09.04: Cooperation Decay in Organizations

Project info

Project consists of following studies
The project aims to describe and explain how, within work organizations and their subunits, variations in the degree of cooperation decay can be explained by differences in their formal governance, informal structures, culture and social norms, as well as the motivation of their members. Understanding the causes of cooperation decay is an important condition for mitigating factors that cause cooperation decay and for designing sustainable institutions.
Project start
End date
Behavioral theory
Rijksuniversiteit Groningen
Rijksuniversiteit Groningen
Rijksuniversiteit Groningen
Rijksuniversiteit Groningen
Work package
  • Work
Sustainability threat
  • Feedback Cycles
  • Reconciling stakeholder interests
Theoretical background
Organizations require cooperation between their members to fulfil their goals. This cooperation can take many different forms, covering a wide range of in-role (e.g. employees or managers acting in the spirit of a rule, not just according to its letter) and extra-role behaviors (e.g. working overtime in an emergency). Organizations’ major tool for eliciting this cooperation is to design its internal processes, work flows, responsibility allocations and rewards – their governance structures – such that they facilitate, foster or incentivize the desired behaviors. In doing so, they have to balance the pursuit of individual assignments (for example because meeting individual performance targets is a condition for promotion) with contributions to the collective goals (e.g. helping a teammate solving a problem that, if not taken care of properly, is likely to affect the whole team or organization). Formal governance efforts can take many forms, ranging from monetary or symbolic rewards, the implementation of technological solutions for monitoring and controlling performance, to active attempts to influence the firm's culture and values. But the effectiveness of formal governance strongly depends on what is known as the "informal organization": the set of beliefs, values and personal relations that form an organization’s culture. The latter has shown to be decisive in either productively complementing formal structures (for example because informal leaders vouch for supporting management, thereby supporting the realization of its goals), or in severely undermining organizational processes (for example because a department is divided into informal factions and engaging in constant in-fighting). Individuals' beliefs, values and relations in turn influence their motivation, leading, for example, to a commitment to organizational goals or an attitude of merely "doing one's job." Though organization science has made great strides in developing a better understanding of formal governance and informal culture, at least one blind spot remains underexplored. It concerns the question how the interplay between formal governance and informal culture affects the sustainability of intra-organizational cooperation. In most theories of the firm, the problem of sustained cooperation remains implicit in that the theory assumes that the instruments that are able to elicit specific kinds of employee behavior, including cooperation, are also the ones that sustain this behavior through time. However, a substantial body of empirical evidence suggests otherwise, and that this holds across a broad range of governance forms, ranging from those informed by agency and exchange theories in economics, or those guided by sociological and psychological stewardship and identity theories in sociology. These studies point to the potentially self-undermining nature of the related organizational designs. Self-defeating processes can have their roots in a variety of organizational structures, as the following two examples illustrate. First, a classical example are monetary incentives, like performance-related bonuses. They have been shown to be quite effective in eliciting certain kinds of desired behavior, as predicted by agency theory. However, they were also found to narrow the attention to those aspects of the job that form the basis for the rewards, with the result that other aspects of the job, like compliance to ethical or professional norms can be eroded. Moreover, it has been argued that monetary incentives trigger a mindset in which the realization of personal gain dominates one’s reasoning, thereby pushing the intrinsic features of activities and normative concerns into the cognitive background. Moreover, when individuals act from a goal frame of "gain", this is detrimental to participation in cooperative ventures, due to its emphasis on net benefits for the individual, rather than on the prospect of mutual benefits (Lindenberg & Foss, 2011). A second example can be found in self-organizing teams, where work groups receive farreaching autonomy. While such organizational designs strongly empower the workfloor, they may also trigger vicious cycles of so-called “concertive control” (Baker, 1993): these are processes of strong informal peer pressure, in which the “self-organizing” group rather than formal management is conceived as the legitimate locus of authority. Peer pressure can become increasingly severe, including disproportionately strong social sanctions, causing distress and exhaustion of group members and undermining cooperation. Though the early organizational literature had repeatedly flagged that some forms of governance may be more susceptible to triggering such vicious cycles than others (Masuch, 1985), such processes of cooperation decay seem to have largely disappeared from the research agenda. As a consequence, current theories of organizational governance are largely ill-equipped to model them, let alone to elaborate design principles that would effectively prevent them. Likewise, empirical research left unaddressed to what degree the members of the organization are aware of such processes of decay and related self-fulfilling dysfunctions (probably because of problems of empirical access to organizations with cooperation decay). Several leads from previous research suggest that that in order to capture the conditions under which cooperation decays, it is necessary to depart from theoretical accounts of motivation centering exclusively on gain related individualistic concerns of employees or formal organizational rules and structures. More specifically, cumulating evidence points to intrinsic motivation, social identities and belongingness (Finkelstein & Penner, 2004; Lindenberg, 2001) as important individual level conditions, and organizational culture and the related informal rules (Herzog 2018) and emerging group norms (Titlestad et al., 2019) as key organizational conditions involved in the decay or sustainability of cooperation. Building on goal framing theory and the literature on cultural slopes, a theory of cooperation decay in organizations will be developed and empirically explored. It first identifies the potentially self-undermining characteristics of different formal governance structures and informal organizational cultures, and their interplay. It then elaborates on the conditions that may prevent the emergence of such vicious cycles (undesired) change or stability. According to goal framing theory, eliciting and maintaining a high level of joint production motivation is a key requirement for well-functioning organizations or organizational units. Joint production motivation refers to an individual’s desire to contribute to productive activities that involve heterogeneous but complementary resources and a high degree of task and outcome interdependence. Joint production motivation needs a salient normative goal frame in which the norms put value on contributing to the joint product and the process of its creation. However, normative goals are inherently brittle, because the normative goal frame has the lowest a-priori salience. Unless supported by additional means, it has the tendency to fall prey to two other goal frames that have a higher a-priori salience: the gain or the hedonic goal frame. Therefore, the normative goal frame needs constant support to be kept salient, and to keep gain and hedonic goals in the background. An overarching working hypothesis informing this project is that the impact of informal rules is likely to be particularly strong if they are accepted (or perceived as legitimate) and when they are shared. More specifically, organizational practices fostering joint production motivation (Lindenberg & Foss, 2011) and the related shared intentions are hypothesized to be particularly important to sustain cooperation. Hence, the crucial question becomes: how can a normative goal frame nourishing joint production motivation be created and maintained? Which institutional arrangements, cultural practices or social processes are necessary to keep normative goals salient? Previous scholarship on organizational pathologies (e.g. Barnett & Finnemore, 1999) has identified several potential conditions, which will inform this project as sensitizing concepts in an initial conceptual model (Bowen, 2006). For example, behavior signaling moral failures by organizational leaders may stand at the beginning of a “cultural slope”, i.e. an organizational climate characterized by a gradual erosion of professional and moral norms (Herzog, 2018). Likewise, lack of transparency, competence or inaccessibility may trigger a process leading to value co-destruction (Engen et al. (2020)).
Research design
The project uses a multi-method research design, combining sociological and philosophical methods. The purpose of the research strategy is to identify and reconstruct processes of cooperation decay and the conditions that may trigger, facilitate or prevent them. In a first, theoretical step, sensitizing concepts and an emerging conceptual framework will be derived from the joint production, cultural slopes and organizational pathologies literatures. In a second, empirical step, published “post-failure reports” will be analysed with regard to indicators of cooperation decay and its potential antecedents. An example is the so-called Salz Report, which details the processes that led to the financial crisis of 2008 at the Barclay Bank. Another example are selected reports from the Dutch Safety Board (www.onderzoeksraad.nl), which reconstructs the onset and causes of minor and major organizational failures in a broad set of domains ranging from health care (e.g. conflicts in a heart surgery department leading to excessive patient mortality) to industry. Selected reports will be content coded using the sensitizing concepts derived during the first phase. Qualitative Comparative Analysis (QCA, Rihoux & Ragin, 2008) will subsequently be used to uncover different pathways to cooperation decay. Third, a case study approach will collect primary data from managers and employees of selected organizations. The development of a feasible strategy for identifying, selecting and negotiating access to suitable cases will take place during the first year of the project. A critical incident or “trouble case” methodology (Morrill, 1995; Wittek, Van Duijn, Snijders, 2003). Because direct observational access is unlikely to be feasible, the method will use semi-structured interviewing of expert informants to systematically elicit information about critical incidents, i.e. past problems (“trouble cases”) as perceived by members of the organization, as well as the organizational context. The systematic longitudinal elicitation of such events and their characteristics (e.g. what are the perative reactions did it trigger and by whom) allows the creation of a rich multi-level, characteristics of the involved employees or managers , what kind of action or moral infraction did it entail, how severe do informants judge the norm violation to be, what kind of cooperative or non-coomulti-moment trouble-case repository, which can then be analysed both quantitatively (e.g. modelling trends of cooperation decay as a function of the characteristics of the situation, the involved actors and their relationships), and qualitatively (e.g. content coding the in-depth accounts of trouble cases to unravel the social mechanisms underlying potential cultural or motivational changes.
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