The Service Logic and the Logic of Effectual Reasoning

The service logic has important integrative potential, bringing together not only the economic and commercial concerns of organizational design but also a significant part of its normative considerations. Given that service co-creation implies mutual dependence and reciprocal exchange, the service-centred view of the organization gets drawn directly into the ethical behaviour of the actors involved. Moreover, service integrates also the logic of ‘effectuation’, a concept put forward to explain entrepreneurial action in terms of the processes of creation and development of firms. However, most managers reason in terms of a logic of planning or causation, leading most organizations to be dominated by a traditional, finance-biased mind-set rather than an entrepreneurial one. This chapter highlights that in order to excel at service design, which entails cooperation, networking, and meaning-making, managers should be taught to think primarily as entrepreneurs and only secondarily as financial managers

From the Design of Structures to the Designing of Organizations

The chapter starts with a historical outline of organization design featuring the following trends: • Contingency and configuration • The Simonian design tradition • Institutional organization design • Cognitive, situated, and generative approaches • Systemic approaches from business economics. Next, the chapter turns to an analysis of future trends, based on three proposals. The first concerns the growth of design thinking, which although containing a host of proposals for organization design change, it is so far not seen as an organization designing trend. Second, the trend of managerial choice and action as the focus of organization design is brought back from classical organization theory but with a new twist, that is, the role of the manager is now split into three separate but integrated activities—strategizing, designing, and managing. Third, it is proposed that the turn in some management literature towards language and meaning would become the focus of managerial action under the new design-inspired paradigm.

Conclusion

The book concludes with the suggestion that the key condition for the required paradigm change in organization design is a change in managerial discourse which depends to a large extent on the professional education of managers. According to traditional management education, managers have several roles and although organization design is included in many of them in a more or less implicit manner, designing remains relatively marginal. Organization designing, which is differentiated from managing and strategizing, is defined as comprising the following as a set of activities: creating, monitoring, shaping, reshaping, assessing, and improving artefacts at the three organizational interfaces: the identity and values interface, the market interface, and the internal interface. It is also suggested that for the new design role of managerial activity to flourish and take hold, it must be framed within a new type of culture, that is, a culture of human-centric, leaderful organization design(ing). The chapter ends with a summary of the key concepts used in the book, drawing attention to the issues that managers-as-designers need to be aware of.

Bridging between Organization Design as a Noun and as a Verb

The two conceptions of organization design—simultaneously historical legacy and dynamic change—create a major conundrum, identified by Simon’s (1996) as an important challenge to the design of social organizations. The solution, according to Simon, is to design without final goals, however no advice is provided about how this might be achieved. In this chapter, it is proposed that this is possible through the use of mechanisms that bridge between the past and the future of the organization’s design. The mechanisms are formative affectual contexts and design trace. Enhanced by embodied cognition theory, the notion of formative context provides a solid background for an understanding of the processes of organizational change that co-evolve with organization designing. The notion of design trace is based on the idea that organizational interactions leave a trace that can be harnessed and used to help manage the organization’s designing effort.

Introduction

The Introduction deals with four issues which summarize the aims and the reach of the book. First, the realization that organizations dominate our socioeconomic landscape, with their influence and their impact on the environmental, ethical, and social issues of our age, extending to our everyday lives. Second, it focuses on the widespread dissatisfaction with the way organizations are governed and managed, the lowering of moral standards, and the increase in the toxicity of most organizational environments. Third, it suggests that the prevalent theoretical paradigm of contingency and configuration not only seems to have reached a total impasse in terms of further academic development but, more importantly, it has not succeeded in creating organizations that fulfill the needs and ambitions of ordinary people. Fourth, it proposes that design, design theory, and design culture have much to offer to organization design and should indeed constitute the basis for the new, badly needed paradigm.

The Logic of Interactive Structure

This chapter builds on the discussions in Chapter 4 about the bridging between organization design (design as a noun) and organization designing (design as a verb). Based on the key precepts of Giddens’ (1984) social theory, it is argued that the traditional notion of organizational structure can be split into the concepts of structure and structuration and that while ‘structure’ is relatively stable, ‘structuration’ is ever changing. This allows us to talk of ‘interactive structure’ as a type of structure that changes with interaction and where the emphasis is on the monitoring of interactions between human and non-human actors, by means of multiple types of traces. Thus, rather than controlling people, with interactive structure, organizations are better able to deal with the disconnect between the formal and the informal sides of organization and take full advantage of the organizational capital to be found in one of the key characteristics of informal organization, i.e. improvisation.

A Design-Driven Epistemology for Organization Design

It is argued that the epistemological foundations of organization design can be built on a dual theoretical base: design-as-practice and design-as-meaning. The first is founded upon practice as part of current sociological theory applied to organizations (Schatzki, 2001; Nicolini, 2012) and the second is based on design theory (Krippendorff, 2006). If designing is defined as ‘to create meaning’ and if the symbolic action of managers plays a central role in the social construction of organizational reality, then meaning becomes a central concern for organization designing. On the other hand, while asserting that practice provides an ontological foundation for the artefacts which constitute the organization’s design, practice theory does not contain the mechanisms of intentionality and direction required by managerial action. The chapter ends with a broad interpretation of Davidson’s (2001) three types of knowledge—subjective, objective, and intersubjective—in terms of three broad groups of meanings found in organizations: managerially generated intended meanings, organizationally generated emergent meanings, and stakeholder generated perceived meanings.

Leaderful Organization Design

This chapter is about the implementation of new or modified organization designs; therefore, it is about organization design leadership. We have opted to use the expression leaderful designing instead of design leadership, thus avoiding the complicated issue of defining and establishing the scope of leadership. Leaderful designing represents an attitude towards the design of organizations, indicating a concern with action, participation, and collective action. It shares the defining features of democratic leadership, understood not in its representative sense but in the sense of distributed leadership. The second most important aspect of leaderful design concerns meaning. Meaning is constantly created, communicated, and changed in organizations; and all participants play a role in articulating the meaning(s) of what their group members need to accomplish their tasks, however the primary meaning-makers are the managers. Managers play a crucial role in extracting or providing cues that guide behaviour and transmit cultural norms to group members.

The Logic of Identity and the Normative Logic

Attention is focused on the instrumental uses of identity, that is, how identity affects perceptions of organization design and how it can be instrumental in changing organization designs. The concept of identity orientation is highlighted, given the crucial role it plays in the linking between the identity logic and the normative logic. In many ways, identity is also normative because, once established, it sets the standards of behaviour. Given the intimate relationship between the two logics, they are dealt with in the same chapter. The normative logic is inspired by the principle of ethics from design theory, but for purposes of organization design it finds translation in stakeholder theory, which holds that (1) enterprises have a moral duty to ensure the welfare of all their stakeholders, not only that of stockholders; (2) by acting in a socially responsible manner toward all their stakeholders, firms can enhance their performance and gain business advantage

Deriving Five Human-Centred Logics of Organization Design

For the past century or more, we have been taught to think of the design of organizations in terms of a legacy of principles left to us by pioneers such as Taylor, Fayol, and Weber. Names such as Follet, Barnard, or Elton Mayo, although admired and often cited have never made it to the compendia of organization design. So, organizations continue to be designed with a logic of command-and-control, carrot-and-stick, and make-believe ethics which cause the organizational unease often reported in the literature. In this chapter, a proposal for a set of five new human-centred logics of organization design is put forward. The proposal is the result of an investigative process which starts from the realization that a number of contemporary literature trends on management and organization reveal concerns that somehow coincide with human-centred design (HCD) principles and ideas. The new logics are: identity and identification, normative, service, effectual reasoning and interactive structure.