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The Dominant Coalition

Groups of individuals pursuing similar interests Seeks to impose goals on organization. Seek out allies. Allies have different goals. Side-payments to other group to gain cooperation. Note: a side payment by one group is a goal of the other. All such groups are by definition part of the dominant coalition Each negotiation between groups redefines the overall goals Simon says that from the multiple facets of the goals usually one is goal singled out as the organizational goal. The concept of the Dominant Coalition is embraced because The problem of reification is avoided. No presumption that members are of equal footing. No assumption that they have common objectives. Rarely a single dominant member so goals do not reflect a single member. Organizations have different dominant coalitions of varying size and content. Coalition changes over time. Interests change during negotiation and interaction. Members may be outside the formal boundaries of the organization. Ancona points out Groups of individuals or other organizations are social actors. Stakeholders extends the political perspectives focus on power, interests, influence, coalition-building and negotiation beyond the formal boundaries of the organization to provide a way to assess the environments influenceand potential influenceon the organization.

Factors Affecting the Size and Composition of the Dominant Coalition


Owners and managers The group that legally own the organization rarely perform outright control but are left to an administrative group. Interests of managers and owners might diverge. Owners become dependent on managers power base. Post Reagan and following deregulation hostile takeovers (against managers interests) increased.

Managers fought back with poison pills, and shark repellents, Much less effective due to waning power of banks and the use of interlocks. Labor Can gain considerable power by engaging in or threatening strikes, slowdowns, or sabotage and expressing their demands through collective bargaining or other forms of negotiation. Unionization is falling in both the private and public sector. Just the threat of unionization is enough for Labor to achieve goals. Knowledge working has increased Labors power. Boundary roles These are individuals and work groups that connect with important resource suppliers, mediate the demands of regulatory agencies, or embody the concerns of institutional actors obtain power within the organizations they serve. These are. are relatively central to the work flow do not have readily available substitutes successfully cope with important sources of uncertainty Finance has become more powerful as financial markets have become more volatile and investor relations has become more important. Organizations and their internal units derive legitimacy, power, and authority from their status in social environments... The social validity of a given unit is often defined more importantly in the environment than by internal technical efficacy. External Actors Regulative agencies, employee associationsboth trade unions and professions business associations, tax authorities, planning commissions, and organized interests within host communities. Stakeholders exert varying levels of influence. Many economists assert that firms in capitalist systems exist for one primary purpose: to return profits to investors. Sociologists are more likely to view as legitimate the claims of multiple participants and others affected by the organization and to condemn the culture of shortsightedness that views organizations as no more than tools of financial interests. Which interests are in control changes as environmental conditions vary. Power within and over health care organizations has shifted from owners and trustees, to physicians and their professional associations, to managers, to public funding and regulatory agencies and insurance plans. The composition of the dominant coalition in U.S. corporations have changed over this century. Power shifts during the period 18801920, CEOs tended to come from manufacturing departments between 1920 and 1940 reflecting production problems, from sales

departments between 1940 and 1960 reflecting distribution problems, and from finance departments after 1960 reflecting financial problems. Modes of capital The power of owners resides in financial capital. That of managers and workers is based on human capital. Also the power of managers and, particularly, that of those occupying boundary roles rests on their social capital. Social Capital is defined as those features of social organization, such as networks, norms, and trust that facilitate coordination and cooperation for mutual benefit. Social capital enhances the benefits of investment in physical and human capital. Social capital is embedded in social relationships. Social capital is at once the structure of contacts in a network and the resources they each hold (Burt, 1992a: 61). Burt stresses how certain features of social structures provide competitive advantage. Structural hole is the term for the separation between nonredundant contacts. Nonredundant contacts are connected by a structural hole. A structural hole is a relationship of non redundancy between two contacts. The hole is a buffer, like an insulator in an electric circuit. As a result of the hole between them, the two contacts provide networks benefits that are in some degree additive rather than overlapping. (Burt, 1992b: 18) Clusters are dense networks of redundant relationships such as are found within departments or organizations. Bridges are the relatively scarce and, hence, valuable links between clusters. A bridge represents an important social opportunity to another cluster. The notion of cultural capital allows us to understand the influence of of scientific, professional, and other elite groups who create new forms of knowledge, new distinctions and associated organizational models for example, high culture and art museums and new goals and standards. Size of coalition Rather than highly centralized hierarchies Galbraith (1967) argues the modern corporation has seen the shift from an entrepreneurial mode in which a single powerful person dominates the enterprise to a flatter structure. James Thompson (1967: 12736) argues that the size of the dominant coalition, is affected both by the nature of the organizations technology and by its task and institutional environments.

Uses of Power When another member joins the coalition we can expect the goals of the coalition to change. Fligstein (1987; 1990) documents changes in goals associated with changes in the composition of the dominant coalition. He asserts that associated with changes in the origins of CEOs are basic changes in the goals of these organizationsin the types of strategies being pursued. Power can be used appropriately to determine which of several possible goals should guide the organization. It can also be misused to divert organizational resources to serve personal ends. Founding entrepreneurs pursued strategies of horizontal merger as they attempted to control the market. As the scale of production increased, coordination and resource problems came to the fore and manufacturing officials became dominant, pursuing strategies of vertical integration. In more differentiated and loosely coupled systems, such as universities, power differences among subunits may be reflected not so much in direct attempts to redefine the goals of the larger system as in efforts to lay claim to a disproportionate share of the organizations resources. The allocation of scarce resources among diverse programs is one of the clearest indicators available as to the real goals of the organization (Wildavsky, 1988).