Organizations as decision machines
Nassehi, N. (2005), Organizations as decision machines: Niklas Luhmann’s theory of organized social systems, in: The Sociological Review, Vol. 53, Issue 1.
Niklas Luhmann's theory of organizations as decision machines looks at how organizations describe themselves in order to survive, rather than trying to figure out if they are truly rational or efficient. According to Luhmann, organizations must make decisions and navigate the problem of self-deconstruction by creating accountability and stability. They also create a specific kind of rationality, which is their accountability for decisions, and this makes it possible to understand the structure of the organization's functions. In the context of safety management, this perspective can be used by understanding the role of decisions and communication in promoting safety within an organization and how the organization's self-descriptions with regard to safety play a role in maintaining it.
Niklas Luhmann's theory of organizations as decision machines is a perspective that looks at organizations from the point of view of their self-descriptions, rather than trying to determine if they are truly rational or efficient. Luhmann argues that these forms of self-description, such as being rational or efficient, are themselves a part of the practice of organizations. He is not interested in determining whether organizations are truly rational or efficient, but rather in understanding the function of these self-descriptions for the continuity of organizations. Luhmann's sociology is a systems perspective, in which all operations, including self-descriptions, are part of the system and can only be understood in terms of their function within the system.
Luhmann's theory of organizations as decision machines views communication as a present-based, operationally closed, and self-referential process. In this view, systems become surprised by themselves because there is no place where the communication can be communicated unless in communication. Luhmann's systems theory is not a theory that emphasizes a system level in opposition to a level of individual actors, but rather a theory that is interested in understanding how events that can be attributed to individual actors become meaningful within a process that itself cannot be attributed to individual actors. Systems theory does not look at organizations as entities that can be described as transindividual or that can be evaluated as more or less compatible with individual needs for individual freedom. Luhmann does not appreciate ‘the actor’ as a theoretical concept. Actors and human beings, routines and structures, expectations and experiences are mechanisms which release social systems from the danger of losing themselves in their own self-reference. Social systems let structures emerge in which their operative circularity becomes invisible. Time is the most important mechanism for this. Luhmann's systems theory is not a theory which proposes a stable structure or which begins with complex theoretical presuppositions. According to Nassehi, it is a remarkably empirical theory that is interested in the basic processes in which social systems occur and in which structures come into being.
Luhmann's theory of organizations as decision machines views decisions as the basic elements of organizations, which is a long-standing tradition in organization research. Luhmann locates rationality in a different point of the decision-making process than traditional theories, which focus on the relationship between rational reasons for a decision and non-rational outcomes. For Luhmann, organizations consist of decisions and they have to cope with their self-made form of decision practice. The main problem of organizations as social systems is the communication of decisions to perform strategies to make this problem invisible, and organizations must overcome this problem by constructing accountable anchors or by stabilizing expectable connectivities in time. The common technique to do this in decision-making processes is the construction of a decider as an accountable address. However, for Luhmann, the decider is only a construction of the system to overcome the menacing deconstruction of its own conditions. This has the consequence that with Luhmann one can disburden the decision-making process from the responsibility of the individual decider and instead focus on the systems perspective of decision making.
In Luhmann's theory of organizations as decision machines, organizations are viewed as the locations where decision-making forms are concentrated and where a special form of decision history and decision routine can arise. Organizations produce a special kind of rationality, which is their accountability for decisions, and this makes the structure of function systems observable. Organizations play the same role in society as ‘persons’ for action theory, in that they are constructions of communication processes that make themselves observable by constructing actions which can be accounted to actors. Critics who bemoan that Luhmann's theory does not adequately thematize the level of individual actors within and outside of organizations, misdirect their criticisms. They demand what Luhmann tried to avoid: repeating the everyday accounting processes rather than observing them. Organizations are authorized to exclude by their own means, arranging the relationship of included and excluded persons. They also distribute unequal and hierarchical positions within an organization, which has a cultural impact on normalizing exclusion and inequality.