"Academy ot Management Review, 1988, Vol. 13, No, 1, 53-64,

Configurational and CoactivationalViews of Organizational Structure

GREGORY K. DOWUniversity of Alberta

Two distinct vie'ws of organizational structure, configurational andcoactivational, are discussed. The conhgurational view stresses theauthoritative coordination of work, whereas the coactivational viewemphasizes recurrent patterns of interaction among participants. Thesetwo conceptual schemes differ in their stances toward hierarchy,power, and organizational purposiveness. The coactivational viewsubstitutes "invisible hand" explanations of structure for the inten-tionalist explanations advanced by configurational theory.

Organizations are singularly complex systems,and it is far from obvious how their internal struc-tures can best be described. Two distinct viewsof organizational structure can be found in theliterature: the configurational and the coactiva-tional. The configurational view emphasizes theintegration of work tasks under common mana-gerial authority, whereas the coactivational viewstresses recurrent patterns of interaction amongorganizational participants. These two concep-tual schemes differ in their stances toward hier-archy, power, and organizational purposiveness.Configurational theory advances intentionalistexplanations of organizational structure, whereasthe coactivational view is more compatible with"invisible hand" modes of explanation.

This paper is concerned primarily with descrip-tive uses of these views, rather than with theprescriptions for organizational design that canbe derived from them. The prescriptive stancesof the two views are compared briefly in the clos-ing section of the paper.

The coactivational view opens up promisingnew avenues of attack on questions which seemlargely impervious to the tools of configurationalanalysis. These questions include the relation-ship between organizational hierarchy and mar-

ket exchange, the ways in which labor-managedfirms differ from conventional enterprises, andmore generally, how conflict and power becomeembedded in organizational structure. Althoughit is impossible to justify these claims fully here,it is hoped that the coactivational view of struc-ture, when coupled with invisible hand explana-tions of the sort described in the final section,will point organization theory in fruitful newdirections.

Configurational View of Structure

In the configurational view, an organization'sstructure involves two core features: the decom-position of an overall objective into subtasks, andthe integration of these subtasks to achieve aneffective organizational performance. Subtasksare coordinated by placing related activities un-der the supervision of a single manager. Theseideas imply a purposive view of the organiza-tion; indeed, in this literature organizations oftenare defined as purposive human associations(Blau, 1974, chap. 1).

The archetypal image of the configurationalperspective is the organizational chart with its

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vertical lines of managerial authority. Threetypes of variables are regarded as central:

The properties of the organizational hierarchy.Classic examples include the number of levelsat which tasks are grouped together (height ofthe hierarchy) and the number of subtasks super-vised by a single authority (span of control).

The principles used to group tasks at each levelin the hierarchy. For example, tasks can begrouped by intended purpose or product, theprocesses or raw materials used, the clienteleserved, the time at which activities are carriedout, or their geographic location.

The administrative mechanisms used to coor-dinate subtasks. Examples include the relation-ship between line and staff, the degree of cen-tralization in decision making, and the ratio ofadministrators to production workers. Pugh,Hickson, Hinings, and Turner (1968) provided amore extensive list of variables; one paradig-matic example of empirical research in this veinis that of Blau and Schoenherr (1971).Intellectual Grenealogy

The roots of the configurational view are an-cient. Wren (1979, chap. 2) pointed out examplesof it dating back to the early military, religious,and state bureaucracies of Egypt, Mesopotamia,and China. Often, modern configurational anal-yses use Max Weber's portrait of the ideal bu-reaucracy as the point of departure (1978, pp.212-226, 956-1005). The configurational view alsois indebted to the work of management theoristssuch as Fayol (1930), Gulick (1937), Mooney andReiley (1939), and Urwick (1937, 1943). The hu-man relations school flowered partly as a reac-tion against the methods advocated by thesewriters, and the configurational approachdeclined in importance. It was revived in Wood-ward's (1965) attempt to test the validity of classi-cal management principles, however. Her work,in turn, presaged the rise of contingency theoryvariants of the configurational view (Lawrence& Lorsch, 1967; Perrow, 1967; Pugh, Hickson,Hinings, & Turner, 1969; Thompson, 1967).

Contingency theory moved away from the "onebest way" approach that characterized much

early configurational writing. Its advocates ad-vanced the idea that structure is a result of theorganization's size, technology, and environ-ment. However, the contingency theorists contin-ued to view structure in configurational terms,much as the classical theorists did. For example,Lawrence and Lorsch reformulated the divisionof labor and task coordination as differentiationand integration, remarking that these ideas"suggest a return to the central concern of earlyorganizational theorists; i.e., the optimal divisionof labor given a general organizational purpose"(1967, p. 2). Although the notion of a single bestway to organize was rejected by contingencytheory, observed structures were regarded asappropriate adaptations to technological and en-vironmental exigencies.

Economists arrived at a configurational per-spective by two quite different routes. First, thisviewpoint figured prominently in Chandler's(1962, 1977) work on business history, particu-larly in his account of the transition of large U.S.firms from functionally departmentalized struc-tures to multidivisional structures. Chandler'sanalysis stimulated the development of transac-tion cost economics (Armour & Teece, 1978;Williamson, 1975, chap. 8) and provoked an ex-tensive body of empirical research by other in-dustrial organization economists (Caves, 1980).

Another more mathematically oriented vari-ant of economic configurationism has developedthat has few, if any, precursors in common withsociological organization theory. Much of thiswork traces generally to the planning and mar-ket socialism debates of the 193Gs and 1940s(Nelson, 1981; Ward, 1967, chap. 2), and morespecifically to the explosion of interest in theeconomics of information during the 1970s(Spence, 1975). Popular research areas have in-cluded identifying the limits to a firm's size(Beckmann, 1977; Calvo & Wellisz, 1978; William-son, 1967), explaining observed intraorganiza-tional pay differentials (Calvo & Wellisz, 1979;Mirrlees, 1976; Rosen, 1982), and the optimal co-ordinating of subunits (Cremer, 1980; Groves &Radner, 1972; Weitzman, 1974). Each of thesestudies postulates an organizational objective

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(cost minimization, profit or utility maximization,or Pareto efficiency), hypothesizes that certainaspects of organizational structure will be ad-justed to promote attainment of this objective,and assumes a hierarchical coordination or su-pervision scheme.Hierarchy and Power in ConfigurationalThought

The configurational emphasis on managerialauthority leads to certain theoretical blind spots,including a reluctance to interpret market rela-tions as a form of organization. For many years,economists have sought to explain why sometransactions are mediated by market exchangewhereas others are internalized within firms(Coase, 1937); often they have found it useful tothink of market and hierarchy as endpoints on acontinuum of possible organizational structures(Mirrlees, 1976, p. 106; Williamson, 1985, p. 83).The configurational view, however, postulatesqualitative differences between market exchangeand hierarchy. Blau (1974, pp. 28-29), for ex-ample, distinguishes organizations (e.g.,hierarchies) that arise through deliberate designfrom nonorganizations such as markets that arisethrough merely emergent forces. This line of de-marcation seems increasingly artificial in lightof recent efforts to handle transactions withinfirms and across markets in a unified way(Arrow, 1974; Dow, 1987a, 1987b; Powell, in press,Williamson, 1985).

A second blind spot involves issues of powerand legitimacy. When managerial authority isdepicted as being exercised on behalf of a com-mon goal, unless one regards the organizationalraison d'etre as unacceptable per se (e.g., or-ganized crime) it tends to be seen as both legiti-mate and functional. The tacit assumption thatsubordinates and superiors share in a commonorganizational purpose leads the theorist to speaknot only of managerial power, but also of mana-gerial authority (that is, legitimated power).

This aspect of configurational analysis may ac-count for its failure to shed much light on thepossible merits of the labor-managed firm (Dow,

1986; Horvat, 1982; Putterman, 1984; Russell,1985). The idea that workers should exercise ulti-mate control over the managers of an enterprisemakes little sense if all exercises of managerialpower are legitimate. Thus, the configurationalview obstructs recognition that monitoring andcontrolling behavior is a two-edged sword be-cause subordinates have a stake in curbing self-interested abuses of power by their superiors(Dow, 1987a).Role of Intentionality in ConfigurationalThought

Once an organization has been defined as apurposive association, it is only a short step tothe assumption that its internal structure will beadjusted to facilitate its purposes. Explanatoryreasoning then acquires a highly intentionalistcoloration: Observed structures are understoodas rational devices for pursuing assumed organi-zational goals, within a given technological,institutional, and market environment.

Such reasoning is most visible among econo-mists, who routinely prescribe particular organi-zational forms as a means to allocative efficiency(Groves & Radner, 1972; Hurwicz, 1985; Weitz-man, 1974). This openly prescriptive stanceshades off imperceptibly into descriptive theo-ries postulating that efficient structures will infact be observed (Williamson, 1980, 1981). Indeed,the role played by Pareto efficiency in economicanalyses parallels closely the role of organiza-tional survival goals in functionalist sociology.The difficulties of functionalist social theory are,of course, well known (Burrell & Morgan, 1979,chap. 4; Elster, 1983, chap. 2; Giddens, 1979, pp.1-7).

Once an intentionalist view of structure isaccepted, organization theory easily slips into"arguments from design" reminiscent of thoseused by natural theologians to explain theadaptations of living organisms (Mayr, 1982, pp.103-105). The subtle adaptations of an organiza-tion to its environment are interpreted as the markof the organization's designers, who instituted asuitable structure at the outset and reshaped that

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structure over time in response to changingcircumstances. These designers typically areidentified as founders, entrepreneurs, top man-agement, or a dominant coalition. Chandler(1962), for example, believed that structure fol-lows strategy, meaning that the strategic choicesof corporate managers determine organizationalstructure. Industrial organization economists(Caves, 1980, p. 64) and sociologists concernedwith strategic choice in organizations (Child,1972) have expressed similar views.

This analysis is at best an incomplete descrip-tive theory of organizational structure because itignores the counterstrategies of organizationalactors who may contest managerial objectives.Implicitly, the configurational approach presup-poses that some privileged group has the powerto impose its preferred structural arrangementsupon other organizational participants. While thispresupposition often approximates reality, a sat-isfactory theory of organizational structure shouldregard the power to impose particular patternsof behavior on others as a fact requiring expla-nation, not as a given. Further, explanatory as-sertions based on the premise of organizationalintentionality tend to distract attention from pat-terns of behavior rooted in intraorganizationalconflict.

Philosophers of science have endorsed the an-cient maxim that you can't beat something withnothing. In the words of Lakatos: "[A]n objectivereason [to abandon an existing scientific researchprogram] is provided by a rival research pro-gramme which explains the previous success ofits rival and supersedes it by a further display ofheuristic power" (1970, p. 155, emphasis deleted).The coactivational view provides an alternativeto the configurational view.

Coactivational View of StructureThe term coactivity is borrowed from ecology,

and it emphasizes the importance of ongoingbehavioral interactions for the study of organiza-tional structure. In the coactivational view, anorganization is a communication network inwhich actors or subunits recurrently process re-

sources and information. The organization'sstructure is inferred from regularities in the be-havior of these actors as they are observed overtime (Mackenzie, 1976). Conventional organiza-tional charts are replaced by flow charts depict-ing the movement of symbols and resourcesthrough the system (e.g., Cyert & March, 1963;p. 87).

Writing in this spirit, March and Simon de-fined structure as "those aspects of the pattern ofbehavior in an organization that are relativelystable and that change only slowly" (1958, p.170). A slight modification of this definition is mostuseful for present purposes:

The structure of a social system is identical withthe recurrent patterns of resource and informa-tion flow generated by the decision rules of itscomponent actors or subunits.

Such structures can be represented mathe-matically using a variety of block-modeling,simulation, or stochastic process techniques. Itmight be said that organizational boundaries aretaken as given under this definition, and it istrue that some universe of actors must be speci-fied in advance. However, if boundaries can beidentified behaviorally (e.g., as regions of low-frequency interaction separating regions of high-frequency interaction), then the location of suchboundaries within the prespecified system of ac-tors can be regarded as endogenous.

The decision rules that generate an organiza-tional structure specify with reasonable accuracyhow each actor responds to messages from otheractors or from actors in the external environment.The key task of organizational theory, in thecoactivational view, is to explain why decisionrules are what they are; that is, why a givenstructure of interaction emerges in a specific so-cial setting. The coactivational view highlightsthe following variables:

The coding systems and observed behaviorsof each actor. Decision rules are not observeddirectly. Each actor's decision rules must be in-ferred by studying the relationship between in-coming messages or resources and his/her be-havioral responses (Barley, 1983; Gregory, 1983).

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Technological and institutional constraints onthe acquisition of resources and information byorganizational actors. These constraints definethe avaiiable channels of interaction, and,hence, iimit the range of possible structures. Ii isvital to distinguish these exogenousiy given ruiesof the game from the decision rules of the actors,which are the dependent variables to be ex-plained. In practice, this distinction can be dif-ficult to make because seemingly exogenous"technical" constraints are sometimes imposedon an actor through the strategic behavior ofother actors (Dow, 1985; Noble, 1984). Rules ofinteraction that are institutional givens in oneanalysis may be treated as endogenous struc-tures in another, but any analysis must positsome framework within which feasible or per-missible interactions take place.

The response of the external environment toactions by organizational participants. All orga-nizations exchange resources and informationwith their environments. Actors in the environ-ment generally reward some actions and pun-ish others. Environmental states often can be ma-nipulated through strategic behavior to the ad-vantage of particular organizational participants.Intraorganizational decision rules cannot be ex-plained adequately without referring to this webof incentives, information exchanges, and powerrelations that link actors with the external en-vironment.

Intellectual GenealogyAmong U.S. writers, the coactivational view

received its first clear formulation in the works ofCyert and March (1963), March and Simon (1958),and Simon (1976), a group often labeled theCarnegie school, although Barnard (1938) andthe human relations school also were significantin its development. The fundamental differencebetween the Carnegie school and classical the-ory was the former's elevation of individual deci-sion making to a paramount analytic position.At an early stage, Simon argued that a scientifi-cally relevant description of an organization"designates for each person in the organizationwhat decision that person makes and the influ-

ences to which he is subject in making each ofthese decisions" (1976, p. 37). The social-psychological focus implicit in this approachforced organization theorists to consider the linkbetween the decisions made by individual ac-tors and the structure of the organization, a themelater developed at length by Weick (1979).

A second crucial break with previous workcame with the emphasis on dynamic, rather thanstatic, modeling of organizational phenomena.March and Simon revised classical managementtheory by taking into account "contingent activi-ties." These are activities that depend either oninformation obtained from others in the organiza-tion or on signals about the external world, andthey come "with time subscripts attached" (1958,pp. 26-29). Ultimately, this line of thought led tocomputer simulations of organizations (Cohen,1981, 1984; Cohen, March, & Olsen, 1972;Crecine, 1969; Cyert & March, 1963) as well asmodels using the mathematics of stochastic pro-cesses (Dow, 1987b; Padgett, 1980).

The coactivational view entered politicalscience through the studies of federal and localbudgeting processes conducted by second-generation researchers at Carnegie (e.g.,Crecine, 1969, and Gerwin, 1969) who built onthe earlier work of Wildavsky (1964). Since then,the insights of these authors have been absorbedinto the mainstream of theoretical and empiricalwork on public sector budgeting (Danziger, 1978,chaps. 6-7). TTie Carnegie school also in-fluenced the study of foreign policy decision mak-ing (Allison, 1971, chaps. 3-4; Steinbruner, 1974,chap. 3).

Important economic contributions to the coac-tivational view were made by Nelson and Win-ter (1982, chap. 5); they argued that decision-making routines provide the basis for organiza-tional continuity over time, and that evolutionaryforces select from among alternative structureson the basis of the profitability of the firm. Someelements of transaction cost economics, espe-cially Williamson's (1985, pp. 20-22) emphasison the decision procedures used by transactingparties in adapting to changing circumstances,also have a coactivational flavor (Dow, 1987a).

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Marschak and Radner's (1972) theory of teamsexplicitly modeled organizations as communica-tion networks in which the flow of messages isgoverned by consistent decision rules. Radner(1972, pp. 177-188) also proposed a game-theoretic extension of the theory of teams to ac-count for intraorganizational conflict, and hegave the bounded rationality precepts of the Car-negie school a precise mathematical formula-tion (Radner, 1975a, 1975b). Of related interestare the efforts of game theorists to anchor con-ventional solution concepts either to underlyingprocesses of adaptive learning (Crawford, 1985;Schotter, 1981) or to natural selection (Axelrod,1984; Friedman & Rosenthal, 1985).

Examples of coactivational analysis from out-side the United States include Giddens' theory ofstructuration, in which the structural propertiesof collectivities are "rules and resources recur-sively implicated in the reproduction of socialsystems" (1979, p. 64), and Crozier and Fried-berg's conception of formal structure as "a provi-sional codification of a state of equilibrium amongopposing strategies of power" (1980, p. 61). Theseideas are particularly relevant to questions ofpower and intentionality.

Hierarchy and Power in Coactivational ThoughtGiddens provided the foundation for a coacti-

vational interpretation of power relations amongorganizational actors: "The notion of human ac-tion logically implies that of power, understoodas transformative capacity: 'action' only existswhen an agent has the capability of intervening,or refraining from intervening, in a series ofevents so as to be able to influence their course"(1979, p. 256). As Giddens pointed out, if oneuses this definition, power may or may not beconsciously exercised. One's power is deter-mined solely by the potential impact of one's ac-tions on subsequent events, regardless of whe-ther or not these repercussions are intended.

Viewed from the coactivational perspective.Actor A's power hinges on the decision rulesused by other actors and, hence, on organiza-

tional structure because the decision rules of oth-ers partially determine the consequences of hisor her actions. Therefore, to study power rela-tions one must examine the opportunities that agiven structure of interaction affords each actorto alter the behavior of other actors and the distri-bution of resources among them (Mackenzie,1986; Ranson, Hinings, & Greenwood, 1980). Inparticular, if one actor's behavior is unilaterallyconditioned by the decisions of another, an au-thority structure can be inferred (Dow, 1987b);complex hierarchies are characterized by nestedpower asymmetries of this type.

Systematic investigation of power relationsfrom a coactivational perspective requires knowl-edge of the decision rules of the actors, the avail-able channels of resource and informationflow, and the nature of the exchanges betweenthe organization and its environment. Since anactor's power is derived from his or her role inan organizational structure, a theoretical accountof the decision rules that constitute this structuresimultaneously explains the power relations em-bedded in it. This broad view of power allowsone to map the power relations that arise underunconventional forms of administration (thelabor-managed firm) or in settings devoid of for-mal hierarchy (relations of bargaining or marketexchange).

Economists often are uncomfortable with theidea of intraorganizational power because it runscounter to the usual assumption that market com-petition eviscerates any potential bargainingpower an organizational actor might seek toexercise. However, this conventional assumptionbecomes untenable if some actors control idio-syncratic physical or informational resources thatcannot be replicated on comparable terms inthe external market. The advocates of transac-tion cost economics have argued convincinglythat instances of asset idiosyncrasy are common-place; indeed, they also help to explain the veryexistence of business firms in a market economy(Williamson, 1985). Accordingly, intraorganiza-tional power relations are partially insulated from

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the discipline of the market, even where the ex-ternal market has a competitive structure (Dow,1985, in press).Role of Intentionality in Coactivational Thought

That power need not be exercised intention-ally raises larger questions: How much intention-ality lies behind the decision rules of an individ-ual actor, and how much purposiveness shouldbe imputed to the organization as a collectivity?At the level of the individual actor, any of thefollowing views would appear to be compatiblewith the coactivational view.

Hypercognition (the von Neumann actor). De-cision rules are consciously chosen strategies thatmaximize the expected utility of the agent, giventhe rules of the game and the strategies beingused by other actors. Predicted structures arederived by applying a suitable game-theoreticsolution concept, such as Nash equilibrium (Dow,1987b; Radner, 1972).

Bounded cognition (the Simon actor). Actorsare "intendedly rational, but only limitedly so"(Simon, 1976, p. xxviii); they cannot anticipate allof the consequences that flow from using a givendecision rule. The problem of calculating conse-quences is truncated by satisficing, adopting amyopic planning horizon, and using simplesearch heuristics to modify unsatisfactory deci-sion rules.

SubcogniWon (the Skinner actor). Decision rulesare shaped by operant conditioning mechanismsof which the actor may be entirely unaware.Structures arise spontaneously as a result of re-ciprocal behavior modification within interactinggroups.

ITie loaded term rationality was avoided inthe preceding paragraphs because here, the the-oretical issue at stake is simply the degree towhich foresight determines decision rules. In par-ticular cases, the choice among hypercognitive,boundedly cognitive, or subcognitive models willbe governed by criteria of theoretical tractability,empirical adequacy, and personal taste.

While coactivational theory can maintain aneclectic stance toward intentionality at the indi-vidual level, many writers sympathetic to this

approach have gazed upon ideas of collectivepurpose with profound suspicion. Giddens, forexample, declared that "social systems have nopurposes, reasons or needs whatsoever; oniy hu-man individuals do so. Any explanation of so-cial reproduction which imputes teleology to so-cial systems must be declared invalid" (1979, p.7, emphasis in original). Crozier and Friedbergheld that "we cannot speak of an organization'srationality and objectives as though they existedin themselves, apart from and above the indi-viduals and groups who embody them in theirstrategies and behavior" (1980, p. 46).

Therefore, it is somewhat surprising to find thatCyert and March regarded their theory as "pre-dicated on the essential purposiveness of thefirm" (1963, p. 44). However, the Carnegie tradi-tion derives organizational goals by treating theaspiration level of each subunit as a constrainton the choice of organizational policies, so thatany policy satisfying all such constraints is saidto satisfy the "organizational" aspiration level(Cyert & March, 1963, chap. 3; Simon, 1964). Be-cause organizational goals are merely an aggre-gate of disparate individual goals, real purpo-siveness at the organizational level of analysis isabsent.

In any event, the technique of superimposingdiverse subunii aspiration levels breaks downfor more complex goal structures. Indeed, Ar-row (1963) showed that when individual prefer-ence orderings are unrestricted there is no gen-eral way to aggregate these goals to obtain aconsistent collective preference ordering or so-cial welfare function. If individual goals can beexpressed in terms of a common medium ofexchange, such as money, tlien it is arguablyan "organizational goal" to maximize the size ofthe collective pie prior to its division amongindividuals. However, even in this special casedistributional issues can be settled only by re-course to shared norms of justice or the use ofpower.

In short, the notion of collective purpose is ex-cess baggage for coactivational theory. Aban-doning this concept in no way precludes interest-ing explanations of organizational structure.

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because game-theoretic equilibrium concepts, in-teractive learning processes, and evolutionaryselection mechanisms all remain as viable ex-planatory frameworks. In none of these frame-works are organizational structures directly cho-sen by any specific actor or coalition, much lessby the organizafion as a whole. Even if organi-zational behavior seems to be rationalizablein terms of some imputed collective goal(McFadden, 1975, 1976), such goals can be re-garded as entirely epiphenomenal; they are areflection of structure, rather than its cause.

Visible and Invisible Hands

All theories of organizational structure are anattempt to understand patterns of social interac-tion. The two perspectives described in this pa-per support dramatically different styles of ex-planatory theory. For example, the two perspec-tives involve significantly different commitmentsregarding the subjective or objective nature ofsocial reality, and disagree over the relative im-portance of social conflict and integration (Burrell& Morgan, 1979), For present purposes, however,the key area of contrast involves a distinctionbetween intentionalist "visible hand" and inter-actionist "invisible hand" explanations of socialstructure,

Configurational theory posits a visible hand ofauthority which shapes structure fn the serviceof shared objectives, A structure is explained byshowing that it enables an organizational de-signer to accomplish certain tasks in a givenenvironment. In coactivational theory, on theother hand, structure is seen as a joint product ofvarious interlocking decision rules or strategiesadopted by individual actors. Thus, the coactiva-tional view explains structure by explaining howthese rules arose and why they remain viablefor the actors who employ them.

Due to conflicts of interest, observed patternsof interaction do not reflect fully the desires ofany single actor. Therefore, it is necessary todecipher the processes operating at fhe sociallevel of analysis which mediate (perhaps onlyincompletely and temporarily) among the con-

flicting aims of individual actors. Thus, the coac-tivational view demands an invisible hand ex-planation of organizational structure.

The concept of an invisible hand is derivedfrom Adam Smith's (1974) idea that market forcescould yield a coherent allocation of resourceswithout deliberate guidance from any economicactor. In the present context, no connotations ofeconomic efficiency or social harmony are in-tended. Simply, the point is that often one canexplain patterns of social behavior as the un-planned outcomes of processes of social interac-tion (UUmann-Margalit, 1978),

An invisible hand approach at the social levelof analysis is logically compatible with an inten-tionalist view of individual behavior (Schelling,1978); modem microeconomic theory provides themost highly elaborated instance of such a blend.Also, although invisible hand theories can havefunctionalist overtones, as in economic modelsof perfect competition and in some interpreta-tions of evolutionary biology (Elster, 1983, chap,2), they need not. Thus, theories of this type offeran escape from the quicksands of functionalistorganization theory (Burrell & Morgan, 1979,chap, 5), The game-theoretic concept of Nashequilibrium, for example, constitutes an invisi-ble hand model of social interaction in the sensethat the equilibrium position of the game is notdirectly dictated by any single player. In pris-oners' dilemma situations, a Nash equilibriumcan prove socially disastrous (Axelrod, 1984),

The clash between visible and invisible handperspectives is illustrated through controversiesabout corporate culture, A configurational ap-proach encourages the belief that top managerscan and should engineer an effective organiza-tional culture, much as they engineer the coordi-nation of work tasks more generally. This propo-sition is endorsed to varying degrees by thecontributors to a volume of readings on the topic,titled Gaining Control of the Corporate Culture(Kilmann, Saxton, Serpa, & Associates, 1986),On the other hand, the coactivational viewstresses the idea that shared beliefs and values,like the patterns of behavior fhey support, emergefrom processes of social interaction in which top

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management is only one player among many.Culture in this view is not an object open todeliberate, unilateral choice by any single parti-cipantas Riley (1983, p, 418) puts it, culture"should not be analyzed as something an organi-zation has, it should be analyzed as part of whatthe organization is,"

At a deeper level, the coactivational viewquestions whether any tacit organization-wideconsensus on fundamental values and beliefsactually exists, just as it doubts the axiom ofshared organizational purposes, Schein poinfedout that within a given organization one mayfind "a managerial culture, various occupation-ally based cultures in functional units, group cul-tures based on geographical proximity, workercultures based on shared hierarchical exper-iences, and so on" (1986, p, 7), Organizationsoften are multicultural (Gregory, 1983), and theymay exhibit conflicts between an "official" mana-gerial culture and various other cultures. There-fore, it is important to stress that coactivationalstudies of structure do not hinge on the existenceof a common culture; as Barley stated, "be-havioral regularity is a necessary, but not suf-ficienf, condition for fhe explication of a culturalunderstanding" (1983, p, 398), Even in a socialsystem wracked by open warfare or class conflict,the structure of behavioral interaction betweenthe warring camps could still be analyzed.

The development of configurational ideas bythe classical managemenf theorists coincided

with the emergence of what Wren (1979, chap,16) terms a top management viewpoint in organi-zation theory, Configurational prescriptions tendto be of value primarily to managers of formalwork organizations in which either (a) no signifi-cant intraorganizational conflicts exist, or (b)power asymmetries are substantial, so that man-agers can shape the behavior of subordinateswith little or no concern for the reciprocal exer-cise of power by actors with opposing interests.

The coactivational affinity for invisible handexplanations limits the prescriptions that can bederived from it because prescription inevitablyinvolves intentionality. However, the outlines ofa prescriptive coactivational theory can besketched. Any organizational actor, whetherCEO or production worker, has an interest indiscovering how changes in the behavior of otheractors or the environment can be induced byfeasible modifications in that actor's own deci-sion rules. This search for strategies capable ofredirecting organizational events is precisely asearch for previously unrecognized sources oforganizational power. Thus, coactivational pre-scriptions can help specific actors make their la-tent power manifest, in order to advance theirinterests. The resulting struggle between the in-visible hands which have shaped our histori-cally given structures and the visible hands work-ing to transform them provides much of thedrama to be found in the modern world.

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Gregory K. Dow (Ph.D., University of Michigan) isAssociate Professor of Economics in the Departmentof Economics, University of Alberta. Correspondenceregarding this article should be sent to Gregory K.Dow, 8-26 Tory Building, Department of Economics,University of Alberta, Edmonton, Alberta T6G 2H4Canada.This paper has been improved substantially by com-ments and criticism from Charles Perrow, Oliver Wil-liamson, and Paul DiMaggio. The author also ac-knowledges the pervasive influence of Sidney Winterand Richard Nelson, though these colleagues bear noresponsibility for the unintended consequences of theirremarks.

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