Toward Permeable Boundaries of Organizations?: Volume 57

Boundaries are a popular topic among organizational researchers, many of whom argue that over the past decade we have witnessed a trend toward permeable boundaries and in some cases a blurring between organization and environment. Contrary to received wisdom, we argue that the question as to whether organizational boundaries have become more permeable or not cannot be decided empirically but is mainly a theoretical issue. Whether or not data indicate permeability or impermeability depends on the theoretical lens employed. Against this backdrop, we review how two prominent approaches to the study of boundaries, sociological systems theory and new institutionalism, not only arrive at different conclusions but also mandate diverging avenues of research. We focus in depth on several empirical trends: advances in information and communication technologies, increasingly dynamic fields and markets, invasive transparency regimes, and meta-organizations. We then introduce the contributions in this volume, showing how they elaborate on these and other empirical trends, drawing on different theoretical perspectives, to advance our understanding of the importance of boundaries within and around organizations.

Financial accounting necessarily depends on an entity assumption that shapes the way it recognizes and accounts for organizational exchanges with social environments. It thereby constructs boundaries and frames permeability in terms of what counts, is accounted for, as being inside and outside of the organization. Yet there are different possible entity concepts reflecting different values about the relationship between the organizational entity and society. This essay considers four problem areas in which these values and the entity–society relationship are at stake within financial accounting: the problem of control within group accounting; accounting for externalities; the economization of public organizations; and the construction of organizational actorhood. These four problematics suggest that financial accounting, its boundary determining assumptions, and the forms of organizational permeability it permits are deeply intertwined and subject to continuous pressure for change.

According to popular belief, transparency is a versatile tool for the governance of organizations: it is supposed to help in mitigating problems such as corruption, economic deficiencies, and a lack of legitimacy. However, is it a truly effective panacea, as it has been envisioned by its advocates? Empirical research gives reason to doubt, indicating that there is a wide gap between the idealized expectations of transparency and its practical merits. Organizations face severe difficulties when they try to implement such measures, especially because their daily activities often deviate significantly from societal expectations. Putting a combination of Erving Goffman’s frontstage/backstage theory and Niklas Luhmann’s sociological systems theory to use, this chapter conceptualizes organizations as social entities constantly engaged in boundary-maintenance, which not only comprises – in Luhmannian terms – “operative closure” (the autonomy of a system from direct influence of its environment) but also boundaries of visibility. It is thus not at all surprising that organizations regularly try to circumvent the implementation of transparency and develop new practices of secrecy. This chapter outlines an integrative conceptualization that enables researchers to reject mundane visions of how transparency ought to improve organizations, and suggests new pathways for empirical research.

“Shared purpose,” understood as a widely shared commitment to the organization’s fundamental raison d’être, can be a powerful driver of organizational performance by providing both motivation and direction for members’ joint problem-solving efforts. So far, however, we understand little about the organization design that can support shared purpose in the context of large, complex business enterprises. Building on the work of Selznick and Weber, we argue that such contexts require a new organizational form, one that we call collaborative. The collaborative organizational form is grounded in Weber’s value-rational type of social action, but overcomes the scale limitations of the collegial form of organization that is conventionally associated with value-rational action. We identify four organizational principles that characterize this collaborative form and a range of managerial policies that can implement those principles.

We are currently witnessing a new wave of the digital economy. A prime example is the sharing economy where an organization operates a platform for its online community, the sum of individuals who interact to exchange goods and services. The sharing economy blurs several boundaries of economic life – a fact that extant theory on platform organizing has yet paid little attention. We argue to consider two aspects of the sharing economy and revisit related theory to address this lacuna. First, we revive the concept of hybrid community to denote a variant of an online community that mirrors the boundary-blurring nature of the sharing economy. In a hybrid community, individuals interact both online and offline (instead of only online) and consume as well as produce. Second, we revisit the range of strategic responses suggested by extant literature to minimize the dependence of a platform organization on its hybrid community and show that the sharing economy requires management research to adapt and potentially recast existing claims.

This chapter explores the multiplicity, formation, and porosity of organizational boundaries in new, fluid forms of production. Conceptualizing them as “partial organizations,” we argue that both the intentional design of organizational elements (such as membership, hierarchy, rules, monitoring, and sanctioning) as well as unintended adjustments of “unorganized” aspects drive boundary formation and impact boundary porosity. In addition, we contend that structuring dynamics will create specific trajectories for boundaries over time. Empirically, we further our theoretical framework on the basis of an in-depth case study of the Apache open-source software community during its formative years (1995–2002). We find that both the salience and formalization of boundaries increase over time. However, different conceptions of boundaries (such as efficiency, competence, power, and identity) become salient at different points in time. While design and adjustment drive boundary formation with regard to all boundary conceptions in our empirical case, porosity develops differently for each of them. We also demonstrate that the formalization of boundaries does not necessarily reduce boundary porosity, but actually may increase it.

Assuming that organizations are open and have increasingly permeable boundaries, one risks overlooking the strategies employed by organizations to defend their own logics and routines, as illustrated by the example of the implementation of active labor market policies. It is often assumed that only open, networked organizations can fulfill the demand of offering individualized employment and social services to citizens. On the basis of an in-depth case study, we show how a jobcenter organization dealt with these challenges by developing its own decision-making criteria on a procedural, structural, and personal dimension. This implies not only cognitive openness but also operational closure and increased internal “requisite variety,” in the language of systems theory.

What happens to nonelite workers’ meaning, belonging, and identity when work is “on-demand”? On-demand organizations, such as Uber and TaskRabbit, have ambiguous boundaries and locations of workers. This qualitative study investigated how organizational and societal boundary discourse and the organization of the work itself, constructed sometimes conflicting worker roles that influenced how ride-hailing workers understood the boundaries of the on-demand organization and their location with respect to it. The roles of app–user and driver–partner constructed ride-hailing workers as outside the boundaries of the organization, while the driver–bot role constructed them as (nonhuman) elements of organizational technology. While the driver–partner role had positive and empowering identity, meaning, and belongingness associations, its conflict with the other roles blocked these positive associations, and led to cynicism and fatalism. We reflect on the possible impacts of the on-demand economy on society, workers, and the practice of work, particularly for nonelite workers.

The chapter uses a comparative case study design to address the mutations and trajectories of transparency in two organizations. We chose organizations that are similar in that they favor extensive forms of self-disclosure, but also different in terms of which sector they inhabit, audiences, and organization type: the Pirate Party of Germany and the lobby organization Epsilon. The findings, in close dialog with different threads in the transparency literature, unveil three crucial dimensions in which transparency regimes are likely to trigger unintended consequences: first, organizations have to cope with the tension between the disclosure of internal information on the one hand, and the need to appear consistent in public on the other. Second, transparency strategies can, however, turn into surveillance and trigger new forms of data ordering, sorting, and aggregating practices. Third, disclosure practices create and undermine complex hierarchies and power relations for organizational members. The comparison of the cases demonstrates that it is crucial to observe the practical implications and multiple trajectories of transparency practices.

How do organizational associations affect extra-organizational boundaries? This chapter addresses this question by looking into the long-established practice among universities to form associations. In order to examine how associations delineate boundaries in universities’ institutional environment, the chapter draws on the scholarly work on categories and conceptualizes associations as meta-organizations. The chapter finds that category-based identities, and other organizational characteristics, enacted to demarcate members from non-members play a central role in this process. In following these lines of demarcation on a sample of 185 national and international university associations a typology emerges, accompanied by a global diffusion pattern. Three sets of institutional conditions are then identified as being conducive to this process: (1) the twentieth-century university expansion and the consolidation of national higher education fields, (2) the intensification of cross-border interaction and the advent of international institutions, and (3) the formation of a global field and the rise of competition as an ideological imperative.

In their contribution, Maja Apelt and Jana Hunnius ask how the physical proximity of organizations in a network impacts the creation of organizational boundaries. They assume that against a background of shared experiences, members of organizations can develop a community and cooperate on a basis of trust, but that this is not tantamount to organizational boundaries becoming permeable. Here, Apelt and Hunnius draw on Lefebvre’s (2006) concept of space and adapt this to the practice of organizations by drawing a distinction between three dimensions of spatial practice: spatial practice in the narrow sense, in other words, how the organizations structure the space; organizational practice or, in other words, which formal and informal structures they establish; and representative practice, that is, how they speak about space, legitimize their actions, and thus give them meaning. Empirically, the chapter is based on case studies at two German airports. Using the evidence provided by these studies, Apelt and Hunnius are able to show that the organizations develop different practices. While at one of the airports the community is strengthened, but the organizational boundaries are protected at the same time, the other airport establishes cooperative structures through which the organizational boundaries are weakened. The airport community plays a less important role here.

Access to personal data is key to many of the most successful recent business models. These models rely on individuals outside of traditional organizational boundaries as their product, content providers, and customers. The topic of organizational boundaries is central to organizational research, and these models raise questions about the permeability of these new forms’ boundaries. Herein I elaborate on data-based business models, the organizational field that has emerged around data governance issues, and the institutions that have formed around it at different stages, by various actors. I also explore the interplay of institutional field and organizational boundaries, to identify how field-level issues influence the permeability of organizational boundaries.

Close interaction between universities, industries, and governments has given rise to hybrid organizations incorporating economic development alongside scientific research and higher education. We will approach this phenomenon and the related organization-theoretical problems by looking at two cases of discipline making to discuss the potential of the concept of organizational field introduced by the neoinstitutionalist school of organization theory. As this concept presumes the Bourdieusian theory of social fields, we will consider possibilities of reflective contesting of the states of doxa in discipline making in regard to organizational aspects of disciplinary boundaries in the university-centered system of higher education, its demarcation to business and schooling, as well as to the related ideology of professionalism and science policy. We will also comment on the Bourdieusian conceptuality inscribed in the neoinstitutionalist metaphor of organizational field from the perspective of systems theory inspired by Luhmann. This is because we believe that further development of the semantic focus in the problem of disciplinary boundaries would benefit from Luhmannian tools designed to grasp organizations as social systems that facilitate interrelations of differentiated function systems relevant for discipline making in current technoscience.