An analysis of the concept of equilibrium in organization theory

Henk W.M. Gazendam and John L. Simons Faculty of Management and Organization Groningen University, The Netherlands Abstract This article analyzes how the equilibrium concept is used in four organization theories: the theories of Fayol, Mintzberg, Morgan, and Volberda. Equilibrium can be defined as balance, fit or requisite variety. Equilibrium is related to observables dependent on the definition of organization as work organization, formal organization or artifact organization. The discussed theories can be mapped on a state space model in a way that clarifies the equilibrium concept. The equilibrium concept in organization theory in general can be formalized mathematically using concepts from systems theory. The equilibrium condition can be formulated in terms of a difference function that has to be zero at equilibrium. A central idea is the necessity to maintain equilibrium by actions. This is done by means of a circular causal mechanism that reinforces equilibrium once it has been established as long as the organization conforms to the Law of Requisite Variety. The difference function on which the condition of organizational equilibrium is based takes different forms for each of the four organization theories studied. The establishment of these difference functions enables a comparison with the types of fit described by Venkatraman. It turns out that all types of fit described by Venkatraman are gamma-space based. The analysis of the four theories leads to five equilibrium types, of which two (the Gestalt type and the Matching type) have been described by Venkatraman. Three types of equilibrium that were found have not been covered by Venkatraman: Fayol’s balance / mu-space type, Volberda’s gamma-space/ variety type and Morgan’s mu-space / variety type.