Managing human relationships among organizations

Mills examined the literature on interorganizational relationships. Finding the sustenance slight, he has devised a set of action guidelines for managers confronted with the problems of dealing with the external environment.

THEORY

Ga

AND PRACTICE

s our society becomes increasingly into a multitude of special-purpose

b

tions, the problems

between

these

of cooperation

institutions

grow

more pressing.

Yet we know

the techniques

of handling

Social scientists

have given

terorganizational avoiding

Lawyers

regulates

interorganizational

system

federal

and

tends

and

situations.

us theories

of inin

constructive

failure

in these relationships in managing

tions. Yet managers recognize in

among organiza-

describe the resort to

handled litigation,

interorganizational typically

the potential

which

as proof

of improving avoiding

rela-

have failed

interorganizational and thereby

of to

the ways

relations

are

public conflict,

and other costly occurrences.

a legal system that relations.

to be excessively

time-consuming.

court

more

litigation

accommodation

and public officials have

and maintained

this

tions. In fact, we might

too little about

or generating

developed

rigid,

constructive

organiza-

conflict but little guidance

conflict

cooperation.

organized and conflict

such

D. Quinn Mills

Yet

INTERORGANIZATIONAL RELATIONSDEFINED

costly,

Reports

by the

system show a rapidly

increas-

ing volume of cases directed against business and a court system overburdened and ineficient. Furthermore, litigation generally provides only a shallow and short-lived resolution of conflict rather than a more permanent

and

This article will describe approaches that have been made to the problem of interorganizational relationships and will provide some suggestions as to how management can improve its handling of these matters. But first let’s define

interorganizational

those that occur among

separate

relations

as

and distinct

35

organizations,

as distinguished

from

those

to provide leadership

can be a group, but it is a group with a clearly

groups,

defined

structures

purpose

and clearly defined

ries. It could be a corporation, labor

union,

group

of

a consumer

such

Chamber

of Commerce.

by virtue

of their

others.

a

or even

a

size, mission,

major

U.S.

Some organizations,

are of greater

The

bounda-

as the

(such as General

so forth)

are probably

or political

informally.

with

engineer

such circumstances

viduals

embroiled

this

of the

contacts

as do intra-organizational

involve

way,

tions, personal

or

however,

are more

In

very greatly.

we place ad hoc groups

we place

interpersonal These

simple simple

groups groups

relations

relations

that

involves

separate

that in most formal

with within

involve

is similar

no or-

either

shared

duction

19th

and

attention

relacom-

early

except within

organization

there

remain

and loyalties

along

with the opportunity

an

objectives for

century,

large-scale

pro-

processes and the organizations

that

them. In more recent decades, attenand

their

attention

orderly is shifting

relationship ganizations

on the problems

controlling

and complex organizations ing

20th

focused on the problems

and maintaining

of coordinating

these

large

and upon facilitat-

growth.

Now,

however,

to aspects of the inter-

of business and nonbusiness or(such as government agencies,

environmental groups, civil rights groups, purchasers’ organizations, labor unions, and so on).

to one

organizations, relationships

late

tion has been concentrated

individuals represent merely themselves, while in formal groups they represent other people who are not present at the meeting. Such an meeting

is

indi-

are further

of persons,

or some formal groups. In such as a sales meeting, the

intra-organizational

interactions

operated

ties to the others. Next,

ganizations.

characterize

in interorganizational

At one ex-

as an individual

formal organizational

the

of building

may be made more

of a continuum.

each participating

by his company

in which he resides.

INTERORGANIZATIONAL RELATIONS

managerial

treme,

A petroleum

com-

which may

clear in terms

loyand a

GROWINGIMPORTANCE OF

berships in separate organizations, relations

is on strike,

inter-

have mem-

This distinction

For

plicated.

involved

affect interpersonal

or-

interpersonal

Generally,

relations

a single

considerable

to loyalties.

needed

Where

on behalf

individuals

may be upset because the construc-

tion of a pipeline

or

individu-

and

may be torn between which

as by contracts,

relations

plex in that the persons

a worker

are

In

than

due

opposed by a community

involved.

interorganizational

example,

conflict

relationships

acting

relations.

to more

and may experience

desire not to harm his employer.

organizations

small-group

may even belong ganization

orga-

organizational just

In some instances,

business

In all cases they involve

als or small groups

relationships.

goals

upon the personal

alty to his union,

the organizations

either formally,

organizational

than

the most clearly defined boundaries. conducted

interorganizational

are superimposed

psychological

Motors, IBM, and

Interorganizational

divergent

in

significance

American

nizations

or resolve disagreements.

By contrast,

a division,

group,

organizations

importance,

36

appeal to higher echelons of the organizations

that occur among persons or groups within an organization. Of course, an organization

It is increasingly provements

in the manner

probable

that

im-

in which organiza-

tions relate to each other are as important the future ternal

of the organization

functioning.

to

as its own in-

Since this is likely

to be

the case, hopefully may persuade

an enlightened

the leadership

of the importance resources

and

organizational

of organizations

of devoting

attention

miliar

variety.

Perhaps

to business received

attention Other may

relationships

are

the ones most

fa-

managers

more

types

Another

recent,

but

of great importance.

each business various

organization

including

police, transit

building

but

fire,

and

supervisors,

authorities.

concerned

with

labor, personnel

prac-

tices, and product-market corporations The relations groups

behavior.

deal continually

on matters

developments

to begin production

influence

have instructed

business and

chinery point,

and

measurable

and electrical

ways.

struction

continue.

how

problems

or

and employees

in

let’s assume a manufac-

decides to construct

the structure

can begin

to be installed.

the manufacturer

will

some of its own employees how to operate

a new

is completed,

and monitor

want

At

in some parts of the new

equipment

finishing,

of such problems.

company

while

other

have considered

supervisors

For example, Once

L

plant

interorganizational

to deal with interorganizational

plant.

lished this year by Chicago University Press).

such as technological of

Yet very few managers

turing

Among his publications are Industrial Relations and Manpower in Construction and Labor (The M.I.T. Press, 1972) and Labor, Government, and Inflation (to be pub-

quality

in substantial

and

Living Council (1973-74).

In addiwith other

In-

(1971-72)

as special assistant to the director, Cost of

and joint ventures.

can

the intricacies

also has served as secretary, Construction

deal with a variety of

agencies

tion, corporations

ment of furisdictional Disputes in the Cott-

dustry Stabilization Committee

bodies of a public and quasi-public of organized

of Labor, and an impartial

struction Industry in the United States. He

depart-

corporations including

U.S. Department

departments,

and housing

at Har-

umpire for the National Plan for the Settle-

it operates,

sanitary

water

School of Government

vard, consultant to the Ofice of the Secretary,

in a

regulatory activities

He is research associate at the fohn F. Kennedy

of the

Similarly, nature,

degrees.

For example,

in which

University,

where he also received his M.A. and Ph.D.

are

is involved

agencies,

an assistant professor at Harvard

relations

with the agencies

communities

ments,

substantial,

to mind

M.I.T. where

fie has taught since 1968. Prior to that, he was

relationships.

as readily

web of relationships

Sloan School of Management,

aspect that

of interorganizational

not come

D. Quinn Mills is associate professor at The

are those involv-

is union-management

nonetheless

inter-

relations.

ing sales and purchasing. has

the necessary

to improving

Interorganizational of great

self-interest

and

con-

supervi-

for periods

in close of as

A number of hazards are inherent in this process. First, there may be dificulties in assigning

this

permit

specific equip-

Employees

proximity to one another much as several months.

Second,

on site learning

interior

sors of several firms may be working

ma-

to have

installation,

and mechanical

responsibility

intermingling comparison

of

if accidents

occur.

employees

may

of relative

wages, fringe

benefits, and working conditions, resulting in dissatisfaction among certain employees. (Dis-

ment and directing

aspects of its installation.

satisfaction is especially likely among the manufacturer’s employees due to compari-

In some instances,

it may even be desirable

sons with

high

hourly

wage

rates

in con-

struction.)

Third,

facturers

employees

and contractors

inefficient

work

of both manu-

ment,

and attitudes

methods,

practices

the other since manufacturing tion

conditions

demands

place

on

Fourth,

that

organizations

and may,

are involved,

different supervision.

occur

operations

normally where

employee

crossed

and

belonging

to an

damage would

were

a dispute

zational

science

consultation.

Organi-

as it is applied OD

provement

cable

tions, and control and channeling

of conflict.

contractor.

The

no break in

men

Since

many workers

involved they

were

from each

by the manufacturer’s

How

applicable

to interorganizational for

two

niques

primary

either presume

use)

a congruence goals.

(such

directing

as assigning

employees) when

be-

the per-

often

both

the

(though

to situations right.

techniques

to groups

substantial

difficulties.

handled? More aflirmatively, how are desired changes to be achieved when multiple or-

are not ordinarily

ganizations

uals since

same fashion

their

constituents resentatives

of managerial

niques

derived

methods,

team

personal

often

themselves;

group relations

training

detrimental

involved in the individmust

be

important

the various rep-

hence

the

regarding

are irrelevant

to accomplishing

tives. At worst, developing

of the relaand their

more

among

research.

team

behavior

becomes

from organizational and

persons

raises

to their roles as representatives.

tions of OD practitioners

are survey feedback

of OD

of representatives

of tech-

building

in his

application

The

been

small groups

is a participant

applications

these techniques

unnecessary.

free to participate

than the relationships

group Among

and

In such a situation the problem tionships between representatives

For simplicity, let us employ the term “organizational science” to characterize a broad

conmuch

is, therefore,

as if they were simply

subordinated ORGANIZATIONALSCIENCE APPROACHES

Too

have generally

The

is

organizations

involving

each person

and in-

not necessarily

inappropriate

applied in which

of their

relationships

congruence

OD techniques

tech-

characteristic

and loyalties.

sons involved are not employees of the corporation. How are such problems to be

are involved?

most

from different

Second,

or her own

very-

OD

as a result of their

of interorganizational

to goal

by any firm. Traditional

First,

of organizational

Yet

that participants

techniques Not

as a condition

use (or seek to establish

attention of the type just described

are OD relations?

reasons.

lay.

or impossible

to change,

extension

objectives

and

listening,

communica-

and

and

Es-

and im-

active

of a commitment

flicting)

difficult

the analysis

openness

have divergent

responsibility

been

edge of behavioral

of interpersonal

general foreman and the contractor’s chief superintendent only after a considerable de-

come

include

valid

arose as to who was

approaches

may

to management.

involves

establishment

feature

managerial

38

process

as the cutting

sentially,

ment soon involved

Problems

enlargetraining

development-which

described

dividual

may be encountered

job

laboratory)

some or all of the above techniques-has

at fault and what was to be done. The argufirm and was settled

and

and

(or

promoting

the

firm.

enrichment

truck

have occasioned

the same

not, however,

I observed,

job

sensitivity

a forklift

and easily repaired

operations from

some

electrical

was minor probably

normal both

driving

severed

in

several

create costly dis-

putes and delays. In one instance a plant

from

and construc-

considerably

employees

incidents

production

methods,

are likely to absorb

expectainternal

or perhaps even desired

objec-

too much

group

cohesion

and identification

person

may disqualify

as a representative

a

in the eyes of his

niques

to labor negotiations

ing is not likely to be a hospitable

constituents.

application

of these techniques

To APPLICATIONS TO COLLECTIVE BARGAINING

management

There

is an understandable

Rather,

tempt

to extend

from

organizational

tendency

the techniques

science

a deep interest lations

and involvement

applied

organizations. Golden,

continues in labor re-

behavioral

Douglas

Joseph

and

others

and

experience

Scanlon,

had

with

to apply

techniques

management. enticed

appear

these researchers.

gaining,

involving

of workers stantial

and their appear

rate organizational

First, collective

character.

or conflicting

for workers.

In some extreme

science practitioners

a union

as simply

device between ion’s organizational

a result

the two

affirmative

strike

function

to

in a manner

concessions

and ultimately

agreement. The

role of work

lective bargaining overlooked reporting

what

scientists.

example. Balke,

described

the

a major

Hammond,

successful

designed

to improve

communication.

Follow-

strike the authors reenacted

labor and management

in order

to in-

of the negotiators’

of their counterparts’ revealed

with

officials the last phase

negotiation

the accuracy

The analysis

inand

apparently

of techniques

derstanding

or Let

In an article

was apparently

effort,

ing a lengthy

in col-

is easily misunderstood

by organizational

tervention

vestigate

stoppages

considerable

un-

judgment. misunder-

by each side of the other’s real prefIn consequence

to

the use of techniques

tion

reported

significant.

two aspects

in this

First,

study

the authors

to

mained

only two major

or

demand

by the union

and

report

especially that in there re-

issues: wages and a that

the strikers

be

rehired by the company. A student of collective bargaining would recognize that when the major union position

tional scientists. And, in fact, some interesting

rehiring

efforts

happened

tech-

suggest

of the situa-

were

the final phase of the negotiations

overt conflict

science

the authors

such as evaluation

feedback to help avoid strikes. However,

the un-

of misunderstandings

organizational

that motivate

standing

otherwise faulty human interaction, the conflict-ridden arena of labor-management relations seems a fertile field for many organizato apply

think.

are actual

erences.

and the work-

believe

many

there

loyalties

cases, organi-

to ignore

labor-

less often

and

character entirely.

Since many

that may induce

a communications

force and have attempted

be largely

It may

have chosen

management

than

to alter the situation

of a completed

the sepa-

existence of the union

of dual

zational

bar-

has a sub-

to ignore

the problem

perform:

an

labor-management

most

in

far

sides. In this context, overt conflict-the

Mayer

and

in the future.

arises

of interest

bargain-

area for the

conflict

instances,

or lockout-has

application

employers,

possible

differences

of union to have

relations

in most

in organiza-

as it does the relationship

intra-organizational

therefore

attempt

Two aspects of the union-man-

relationship

with,

us take an important

with little

relations

developed

of

bargaining.

scientists

tional studies to the relationship agement

Bakke,

knowledge

collective

of labor

in

begin

misunderstandings

Clinton

E. Wright

considerable

or no knowledge

of those

science

McGregor,

Yet today organizational

view

bargain-

simply

that was possessed by many first

to at-

of applied

to collective

ing. In part this tendency

who

have been made.

Yet there are reasons why collective

of strikers,

is simply to demand

something

significant

has

in the course of the strike. Unions

39

do not ordinarily with

a demand

strongly

held

objective.

this demand tiations

enter upon work stoppages to be rehired

as their

The

importance

at the termination

is evidence

union.

What

course

of the work

union

had

by management

its priorities.

the second significant report

that ended

were rehired

to the union

corre-

and the com-

that is, the strikers

and the union

wage proposal.

this result

by

the strike,

and Mayer,

pany’s final preferences; pany’s

is supported

aspect of the situation.

agreement

exactly

a commit-

to rehire its striking

Balke, Hammond,

sponded

Toward

largely on terms proposed

This interpretation

The actual

the

was prepared

if it could obtain

ment from the company members.

in the

was that

the end of the strike, the union to accept a contract

lost by the

happened

stoppage

reordered

of

proving

accepted the com-

to collective

some

union,

primarily)

suggested

parties perts

have made changes

parent

sooner to the two sides and so might to shorten

communications

have resolved

because communications

alter. The contributions to collective

the the

alone could

and preferences

of organizational

bargaining

ap-

But better

could not have avoided

not have caused positions entists

in preferences

the strike.

strike, nor, in its absence, dispute,

in

through

to

result

tional

against

intervenor.

and

is likely

done

ment in avoiding

is

organiza-

themselves

great

by so often

prescriptions

for organiza-

to assist manage-

unionization.)

A final reason for the limited ness of organizational collective

bargaining

fessional

mediators

pass many

of

to receive

with the labor movement as a method

at

who are ex-

(Incidentally,

have

their

the

Where

accommodation

acceptances.

health

must

to get an agreement

achieving

theorists

or

bargain-

for the parties

performed

science

is the existence whose

useful-

techniques

in

of pro-

functions

encom-

by an OD practitioner

but who also have expertise in the substance of labor-management relations. There are in the United part-time

States several thousand mediators.

sci-

ator’s function

im-

attention serves. trained former

the medi-

has never received

the careful

from behavioral

in the behavioral labor

nonetheless

full- and

Unfortunately,

scientists that it de-

In any case, mediators, and

espouse many

at communication,

though

sciences

rarely

(most

management

conciliation,

are

officials),

organizational

ence tenets. The better mediators

40

or at least can

But this militates

significance

as

might

the

bargaining

accommodation,

all, then the role of intervenors

presenting

and Mayer,

of collective

fear failure

the prefwas

the con-

the parties know

role of the organizational

by altering

an agreement

limits

In this respect, collective

live together.

damage

in communication,

be

science techniques is, paradoxically,

ing is like a marriage,

that had

until

to

only in the collapse of either the business

of a strike

by Balke, Hammond,

have helped

working

the union.

fact, a perfect

possible. Improvements

that

that failure to reach an agreement,

greater

(in this case the

tend

that, in the end, they must reach a settlement.

at “by coincidence.”

erences of one side or both

bargaining

It is in the nature

tional

its function

factor

of organizational

fact that in most situations

But of course it was not. The result was, in performed

thus

and do not go to the heart

Another tribution

greater

example

limited

of the matter.

Yet, say the authors,

was arrived

communications

inherently

of the nego-

of a strike

had probably

most

sci-

are experts and

conflict

resolution. wages,

In addition,

fringe

they are familiar

benefits,

and other matters

working

intrinsic

gaining.

In consequence,

tervenor

might. criticize

ments

in

certain

employed make

to collective while

by mediators,

in an area in which

lasting

so much

is already performed, view, by members

and

techniques expect to

contribution

of his function

albeit imperfectly

of another

in-

improve-

he cannot

and

bar-

the OD

or suggest

practices

a significant

with

conditions,

formally them

by merger or informally

within

managers versary

on a board Third,

managers

organizations

is most significant

instances

ernmental

include

for that of a manager

although

his ability to manage

the termination

improve

his capacity

among

organizations?

does a manager

to handle In

question,

our discussion

tive and

analytic

and

relationships

answering

becomes

prescriptive.

As such, its material

is drawn

relevant

organizational

aspects

from personal

experience,

ommendations nizational

of

tion appears

of persons

active in interorgaanother

to offer a challenge

case of a business

tor, a government

regulatory

or a consumers’

of the corporation adversary

stance.

expensive,

corporate responses Ouchi and Harris, search

into

this

may

attempt

ulatory

the

to which

pressures

mote

employing

union of the

relations

the union,

federal antitrust

a labor

may

even a proxy

responses

are

time-

and unsuccessful.

But

lems matters

are

and

may embitter can

re-

sometimes

to be opposed

a by

policy.

Evidently, rial approaches

than

but too successful

agency,

reaction

nor-

rather

the company

competitors

by mergers,

supervisory

therefore, But

between

often pro-

into

(and

union).

use of this device is certain

The

to reg-

regulatory

companies

leaders

such promotions

Finally,

be co-opted

ex-govern-

but it is often expen-

roles in the company out

at

service.

response

in controlling

Alternatively,

labor

mally

lations.

an individual

must vary with the industry

involved,

sive and ineffectual pressures.

com-

of gov-

of his government

officials is an effective

and company

be ef-

relationships

bodies on their boards,

a new competi-

controversy

or perhaps

these

other managerial

or a threat.

corporation,

group.

A public

ensue, or a lawsuit, consuming,

organiza-

most often is to adopt an

Normally

degree

cannot

For example,

they may include

improve instances

may involve

fight.

from

science,

and from the rec-

specific situation union,

largely

relations. In many

In the

this

ceases to be descrip-

The ment

character.

representatives

regulatory

the perspective

How

trade

about these

limited

to improving

with other organizations.

organizational

relations.

very

they simply

responses

Let us now exchange

intergroup

or as stockholders.

may hire people from other

is their

panies cannot

who wishes to improve

by includ-

or may, in some instances,

What

fective

of the

example,

executives.

In many

scientist

Second, a less ad-

of the other organizations

of directors

alternatives

MANAGING INTERORGANIZATIONAL RELATIONS

to develop

relationship-for

ing representatives

by bringing

framework.

may attempt

in his

profession.

a common

many

common

manage-

to interorganizational

of limited

usefulness.

need not be left to lawyers

probYet

these

or public

are not always defensive. in a recent review of re-

question,

distinguish

approaches.

to co-opt

other

three

First, managers organizations

41

relations

specialists.

use methods quiescence

by

following

section relations

and

cooperation

may

United

Mine Workers.

1973 convention.

In

the

better position

two steps in managing

in-

organizations.

contacts.

factors

Among

management

the most

knowledge

in managing

these

well are some that are reminiscent from

the organizational

other

factors

are

sciences

unique

steps

of those literature;

other

A manager

situation,

without

first developed

knowledge

should

disruption

answers

questions : What

is the

structure personal

or

following

formal

leadership

officers?

backgrounds,

What

their

gle for leadership stability?

What

ganization? tion?

cooperation regard

lines

Will

they

ap-

? What do they Are

How will

to success? Are

on commitments

ening

labor

of a major

negotiations

instances

Recently

company

are, of course,

they

the

groups,

rhetoric

such groups

rhetoric

exceptions.) to those

may seem to are given

as a method

and maintaining a commitment

internal

if the corporation

way to arrange

an accommodation.

knowledge The

above

will

go a long

Failure

presumes

may

like

way

indicat-

that is appropriate to and how much can to obtain

answers

to

means

that a man-

that

other

organization

the

his own-a

mistakes

toward

listed

normally

be erroneous

serious

But this

to the questions

ing both the approach the other organization be achieved.

objec-

can find a

of the other organization.

answers

these questions

cohethem to

to a limited

tive for rhetoric requires

to in-

of retaining

sion. It is often possible to persuade substitute

en-

might

as opposed

as a confrontation

show. Rather,

tions.

in many

consumer

such

and so on, are not as threat-

(There

constituents

of

character,

as their

cendiary

hold meetings, sentative

ring and organiza-

organizations

to business

suggest.

ager

is free to attend.

minority

rights

however,

groups,

There are various sources of such information. Most formal organizations publish their constitutions or bylaws, and they often public

and

as civil rights

operates

which

orga-

lawsuits

public-interest

expect

and weaknesses?

for action or patient?

they able to deliver might make or not ?

the

the organiza-

or a confrontation

they react to frustration-and

in-

in the or-

organization

group?

as our strengths

they anxious

42

histories,

or is there

influence

will the other

our own

whose

with

a professedly

of business

their

What are the objectives-and

How

leader

civil

are

work

history of success or failure-of proach

reputable

Nor are their objectives

are the informal

and

In an-

that this organization

Who are

Is there a strug-

internally,

of communication

the strike.

a front for an extortion

vironmentalists,

to the

and their outside affiliations? ternal

a thorough

of the other organization?

its executives

discovered

be-

than other

by a particular

Generally,

or his

of those organizations.

find

the union’s

tions with which to negotiate.

not expect himself

to deal with other organizations

having

working He

the other group

a union

physical

out

their

And he used his

settle

was threatened

was simply

should

subordinates

to help

nization

sought Understanding

to understand representatives.

organization

to interorganiza-

tional relationships.

So he attended

He was, as a result, in a far

havior in the 1974 coal negotiations

prepara-

are distinguished:

direct

important

managers

and ac-

other

tergroup tions

Instead,

to develop

and

presumption is liable

that

to lead

in interorganizational

to

rela-

a repre-

involved

in the coal industry

in

Organizing

de-

It is most

important

thoroughly.

And

cided he needed to know more about the changing leadership and procedures of the

combine

objectives

various

to analyze

priorities

the best way to do it is to options

and

hypothetically

choose among ager’s own manager

them.

This

organization

to establish

permits

the man-

priorities

in a systematic

way. The results are often surprising agers

who

thought,

understood

their organization’s

A further

pany

must

structure,

quired

by a corporation

so considerable

effort is re-

in assigning

for a response.

had to respond agencies

The

many

respon-

enforcement

to investigations

of civil

rights

sult of complaints Government their inquiries procedures

laws.

by individual

to examine

of the company

of investigation

employees. but

level to respond.

Often

plaint

at a particular

an individual’s

of the corporation. in a particular

com-

plant

or de-

However,

the

plant or department

by-step

process

should

in answering

the complaint

at once?

it

Initially,

representatives for meetings

It is often have

certain

the objectives them. ular

difficult

objectives

appear or simply

themselves

approach,

substantial

and

who about

but how to attain a partic-

be done,

to a

degree, in advance. that

make is to attempt

organizations

to change

of behavior

ple, a corporation

too suddenly.

to the community came

under

fied, the company the decided

For exam-

in which

it was

considerable

criticism

As the criticism

intensi-

convened

meetings

officers and board of directors, viewing

often

a long-standing

that had never paid much

from local residents.

town,

not

to structure

it must

A mistake pattern

for people

to think

Yet it is critical

structed

pany’s objective

step-

or would

to be in attendance?

investiga-

is a tendency, therefore, to have corporate staff handle such matters. Yet, if the com-

be re-

Is there a logical

the company’s

of the government’s

There

should

priorities

to be followed,

to be well prepared

top-level situation,

as a whole.

Which

ultimate

be best to do everything

the wider

for the corporation

Should

vealed at the outset?

to understand

may be unequipped

to think about how these

to be addressed.

come first?

located

problems

by

procedurally

are

attention

This

how and at what

managers

issues

generally.

raises many

partment

Thitt&ng

the policies and

including

ramifications

many

are before it can re-

way to a challenge

organization.

as a re-

however,

for the company, is directed

In

the

have not limited

to the claimant,

also have sought

with

have arisen

investigations

have

by various

concerned

these requests

another

process of orga-

organizations

of government

instances

tion

at

objectives helps to resolve these issues. Recently,

kind

of the com-

the problem

from another organization into the corporation’s in-

ternal sibility

with

in a coherent

Next, it is necessary

it will be to mobilize

deal

hand. Challenges rarely fit neatly

they

of this process

all the related elements

that

nizing

that

priorities.

advantage

is to reveal how d&cult internally

to man-

incorrectly,

what its own objectives spond

and the individual

record

and upon

of its relations

that it had been

of its re-

to the

in error.

A

decision was made to rectify the and lower-level managers were into cooperate

with town

o&ials

and

local citizens to the utmost. The result was confusion and increased bitterness. How did this happen ? The

objective

of the corporation-

is not simply to delay or deflect it, but rather

to become

to

-was not at fault. But the corporate decision makers had given no thought to how to

and,

investigate

its

if possible,

then operating involved

own

internal

to amend

personnel

operations

poor

must

practices,

be intimately

in the entire process. Even

this

limited

strates that a company

must

example

demon-

first determine

a better citizen

in the community

go about it. Hence, there were three direct, and undesirable, results. First, the townspeople who were angry no opportunity

at the corporation

to air their

discontent.

had The

43

corporation

with

which

had been behaving, a distant, became

sphinx.

a marshmallow.

Even

their

to argue certain

matters

an embrace.

was inappropriate Second,

townspeople

Among

to be

They

had

out; instead,

Psychologically,

and generated

it turned

it

wildest

knew

were not challenged.

they received

dealing

Suddenly,

ones they themselves

exaggerated,

tility.

were

unresponsive

accusations, wanted

they

in their eyes at least, like

further

ber of the community.

out that not all the

flict with another.

mem-

And as the corporation

tried to satisfy one group, Third,

some of the townschange

in corpo-

Recognize

In most intergroup to be right

and complete

an alteration

the opposite corporation from

so and

as sudden

in the future

in

direction ? To these people, the did not appear

a nonresponsive

nization,

alter

but rather

an unusually

to have changed

to a responsive to have revealed

erratic, and therefore

orgaitself as

dangerous,

especially

Thus, change

the

of heart

unpleasant

result

of the

was to worsen

situation.

done differently?

What

company’s an already

should

Essentially,

it have

it should

have

added to the decision to become more responsible in the local community another element: to move at a deliberate

pace toward

this goal.

optimal

time

Correct timing

depends

is likely

timing.

upon careful observaAlso, it requires

involved

However,

First,

and not merely

in general, is acceptance

need to act. Second, alternative

proposals have

way. Third,

organizations

the persons

represented

ready to agree on some formulation ceptable

of the

discussed, and found want-

ing in an important and

a pro-

when three conditions

there

been put forward,

relationship

under discussion. It is criteria for better or

posal is best advanced are met:

is of

if offered

to be rejected.

review of the general

the particular subjects not easy to establish worse

timing

solution

interactions.

of the organizations

relations,

one can be found

are

if an ac-

(that is, the time

allocated for discussion and controversy expired, and the desire to act is pressing). Ogler a problem,

not a solution

Many managers

err in relationships

by failing

to pay adequate

had been missing

ager confronting a problem, for example, develops an idea about how it may best be

deliberations

in the corporation’s

was a concern

internal

for the proper

in dealing with outside groups.

solved. Then spends

DIRECTCONTACTS are

many

which

organizations

different

formats

deal with

within

one another.

to others. A man-

he calls a meeting

at which

little or no time describing

lem;

instead,

many

times

especially, There

attention

has

Hasty action should have been avoided. What

procedure

44

in negotiations,

at the wrong

involved

organization.

it is less useful

an issue than to express a

the essence. The

all, if the corporation

what was to prevent

as supple-

view at the right time. In all human

After

behavior.

relations,

about

a constant

so completely,

but other means

may be viewed

that timing is crucial

suspicious

could

meet-

discussion

menting direct personal contact. What methods help to ensure a successful conclusion ?

more

so suddenly

The

below focuses upon meetings,

tion of personal

many past years of behavior

communicaformal

meetings.

of communication

rate policy had been directed were made even of the company’s

written

conversations,

ings, and informal

but

it came into con-

people to whom the sudden

telephone

it hos-

agreed on what the corporation

should do to become a more responsible

them are formal

tions,

he offers

his

when

the prob-

solution.

it is rejected-even, it is the optimal

he

And

or perhaps solution.

Why ? The first reason for this unfortunate

occurrence,

which

the manager may

not

is very common,

has failed to consider

define

the problem

is that

that others

exactly

as he

has or may disagree

as to its importance.

is scarcely reasonable

to expect others to agree

to a solution recognize

of a problem

that they do not

or define differently.

Therefore,

first step must aZz.uays be to advance consideration of others a problem-not posed solution-and desirability

of the problem

of doing something

various

tality.

solution

He is more

getting

his solution

likely

adopted

tion.

principle

the manager

for developing

In fact, it may

be offered

of group persuasion

most effective

he has

of this procedure

is that it is likely to prevent the credit

in

if he is prepared

the solution

The disadvantage

receiving

toward

it in its to-

to be successful

to lead others to discover in mind.

of

At this point

or present

in getting

from

the soluas another

that the person

constructive

action

taken will often be the person least recognized as the originator extreme, their

own

Plan”] ing

names

attached

At the

programs

with

(e.g., “the Jones

are likely to be least effective in gain-

acceptance

resent

of ideas or proposals.

people who advance

of their

ideas. Other

such grandstanding.

These

apply to both intra-organizational organizational

human

especially important

relations,

people

of power.

relations

in international

power.

What

common

with that of authority measure

the ratio meeting

between

and interbut they are

to success in the latter.

of national

of power

of latent or actual coercion.

is the element

Thus

a proposed

of bargaining

power is

organization’s

cost of

terms and the

(due to conflict with the

other organization). However, ployment

we contend

that the em-

of power has certain substantial

advantages

that make

comparison

to persuasion.

First,

other

in

orga-

nizations often have a much greater capacity to resist the exercise of power than one imagines in advance.

Second, the overt use of financial

or other types of coercion is often constrained by the capacity obtain

of the other organization

allies in its resistance,

organizations

including

to other

that fear they may find them-

selves in the same spot next. Third, power

almost

always

involves

pected costs to the organization

the use of large

unex-

employing

it.

In part, this is because a stage is set in which people

the organization

feel justified

in using such means generally.

within

And coercion

is often

self-destructive

if it is employed

too

often. Persuasion to coercion,

is the principal

alternative

but it is a complicated

Essentially,

it involves

son or organization suasion

is much under-

dis-

it far less effective

assisting

process.

another

are many.

objections

and

per-

to develop a commitment

to a course of action. The techniques of persuasion

has in

an organization’s

another

in

of bargaining

relations,

the concept

quantitative

is prob-

For example,

we speak

power;

principles

Use persuasion The importance

industrial

among

the key to authority

ably the concept

people

may either direct discussion

his preferred

even there. In relationships

cost of not agreeing

recognition

of a problem,

will begin to propose solutions. a manager

at the and the

about it.

Once there is general the existence

the

for the a pro-

to seek agreement

outset on the nature

It

necessarily

organizations,

They

advancing

include

of per-

anticipating

refutations

in ad-

rated, both in relationships between individuals and between representatives of organi-

vance, if possible; interrogations to discover underlying motivations or concerns (for ex-

zations.

ample,

Instead

of persuasion,

prefer to rely on the authority

most managers to issue direc-

tives, but this can only be accomplished members

of their own organizations,

with

and not

“Why

and capitalizing apparent

do you ask that question?“) objections-showing

objection

the proposal.

;

that the

is really a reason to accept

Persuasion

is often

a difficult

45

procedure

for managers

requires

a particular

characteristic

to employ

because it

type of patience.

of persuasion

that initial

ress is slow, and often backsliding is sometimes

difhcult

be success. However,

prog-

occurs. It

Revealing ing with effects.

If the initiator

Action can

once the other parties

tional

changes

lend

and

imagination

persuasion

when action is undertaken, has a commitment ceed.

costs of making incidentally, sisting

therefore,

is a primary

agreement-even -rather

suc-

minimizes

the

work. (This,

argument

negotiations

for in-

be settled

by

at the prior cost of a strike

than by governmental

how

for the purpose secondary

to behave.

effects.

stantial.

inevitably

problems

or potential

introduced.

arrangements

issues. In order

initiator

of a change

affected

organizations

regarding relationships

on the funda-

inform

of his true

this, the

between

not because

proposal potential

as Ex-

relationships

are

of any difficulties

pre-

in the

itself, but because of concern for the implications of the change for other

aspects of the relationship. It is the secondary impacts that matter. Yet many managers or change

agents

secondary tration

46

remain

impacts

unaware

of potential

and experience

in attempting

to understand

chances of obtaining

only fruswhy

proposal that is useful in itself is rejected.

a

must be

should be aware,

without

one cannot

endangering

the

the desired changes.)

Conduct interorganizational

discussions

There is no reason to believe that direct, comgenerate

the organizations.

of existing

priorities

priorities

change--especially

In less clearly

of course, that in some instances disclose

to pay to

priorities

(Managers

plete communication

will affect aspects of the

are essentially

is prepared

relationships,

the other

suggests that very often useful mod-

ifications vented,

of

will be

to achieve

must

the proposed

to how the change perience

array

Yet in order to have any action,

it is necessary to focus attention mental

course

a considerable

important

are often revealed

of his proposal.

In the course of action,

that

ones, priorities

revealed directly.

to get various

questions

If it is an

In relationships

bargaining

transactional

of attempting

ob-

matter, they may appear to be insensitive or callous if they insist on treating it as insub-

gain acceptance

to agree to a common

a minor

to be merely

if they raise extensive

of secondary

repre-

do not know

If it is, in truth,

by the cost the initiator

decree.)

of insulating

are revealed,

they will appear

structionist

for addi-

effects of the desired

of other organizations

Reveal priorities in some instances

organizations

suggestions

If no priorities

proposal,

the action

an arrangement

that labor

and

each organization

to make

Persuasion,

to the

is effective,

to advance

or offsetting sentatives

support

allows

are likely

once accom-

change.

Where

secondary

of a change

persuasion,

are sold on a course of action and they will their

is a way of deal-

of possible

others to know that, for example, he views the change as being of primary importance, they

very quickly

project.

priorities

the problem

to believe that there can

plished, pays off very handsomely. be taken

It is

between

consensus;

the case. Hence, considerable conducted

two groups will

the opposite is more likely

a change

attention

agent must devote

to having

in a framework

discussions

and manner

that

will facilitate agreement. Since

the

discussions

interorganizational

and

involved

are likely

are

to be of

interest to the public or trade press, it is necessary to establish at the outset a basis for dealing with the press. The basic rule, if progress is desired in the discussions, is that no organization or participant talks to the press unless all do. The

best procedure

either no discussions arrangement

is to have

with the press until some

can be announced

or to agree

upon

brief statements

behalf

that can be issued on

of all the participants.

party

(a mediator

volved,

he alone

and convey

or neutral should

only what

authorized

If a “third” person)

speak

is in-

to the press

the participants

have

him to say. Only ceremonial

occa-

No other factor is as certain to ensure of discussions

sentatives shod

of various organizations

or incompetent

press. There it is critical tion

among

the reprethan a slip-

relationship

are two reasons

with

the

for this: First,

to the success of any representa-

function

that

the volume work

the representative

is al-

achieved.

This

porations

and

order

his actions.

of each organization members

Second,

to appeal directly

to short-circuit

among representatives. proffered,

is usually

to the

and thereby the discussion

This opportunity, too enticing

will always undermine

once

to resist and

There

are continually

cant case (in by a major discussions federal regarding

important

engineering between

government, a general

ex-

consequences of A recent signifi-

1974) involved

the disclosure

trade

magazine

representatives management,

of

of the

and labor

price and wage stabiliza-

Wo other fdctor is ds

assistance unions,

from

cor-

especially

in

the development

of inefli-

sort

had

successful

been

worked

early in 1941 (many attack)

months

to facilitate

Unfortunately,

tain representatives porting

arrangement out

before the Pearl the rearmament

in January themselves

discussions

the press

though

assured

of their

tion of these reports

published inaccuracy.

resulted

and

from re-

to the press.

The reports were largely inaccurate, and

1974, cer-

of both management

preliminary

sational,

nationally

but senthem

al-

Publica-

in a break-off

so that there does not now exist policy with respect to controlling

costs in an energy expansion. perience

Where various groups have little exin dealing with each other, or where

the problems

are very d&cult,

it is useful to

involve a third party, let us say a “moderator.” To be effective, munications

he must

be skilled

with all groups.

sociates, if any, will probably

at com-

He and his ashave a major

certdinto en.szuethe

fdilzlreofa!iczlssz0n.s dmong tivesofvdriow

labor

could be

of

this

any national

among the representatives.

avail-

of

of discussions

the direct relationships

amples of the unfortunate premature press publication.

required

labor could not restrain

to representatives

of other organizations

invites attempts

the

to the marketplace

A largely

program.

explains

strain

work.

to his constituents

that

will

cient practices in areas with an oversupply

his position way

en-

Because

and construction

involved

to prevent

Harbor

press offers the opportunity

the proposed

of engineering

potentially

his views and shifts in in a

with

Project Independence.

able resources, the government sought some arrangement by which an orderly introduc-

lowed to communicate personally

associated

ergy program,

tion of projects

sions should involve the press directly. the failure

tion effort

the representa

0rgdnimtion.sthdn d

or incompetetent ~ehtionshzj with

slipshod

the press.”

47

educational

task to perform

for the gaps in

knowledge and sympathy among the groups may be very wide. In some extreme instances, he must be able to interpret one group common

to another, language.

cipal requirement

statements

from

as if they spoke

This

no

is, in fact, a prin-

placed upon a moderator

a confrontation

or negotiation

in

that involves

racial conflict.

party

since 1968 the federal

has attempted

affirmative

struction

industry.

the recruitment

building feature

These

members

of these plans

the

programs

involve

for employment

in the

trades. The unusual (as compared

to the

in the steel or teleis that

on an equal

the

basis with

of minority

community

in the development,

tion, and administration

conof mi-

for example)

industries, involvement is sought

in

three-

and training

being followed

unions and employers groups

plans

and construction

procedures phone direct

to develop

action

primarily

nority-group

opera-

of the programs.

several

napolis,

cities,

Denver,

and

of the programs mixed,

including

Chicago.

(“home-town

The

It is not enough the group an intent the first

(though

required

civil rights groups.

is

What

is sig-

any problems ally-by

devising

have

worked

step. Also of what

are to be resolved.

be managed

a method

procedur-

of further

substantively,

con-

that is, answers

should not be spelled out in advance to distant or hypothetical

problems,

For example,

a corporation

who would object to having of person

(for example,

company’s

board of directors

at all to a specific known

chairman

a particular

a professor)

on the

might not object

individual

to him and whom

type

who

is well

he might

believe

“is not like those other eggheads.” The point, is the value

tion process down a company not, admit plicants

the selec-

to specifics. Alternatively,

for employment

race may nevertheless existing

of getting

that will not, and perhaps should to any discrimination against ap-

hiring

because

of sex or

be persuaded

practices

for specific numbers

to modify

in specific cases and

of people.

To the extent possible, all ideological or philosophical example,

issues should be avoided. For

the question

ner. Whichever

who

This is only

should

sultation-not

quired

moderators

to cooperate. indispensable)

encountered

organization

the

among

is to be done, how it is to be done, and how

in the offices of

labor-

to develop

is a fairly full understanding

nificant, however, is that to achieve any success in this three-party arrangement has re-

of who is to control an

or program

is almost

solvable except in a profoundly organization

never

divisive

re-

man-

gets control will

of

expect to exploit it, and the other organization will have a similar expectation. Instead of

Whenever necessary, outside pressure should be applied on the groups involved to reach some understanding; but these out-

meeting such issues head-on, specific arrangements should be worked out for specific prob-

with the three sides to develop communication and cooperation.

side influences

48

record by ele-

and management

as well as by the national

some major

India-

solutions”)

and they have been opposed

ments of the unions industry

Boston,

officials, in important

disputes.

of course,

Efforts of this nature have been made in

management

The last item

For example, government

eral government

should

means

not participate

details

of the discussions.

Examples

tential

outside

are:

merger

discussions

chief executives,

influences between

in the of po-

bankers,

firms;

in racial conflicts;

in

municipal and fed-

lems. A method for periodic

review

arrangement

jointly

organizations.

must always be provided and modification undertaken

No individual

foresee the future

of any

by different can so clearly

that all important

contin-

gencies can be provided

for in advance.

do expectations

among

organizations

dividuals

the future

about

Nor or in-

coincide.

Rather

concessions,

and

sary. This important

function

serve as a bridge

any case, it is preferable

tions extends

to provide

periodic

to make adjustments

ing conditions.

If the important

to get the organizations is feasible, including

objective

working

then it should be done under provisional

to changis

together,

whatever

guise

that of experimental

or

arrangements.

The importance

neces-

the more

of persons

among

who can

separate

organiza-

even to the level of entire socie-

ties. An obvious

example

0.

considerable

Reischauer’s

reconciliation Japan

were

is often

of the two.

than trying to get consensus on the shape of future events, a frequently hopeless task in opportunities

arrangements

latter

between

currently

the United

in the aftermath

is Edwin

contribution

to

States and

of World

War

II.

Reischauer’s role has been, in large part, to assist his fellow Americans in understanding and coping with the Japanese. American-Japanese relations have benefited from other such

PREDICTING

THE

PROBABILITY

Under

what

among

organizations

conditions cooperation?

five factors

that,

initiators,

relationships

are there

if correctly

not

to permit

Above I have listed

arrangements

organizations

persons

%~ccEss

likely

addressed

will enhance

of constructive But

are

most

constructive change

0F

among

certain

groups.

characteristics

themselves

by

the likelihood

that

influence

of the

at both

the national

level. For example,

Takuma

cial of the Mitsui

companies

cooperation

between

assassinated

in 1932, at age 75, in part because friendly

relations

tween

two organizations

is enhanced

by the

existence within either or both groups of some members

who

are genuinely

the characteristics is because among

familiar

of the other

conditions

organizations,

often

differ

This greatly

even those of a similar

who serve as bridges

cultures

and different

and to the inherent business

dangers

corporation,

times be misunderstood disloyalty. Because within

the existence

an organization

other organizations ful intergroup

is so important

relations,

for attempting

is familiar twofold.

with

the other

First, he should

in understanding organization. leagues

of a group

member

who

organization

are

assist his colleagues

and coping

with the other

he must

assist his col-

who are representatives

to the other

organization

Second,

in explaining

why the actions,

such groups

dent

experts

in their turn,

resi-

on business.

Such people

need

to dealing

of course,

should be available organizations

with

the other

but their

expertise

to the organization

it is needed. Education within

experts on gov-

groups, and so on.

require,

not be restricted organizations,

to success-

more such people.

consumer

And

with

there is an argument

to develop

unions,

of individuals

who are familiar

ernment,

cies. The functions

or in a will some-

and even accused of

Large businesses need resident

agen-

for those who

In a nation

environmental

or government

between

organizations

such persons

nature. Not all business organizations are alike; nor are all unions, civil rights groups, groups,

Japan

tional ones, they point to both the importance of individuals

with

group.

between

and the West. While these examples are excep-

serve in this capacity. be-

had

he favored

there is only one such characteristic. of cooperation

in Japan,

the two nations. Dan was

different

possibility

corporate

been trained at M.I.T. and sought to encourage

degree of cooperation with other organizations? The answer is yes-but surprisingly, The

and

Dan, a high offi-

and training

when

programs

should take this require-

49

ment

into account

more than they currently

and that is all there is to it. In fact, exclusive reliance on competition

do.

and regulation

in a society that is characterized

results

by too much

conflict. This

A LAST WORD number In our society upon and

we lavish

improving human

business dismiss

the

relations

and

of our

government.

questions

a lot of attention

internal

about

institutions

Yet, we tend

ernment

compete should

with

one another,

regulate

the entire

their organization successfully

by which

form of organization,

to deal constructively

sure of progress

and

A mea-

in this area (one cannot

sonably hope for much)

rea-

should pay dividends

both to the individual

process-

and to society as a whole.

John R. Commons, in Institutional Economics (Macmillan, 1934), and Sumner Slichter, in Modern Economic Society (Henry Holt and Co., 1931), tried to erect a theory of economics upon the functions and interactions of large organizations. Edgar H. Schein, in Organizational Psychology (Prentice-Hall, 1970, Second Edition), summarizes, on page 3, studies of the action of formal and informal groups within large organizations. Mason Haire’s “Group Dynamics in the Industrial Situation,” in Kornhauser, Durbin and Ross, editors, Zndustrial Conflict (McGraw-Hill, 1954), provides a particularly good analysis of the functioning of groups within a large organization. Walter Morley Balke, Kenneth R. Hammond, and G. Dale Mayer’s “An Alternative Approach to Labor-Management Negotiations,” (Administrative Science Quarterly, September 1973) provided the analysis of a strike situation that is discussed in the text. William E. Simkin, in Mediation and the Dynamics of Collective Bargaining (Bureau of National Affairs, 1971), has written the most comprehensive and up-to-

and that of

with other organizations.

and gov-

SELECTED BIBLIOGRAPHY

50

a limited

and devices

their own capacity

to

we say,

has proposed

in whatever

of

how large organiza-

tions relate to each other. Businesses, should

managers,

can improve

management

article

of directions

organizations

involved

date book on mediation in labor disputes. Richard E. Walton’s Interpersonal Peacema&ng: Confrontations and Third-Party Consultation (Addison-Wesley, 1969) approaches the same questions from a different perspective. William G. Ouchi and Reuben T. Harris’s “Structure, Technology, and Environment, ” in Strauss, et al., Organizational Behavior (Industrial Relations Research Association, 1974), discusses efforts by management to control the external environment of the firm. Edgar H. Schein, in Process Consultation (Addison-Wesley, 1969), and Douglas McGregor, in The Professional Manager (McGraw-Hill, 1967), discuss problem-solving techniques that are also generally applicable to interorganizational relations. For examples of negotiations among various groups involving racial conflict see W. Ellison Chalmers’ Racial Negotiations: Potentials and Limitations (Institute of Labor and Industrial Relations, 1974). Richard L. Rowan and Lester Rubin’s Opening the Skilled Construction Trades to Blacks: A Study of the Washington and Indianapolis Plans for Minority Employment (University of Pennsylvania Press, Report No. 7, Labor Relations and Public Policy Series, 1972) examines interracial negotiations and cooperation in construction.