Critical Review of Charles Handy
Born in 1932, Charles Handy is an Irish author and philosopher who has contributed immensely to the field of organizational behavior by predicting the future of work and the implications of change in organizations. He is also a theorist who has contributed significantly to the field of organizational theory and management.
He has received several accolades because of his work in these fields. One notable one is a top ranking in the group of Thinkers 50, which is a prestigious clique of influential philosophers in the management field (King & Lawley, 2016). His contributions to organizational behavior have greatly redefined how people view their careers and manage their lives.
A key hallmark of his influence in organizational management is the understanding that work will have a discontinuous change, whereby few people would be confined to full-time jobs in the future (King & Lawley, 2016). His findings portray a future where discontinuous change will become a permanent fixture of working lives and organizations. Organizational adaptation to change has been at the center of Handy’s works (Pugh & Hickson, 2016). It is also going to be at the center of our research focus because, in this paper, we critically review his contributions to organizational behavior.
Handy on Organizations
A review of Handy’s work on organizations shows that four books written by him have been the source of his predictions about the future nature of organizations. These books include “Understanding Organizations” (first published in 1976), “The Age of Unreason” (first published in 1989), “Gods of Management” (first published in 1985), and “The Empty Raincoat” (first published in 1994). In the first book called “Understanding Organizations,” Handy explores different aspects of organizational behavior, including motivation, leadership, power, and influence (The British Library Board, 2016).
Coupled with the effects of roles and interactions, the philosopher says that these influences are bound to affect organizational culture and affect their understanding of group dynamics. In the book, “Gods of Management,” Handy talks about existing organizational structures and their transformation after the change occurs.
In the context of this analysis, he says that many organizations often represent four types of cultures, which include club culture, role culture, task culture, and existential culture (Persily, 2013). Alongside this review, he says there are four gods of management – Zeus, Apollo, Athena, and Dionysus (Bolton & Thompson, 2013). Each of these gods represents a given type of organizational culture. The table below shows the association.
The god of Zeus represents the club culture, which is often defined by the presence of a strong leader who has the power to make decisions in an organization (in a web-like decision-making system where people report to him or give him information about organizational issues for his direction) (King & Lawley, 2016). Handy argues that the current form of organizational functioning, which is dominated by shareholder activity is complicated and must give way to a simpler form of organizational structure (Pugh & Hickson, 2016). The new form of organization should be flexible and based on the spirit of private enterprise.
He argues that this type of organization would improve collaboration among shareholders and create a greater sense of understanding among them (Persily, 2013). However, different parties in the organization are bound to have different interests and views that would all be accommodated in the unit. Their rewards and compensation would also be different, depending on their overall contributions to the organization.
Metaphorically, Handy says that organizations would eventually be like communities (The British Library Board, 2016). He draws different comparisons between corporations and villages by saying that the latter has existed for many years, while corporations have only existed in the last century or so (Leader to Leader, 1997). He believes that these corporations are bound to evolve and become lively villages as opposed to the constrained and impersonal entities they are today (King & Lawley, 2013). Handy reiterates this fact in his book, Gods of Management: The Changing Work of Organizations when he says,
“Villages are small and personal, and their inhabitants have names, characters, and personalities. What more appropriate concept on which to base our institutions of the future than the ancient organic social unit whose flexibility and strength sustained human society through millennia?” (The British Library Board, 2016, p. 11).
Nobody owns communities because every person is a member, albeit with different interests. Here, workers would be as citizens in the community, and shareholders would be like investors in these communities, as opposed to owners, which is the case in present-day organizational structures. Depending on the risk appetite of the shareholders, they would be rewarded according to their investments.
An important part of Handy’s concept of the future organization is the concept of the Age of Unreason, which King and Lawley (2013) described as a community-oriented deferral organization. In this structure, power and responsibility sip from the small corporate center and spread to the wider privately run business elements that are closest to market activities (Pugh & Hickson, 2016). Comparatively, present-day organizations have a small center of power where most decisions are made. Low in profile, most centers of power make the most impactful decisions and determine the destinies of these enterprises without the influence of many external parties.
For example, these centers of power make decisions about where to allocate corporate resources, or where to assign responsibilities to new and existing employees. According to Handy, this is bound to change in the new corporate structure (Leader to Leader, 1997).
Under the concept of role culture, Handy assumes that people are rational creatures and they can complete their roles without much hassle, or conflict (King & Lawley, 2013). In this type of setting, he says that certainty and stability are likely to prevail in the organization. Comparatively, in situations where change is paramount, the same employees are likely to display weaknesses, as they try to adapt to change (Károlyi, 2015).
The concept of task culture is different from that of role culture because Handy argues that management is often preoccupied with trying to solve a series of problems, as opposed to assigning roles, as is the case in the task culture (Károlyi, 2015). Here, management may choose to use different resources to solve only one organizational problem. It is common to find managers developing task forces, and ad hoc committees to solve organizational problems in this type of culture.
Groups of experienced people who encountered such problems in the past, or who have an expert knowledge of the same, may improve coordination within these group setups. Observers say this type of culture is often useful when organizations are experiencing change and require dynamism to adapt to it (The British Library Board, 2016).
Handy describes another type of organizational culture (the existential culture) which exists to serve the interests of a group of people, but where the people are not servants of the organization (Persily, 2013). He says such types of organizations often involve skilled professionals, such as doctors and lawyers, who are not necessarily servants of the organization. Steinhäuser (2013) terms them as professional groups. The activities of these groups may be coordinated by the professionals, or by their peers. Their popularity is often high in situations where people require outsourcing services that can be provided by them.
Change and Adaptability
Within the concept of change and adaptability, Handy argues that organizations should adopt effective change management strategies in the face of changing organizational conditions (Bolton & Thompson, 2013). He mostly says that this change should focus on a redefinition of manager-employee relationships. Here, he contends that the change should reflect a transition from management-worker relationship to a manager-client relationship (Bolton & Thompson, 2013). Under the framework of change management, Handy also advocates for a change of paradigm in employee compensation – from the focus on hours spent in the organization to a focus on the output (Bolton & Thompson, 2013).
Although some researchers argue that Handy does not explicitly advocate for this change, they agree with other experts who say the trend exists and would probably characterize organizational processes for a long time (Károlyi, 2015).
When it comes to the concept of outsourcing, Handy says that it may lead to a hollow organization where managers and supervisors are the dominant forces (Fowler & Graves, 2013). Such organizations are vulnerable to failure because the managers could only be accountable to themselves and their existence can only be pegged on the relationship they share with the providers. Handy uses the doughnut model to explain this relationship.
The metaphor presents such an organization as that which has a filled center, but a hollow exterior (Károlyi, 2015). In this type of organization, the managers replace efficiency for effectiveness by giving providers adequate room to exercise their creativity for the fulfillment of organizational goals (Bolton & Thompson, 2013). In this type of relationship, the role of outsiders and insiders are crucial to the organizational success, hence the need for outsourcing. In line with this school of reasoning, Handy identifies three types of organizations that would fulfill these needs. They are the Shamrock organization, the Federal organization, and the triple I organization. They appear below.
Shamrock Organization
In the book, “the Age of the Unreason,” Handy describes the Shamrock Organization by describing people’s bases of employment and linkage (Persily, 2013). Here, he says there are three different groups of employees who work in these types of organizations and who are rewarded differently. The first group of workers/employees is professionals. They are essential to the continuity of organizations and have an intricate understanding of its processes (The British Library Board, 2016).
Coupled with a detailed understanding of organizational aims and objectives, these groups of professionals are often the champions of change in the organization and are rewarded heavily because of this role, through high salaries and attractive associated benefits. In return, they are supposed to show commitment and hard work in their organizational processes. If necessary, organizations require them to work overtime (Persily, 2013). These groups of professionals also work within a task culture where they are often required to be mobile and demonstrate a constant effort to be efficient in their work.
The second group of professionals is contractual employees, such as technicians, advertisers and people involved in research and development activities. Their work often happens in an existential cultural context and, as opposed to being rewarded with salaries, they get paid in fees (Pugh & Hickson, 2016). Their contribution to organizational processes is often measured in terms of output, as opposed to the number of hours they have put in the organization.
The last group of workers in a shamrock organization is comprised of employees who provide their services on a casual, or part-time, basis. They often operate in a role culture context. Although their contributions to the organization are on a casual basis, Handy says that the management styles needed to guide their efforts should not be treated as such. Instead, organizations should treat them fairly, based on the worth they bring to organizations. Some researchers refer to the aforementioned groups of workers in the shamrock organization as core workers, flexible workforce, and contractual fringe workers (The British Library Board, 2016).
The Federal Organization
Handy has explored the concept of the federal organization in the book, “The Age of the Unreason”. It has also been explored in the book, “The Empty Raincoat” (The British Library Board, 2016, p. 12). These types of organizations always exist as a network of individuals and are often allied under a common banner and identity. In it, there could be different subsidiaries, which prefer to stay in the federation because of the economies of scale they enjoy.
Handy cautions that we should not confuse this type of organizations with decentralized organizations where power is often concentrated at a central point and dispersed to other centers of contact within the decentralized structure (Steinhäuser, 2013). The role of management is mostly focused on providing direction and vision to other parts of the organization. The top management is also required to motivate, inspire and lead people in the organization to accomplish their tasks. However, initiative should always come from bottom-level parts of the organization. The concept of “subsidiary” in this context often works when equal partners allocate power to one entity to exercise power and not necessarily through the delegation of power from a central authority.
In the book, “The Empty Raincoat,” Handy uses the analogy of an inverted doughnut to explain how these kinds of organizations work (The British Library Board, 2016, p. 12). Using the same analogy, he explains how subsidiaries in the organizational power structure should extend their roles and associated activities to make the organization perform well. The core activities of the organization characterize the doughnut metaphor. The substance in the doughnut should symbolize a vacuum, but one which is diminishing because the smaller elements of the organization could exert their influence on the organizational structure to take greater space, or exercise greater power, depending on their will to do so (Persily, 2013).
The Triple I Organization
The three ‘I’s identified in the triple I organization denote intelligence, information and ideas (King & Lawley, 2013). Handy says that, in the future, the three ‘I’s in the organizational power structure would have to amount to added value. These types of organizations would also have to increase their competitiveness through the adoption and investment in technology.
They are also required to recruit skilled and smart people to run this technology and possibly leverage it to exploit organizational strengths and minimize their weaknesses (King & Lawley, 2013). Lastly, Handy says this group of people should receive equal and adequate compensation for their work; otherwise, it would be difficult to motivate them to undertake their duties effectively (Pugh & Hickson, 2016).
Critique
From a review of Handy’s works, we find that change is an inevitable force that will redefine the structures and functions of different organizations. Through the views outlined in this paper, we see that he takes a long-term view of the preparedness of these organizations to this force (Károlyi, 2015). Some critics argue that his views are not guaranteed to suffice in future because different organizations have been successful in the past without an incorporation of the strategies proposed by Handy (Steinhäuser, 2013).
In this regard, we may ask ourselves “Why bother changing something that is successful?” Handy has an answer to this question when he says that organizations are most vulnerable to failure when they are the most successful (Bolton & Thompson, 2013).
This is because when they are excelling, they are the most reluctant to prepare for the next wave of success. Since Hardy believes that innovation is important to the success of these organizations, he tries to bring as many innovative people to the fold as possible. He does so through the federalism organizational structure. This structure aids in promoting the ebb and flow of new voices and new ideas in the organizational structure. This approach is the sure way to bring stability and continuity in organizations. Alternately, Handy believes that future organizations should treat their employees differently, in the sense that, instead of looking at them as servants, they should look at them as assets that require development and motivation.
Conclusion
Based on a review of the organizational insights proposed by Charles Handy, we find that he has a strong belief in the fact that organizations could be vibrant and dynamic entities in today’s fast-paced world. In this regard, they could decide their own direction. However, even with this flexibility being apparent, Hardy says that these organizations should be analytical because this skill would help them to manage and administer their activities.
He says so because there is no one solution to all kinds of organizational problems. Therefore, context is important in understanding organizational problems and organizational change. Change is inevitable because, like human beings, living things are bound to experience it. Flexibility, in the wake of such changes, is paramount. Here, decisiveness and flexibility are also important skills that all organizations should possess because a reliance on experiences and the problem-solving skills of other organizations could not yield positive outcomes during times of dynamic change. Based on these factors, Handy says that having a holistic approach to organizational management is the key to staying relevant in the future.
Although some ideas of what Handy has proposed to be the new face of 21st century organizations seem far-fetched, some of the predictions he has made in the past two decades have stood the test of time. The popularity of outsourcing, communications, and portfolio careers in today’s corporate environment are a few examples of some of the trends that he predicted in the 1980s. Indeed, although they were outrageous then, they characterize today’s corporate environment. Thus, it is pertinent to look at his views as presentations of possible scenarios about how future organizations could be.
Reference List
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Fowler, E., & Graves, P. (2013). Managing an effective operation. London, UK: Routledge.
Károlyi, L. (2015). Business chameleon: A practical guide to success for managers. New York, NY: iUniverse.
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Persily, C. (2013). Team leadership and partnering in nursing and health care. New York, NY: Springer Publishing Company.
Pugh, D., & Hickson, D. (2016). Great writers on organizations: The third omnibus edition. New York, NY: CRC Press.
Steinhäuser, R. (2013). Passion in corporate cultures?! The role of passion in the organisational culture of a Dutch and a German business: A qualitative analysis. New York, NY: GRIN Verlag.
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