Lecture Series Calendar

Organizing Uncertainty 2009 - 2011

'Organizing Uncertainty' is a deliberately ambiguous title for a Public Lecture Series, but also, we hope, a not entirely unsuggestive one. After all, formal organization, pretty much the core object of analysis for academics working in business schools, has always existed in a fundamental, even rather banal sense, to manage uncertainty. The idea of formal organization as the management of uncertainty is a constitutive feature of  a number of well known organizational theories -  transaction costs and principal agent modelling, for instance.

Many traditional approaches to analysing the relationship between formal organizations and  uncertainty within the field of organizations studies  focus upon the relationship between an organization and its environment,  What have been termed ‘dyadic’ approaches, for example,  examine exchange relationships between organizations and their environments in terms of other organizations in supply chains and customer relationships, or in terms of resources and capabilities, such as technology and labour (Power, 2008). While these dyadic theories have tended to concentrate upon the individual organization as the central object of analysis, other significant strands of work focus upon the ways in which organizational environments themselves are organized. Specifically, work undertaken within what has come to be known as the new-institutionalism suggests that organizational environments themselves help supply the scripts, routines, ideas, and forms of knowledge which formal organizations adopt   to deal with crucial elements of uncertainty, such as legitimacy (Powell & Di Maggio, 1992).

These and many other accounts of how organizations deal with uncertainty suggest that ‘risk’ management, in the broadest and most abstract meaning of that term, is constitutive of organization. Organizing and managing in this sense are fundamentally concerned ‘with individual and collective human efforts to process uncertainty’ (Power, 2008:8). However, uncertainty in this very general sense is also an analytical construct of the organizational theorist, and is certainly not the only way in which we might approach the notion of ‘organizing uncertainty’.

A second, rather different, way of approaching the issue relates to how uncertainties become objects of organization and management in the first place, and this  demands an analysis of the manner in which  they are represented  and assembled within organizational and managerial fields(Hood & Heald, 2006, Power, 2008). Uncertainties in the form of possibilities of financial loss, for instance, have to ‘be organized, ordered, rendered thinkable and made amenable to processes and practices of intervention’ (Power, 2008:9). In this sense, formal practices of ‘risk management, for example, are themselves part of this organizational construction of risk from uncertainty (Hutter & Power, 2005; Power, 2008). From this point of view,  definitions of risk and uncertainty management do not exists prior to practice but are themselves part of the practical organization of uncertainty.

This focus on the organizational processing of uncertainty also requires that attention be paid to the uncertainties that are produced as a result of these very same efforts to manage and organize uncertainty and risk. Exploring and analysing the unintended consequences or effects of organizational action has long been a feature of social scientific enquiry, in economic sociology and organisation studies, for instance, but more recently  a veritable explosion of ‘risk regulation’ has taken place in response to political and social demands to deal with these effects, though not, of course, ‘without further side-effects of its own’ (Power, 2008:9, Perrow, 1984). The notion of organizing uncertainty in this sense, tries to capture both the sense of organizations as constructing  processes of uncertainty management, and relatedly, as producers of uncertainties resulting from those  very same efforts. Again, as recent events in the world of finance have indicated., financial risk models may themselves be an enormous source of risk,  not least when all market participants end up deploying more or less the same one (Power, 2008; Tett, 2009).

Ultimately, any form of organizing involves closure, restriction and limitation, which can of course become a source of uncertainty itself. As Michael Power (2008:202) has indicated, ‘Organized uncertainty’ is a paradoxical idea ‘which signifies that efforts to construct knowledge of things as risks or uncertainties can create new risks and uncertainties’. Clearly, technological systems, for instance, will continue to be a source of risk, but management systems, particularly the sometimes far from  subtle contemporary variants  associated with certain political rationalities of enterprise and audit are implicated too.

It is sometimes claimed in certain epochal forms of social theory, that the present age while apparently more complex than its predecessors – and the word ‘apparently’, should be stressed here  - is also, at the same time, more aware of what it does not know. However, as Power (2008: 202-3) has argued, the rise of a broad “risk management” mandate over the last decade or so suggests a continuing ambition to ‘control and managerialize the future’ in a distinctive way. This ambition is reflected in a powerful, mechanistic focus on internal control systems in organizations, in the creation of ‘new risk categories and definitions to focus managerial efforts, in the creation of new agents and risk responsibility structures, and not least in the development of new procedures and routines that seek to align risk with a certain moral discourse of good governance’ (Power, 2008:203). The reach of this ambition, as Power (2004) describes it, seems to be the ‘risk management of everything’. The re-framing of organizational governance in the name of uncertainty is no mere technical development. It also institutes a new moral economy of organizational life by defining ideals of  best practice for states, public bodies, private corporations, and individuals as particular categories of person, whether  employees, parents, consumers or patients.
 

References
Hood, C. & Heald, D. (2006) Transparency: the key to better governance? Oxford: OUP

Hutter, B. & Power, M.(eds.) (2005) Organizational Encounters with Risk Oxford: OUP

Perrow, C. (1984) Normal Accidents: living with high risk technologies New York; Basic Books

Powell, W. & di Maggio, P. (1991) The New Institutionalism in Organizational Analysis Chicago: University of Chicago Press

Power, M. (1997) The Audit Society: rituals of verification Oxford: OUP

Power, M. (2004) The Risk Management of Everything London: DEMOS

Power, M. (2008) Organized Uncertainty; designing a world of risk management Oxford: OUP

Tett, G. (2009) Fools Gold New York; Little Brown
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Professor
Paul du Gay
Telephone: +45 3815 2917
Email: pdg.ioa@cbs.dk
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