The organising paradox
Many organisations, and especially cooperatives, have at their heart a paradox known as ‘the organising paradox’. This is based on the idea that organisations, and in particular cooperatives, have democratic ideals of shared leadership, a sense of ownership, participation and collective decision-making with transparency and accountability being core values, whilst at the same time having a hierarchical organisational structure with a CEO and layers of managers.
The organising paradox occurs where there is a tension between control and empowerment within an organisation, or even within a team
The tensions of the organising paradox
The tensions that exist in a system that espouses more democratic ideals, such as shared leadership and decision-making, joint ownership of outcomes, etc., whilst sitting in a hierarchy include:
- Balancing collective input with the need for decisive leadership and prompt decision-making.
- Ensuring equitable participation without compromising on expertise and efficiency.
- Managing potential conflicts between individual ambitions and collective goals.
- Aligning the organisation’s strategic direction with diverse member interests and values.
- Reconciling the pursuit of shared objectives with the operational demands of a competitive market.
A new study
A new study by researchers from the Universität Duisburg-Essen, Technische Universität Chemnitz and Hochschule Hamm-Lippstadt, all in Germany, has looked at how cooperatives manage the organising paradox.
Findings
The study found that there are four primary ways organisations deal with the organising paradox:
- Project-based participation – This occurs where the organising principle is to split the organisational tasks and work into projects with relatively autonomous project teams which prioritise self-determination and shared leadership over formal structures and market orientation. Issues such as a market orientation tend to be left to the organisational system outside of the project teams or tasked to a market orientation team as a series of projects.
- Value-oriented participation – This form of participation focuses on wider participation by involving the customer / client / stakeholders in decision-making, product development and so on as democratic partners. Issues such as profit and management move to the background and are dealt with in the background, as the visible organising principles centre around value co-creation.
- Customer-oriented participation – With this form of organisation the focus has a market and service orientation. Employees are considered to be ‘members’ and are treated like customers (although not equal members) with a voice where the job of the management is to respond to their feedback. Servant leadership tends to be the primary mode of management, however, the rewards for members / employees are in the form of dividends and other financial incentives. Strategic business issues dominate over individual member concerns with certain members with more strategic roles given primacy in decision-making with the ‘business’ being the prime focus.
- Participation controlled by management – In this form of organisation there is a clear managerial dominance with limited member participation. The cooperative operates more like a regular company, with employees / members acting mainly as investors by providing their time and effort and having a financial share of the business, but little or no control.
Primary reference
A model for coping with paradoxes of management
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