employees and officials. Thus, despite similarities in
technologies and equipment, workers must contend with diversity and cultural
differences. Our example earlier of the pharmaceutical researcher or

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semiconductor technician/engineer who moves from one organization or nation
to another will be faced with diversity in age, gender, ethnicity, language,
norms, culture, and traditions.

In the traditional organizations, position titles and departments are

manifestations of differences in power and authority. Although the structure
was rigid, it had the advantage of making the roles of managers and employees
"simple, clear, and relatively stable" (Hirschhorn and Gilmore 1992: 104).
Everyone knew who reported to whom and who was responsible for what. As
discussed earlier, globalization is making this traditional organization map fade
away. With the blurring of boundaries, "the roles that people play at work, and
the tasks they perform become correspondingly blurred and ambiguous" and
now pose the challenge of figuring out "what kind of roles they need to play and
what kind of relationships they need to maintain" (Hirschhorn and Gilmore
•
1992: 105).

Breaking down organizational boundaries does not mean that differences

in authority, skills, talents, and perspectives will cease to exist. On the
contrary, they will become even more relevant in the new organizations without
boundaries. These differences make up the psychological boundaries of flexible i
organizations. Hirschhorn and Gilmore (1992: 107-110) identify four I

psychological boundaries: (1) the authority boundary; (2) the task boundary; (3) .
the political boundary, and (4) the identity boundary.

The authority boundary refers to the distinction between leader and

follower, between manager and subordinate. The authority structure in
traditional organizations is clear. In flexible organizations, however, the leader
may not necessarily have the best information required for speedy and effective
decisionmaking thus subordinates may need to challenge their decisions. In
this respect, there is a need for superiors and subordinates to work well
,
together. The task boundary has to do with identifying the tasks, dividing up
the responsibilities, allocating resources, and coordinating the individual tasks
into team effort. Again, because of the flexible character of the organization
spread over the global expanse the task boundary is a complex area to manage.
The political boundary refers to the politics involved in the interaction among
people and groups with different interests, backgrounds, and beliefs. The
identity boundary is about individual and group values-about who is "us"
versus "them." Relationships at the identity boundary may run counter to the
•
allegiances necessary to work together, thus, the need to strike a balance
between loyalty to group and respect for others.

Standardization of equipment and facilities will not do away with

disparities in policies and practices among component parts of global
organizations. Thus, boundary management becomes a difficult challenge. The

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 • GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 167

key to productivity, innovation, and effectiveness lies in creating the right kind
of relationships or developing the "creative tension" at the right time. However,
this kind of creative tension does not happen automatically; managers must
work for it. These four psychological boundaries interact dynamically with one
another and managers must learn how to understand and manage them
(Hirschhorn and Gilmore 1992: 110).

The emerging organizational structures and other global forces have

tremendous implications on planning, leading, controlling and the other
functions of management. Uncertainties in the global market make planning a
more ticklish endeavor. Coordination and motivational techniques become more
• challenging in networks, cells, or virtual organizations. The issue of how to
manage people we do not see arises. Unscheduled meetings may become more
difficult; consultations among colleagues may have to be prearranged because
they are no longer down the hall but elsewhere. The issues of supervision,
performance evaluation, accountability, responsibility, and productivity are
other critical areas of concern.

The next section looks into existing theories of organization and their
relevance in these times of turbulence, uncertainty, and globalization.

Organization Theories and the Global Context

Theories about organizations are reflective of the historical and cultural

realities and trends during the period in which they were generated. As Ott
and Shafritz (1992: 2) put it, "contributions to organization theory vary over
time and across cultures and subcultures." Some theories emerge to challenge
earlier postulations; others build upon existing theories. What do existing
organization theories have to offer to help managers of today cope with the
challenges of the times? To obtain some answers, the highlights of major
organization theories are presented briefly.

There are multiple paradigms of organization theory other than the

functionalist perspective which believes that reality is objective and empirically

r observed. Other paradigms view reality as a product of one's experiences and

therefore subjective. These include the radical structuralist, the interpretivist,
and the radical humanist paradigms (Burrell and Morgan 1979: 22). Each of
these perspectives proceed from different ontologies, epistemologies,
methodologies, and assumptions about human nature. Although the search for
paradigms is a recognized dimension of organization studies, this paper does
not intend to pursue the dilemmas associated with them.
,.

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The Basic Features of Organization Theories

The first well-developed ideas on organizations are generally referred to as

classical organization theory. Besides its historical significance, it is
essential to have an understanding of it because it lays down the foundation for
the development of other theories on organizations and their management.
This school of thought was preceded by Adam Smith's ideas on specialization
and division of labor which greatly influenced the classicists and subsequent
thinkers as well.

Classical organization theory emerged when there was considerable

concern about productivity and the belief that the "one-best way" to do things
could be found through scientific inquiry. A major approach of classical
organization theory is the Scientific Management approach which is focused on
•
work and the workers, particularly "the performance of routine and repetitive
physical tasks" (Fry 1989: 3). It sprung from the studies conducted by
Frederick Winslow Taylor, Frank and Lillian Gilbreth, Henry Gantt, and
Harrington Emerson. Taylor, the acknowledged father of scientific
management, pioneered in time and motion studies aimed at searching for the
"fastest, most efficient, and least fatiguing production methods" (Ott and
Shafritz 1992: 30). Taylor believed that it was the responsibility of
management to find the "one best way" of doing things and to teach it to
employees so that productivity, and ultimately profits, would increase. If there
is a one best way of performing tasks then, corollary to this, there is also one
best way of designing the organization's structure.

Ott and Shafritz (1992: 27) identify the fundamental principles of classical
organization theory as follows:

1. that organizations exist to accomplish production-related and

economic goals;

2. that production is maximized through specialization and division

,
of labor;

3. that there is one best way to organize for production, and that
way can be found through systematic, scientific inquiry; and

4. that people and organizations act in accordance with rational

economic principles.

The other approach to classical organization theory focused on managing

the total organization and on ways to make it more efficient and effective.
Foremost among the theorists were Frenchman Henri Fayol, German sociologist
Max Weber, British Lyndall Urwick, and American Chester Barnard. Fayol is

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• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 169

best known formally identifying the major functions of management which

influenced many other subsequent theorists and for his 14 principles of
management: division of labor, authority and responsibility, unity of command,
unity of direction, subordination of individual interest to general interest,
remuneration of personnel, centralization, scalar chains, order, equity, stability
of personnel, tenure, initiative, and esprit de corps (Ott and Shafritz 1992: 30).

The bureaucratic structure attributed to Max Weber is characterized,

among others, by specialization and division of labor, hierarchy, centralization,
authority, a system of rules, recruitment on the basis of merit, discipline,
security of tenure, and impersonal relationship. This form may be functional
• for certain types of activities and conditions but is heavily criticized for its
dysfunctions. Specialization has been shown to create conflict and impede
communication. Hierarchy limits participation, stifles initiative, and causes
delays. Rules can obstruct fast and efficient operations. Impersonality
sometimes translates to insensitivity and may lead to alienation and
withdrawal. Despite its manifest dysfunctions, however, bureaucracies may still
be relevant for certain operations.

The early classical organization theorists were criticized for neglecting the
human dimension, the "coordination of needs among administrative units,
internal-external organizational relations, and organizational decision
processes" (Ott and Shafritz 1992: 97).

• The organizational behavior perspective views the organization as the

arena in which behavior occurs. Its major assumptions are: (1) that
organizations exist to serve human needs; (2) that people need each other; and
(3) that when the fit between the individual and the organization is poor, one or
both will suffer (Ott and Shafritz 1992: 144). This perspective focuses on
people, groups, and relationships among them and the environment. The
Hawthorne experiments conducted by Elton Mayo and Fritz Roethlisberger
form a major component of this approach. It highlights the need for workers to
be recognized, to socialize, and to be treated as human beings.

The "modern" structural organization theory argues that the "best"

• or the most appropriate structure for any organization is one that takes into
consideration the organization's objectives, the environment in which it exists
(e.g. government regulations, suppliers, competitors, etc.), its product or services,
and the technology used for its production. The theory further argues that the
problems of an organization are a result of its structure and can, thus, be
resolved by changing the structure (Ott and Shafritz 1992: 201-202). It assumes
that "organizations are rational institutions whose primary purpose is to accomplish
established objectives" and that the best way that this can be achieved is through
rules and formal authority (Ott and Shafritz 1992: 343).

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Systems theory views an organization as a "system" which consists of
parts that are united by a system of relationships for the attainment of specific
objectives. The parts which are dynamically interconnected and are continuously
interacting include the inputs, processes, outputs, the environment in which it
operates, and feedback loops. A change in any part or element of the system
will affect other parts of the system. While classical organization theory may be
said to view organizations as closed systems unaffected by the environment and
thus focused on the functions of planning and controlling, systems theory views
organizations as open systems which are affected by the environment.

Systems theory had a strong influence on a number of theories that

followed. The information processing view of organizations is a product of
systems theory. It proceeds on three assumptions: (1) that "organizations are
open systems that face external environmental uncertainty ... and internal
•
work-related task uncertainty" requiring the mechanisms to cope with these
uncertainties; (2) "given the various sources of uncertainty, a basic function of
the organization's structure is to create the most appropriate configuration of
work units (as well as the linkages between these units) to facilitate the
effective collection, processing, and distribution of information;" and (3) that the
different departments or subunits of the organization are important and
coordination among them must be facilitated (Luthans 1995: 479-480). The
focus of the information processing view is on information flows to enable the
organization to cope with external and internal uncertainties.

Both the systems and information processing theories focus on

environmental factors but succeeding theories put even greater emphasis on the
•
environment than these two. The contingency theory of organizations is
"analogous to the development of contingency management as a whole; they
relate the environment to specific organization structures." It is concerned with
"how the organization structure adjusts to fit with both the internal
environment, such as work and technology, and the external environment, such
as economy or legal regulation" (Luthans 1995: 480). It draws heavily upon
systems theory which believes that "the effectiveness of an organizational
action (for example, a decision) is viewed as dependent upon the relationship
between the element in question and all the other aspects of the system-at
that particular moment" (Ott and Shafritz 1992: 267). Nothing is absolute or
universal; rather everything is situational. •
The premise of the contingency theory is that the survival of an
organization depends upon its efficient and effective performance, which, in
turn, can be achieved if the organization responds and adapts to its
environmental demands "appropriately." Matching the structure and other
environmental variables is the "appropriate" response. The variables upon
which the structure is contingent include the technology, size, environmental
uncertainty, industry, strategy, and dependence (Tayeb.1988: 9-11).

July-October
• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 17l

Another approach, which some organization theorists like Glenn Carroll

think should replace contingency theory, is the population-ecology
approach. This view focuses on groups or populations of organizations rather
than individual ones. It defines organizational effectiveness simply as the
ability to survive and believes that, in the short-term, management can have
little impact on the organization's survival. Since the environment has limited
capacity, organizations will have to compete and either succeed or fail.
Management's role is to adapt the organization structure to fit the changing
demands of the environment (Luthans 1995: 480-481). The focus is on the
reasons for organizational diversity, formation, survival, and death. It seeks to
understand how social realities affect "the rates at which organizations and new
• organizational forms arise, the rate at which organizations change forms, and
the rates at which organizations and forms die out" (Hannan and Freeman cited
in Ott and Shafritz 1992: 267).

The multiple constituencies/market perspective challenges the assumptions

of "modern" structural theory that the organization exists in order to pursue
established utilitarian objectives. It posits that the organization "is only an
extension of and a means for satisfying interests of the individuals and groups
that affect and are affected by it" (Ott and Shafritz 1992: 344). The organization
does not have goals or objectives but its constituencies, who may come from
within or outside the organization, have objectives which they wish to attain
through the organization.
• The primary unit of analysis of the multiple constituencies/market perspective
is the self-interested individual whose interests must be satisfied in order to
maintain the nature of the equilibrium. Since constituencies have varied interests,
an organization is a place where a "complex equilibrium process" occurs to
determine how resources are to be allocated. Organizational goals change as
often as participants' negotiations occur. The effectiveness of the organization
is likewise based on the changing priorities of the constituencies. The multiple
constituencies approach is also referred to as the market perspective, stakeholders
approach, social contract theory, and negotiated order theory (Ott and Shafritz
1992: 343-349).

The power and politics theory is an application of the multiple constituencies

• perspective, which identifies power and political activities as the basis for
influencing the bargaining and equilibrium process in organizations. Organizations
are viewed as complex systems composed of individuals and coalitions with
their own preferences and interests and are continuously competing for resources.
Besides formal authority, there are other sources of power in organizations and
power flows in all directions, not just top down. These include, power over
control of resources, access to power centers, a pivotal role in any of the constituency
groups, ability or knowledge about organizational procedures and processes,
and credibility. Thus, power is relative to other actors in the organization (Ott
and Shafritz 1992: 397-400).

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•
The culture perspective in organization theory is relatively new which
allows us to view organizations as a cultural phenomenon. Culture involves a
complex mixture of assumptions, norms, beliefs, behaviors, stories, myths, and
other ideas that fit together to define what it means to be a member of a
particular society. Organizational culture is not necessarily equivalent to
societal culture as the former is influenced by the organizational factors such as
the leaders, the technologies, or the clients. The theory assumes that "many
organizational behaviors and decisions in organizations are almost
predetermined by the patterns of basic assumptions held by members of an
organization" (Ott and Shafritz 1992: 482). The organization's view of itself and
its environment is shaped by the basic assumptions and beliefs shared by its
members, which operate unconsciously. Instead of being controlled by rules, •
authority, or norms of rational behavior, organization members are controlled
by culture. This perspective is often referred to as a counterculture within
organization theory because it challenges the assumptions of the structuralists.

The major strength of the culture perspective lies in its recognition of

(a) the important role which culture plays in shaping work-related

values, attitudes, and behaviors of individual members of various
societies; (b) the fact that cultural values and attitudes are in different
degree from one society to another, and (c) the fact that different
cultural groups behave differently under similar circumstances (Tayeb
1988: 40).

Osborne and Gaebler's reinvention theory provides an alternative direction

for public organizations. They identify ten major principles for infusing the
•
entrepreneurial spirit in the public sector; (1) steering rather than rowing-or
focusing more on catalyzing all sectors of society in solving community problems
rather than assuming the role of providing service on its own; (2) empowering
rather than striving-or pushing controls out of the bureaucracy into the community
by empowering citizens; (3) injecting competition into service delivery; (4) transform-
ing rule-driven government to one driven by goals; (5) funding outcomes, not
inputs; (6) meeting the needs of the customers, not the bureaucracy; (7) earning
rather than spending; (8) preventing problems before they emerge rather than
simply offering cures; (9) decentralizing authority, reducing hierarchies, and
embracing participatory management; and (10) preferring market mechanisms
to bureaucratic mechanisms (Osborne and Gaebler 1993). •
Other developments go beyond reinvention of the old science of
administration into the reformulation and reconsideration of a new one for the
21"1 century. This is in the area of what is collectively referred to as the new
sciences. Chaos theory is one of the new sciences (Overman 1996: 487).

In the 1970s, mathematicians, physicists, biologists, chemists, and other

natural scientists, started studying the "irregular side of nature, the

July-October
• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 173

discontinuous, erratic side ... seeking connections between different kinds of

irregularities." This movement later came to be known as chaos and spawned its
own language, created special techniques of using computers to capture
structures underlying complexity. It breaks the lines that separate scientific
disciplines and because "it is a science of the global nature of systems, it has
brought together thinkers from fields that had been widely separated" (Gleick
1987: 3-5).

Advocates of chaos theory, including Gregersen and Sailer, claim to have

the best understanding of today's organizations. They argue that "prediction

•
and control of systems behavior is unobtainable, even in extremely simple and
deterministic structures, let alone in the increasingly complex and changing
organizations of modern times" (Luthans 1995: 481). Chaos and complexity are
not problems to be solved but are "meaningful aspects of a process which living
systems adapt, renew, maintain, and transcend themselves through self-
organization" (Overman 1996: 495). Overman (1996: 498) further characterizes
a chaotic system as:
... both self-referential and transformational. It adheres to a Bet of
organizing principles to which the change process always reconnects to
create an enduring, stable, recognizable, and evolving structure. 'Yet
the structure itself is not deterministic as milch as it is accommodating
to the environment of which it is also a part.

• Relevance of Organization Theories in the Global Context

The existence of all these theories indicate that arrrvmg at a unified

theory of organizations is difficult. In the context of globalization, how relevant
are these theories in understanding organizational phenomena?

Table 1 identifies major features of organization theories and their

relevance to current global challenges. It shows that despite the changes
occurring in today's organizations, existing theories continue to manifest
features relevant to understanding them better.

. Gareth Morgan offers a fresh perspective for viewing theories of organization.

He proceeds from the premise that "all theories of organization and management
are based on implicit images or metaphors that lead us to see, understand, and
manage organization in distinctive yet partial ways" (Morgan 1997: 4). The usc
of metaphors allows different ways of thinking about the nature of organizations.
Since metaphors tend to highlight certain dimensions while forcing others into
the background, they also necessarily create distortions. Therefore, Morgan
(1997: 4-5) warns that any theory or perspective for studying organization and
management, "while capable of creating valuable insights, is also incomplete,
biased, and potentially misleading."

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174 PHILIPPINE JOURNAL OF PUBLIC ADMINISTRATION •
Table 1. Organization Theories vis-a-vis Globalization
Theories Features Relevant Features Challenged
to Global Chanzee by Global Changes
Classical • search for the best way increases • inflexibility of "one best way"
Theory organizational competitiveness of doing things
• bureaucratic structure:
hierarchy, centralization,
system of rules
• organizations as closed
systems
Behavioral
Theory
• organization as context in which
behavior occurs
• relationships among people
and groups
•
Modern • best structure is based on • rules and formal authority
Structural objectives, environmental
Theory conditions, products/services, and
technology
• organizational problems can be
solved by changing structures
Systems • organization consisting of parts • linking widely dispersed parts
Theory existing in an open system
• input-output-feedback

Information
Processing
•
transformation process
creating the best structure to
facilitate information gathering
• direction and flow of
information
•
View and distribution
• information overload
Contingency • adaptation to environment • dynamic environmental
Theory changes
Population- • its focus on groups of • continuing changes in group
Ecology Theory organizations composition and structure
• focus on organizational diversity
Market .. organizations as locus of fluid • self-interest as determinant for
Perspective
Power and
Politics Theory
•
interactions among stakeholders
organizations as coalitions
competing for organizational
resource allocation
•
resources
Culture • behavior is determined by • shared beliefs difficult in global
Perspective cultural norms and values networks and virtual
structures
Reinvention • all principles
Chaos Theory • order in complexity

July-October
• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 175

Morgan explores different metaphors for thinking about the nature of

organizations which can complement and build on the strength of one another.
These are: (1) the image of the organization as a machine made up of
interlocking parts that have defined roles in the functioning of the whole;
(2) organizations as organisms, where the image of having different species
found in environments most suitable for them, represents the different
organization types and structures; (3) organization as brains, which provides a
means of understanding modern organizations in terms of the significance of
information processing, learning, and intelligence; (4) organizations as cultures,
focuses on values, beliefs, ideas, rituals, norms, and other patterns of shared
meanings in organizations; (5) organizations as "psychic prisons" where "people
• become trapped by their own thoughts, ideas, and beliefs or by the unconscious
mind" and could explain the tendency toward control and other favored styles of
management; (6) organization as flux and transformation, which focuses on four
logics of change-a) the logic of self-production, b) the logic in chaos and
complexity, c) the logic of circular flows of positive and negative feedback, and
d) logic of dialectics; and finally (7) organizations as instruments of domination,
which views organizations from the perspective of exploited groups (Morgan
1997: 4-5). The images presented by Morgan offer new insights for looking at
organizations.

The theories outlined earlier may be viewed as different images and

metaphors for looking at organizations.

• Challenges to Public Administration

Changes in organizations are widely observed in private corporations and

there has been increasing pressure for public agencies to follow in the same
direction. The size and scope of operations of government bureaucracies used
to be their source of power and strength. Do they still perform this distinctive
role or should traditional structures be abandoned in favor of new
organizational forms and processes?

In their seminal work, Reinventing Government, Osborne and Gaebler

provide the answer as they paint the picture of government bureaucracies thus:
The kind of government that developed during the industrial era, with
their sluggish centralized bureaucracies, their preoccupation with
rules and regulations, and their hierarchical chains of command, no
longer work very well. They accomplished great things in their time,
but somewhere along the line they got away from us. They became
bloated, wasteful, ineffective. And when the world began to change,
they failed to change with it. Hierarchical, centralized bureaucracies
designed in the 1930s or 1940s simply do not function well in a rapidly
changing, information-rich, knowledge-intensive society and economy
of the 1990s. They are like luxury ocean liners in an age of supersonic

, 1998
176 PHILIPPINE JOURNAL OF PUBLIC ADMINISTRATION
.,
jets: big, cumbersome, expensive, and extremely difficult to turn
around (Osborne and Gaebler 1992: 11·12),

The traditional role of the state-regulation of the market, taxation,

stabilizing the value of the currency, correcting economic booms and busts,
etc.-are slowly being taken over by market forces. Globalization is demanding
a shrinking of state involvement in national life. Already globalization is
shifting more and more power from governments to global organizations and
businesses. In the Philippines, this has resulted in privatization of public
enterprises, deregulation of markets, and rapid liberalization of the economy.

The recent attacks on Asian currencies indicate the powerlessness of the

state against world markets. Globalization demands a stronger state to help
people reap benefits and mitigate its costs. Instead of less government, the
•
appropriate response may be a government that shifts its focus to basic
functions and pursues this mandate with zeal, competence, and effectiveness.
Among these basic functions are: providing public goods such as law and order,
national defense, macroeconomic management, education, health, property
rights, and environmental protection (WB 1997: 7). Government should bear
the responsibility of ensuring that the benefits of global integration are shared
equally, especially by the poor (UNDP 1997: 89).

In performing these basic functions, public organizations must build a capacity

for flexibility and adaptation. This necessarily demands effective structures
and processes. It requires a professional core of civil servants who are aware of
global issues and can adopt global perspectives. Policy decisions have to be
•
enriched with regional and global dimensions. There needs to be greater flexibility
in budgeting that focuses more on outcomes rather than inputs. This should be
complemented by a retreat from rules and restrictions towards the development
of standards for ensuring accountability and responsibility, as well as standards
for fair labor, management, and business practices.

Just like business enterprises, public organizations should adopt

structures appropriate for their operations. Networks with civil society
organizations, already provided for in the Local Government Code of 1991,
should be pursued with greater intensity. Networks with business,
international, and global organizations can be further expanded. More non-core
activities can be contracted out and only a lean but efficient core of civil
servants should be maintained. A decent and competitive compensation
•
package will help ensure that the government can attract and keep its
competent civil servants. Considerations for family circumstances, such as dual
career parents, single mothers, or mothers with children under six years of age,
require greater flexibility in work arrangements. There will be the same
demand for flexibility in decisionmaking.

July-October
• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 177

The tools and technologies that are available to the private sector are also
within the reach of government to utilize. This will allow public organizations
to respond more rapidly and accurately to market forces. The same technology
can, however, also be a source of frustration for government. Individuals or
corporations may no longer seek permits and licenses to operate for they can
transact business electronically. Taxation of electronic commerce will be a challenge.
Entries of external funds and the rapid pull-out of these will be more difficult to
monitor. But it will be in these areas that government's presence will be vital,

As it spins off the functions that are best undertaken by business,

government will need to do well in performing its defined role. The contraction
• of government's role will allow it to infuse more funds on social programs,
especially in developing a globally competitive workforce through massive
investments in education and training.

With business organizations adapting roles previously played by

government, there is growing expectation that they will assume greater social
responsibility and accountability. There are, however, difficulties in enforcing
responsible behavior from organizations but there is reason to be hopeful. In
1994, business leaders from Japan, Europe, and the United States gathered,
worked on the integration of basic Eastern ideals of kyosel (living and working
for the common good) and human dignity, and came up with the Caux Round
Table Principles for Business which calls upon business leaders to assume

• greater social responsibility. In 1995, Transparency International was founded

by 45 major nations to combat large-scale corruption involving corporations and
holders of public offices around the world (Parker 1996: 498).

Still, it will be difficult to implement any global code of ethics because

activities that cross boundaries may easily slip out of sight and therefore
difficult to police. Furthermore, ethical standards vary from culture to culture
leading to varying organizational behaviors and attitudes.

Other areas requiring government attention include: the formulation of

strategies for the taxation of the global commons; increasing investments in
social development to protect marginalized groups from the devastating effects

• of globalization; and enforcement of laws against international organized crime,

pursuing criminals outside its territories.

More challenges await government. Unless it transforms its structure,

processes, and behaviors, government will be unable to cope with the onslaught
of global economic, political, and social forces.

The impact of globalization cannot be ignored by public agencies. Riggs

challenges the "parochialism prevailing in public administration" and observes
that:

1998
178 PHILIPPINE JOURNAL OF PUBLIC ADMINISTRATION •
... global forces are penetrating individual agencies in the United
States at every level... Several points of interaction are emerging and
individual agencies are finding themselves either defending their own
interests against global penetration or aggressively engaging
themselves in global integration (Khator and Garcia-Zamor 1994: 4).

The field of public administration must, therefore, respond to global

challenges. Khator and Garcia-Zamor further define an expanded role for
public administration:
The approach to the study of public administration must not be
reductionist. The reductionist tendencies of the past have led to
parochialism, ethnocentrism, and isolationism. Public administration
in the past has been reduced to the actions related to the executive
branch of the government or to the implementation aspect of public
policy or to civilians within the public sector or even to development
•
managers .... Public administrators must be sensitive to their
vulnerability to global, international forces at the outset, and they must
also be aware of their potential influence in the global context. xxx
... no public policy are and no public agency is free from potential
penetration of global forces, whether directly or indirectly [and]
international and comparative aspects should become a natural and
integral part of mainstream public administration (Khator and Garcia-
Zamor 1994: 7·8).

The emergence of a New World Order-characterized by the end of the

Cold War, U.S. military might, the globalized economy, cultural penetration,
the dominance of the global environment, the centrality of the marketplace, the •
emergence of the United Nations as a collective legitimizing instrument, and
the absence of a single superpower (Khator and Garcia-Zamor 1994: 6)-raises
expectations for public administrators to function "in the complex web of global
federalism by accepting vertically sensitive, horizontally open, and diagonally
responsible relationships" (Khator and Garcia-Zamor 1994: 12).

The emerging New World Order "demands a public administration that is

far less parochial and more genuinely globalized or internationalized" (Caiden
1994: 59). As the world "globalizes," the theory and practice of public
administration must also globalize.

Conclusion
•
Whether large or small, business or government, global organizations,
face the "same management challenges: creating organization-wide processes
and structures in support of their global commitment" (Parker 1996: 490).
Globalization is creating opportunities for people and organizations but it is
difficult to explain what is happening and which tools and techniques are
appropriate in managing a global enterprise. While some say that bureaucracy
has lost relevance in a global world, others believe that it "has as much

July-October

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• GLOBALIZATION, ORGANIZATIONS, AND PUBLIC ADMINISTRATION 179

currency today as ever" (Parker 1996: 485-486). Global organizations appear to

have developed beyond the capacity of a single discipline to explain it. The
need is for multidisciplinary research and theory building to address the
diversity and scope of global practices. "Both the theory and practice of
organizations have changed substantially in recent years. In both cases, the
changes have led to increasing diversity and fluidity, and decreasing certainty
and structure" (Clegg and Hardy 1996: 11).

Organizations are too busy coping with change that there has been little
time to explain what is happening. Changes resulting from global forces pose a
different set of research questions for organization studies.
• Reflecting on the 40 years of organization studies, Lyman Porter,
identified a gap and noted that "an area of organizational studies that cannot
point to a high level of accomplishment is the global dimension" and that "the
time has more than come for the field to become much more globally focused"
(Porter 1996: 266).

A review made by Adler in 1983 shows that throughout the 19708, less
than five percent of articles appearing in top management journals looked at
organizational behavior issues from a cross-cultural perspective. Adler and
Bartholomew looked at 73 academic and professional management journals
from 1985 to 1990 and found out that publications on international human
• behavior and human resource management had not increased in two decades
(Parker 1996: 487, 501).

Theories of motivation and the research samples from which they have
been derived were developed mostly in the U.S. The same is true for leadership
studies. But since there are many ways in which culture per se varies, there
are also many ways in which behavior varies across cultures. Leadership
processes and styles, for instance, may be similar across cultures, but the
manner in which these approaches are used and successfully applied may vary
from culture to culture. There is, therefore, an increasing need for
multicultural research.

• In societies like the Philippines where face-to-face interaction is a

relational necessity, the new organizational structures pose additional
challenges for research. How do you motivate a workforce in virtual
organizations when you hardly see them? How do you ensure accountability
and responsibility?

To what extent does the extensive use of technology destabi lize

relationships among workers, not to mention the hazards to health? As
transactions move toward the impersonal (electronic and officeless), how can
teamwork be created?

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•
180 PHILIPPINE JOURNAL OF PUBLIC ADMINISTRATION •
Globalization also calls for radical changes in the performance of the
functions of management. Planning will depend largely on global information
and on seeing the future in a different way, and less on historical analysis.
What mechanisms of coordination and integration will be most effective? Will
supervision be necessary?

Global organizations will face profound challenges for human resource

management and development. Greater focus will be on developing employees
with cross-border capabilities, those who cope with a diverse workforce. Which
concepts of right and wrong will prevail in a global organization? With greater
access to global information on how cellular and network organizations treat
their workers in terms of pay, rewards, benefits, and training, what are the •
implications on management policies on the same? How will organizations cope
with declining commitment and loyalty resulting from modular employee
relationships?

Organizations-big or small, private, nonprofit, or government-will have

to transform themselves into learning organizations,
where people continually expand their capacity to create the results
they truly desire, where new and expansive patterns of thinking are
nurtured, where collective aspiration is set free, and where people are
continually learning how to learn together (Senge 1995: 3).

Alburo, Florian A.
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