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Chapter 5 ■ Theories of change: critical perspectives
wider interests nor deal with questions and concerns others might seek to impose
on them.
This is a challenge to legitimacy. Sure enough there are ways of responding.
Stakeholder theory is one such response. In this theory the modern organization
must respond to the concerns of the various stakeholders to which it relates and,
in any event, must operate within the legal framework established by the mod-
ern state. Thus it is that these so called broader concerns can and are responded
to. In the context of the emerging ‘market state’, assuming for the moment that
we accept that idea, the view of Milton Friedman (1972) would still hold true. In
such a context the modern business organisation, in pursuit of profit maximiza-
tion and operating within the law, would act in ways which would be effective
both to owners and the society of which it is a part. Nevertheless, the current
interest in ethical management, sustainability and social responsibility suggests a
tendency to reject at least the extreme form of that argument.
In any event it is not obvious that all thinking and writing about strategy and
organization is powerless to take account of the concerns raised by critical theory.
There is no monopoly on the ability to see that the existing organizational para-
digm does not always work effectively. For example, Argyris and Schon (1978)
clearly do so by distinguishing between ‘espoused theory’ and ‘theory in use’. Or
at least they show that decision making in organizations is not as simple nor as
deterministic as the critique of positivism supposes. In a similar vein Senge (1990)
argues that reflexivity and dialogue enable people in organizations to explore
issues and assumptions more freely. Why would that be needed in a positivist
world? Why would senior executives spend time and money on training managers
in such approaches? As a smoke screen? No, that will not do as an argument.
There is too much evidence that in learning settings executives can and do pursue
a fuller exploration of thought and experience. This brings forward the possibility
of transcending current views and ideas.
Fraher (2004) has presented an even tougher challenge to critical theory (which
is not to say that this was her intention). She has written a history of group study
and the psychodynamic organization through a study of the origins and develop-
ment of the Tavistock Institute of Human Relations and the A.K. Rice Institute.

Utilizing the ideas of Freud, Jung, Melanie Klein and Wilfred Bion these organiza-
tions developed approaches to the study of groups and of organizations. The initial
impetus was the problem of rapidly expanding the UK armed forces in the early
Second World War, giving rise to the need to establish an effective officer selection
board process. The emerging ideas and practice were subsequently applied to con-
ferences of practitioners interested in issues of authority and leadership in groups
and in organizations. Viewing both organizations as ‘idea organizations’, Fraher
shows that each achieved transformation through reflection, the willingness to
experiment, and to openness to new ideas and groups, but neither disregarded the
past thoughtlessly. To achieve transformation organizations ‘must find ways to
acknowledge and then mitigate intergroup rivalry that inevitably arises when com-
peting ideas are engaged’ (Fraher, 2004).
To what extent does this study provide a challenge to critical theory? The idea
that the construction of knowledge and ‘strategy talk’ may disadvantage those
without power needs serious consideration even though in practice it may be an

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