The Org

The Underlying Logic of the Office

by Ray Fisman and Tim Sullivan

The Org

Hardcover, 308 pages, Grand Central Pub, List Price: $26.99 | purchase

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The Org
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Book Summary

Ray Fisman, a professor at Columbia Business School, and Tim Sullivan, editorial director of Harvard Business Review Press, describe how the everyday dysfunction inherent in all organizations is actually a necessary part of work. Using case studies from McDonald's, Google and even al-Qaida, they explain how the red tape, meetings and management all serve a purpose.

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In The Org, Tim Sullivan and Ray Fisman share case studies of organizations including McDonald's and Procter and Gamble. iStockphoto.com hide caption

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Note: Book excerpts are provided by the publisher and may contain language some find offensive.

Excerpt: The Org

A Machine for Getting Stuff Done

According to a national time use survey, in 2008 the average employed American parent between the ages of twenty-five and fifty-four spent more than a third of the day, nearly nine hours, at work and in "related activities." We spend as much time at work as we do eating and sleeping, combined. More time with our coworkers than with our loved ones.

In fact, we spend so much time with our coworkers that some of them serve as substitutes for our loved ones. Consider the idea of the "work spouse," someone with whom you have a platonic relationship, but one of such intimacy that it replicates your marriage, perhaps even doing it one better by not involving domestic and financial tensions. In one survey, 65 percent of respondents said they had an "office husband" or "office wife."

This is just the most recent data point in a worldwide trend of more work. Since the early 1980s the amount of time we work has been on an upward trajectory, and with the advent of e-mail and smartphones, the invasion of our home lives by work is nearly complete: you can take the worker out of the office, but you can't take the office out of the worker.

Despite the hours logged at the office, or maybe because of them, most employees struggle to make sense of their work lives. Many give up trying: office life can seem just too nonsensical to bother. So we descend into cynicism, offering up sarcastic commentary and office jokes that follow a few well-worn premises: clueless managers who have no idea what their direct reports do, failure to communicate objectives, failure to have real objectives, a blatant disregard for data and evidence, perverse incentives and personal fiefdoms, rote behavior in the face of new challenges, meaningless memos sent down from on high, the disconnect between HR proclamations and the experience of the average cubicle dweller. The list, as they say, goes on.

It's not that you couldn't make this stuff up, but you don't have to. Ask a friend. Stop a random commuter. Read a strip from Scott Adams's Dilbert, a cartoon built largely on readers' suggestions from their own experiences. Office life is so full of absurdities that our reality provides rich fodder for satirists to return to again and again.

But when satire pales in the face of reality, what are we left with? That's the kind of existential question that modern organizations inspire.

While this existential dread moves many to cynicism, it moves others toward action. In her book Escape from Cubicle Nation, for instance, Pamela Slim, a career and marketing blogger, advises readers on how to escape "corporate prison" to become thriving entrepreneurs (with no more pesky organizational headaches to deal with, of course). Slim isn't the only one: the bookstore shelves are filled with other similarly aspirational volumes.

But before you rail against the system or dive in to fix it, it might just pay to figure out how things got to be the way they are in the first place. That's where this book comes in. We're offering a description of how and why orgs do what they do — how the parts fit together, how the rules get made, and what happens when you change the rules or move things around. We aim to shed light on the anxiety and confusion that can accompany life in cubicle nation, to show how the path from one-room-workshop-cum-homestead to world-bestriding behemoth is pockmarked with daunting trade-offs and compromise, to demonstrate the logic of office life.

Then, armed with a clearer understanding of how orgs work, you can descend into better-informed cynicism.

The Least Possible Dysfunction

We're not organizational mechanics. There are lots of those around — experts who'll tell you how to fix your organization, which tactical levers to pull, exactly what steps to take to get employees to be more productive, more devoted, more engaged, more trustworthy. Nor are we here to tell you that everything you know about orgs is wrong. It's not.

Instead, we aim to explain the inner workings of the org, drawing on the tools of organizational economics. For decades, economists — people who we might think would have something to say about work — treated the workplace or organization ("the firm," as economists call it) as a black box. In economists' models of the world, stuff went in (inputs) and product came out (outputs). These inputs and outputs might be given more descriptive labels: "labor," "capital," and perhaps even "technology" went into the production of "widgets" (a placeholder for any manufacturing item). Then firms marketed the outputs, consumers bought them, and economists measured it all with demand curves to determine how many widgets would get made. And there you have the manufacturing economy of the mid-twentieth century. What actually happened within the black box of the organization — be it a giant Fortune 500 company or a small entrepreneurial shop — was largely beyond the scope of the economics profession.

But then along came organizational economics. While it has deeper historical roots, org econ really matured starting in the mid-1980s (at about the same time, coincidentally, that our work hours were slowly increasing). Organizational economists build mathematical models that aspire to make sense of why organizations look the way they do, how they function, and how they might improve: page after page of algebra impenetrable to the very subjects whose experiences the economists are trying to describe. But lying behind the Greek symbols and esoteric economic jargon are a set of logical principles that can help us make sense of our experiences. Economics doesn't provide a complete view of the org — psychology, sociology, and other disciplines have lots to say as well — but it is very good at showing us the logical structure, the architecture of our organizational lives.

When economists look at the firm, they don't see the dysfunction — or at least that's not all they see. Rather, they recognize a set of compromises that result from trade-offs among many competing interests and objectives. From these compromises comes the seeming dysfunction of our work lives — the cost side of all those cost-benefit trade-offs. Organizational economics can help explain why the highly imperfect office of today may nonetheless represent the least dysfunctional of all possible worlds, however depressing the idea of "least dysfunctional" may be.

From The Org by Tim Sullivan and Ray Fisman. Copyright 2013 by Tim Sullivan and Ray Fisman. Excerpted by permission of Twelve/Hachette Book Group.

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