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By: Kirsten Duindam, Student number 10475737Supervisor: dhr. prof. dr. J. Strikwerda
University of Amsterdam, Faculty of Business and Economics Programme: Bedrijfskunde in deeltijd
London, 1802
MILTON! thou shouldst be living at this hour: England hath need of thee: she is a fen
Of stagnant waters: altar, sword, and pen, Fireside, the heroic wealth of hall and bower, Have forfeited their ancient English dower Of inward happiness. We are selfish men; O raise us up, return to us again,
And give us manners, virtue, freedom, power! Thy soul was like a Star, and dwelt apart;
Thou hadst a voice whose sound was like the sea: Pure as the naked heavens, majestic, free,
So didst thou travel on life's common way, In cheerful godliness; and yet thy heart The lowliest duties on herself did lay.
William Wordsworth (1770-1850) (Wordsworth, 1807)
In this sonnet the English poet William Wordsworth eulogises John Milton, a seventeenth-century poet. Wordsworth claims that England is in need for Milton. Selfishness of men and the declining of England’s moral standards calls for the return of Milton, as he could give manners, virtue, freedom and power back to England.
Wordsworth wants Milton to empower the nation.
I chose the poem as an introduction to this paper, since Milton is the second author and first poet that has used the word empowerment and perhaps is, as illustrated by this poem, the one who laid the foundations for the nowadays definition of the term.
v
Preface
Until last November I was employed as a teacher at the University of Applied Science in Amsterdam. It occurred to me that it is the objective of the Ministry of Education, Culture and Science to have motivated and skilful teachers in front of the class. But, this objective is pursued for by a control mechanism that measures quantities with respect to output in the educational system, not outcome of the educational system, as is to be expected of the role of education in the furthering of the general interest of society. My observations are consistent with the recommendations of the WRR (Wetenschappelijke Raad voor het Regeringsbeleid, 2013). The WRR (2013) describes that the Netherlands faces a productivity challenge in the future as the labour force will shrink, raw materials will become scarcer and less capital will be available. According to the WRR (2013), the Netherlands needs to invest in productivity growth and be able to ‘do more with less’. This implies developing innovation strategies and the most appropriate use of everyone’s talents and skills. The focus on talent management in our educational system demands the focus on individual potential by individualized service, by differentiation, by the focus on targets instead of discipline, by time and location
independent education, an inspiring learning environment, passionate teachers, commitment and so on… At this moment, there is little insight into quality and inspection policies lead to risk aversion. Ultimately, this demands for a new social contract between the government and the educational institutions. Mutual goals, expectations, obligations and commitment must become central (Wetenschappelijke Raad voor het Regeringsbeleid, 2013).
This discrepancy kept me busy during my study as I stumbled on several concepts such as tight and loose programming, self-organization and empowerment. I changed jobs, I am now working in the financial industry, but again I have the same observations. We want people to think for themselves and take ownership in what they do, but we exert control that hinders
vi these objectives. Similarly on a management level we want people to take initiative and come up with innovative ideas, but simultaneously we keep information to ourselves and want to exert our power within the organization.
In (Block, 1987, p. 31) I read about the Franco rationale: Francisco Franco, dictator of Spain, for years claimed that he would love to hold popular elections but that the people of Spain were just not ready for them. (Block, 1987) claims that our wish to stay in control is stronger than our wish to increase performance. And having this said, we should realise that our power to control is always limited. We can tell people what we want them to do, but people decide themselves on what they will do.
Power is a peculiar thing. Power and the process of using power to transcend yourself and organizational goals fascinates me. The flow of positive energy that emerges from chaos as you let go of control inspires me. Therefor I chose the subject of empowerment to write a
thesis about.
I would like to thank all respondents, my employer, my supervisor, my former employer, my former manager Gerard, my former-former manager Irith, colleagues and former colleagues, friends and especially UvA-friends Sander, Marten and Ron. Finally a very special thanks for my daughter and parents who provided me the opportunity in time and motivated me all the way.
vii
Abstract
The primary purpose of this thesis is to create an unambiguous understanding of the concept empowerment within an organizational and managerial context by interlinking existing theories. The secondary purpose is to offer guidelines about how organizations can implement the concept as a means to an end, by interpreting empowerment as a total concept within multiple levels of the organization. In order to help achieving this clarity, a single case study
has been conducted which is presented in this paper.
In its essence, empowerment is a mean that leads to an end. It’s a process that supports any organization in reaching its goals. The purpose of empowerment is to create organizational effectiveness or a competitive advantage in which innovation plays a large role.
Empowerment is about creating the optimal circumstances or context by which the organization is able to self-organize the growth and circulation of power within itself.
The focus on describing empowerment as a ‘gestalt’ lies on the practices that organizations can apply in order to give room to the natural flow and development of power. These
instrumental practices take decisional power, information as power and control as power into account, and is built on the principle of self-organization and power within the playing-field of actors. The following general practices can be applied in order to initiate the empowerment process.
1. From an hierarchical perspective, employees should be able to interact with colleagues on any level or on any position within the organization in order to give them access to necessary information.
viii 2. Employees must have access to external, effect (= business model, working of markets
and the industry the firm is in) and pragmatic information in order to choose themselves the information they need to make decisions.
3. There should be room for experiment. This means time and room for mistakes. 4. The control up-front should be managed by providing employees with goal (mission)
and axiological information (values) of the organization.
5. Decision rights should be placed at a low level in the organization and collocate with the employees who have or should obtain relevant information and are directly linked to the customers, clients or suppliers.
6. The back-end decision-control should be managed by having an evaluation system in place for each subdivision and each decision agent. Furthermore, a reward and punishment system must be related to individual performance.
Practical research was performed to find evidence for the feasibility of implementation of these practices.
Based on the theory of chapter 2, this thesis has provided an unambiguous understanding of the concept empowerment. But, as results of the case study reveal, a more detailed construct is necessarily. Findings indicate that the focal firm fits the practices as described to a large extent, however, the details make a difference.
ix
Contents
Preface ...v
Abstract ... vii
Contents ... ix
Listing of figures and tables ... xi
1. Introduction ... 13
2. Theoretical Background ... 19
3. Methods ... 55
4. Results ... 71
5. Conclusion and Discussion ... 87
6. Limitations and future research ... 91
7. Reflection ... 93 8. References ... 95 9. Appendix A ... 109 10. Appendix B ... 110 11. Appendix C ... 111 12. Appendix D ... 112
xi
Listing of figures and tables
Table 1. Four types of information based on the cybernetic control-theory (Strikwerda, 2014)
Table 2. Bases of power (Raven, Six Bases of Power, 2004).
Table 3. Demographics of the focal firm, distribution by gender
Table 4. Demographics of the focal firm, distribution by age
Table 5. Demographics of the focal firm, distribution by years of service within the focal firm
Table 6. Enumeration of used sereach methods
Table 7. decisions and follow up during management team meetings
Table 8. Example of the codifying process
Figure 1. The meaning of the word 'empowerment'
Figure 2. fragment of book X, Paradise Lost by, John Milton
Figure 3. construct of empowerment by (Spreitzer, 1995)
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1.
Introduction
The meaning of the word empowerment, when first recorded in 1655 (L'Estrange, 1655) is ‘giving authority’. Much later, empowerment is also defined as ‘giving power or confidence’ to others. This dichotomy in definition of the term is noticeable in explanation of the concept. Within organizational and management literature, the concept was first defined as ‘sharing power’ or ‘giving authority’, later a more psychological interpretation of the concept emerged. Both interpretation co-exist and intertwine, but the concept remains ambiguous as theory spreads out over several research areas such as organizational strategy, job design, leadership and motivational psychology.
The primary purpose of this thesis is to create an unambiguous understanding of the concept empowerment within an organizational and managerial context by interlinking existing theories. The secondary purpose is to offer guidelines about how organizations can implement the concept as a means to an end, by interpreting empowerment as a total concept within multiple levels of the organization. In order to help achieving this clarity, a single case study has been conducted which is presented in this paper.
Until the early nineteen eighties the term empowerment was used when referred to the sharing of power by managers with subordinates or the attribution of decision rights (Burke, 1986)
14 (Kanter R. M., The Change Masters, 1983) (Conger & Kanungo, 1988). This theory emphasis on empowerment and the use thereof based on economic reasoning. By decentralized
decision-making, including the encouragement of initiative, the information processing capacity is maximized (Arrow, The Economics of Information: An Exposition, 1996) and there is better use of human capital which increases the growth potential of the organization. From a humanitarian perspective, the decentralization of decision-right increases the respect for the dignity of employees.
During the nineteen eighties, interpretations of this theory changed as the focus on
empowerment shifted from an organizational perspective to an individual perspective. Not every person was ‘empowered’ when power was shared. Psychological concepts such as self-determination (Deci, 1975) and self-efficacy (Bandura, 1986) became leading in the
development of theory referred to as a motivational construct (Conger & Kanungo, 1988) or
psychological empowerment (Spreitzer, 1995) (Thomas & Velthouse, 1990). These theories emphasized on the humanitarian aspect: empowered employees, and the organizational aspects that could lead to this outcome.
Both bodies of work gradually intertwined as empowering structures and practices are seen as contextual variables affecting employee feelings of empowerment (Seibert, Silver, &
Randolph, 2004, p. 332). Theoretical relationships are presented between contextual aspects on a macro level and content or psychological empowerment on a micro level (Seibert, Silver, & Randolph, 2004).
During the last decade, empirical research on empowerment has increased to transcend the context of power sharing and accomplish a much wider scope on the subject. Interaction with other dimensions as psychological empowerment but also organizational empowerment has become the recent focus of research. (Seibert, Silver, & Randolph, 2004) and (Randolph &
15 Kemery, Managerial Use of Power Bases in a Model of Managerial Empowerment Practives and Employee Psychological Empowerment, 2011) (Blanchard, Carlos, & Randolph, 2001) contributed to this by linking psychological empowerment to contextual variables. But, (Randolph & Kemery, Managerial Use of Power Bases in a Model of Managerial Empowerment Practives and Employee Psychological Empowerment, 2011) encourage further research in this field and especially into the role played by power base use in a model of empowerment. This corresponds to the ideas of (Cullen & Townley, 1994), who claim that we need to understand power within an organizational context in order to understand
empowerment and implement it in a righteous way.
The last 25 years, there has been considerable research on the concept of empowerment. In 1995, Spreitzer (Spreitzer, 1995) called for further exploration of her construct on
psychological empowerment to build a ‘gestalt’ of the concept. Although (Seibert, Silver, &
Randolph, 2004), (Randolph & Kemery, Managerial Use of Power Bases in a Model of Managerial Empowerment Practives and Employee Psychological Empowerment, 2011) and (Blanchard, Carlos, & Randolph, 2001) contributed to this, existing theories have not been phrased into an overarching generally shared concept. (Randolph & Kemery, Managerial Use of Power Bases in a Model of Managerial Empowerment Practives and Employee
Psychological Empowerment, 2011) recently again called for a ‘more complete model’ of the concept.
The primary purpose of this paper is to create an unambiguous understanding of the concept empowerment within an organizational and managerial context by interlinking existing theories. I take an in-depth look at different theories, perspectives and the origin of the definition of the concept to present this better understanding. The secondary purpose is to offer guidelines about how organizations can implement the concept as a means to an end, by interpreting empowerment as a total concept within multiple levels of the organization.
16 One of the main reasons why it is important to have an unambiguous and in-depth
understanding of the concept is because empowerment can contribute to organizational effectiveness (Conger & Kanungo, 1988). During the nineteen-eighties, interest in the concept of sharing power and authority by managers developed (Kanter R. M., Power Failure in Management Circuits, 1979) (Burke, 1986) (Block, 1987) (Lawler & Bacharach, 1980). Organizations had to deal with increased globalization, up-tempo technological innovations and higher customer expectations (Quinn & Spreitzer, 1997). Instead of lingering in the traditional command-and-control hierarchy, this demanded more initiative, creativity and responsibility of employees (Quinn & Spreitzer, 1997) or better engagement of the talents and motivations of employees to achieve better results (Randolph & Kemery, Managerial Use of Power Bases in a Model of Managerial Empowerment Practives and Employee Psychological Empowerment, 2011).
The concept of empowerment from an managerial or economic perspective and from a psychological or humanitarian perspective is rooted in theories of self-organization,
information processing capacity, self-efficacy, self-determination and the use of human and social capital. These theories are based on the balance between the phenomena autonomy and hierarchy. In constructing a ‘gestalt’ on empowerment, the concept of power is the starting point. Theories by (Weber, 1947), (Arendt, 1958) and (Göhler, 2009) shape the general construct of power. Under influence of the economic change from a mercantilist system to a free market system, and the establishment of firms as legal entities, within a period of centuries the absolute concept of power has shifted to a concept with a formal (decision authority) and informal (influence) aspect, both in pursued of (business) success. The concept of decision authority and the underlying theory on self-organization, property rights and control is illustrated by the work of Adam Smith, Friedrich von Hayek and Kenneth J. Arrow. Also, the gradual change from a tangible asset-based economy to a knowledge-based
17 economy and the therefor increased importance of information in reducing uncertainty has contributed to this shift, this is illustrated by the work of Simon, Strikwerda, Drucker and Kanter. The shift in the absolute concept of power to the construct of decision rights,
knowledge and information that implicitly represent power is coupled to the definition of the concept of empowerment, and partially the reason for its ambiguity. However, our nowadays understanding of the attribution of decision rights, knowledge and information, helps us creating an general ‘gestalt’ of the concept.
Our understanding of the concept of empowerment has evolved over time, but the importance of the matter has always remained unaltered.
In Business Strategy, we speak of the concept of competitive advantage or sustained competitive advantage. This refers to a general objective organizations have, the precise definition is elusive, but the term is used in combination with the theme value creation
(Rumelt, 2003). For whom this value is created and how the concept of value is defined varies. In general, depending on which school of thought one takes as a starting point, value can be customer related and built up through a generic strategy (Porter, 1980). In welfare economics the value created by a firm is the difference between the maximum-willingness-to-pay by the customer and the costs of resources. This value is divided by the price P in the consumer surplus and the surplus for the firm. Or, allocation efficiency of the scarce resources of a firm is a source of competitive advantage in the creation of sustained above normal returns (Peteraf , 1993) or economic profit (Barney, 1997).
Empowerment can be viewed at as a source in the process of creating value by increasing organizational effectiveness. Theoretically, the construct or organizational effectiveness lies at the very centre of all organizational models (Wetten & Cameron, 1984).
18 The word empowerment has a long history and the term can be explained form an economic and a humanitarian perspective. As theory on empowerment within organizational and management literature spreads out over several research areas and on different levels of analysis, the concept has become diffuse. Literature predominantly focusses on the outcomes of empowerment as a mean or the use of empowerment on a specific area or level within the organization. In this thesis I will elaborate on how and why empowerment is a total concept.
First, I will review relevant literature on the origin of the definition and the concept within an organizational and managerial context. Similarly, the underlying concept of power within an organization will be reviewed. Then I will present a general ‘gestalt’ on the concept, based the reviewed theory and encased in six practices. Then I will describe the methodology that I used to demonstrate how these practices work in an organization. After that I will present my findings and I will link these findings to the existing theory. Then I will discuss the
implications of these findings. At last I elaborate on the limitations of this thesis and I will make suggestions for further research.
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2.Theoretical Background
2.1 Origin and definition of the word empowerment
According to (Lincoln, Travers, Ackers, & Wilkinson, 2002) the first use of the word ‘empower’ was recorded in 1655 in the book The Reign of King Charles by Hamon
L’Estrange (1605-1660). The word ‘empower’ consists of the preposition ‘em’ and the noun ‘power’, and has a French and Latin origin. The meaning of the word, in this writing, is ‘giving authority’. In the sentence “letters from the Pope empowering them to erect this college”, ‘they’ are given the authority by the Pope to erect a college.
The second use of the word ‘empower’ was recorded a short while later in 1667 in John Milton’s (1608-1674) work Paradise Lost. In the tenth book of Paradise Lost, Adam and Eve remorseful look back on their sin and their loss of the favour of God. The word ‘impow’rd’ (Figure 4) relates to the power that Adam and Eve had been given by God at the beginning of their lives in the Garden of Eden before the fall of man.
The meaning ‘to authorize’ is still seen as one of the explanations of the word
‘empowerment’, as defined in the Oxford English Dictionary by definition one (Figure 3). In this first definition, the Oxford English Dictionary also speaks of ‘giving power’ but in this definition ‘giving power’ is synonymous for ‘giving authority’ or ‘to authorize’.
20 In the intervening time until the twentieth century, the word empowerment was mainly used according to the first definition of the Oxford English Dictionary. The second definition of the Oxford English Dictionary is related to the modern dimension of the meaning of the word. In the Oxford English Dictionary the second definition is supplemented by the sentence:
‘movements to empower the poor’. This reveals the roots of this second definition as is later confirmed by (Lincoln, Travers, Ackers, & Wilkinson, 2002). The modern concept of empowerment originates from humanitarian grounds and in specific the movement by which minorities stand up against oppression. This is further described in paragraph 1.4.
The definition of the word ‘empowerment’ in organizational and management literature is ambiguous. The concepts ‘means different things to different people’ and shifts from decisional power to a process of risk taking and personal growth (Quinn & Spreitzer, 1997). ‘Empowerment’ has been called vague and an omnibus term (Bandura, 1986), a variation on the theme of employee involvement (Appelbaum, Hébert, & Leroux, 1999) and a term that confuses even as it inspires (Simon B. L., Rethinking Empowerment, 1990, p. 27).
Figure 3. The meaning of the word 'empowerment'.
Figure 4. fragment of book X, Paradise Lost by, John Milton.
Oxford English Dictionary:
1. Give (someone) the authority or power to do something.
2. Make (someone) stronger and more confident,
especially in controlling their life and claiming their rights: movements to empower the poor.
From Book X, Paradise Lost, rule 364-371: Such fatal consequence unites us three: Hell could no longer hold us in her bounds, Nor this unvoyageable Gulf obscure Detain from following thy illustrious track. Thou hast atchiev’d our libertie, confin’d Within Hell Gates till now, thou us impow’rd To fortifie thus farr, and overlay
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2.2 Power as a social concept
The basis of the words ‘empower’ or ‘empowerment’ is formed by the noun ‘power’.
Empowerment as a concept is derived from the theory on power (Conger & Kanungo, 1988). And it is important to understand power in order to understand empowerment (Cullen & Townley, 1994). ‘Power’ is an ambiguous concept and research on power starts with explanation of the concept as a social or relation phenomenon. In order to explain
empowerment within an organizational context, the appropriate theories on power are those theories on power that analyse power within the boundaries of the firm as a legal entity. In these theories, power is no longer ambiguous, but based on administrative law and property. In the next few paragraphs I will explain power as a social concept and how it has shifted to a concept based on administrative law and property due to the boundaries of the firm.
(Lincoln, Travers, Ackers, & Wilkinson, 2002) admit the connection to the concept of power but also argue that it is important to acknowledge power within the concept of empowerment as to achieve an end rather than as an end itself. Perhaps the ‘giving’ instead of the ‘horde’ of power is the most distinguished element of empowerment, still the subject is ‘power’ and functions as a starting point in unravelling empowerment as a concept.
The two main contributors to theory on power as a social conceptare Max Weber and Hannah Arendt (Clegg & Haugaard, 2009). Weber defines power as: ‘the probability that one actor within a social relationship will be in a position to carry out his own will despite resistance, regardless of the basis on which the probability rests’ (Weber, 1947, p. 152). This resembles the classic definition on power. (Weber, 1947) describes power as a social phenomenon, as an intuitive ‘force’ between people who are in a social relationship with each other. What
characterizes Weber’s definition is that one person can enforce his will on another person and if necessary with the use of violence. Therefore, power is a capacity that someone has, it does
22 not necessarily need to be exerted. The link to the use of violence gives Weber’s definition a negative connotation. Other scholars followed on the assumption of a social relation that Weber made but differentiated their concepts of power (Baldwin, 2002) (Dahl, 1957) (Wrong, 1968). In the late fifties a long discussion on power and politics was initiated by Dahl, which we now call the power debate. Dahl built on Weber’s definition of power but he presented the concept as a logical succession of events and emphasised on the use of power as ‘power’ and not only the potential (Dahl, 1957).
Hannah Arendt, a political theorist, presents a more radical view on the concept of power. She emphasises on the positive effect of power. Arendt was born in Germany but had to escape from Europe during WOII because of her Jewish religion and political thoughts. She built on her previous work on totalitarianism. (Arendt, 1958) presented power as a collective force and not as a ‘force’ within a social relation but as the social relation itself. In communication and
through symbols that represent shared values, Arendt defines power as ‘the speaking and acting in concert’ (Arendt, 1958).
(Göhler, 2009) integrates both concepts in his work ‘Power to’ and ‘Power over’. He makes the distinction between transitive power and intransitive power but argues that both concepts are complementary. Transitive power is derived from Max Weber’s concept (power over) and intransitive power from Hannah Arendt’s concept (power to). According to (Göhler, 2009), intransitive power creates a common field of action between actors. Within this field, by the capacity or actual use of transitive power, actor A can open or close options for actor B.
In other wording, transitive power depends partially on intransitive power. Aristotle one’s stated: ‘What it lies in our power to do, it lies in our power not to do’. The use of violence by actor A on actor B can influence B’s options and behaviour, but actor B still has its own will
23 to follow or not to follow on actor A. Intransitive power can influence actor B’s decisional process when transitive power is used by actor B.
While (Göhler, 2009) argues that transitive and intransitive power are both different dimensions of the same concept, he also adds that ‘with Max Weber, power is capacity as well as influence, with Hanna Arendt power is self-binding as well as empowerment (Göhler, 2009, p. 36)’. This shows there is a distinction between the use or possession of power over others as a general concept in social relations, and the presence of power in the playing-field in which actors interact based on communication and collective values. The latter is referred to as empowerment.
2.3 Power within organizational and management literature
The general concept of power as a social relation is used as a starting point in explaining power within organizations. However, Max Weber’s broad definition withholds formal power or legal power as well as influence. When specifying power within organizations, the
distinction between formal power or legal power and influence logically arises due to the fact that the playing-field of actors lies within the boundaries of the firm. The authority structure constitutes the formal dimension of stratification in organizations, while the informal dimension emerges from the influence processes (Bacharach & Lawler, 1980, p. 45). Actors differ in role and type, and according to (Dahl, 1957) have different bases, means, amounts and scopes of formal and informal power. The following subparagraphs describe how power within the firm has changed as work became a commodity within the hierarchy of the firm as a legal entity. Further explanation of the distinction between legal power and influence will take place as well.
24 2.3.1 Absolute power
In the literature on leadership and management, the concept of power has always occupied an important place. In his work ‘il Principe’ (The Prince), Niccolò Machiavelli (1469-1527) advocates the acquirement, consolidation and preservation of power by the prince in the sixteenth century (Machiavelli, 1532). He elaborates on the use of violence but warns not to use violence excessively as it could weaken one’s position. His work is dedicated to Lorenzo I d’Medici, who ruled the republic of Florence during the height of the Italian Renaissance and emphasized on how to be a successful prince and not on how to be a good human being. Machiavelli’s ideas on the concept of power fit the then prevailing mercantilist economic system of that time that serves as a breeding ground for the European expansionism and imperialism. With his work, Machiavelli elaborated on leadership qualities and power. His view on power fits the later concept of Max Weber as described in paragraph 2.2.
2.3.2 Division of power
After the union with England in 1707, Scotland prospered economically from the world power of England during the 18th century. While the parliaments united, Scottish law remained separate from English law which led to the migration of politicians to London and the rise of a strong intellectual middle-class elite in Scotland. During this age, called
Scotland’s Golden Age or Scottish Enlightment, Scotland thrived intellectually, scientifically and commercially. The effect of the Scottish Enlightment was noticeable over a large part of the world as the ideas of intellectuals spread. Adam Smith (1723-1790) was an economist and one of the Scottish intellectuals who wrote about morality and economic change as Scotland and the rest of the world rolled into the agricultural and industrial revolution.
Adam Smith describes the way in which the profit rate of the aggregate national capital, or wealth of the nation, can increase by self-organization. As wealth-owners reallocate capital
25 between lines of production with the intention to self-benefit from a maximum rate of profit, profit rates between different lines of production will equalize (Foley, 2003). In essence, this self-organization principle leads to a state of equilibrium, but this state will not be reached due to individual actions of wealth-owners and environmental disturbance. However, the process or self-organizing stimulates the division of labour. Capitalists accumulate capital and unintentionally increase the wealth of the population. The extent of the market widens as room for capitalists increases, as a consequence the division of labour increases as well.
(Smith, 1776) elaborated on the division of labour to improve efficiency and criticized the mercantilist economic system while creating the basis for the free market economy as we know it. Fredrick W. Taylor (1856-1915) was one of the scholars that increased the efficiency of organizations through time motion studies to eliminate redundant activities and by the division of staff-activities, soon to be abandoned with the implementation of Scientific
Management. In the late 19th and early 20th century consultants applied scientific management to process engineering and management. Efficiency in labour was achieved by, inter alia, task specialization and hierarchical or imposed coordination of those specialized tasks and by time-motion studies. Taylor was one of the first scholars that advocated a split in
responsibilities, or stratification of the organization. Although Taylor advocated a partnership in the workplace between managers and subordinates, this latter concept from a practical view was never realized.
The principle of free market capitalism has been adopted by many scholars in the years to come, and as so by the Austrian school of thought in the late 19th and 20th century. According to this school of thought the individual behaviour and rational choices by people where important factors within the marketplace, as emphasized by scholars such as Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser and Ludwig von Mises.
26 Friedrich von Hayek, also from the Austrian school of thought, specifically stresses the fragmentation of knowledge and its dispersion among the multitude of individual consumers and producers (Salerno, 1993, p. 115). His theory laid the foundation for information
economics. According to (Hayek, 1945), the free market price system gives individuals the opportunity to self-organize, or spontaneous order, by individual choice and let’s society as a whole benefits. The same principle of self-organization as described by Adam Smith on a market-level and by Friedrich von Hayek on an individual level, can be applied within organizations. As a price system is a communication channel that communicates information about the scarcity of goods. When decisions are made as decentralized as possible, the organization will maximize the information processing capacity by self-organization and
benefits economically.
At the end of the 19th century, the corporation as a legal persona was created, being the legal
instrument within which to organize the enterprise. This legal construction implied a separation between private capital and the capital of the owner. The corporation became the owner of the assets of the firm and labour became a commodity as it could be purchased by paying for it by an ex-ante fixed salary. With that, labour did not have decision rights over the assets, not uses fructus, not alienation rights; labour was only granted to right to use assets. A consequence of this legal construction is, according to (Berle & Means, 1932), the separation between ownership of the corporation by shareholders and control over the corporation by management and workers in the firm. (Berle & Means, 1932) pointed out in 1932 what was later amplified by (Marris, 1964) and (Williamson, 1964) in the nineteen sixties: this separation causes a conflict of interest between owners and managers. An agency conflict. Due to the fact that management does not function as an extension of the owner but has interests of its own, there will be a divergence between the decisions by management (agent) and those decisions that would maximize the welfare of the owner (principal). In accordance
27 with this theory, the owner (principal) can experience an economic disadvantage or residual loss (Jensen & Meckling, 1976).
(Coase, 1937) elaborated on the reasons for firms to exist in the first place, as according to the then prevailing neoclassical price theory the price system itself gives no reason for firms to establish. (Coase, 1937) introduces the phenomenon transactional costs as the costs for using the price system, that stand separate from production costs and functions as an incentive to establish a firm. According to (Coase, 1937), information is one of the factors that contains or withholds transactional costs. His insights where neglected at that moment but picked up in the nineteen sixties as research on information as an economic value came into motion. Arrow (Arrow, The Organization of Economic Activity: Issues Pertinent to the Choice of Market versus Non-Market Allocation, 1969, p. 7) states that the critical impact of information on the optimal allocation of risk bearing is not merely the presence or absence of information, but its
inequality among economic agents. With the establishment of the firm, or vertical integration, the costs of using the economic price system are replaced by intra-firm transfers (Arrow, 1969). This information asymmetry plays a fundamental part in the conflict of interest, or agency conflict, between owners and management. (Jensen & Meckling, Specific and general knowlegde, and organizational structure, 1990) distinguish specific knowledge from general knowledge from a cost perspective. In their study, specific knowledge is costly to transfer, (whereas general knowledge isn’t) and thus decision rights need to be decentralized in order to use specific knowledge without the costs of transferring this knowledge. (Strikwerda, 2014) explains a view on information based on the cybernetic control-theory and distinguishes goal-information, axiological goal-information, external goal-information, effect information and pragmatic information. See table 1.
28 Information type
Goal information Mission.
Axiological information Motivational information: values.
External information Information from the external environment of the organization and interpretation of this information through vision. This type of information has two subcategories:
Material information: objective facts regarding the external environment of the organization such as market share, competition, prices, technological developments and regulation.
Eidetic information: interpretation of material information in view of the mission and value hierarchy, defined as strategic choices made.
Effect information Causal and effect relations made explicitly through information. This type of information is subjected to our bounded rationality.
Pragmatic information Choice information or facts. Internal administrative and management information. External information based on transaction data and non-financial general information.
This division in information types is based on the interaction of different hierarchical parts within and outside the organization and has less to do with our classical interpretation of control. As Strikwerda (2012, 2014) claims, the more an organization is devoted to being in-control by administrative terms, the less in-in-control a firm will be in terms of continuity.
The existence of the firm as a legal entity, and the split in ownership by shareholders and control by management does not exclude the owner from control as advocated by (Berle & Means, 1932). Ownership or property rights over the firm are important as a legitimate or formal source of power; the power to make decisions and to take action with resources (Jensen & Meckling, Specific and general knowlegde, and organizational structure, 1990) and to share decision-making authority (Stein, 1976). (Van Ees, Postma, & Sterken, 2003) explain that the agency conflict due to the split in ownership and management has made research on corporate government more significant. In both the one-tier and two-tier corporate
governance regime there is a supervisory committee or supervisory board. Within the two-tier model, control rights lie with the separate supervisory board (Raad van Commissarissen) and within the one-tier model these rights lie with the non-executive within the board
(committee). In the Netherlands, traditionally the two-tier model was authorized, however since 2013 the one-tier model is also accepted as a corporate governance regime by Dutch law. Management of the organization are fiduciary owners of the assets of the organization.
29 These assets contain the decision rights. Management is authorized to attribute decision rights to others within the organizations but remain fully responsible and owner of the control rights concerning the attributed decision rights. As a consequence management needs to programme, anthropological sense, the employees within the organization to which the decision rights have been attributed to. The mission, values, business model, but also briefings, the attribution of resources, reporting mechanisms that are in place are all part of this
programming. Programming can be tight, with few room form mistakes and experiment, or loose with a lot of room for initiative and experiment.
2.3.3 Information is power
Under influence of the economic change from a mercantilist system to a free market system, within a period of centuries the absolute concept of power has shifted to a concept of decision authority, both in pursued of (business) success. The concept of decision authority and the underlying theory on self-organization, property rights and control is. In the previous sub-paragraph the phenomenon of phenomenon is illustrated by the work of Adam Smith, Friedrich von Hayek and Kenneth J. Arrow. Also, the gradual change from a tangible asset-based economy to a knowledge-asset-based economy and the therefor increased importance of information has contributed to this shift.
Herbert Simon (1916-2001) dedicated his work to decision-making within various fields of research from different perspectives. In his approach he studies decision-making as a theme that overarches the areas of psychology, economy and mathematics. Herbert Simon is often associated with the term bounded rationality as humans decide how to behave based on their bounded perception of reality. In decision-making, it is practical impossible to exercise global rationality as people do not have the knowledge about all possible alternatives and cannot valuate consequences objectively. (Simon, New Developments in the Theory of the Firm, 1962) emphasis on the increased importance of information. In allocating resources internally,
30 the formal organization uses authority, influence, democratic-political processes and
bargaining as co-ordination mechanisms. In the Theory of the Firm, information is the key to reduce uncertainty in the decision-making process in allocating resources. Information asymmetries need to be limited to a minimum in order to allocate resource as efficient as possible.
(Simon, The Architecture of Complexity, 1962) describes hierarchy as a natural phenomenon. By analysing hierarchy in a cybernetic way, Simon emphasis on the part-whole concept (as parts are nested within wholes and again within larger wholes) and not on the
superior-subordinate structure. Herbert Simon presaged that organizations need to exert a loose form of programming or loose coupled control, which is to say that lower level members of the organization are offered room to experiment in response to changes (Strikwerda J. , 2012). This corresponds to his view, and the view of Hayek, on the importance of information needed to make decisions when the decision to take initiative lies with the workers. This is later confirmed and substantiated economically by scholars as (Arrow, The Organization of Economic Activity: Issues Pertinent to the Choice of Market versus Non-Market Allocation, 1969), (Fama & Jensen, 1983) and (Jensen, Foundations of organizational Strategy, 1998).
(Jensen & Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, 1976), (Fama & Jensen, 1983) and (Jensen, Foundations of organizational Strategy, 1998) explain that, with the diffusion of knowledge within the organization, it is important to delegate the initiation and implementation of decisions to workers with valuable relevant knowledge in order to reduce the costs of transferring information. With the delegation of decisional rights, two problems arise: the rights assignment problem and the control or agency problem (Jensen & Meckling, Specific and general knowlegde, and organizational structure, 1990, p. 2). It is an important consideration who the organization will assign
31 decisional rights to. The decisions made need to be controlled by the organization as control does not result naturally from the institution of alienable decision rights.
The alienability of decisional rights would solve the control problem naturally as information and decisional rights would collocate at a worker who also benefits from or bears the costs of making the decision. If a person has decision right and the right to alienate that right; this is referred to as property right, as described at the end of paragraph 2.3.2. Voluntary exchange maximizes collocation of knowledge and decisional rights (Foss, 2000). In other words: decisional rights will convey to those who value them most highly because they possess relevant information. As information and decisional rights collocate at a worker who also benefits from or bears the costs of making the decision, this serves automatically as a control mechanism as performance is measured and a reward or punishment follows accordingly (Foss, 2000). Due to the concept of the firm as a legal entity, logically the workers with
decisional rights and information are in most cases not co-owners of the firm and do not benefit from or pay the price for the consequences of their decisions. It are the shareholders who own the residual claim on the cash flows produced by the firm. The control issue, according to (Jensen, Foundations of organizational Strategy, 1998), can be solved by three systems that substitutes the process alienability of decision rights in organization: allocation decision rights, measuring and evaluating performance of the firm and rewarding and punishing individuals for their performance.
Herbert Simon elaborates on the importance of information at that time, during the nineteen-sixties. The use an spread of knowledge has only become more intense and diffuse ever since. Theories by Fama and Jensen are written during the nineteen-eighties and nineties, right after the first innovation wave (Kanter R. M., Innovation: The Classic Traps, 2006). In paragraph 2.5. I will elaborate more in this increased importance of information and the information waves in the context of empowerment.
32 The prefacing paragraphs illustrate that power has not only shifted from a central to a
decentralized concept, in which information plays a significant role, but also that power is indissoluble connected to the concept of control due to the boundaries of the firm and that specific significant role of information. (Block, 1987) explains that the advantage of high control within an organization is clarity but the organization pays a price by the fact that people take less responsibility. And although the positive relation between an increase in responsibility and an increase in performance has been verified, managers generally choose to maintain control (Block, 1987). This illustrates that decentralization of decisional power not only leads to control: this control equals power, and needs to be exerted loosely in order to allow workers to take responsibility.
(Strikwerda, 2014) integrates the perspective as described above, of (Simon H. A., The Architecture of Complexity, 1962) (Jensen & Meckling, Theory of the Firm: Managerial
Behavior, Agency Costs and Ownership Structure, 1976) (Fama & Jensen, 1983) (Arrow, The Economics of Information: An Exposition, 1996) (Hayek, 1945) by advocating that the modern integrated firm needs to give room for self-organization by loose programming. In that way the organization can profit from maximum information processing capacity, workers can take more responsibility, and workers can adapt to changes outside the firm with
preservation of the identity and integrity of the firm (Strikwerda, 2014). (Alberts, Garstka, & Stein, Network centric warfare: developing and leveraging information superiority (2nd ed.), 1999) (Hayes-Roth, 2006, p. 204) (Perry, Signori, & Boon, 2004) describe how the American army acts from the principle of information superiority and as an organization operates as an edge-organization. The necessity to work in this way came about due to the need to improvise on a local level in warfare actions as the tradition approach was no match for the guerrilla warfare style of the opponents (Alberts, Garstka, & Stein, Network centric warfare:
33 (Alberts & Papp, The Information Age: An Anthology on Its Impact and Consequences, 1997). This means that operational decisional rights are attributed to people who are in contact with, in the case of an army; the enemy, in case of an company; the clients or suppliers (Strikwerda J. , 2012). Based on free access of information, and no hierarchical constrain, decisional rights are placed at a low level in the organization. Accompanied by information about the intention of the mission and values that need to be guaranteed, a corporal gets the discretion to interpret this information and decide on action to be taken. Knowing that his decisions are monitored by superiors who are able to see the consequences of his action. (Strikwerda, 2014) describes the shift from a Weberian command-and-control organization to an information-based organization. Information in information-based
empowerment is not the mathematical information, but comprises all the types of cybernetic information. For a person on the work floor this translates into interpretation of the situation based on information about the mission, the values, goals and causalities.
2.3.4 Social power
Until the nineteen-seventies, the general view on organizations remained rather static. Organizations where coordinated parts within an apolitical structure. Several researchers initiated a more dynamic perspective on organizations and strategy (Mintzberg, 1978) (Quinn J. B., 1978) (Burgelman, 1980) (Bacharach & Lawler, 1980). They promoted a more real life view on organizations in which interactive, dynamic and incremental processes play a part in strategy formulation and power and politics, at its base, in organizational structure. But, they ignored the legal part: because shareholders carry the residual risks of the firm, not the workers, the shareholder are entitled to the residual claim and on basis of that have the last say in making decisions.
Views on power as described by (Weber, 1947) where broadened during the nineteen-fifties and nineteen-sixties. Namely French and Raven elaborated on the concept of social power by
34 putting forward five, and eventually six bases of power. They made the distinction between three types of power: formal power (coercive, reward, legitimate), personal power (expert, referent) and information (collective/personal). Although their research is aimed at social power in an general sense, details and examples are mostly about the use of social power in work-related situations.
In 1959, French and Raven elaborated on the concept of social power and specified five social influences that can be used by an ‘agent’ or ‘power figure’ as a resource to influence the beliefs, attitude or behaviour of a person (target of influence). In 1965, one influence
(information) was added. This is consistent with the view of Herbert Simon and other scholars during the nineteen sixties on the increased importance of information at that time since two decades, as described in the previous paragraph. The six sources of influence are represented in six bases of power: coercive, reward, legitimate, expert and referent (Raven, Six Bases of
Power, 2004). The bases of power differ in the manner that the social change is implemented, the permanence of such change, and the ways in which each basis of power is established and maintained (Raven, The Bases of Power and the Power/Interaction Model of Interpersonal Influence, 2008, p. 2)
35 In table 2, all six bases of power are explained. Socially dependence refers to the fact if the target links the used power to the agent or not. When surveillance necessarily, then
monitoring of the target is necessary in order to assess the outcome of the behavioural change.
power base socially dependent surveillance necessary further differentiation explanation or example
reward yes yes personal
impersonal
tangible reward approval coercive
(punishment)
yes yes personal
impersonal
real threat disapproval
legitimate yes no position
reciprocity equity responsibility
‘I need to obey someone in a higher rank’ ‘I need to reciprocate him because he did good’ ‘I have worked hard and have the right for compensation’
‘I cannot force you to do this but I need you to do so’
expert yes no ‘my supervisor has superior knowledge’
referent yes no ‘I want to be like my supervisor’
information no Target understands agents reasoning
Scholars in the field of leadership, organizations and social psychology elaborated on the construct of social power by French and Raven (1957) and Raven (1965) from different angles, within or outside of organization (Kanter R. M., Men and Women of the Corporation, 1977) (Kanter R. M., Power failure in management circuits, 1979) (Blau, 1977) (Bacharach & Lawler, 1980) (Keltner, Gruenfeld, & Anderson, 2003). (Bacharach & Lawler, 1980)
elaborated on the construct of social power by French and Raven (1957) and Raven (1965) and examine organizational life by taking power and politics within an organizational
structure in account. They analyse the concept of power and propose power as a concept with three dimensions: the relational aspect, the dependence aspect and the sanctioning aspect. (Bacharach & Lawler, 1980) thus clearly follow-up on Weber’s thoughts on power, as does Kanter (1977, 1979). In her work, power is described as the ability to mobilize resources (human and material) to ‘get things done’. She describes this power as productive power. Access to resources, support and information in combination with the opportunity access to a challenge determines the amount of productive power a person has within an organization. All Table 2. Bases of power (Raven, Six Bases of Power, 2004).
36 which are influenced by the degree of formal and informal power (Kanter R. M., Power Failure in Management Circuits, 1979).
Later, during the nineteen-nineties, within literature power becomes increasingly recognized by psychologists as a dynamic capacity that influences behaviour. (Keltner, Gruenfeld, & Anderson, 2003) develop a power-approach theory that describe variables, based on extended research by different scholars, that determine the amount of power a person has vis-à-vis others. Personality traits, such as extraversion and charisma, but also physical characteristics, such as height and physical attractiveness are variables that can elevate the amount of power someone has. (Keltner, Gruenfeld, & Anderson, 2003) also describe factors within the
relation, processes within a group and characteristics of the ‘other actor’ that can influence the amount of power. This theory also integrates motivational theories to research the outcomes in behaviour in a dynamic power relation.
2.4 Empowerment outside organizational and management literature
The term empowerment or empowerment as a concept is used in a wide variety of disciplines. (Lincoln, Travers, Ackers, & Wilkinson, 2002) make a strong link between humanitarian fields of research, as empowerment of people implies that there is a need for power by those without power.
In an oppressed situation, a person can sometime envision a more liberated identity of oneself and thus recognize their own identity as inauthentic. In such a situation, a person feels the need to replace his or her inauthentic identity with this more authentic identity (West, 1990). This person feels the need to be empowered in order to leave his powerless position because he or she now knows how the alternative could be (Lincoln, Travers, Ackers, & Wilkinson, 2002).
37 This intrinsic need to pursuit a more authentic identity resembles the construct of autonomy. (Ryan, Kuhl, & Deci, Nature and autonomy: An organizational view of social and
neruobiological aspects of self-regulation in behavior and development, 1997) describe human autonomy as the natural potential to self-regulate which has deep evolutionary roots. This phenomenon operates on neurobiological and psychological levels and manifests itself as the need to acts in accord with self-endorsed values, needs and intentions.
In a more practical and magnified way, the pursuit of freedom from a position of slavery illustrates this process and is also one of the main themes in literature on empowerment within non-management literature. The sociologist (Patterson O. , 1991) describes slavery as a phenomenon that has been in existence since the beginning of history and was (and still is) entrenched in a diversity of cultures all over the world. This phenomenon implies the distinction between a free person and a slave (Pettit, 1996). The free person distinguishes
himself by not being subject to the arbitrary power of another (Patterson O. , 1991). The West was the first civilization to abolish slavery, and according to (Powell, 2008) this was under influence of independent thinkers. Jim Powell has recorded the history of slavery in his work, “Greatest Emancipations” (2008) approximately as followed: Western slavery had existed for ages and increased dramatically during the Roman Empire. For years, even throughout the Renaissance, the ruling general opinion on slavery was positive: good for a stable society and a respectable trade. As from the 16th century, some voices rose that denounced the cruelty of slavery. Within the mid-17th century, the discussion about natural rights came to live. Again, the Scottish Enlightment catalysed the revolutionary way of thinking about the right that every person is entitled to because of the fact het he/she is human. Francis Hutcheson (1694-1746), who influenced Adam Smith, advocated liberty and antislavery based on natural rights.
The discussion on the existence and legitimacy of natural rights is ever continuous, but the idea of natural rights operates as the foundation of empowerment as minorities want to
38 exchange their inauthentic identity with a liberated, authentic identity in search for autonomy. This is why empowerment from a humanitarian perspective is linked to minority groups and woman. Empowerment outside of management literature has a strong political link as suppression of minorities and women where (and still are) embedded in legal systems as formal status derived from the existing ethical standard.
Empowerment in non-management literature has a link to education, as education is part of all empowerment programmes, but also because a person can empower oneself by the means of education (Lincoln, Travers, Ackers, & Wilkinson, 2002). This is illustrated by the speech of president Lyndon B. Johnson of the U.S.A. On the 4th of June, 1965, he presented his civil rights agenda, accompanied by the words:
Freedom is not enough. You do not wipe away the scars of centuries by saying: Now you are free to go where you want, do as you desire, and choose the leaders you please. You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, “You are free to compete with all the others,” and still justly believe that you have been completely fair. Thus it is not enough to open the gates of opportunity. All our citizens must have the ability to walk through those gates (Patterson J. T., 2010, p. ix).
According to Johnson, opportunity is not enough to empower people, you must provide the ability to take that opportunity, by for instance education.
This paragraph gives a brief overview on the concept empowerment outside of management literature, with reference to the example of slavery. Further explanation of the concept outside of organizational and management literature is not relevant for this thesis. However, it is worth mentioning that (Lincoln, Travers, Ackers, & Wilkinson, 2002) emphasize that empowerment has a radical left-wing lineage and has been transformed into a right-wing managerial theme. This has contributed to the ambiguity of the concept and the expectations
39 people have about the implementation of the concept, based on their existing experience with the concept in this humanitarian context.
2.5 Empowerment within organizational and management literature
2.5.1 Introduction of the concept but not the term
The first one to introduce the concept of empowerment in business was Mary Parker Follett (Graham, 1995), be it for humanitarian reasons. Mary Parker Follett (1868-1933), born in Massachusetts U.S.A., graduated Radcliffe college in 1898, at a time when few women enrolled in college. She graduated in economics, government, law and philosophy. She started her career as a social worker in Boston and worked her way up by eventually becoming the vice-president of the National Community Center Association in Massachusetts and a popular lecturer. One of the topics she spoke and wrote frequently about was individualism and simultaneously the way in which an individual contributes to the welfare of the group and the interaction between individuals and groups (Tonn, 2003). Follett believed that people had the desire to self-govern, but that the full potential of individuals could only be realized through group activity (Eylon, 1998). Her general thoughts on this originate from her social work, where she gained an understanding of group dynamics. She increasingly lectured her ideas to businessmen. She spoke in an appealing way, with passion and common sense, and brought her philosophic ideas to a practical level by applying her thoughts on networks in general to organizations in specific. The work of Mary Parker Follett dates back to a period in time when many scholars adhered a scientific approach to management and organizing business. This, and the fact that many of her ideas became solid findings after many years of research, is probably why she is a remarkable personage in management literature. Or, a prophet of management (Drucker P. , 1995).
40 Mary Parker Follett contributed to several fields of research but mainly to the business, psychological, sociological and political field (Fry & Thomas, 1996). She is recognized as having made significant contributions and is laureled as the ‘brightest star in the management firmament’ (Drucker P. , 1995). However, she is also seen one of the most neglected authors on early management theory (Fry & Thomas, 1996) (Parker, 1984). Reasons for the
divergence between contribution and recognition could be her lack of practical advice (Fry & Thomas, 1996) or the fact that she is a woman (Kanter R. M., Preface. Mary Parker Follett prophet of management: A celebration of writings from the 1920s, 1995), or because her writings are difficult to clarify (Parker, 1984).
Mary Parker Follett introduced separate principles about individualism and group dynamics that are part of the construct we nowadays label empowerment. She described power as ‘power with’ instead of the Weberian ‘power over’ and defined this power as a power that is
developed between two actors, a power that grows and is an infinite commodity. Not a power that is coercive and can be delegated and thus resembles a finite commodity. Follett
introduced the concept of empowerment as an ongoing and continual cyclical process (Eylon, 1998).
2.5.2 Managerial empowerment practices
While the perspective on organizations became increasingly organic instead of mechanistic, empowerment was used as a term to label power sharing. It was merely seen in an economic context as a managerial tool to increase productivity by delegation and decentralization of decision making (Kanter R. M., The Change Masters, 1983) (Burke, 1986) (Block, 1987). This explanation is consistent with the first definition of the term ‘empower’ according to the Oxford English Dictionary and derived from the seventeenth century meaning of the term. And while the act of power sharing is labelled ‘empowerment’, it fits the Weberian dimension
41 of ‘power’ as defined years later by (Göhler, 2009). At this time theory is more or less an explanation of intuitive power within an organizational context.
This early view on empowerment is illustrated in the work of Rosabeth M. Kanter. Although it is important to add that she has a broader view on empowerment than many other scholars at that time due to her focus on innovation. She elaborates on creating a work context in which employees become committed to participate, not just to become motivated to work but to contribute to the innovation process. Decentralization of decision making is part of that context.
(Kanter R. M., Innovation: The Classic Traps, 2006) argues that the desire for companies to innovate comes and goes. Rising competition is closely followed by the desire to innovate, but this desire decreases when cost-cutting seems necessarily. According to (Kanter R. M., Innovation: The Classic Traps, 2006), the first innovation wave started at the dawn of the
information age. In the late 1970’s and early 1980’s, information technology was upcoming and new products and manufacturing processes where introduced. In ‘The Change Masters’ (Kanter R. M., The Change Masters, 1983) emphasizes on the importance of fostering the desire to innovate by re-designing the organizational and job structure while at the same time allowing for maintenance of ongoing routines. She points out the need to institutionalize participation through increased and earlier communication about company plans.
Give people at lower levels a chance to contribute to the shape of change before decisions are made at the top. Empower and involve them at an earlier point –e.g., through task forces and problem-solving groups or through more open-ended, change oriented assignments, with more room left for the person to define the approach. (Kanter R. M., The Change Masters, 1983) (pp. 362, paragraph 4)
Earlier, (Kanter R. M., Power Failure in Management Circuits, 1979, p. 155) already connects empowerment to the sharing of power:
42 information, and support to make more informed decisions and act more quickly can often accomplish more. By empowering others, al leader does not decrease his power; instead he may increase if – especially of the whole organization performs better.
Later, as theories on innovation increase, it becomes more clear that innovation is not only about facilitating recourses and support through the sharing of decision rights, structure and information. Innovation is holistic in nature (Pervaiz, 1998, p. 30) and requires a certain culture in which members strive for innovation and the organizational climate supports creativity. Innovation means taking risks. And freedom of risk-taking requires room for experiment and the acceptance of mistakes. Also, a culture that accepts mistakes and supports the learning from mistakes leads to the development of competencies and skills of employees (Harteis, Bauer, & Gruber, 2008).
In paragraph 2.3 the shift of power within organizations from an absolute, to an decentralized phenomenon is described. Smith, Hayek, Arrow, Simon, Fama, Jensen, Strikwerda and many other scholars, advocate the importance of self-organization by allowing decisions to be made by informed workers on a lower lever in the organization. The word empowerment seems to label this shift in the way that power manifests itself and can be used to substructure
organizational goals. At the end of the nineteenth century, Mary Parker Follett already presaged that free exchange of information is necessarily for making genuine coordination possible (Eylon, 1998). She argued that power should be considered a collective source and knowledge should not be withheld by people my means of gaining power.
(Burke, 1986) follows on (Kanter R. M., The Change Masters, 1983). However, he takes the discussion on empowerment to a new level by pointing out that managers differ from leaders and people have the need for autonomy. From this perspective, according to (Burke, 1986), evidence is beginning to materialize that leaders are transformational and managers
43 direction, inspire people and reward with personal recognition. Managers, Burke states, provide directions through involvement in determining paths toward accomplishment and important decision-making activities. Both ways are defined as ‘empowerment’ but with regard to the content of his perspective on empowerment he launches a new body of work on the topic: psychological empowerment. At the beginning of the 21st century, (Uhl-Bien & Marion, Complexity Leadership Part I: Conceptual Foundations, 2008) (Uhl-Bien, Marion, & McKelvey, Complexity Leardership Theory: Shifting leadership from the industrial age to the knowledge ara, 2007) argues for a different view, as leadership in the knowledge era is no longer an individual or top down affair. Organizations are Complex Adaptive Systems in which interaction between interrelated components, bonded by a common purpose takes place (Uhl-Bien, Marion, & McKelvey, Complexity Leardership Theory: Shifting leadership from the industrial age to the knowledge ara, 2007). Complexity Leadership Theory (CLT) strives for learning, innovation (creativity) and adaptability as outcomes by focussing on the complex interactive dynamics between the interrelated components, or agents, or people within an organization. According to CLT, there are three entangled leadership roles, administrative, adaptive and enabling that differ according to where they occur, and thus, in contrast to ‘older’ leadership theory including (Burke, 1986), it is about leadership throughout the organization and not about the leader.
2.5.3 Psychological empowerment
(Burke, 1986) demonstrates the shift from an organizational to a combined individual perspective on empowerment. Not every person was ‘empowered’ when power was shared, thus more attention was given to the psychological processes behind the actual individual feelings of empowerment. This new outlook on empowerment is upcoming due to the innovation wave of the nineteen-seventies/nineteen-eighties (Kanter R. M., Innovation: The
