Power and organizational change: Re(tracing) circuits of power from innovations to rules and practices

Abstract

This paper is based on an in-depth, processual, 3 years case study of a large Portuguese industrial organization. The researcher was confronted with an apparent puzzle: in the past, formally powerful 'central' actors had been confronted with important limitations - including in their relations with formally less powerful actors, particularly 'local' actors at the plant level. At the time of the fieldwork, however, the situation had substantially changed. The puzzle was therefore about the distribution of power in the organization, about who the powerful actors were and, more fundamentally, what caused (or limited) actors' relational power. The research then focused on explaining the capacity (or lack of capacity) of various actors to structurally influence the practices and configuration of the organizational network. This paper highlights key intertwined roles of accounting and management control practices and structures, as a key aspect of wider organizational practices within the particular socio-technical network of this organization. The empirical puzzle was theorised through Clegg's (1989) perspective that power flows in organizations through three circuits, including the circuit of social integration (related with actors' enactment of rules - a key component of an OIE perspective) and the circuit of system integration (related with technological and organizational devices). Central actors' initial limitations were traced to characteristics of the circuits of social and system integration. The change in actors' power was attributed to three innovations introduced by central actors in the circuit of system integration: a technological innovation - the adoption of the financial module of an ERP system (SAP FI) - and two organizational innovations: the relocation of the Corporate Centre; and the creation of a Shared Services Centre. These (and other) innovations collectively affected the various circuits of power in multiple, interrelated ways, creating benefits to central actors. These repercussions had a structural nature, since the innovations collectively succeeded in becoming a network of complementary, mutually dependent and mutually reinforcing Obligatory Passage Points.

This paper proposes several contributions concerning the repercussions of innovations across circuits of power. Examples are embedding rules in technology (Volkoff et al., 2007) and organizational processes, redefining the scope of agencies, creating non-zero sum outcomes, and the emergence of the perception of control inevitability and naturalness within organizational normalcy. Collectively, these innovations promoted rules enactment (by both human and non-human actors) in ways that benefited the interests of central actors. Finally, the paper proposes several refinements to Clegg's framework, comprising changes in its graphical layout, linkages and even concepts.