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Organization Theory Builders

Feeding off each other's ideas, a diverse group of scholars shaped the Stanford school of organizational behavior.

by Jocelyn Wiener

Beginning in the early 1970s, Stanford University became home to one of the world's biggest, most vibrant communities of organizational scholars. In the ensuing decades, those scholars would develop some of organizational theory's most important ideas.

The "Stanford school" of organizational theory helped shape our understanding of schools, hospitals, banks, prisons, sports teams, and all kinds of businesses. Its ideas have informed policymakers and business leaders in such realms as education, medicine, business, law, engineering, military organization, and international development. Its scholars have examined everything from why some startups live and others die to how banks become too big to fail to why some hospitals have much better surgical outcomes than others. They have written books on topics ranging from the importance of reforming abusive bosses to how companies can translate knowledge into positive outcomes.

On campuses around the world, some of the school's hallmark ideas — including institutional theory, resource dependence theory, and population ecology — have proved fundamental to the education of decades of business students and organizational scholars.

Why did such remarkable scholarship blossom at Stanford? Why did its influence spread so widely?

In a volume published last year, Stanford's Organization Theory Renaissance, 1970–2000, students and faculty from that era grapple with those questions. Their answers point to a rare convergence of strong leadership, high research standards, generous federal grants, campus-wide collaborations — and parties on the beach.

The story, most agree, begins with a young professor named Dick Scott.

Fresh out of the University of Chicago, Scott arrived at Stanford's sociology department in 1959, around Christmastime, in part because the university had decided to invest in sociology. Within a couple of years, Scott would become well known for coauthoring Formal Organizations, one of the founding texts in the field of organiza- tional studies.

But because the field was new, it didn't yet have many adherents. Scott missed having peers around who were reading the same books and grappling with similar ideas. "Either I'm going to leave Stanford," he decided, "or I'm going to look around and see if I can find some colleagues."

He found friendly faces first at the business school, then in edu-cation, then in engineering. By the early 1970s, these scholars — including Hal Leavitt, Gene Webb, and Bill Ouchi from the Graduate School of Business, Victor Baldridge and Edwin Bridges from the School of Education, and Jim Jucker from the School of Engineering — had created an interdisciplinary community of people who spoke the same language and were excited to discuss organizational phenomena from their different vantage points.

In the 1960s, the study of organizations had shifted from a focus on individuals within organizations to the role of the environment in shaping organizations. Stanford scholars expanded even beyond that by looking not just at the rational and technical forces that shaped organizations, but also at the social, cultural, and political forces.

In those years, Scott and others recall, Stanford did not have the same elite status it enjoys today. But a sense of momentum pervaded the campus, fueled in part by the growth of nearby Silicon Valley.

Andy Van de Ven, a professor at the Carlson School of Management at the University of Minnesota, believes the fact that Stanford was not yet counted among the top international universities may actually have helped the organizations group flourish. The success of that group, in turn, helped to improve the reputation of the entire university, he said.

Scott adds: "We were growing up with the university, and we were part of its leap to greatness."

In 1970, another well-known organizational scholar, Jim March, arrived at Stanford from the University of California, Irvine. Previously at Carnegie Mellon, March had coauthored two of the field's founding texts, A Behavioral Theory of the Firm and the succinctly titled Organizations. He came to Stanford with appointments in education, sociology, and political science, adding an appointment in business in 1978. His multiple hats — and cheerful charisma — helped to further integrate the growing organizational studies group.

Scott, March, and their colleagues decided to apply for a training grant from the National Institute of Mental Health (NIMH). The federal government was investing heavily in the social sciences at the time and also in the transitioning of the mentally ill from hospitals and asylums into community-based programs.

In making their case for funding, the Stanford group argued that (a) most services for the mentally ill are provided by organizations and that (b) all organizations — businesses, schools, hospitals — affect the mental health of their employees and the people they serve. Was this a stretch? The federal government apparently didn't think so. During the next two decades, the institute provided Stanford's organizations community with about $10 million in funding, about half a million each year.

The infusion of so much money allowed the university's organizational studies program to take off. Every year, the grant supported about five doctoral students and five postdocs. These students, who hailed from different schools and departments around campus, met weekly in a seminar organized by Scott. The business school and the university also sponsored a quarterly conference and monthly colloquia that drew outside scholars. These regular interactions cemented the ties among young scholars and the professors with whom they worked.

"You just become smarter when you hear other people's ideas," said Claudia Bird Schoonhoven, who came to Stanford in 1972 and was one of the first doctoral students to be funded by the NIMH grant. While Scott himself was a major draw for her, Schoonhoven said she also was attracted by the financial support, which allowed PhD students to finish in 5 years, instead of the 10 it could take at an underfunded university.

Now a professor at UC Irvine's Paul Merage School of Business, Schoonhoven says interacting with business students and professors as a young sociologist taught her to search for more concrete applications of the theories she was learning. This, in turn, informed her research on post-surgical mortality and morbidity rates in acute-care hospitals — and, later, on how high-tech companies are organized to deal with high-change environments and constantly evolving technologies.

"You literally have people say things you never thought of," she said. "That's what makes it so rich. The diversity of perspective is so important."

By the end of the 1970s, Scott said, more than 100 doctoral students and 75 faculty members were engaged with Stanford's organizational studies community. Increasingly, the field's most respected scholars had come to Stanford to develop theories that had emerged first elsewhere. John Meyer arrived in 1966 and joined Scott in developing institutional theory. Michael Hannan joined the sociology department in 1969 and worked on his ideas regarding population ecology. Jim March pursued important work on decision making, leadership, organizational learning, and institutions. Joanne Martin, who arrived in 1977 and was later for several years the lone tenured woman on the Stanford business school faculty, made great strides in her work on organizational culture.

Jeffrey Pfeffer, who had first described resource dependence theory in his 1972 doctoral thesis at the business school, was "lured back" in 1979 after developing his ideas at the University of Illinois and the University of California, Berkeley. His groundbreaking work looked at how external resources affect the behavior and power of an organization.

"If you hire good people and they do good things, then you get to hire more good people and they do more good things, and the cycle kind of builds on itself," he said.

As more of these top scholars came, they attracted many of the country's best graduate students. "It was enormously exciting in an intellectual way," Martin said.

The interdisciplinary organizations community was important socially, as well, she said. Being the only woman on the faculty at the business school could feel quite isolating. In the organizations community, she met many more female colleagues.

This social aspect of the organizational studies community should not be underestimated, many who were on campus at the time say. Some of the most exciting conversations surrounding the emerging theories took place outside of formal lectures and seminars.

"What made that time at Stanford distinctive was this broader conversation," said Marc Ventresca, who began his doctoral studies at Stanford in 1985 and now teaches at Saïd Business School, University of Oxford. "It was seeing the same people week in and week out and having those debates and then having lunch the next week and pursuing them. There was a texture and a continuity to the conversations that I think shaped many of us."

The well-loved Jim March hosted wine-and-cheese gatherings in his office on Friday afternoons. Famous professors, who in the classroom might seem intimidating to students, were more approachable over a glass of wine.

Perhaps the clearest, most iconic symbol of the community's growing vibrancy was an annual weekend gathering at Asilomar, the oceanfront conference center near Monterey. What had started as a small gathering in Menlo Park in 1975 a few years later had become a major social and intellectual event for organizational scholars across the country. The student-organized conference became an important tool for fostering a sense of cohesiveness among students and faculty alike.

Scott, through grants and other funding sources, provided the financial support for the gatherings, but students selected keynote speakers, presented papers, and worked out the logistics. At least as important as the formal presentations were the walks on the beach, the volleyball games, and the parties that ran late into the night.

"Often faculty-student relations can be very hierarchical," said Frank Dobbin, a Harvard sociology professor who first arrived at Stanford in 1980 to pursue his PhD. "At Asilomar you saw every- body in their swimming trunks. You sat next to everybody at the cafeteria."

The conversations and friendships at Asilomar spilled into the rest of the year. "It was sort of a family thing," said Kathy Eisenhardt, who arrived at the business school as a doctoral student in 1975. "It was relatively small, it was informal, everybody was focused on ideas and stayed at the conference." Now codirector of the Stanford Technology Ventures Program and the Stanford W. Ascherman M.D. Professor in the School of Engineering, Eisenhardt said she often brought her children to the conference.

With every passing year, the Asilomar conference grew, and its fame spread. Faculty at other universities asked to participate and began helping with the financing. Students from other campuses asked to join. Alumni came back.

As the field of organizational studies grew, Stanford's influence radiated outward. Doctoral students graduated and took jobs at other universities. They took the new theories and ideas with them, and taught them to the next generation of organizational scholars.

"It just was like a cyclone, feeding itself and getting stronger and stronger," Martin said. "It kind of spread out in a weaker form all over the country and then to certain international universities."

Outside organizational scholars also hitched brief rides on Stanford's rising star. Van de Ven, of the University of Minnesota, visited Stanford many times, giving talks at Asilomar and at the business and engineering schools.

"To an outsider, there was this welcome feeling among the Stanford community to participate in their activities and make contributions to understanding the field of organizations," he said. "You would both present your work and ideas, and in return, you would pick up ideas from others."

By the late 1980s, the Stanford school had enjoyed years at the center of the organizations world. But as the community grew in size and prominence, things began to change.

Funding was one shift. The federal government began reorienting its priorities to focus on the role of the individual in mental illness — as opposed to the role of social organizations. Realizing that the days of the NIMH grant were probably numbered, in 1987 Scott, March, Pfeffer, and others founded the Stanford Center for Organizations Research (SCOR). Even if they couldn't fund graduate students outright, Scott thought the university still should support an interdisciplinary community of scholars.

In 1989, the NIMH grant officially ended, having funded more than 120 pre- and post-doctoral students for nearly two decades. Together with Provost James Rosse, Robert Jaedicke, then dean of the Graduate School of Business, and Al Hastorf, then dean of the School of Humanities and Sciences, came up with additional funding to support the Asilomar conference and SCOR for a few more years.

By the mid-1990s, the annual Asilomar gatherings had ended. Soon after, in 1996, Dick Scott stepped down from SCOR in preparation for retirement. Despite his initial hopes, no one stepped in to take his place. And with that, a quarter-century of vibrant interdisciplinary seminars came to an end.

In some cases, rifts had developed between faculty who belonged to the various schools and theoretical perspectives. By that time, too, the organizations group was no longer a small, nimble collection of a few like-minded souls. It had become the largest such group in the country. Increasingly, each school focused on its own group and its own ideas.

Joanne Martin likens this dissolution to an extended family, which, as it grows, tends to separate into various nuclear units.

"I think it dissolved because it got too big," she says. "You couldn't be friends with everybody so you tended to be friends with people who were closest to you intellectually."

But while some lament the end of those idealized golden years of the 1970s and 1980s, Martin and many others say Stanford continues to lead the field in producing great organizations research.

"I think, if anything, there's even more first-quality organiza-tional scholarship coming out of Stanford than there was 20 years ago," she said.

Rod Kramer, who came to the business school in 1985 as a psychologist studying cooperation and conflict, remembers the excitement on campus when he first arrived. "Everyone was kind of on fire," he said. But, 25 years later, he says his students are just as excited. "It actually has gotten bigger and better in lots of ways."

To a more limited extent than was true under Scott's SCOR, collaborations continue to happen around campus. The Scandinavian Consortium for Organizational Research, a formal collaboration between Stanford faculty and Scandinavian scholars, was founded by Jim March and a group of his Scandinavian colleagues in 1988 and still thrives in the basement of the School of Education. The Center for Work, Technology, and Organization at the School of Engineering hosts regular seminars for organizational scholars across campus.

Steve Barley, the engineering school's Richard W. Weiland Professor who codirects the center, says that absolutely as much good work is happening on campus today as in earlier decades, though the new theories do not have the same star power as the old ones.

"From time to time there is something that takes off in a really big way," he said of those old theories. "What happened here," he added, "shaped the field."

What are the lessons to be drawn from the story of the Stanford school?

Mike Lounsbury, a professor at the University of Alberta School of Business who edits the series Research in the Sociology of Organizations, said he commissioned the volume on Stanford's organizational theory renaissance because he believes there are important truths to be documented.

As ingredients in the organizational community's success, he points to a unique constellation of incredible scholars and administrative support. Others emphasize the high research standards, the federal grants, the campus-wide conversations, and the friendships built at Asilomar. Many agree that one of the key events was the arrival on campus of a young sociology professor in 1959 around Christmastime.

"It's often forgotten," said Ventresca of Oxford University. "These kinds of things don't just happen. Someone architects them.

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