Organization Theory (OT) is about the context or structure of an organization. By looking at the structure of an organization, the architecture is revealed instead of the leadership roles or behaviors within an organization. Organization theory focuses of the design of the organization's structure and on the mission. An organization's strategy is a key to being successful but to accomplish this, the right design is required. Within organization theory there is a prehistory perspective which represents the theories and theorist that thought of organization theory before organization theory was considered to be a discipline. After the prehistory perspective, modern, symbolic-interpretive, and then postmodern perspectives came around (Hatch & Cunliffe, 2006). Through these perspectives, an organization can be evaluated on effectiveness, performance, and design as well as the design that constructs the hierarchy and roles within the organization. Western & Southern Financial Group shows strong characteristics of the modernism and symbolic-interpretivism perspectives which will be evaluated, illustrated, and demonstrated throughout this paper.
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The modernist perspective came around in the 1960s and 1970s and is based on the theory that what you can see, touch, taste, hear, and smell are the boundaries to the perspective. This limiting is restricted to the five senses and is thought to be an element to help others recreate the procedure and to experience the results for themselves (Hatch & Cunliffe, 2006). In the 1980s, symbolic-interpretivism broadened the view of organization theory perspectives when theorists started thinking outside of the five senses. Symbolic-interpretivism is taking the experiences of others involved and using the gathered information as facts within their research. The experiences and observations of individuals involved within the criteria of a specific study gives information that, to a modernist, is not measureable.
The modern perspective is viewed as the perspective that can research, study, and acquired data and recreate the information results at a later date. This is mainly due to the fact that the modernist perspective is based off of the five senses. Symbolic-interpretist is based on other's experiences and is not as easy to recreate. The information is always changing because the sources of information cannot be duplicated.
Within comparisons of modernism and symbolic-interpretivism, there are philosophical choices of ontology and epistemology that are important. Ontology is the assumption as to what is real or can be viewed as reality. Each perspective has its own view of what reality really is, or is not, whether it is an objectivist, subjectivist, or postmodernist view. Epistemology is concerned with obtaining knowledge and evaluating those findings through a positivism, interpretivism, or postmodernism views (Hatch & Cunliffe, 2006).
Modernist perspective on organizations is based on management and balance within the organization as well as achieving an effective and efficient competitive advantage and profitability. Modernist organization theory is based off of general systems theory, socio-technical systems theory and contingency theory. The general systems theory is a theory that is based off of scientific findings and grouping that led from the largest of grouping down to the smallest. Within these groupings the comparison was made from science to corporations (Von Bertalanffy, 1972). Within management through modernist's views there is structure and a hierarchy such as that of a tall or flat organizational structure (Hatch & Cunliffe, 2006). Modernists work with the team that they have in the situation that they are put into.
Symbolic-interpretivism within organizations is the meaning and interpretation of the groups and members but also of their stories, actions, experiences, and interactions. Social construction theory proposes that our interpretation of what is happening around us is negotiated, organized, and constructed. This interpretation is based on the understanding of our shared experiences and our shared history. Our understanding of organizations is based on the stability and instability of the potential organizational changes (Hatch & Cunliffe, 2006).
Within the perspectives there are a range of possibilities for designing and managing organizations. From the modernist perspective, the influence of organizational structure (flat or tall), Burns and Stalker's mechanistic and organic management system, and Lawrence and Lorsch's differentiation and integration show organizations as a structure (Hatch & Cunliffe, 2006). These models not only show the structure of an organization but also help to decipher what type or style the organization currently is or is desired. Symbolic-interpretivism views of organizations are that they are human created structures that are consistently a work-in-progress. The structure of symbolic-interpretivism is that it is about the social structure and interaction and not about the hierarchy within the organization (Hatch et al., 2006).
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There is a central question, according to Nelson (1991), for organizational study as to why organizational are different. There are two way to address the question. The first would be to look at organizations more from an objective standpoint as if adaptation to the environment, take inputs, and set output levels accordingly. The second would look at the subjective elements which might include a value system and its knowledge transfer culture (Nonaka & Toyama, 2005). According to Dwyer (2005), organizations are both objective and subjective.
Many organizational design concepts don't coincide with one particular theoretical perspective nor with the philosophic views that cannot be worked into one organizational generalized theory due to the fact that each perspective stands for multiple organizational researchers' interest and view of ontology and a corresponding methodology (Tsoukas & Knudsen, 2003). The utilization of two of the three theoretical perspectives will explore and expand on both the objective and subjective aspects of Western & Southern's organizational design.
As one of the top insurance companies in the world, Western & Southern Financial Group (W&S) has been a Fortune 500 company since 2004. W&S provides life and health insurance, annuities, mutual funds, and a variety of investment management products and services through out fifteen member companies. Along with the fifteen member companies there are a number of member companies that provide support services internally or to others in the financial services industry.
Western & Southern Life Insurance Company was founded in 1888 and has prided it's self on constant growth over the past 120 years. In 2008 record sales and revenue were hit and were with $5 million of the record operating profits (W&S, 2009).
W&S has four key missions that display their organizational structure and focus. The customer mission is to help customers meet the bulk of their financial needs by providing responsive, competitive life, health, retirement savings and investment products and services. Their home office mission is to develop increasingly profitable, long-term relationships with their customers, producers and other stakeholders. Their financial mission is to be a top-quartile performer in everything they do. Finally, their business development mission is to create profitable relationships with customers by providing needs-based products and services while observing the highest standards of ethics and business conduct (W&S, 2009).
W&S Organizational Elements
Looking into the subjective and objective approaches when trying to answer the question of what makes organization different can be taken for the many different ways one can analyze various concepts.
W&S shows a strong correlation to centralized organizational structure as well as an equally strong correlation to the decentralized organizational structure. As seen in figure 1, the structure of the organization is constructed of executives and board members that are linked to many or all of the member companies. These executives, on large decisions, have the final vote or veto power. Among the departments within the various companies those who are closest to the project will draw conclusions and present those to their superiors. W&S as well as the member companies show Burns and Stalker's mechanistic structures. Figure 2 shows several examples of the hierarchy within different departments. This hierarchy shows the high formalization of what the roles are and how the responsibilities are spread from one level to the next. Suggestions are made at the lower levels and then the final decisions are made among the top of the hierarchy. Within W&S there are procedure manuals and guides for every task including work orders to request slight changes in procedure in order to document the trail of event. The organization is considered to have a flat organizational structure due to the high number of departments. Within those departments is the tall organizational structure due to the many hierarchical levels.