Managing general managers: Control and motivation at the top

Managing General Managers: Control and Motivation at the Top* Barbara Czarniawsku A study of control and motivation processes taking place at the top levels ofeconomic

organizations

in American

in Poland was extended to analogous processes

corporations.

The

psychologically

based processes

(ap-

praisal, incentives) were shown to be similar in both systems. The control processes differed, revealing strong linkages to broader economic, political and cultural structural

contexts.

The

findings

demonstrate

why borrowing

solutions fails, and indicate a need for comparative

organizations,

which take into account the macro determinants

the

studies of of organ-

izational activity.

Any version of a central management some

solution

combine

to a basic

autonomy

which is supposed with dependence

granted

dilemma:

by definition

natural to relationships

how to

to any enterprise

to act as an independent

tion. This dilemma agement

process must include

organizational

economic

agent

within an organiza-

is much more acute at the central man-

level that at any other where it could arise. And yet

this problem

is not getting much attention.

As Etzioni (1965)

put it, “much more is known about control of lower-ranking participants

than

of higher-ranking

ones,

and, clearly,

control of higher ranks is at least as important” motivation

problems

sumption

are relatively

is that managers

motivating

others

unexplored,

of the companies

the

(p. 674). The too: the as-

concentrate

and do not have to be motivated

on

them-

selves. * The

Polish

ductcd

part of the study

in 1978-80

thr Faculty

and sponsored

of Management,

sity of Warsaw. was supported American ties,

was conUniver-

The American study by a grant from the

Council

which

by

enabled

of Learned the

Socie-

author

to

spcndtheacadcmicyear1981/1982in the OI-ganization Study Group, School ofManagemcnt, M.I.T.

Sloan I am

cteepty gYltcful to Professors Lotte Baityn, Richard Beckhard, John Van Maanen and Edgar Schein for their help and encouragement

The present study was born from an interest in control and motivation

processes

izations in a centrally tween

Polish

General

taking place at the top levels of organsteered economy,

Central

Managers

Economic

i.e. in interactions

Authorities

of firms. These interactions

main aspect of management

and

constitute

the

process, which therefore

whose shape and

meaning

the actors -

CEA

is understandable

only through

offricers. This assumption

those which describe performance ized

0

1984 Scandinavian

of Management Studies.

November

1984

can be

seen as a special case of social influence,

management

(e.g. Mintzberg,

factors

dependence

like

size,

process as individual

1973; Kotter,

technology

of which the Aston

1980) are the best example.

the

places the study in between

and

role

1982) and those

which choose to see it as a result of an interplay

Journal

be-

(CEA)

of objectiv-

interorganizational

studies (see e.g. Kuc et al.,

Here, the CEA officers and GMs

were not the objects of the study, but the main source of per101

BARBARA CZARNIAWSKA ceptions which

process

on

the study focuses was not seen as a composition

and interpretations.

of

objectively enacted

determined

management

characteristics,

but as a social reality

by its main actors and therefore

inter-subjective process

The

in

perspective.

question

approach

comparative

interviews

(Glaser

at reproducing

the

chaise

of the

of metho-

has been used, based on the

analysis

& Strauss,

the

through

an understanding

predetermined

dology: an inductive continuous

Such

cognizable

of the contents

1974).

respondents’

of open

The interviews

perceptions

aimed

of manage-

ment process and were guided by the following questions: -

what are the CEA

expectations

concerning

companies’

activity, -

how are these expectations

-

what are the incentives related to expectations

how is the fulfillment and the sanctions

The

transmitted

of expectations

connected

of central management

how this aim was pursued, method

evaluated, fulfillment

to failure.

aim of the study was to discover

patterns

to GMs,

and explain

processes.

possible

In order to show

a more detailed description

of the

is needed.

The Research Design Within this framework

a three-part

two first parts in Poland,

study was conducted:

the third in the U.S.A.

part took place in Polish merchandising second in Polish manufacturing American

explain the consequent three

parts.

The

access granted enterprises There

sampling

first choice

by sponsors

operating

of them

is to provide

the

and the third in I shall try to

choices while describing

(Polish

in the functioning market

trade entities in Poland

market. The responsibility

city consumers There

supplies the city consumer household appliances.

of

in Poland. of one

with food. It has its

in one of the biggest cities and 49 “divisions”

each of 49 voivodships.

all

retail) was a result of

interested

are three central domestic

headquarters

“corporations”,

corporations.

in the consumer

which supply the consumer

first

companies,

(mostly merchandising)

the

The

is another

corporation

in that

market with clothes, furniture and

The third one sells both food and other

products but operates only in rural areas. Those three “corporations”

and selected

“divisions”

(companies)

were studied

during the first stage. The choice of companies

(“divisions”)

tions was guided mainly by the principle mization 102

in relation

within the corporaof difference

to the following variables:

maxi-

MANAGING

-

size (large, medium, geographical

small companies)

location

administrative

GENERAL MANAGERS

(the reform

division

of 1975 changed

of Poland,

creating

ships” instead of 17, each with its own capital. them

were identical

example

compete

“capitals’: (agricultural,

corporation

officers

55 interviews

each of the corporations the company

to

etc.).

were conducted

and top managers

altogether.

the

started

“superiors”),

industrial

interviews

(headquarters)

of for

stimulated

immediately

with their old administrative

local tradition

companies,

which

Some units,

environments,

were new and their creation

newly created

In every

existing

big cities and their immediate

but many

CEA

with previously

the

49 “voivod-

The

with the from three

interviewing

started alternately

at the CEA

in or at

level. This part of the study was conducted

in

1978. In the years 1979-1980 facturing

corporations

in the consumer

the study was extended

(associations

goods

market.

ducted in 6 corporations,

to manu-

of producers)

The

operating

interviews

were con-

36 interviews altogether.

The qual-

itative data analysis revealed a picture much the same as the one presented adopted

here

method

maximizing

(Beksiak

suggested,

differences

& Czarniawska,

between

the studied

ever, a similar study done in heavy industry yielded analogous to extend

1982).

The

that the next step should aim at objects.

How-

(Daniecki,

1981)

results. At this point the decision was made

the study to big corporations

in a Western

econ-

omy. The choice of the American as the doubt

rences by such a jump parability

does not produce

point

of view,

are organized

rations.

As the early

rous attempts, latest major tions”

based

corporations. organizational

American

objects

diffe-

a danger of incom-

enterprises

reform

so-called

Polish

experiences

to learn from them. The

in Poland, “Large

1. outlines

structure I began

the

the world, there were nume-

on the organizational Figure

in

organizational

around

economic

As the differences big enough,

most

in many countries,

to introduce

nizations

may be surprising, to maximize

in the same way as most large corpo-

were widely advertised

tried

an attempt

It is not a very well known fact that from a formal,

structural economy

companies

arises whether

initiated

Economic pattern

in 1972, Organiza-

of American

a simplified

design

of the

of the Polish economy.

in political and economic the American

systems were

study in search of orga-

which would be as close as possible to my original

in other respects.

the organizational

I decided

structures

to look for similarities

(organizational

in

design) and the 103

BARBARA

CZARNIAWSKA

central economic ministries,

boards:

banks, planning

or price commissions

etc.

T associations

of producers

centrals (“corporate

of trade headquarters”)

companies

“corporation”

(“divisions”)

1 plants/stores (field units)

Figure

1. The organizational

structure of the Polish

economy:

a

formal design. type of business. rations, country, The

access realities. to conduct

sampling

with research I had neither

still remained

is, unfortunately,

budget

planning

the possibilities before

usually in

practices

and

nor the means

a study on a wide sample of American

access to any corporation,

corpo-

in a smaller

in retail.

generalizations

Help came quite by chance:

familiarity

companies

and preferable

of possible

Theoretical

disaccordance

I needed large American

to nation-wide

multidivisional, problem

unsolved.

tions.

Therefore

comparable

corpora-

I was able to get

I had been trying to gain a general

with the life of American

corporations

by inter-

viewing executives who were taking part in special programs offered by the Sloan School of Management. much I had learnt from them, sults as well. It helped 104

Realizing

how

I decided to include these re-

me to establish

a general

frame

of

MANAGING

GENERAL

MANAGERS

reference

for studying central management

porations

which

American

study was a reverse of the Polish study: in the latter

granted

in two retail cor-

me access afterwards.

I moved from the retail to non-retail

Hence,

companies,

the

in the for-

mer I did the reverse. Altogether,

I interviewed

officers and General companies.

sales around

trying to reach the extremes.

* One

anonymous

rhnr rhr term

rrf+ree

wguc and should ~nstancc, “So&” truth

commented

“expectations“

is LOO

be rcplaccd by, for or “rules”. The

is, that the term

was chosen

GIUSC of its vagueness.

be-

“non-directive,

non-para-

m(.tr1(.“, nomic

a category which makes rhrorisrs vu-v unhappy.

central

political

authorities

industries:

and medical

Therefore

mining,

equipment.

of consumer

respective

interviews

heavy

industry

The smallest had sales around

businesses

altogether,

I was also

I included companies

electronics,

million dollars, whereas two are considered their

goods or ser-

2 billion dollars,

350

to be the No. 1 in

in the country.

There

were 41

26 from the retail corporations.

Expectations

mi+t contain rules, goals and objecrives. but also many other, unspecified elements which still have a distinct controlling fun&n. The respondcnta did not have troubles in using the term. Similarly, we found in another study (Bcksiak & Czarmawka, 1982) that one of the most common management tools is a hybrid called

other

(CH)

American

of them were involved in the

or merchandising

vices with annual

Headquarters

from 17 different

While the majority

manufacturing

from

Central

Managers

eco-

Result I: Expectations The first results of the Polish study showed clearly that the outlined structure the formal

presented

spond to the reality. expectations*: mainly

GMs

The

economic

CEA

authorities

authorities

of

by other authorities,

(party committees)

central

boards

and

administrative

authorities*

I

+

centrals

does not corre-

at the local level.

-i

-1

system,

are not the only source

are also controlled

by local political

state administrative

central

before (Fig. l.), if truly showing

design of the economic

of trade

1 local political

local administrative

authorities

authorities companies Figure 2. The actual structure of authority in the Polish economy. * Central

administrative

with economic matters,

authorities

authorities.

They

constitute

part of government,

do not, however,

but with public administration,

together

deal with economic

legal system etc.

105

BARBARA CZARNIAWSKA This is not a case of usurpation,

however. In every com-

pany statute it is said that state local administration local committees activities.

This was originally

the potential anything matters,

ill-effects

surprising

intended

as counterbalance

of centralization.

Hence,

about political intervention

it is the economists’

do not know that political formal management atic intrusion

persistence

in pretending

intervention

is included

system and treating

tions and demands cult to estimate

confronting

it as an unsystem-

precisely

expectations

the number

formulated

of expectations,

but I

as 15, 33 and 23 different

in the Polish corporations,

ively for each of the three studied companies, Let us compare

are nume-

nuances make it diff-

were never more than 6 in the American the expectations

Polish corporations

the expecta-

the Polish GMs

Semantic

that there were as many

respect-

whereas

there

firms.

formulated

in one of the

(not all will be quoted, as the whole list -

would be far too long) and the expectations

to GMs

they in the

from the outside.

rous and often contradictory.

33 -

to

if there is in economic

As a result of the multiple sources of authority

found

and party

have rights to exert control over enterprise

in one of the American

attributed

retail companies:

The Polish corporation:

1

Follow all CEA

guidelines

-

do not attempt

to create

your own policies. 2.

Demonstrate

imagination

3.

Think

in long-range,

4.

React

immediately

and

aggressiveness

in

planning.

and instructions 5.

Have better coming

6.

Control

general categories. and with discipline

to the directives

from the CEA.

supply than other

regions

(an expectation

from the local authorities). the

quality

of delivery

from

producers

and

punish every deviation. 7.

Keep in touch with producers, and catch every opportunity

maintain

8.

Be reliable and loyal (local authorities).

9.

Never exceed the wage fund limit.

The American 1. Operate return 2.

Adhere holders,

(as indicated

by sales,

profits

and

on investments). to company

principles

to consumers

Demonstrate

long-range

4. Share the corporate view. 106

delivery.

corporation: effectively

and

(commitments

community,

choice). 3.

friendly contacts

of an additional

thinking.

to share-

to quality,

to

MANAGING As shown, Polish

the majority

managers

expectations more

general.

of the expectations

are more

coming

concrete

The four American

expectations

and from

companies’

different

among

sources.

the CEA

ly”) and their reaction

political) authorities. long-run

effects,

control, local

(sometimes

orientered

extraordinarily

the national

is sales volume of certain

and competition of others).

explain

their

(supply

This

for GMs

American instructed

at the

to much

that the CEA

However,

greater

(GMs

can

that they

those

role conflict.

expectations

of

local

are

authorities

if the whole set of expectations is compared

with the be-

The Polish GMs are continuously

on how to organize

their work and the notion of

does not seem to be popular among their superiGMs

The

in Polish

outcome-oriented corporations, way. There

process must eventually

which they

expectations

and the outcome

are less itself is

is a belief that the right

in the American

long-range

as a complete

planning and measurement most

told that ends are through

bring about the right outcome.

expectations

general (“demonstrate be interpreted

are continuously

than the means

in a different

process-oriented

The

leads

by the CEA

by demonstrating

and

more important

numerous

grocery

ones, the process- versus outcome-orientation

were achieved. defined

an index

by the Polish authorities

ors. The American much

and, sometimes,

a strong perceived

previously

comes the main difference. equifinality

at the

coming from another source of expec-

process-oriented

articulated

of

goods at the corner

desired

but it also produces

outcome-oriented.

holiday

for the local market

insubordination

I mentioned more

effects

control (the most typical

situation

than

fulfilled an expectation tations)

The

short-run

so, as with the expectation

outcome

as simple as presence

to outcome

cooperation.

toward:

weeks), outcome

autonomy

“be

in contradic-

(as opposed

nation-wide

supply in stores during

expense

is a pattern

of CEA and the local (mostly

expense of coming

store)

itself (“be obedient’:

control

and

are

measure

concerning

The former seem to be oriented toward:

1977)

authorities

are two typical

(“be tough”, “be friend-

There

process

Ouchi,

perfect

There

to the CEA

tions involving the expectations

can

coming from the same

expectations:

relations with producers

creative and independent”).

but in the

and contra-

The inconsistencies

be found both among the expectations source

are

can also be

extended

dicted by many other expectations.

to

whereas

headquarters

by the Polish CEA,

case they are complemented,

inconsistencies

attributed

and detailed,

from the American

found among those formulated latter

GENERAL MANAGERS

prominent

thinking”).

The

case are very This should not

lack of care for process:

the

systems take care of it. feature

of the Polish

case is the 107

BARBARA

CZARNIAWSKA

inconsistency comes.

of expectations

Looking

comments

on the impact

opinion,

depends

1979). I n a technical

effective

only if control

output.

on the nature

In institutional

domains

can be

on assessment

of actual

control is only a

of activity.

Although

clearly resemble

because

to measure

properties

and services. If they are not measured,

of concrete it is because

there is no need to do so. A producer-dominated creates a so-called easy market shortages consumers

-

is an economic

dominate control

consumers

economic

central and

inevitably

Analyzing consistency

conduct

multiple

the

producers

effective

authority

central

reason

for

of the political, structure,

sources of authority

the American

which

and there-

and requests. data I failed to observe

of expectations.

this in-

And yet Frank (1959) proposes to

phenomenon,

which

as a basis for an approach Frank

of quality.

A second

is the unification

expectations

tional systems. ambiguity

therefore

administrative

the same

standards”

regardless in which

is not needed.

control

produces

fore inconsistent

treat

and

economy of constant

reason for the observed situa-

disequilibrium

over outputs

ineffective

in a situation

will buy anything,

Hence the first macroeconomic tion

the

organizations

it is impossible

But there are ways to measure

products

domains

centralization

domain. The latter do not control the prop-

erties of their output them.

in his

under study was undoubtedly

their characteristics

in an institutional

which,

centralized

categories

domain of Polish organizations

for out-

of Meyer’s

of organizational

domain,

is based

of legitimate

technical,

one is reminded

of centralization

(Meyer,

definition

and lack of concern

for explanations

he calls

“conflicting

to study all organiza-

studied Soviet industry

and made the

among goals and conflicts among the standards for organization

members

the basic assumption

of of

his study. Pfeffer ican

mands.

(1978) mention

and Salancik

business Their

firms

are

confronted

observation

the fact that Amerby incompatible

de-

is based on the study by Fried-

lander and Pickle (1968). These authors claim that an organization, growth,

if it is to become

effective

in terms

of survival and

must satisfy the needs and demand

owners, community, itors. Findings

government,

customers,

of their study of 97 small business

tions showed only a moderate

number

tween the degree to which organizations the needs of various agencies Friedlander organizational tions themselves.

of employees, suppliers,

of correlations concurrently

befulfill

related to them.

and Pickle’s

study focuses

functioning,

not on the functioning

on the effects of opera-

It is more than likely that Polish managers

also fail to fulfill the needs of their internal and external 108

cred-

organiza-

social

MANAGING environment, necessarily

GENERAL

but this does not prove that Americans confronted

with conflicting

tion is that one of the most important is to reconcile consistent

MANAGERS

those demands

expectations.

a “responsive

demands.

must be

My sugges-

tasks within a CEO

and to communicate

role

them as

This is what Pfeffer and Salancik

call

role of managers”:

“The responsive role of management posits the function of management as being an assimilator and processor of demands. The most appropriate activity of the responsive manager is not developing appropriate actions but deciding which demands to head and which to reject.” (p. 266). Thus,

the responsive

at the CEO

role in American

level, whereas

corporations

in Polish corporations

is placed it is “dele-

gated” to the level of GMs. The latter have neither the autonomy

nor

the

expectations. function,

power

to deal

sovereignly

They do reconcile

conflicting

but there are high costs to both parties in terms of

organizational

efficiency

It is interesting

and personal

well-being.

to note that Granick

tive study of socialist economies sistency

with

them in order to survive and

of expectations.

that his analytical

This

(1975) in his percep-

failed to observe this inconwas probably

due to the fact

frame of reference was based upon Amer-

ican reality, and also due to his assumption

that the industry

as a whole should be seen as an equivalent

to a corporation.

This macro approach problems

probably

at the company

swept out many conflicts and

level.

Results II: Communication A complete

communication

lows: (1) the headquarters pectations

to the GMs,

(CEA

against too high standards,

outcomes might and

can

be pictured

or CH)

transmit

(2) GMs

etc.), (3) the headquarters report on outcomes

loop

are evaluated.

offering

Task-relevant

information

information

information

(Schein,

around

whereas

(4) a (5) the

flowing in this loop

task-relevant

concentrates

procedures,

contributions

their expectations,

The information

evaluative

ing and reporting

additional

to the headquarters,

be of a twofold character: interpersonal

their ex-

react to them (protesting

reconfirm

is forwarded

as fol-

interpersonal

evalu-

ative information

relates to appraisal

in organizational

life the two are mixed, but the results of my

study show differences

in task-relevant

larities in interpersonal

information,

processes.

1981).

plan-buildIt is true that

information and therefore

and simithe two

must be separated. The

transmission

and (3), is similar

of expectations enough

from the top down, (1)

in both cases: there are various 109

BARBARA CZARNIAWSKA ways of communicating is expected

them and GMs

of them.

GMs complain:

learning

and very concrete onciliatory

Sometimes

about too numerous,

expectations

interpretations

and

creative

reports

concerning

concerning

realization

But

at the CEA level) and

of the plans.

the demands

a result of an insufficient

Both

the CEA

knowledge

whereas

are overstated.

The CEA

the companies’

“insurance

try to minimize The GMs

Those

concerning

those concerning

considers

but the reasons by the CEA.

tion is concerned, are

never

transmitted

demands

are

As far as the demand

fulfilled.

and

The GMs

by overstating

assume do not

their

Hence

a

that companies’ meet

them

fully:

their demands.

believe that the inaccuracy

tion is caused by an irrational between authorities.

report its sales volume every month. CEA

previous month,

of report

“competition”

informa-

for information

Let us say that a company

best date to prepare

is expected to

According

to GMs,

the

such a report is the 5th of each month.

wants this information

on the 30th of the

because it will facilitate any needed reaction

in case something month

informa-

assume that their needs will not be fully met,

and so they exaggerate

However,

from

tells them that their re-

Thus

the CEA

exaggerated

GMs

upward

they give are different

their experience

circle is formed:

whereas

to be

the way in which they

needs, they hope to receive what is really necessary. vicious

capaci-

achievements

these inaccuracies

policy” -

as

demand.

possible failures.

those perceived quirements

of the market

agree that the information

is inaccurate,

In the

are usually exaggerated,

The reports are also innaccurate: ties are understated

of

and supply (the

agree that this process is far from perfect.

opinion of the CEA,

it is

pass on information

resources

with suppliers are negotiated

and GMs

actions.

(2) and (4), which is dif-

ferent in both cases. The Polish GMs contracts

the Polish

contradictory

does not leave room for rec-

from below to the top information, two types: demands

usually know what

all too clearly,

goes wrong.

Therefore,

figures have to be estimated

local administrative

authorities

figures so they demand

the end of the

by sales forecast.

Yet the

want to be first to receive the

the information

to be ready by the

27th. Finally, the local political authorities

want to be ahead

of all receivers, so they require a report on the 25th. The combination

of this absurd competition

processing

techniques

apart from deliberate interests.

This

“boomerang

encourages

110

data

information,

efforts to lie in the name of company

situation

gives birth to what I have called a

effect”. Because

the firm’s performance

gerated in the reports, expectations unrealistically.

and unsophisticated inadequate

Consequently,

is exag-

for the next period are set

the company

is confronted

in

MANAGING the next period with unattainable between

expectations

and

GENERAL MANAGERS

expectations,

performance

and the gap

widens.

The

boo-

merang hits the thrower. There

is, of course,

American

an objective

munication.

Thanks

to widespread

cessed data, the American feedback mation

difference

and the Polish companies:

on company

between

the technology

the

of com-

use of electronically

pro-

CH are supplied with immediate

results. This “objectivization”

creates a good ground

for high-trust

of infor-

relations

(Fox,

1974). Some Polish stores do not even have a telephone, forms

are obsolete

processing

and dysfunctional,

techniques

do not

when it is finally produced. for low-trust relations.

GMs

perpetuate

effect”,

pattern

their

repetitive

spiral. CEA

requests.

The

unreliable

communication

not a cause. A technological

im-

but as long as

goals (and this is hard to achieve in a

Both studies showed that appraisal do not function

most pervasive

the low-trust spiral

phenomenon

performance,

evaluation

An explanation

The

is that of a disproportion

be-

on performance.

There

evaluation

ple tend to neglect the phenomenon ance, which is an inevitable

in cases of poor

can be found in Kahneman

(1973) studies in the psychology

of prediction.

of regression

part of learning,

and Peo-

in perform-

and whenever it

they see it as a result of a wrongly

reinforcement.

both formal

in cases of good and/or excellent

but very explicit

performance.

systems,

as well as they should.

tween positive and negative feedback is no explicit

happens,

know that

to persist.

and informal,

Tversky’s

so they

so they almost automatically

situation of multiple sources of authority), will continue

low-trust

for resources

would slightly relieve the tension,

there are no shared

basis

knows that

cut down their supply. GMs

is only a symptom,

provement

The

their demands

cuts down their supplies,

exaggerate

data

in information,

But this is only a “material”

the low-trust

tend to exaggerate

almost automatically CEA

allow trust

The main point was shown in what I

have called a “boomerang experiences

the report

and traditional

administered

As the authors say:

“We normally reinforce others when their behavior is good and punish them when their behavior is bad. By regression alone, therefore, they are more likely to improve after being punished and most likely to deteriorate after being rewarded.” (p. 251). It is worth noticing

that the above reasoning

ularly well to the learning tional process Kahneman a continuous

(indeed,

situation,

applies partic-

and therefore

the experimental

situations

to educaused by

and Tversky were only of this sort). Even if life is learning

process, organizational

performance

is 111

BARBARA more

CZARNIAWSKA

predictable

and less prone

than performance enon

still persists.

theoreticians

This

is, in my opinion,

and managers

regression

shape organizational

because

use the metaphor

child or the teacher-pupil performance,

to unexpected

in a training process. And yet the phenom-

relationship

leadership.

both

of the father-

to understand

And because

a feedback

both spheres of life, the older The functional

educational

tradition,

influ-

one.

usefulness

of metaphors

as tools to undcr-

stand reality and to cope with it, is very clear (Morgan, Less obvious This

are the possible happens

when

dysfunctional

they become

clusive, when they are believed and not its creative useful

to apply

standing

on

as a specific activity, is actually to be found in

ences the organizational

them.

and

a particular

and exof reality

In other words, it might be

the parent-child

it is dysfunctional

orthodox

to be a reflection

distortion.

1980).

effects of using

metaphor

toward

manager-subordinate

under-

interaction,

but

to treat the latter as identical to the former.

In summary,

the analysis

of communication

showed that the flow of task-relevant

processes

information

is different

in the two systems. It seems that the factor crucial in explaining this phenomenon goals. Whereas

is the presence

American

CH

agers perceive

their basic interests

CEA

and

officers

GMs

or absence

officers

clearly

as the same, belong

The information

petrifies this difference The transmission This

training:

distortion

in the process

both reveals and

of interests.

of interpersonal-evaluative

is, in both cases, characterized feedback.

finding

Man-

the Polish

to two different

groups. They are “sides” and not participants of management.

of shared

and General

should

to help managers

information

by the dominance

of negative

be of use in management

in improving

their

evaluative

skills, one should make them aware of the psychological of the process rather than offer them yet another

basis

“appraisal

system”.

Results III: The

Motivation

study of incentives

revealed

a somewhat

system practically

operating startling

within

picture:

does not function.

the Polish system the formal

Bonuses

integral part of a salary, and they could eventually punishments,

being withdrawn.

Other incentives

unattractive

(e.g. letters of praise)

allotments).

The

punishment

But if there are no rewards, General 112

Manager?

operate as are seen as

or improbable

system

rate. The most severe punishment

reward

are seen as an

is much

(e.g. car

more

is to lose a GM

what is so attractive

elabo

position.

in being a

MANAGING The most convincing

GENERAL MANAGERS

answer is that being in a role is itself

a source of rewards and that these rewards are largely independent

from

(bonuses

included)

formance,

the

formal

incentive

but on remaining

reward is power: influence, contents

system.

of the interviews

within

the system.

prestige,

power. The former is the traditional

can be seen as an increase

meaning

and privileges

counterparts

resulting

from being a member

composed

of local GMs

The

power means,

in horizontal

to company

sometimes

in vertical

threaten

depend

on

the

where

of legality to the increase

the individual

he or she belonged.

levels that accumulate

promotion

out from are

amount

that do not. The

is the one which allows a person to

step into the next “horizontal the next hierarchy

in

There

a significant

power and there are others

only attractive

The

some types of promotion

power, breaking

circle”

of horizontal

activities and in quite

power is not equal

horizontal

certain hierarchy

above all, the in-

verge

power. On the contrary,

the “power

cer-

on each other.

one can exert outside of the organization,

both in spheres pertaining affairs,

of a

and their

who pay themselves

mutually

increase

level. This

of the word. The latter is influence,

in other institutions,

crease of influence

of influence,

hierarchy

tain services and therefore

increase

The

proved that it is useful to differen-

specific “power circle” -

horizontal

Another

special privileges.

prestige and privileges at the subsequent

private

salary

not upon per-

two kinds of power: vertical power and hori~ontul

tiate among

prestige

High

is a reward that depends

power circle” which is far from

level. For a General

Manager

of a compa-

ny such a next step would be as far as the president or senior vice-president

of the corporation.

the whole country,

a likelihood

As there are 49 divisions in of such a promotion

for each

of 49 GMs is not really high. Whereas

the most probable

motions,

in some

as to a directorial

quarters

departments,

position

are lacking

pro-

of the head-

in the desired horizontal

power. The American executives well”, nature,

and

incentive

there

are

many

which generously

terestingly

system is very elaborate.

are paid, as one of the CEOs

enough,

other

reward

perquisites

the managers’

these start relatively

chy, and it is not necessary

to be a General

paid. To an outside observer,

rise

certain

above

hierarchy

work overload,

levels

of material efforts. In-

early in the hierar-

handsomely

inconveniences:

The top

said, “shamelessly

seems

Manager

to be

the promotional to bring

excessive responsibility,

and strain, and a risk of the ultimate humilation,

only stress

the same as

in the Polish system: being fired. Why, then, is a promotion

to

a high position so desirable? Almost everybody

said that money is Number

Two. What, 113

BARBARA CZARNIAWSKA then,

is Number

One?

It has different

names,

them seems to be the most appropriate. hidden

behind

most

“achievement’!,

of the well-rounded

“self-fulfillment”

but one of

Power, I think, was expressions

etc. Why

like

is power not al-

ways called by its proper name? McClelland’s

paper on “The

Two Faces of Power” (1970) sheds some light on this embarrassment.

He conceptualizes

locutors

did: as power

manipulation

power

as many

over people,

or coercion.

of my inter-

ultimately

reduced

be ethically wrong. Still, one might consider a hypothesis managerial

power is a feeling of control over happenings, over people.

if Kelley

I would be tempted

and Thibault

this term in a much

(1978)

narrower

to

that

necessarily control”

to

This is why power is considered

not

to call it “fate

had not introduced

sense, as control

over other

people’s outcomes. Does it make it less unethical? This is a difficult question to answer

in

absolute

terms.

Control

over

happenings

volves people and things being instrumental

in-

to what is hap-

pening, but on the other hand there is always an option to include other people into common instead

of using them

control over a common fate,

instrumentally

on the way. So it is

perhaps more a matter of how it is exercised, control

as such. Nevertheless,

and not of the

the social odium

put on the

term “power” is very strong. Only after having spoken to the American

managers

did I realize that in the Polish study I

was the one who introduced

the concept

analysis. By doing that, I attempted to various phenomena

of power into the

to give a common

that were described

name

to me under vari-

ous names. If the term “power” was ever used, it was always in reference to somebody else, and never to the speaker. Polish managers

are as afraid of this word as the Americans

In summary, situation very

it only seems

of top managers

dissimilar,

American closely

related

in the United

especially

managers

as though

where

enjoy

to promotion:

States and Poland is

rewards

money

are

and power,

Polish managers

enough money and do not want promotion. look suggests that sources of motivation only the sources of incentives Managers perquisites higher

connections

And yet a closer

by power and com-

power, within an organization.

The

“chunk”

In Polish companies

within

are

In the American

one gets, the bigger an increase

which

do not get

are actually the same:

are gratified

related to their positions.

can be controlled. from

concerned.

are different.

in both countries

panies it is a “vertical”

are.

the motivational

in “horizontal” a “horizontal

of organizational the gratification

power:

more

power circle”.

fate stems

and better There

are

also similar, if weaker, trends in both countries:

a promoted

American

of personal

114

manager

can count

on an increase

MANAGING influence

among

GENERAL MANAGERS

peers and a highly promoted

level) Polish manager

(to the CEO

would enjoy a substantial

increase

of

power within the organization. The

same

concerns

motivational

value

recognition Polish

perquisites.

In both

of compensation

it bestows on recipient”

managers

compensation

(Crystal,

tend to stress it more

for them has practically

ican managers

systems,

lies primarily

“the in the

1978, p. 17).

explicitly,

because

no other value. Amer-

are more than the Polish, rewarded by mone-

tary incentives,

because

money,

apart from its purchasing

power, serves as a store of value and a standard

of value. In

the Polish. economy

scarce goods serve the same purpose,

so

the access to them

is rewarding

al-

though

there

formal

rewards,

motivated

is a very distinct

difference

I do not think

by factors

stimulate

for managers.

altogether

American

in the effects

that Polish different

Hence,

managers

of are

from those which

managers.

Myth of Improved Performance: People uersus Systems I never asked the respondents

what makes

a management

system effective nor have I tried to discover their evaluation of the system

within

Nevertheless,

respondents

questions.

The

patterns.

opinions

They

been used for

more concrete and less persistent sets of values and beliefs, which change with a change in leadership the

environment

(e.g.

or even in JGnsson

&

Lundin, 1977). I would prefer to call thcr “ideologies”, following Rrunswn (1982) and Dunbar, Dutton and ‘l‘orbrrt (1982), and to reserve the term “myth” for more general and more persistent set of ideas, very much like Starbuck’s ideologies”.

(1982)

“societal

they were actually spontaneously

brought

what is important

operating.

discussed

forward

could be called myths -

beliefs explaining * The term “myth”has

which

these

show interesting sets of values and

for the organization

and

how should it function.* In the Polish case, the CEA of effective oriented,

management

economically

also GMs’

officers believed that the basis

lies in an impersonal,

sound management

quantity-

system. This was

belief: while speaking about their own actions they

would very frequently the effectiveness

indicate that their aim was to improve

of management

processes

by perfecting

system. However, when it came to actions, perceptions to differ. The companies,

respondents

and therefore

from CEA

trolled by a set of financial systematic,

impersonal

measures

way. In GMs’

control

dominated,

in a highly

cording

to the CEA

officers,

GMs

tended

their managers,

the

began

to think that

were being con-

which operated perspective,

idiosyncratic

the philosophy

in a

ad hoc

manner.

Ac-

passed down to

was that of profit and growth. The motives presented

by GMs

were much more complicated,

be sometimes

and if growth could

found among them, profit was mentioned

very

rarely. In summary:

the CEA

sound management

officers

and GMs

believe that a

system is a sine qua non of effectiveness, 115

BARBARA

CZARNIAWSKA

but they differ in their perceptions

of the actual system. CEA

sees it as fulftiing

perceive it in the opposite

way. The

CEA

the myth, GMs

officers notice certain

deviations

in the sys-

tem’s functioning,

for instance

falsified feedback,

see it as people’s

imperfection,

rather

than

inherent weakness in the system. The GMs tem as faulty one and only people

but

they

as proof of an perceive the sys-

can save it from

total

failure. It should be pointed out that the inconsistency tions results in lesser importance management individuals Therefore

being given to the formal

system and in greater who interpret

both the CEA

of expecta-

importance

and transform officers

and GMs

viduals spoil the system and counteract

awarded to

the expectations. are right: indi-

its faults at the same

time. What the CEA fails to observe is that the actual system in operation

is not the one they designed.

ever, easy to explain: CEOs

for instance

is one of the “fathers”

Such bias is, how-

one of the interviewed

of the economic

reform,

and

who is willing to notice the defects of one’s own child?. . American

managers,

especially

at the corporate

never cease to stress the importance for organizational simple:

effectiveness.

find an adequate

trust him/her

give him/her

This

opinion

Selection

processes,

is shared

by the GMs,

but, again,

their own actions and not.

those of their superiors.

As far as the CH

cerned,

observed

actions

are con-

in the Polish study reap-

pears: the CH officers believe that the myth is actualized their actions,

GMs

and

one of the main duties of every

they illustrate it mostly by quoting the discrepancy

autonomy,

results.

are the crucial organizational

care for people’s development

level, factor”

The recipe for success is very

person,

and then wait for excellent

and motivation manager.

of the “human

by

have their doubts:

“I had my personal autonomy because my boss knew we had all these systems that literally, if I fell over with a heart attack, would continue to work.” To support Chandler

this observation

one could

study of the managerial

quote

revolution

leaves no doubt that one of the most important the one from “personal sonal techniques Hence,

management”

of modern

the executives perceives

successes and failures, but if

it also as a right description

which will absorb their individual

of organiza-

by impersonal

systems,

efforts only as long as they

with the system’s demands.

The Polish managers 116

imper-

(p. 381).

from both levels believe that it is

tional action, the GMs feel controlled are consistent

which

changes was

to “systematic

top management”

people who make organizational the CH

the famous (1977),

believe in ~&ms,

even though they

MANAGING

GENERAL MANAGERS

have to cope with a reality in which

individuals

within the system decide over its effectiveness. managers

operating

The American

believe in people but use the impersonal

systems to

operate effectively. How can it be that the Polish myth fits a managerial

perception

of the American

reality?

myths persist in spite of their inadequacy The explanations

can be found on the level of meta-myths,

within the cultural Americans

contexts

are famous

itive individualism notices,

for their commitment freedom.

tition Whyte

than

of people

Ethic to the Social Ethic:

a source of creativity, to achieve

ment of collective

change

systems. from the

“a belief in the group as as the ulti-

and a belief in application

this belongingness”

science that recommended

inde-

of compe-

versus

a belief in ‘belongingness’

need of the individual,

science

lay in coope-

But it is rather a question

cooperation

also speaks about the forthcoming

Protestant mate

and failing -

(1956)

was noting

we talked more than others of personal

and freedom”,

versus

or

to compet-

As Whyte

years ago De Tocqueville

that though our special genius pendence

do

of both social systems.

and personal

“one hundred

rative action,

Why

to explain actions?

of

(p. 7). And it was

systems as a means to the achieve-

goals.

Whyte wrote this in 1956 and many things have happened since,

the 1968 revolution

O’Toole

( 1979),

ture, described equality

maximization and

them.

No wonder

that

changing

managerial

cul-

(as opposed (as opposed

friendship

environmental

to economic

(as opposed

growth),

to loyalty

right? The present economic

to the

companies

The

“system

demands

before

best way to promote tive individualism. management individual

principle

of socialist

that the impersonal,

systems.

leads

this is what Martin

et al.

values. in the

Of course,

this is

The ideology

effectiveness

of collectivism systems

are the

and to counteract

destruc-

objective system of central

organizations to an

Is

is perceived

quantitative

An impersonal,

commitment

system).

with conflict be-

and individual

people”

hardly an insider’s perspective.

intimacy

stories which are shared by

deal with the discomfort

West as a trademark assumes

Maybe

even more needed.

(1983) noticed that organizational

and profit

situation makes it hard

to believe the changes will be immediate.

tween organizational

quality

efficiency),

to unlimited

makes the myth of “people” many

-

is coming brings new myths with it:

of opportunity,

full employment

O’Tbole

about

the culture that Whyte saw as forthcoming

as a passing one. What liberty,

among

speaking

to effectiveness organizational

which in the long run will be rewarding interesting,

through

imperative,

for individual

bers. What

is extremely

though,

the origins

of this myth can be traced to the idealized

mem-

is the fact that per117

BARBARA CZARNIAWSKA ception

of American

reality, back to the time when Lenin

decided one can learn even from the devil (meaning

Frede-

rick Taylor). If reality

remains

different

because rugged individualism effective

from

systems (the top-down

right systems

the myth,

still undermines perspective)

have not yet been

it is either

even the most or because

the

found (the down-top

per-

spective). The specific history of Poland acceptable. individual systems.

makes this situation

Poles live from one emergency qualities

are more essential

In the short periods

when

for survival than are

between

there is never time

enough to test the myth, as a new emergency survive, and there is no way to question practical

easily

to another,

arises. So myths

them on a basis of

failure.

In both cases the reality seems to be dragging myth.

It cannot

better

reality and therefore

individualist

be otherwise,

Americans

impersonal

systems,

as myths

behind the

express

hopes for

help to live in the present.

have

to spend

their

The

lives within

but this is not what they would like to

believe. The rapidly deteriorating

economic

the Polish myth still more convincing.

situation

makes

Now, more than ever,

Poles need an effective system.

Summary and Conclusions It is time to say what is good and what is bad and who should learn

from

whom.

Organizational

strong conclusions, avoid increasing

theory

is full of such

which usually contradict

each other. To

their number,

general level and indicate

I shall try to stay at a more

the possible use of the findings of

the present study. There larities

are two groups of results from which to draw: simiand

psychological

differences.

The

similarities

issues: appraisal,

incentives,

is not surprising structures They

mainly This

as one can expect that the impact of macro

diminishes

also indicate

proved

concern motivation.

as we come

that appraisal

by training

rather

than

to the individual

procedures by designing

level.

should be imstill new ap-

praisal systems. The incentive systems must take into account not only the basic laws of human

motivation,

but also the

economic structure in which they are supposed to operate. The

differences

phenomena. tations tems.

118

at the organizational

yet all described

exist within This

level of

processes (as seen in contents

and their transmission) And

nomena tures.

are located

Control

differ between patterns,

the same

can be commented

basic upon

of expec-

the two sys-

processes

and

organizational from

three

phestruc-

comple-

MANAGING

mentary

perspectives:

GENERAL

MANAGERS

organizational/functional,

political

and cultural. The fact that distinctly within

the

same

structures change.

are

different

processes

organizational

at the same

can take place

structures

time

flexible

indicates and

that

resistant

to

It seems that strategies are reflected first in processes,

and only later in structures.

Hence,

to start to redesign the structure desired

processes,

and especially

uced the given structures by a reformist. common

if the strategies

non. Kornai

(1980)

ready solutions

not an exclusively

speaks about

an “optimizing”

look for “optimal”

the

that prod-

are different from those represented

And yet “borrowing”

and certainly

describing

it should be inadvisable

in the hope of producing

is very

Polish phenome-

a similar phenomenon

in

attitude of system designers who

pieces as if they could be found on store

shelves. “But that is a na’ive, wishful day-dream. provide

such

choices

in which

as we like. Every real economic

an organic tures,

supermarkets

whole.

and more

of the system

They

may contain

the components

our

good and bad fea-

various

to pick out from

does not

system constitutes

or less in fixed proportions.

lies only among

is not possible

History

we can make

The

‘package

the different

we like and to exclude

choice

deals’.

It

‘packages’

what we dislike.”

(pp. 156-157).

Why, then, are such attempts spective offers a possible Polish

situation

notions

using

answer.

Briefly,

Mrela

a variation

of the “legitimacy

identity”.

undertaken?

The political per(1983) analyses

on

Habermas’

of social order”

the existing

tolerated

the guardians efforts

where

these reforms

crisis,

economic

pervasive market

threaten

the market elements as to change

reforms,

are introduced.

the system’s

identity.

cannot be so numerous

a centrally

planned

economy

of processes rebellion social

or so into a

economy.

The reform of 1972, which shaped the organizational

reform

In

alien to the

can only be realized up to the point

they do not seriously

Therefore,

the solution

is

threatens

of the social order with an open rebellion.

e.g. market-type

However,

of illegitimacy

but only until growing discontent

to avoid this open

system,

and a “system’s

social order was never legit-

imized by the Polish people. This situation being

the

(1976)

presented

in December

order

had been

was introduced

sistent with the system.

in this paper,

1970. The existing illegitimacy openly

basis

followed the workers’

questioned

of the

and therefore

a

providing

solutions

that were incon-

However,

it could not have been fol-

lowed through to the point at which the local political authorities would have had to resign their control functions,

as this 119

BARBARA

CZARNIAWSKA

would have threatened

the basic

political

premises

of the

system. The reform stopped at the point of introducing structures, Hence,

leaving

all the conflicting

the desired processes

The existence

framework

it.

could not take place.

of myths direct us toward the cultural con-

text of economic

activities.

sions experienced

The myths reveal the main ten-

by the organization

members,

and also

show the close links between the everyday organizational and

new

around

a deep-rooted

historical

and

cultural

life

consciousness,

which must not be neglected. The words,

final conclusion

is almost

and yet the same

repeated

too trivial to be put into

findings

again and again. There

tional laws, as every organization

show that it should

are no universal operates

nomic, political and cultural context. possibility learning

of learning must,

however,

The possible gains extend knowledge

take into account

complete reference.

120

and limited

of others. Such a those contexts,

on any research

beyond

of organizational

in a specific eco-

This does not exclude a

from the experiences

which puts difficult demands

be

organiza-

undertaken.

the sphere of design:

functioning

will remain

if it fails to include broader

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