**4. Organizational paradigm analysis framework**

#### **4.1 Organizational paradigm**

The previous section referred to a situation in which a hybridisation of 'freedom as control' by government and university administrators and 'academic freedom' in university faculty members has emerged. The above situation is closely related to the issue of bounded rationality brought about by their values. In this section, the concept of *organizational paradigm* will be introduced to systematically combine values and organizational culture as sources of bounded rationality and to position organizational culture as an analytical perspective of *organizational failure*.

Transaction cost theory, which is the theoretical basis for the mechanism of 'the organizational failures', incorporates concepts related to organizational culture, such as 'atmosphere', which enables 'supplying *a satisfying exchange relation*' [14]. Milgrom and Roberts [10] also stated that 'implicit contracts', which are closely related to corporate culture, correspond to a shared set of values, ways of thinking and beliefs and serve 'An important adjunct to incomplete written contract'. Focusing on organizational culture as a factor in the forming of bounded rationality at the organizational

### *Organizational Culture as an Analytical Perspective on 'Organizational Failure' DOI: http://dx.doi.org/10.5772/intechopen.113154*

level, not only among individual members, is useful in examining *the organizational failures* in universities, which encompasses intergroup conflict within organizations due to differences in values.

On the other hand, the concept of organizational culture is multivalent, Schein [41] identified the elements of organizational culture as 'articfacts', 'espoused beliefs and values' and 'underlying assumptions'. Tierney [25] who noted 'organizational culture is as slippery a term as the word culture' pointed out the elements of organizational culture generally agreed upon by organizational culture researchers as 'environment', 'mission', 'socialisation', 'information', 'strategy' and 'leadership'. However, in all of these, the concepts of values and mission are included in the elements of organizational culture. Another term that has the same meaning as values and worldviews is *paradigm*. Bess and Dee [12] point out that 'underlying assumptions', which Schein [41] defines as part of organizational culture, are most closely related to the concept of *paradigm*. Thomas Kuhn used the term *paradigm* to examine the history of the development of science, which Kuhn defined as meaning 'universally recognized scientific achievements that for a time provide model problems and solutions to a community of practitioners' [42]. The concept of paradigms has also been the focus of attention in organizational theory, but Kagono [43] criticised that 'what has been called a paradigm in previous discussions can be adequately substituted by the concept of a common worldview or organizational ideology' and that 'the inherent implication of the concept is developmental' and proposed the concept of *organizational paradigm*, which defines the thinking and behavioural patterns of organizational members.

Kagono [43] explains that the organizational paradigm consists of three elements and defines a *metaphor* as an assumption of thinking that is unquestionably accepted by the members as legitimate within organization members. And the metaphor itself is composed of the following subcomponents.

*'The members of a company themselves share a variety of metaphors about the company, about the relationship between the company and the market, and about the relationship between the company and its members' [43].*

The second and third components of the metaphor's upper structure are then explained as follows.

*'The second is the paradigm as values and norms that more concretely indicate how members of an organization should behave in different situations. It is the level corresponding to what we have called the daily theory and is a similar expression to which we have called organizational culture in organizational theory. Finally, it is an exemplar or example that concretely represents the daily theory' [43].*

Organizational paradigm have robustness and can lead to a decline in the organization's adaptability to its environment. Hence, for an organization to survive in the long term, it must undergo a *paradigm shift* [43]. Milgrom and Roberts [10] describe the difficulties of making changes in corporate culture, which are closely related to implicit contracts, as being equivalent to '*breaking old contracts and implementing new ones, all without the benefit of being able to discuss the terms of either contract very explicitl*y'. In the light of this point, it will be understood that *organizational paradigm* and *implicit contract* are synonymous concepts. The current situation in university can be described as the coexistence of two types of contract between administrators and faculty members based on different values that have not been discussed on both sides.

The above-mentioned *appreciative inquiry* [12], which creates a *new contract*, may be one solution to this situation.

#### **4.2 Typology of organizational paradigm**

In this section, the concept of *organizational paradigm* is used to attempt a typology of the values of university members and the organizational culture that arises from them. The 'organizational paradigm analysis framework' based on the above typologies will be presented as a frame of reference for understanding why organizational failure occurs in universities. In examining this analytical framework, reference is made to the university typologies of Olsen [44] and McNay [45], who formulated a typology of universities in terms of adaptability to the society surrounding the university. Furthermore, the 'Competing Values Framework' (CVF) [46] is additionally taken into account in making the connection with the organizational culture arising from the values of the members. Considering the consistency between the concepts in these previous studies, an attempt is made to integrate them into the 'organizational paradigm analysis framework'.

First, Olsen [44] in Table 1 (p. 30: hereafter 'Olsen Table 1') describes four types of university and governance based on the two dimensions of *autonomy* and *conflict*: a rule-governed community of scholars, a representative democracy, an instrument for national political agendas and a service enterprise embedded in competitive markets. In terms of the low autonomy typology, low conflict is a 'rule-governed community of scholars' based on traditional value norms, while high conflict is a 'representative democracy' based on the participation of diverse members. The low conflict in the high autonomy typology is an 'instrument for national political agendas' that acts as an administrative organization, while the last high autonomy–high conflict is a 'service enterprise embedded in competitive markets'. The 'community of scholars', which is based on academic values, is classified as an 'institution', while the other types of 'representative democracy' are an 'instrument' for individuals and groups within the university to realise democracy, while the 'national political agendas' promote the government's national policy, and the 'service enterprise' type is organised as an 'instrument' to meet the needs of external stakeholders and 'customers' in a competitive environment (p. 29). The top row of the organizational paradigm analysis framework (**Table 1**) is defined on the basis of the above. As noted above, Kagono [43] states that the organizational paradigm is composed of three concepts: the '*metaphor*', the 'daily theories' meaning the *organizational culture* and the *'exemplar or example*' meaning representations of actual reality, of which only *metaphor* and *organizational culture* related to the perceptions of the members were placed in the leftmost column. Furthermore, the sub-concepts of metaphor are also discussed above Kagono [43] and are divided into the following categories: 'the ideal state of the university', 'the relationship between the university and its members' and 'the relationship between the university and society'. In the upper row, the 'daily theory', organizational culture, was placed. Next, in the second column, the 'constitutive logic' in Olsen (Table 1) was used for 'the ideal state of the university'. For 'the relationship between the university and its members', as it was difficult to find an evaluation perspective equivalent to Olsen's (Table 1). The author used the 'dominant unit', the 'internal references' and the 'administrator roles of servant of…' from McNay [45] in Table 9.1 (p. 109: hereafter 'McNay (Table 9.1)'). For 'the relationship between the university and society', we used the 'reasons for autonomy' from Olsen (Table 1) and the 'models of universities as organizations' from McNay (Table 9.1) , together with Figure 9.1 (p. 106) from [45],



#### **Table 1.**

*The organizational paradigm analysis framework.*

which shows the four types of university models. In integrating McNay (Table 9.1) and Olsen (Table 1) for the above items, based on the suitability of each type, the 'bureaucracy' corresponds to the 'community of scholars', the 'collegium' to the 'representative democracy', the 'corporation' to the 'instrument for national political agendas' and the 'enterprise' to the 'service enterprise'. Based on the above, the 'organizational paradigm analysis framework' was constructed.

Next, we refer to organizational culture. Cameron and Quinn [46] defined the competing value framework (CVF) based on two dimensions of organizational culture, external/internal and stability/flexibility, and proposed four organizational culture typologies: adhocracy, market, hierarchy and clan. Adhocracy is concerned with *innovative and pioneering initiatives* (p. 43), which it states represents the characteristics of an organization's emphasis on *mainly in the business of developing new products and services and preparing for the future* (p. 43). The same external focus dimension, market emphasis on stability and control than adhocracy. Market's special character lies in its *transactions with (mainly) external constituencies* (p. 39), which differs from the hierarchy's emphasis on internal constituencies. The most important aspect of market culture is the emphasis on *transaction costs* which Williamson [14] proposes (p. 39). Hierarchy assumes Weber's bureaucracy, an organizational characteristic that emphasises *stable, efficient, highly consistent products and service*s (p. 37). This assumption provides validity when the external environment is stable, sectional functions are integrated and members are under control (p. 37). The clan is an organizational cultural characteristic exemplified in Japan during its period of rapid economic growth (1960s to early 1970s) and derived from the Japanese-style management of *shared values and goals, cohesion, participativeness, individuality and a sense of 'we-ness'* (p. 41).

Based on the above typologies, the organizational culture in CVF corresponds to adhocracy as 'community of scholars', clan as the 'representative democracy', hierarchy as the 'instrument for national political agendas' and market as the 'service enterprise'.
