The Problem of Organizations

This is an old idea, particularly in the branch of sociological thought that descends from Weber, but it really seems to me that the political problem of the 21st Century is not a problem of markets or capitalism, not of the state, not of ideologies or religions, but of institutions and organizations. Loosely speaking, what doesn’t work about government as a whole is also what doesn’t work about a local religious charity. What doesn’t work about financial capitalism is what doesn’t work about the Chamber of Commerce in a small town.

Loosely speaking, I stress again. The consequences of the collapse of the global financial system are different than when a local veterinary practice stops being meticulous about controlling infection in their clinical work. The inability of a vitally important government bureaucracy to deliver useful services where they’re needed most means something different than when a new restaurant loses money and fails because the front-of-the-house staff are poorly trained and indifferently motivated.

It’s not just consequences that differ. Modern institutions succeed and fail because of their organizational cultures, and those are shaped by their own singular internal histories as an organization and by the larger history of the activity to which they are devoted, as well as by the contingent actions of individuals working within an organization. This is where an overly functionalist account of organizations always comes to grief. But it seems to me that there is also something about modern institutions that makes their problems comparable: similar relationships to state, society and market, but also to individuals, similar devices and technologies of organization.

This is my roundabout way of approaching recent stories about institutional failure within higher education. Take for example this New York Times story about the Stevens Institute, a New Jersey university staggering from charges of financial mismanagement levelled against its president. As the Times notes, it’s not the first time we’ve seen this in the last decade: university president, often at a lower-tier or less-selective institution, backed by servile trustees, gorges on personal luxuries and extravagances, usually claiming that they were necessary for effective fund-raising. Often accompanied by defensive and petty retaliations visited upon critics within the organization and in the wider community, and various other kinds of tinpot managerialism.

The larger sociocultural story involved here, beyond just universities, is the rise of the new executive plutocracy across a range of institutions, because similar episodes of executives-gone-wild have cropped up in many businesses and in non-profit community organizations over the last decade. The larger institutional issue is the failure of mechanisms designed to safeguard the long-term mission of such institutions. Trustees, boards of management, auditors, ratings firms, accreditors, all turn out to be possible to suborn when there’s sufficient will, when there’s a lack of transparent operations, and when the institution in question is one which no one really cares about save those who work with or rely upon it.

But institutional failure can happen from below as well, in the ordinary work or activities of an organization. Margaret Soltan wrote recently about the case of the UC Davis employee charged with reporting on sexual violence who inflated crime numbers for years as well as misused funds. As Soltan points out, this was more than just an individual misdeed. But I’d also say it’s more than just a problem with academia or with a particular belief system. This is a danger every single time you create an office, position, division or what have you within an organization that has a specialized responsibility and no sunset clause. That’s a hammer that’s almost bound to see everything as a nail even if the people charged with that responsibility are saints.

The subtle problem that organizations and institutions pose to contemporary life is that people who live inside an institutional culture often are so sensitive to the nuances of the way things work, the limits and possibilities of change within the institution, that they let problems and failures slide or pass. No one wants to be that guy, the one who rants about everything. And that’s what often happens to someone inside an institution who blows the whistle on a bad practice or a growing issue, because that often ends with that person in a kind of internal exile, and in that circumstance, a loss of a sense of proportion is all but inevitable. Everything will come to look suspect or corrupt.

Institutions often resist external monitoring for the same reason. Institutional actors really do know things about how and why things work inside their worlds that outsiders don’t know. Precisely because a lot of that knowledge is about culture, about the unspoken patterns of everyday life, it can’t just be made transparent by providing documents or access. A monitoring group which gains an intimate knowledge of that interior culture of their target of scrutiny becomes a part of that culture in the process, loses perspective. A monitoring group which maintains a steely, formal distance from that kind of knowledge tends to constantly screw up processes which are working well, to create formalities and record-keeping requirements which become a burden without providing a service, and to be presumptively hostile to the organization they monitor even when it’s not warranted.

And of course outside monitors are themselves institutions, and just as prone to developing arteriosclerotic rot in their own procedures and internal culture. No institution wants to be monitored by another institution which may become just as fallible or broken.

Quis custodiet ipsos custodes and all that. It reminds of Dr. Seuss’ image of a world full of people holding the tail of the person in front of them.

There are ways to split the difference, but most of them are time-consuming and resource-consuming, the equivalent of breaking the alarm glass when there’s a fire. Outside monitors can use forceful legal implements like depositions to produce narratives about how an institution works (though this is more often past tense: how it worked, before it failed). Consultancies with specialist knowledge offer themselves (for a fee) as honest auditors who will sensitively tell an institution how to fix itself–but there’s only so far you can go before the customer stops payment.

The political and social problem of making institutions renewable and self-repairing without handing them a perpetual license to seek transfers, to be always “too important to fail”, is the real problem of the 21st Century. It applies across market and state, civil society and private life. I think there’s a part of the problem that is in some broad sense technical, that can benefit from information technologies, from new forms and designs of social networks, from new possible relationships between publics and institutions. But it would be a mistake to think primarily in those terms, to make these out to be questions of design. Thomas Malaby’s recent book on Second Life is a smart, meditative example of why trying to create culture through superior design usually falls short of its own ambitions, and indeed, those ambitions are often part of the problem.

Institutions work best through and are safeguarded most by strong cultures of professionalism, loyalty, and honor. Institutions are most at risk from parasitic infiltrations which adroitly use professionalism and loyalty as shields and weapons, who act like cancer cells, turning healthy structures into diseased ones. Problems of cultural maintainance and cultural creation are the hardest of all, because they can only be worked upon through incremental action within culture, with a humble sense of the immediate horizons of plausible transformations.

But the fate of institutions can’t just be left to them alone, because even the least of them has some kind of consequential social and economic power. If we need to think about how to live better within our institutions, we also need to think about how to act more wisely towards the institutions of others, to concern ourselves with their workings and when necessary, find smarter and more humane ways to intervene in their affairs and even to shut them down. The tools we have aren’t up to it, and the habits we have even less so.