Page 114 - Information and American Democracy Technology in the Evolution of Political Power

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The Bureaucratic Conception of Pluralism
integration, rather than market-based forms of organization and coordi-
nation. Therefore, production, marketing, finance, and other functions
tend to be integrated into classical bureaucratic forms inside businesses.
On the other hand, low transaction costs, if and where they occurred,
would tend to favor non-Weberian organizational forms. Ronald Coase’s
1937 argument that high transaction costs lead to bureaucratic organiza-
tion while low transaction costs lead to nonbureaucratic structures is the
classic statement, and it implies that the evolution of societies toward in-
formation abundance should reduce the occurrence of bureaucratically
structured organizations. 11
This implication was born out by developments in the world of busi-
ness organizations by roughly the 1980s. Technological change did in fact
prove to decrease the cost of many kinds of information and transactions
in business, with the result that market-like mechanisms for organizing
12
firms’ functions replaced some traditional hierarchical forms. Scholars
of business and organization observing these changes added new models
of market- and network-based economic structure to the neoclassical
theory of the firm. In these models, firms exhibit reduced levels of vertical
integration, reconfigured external boundaries and so-called outsourcing
of functions to other businesses, and flexible new ways of organizing
expertiseandtasks.Theorganizationsinthesemodelsgobymanynames:
“organic,”“network,”“interactive,” and so on, all of which highlight
their “postbureaucratic” characteristics. 13 The models do not reject the
classical view that high information costs lead to hierarchical organi-
zation but, rather, add the idea that low information costs can lead to
nonhierarchical structures.
Postbureaucratic models of organization therefore constitute the con-
temporary complement to Weber’s observations about the role of in-
formation in administration. Applied to politics, this body of theory

11
R. H. Coase, “The Nature of the Firm,” Economica 6, no. 4 (1937): 423–435; O. E.
Williamson, Markets and Hierarchies (New York: Free Press, 1975). Also see Frederick
W. Taylor, The Principles of Scientific Management (1911; rpt., New York: W. W.
Norton, 1967).
12
Thomas W. Malone, Joanne Yates, and Robert I. Benjamin, “Electronic Markets and
Electronic Hierarchies,” Communications of the ACM 30, no. 6 (1987): 484–497.
13
Charles Heckscher and Anne Donnellon, eds., The Post-Bureaucratic Organization:
New Perspectives on Organizational Change (Thousand Oaks, Calif.: Sage Publica-
tions, 1994); Michael Best, The New Competition: Institutions of Industrial Restructur-
ing (Cambridge, Mass.: Harvard University Press, 1990); Walter W. Powell, “Neither
Market nor Hierarchy: Network Forms of Organization,” Research in Organizational
Behavior12(1990):295–336;FrancisFukuyama,TheGreatDisruption:HumanNature
and the Reconstitution of Social Order (New York: Free Press, 1999).

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