Chapter 11 Political Arenas and Political Agents

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  • Topic: RJR Nabisco, Nabisco, F. Ross Johnson
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Chapter 11
Organizations as Political Arenas and Political Agents

Introduction: Wal-mart
Founder: Sam Walton
Started in 1945 as proprietor of 2nd best variety store in small Arkansas town
Over 2 million associates
> 90% of American households shop at Wal-mart
Wal-mart effect: multiple ways this organization influences consumers,
vendors, employees, community, environment
Example of Wal-mart's political influence: disappearing cardboard packaging for deodorants; costing $0.05
Organizations are both arenas for internal conflict, they house an ongoing interplay of players and agendas; directives from the top with pressures from below And political agent or player operating on a field crammed with competitors pursuing parochial interests, serving as powerful tools for achieving the purposes of those calling the shots; organizations operate in complex ecosystems (interdependent networks of autonomous organizations engaged in related activities and occupying popular niches

II. Organizations as arenas
Today’s winners, can be tomorrow's losers; change and stability are paradoxical--organizations constantly change and yet never changes
Barbarians at the Gate--Ross Johnson's example
He began his career in the 60's
Charming, humorous, charismatic--moved ahead
By the mid 70's he was second in command (to Henry Weigl) of Stanford Brands
Lavish spending placed him at odds with his boss
Wooed members of the board and gained more influence that Weigl
Eventually gained control over the company
His lavish spending etc., produced mediocre business results
1981--Nabisco proposed a merger of two companies--1.9 billion deal
Everyone thought Nabisco would be in charge (over Johnson)
Johnson used his "political talent" to win over the Nabisco chairman
Johnson eventually took over the company
1985--another call from RJ Reynolds company (tobacco)
Soon merger transpired; 4.9 billion
Johnson used his same barbarian political tactics and eventually took over too
B. Political Dimensions of Organizational Process
As arenas--organizations house contests and set parameters for players, as well as stakes and the rules of the game
Every organizational process has a political dimension
Actual question is whose preferences and interests are to be served by the organization
The assessment of organizations is dependent upon one's preferences and one's perspective
Groups have conflicting preferences, but they have a shared interest in avoiding incessant conflict; so they agree on ways to distribute power and resources--structures are the resolution, at any given time, of the contending claims for control, subject to the constraint that structures permit the organization to survive

Ex: Ross Johnson’s decision to move RJR's headquarters from Winston-Salem (had been there for over 100 yrs) to Atlanta

RJR Company was the pride and joy of the community, in terms of business
Structural logic points that organizations should be placed in a location that best serves the business
Johnson saw the small city as boring
This decision made Johnson the most hated man in Winton-Salem, but he got what he wanted

C. Sources of Political Initiative
Two major sources of political initiative:
Bottom-up: relies on mobilization of groups
Top-down: relies on authorities' capacity to influence subordinates
Bottom-up--scripts for revolutions: a period of rising expectations followed by widespread disappointment
Rise of trade unions--developed as a result of Industrial revolution--rapid urbanization and the decline of family farms
Emergence of American civil rights movement--after a massive occupational and geographical shift for black citizens
Antiwar movement of the 70's--juxtaposition of an unpopular war with a draft lottery that affected every 18 yr old male in the US
Environmental activism--knowledge...
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