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Saturday, July 21, 2012

"The Sociology of Organizations"

I thought some of these agencies performed much better in the past, e.g. during the Clinton administration. In any case, what seems to be missing from this account is the role of the Republican attack on government (beyond the push for privatization discussed below):

Regulatory thrombosis, by Daniel Little: Charles Perrow is a leading researcher on the sociology of organizations, and he is a singular expert on accidents and system failures. Several of his books are classics in their field... So it is very striking to find that Perrow is highly skeptical about the ability of governmental organizations in the United States to protect the public from large failures and disasters of various kinds -- hurricanes, floods, chemical plant fires, software failures, terrorism. His assessment of organizations such as the Federal Emergency Management Agency, the Department of Homeland Security, or the Nuclear Regulatory Commission is dismal. ...

The level of organizational ineptitude that he documents in the performance of these agencies is staggering... And the disarray that he documents in these organizations is genuinely frightening. ...

What this all suggests is that the U.S. government and our political culture do a particularly bad job of creating organizational intelligence in response to crucial national challenges. By this I mean an effective group of bureaus with a clear mission, committed executive leadership, and consistent communication and collaboration among agencies and a demonstrated ability to formulate and carry out rational plans in addressing identified risks. ... And the US government's ability to provide this kind of intelligent risk abatement seems particularly weak.

Perrow doesn't endorse the general view that organizations can never succeed in accomplishing the functions we assign to them -- hospitals, police departments, even labor unions. Instead, there seem to be particular reasons why large regulatory agencies in the United States have proven particularly inept, in his assessment. The most faulty organizations are those that are designed to regulate risky activities and those that are charged to create prudent long-term plans for the future that seem particularly suspect, in his account. So what are those reasons for failure in these kinds of organizations?

One major part of his assessment focuses on the role that economic and political power plays in deforming the operations of major organizations to serve the interests of the powerful. Regulatory agencies are "captured" by the powerful industries they are supposed to oversee, whether through influence on the executive branch or through merciless lobbying of the legislative branch. Energy companies pressure the Congress and the NRC to privatize security at nuclear power plants -- with what would otherwise be comical results when it comes to testing the resulting level of security at numerous plants. Private security forces are given advance notice of the time and nature of the simulated attack -- and even so half the attacks are successful.

Another major source of dysfunction that Perrow identifies in the case of the Department of Homeland Security is the workings of Congressional politics..., the funds available through Homeland Security become a major prize for lobbyists, corporations, and other interested parties -- with resulting congressional pressure on DHS strategies and priorities.

Another culprit in this story of failure is the conservative penchant for leaving everything to private enterprise. As Michael Brown put the point during his tenure as director of FEMA, “The general idea—that the business of government is not to provide services, but to make sure that they are provided—seems self-evident to me” (kl 1867). ... Activities like nuclear power generation, chemical plants, air travel, drug safety, and residential development in hurricane or forest fire zones are all too risky to be left to private initiative and self-regulation. We need strong, well-resourced, well-staffed, and independent regulatory systems for these activities, and increasingly our scorecard on each of these dimensions is in the failing range.

Overall it appears that Perrow believes that agencies like DHS and FEMA would function better if they were under clear authority of the executive branch rather than Congressional oversight and direction. Presidential authority would not guarantee success -- witness George W. Bush's hapless management of the first iteration of Homeland Security within the White House -- but the odds are better. With a President with a clearly stated and implemented priority for effective management of the risk of terrorism, the planning and coordination needed would have a greater likelihood of success.

It often sounds as though Perrow is faulting these organizations for defects that are inherent in all large organizations. But it seems more fair to say that his analysis does not identify a general feature of organizations that leads to failure in these cases, but rather a situational fact having to do with the power of business to resist regulation and the susceptibility of Congress and the President to political pressures that hamstring effective regulatory organizations. Perrow does refer to specific organizational hazards -- bad executive leadership, faltering morale, inability to collaborate across agencies, excessively hierarchical architecture -- but the heart of his argument lies elsewhere. The key set of problems spiral back to the inordinate power that corporations have in the United States, and the distortions they create in Congress and the executive branch. ... It is specifics of the US political system rather than general defects of large organizations per se that lead to the bad outcomes that Perrow identifies. There are strong democracies that do a much better job of regulating risky industries and planning for disasters than we do -- for example, France and Germany. ...
There isn't much public concern about these risks, and legislators are therefore free to ignore them as well. ... So where will the political demand for strong regulation come from? Will we need to wait for the bad news we've managed by good fortune to have avoided up to this point?

    Posted by on Saturday, July 21, 2012 at 05:49 AM in Economics, Politics | Permalink  Comments (13)


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