Organizational Decay
Howard S. Schwartz
is a process in which an organization shifts its focus from coping with the real world to dramatizing a fantasy about itself. It is a progressive condition that builds upon itself, enlisting more and more of the organization’s energies and re sources, until the capability of the organization to deal with the real world becomes problematic.
Psychology of Organizational Decay
In the beginning of psychological life, the fusion of infant and mother creates for the infant a sense of being the center of a loving world. Freud (1955, 1957; Chasseguet Smirgel, 1985) refers to this experience as primary narcissism. Inevitably, the fact of the world’s indifference presents itself to us, resulting in anxiety. To defend against anxiety, we develop a fantasy of the return to the state of narcissistic fusion. Freud called this fantasy the ego ideal. It represents for us a life free of anxiety.
Our projection of the ego ideal into organizations is what lies behind their attraction for us. In doing this, we picture ourselves in our organizational roles as being the center of a loving world – perfectly good, free of tension, able to do what we want and be loved for it. When we do this, we have taken the organization as our ego ideal. An image of the organization functioning as an ego ideal is called the organization ideal. Unfortunately, we are not the center of a loving world. The ego ideal, whether in the form of the organization ideal or any other form, is never realized.
Organizations attempt, in various ways, to preserve the fantasy of the ego ideal, while registering that it has not been attained. In corporate life, the most common means for this is through the idea of hierarchy. Hierarchy explains how the organization can be the ego ideal, while our lives as organization participants are not perfect. It is because those who really represent the organization, its high officials, have attained the organization ideal, even if we have not. In this way, the organization enlists our anxiety as a powerful motivational force, which it can direct by specifying criteria for promotion.
To maintain the fantasy of the organization ideal as a motivational force, the corporation must dramatize its own perfection and the perfection of its high officials. But the organization and its officials are not perfect. Hence, the organization that operates this way must shift its focus toward the creation and embellishment of a fantasy of perfection, and deny the reality that stands at variance with it. This is the root of organizational decay.
Some Aspects of Organizational Decay
1 Commitment to bad decisions. The organization ideal, being perfect, makes only perfect decisions. An organization in a state of decay compels the belief that its decisions have been perfect, no matter how imperfect they may have been. The subsequent policies of the organization amplify this error, degrading the organization’s capacity to make good decisions in the future and leaving the original problems unresolved.
2 Advancement of participants who detach them selves from reality, and discouragement of reality oriented participants who are committed to their work. As the organization’s capacity to make good decisions erodes, successful idealization of the organization becomes increasingly difficult. At the same time it be comes increasingly urgent as an organizational priority. Promotion criteria shift toward those who are best at advancing and maintaining this fiction, in the face of increasing variance with reality. These people can either be cynics, whose elevation degrades the moral character of the organization, or individuals with a high capacity for self delusion, who simply do not have much engagement with reality at all. Reality oriented participants tend to become discouraged and alienated.
3 The narcissistic loss of reality among management. When the organization becomes the dramatization of its own perfection and that of its high officials, individuals are subjected to organizational pressure to maintain this performance. Those in positions of power, who are central in exerting this pressure, often having been assisted in their rise to power by the lack of a firm connection with reality, can easily take this performance as an authentic reflection of their real perfection. In this way, they may lose touch with reality altogether (Business Week, 1991).
4 Transposition of work and ritual. In the decaying organization, productive work loses its meaning; work becomes a ritualized performance. At the same time, rituals associated with the process of promotion, increasingly divorced as they are from the organization’s function, come to be super charged with meaning. Employees’ energy is redirected accordingly.
5 Creation of the organizational jungle. Progress through the hierarchy, which is supposed to mean increasing freedom from anxiety, may make it worse. The cause of the anxiety cannot be acknowledged, and the necessity of maintaining the fantasy of the organization ideal means that one has to deal with it in isolation. Often, individuals attribute its cause to others, who are experienced as threats to their security, threats that may be dealt with by gaining hierarchical advantage over those seen as posing them.
6 Creation of the enemy without. Another way of dealing with anxiety is by attributing it to forces outside the organization, seen as bad, who make demands on the organization, seen as all good. This may be the source of some of the antisocial activity of otherwise perfectly decent organizational citizens.
Morality is not a matter that affects organizational life only occasionally. It is always present in the obligation to do good work. Organizational decay, by construing the organization as its own moral universe, interferes with the morality of the work process. This places many organizational participants in a condition of sustained moral dilemma, torn between what they need to do to get their work done, and what they need to do to advance within the organization. Resolution of this continuing dilemma requires a realistic sense of what life has to offer and a deep appreciation of the meaning of our relationships to others.
Bibliography
Business Week (1991). Cover story: CEO Disease: Egotism can breed corporate disaster and the malady is spreading. April 1, 52 60.
Chasseguet-Smirgel, J. (1985). The Ego Ideal: A Psycho analytic Essay on the Malady of the Ideal. New York: Norton.
Freud, S. (1955). Group Psychology and the Analysis of the Ego. Standard edition, ed. L. Strachey, Vol. 18. London: Hogarth Press.
Freud, S. (1957). On Narcissism: An Introduction. Standard edition, ed. L. Strachey, Vol. 14. London: Hogarth Press.
Jackall, R. (1988). Moral Mazes: The World of Corporate Managers. New York: Oxford University Press. (Organizational decay processes from a sociological perspective.)
Schwartz, H. S. (1990). Narcissistic Process and Corporate Decay: The Theory of the Organization Ideal. New York: New York University Press.
Trento, J. J. (1987). Prescription for Disaster: From the Glory of Apollo to the Betrayal of the Shuttle. New York: Crown. (Organizational decay processes at NASA.)
Wright, J. P. (1979). On a Clear Day You Can See General Motors: John Z. De Lorean’s Look Inside the Automotive Giant. New York: Avon. (Organizational decay processes at General Motors.)