Resistance from top to bottom : the dynamics of risk management in complex organizations

Organizations today devote substantial resources towards the development of governance systems to increase transparency and accountability in areas such as quality, safety, financial accounting, and environmental performance. In this dissertation, I combine ethnographic and simulation methods to understand the implementation and performance of such systems. In the first essay, I compare the implementation of a safety management system in two industrial plants following accidents. Despite a common process, workers at one plant resist portions of the new system, while at the other plant the system is a relative success. My argument has two parts. First, I argue that resistance to bureaucratic rules is rooted in the lack of involvement that front line actors are afforded in managing anomalies that occur in the application of rules. Second, lack of involvement is more likely to result in active resistance to rules when actors are familiar with one another and with work tasks. While much research emphasizes the benefits of familiarity for performance, I find that actors who are familiar have both the motivation and the ability to resist bureaucratic control, even when rules are designed to serve their own interests. In the second essay, I extend the findings in the first essay to develop a dynamic theory of the success and failure of governance systems in organizations. Consistent with existing literature, I find that pressure to conform to externally imposed norms of bureaucratic rationality can cause dynamics of gradual decoupling between rules and practice. However, I find that the mechanism by which such pressures operate can be different than previously described. Rather than compelling organizations to adopt practices that are inefficient or opposed to the interests of managers or workers, external pressure creates a conflict that is temporal: necessary efforts to demonstrate compliance in the short run directly undermine efforts to make rules effective in the longer term. When organizational actors have the flexibility to build organizational capabilities absent imperatives to demonstrate strict compliance at all times, formal structure can evolve to become a highly effective means of organizing. Absent such flexibility, rules can become a source of conflict characterized by worker resistance, tighter control, and decoupling. In the third essay, I develop and calibrate a detailed simulation model to illustrate why management efforts to develop capabilities that support governance systems so often fall short. For this essay, I study the case of energy efficiency and maintenance reliability in the built environment. Even where proactive investments would improve both regulated outcomes and the bottom line, I show that managers might easily abandon investments early, before crossing a tipping threshold that allows for the realization of full benefits. Thus, successful self-regulation depends not only on managers recognizing and acting on opportunities, but also on managers understanding tipping dynamics and sustaining investments beyond levels that might initially appear sufficient.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2012

Author dc:creator

• Lyneis, John Landry

Advisor dc:contributor.advisor

• Nelson Repenning, Susan Silbey, John Sterman and Ezra Zuckerman.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/79030

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/79030