Profit Seeking Organizations: Accumulation, Irrationality; Politics, and Organizational Change

Abstract

This essay is critical of traditional conceptions of organizations, which attempt to develop models and propositions that apply to all kinds of organizations, employ nomothetic ahistorical methods, or assume that organizational change is an outcome of rational managerial decisions. In contrast to these mainstream perspectives, the theoretical framework herein is anchored in the Marxian and radical Weberian traditions in organization theory. This essay suggests that the need to accumulate capital and the emphasis on cost accounting principles, to determine its income yielding power, distinguishes profit seeking organizations from other kinds of organizations. Moreover, the tendency of mainstream organizational theory to assimilate Weber's distinction between substantive rationality and formal rationality conceals the profoundly political nature of strategic decisions, and the effects of irrationalities on organizational change.