Designing and managing large-scale, public-private technological enterprises: A state of the art review

0160-791X/79/030179-14$02.00/0 coppight 0 1979 Pergamon Press Ltd

TItbr&&v II socisr); Vol. 1, pp. 179.192(1979) Printed in the USA. AlI rights reserved.

Designing and Managing Large-Scale, Public-Private Technological Enterprises : A State of the Art Review

The Challenge An increasingly-sigrrificant kind of technological endeavor has emerged during this latter half of the 20th century: the large-scale, public-private enterprise. This entity is generally characterized by a collaboration of organizations in government, industry, and other sectors. This collaboration is designed to meet novel, large-scale, often technologically-innovative needs which are beyond the technical, financial, political, and managerial capabilities of any single organization. Such enterprises generally exhibit the following major characteristics: 1. They have both public and private components; 2. They are generally established to accomplish some mission, although such a mission can be as focused as a landing on the moon or as ambiguous as implementing an overall energy program; 3. Their components in most instances have quite different cultures, assumptions, priorities, and goals; and 4. In general only a small part of each of, the various organizations participating in such undertakings is actually involved in the effort; the component organizations continue to maintain their separate identities. In spite of the rising importance of such enterprises throughout the world, their success rate is still depressingly low. Moreover, the chances of failure appear to grow the more that such methods are applied to non-military or non-aerospace missions. In addition, the state of the knowledge relevant to the design and management of such undertakings is fragmented and comes from many diverse fields and disciplines. Mel H&b

is Assistunt Rofessor at the Harvard Business S&o01 where be has taught cowses imtecho&ical innovattbn, managingjubiic organizations, poduction operations, and ewgy economics. A former &ace Cosps volunteer irr TM, Dt. Hotwitcb has been cons&ant lo @ate fms andpublic institutions and basjubiisbed numerous ah&s on management, hcbnology, and energy affairs. He is currently completing a book on the SST controversy e&&d clipped Wings: The United States SST Cm&t and a Changing America and is author of the coal section of Energy Future:.Report of the Energy Project at the Harvard Business School (New York: Random House, 1979). 179

180

Mel Horwitcb

Of course, such dispersion should not be unexpected since at least one significant reason for the rise of such endeavors is a growing need to manage a wide range of diverse activities set in various cultures and requiring various skills and professions. In any event, it is hoped that this gathering together of such disparate information will help to improve the success rate of such enterprises. The Underlying Structure Current thinking related to the organizational structure of large-scale, public-private enterprises primarily focuses on the following issues: 0 the interaction of complex organizations with increasingly complex environments; 0 the growth of interorganizational systems; or 0 the impact of technology on organizational structure and decision-making. The large-scale, public-private enterprise responds to and exists in an increasinglycomplex environment. Systematically understanding the environment of such endeavors, therefore, would be extremely useful for designing and managing them. Emery and Trist provided pioneering conceptualization in this area.’ They used an open-system framework-under which a living entity survives by importing material from its environment, transforming this material, and then exporting other types of material back into its environment. More important, they argued that there is a ‘ ‘causal texture” to an organization’s environment in which the environment itself becomes one of the forces shaping an organization’s evolution, and they suggested that this force for change depends on the degree of change and complexity within the environment. They then offered a number of ideal types of environmental causal textures which increase in terms of change and complexity. The most complex and most unstable kind of causal texture, termed “turbulent fields,’ ’ is also the most relevant for large-scale, public-private enterprises. Under this condition, the dynamic processes within the environment itself create changes so due to continuous uncertainty and changing extreme that the organization, organizational attention, has a difficult time adapting. Among other things, Emery and Trist saw the emergence of turbulent fields resulting from the increasing interdependence of public and private sectors, the growing reliance on programmed research and development for meeting competitive challenges, and the appearance of large sets of similar organizations (oligopolies). In Emery and Trist’s terms, large-scale, public-private enterprises are partially a response to the emergence of turbulent fields because the associated increasing environmental complexity created a need for such endeavors. Indeed, Emery and Trist even described the kind of entity, termed an “organizational matrix,” which should operate in turbulent fields. This body should function as an “overall form” to create ‘ ‘some relationship between dissimilar organizations whose fates are, basically, positively correlated.” This behavior and structure are very similar to that of large-scale, public-private enterprise. Building upon the ideas of Emery and Trist, Metcalfe (1974) urged a multidisciplinary approach to deal with the complexity of turbulent fields, invoking concepts from economics, political science, and systems theory.* Metcalfe particularly focused on the need to view the process of adapting to environments of high complexity at

Designing and Manuging Lurge-S&e, Public-Private Technological Enterprises

181

the system level. He used macro-organization theory and stressed the importance of understanding ‘ ‘collective action” or ‘ ‘macro policies.” Such a systemic approach for conceptualizing issues related to large-scale, publicprivate enterprises has been used by others as well. Mileti and Gillespie (1976) presented a model for integrating the various organizational and environmental interdependencies. Chavalier, et al. (1974), introduced a framework for understanding and dealing with what they termed the ‘ ‘metaproblem,’ ’ which closely resembles many of the missions of large-scale, public-private enterprises.* They saw the metaproblem as usually affecting “a large number of groups and individuals with varied and conflicting interests, so that it encompasses multiple and conflicting ends the metaproblem was “so large and and means. ’ ’ Indeed, they continued, multifaceted that it may directly or indirectly affect every part of the total society and yet not be the primary interest and responsibility of any one major organization in which society has vested authority.” Emery and Trist, by suggesting an ‘ ‘organizational matrix” to deal with turbulent fields, also called attention to the actual structure of enterprises established to cope with complex environments. Much of the thinking in this area concerns “interorganizational” issues and the various linkages in a system of organizations. Evan presented the idea of the “organization-set” -the various identifiable organization roles or role-relationships-as the unit of analysis for exploring interactions within a network of organizations. ’ He also postulated that interorganizational cooperation is encouraged by such factors as an input resource scarcity, complementarity of functions, the power of an organization to invoke punishment against others in its organization-set for noncooperation, and certain kinds of competition between organizations within a set. A similar model is the ‘ ‘exchange’ ’ framework developed by Levine and White and others.6 They suggested that, in order for an organization to achieve its goals, it must possess or control three key kinds of resources: clients, labor services or a work staff, and nonhuman factors such as equipment, technology, and funds. Scarcity in any of these three categories, according to this view, encourages interorganizational exchanges, which are voluntary activities between organizations aimed toward achieving their respective objections. A related way to view organizational phenomena is to focus on resource interdependencies. Pfeffer argued that interorganizational networks are established as a result of such interdependencies ,’ Later Pfeffer and Nowak, examining the joint venture, identified two opposing types of organizational interdependencies-competitive and symbiotic .* Also focusing on organizational interdependencies, Litvak and Rothman suggested that interorganizational coordination is a function of the degree and type of organizational interdependence, the organization’s awareness of this interdependence, the number of organizations involved, the extent to which these linkages depend on uniform or nonuniform events, and the resources an organization commits to these interorganizational linkages9 Schermerhom then attempted to incorporate the various approaches for studying interorganizational action. He identified certain ‘ ‘motivating conditions’ ’ which encourage interorganizational cooperation.‘O They include performance distress caused by resource scarcity, cooperation per se assuming a high positive value, a

182

Mel Horwitcb

powerful enough extra-organizational force demanding cooperation, breaking through organizational boundaries, mutually perceived and agreed upon organizational goals, and existing opportunities for interorganizational cooperation. He also identified certain potential costs associated with interorganixational cooperation, such as loss of decision-making autonomy, unfavorable ramifications for organizational image or identity, and use of scarce organizational resources, But his most important contribution was the inclusion of the individual decision-maker or groups of decision-makers as necessary for perceiving opportunities and for developing a strategy for implementing interorganizational cooperation. Schermerhom’s approach is therefore especially useful because it is contingent and nondeterministic. It also encompasses variables at the individual, intraorganizational, and interorganizational levels. Furthermore, he introduced the important concept of strategy for interorganizational implementation. Examining much the same phenomenon Benson introduced a “political economy’ ’ perspective and stressed the resource allocation of scarce resources (money and authority) in an interorganizational network.” He used an interorganizational equilibrium model with four components: domain consensus, ideological consensus, positive evaluation or judgments between organizations on the quality of the work of each, and work coordination. Benson postulated that the degree of interorganizational equilibrium among these components is limited by the resource allocation system -the political economy- of the interorganizational network. Consequently, according to Benson, to change network relationships means altering the resource allocation process. He described a number of possible types of spategies, including cooperative strategies (such as agreements or joint ventures), disruptive strategies (such as threatening the resource-generating capacities of organizations), manipulative strategies (such as altering the supply and sources of money and authority), or authoritative strategies (such as prescriptively determining the interorganizational linkages). Like Schermerhom, Benson presented a contingent and nondeterministic perspective for viewing large-scale, public-private enterprises and emphasized strategic decision-making as a key factor in determining an endeavor’s overall evolution. The thinking which has focused on the structure of phenomena similar to largescale, public-private enterprises has provided some important insights. First, the formation of such entities is at least partially a response to increasingly complex environments-turbulent fields in Emery and T&t’s terminology. Such endeavors also demand a new perspective-an interorganizational one which also encompasses various multi-level linkages, interdependencies, and resource allocation processes. Finally, a key ingredient for survival, let alone success, is the quality of strategic decision-making in such enterprises. The Impact of Technology

Technology has been seen to have a profound impact on the structure of many kinds of organizations, including large-scale, public-private enterprises. Still, serious thinking about technological innovation has generally neglected activities such as these. As Baldridge and Bumham pointed out, most of the research on technological innovation has been limited.12 Such research has mainly dealt with innovations

which, before dissemination, are already highly technical and well-proven, and which involve short-time horizons. Furthermore, much of the fundamental research on technological innovation, like Marquis’ work, focused more on mundane, incremental innovation in the single firm than on large-scale or radical innovative activity.” Even when the role of government was considered, as in Pavitt and Walker, the goal was usually to study how government influences this incremental industrial innovation process.14 Similarly, much of the research on technological innovation emphasized individuals, small groups, or industries rather than complex organizations or macrosystems of diverse organizations. This is particularly true of the diffusion research as exemplified by Rogers and Shoemaker, which focused heavily on the innovator’s Serious research interest in innovations involving heterogeneous personality trait~3.~~ organizations, complex environments, and uncertain technologies appeared only intermittently. I6 Moreover, when a large-scale, public-private enterprise was considered, the emphasis was usually on answering important discipline-based questions rather than on learning more about the managing of the innovation process in such a setting.” Obscuring the impact of technology even further has been the long-run debate about technology’s effect on organizational structure. For example, although Woodward postulated that technology is a key determinant,‘* others, such as Hickson, et al., found it a minor determinant when compared to size.19This whole controversy was seriously critiqued by Stanfield on methodological grounds (that the various conceptualizations of technology use ‘ ‘unrationalized categorization” which often results in working with noncomparable sets of variables under the common name of technology and which therefore makes it difficult to compare various findings). Instead, he called for a ‘ ‘disaggregation strategy” to “rationalize” the categories of significant research variables.20 Even more relevant for the purposes of this paper, this debate generally addressed the issues of technology and organizational structure within the context of industrial firms and, in fact, mostly focused on purely manufacturing units as test sites. Indeed, again there was a profound neglect of the impact of technology in nonproduction, interorganizational contexts where there may be a long payoff and an ambiguous or diverse value system. In one of the few studies which dealt with technology’s influence on complex, interorganizational endeavors, however, Baldridge and Bumham found that increasing organizational size and complexity, environmental heterogeneity, and environmental change positively correlate with the adoption of technological innovation.21 They argued that increased size and complexity lead to specialization, a focusing on subtasks, and a more complex organizational design. Such a complex and diverse structure, they encouragingly concluded, facilitates the adoption of required complex, diverse innovations. In any event, it is clear that technological innovation in large-scale, public-private enterprises frequently differs in fundamental ways from that found in other types of organizations. Indeed, Horwitch and Prahalad postulated that technological innovation-which they have defined as encompassing the process itself and the setting in which it occurs-can be differentiated according to at least three ideal “Modes”:

184

Mel Horudch

Mode I-technological innovation found in small, high technology firms; Mode II-technological innovation found in large, multi-division and/or multi-product corporations; and Mode III-large-scale technological innovation involving a multisector and multi-organization set of participants.** Clearly, the large-scale, public-private enterprise corresponds directly to Mode III technological innovations. They frequently occur in fragmented, politicized, and highly-visible settings. They are often composed of different organizations and have no definite boundaries. They are also generally influenced by a wide range of interest groups and are frequently made up of a constantly changing constellation of involved parties. Using a number of case studies as examples, Horwitch and Prahalad suggested that these various Modes have different characteristics and that each requires a somewhat different set of managerial skills to be successful. According to this view, the Mode I manager must generally make sure to balance a strong technological base with sound basic business skills. On the other hand, the Mode II manager must usually be able to select technical innovations from a large set of opportunities within an established overall strategic direction and must be able to take advantage of highly-developed and sophisticated management practices. But in comparison with these types of managers, the Mode III manager must usually be much more political, adaptive, and flexible in communicating with different groups. Moreover, this individual needs to establish information systems and alliances with a highly disparate set of interested parties. Understanding Decision-Making Although organization theory is useful in providing enlightenment on the influences determining the structure of large-scale, public-private enterprises, and although it is clear that technology plays a key role in the evolution of such endeavors, such thinking has limits in providing an understanding of actual decision-making in this type of enterprise. Metcalfe, sensing this problem while attempting to develop a macro-organization theory, turned to political science for assistance.z3 He saw the diverse kinds of linkages in macro-organization networks mediated by the political process of exchange and bargaining among the component organizations. This political science stress on bargaining to accomodate pluralism becomes a more powerful perspective when it is merged with recent thinking about decisionmaking under conditions of great uncertainty. According to this view, such factors as the very complexity and sheer size of the large-scale, public-private enterprise tend to preclude effective comprehensive and rational planning due to prohibitively high costs and enduring human cognitive limitations. Cyert and March (1963) emphasized that organizational goals are formed through continuous informal bargaining among the organization’s members as well as through formal policy-making procedures and explicitly-stated objectives.24 For the purposes of this paper, there are four important concepts which Cyert and March described: Organizational learning, problemistic search, conflict resolution, and uncertainty avoidance. Organizational learning involves the process by which organizations adapt over time. Organizations usually depend on standard operating procedures. However,

Designing and Mhagihg Large-scale, Public-l+ivate Technological Enterprises

185

when these rules are not set up to cope with some uncertainty in the environment, members seek a new manner of handling this uncertainty. This exploration is not very objective; on the contrary, it is motivated, simple, and biased. Cyert and March termed this process the problemistic search. Complex organizations are also not uniform entities having universal goals. Coalitions are formed. Conflict between members takes place and is, in fact, never fully resolved. Quasi-resolution of conflict can exist because subunits exhibit bounded rationality where subgoals are handled at an appropriate level so that seemingly contradictory policies can co-exist in the same organization. Finally, complex organizations exhibit uncertainty avoidance. They do not, by and large, deal with problems until problems occur. They focus on immediate difficulties and on short-run feedback responses to these problems. Similarly, Braybrooke and Lindblom questioned ‘ ‘synoptic’ ’ problem-solving, which stresses comprehensive planning. 25 They argued that this kind of decisionmaking is costly, inappropriate for man’s limited cognitive capacity, inoperable due to lack of adequate information, and too rigid for an uncertain world. They found that, instead, most decisions are incremental and require little awareness of the eventual outcomes. For conditions of complexity and uncertainty, Braybrooke and Lindblom recommended a decision-making approach, termed ‘ ‘disjointed incrementalism,’ ’ which focuses on incremental alternatives to existing social states and which continuously adapts to shifts in objectives, goals, and values. It can handle social fragmentation. Its cost is low. It operates by proceeding through a series of steps which may or may not lead to a final outcome. Applying such thinking, which is antithetical to rational comprehensive planning, the economist Hirschman called for ‘ ‘imbalanced growth” strategies in economic development.26 Even more relevant, Klein advocated parallel strategies for developing large, complex technologies and technological systems.27 Such an approach is characterized by duplication, flexibility, and improvisation. He warned against a rigid, well-organized plan for complex research and development, and against being locked into a single technology too early in the innovation process. Indeed, keenly aware of the great uncertainties in many large-scale problem areas, like energy, Klein and Coltri observed that many such problems are never fully resolved, but rather are successfully transformed into other problems.** Although the arguments for Braybrooke and Lindblom’s disjointed incrementalism, Klein’s parallel strategies, and Hirschman’s imbalanced growth can be overdone-as they themselves warned-both Hirschman and Lindblom (1962) acknowledged a certain mutual ‘ ‘convergence” of ideas.29 In order to successfully implement activities like large-scale, public-private enterprises, they-like Metcalfe-placed great emphasis on the need for political and managerial sensitivity, pragmatic bargaining, flexibility, and a healthy suspicion of comprehensive systems analysis and detailed forecasting techniques. One particularly useful contribution of the blending of political science and decision-making perspectives are such multi-level frameworks as “Model” by Allision, “Paradigm” by Kuhn and Steinbrenner, and “Theory” by Kt1rth.3~ Using such concepts, which call for identifying alternative whole sets of assumptions and values, it is possible to focus on the same field of data and perceive

186

Mel Hotwitch

simultaneously different ‘ ‘stories,’ ’ different explanations for events, and different conclusions. Because large-scale, public-private enterprises have critical political, social, technological, economic, and other types of linkages and processes, these multi-level approaches can be very powerful for describing and explaining the behavior of such endeavors. The BJending of Two Economic Sectors Modem economic thinking also provided some useful insights for understanding the emergence of large-scale, public-private enterprises. Schonfield argued that there are new powerful forces in the post-World War II capitalist economy which tend to mitigate against the violent economic cyclical patterns of earlier eras31 Two specific features of this new form of capitalism, according to Schonfield, are the conscious pursuit of full employment as an act of policy in advanced countries and the accelerated pace of technological progress. He particularly noted the growth of governmental intervention to increase productivity and technological innovation by funding research and development, training the workforce, and establish specific technological enterprises in key areas. Holland and Vernon focused on one emerging aspect of this new economic order: The European-government-owned enterprise (which Schonfield also mentioned).32 Holland discussed so-called ‘ ‘secondgeneration’ ’ public enterprises which were established for the purpose of promoting exports, encouraging import substitution, combatting the inroads of multinational corporations, or undertaking long-term high risk projects. But Vernon, in reviewing the effectiveness of such new public enterprises, appeared much less sanguine than Holland. He noted that the few European international joint public enterprises which were created to develop advanced technology, such as the Concorde, have not been particularly successful. He also observed that most successful transnational coalitions-which are needed to create a sufficiently large market for the resulting products-had non-European partners. Consequently, according to Vernon, most European large-scale, public-private enterprises in the high technology area were basically one-shot affairs, and they did not generate a really permanent core of required managerial capability. Still, such economics-oriented thinking implied that the emergence of large-scale, public-private enterprises is part of a fundamental shift of the economic structure of advanced Western countries, and therefore their formation will continue to take place. Indeed, as Chandler observed, the socialist-bloc countries have produced their own variety of large-scale, public-private enterprises.33 In any event, advanced Western nations are increasingly consciously applying governmental intervention and national planning to promote social welfare and technological innovation. However, in discussing the high failure rate of large-scale, public-private enterprises, economic research also suggests that usually a sufficiently large market and cadre of qualified managers must exist for such endeavors to succeed. The Role of Management Focusing thus far on such fields as organization theory, political science, decisionmaking, and economics does not mean that various management issues have not been directly addressed. The most relevant set of purely management thinking for

Designing and M&aging bge-&ala,

Public--pLiwteTechnological Enterpti~~

187

large-scale, public-private enterprises falls under the rubric of “project management. ” This managerial approach has been suggested for missions which cut across lines of function, structure, and authority. Its principal features include the lead role of a single project manager for directing the entire complex task and the centralized implementation of this mission using other parts of the organization, external contractors, or other organizations, all of which take direction from the project manager. Project management is supposed to be tailored to deal with problems associated with managing ‘ ‘temporary organizations’ ’ (although many so-called temporary organizations can last for years), highly uncertain tasks and extremely skilled professionals. The most crucial challenge in project management is maintaining control. The project manager has to utilize the services of individuals and organizations from a wide range of functional areas and diverse cultures. His actual power over such people can vary greatly. To achieve needed integration for a mission, the ‘ ‘matrix organization’ ’ approach to project management has been developed. As seen in Chapman, the National Aeronautics and Space Administration found this method to be particularly usefu13’ Under a matrix organization, the various participants in a mission have basically a dual alliance-to their original function and permanent unit and to the temporary project to which they are currently assigned. Consequently, the project manager’s power over key participants is ambiguous and limited, and the formal management system and authority is often cumbersome. Still, NASA enthusiastically claimed that “The matrix organization has the advantages of more efficient use of specialized talent, flexibility in applying that talent to the most urgent problems, and a broad perspective for supervising and evaluating technical personnel. ’ ’ Project management theory and practice are important because they represent the only real attempt to operationalize much of the managerial thinking associated with entities which possess characteristics associated with large-scale, public-private enterprises. Such attributes include many involved professionals, temporary missions, complex activities, and ambiguous control. Of course, this approach comes primarily out of a specific milieu, the high technology aerospace and military culture. As noted by G&berg et al., NASA made numerous contributions in this area and broadly applied system management techniques (including project management, PERT, and simulation analysis).3’ Still, project management is basically limited to aerospace and military development efforts. The earlier high hopes for project management expressed by Gaddis and others have not been realized.36 Gaddis expected project management to be a key factor in developing American technology. Although it had an important role, that role was not a dominant one. As reflected in Archibald and Godwin, project management writing generally exhibited a normative orientation.37 Discussions were usually highly prescriptive. They frequently focused on such issues as how project management should be planned and implemented and they emphasized the use of recommended complex techniques rather than focusing on actual behavior. As a result, the effective transfer of project management from aerospace and military contexts to other fields has not really occurred. Sayles and Chandler, after intensive field work at NASA and elsewhere, provided a

188

Mel Horwitcb

different view of project management .38 They examined project management from the point of view of those involved. They emphasized the behavioral skills needed to manage large systems and, in fact, they soon echoed a similar message to that of Cyert and March and Braybrooke and Lindblom. Sayles and Chandler placed great stress on the need for improvisation as well as on planning, on interpersonal and political skills, and on the need for adaptation in the face of uncertainty in a complex environment. If anything, they played down the role of sophisticated managerial techniques, and implied that such methods are best suited for handling routinized tasks. Instead, they emphasized the need for appropriate behavioral factors for carrying out complex, nonstandardized tasks. It was really this set of creative behavioral attributes, rather than the use of the more routinized techniques, according to Sayles and Chandler, which made NASA so successful in implementing and managing complex systems. The Meaning of Case Studies However, the various generalized and discipline-based studies relevant to designing and managing large-scale, public-private enterprises provided basically fragmentary and difficult-to-discern lessons, with the exception of project management thinking which itself is limited because of its overly normative style. On the other hand, a few important case studies of such endeavors offered a rich source of data from which to derive more general statements on effective management. Indeed, most of the case studies indicated that the quality and style of management are keys for the success of such enterprises. Moreover, the critical administrative variables seem to be of a political and interpersonal nature, not really associated with sophisticated new procedures. Sapolsky (1972) demonstrated that the political skills of the top managers were crucial for the success of the Polaris program.39 Again stressing the importance of political ability, Lambright and Sapolsky, in discussing the issue of terminating Federal research and development programs, argued that the problems in this area are due both to the substantive nature of the programs and to the varying political strength of the constituencies supporting the program.4o Similarly, Turner, investigating the causes of failure to foresee disasters by appropriate public agencies, emphasized that a combination of misperception, culture, miscommunication, inappropriate individuals, and other variables can lead to a breakdown of complex organizations.41 Horwitch, in his studies of the American SST conflict, discussed the effect of management quality. 42He concluded that the lack of insight by high-level American SST program officials (who were generally highly competent aerospace project managers) into the real strength of the rising public opposition to that project allowed the opposition to grow until it was strong enough to destroy the entire effort. Indeed, Horwitch claimed that these managers might have fared better had they been more sensitive to larger societal changes. One important finding which individual case studies have uncovered is that largescale, public-private enterprises often exhibit dramatic and significant life-cycles. Moreover, this underlying instability of large-scale, public-private enterprises can make managing such endeavors particularly hazardous. Lambright, in examining weather modification as case study in public technological innovation, argued that

Designing and Managing Large-&ale, Public-Private Technological Enterprises

189

the political style and management of an innovation changes as the innovation develops. *3 Such an enterprise calls for decentralization and limited interference in the early research stage, according to Lambright, and greater overall policy control in the later development and implementation stages. Similarly, Nelkin and Fallows found that the focus of the debate about nuclear energy policy shifted from a rather narrow concern about specific issues like site location and other technical uncertainties over environmental impacts to a “set of broad political questions about the credibility of decision-making authority and the future of democratic values in a nuclear society.“eP In much the same vein, Horwitch portrayed the American SST conflict as expanding from a period of containment to one of fragmentation to finally one of explosion.45 But in terms of discerning overall and generalizable patterns of evolution and of successful management of large-scale, public-private enterprises, the richest and most convincing source of knowledge comes from a small but growing set of comparative case studies. Horwitch, comparing the American attempt to create a synthetic fuels program-to liquefy or gasify coal-and the American SST conflict, found alternative life-cycles for such enterprises.‘6 He saw certain pathological patterns, such as “unfocused growth” for synthetic fuels development and “uncontrolled growth” for the SST program. He also identified such successful life-cycles as ‘ ‘controlled growth’ ’ for the Apollo program. Furthermore, he concluded that at least four factors are crucial in determining the evolution of such efforts: the status of the relevant technology, the rate of growth which society demands from the enterprise, the stability of the external environment, and internal managerial ability. Hochmuth, in a comparative study of a number of transnational projects in the advanced technology area, put more emphasis on structural variables as the crucial determinants of an enterprise’s outcome .*’ Such factors included maintaining a fulltime transnational management agency, placing sufficient authority at the agency level, and providing an agency leader with “strength. ” Another comparative study of eight large-scale projects by the Stanford Research Institute (McEachron and Teige, 1977) gloomily found that there are possibly inherent limits and constraints for such endeavors.@ Moreover, after identifying the key components of such an enterprise’s evolution-the actual technology, the ‘ ‘adequacy’ ’ of the organizational and managerial capability, the social/political motivation required, and the availability of necessary financial resources-the study concluded that the serious problems associated with such projects lay more in organizational/managerial, sociopolitical, and psychological-motivational realms than in strictly technological or economic ones. Finally, a Rand Corporation analysis of 24 Federally-funded demonstration projects (Baer, Johnson and Merrow, 1976) was also rather pessimistic.49 According to Rand, commercial feasibility for such endeavors depends upon a technology ‘ ‘well in hand,” cost- and risk-sharing with local participants, project initiative from nonFederal sources, the existence of a strong industrial system for commercialization, the inclusion in the project of elements needed for commercialization, and the absence of tight time constraints. Rand suggested conducting such projects on a small scale with little initial visibility. It also called for resisting the “political

190

Mel Honuitcb

pressure’ ’ to demonstrate a premature technology and for allowing enough time in the project’s schedule for slippage. But clearly, as is seen in the nuclear energy debate and the American SST conflict, such strategies are often unrealistic, given the ever-present potential for sudden uncontrolled growth. The Need for Synthesis

The state-of-the-art in thinking ,about designing and managing large-scale, publicprivate enterprises clearly is fragmented and undeveloped. But already some form of synthesis is required if further useful knowledge is to be generated. What would be the shape of such a synthesis of relevant thinking? From the discipline-based fields, one learns that the designers and managers of such efforts must pay careful attention to such factors as growing environmental complexity, interorganizational linkages, interdependencies and bargaining, the impact of technology, the danger of overusing comprehensive planning and of avoiding improvisational and incremental decision-making, the increasing intermingling of the public and private sectors, project management theory, and the application of political and interpersonal skills and informal management methods. Such knowledge would then be merged with that ‘which can be gleaned from interdisciplinary case studies. Most important, these case studies illuminate the existence of life-cycles for such endeavors. Such patterns can, at times, overwhelm unsuspecting managers. Moreover, the case studies re-emphasize the importance of such nontechnical factors as decision-making, strategy formulation, and general managerial ability and sensitivity. Can such a synthesis be helpful? Seamans and Ordway provided a preliminary positive answer to this question. ‘O Examining the management lessons which emerged out of the Apollo program, they found that by focusing on many of the critical variables identified in this review, large-scale, public-private enterprises can often be designed and managed successfully. According to Seamans and Ordway, Apollo’s success was due to such factors as solid external support, sufficient funding, adequate human resources, superior planning and managerial ability, effective public-private communication, and a high-quality industrial team. Moreover, the Apollo management system was flexible. The program was therefore able to adapt to change, withstand constant visibility, and overcome potentially serious setbacks like the Apollo 204 flash fire in 1967 which resulted in the deaths of three astronauts. Of course, the Apollo success story is a rarity. But it does demonstrate the hopeful possibilities for other large-scale, public-private enterprises. Such a development would be beneficial. Schnee identified some crucial, less obvious, indirect, and longterm benefits of such endeavors to society as a whole.” But in order to derive such benefits more frequently, it is necessary to marshall the relevant knowledge and to create a new powerful synthesis. With such conceptual tools and information in hand, the chances of survival and of increased effectiveness for large-scale, publicprivate enterprises significantly increase.

Lksigning and hfanaging Large-Se&, Publtid%ate. Technological

Enterprises

191

References 1.

2.

3. 4. 5.

6. 7. 8. 9.

10. 11. 12. 13. 14. 15. 16.

17. 18. 19. 20. 2 1. 22. 23. 24.

F. E. Emery and E. L. Trist, “The Causal Texture of Organizational Environments,” Human Relations, Vol. 18 (1965). pp. 21-31. [Also in F. E. Emery, ed., Systems Tbhhing (Hammondswonh: Penguin Books, 1969).] “Systems J. L. Metcalfe, Environments: An Approach

Models, Economic Models and the Causal Texture of Organizational Human Relations, Vol. 27 (1974), pp. to Macro-Qrganizational Theory,”

639-663. InterdepenD. S. Mileti and D. F. Gillespie, “An Integrated Formalization of Organization-Environment dencies,” Human Rehtions, Vol. 29 (1976), pp. 85-100. Human M. Chevalier, L. Bailey, and T. Bums, “Toward a Framework for Large-Scale Management,” Ret&ions, Vol. 27 (1974), pp. 43-69. Toward a Theory of Interorganizational Relations,” in J. D. W. M. Evan, “The Organization-Set: Thompson, ed., Approuches to Orgunizutionul Design (Pittsburgh: University of Pittsburgh Press, 1966), pp. 173-191. As a Conceptual Framework for Understanding Interorganizational S. Levine and P. E. White, “Exchange Relationships,” Administrative Science Quarterb, Vol. V (1961), pp. 583-601. Administrutive Science Quarterly, Vol. J. Pfeffer, “Joint Ventures and Organizational Interdependence,” 17 (1972), pp. 137-186. Cooperation,” Acaakmy of Munugemenl J. Pfeffer and P. Nowak, “Joint Ventur es and Interorganizational Jourmzl, Vol. 18 (1975), pp. 846-856. “Towards the Theory and Practice of Coordination Between Formal E. Litwak and J. Rothman, Organizations,’ ’ in W. R. Rosengren and M. Lefton, eds., Orgunixution and Clienrs (Columbus: Merrill, 1970) pp. 137-186. of Interorganizational Cooperation,” Academy o/ Munagement J. R. Schermerhom, Jr., “Determinants Journal, Vol. 18 (1975), pp. 846-856. Administrative Science J. K. Benson, “The Interorganizational Network As a Political Economy,” Quurterly, Vol. 20 (1975). pp. 229-249. “Organizational Innovation: Individual, Organizational and EnvironJ. Baldridge and R. A. Bumham, mental Impacts,” Administrative Science Quurterfy, Vol. 20 (1975), pp. 165-176. D. C. Marquis, “The Anatomy of Successful Innovations,” Innouution no. 7 (1969). p. 28. K. Pavitt and W. Walker, “Government Policies Towards Industrial Innovation: A Review,” Reseurch Policy, Vol. 5 (1976), pp. 11-97. E. M. Rogers and F. F. Shoemaker, Communicution oflnnovutions (New York: The Free Press, 1971). Studies calling attention to larger-scale and more complex innovations in more diverse environments include: Baldridge and Bumham, op. cd.; R. G. Con&, “Strategies for Organizational Innovation: An Empirical Comparison,” Americun Socioiogicul Review, Vol. 37 (1972), pp. 441-454; J. Hage and M. Aiken, “Program Change and Organizational Properties: A Comparative Analysis,” American /our& of Sociology, Vol. 72 (1967), pp. 503-519; J. Hage and M. Aiken, Social Change in Complex Orgurniurtions (New York: Random House, 1970); Structure and Innovation,” Journal of Business, Vol. 40 (1967). pp. H. M. Sapolsky, “Organizational 497-510; J. Q. Wilson, “Innovation in Organization: Notes Toward a Theory, ” in J. D. Thompson, ed., Approucbes to Orgunizutionaf Design (Pittsburgh: University of Pittsburgh Press, 1963). pp. 193-218. See, for example, H. Sapolsky, The Polaris System Development: Bureaucratic and Rogrammatic Success in Government (Cambridge: Harvard University Press, 1972). J. Woodward, Industrial Orgurrixufion: Theory and hzctice (London: oxford University Press, 1965). D. Hickson, D. S. Pugh and D. Pheysey, “Operations Technology and Organizational Structure: An Empirical Reappraisal,” Administrative Science Quarteriy, Vol. 14 (1969); pp. 378-396. G. G. Stantield, “Technology and Organization Structure As Theoretical Categories,” Administru#ive science Quurteriy, Vol. 21 (1976), pp. 489-493. Baldridge and Bumham. op cil. M. Honvitch and C. K. Pralahad, “Technological Innovation-Three Ideal Modes,” Sloun Manugemerr# Review, Winter 1976, pp. 77-89. Metcalfe. op. cif. R. M. Cyert and J. G. March, A Behavioral Theory o/the Fh (Englewood Clii Prentice-Hag, Inc., 1963).

192

Mel Honhtcb

25. D. Braybrooke and C. Lindblom, A Strategy of Decision (New York: The Free Press, 1963). 26. A. 0. Hirschman, The Strategy of Development (New Haven: Yale University Press, 1958). 27. B. Klein, “The Decision-Making Problems in Development, ” in Rate and Direction of Inventive Activity (Princeton: Princeton University Press, 1962). 28. B. Klein and A. Coltri, “Menu of Technology, ” in H. H. Landsberg et al., Energy and the Social Sciences: An Examination of Research Needs (Washington: Resources for the Future, July 1974). 29. A. 0. Hirschman and C. D. Lindblom, “Economic Development, Research and Development, Policy Making: Some Converging Views,” Behavioral Science, Vol. 17 (1962), pp. 21 l-222 [also in F.E. Emergy, ed., Systems Thinking (Hammondsworth: Penguin Books, Ltd., 1969).] 30. G. T. Allison, Essence of Decision (Boston: Little, Brown and Co., 1971). T. Kuhn, The Structure ofScientt$c Revolutions (Chicago: University of Chicago Press, 1962). J. Steinbrunner, The Cybernetic Theory ofDecision(Princeton: Princeton University Press, 1974). J. R. Kurth, “A Widening Gyre: The Logic of American Weapons Procurement,” Public Policy XIX (Summer 1971) pp. 375-404. 31. A. Schonfield, Modern Capitalinn (London: Oxford University Press, 1974). 32. S. Holland, “Europe’s New Public Enterprises, ” in R. Vernon, ed., Big Business and the State (Cambridge: Harvard University Press, 1974), pp. 25-42. R. Vernon, “Enterprise and Government in Europe,” in Vernon, op cit., pp. 3-24. 33. M. K. Chandler, “Project Management in the Socialist Bloc,” Columbia Journal of World Business, Summer 1978, pp. 71-88. 34. R. L. Chapman, Project Management in NASA: The System and the Men (Washington: NASA, 1973). 35. E. Gin&erg, J. W. Kuhn and J. Schnee, Economic Impact of Large Public Programs: The NASA Experience, (Salt Lake City: Olymphus Publishing Co., 1976). 36. P. 0. Gaddis, “The Project Manager,” Harvard Business Review, May-June 1959, pp. 89-97. 37. R. D. Archibald, Managing High-Technology Programs and proiects (New York: John Wiley and Sons, 1976). R. P. Godwin, “Planning and Conduct of Macro-Engineering Projects” in F.P. Davidson, et al., ed., Macro-Engineering and the Infrastructure of Tomorrow (Boulder, Colorado: Westview Press, 1978). 38. L. R. Sayles and M. K. Chandler, Managing Large Systems Organizations for the Future (New York: Harper and Row, 1971). 39. H. M. Sapolsky, The Polaris System Development, op. cit. 40. W. H. Lambright and H. M. Sapolsky, “Terminating Federal Research and Development Programs,” Poficy Sciences, Vol. 9 (1976), pp. 199-213. 41. 8. A. Turner, “The Organizational and Interorganizational Development of Disasters,” Administrative Science Quarterly, Vol. 21 (1976), pp. 378-397. in F. P. Davidson, et al., eds., Macro42. M. Hotwitch, “The American SST-A Cautionary Analysis,” Engineering and the Infrastructure of Tomorrow (Boulder: Westview Press, 1978). a Colossus,” The Wharton Magazine, Summer 1979, pp. 34-41. M. Horwitch, “Managing 43. W. H. Lambright, “Government and Technological Innovation: Weather Modification as a Case in Point,” Public Administration Review, January-February 1972, pp. I-10. 44. D. Nelkin and S. Fallows, “The Evolution of the Nuclear Debate: The Role of Public Participation,” Annual Energy Review, Vol. 3 (1978), pp. 275-312. 45. M. Horwitch, “The American SST-A Cautionary Analysis,” op cit. 46. M. Horwitch, “Uncontrolled and Unfocused Growth-The United States SST Program and the Attempt to Develop Symthetic Fuels from Coal,” Interdisciplinary Science Reviews, in press. 47. M. S. Hochmuth, Organizing the Transnational (Leiden: A. W. Sitjhoff, 1974). 48. B. McEachron and P. J. Teige, Constraints orz Large-Scale Technological Projects, Research Report #CSS4676-14 (Menlo Park, California: Stanford Research Institute International, 1977). 49. W. S. Baer, L. L. Johnson and E. W. Merrow, Analysis of Federally Funded Demonstration Projects: Executive Summary (#R-1925&c); Final Report (fl-1926.Dot) and Supporting Case Studies (#R-1927-Dot) (Santa Monica, California: Rand, April 1976). 50. R. Seamans, Jr., and F. I. Ordway, “The Apollo Tradition: An Object Lesson for the Management of LargeScale Technological Endeavors,” Interdisciplinary Science Reviews, Vol. 2 (1977), pp. 270-304. 51. J. E. Schnee, “Government Programs and the Growth of High-Technology Industries,” Research Policy, Vol. 7 (1978). pp. 2-24.