A stupidity-based theory of organisations – a paper review
The platitude “our people are our most important asset” reflects a belief that the survival and evolution of organisations depends on the intellectual and cognitive capacities of the individuals who comprise them. However, in view of the many well documented examples of actions that demonstrate a lack of foresight and/or general callousness about the fate of organisations or those who work in them, one has to wonder if such a belief is justified, or even if it is really believed by those who spout such platitudes.
Indeed, cases such as Enron or Worldcom (to mention just two) seem to suggest that stupidity may be fairly prevalent in present day organisations. This point is the subject of a brilliant paper by Andre Spicer and Mats Alvesson entitled, A stupidity based theory of organisations. This post is an extensive summary and review of the paper.
The notion that the success of an organization depends on the intellectual and rational capabilities of its people seems almost obvious. Moreover, there is a good deal of empirical research that seems to support this. In the opening section of their paper, Alvesson and Spicer cite many studies which appear to establish that developing the knowledge (of employees) or hiring smart people is the key to success in an ever-changing, competitive environment.
These claims are mirrored in theoretical work on organizations. For example Nonaka and Takeuchi’s model of knowledge conversion acknowledges the importance of tacit knowledge held by employees. Although there is still much debate about tacit/explicit knowledge divide, models such as these serve to perpetuate the belief that knowledge (in one form or another) is central to organisational success.
There is also a broad consensus that decision making in organizations, though subject to bounded rationality and related cognitive biases, is by and large a rational process. Even if a decision is not wholly rational, there is usually an attempt to depict it as being so. Such behaviour attests to the importance attached to rational thinking in organization-land.
At the other end of the spectrum there are decisions that can only be described as being, well… stupid. As Rick Chapman discusses in his entertaining book, In Search of Stupidity, organizations occasionally make decisions that are plain dumb However, such behaviour seldom remains hidden because of its rather obvious negative consequences for the organisation. Such stories thus end up being immortalized in business school curricula as canonical examples of what not to do.
Notwithstanding the above remarks on obvious stupidity, there is another category of foolishness that is perhaps more pervasive but remains unnoticed and unremarked. Alvesson and Spicer use the term functional stupidity to refer to such “organizationally supported lack of reflexivity, substantive reasoning, and justitication.”
In their words, functional stupidity amounts to the “…refusal to use intellectual resources outside a narrow and ‘safe’ terrain.” It is reflected in a blinkered approach to organisational problems, wherein people display an unwillingness to consider or think about solutions that lie outside an arbitrary boundary. A common example of this is when certain topics are explicitly or tacitly deemed as being “out of bounds” for discussion. Many “business as usual” scenarios are riddled with functional stupidity, which is precisely why it’s often so hard to detect.
As per the definition offered above, there are three cognitive elements to functional stupidity:
- Lack of reflexivity: this refers to the inability or unwillingness to question claims and commonly accepted wisdom.
- Lack of substantive reasoning: This refers to reasoning that is based on a small set of concerns that do not span the whole issue. A common example of this sort of myopia is when organisations focus their efforts on achieving certain objectives with little or no questioning of the objectives themselves.
- Lack of justification: This happens when employees do not question managers or, on the other hand, do not provide explanations regarding their own actions. Often this is a consequence of power relationships in organisations. This may, for example, dissuade employees from “sticking their necks out” by asking questions that managers might deem out of bounds.
It should be noted that functional stupidity has little to do with limitations of human cognitive capacities. Nor does it have anything to do with ignorance, carelessness or lack of thought. The former can be rectified through education and/or the hiring of consultants with the requisite knowledge, and the latter via the use of standardised procedures and checklists.
It is also important to note that functional stupidity is not necessarily a bad thing. For example, by placing certain topics out of bounds, organisations can avoid discussions about potentially controversial topics and can thus keep conflict and uncertainty at bay. This maintains harmony, no doubt, but it also strengthens the existing organisational order which in turn serves to reinforce functional stupidity.
Of course, functional stupidity also has negative consequences, the chief one being that it prevents organisations from finding solutions to issues that involve topics that have been arbitrarily deemed as being out of bounds.
Examples of functional stupidity
There are many examples of functional stupidity in recent history, a couple being the irrational exuberance in the wake of the internet boom of the 1990s, and the lack of critical examination of the complex mathematical models that lead to the financial crisis of last decade.
However, one does not have to look much beyond one’s own work environment to find examples of functional stupidity. Many of these come under the category of ”business as usual” or “that’s just the way things are done around here” – phrases that are used to label practices that are ritually applied without much thought or reflection. Such practices often remain unremarked because it is not so easy to link them to negative outcomes. Indeed, the authors point out that “most managerial practices are adopted on the basis of faulty reasoning, accepted wisdom and complete lack of evidence.”
The authors cite the example of companies adopting HR practices that are actually detrimental to employee and organisational wellbeing. Another common example is when organisations place a high value on gathering information which is then not used in a meaningful way. I have discussed this “information perversity” at length in my post on entitled, The unspoken life of information in organisations, so I won’t rehash it here. Alvesson and Spicer point out that information perversity is a consequence of the high cultural value placed on information: it is seen as a prerequisite to “proper” decision making. However, in reality it is often used to justify questionable decisions or simply “hide behind the facts.”
These examples suggest that functional stupidity may be the norm rather than the exception. This is a scary thought…but I suspect it may not be surprising to many readers.
The dynamics of stupidity
Alvesson and Spicer claim that functional stupidity is a common feature in organisations. To understand why it is so pervasive, one has to look into the dynamics of stupidity – how it is established and the factors that influence it. They suggest that the root cause lies in the fact that organisations attempt to short-circuit critical thinking through what they call economies of persuasion, which are activities such as corporate culture initiatives, leadership training or team / identity building, relabelling positions with pretentious titles – and many other such activities that are aimed at influencing employees through the use of symbols and images rather than substance. Such symbolic manipulation, as the authors calls it, is aimed at increasing employees’ sense of commitment to the organisation.
As they put it:
Organizational contexts dominated by widespread attempts at symbolic manipulation typically involve managers seeking to shape and mould the ‘mind-sets’ of employees . A core aspect of this involves seeking to create some degree of good faith and conformity and to limit critical thinking
Although such efforts are not always successful, many employees do buy in to them and thereby identify with the organisation. This makes employees uncritical of the organisation’s goals and the means by which these will be achieved. In other words, it sets the scene for functional stupidity to take root and flourish.
Stupidity management and stupidity self-management
The authors use the term stupidity management to describe managerial actions that prevent or discourage organisational actors (employees and other stakeholders) from thinking for themselves. Some of the ways in which this is done include the reinforcement of positive images of the organisation, getting employees to identify with the organisation’s vision and myriad other organisational culture initiatives aimed at burnishing the image of the corporation. These initiatives are often backed by organisational structures (such as hierarchies and reward systems) that discourage employees from raising and exploring potentially disruptive issues.
The monitoring and sanctioning of activities that might disrupt the positive image of the organisation can be overt (in the form of warnings, say). More often, though, it is subtle. For example, in many meetings, participants participants know that certain issues cannot be raised. At other times, discussion and debate may be short circuited by exhortations to “stop thinking and start doing.” Such occurrences serve to create an environment in which stupidity flourishes.
The net effect of managerial actions that encourage stupidity is that employees start to cast aside their own doubts and questions and behave in corporately acceptable ways – in other words, they start to perform their jobs in an unreflective and unquestioning way. Some people may actually internalise the values espoused by management; others may psychologically distance themselves from the values but still act in ways that they are required to. The net effect of such stupidity self-management (as the authors call it) is that employees stop questioning what they are asked to do and just do it. After a while, doubts fade and this becomes the accepted way of working. The end result is the familiar situation that many of us know as “business as usual” or “that’s just the way things are done around here.”
The paradoxes and consequences of stupidity
Functional stupidity can cause both feelings of certainty and dissonance in members of an organisation. Suppressing critical thinking can result in an easy acceptance of the way things are. The feelings of certainty that come from suppressing difficult questions can be comforting. Moreover, those who toe the organisational line are more likely to be offered material rewards and promotions than those who don’t. This can act to reinforce functional stupidity because others who see stupidity rewarded may also be tempted to behave in a similar fashion.
That said, certain functionally stupid actions, such as ignoring obvious ethical lapses, can result in serious negative outcomes for an organisation. This has been amply illustrated in the recent past. Such events can prompt formal inquiries at the level of the organisation, no doubt accompanied by informal soul-searching at the individual level. However, as has also been amply illustrated, there is no guarantee that inquiries or self-reflection lead to any major changes in behaviour. Once the crisis passes, people seem all too happy to revert to business as usual.
In the end , though, when stark differences between the rhetoric and reality of the organisation emerge – as they eventually will– employees will see the contradictions between the real organisation and the one they have been asked to believe in. This can result in alienation from and cynicism about the organisation and its objectives. So, although stupidity management may have beneficial outcomes in the short run, there is a price to be paid in the longer term.
Nothing comes for free, not even stupidity…
The authors main message is that despite the general belief that organisations enlist the cognitive and intellectual capacities of their members in positive ways, the truth is that organisational behaviour often exhibits a wilful ignorance of facts and/or a lack of logic. The authors term this behaviour functional stupidity.
Functional stupidiy has the advantage of maintaining harmony at least in the short term, but its longer term consequences can be negative. Members of an organisation “learn” such behaviour by becoming aware that certain topics are out of bounds and that they broach these at their own risk. Conformance is rewarded by advancement or material gain whereas dissent is met with overt or less obvious disciplinary action. Functional stupidity thus acts as a barrier that can stop members of an organisation from developing potentially interesting perspectives on the problems the organisations face.
The paper makes an interesting and very valid point about the pervasiveness of wilfully irrational behaviour in organisations. That said, I can’t help but think that the authors have written it with tongue firmly planted in cheek.