Organizational Risk Analysis: Human Nature and

Socio-Technical Systems

John S. Carroll

MIT Sloan School

presented at

16.863 doctoral seminar

April, 2009

Agenda

Major approaches to organizations, organizational behavior, organization theory, and the like

Organizational analysis Organizational approaches to safety Let’s talk

Major Disciplinary Approaches to Organizations

Theory first Application/content first

Economics

Political Science

Anthropology

Sociology

Social Psychology

Individual Psychology

Business

Law

Public Policy

Military

Health Care Mgmt

I/O Psychology

Disciplines Work Within Level

Discipline

Economics

Political Science

Anthropology

Sociology

Social Psych

Individual Psych

Prototype

markets

states, parties

tribes

networks

families, teams

couples

Key Concept

efficiency

power

culture, kin

status, norm

motives

personality

Organizations Are In the Middle

Macro approaches start from institutions and work down to organizations, e.g., corporation as a legal entity. Org’n-in-environment

Micro approaches start from individuals and work up to organizations, e.g., “neurotic” organization. People–in–org’n

Meso approaches try to examine organizational phenomena at a middle level

No “Unified Field Theory”

Academic research rewards depth over breadth

Disciplines grow as communities with close ties within; weak ties across

All theories/models have boundaries This is a very difficult, complex problem The devil is in the details

Major Theoretical Approaches

Natural Selection: evolutionary metaphor, population ecology, environmental determinism

Structural Functionalism/Rational System: organizations have goals, create tasks and roles to adapt contingently to environment

Collective Action/Natural System: political negotiations, norms of cooperation, networks of relationships

Strategic Choice: individual enactment, retrospective rationality

Social Science/Management Principles

Humans are general purpose action learners (note limited rationality; attention is a scarce resource)

Individuals have varied inborn and learned capabilities, motives, values, styles

People live and work in groups/organizations Both hierarchy and networks are organizing principles and

forms Self-interest is both natural and learned, along with other

social motives (power, status, achievement, affiliation, self-actualization). [No real economist would have children (net loss) – note that people are becoming more economic.]

Purpose and meaning are socially constructed; the past, status quo, and future are invested with emotions

An Example: Power of Norms

Cialdini: how to get people to reuse hotel towels? Messages about how much water would be saved or

being good to the environment didn’t help at all Offering to donate savings to a cause helped a little Saying the hotel already donated, now “it’s your turn”

helped a lot (reciprocity, note who goes first) Saying “most people” in this hotel reuse their towels

helped a lot Saying “most people in this room” in this hotel reuse

their towels helped even more!

Organizational Analysis

StrategicDesignLens

PoliticalLens

Cultural Lens

ORGANIZATION

Open Systems Model

Inputs Transformation Processes Outputs

People

TasksFormal Org’n

Informal org’n

Products

Services

Satisfaction

Identity/Brand

Money

Information

People

Environment

History

Str

ateg

y

Strategic Design Lens

Model: organizations are designed (engineered) to achieve agreed-upon goals

Key processes: grouping (formal structure), linking, alignment, fit

Key concepts: goal-directed, information flows, interdependence

Leader: strategist, designer, architect Drivers of change: lack of fit to environment,

internal lack of alignment

Processes in Strategic Design

Assess Environment (threats, opportunities)

Assess Organization (competences, capabilities)

Strategic Intent

Strategic Organizational Design (grouping, linking, alignment)

Results(fit of output to environment, internal alignment)

Political Lens Model: organizations are contests for power and

autonomy among internal stakeholders Key processes: conflict, negotiation, coalition

building Key concepts: power, influence, autonomy,

interests, networks, dominant coalition Leader: coalition builder, negotiator Drivers of change: shifts in power of stakeholders

(can be influenced by changes in design, environment, or strategy)

Cultural Lens Model: organizations are shared

mental maps, identities, assumptions Key processes: meaning and interpretation,

attribution, “taken for granted” (cognitive), “invested with value” (normative)

Key concepts: artifacts, symbols, myths, values, assumptions, identities, subcultures

Leader: symbol of the culture, shaper of the culture, articulator of symbols and vision

Drivers of change: challenges to basic assumptions, new interpretations

Schein’s Model of Culture

Artifacts: what you see, objects, structures

Values: strategies, goals, philosophies, justifications

Assumptions: taken for granted beliefs, mental models, habits

An Example: Project Teams Team composition

Strategic design: know-how & capabilitiesPolitical: represent key stakeholdersCultural: variety of mental maps

Key roles and behaviors Strategic design: project & task management, expertisePolitical: manage conflict, get commitment, build coalitionCultural: reframe and communicate, give meaning

Key outcomes Strategic design: create results within budget, schedule Political: broader coalitions, shared interests, new status Cultural: value openness & learning, new assumptions

Organizational Safety Design

Traditional safety management is heavily “strategic design” oriented

Calculate risks (PRA, etc.) Design redundancies, defense in depth Monitor and regulate key factors Train and supervise people Proceduralize

Political and Cultural Critique

Perrow’s NAT was skeptical of design, e.g., redundancy adds complexity and invisibility, elites only care about their own safety

Vaughan analysis of Challenger argued that people have to maintain systems (cf. Giddens’ structuration)

Professional subcultures create barriers and miscommunications (Schein, Carroll)

Different Worlds J. S. Carroll, J. Mgmt Studies, 1998, p. 712

Design EngineersEquipment/Drawings

VisualPlanning/Fixing

OperatorsEquipment/People

TactileAdapting

ExecutivesMoney

NumericalPlanning

Social ScientistsIdeas/Systems

VerbalLearning

ANTICIPATION RESILIENCE

AB

ST

RA

CT

CO

NC

RE

TE

HRO Theory

HRO took the “appreciative inquiry” approach to characterizing excellence

After early observational studies, many HRO scholars have tended to focus on culture: sensemaking, mindfulness, respect for expertise, preoccupation with failure, building communities-of-practice

Conundrum: hard to change culture by trying to change culture (Schein)

Example #1: CR Problem

During an outage, a design modification was installed to replace old electromechanical indicators in the control room with new computer-based indicators

Operators were trained, and told “there is nothing you can do to harm the new system”

A few months later, an operator entered improper keystrokes and the computer system froze

Root causes were traced to operators and designers Operators were disciplined No one in engineering is “singularly responsible”

Fall From Roof

Joe Smith, an electrical maintenance worker, climbed onto the thin roofing of a shed inside the hot machine shop, an area used to decontaminate equipment with radiological residue. His goal was to replace burned-out fluorescent lights. Joe was advised to stay on the 1.5” steel frame of the shed. As he crawled on the roof, his hand slipped through a Plexiglas skylight, but he caught himself and continued. He then slipped again off the steel frame and fell through the roof to the floor 10 feet below. His injuries included 5 fractures and severe lacerations. Joe had been counseled two months before for failing to use fall protection while painting.

Report’s Cause Maps

V ie w e d asro u tine

W a rn in gsig n ored

F a iled to u sem a nu a l

T u n n e lv is ion

E m plo yee In ju redfro m F a ll

H a za rdsn o t assessed

N o fa llp ro tec tion

M isu seds te p la dd er

F a iled to u sem a nu a l

E m plo yee In ju redfro m F a ll

Corrective actions:Reinforce expectationsDetail/training on working aloftCounsel workers involved

Learning Activities Mature

ReactiveComponentsInputsSingle-loop

ProactiveSystemsProcessesDouble-loop

Comply w/rules

Fix symptoms

Find “root causes”

Benchmark the best

Systems models

Challenge assumptions

Deny problems

Bounded know-how

LOCAL OPEN DEEP INQUIRYCONSTRAINED

Let’s Talk

Major Philosophical Approaches Positivist: cause-effect relations, empiricist

(data are “objective reality”) Naturalistic: description, classification Interpretive/constructive: subjective

perceptions and interpretations Action research: participate in change

efforts Critical/Postmodern: deconstruct, politicize,

self-referent, ironic, views of the marginalized

The Nature of Theorizing

What is an “organization”? What is a “system” or, gasp, an “engineering system”?

Abstraction of “reality” into “concepts: “Organization”, “Profit”, “Leadership”, “Information”, “Authority” are created, not given

Heavy use of analogy, e.g., evolution Cause-effect linkages, usually simple or

conditional, sometimes feedback loops

Controversies of Ideology: Theories of Human Nature Rational goal seeking vs. environmental

determinism Can general laws explain organizations? Competition vs. cooperation as basis of

society: individual vs. collective success Efficiency/optimality vs. relativistic

values/culture Seek to describe, understand, or help?

Current Controversies

Are organizations getting larger, smaller, or both?

What new theories do we need in dealing with networked and distributed organizations?

How much is different across national cultures? Will we have a mono-culture?

What is the role of emotions (cf. POS)? Structuration: structure and action Is diversity good or bad? ESD seems to be creating a “design science”