Atha h ARTO OA Oa : Anh 55S inate dull cog en ay rapeilcay Maatahanas Pore Ss Re cern) TEC os eens PE PRS i eon tee src t ay tet eet : As * iS a et iN Sana ASEAN GW Rong) ‘ sata AIA Me MAL MANOA ALA koma Vv ire at ly Bes Riser AW bf tank ay Wie thane idtars Siromttys tin iets {aN San 1 Derr sdeuinateaneauingan tas en ae aaa \ Te ASN yest m 2a cd ane sitet jae aaah! ? Pina runkasoa teas aay Ta arated rei tere: F ANTAL OMT Le RATA \ ition iat Peenen oi daa a VN a kaa f Bun ae Ain asteantate H at iveblir hort pent piatoc\ habsayayen ts. ‘ t i aa! Perey eae AAU lent ky tae. MAR GARMAN CATION. Kida Muahyanaasaarpeest oes ethan? athe Drie ti Nad MA Rant wtp gts 0 aes sis yok athane Were a ree wig ae hada 2a oak Lye nadonatal ey edtatattealt Or valent ay Ni AemAU NAL, my estan bts ry alii le tae AURA Bia irk oh tan iam Anwa og ae Cerniny ta ies mat anmenniane vane % ; eet gi atthe aca Aaa oa rh ayes 5 4 aati th slatne yale r ory cis saatohahis tinta etl teebe ata saa igen Ra Iyer nung an tut tt A an Sis aoa fod da Aa Avera ed Shacé Oo eRe aren rT CRT BRODER SOR ETO i < mre huadicaiagt atlases Leaked Citenrit anoint NT tee Kio ratanayiniaye thet duo bt fag aaA asad i nt Brveiisitss Meet How AR SoA NT TAA avast hseqay vy PRTC ENaC ETL YaT CYT tie Etc ern Res Ir WAAL ADM doe Ate g, Grae crt Hays ae tapas Aiiehenad yt CLavnit eC ALAS AN Mey Aap hictin fy iuheae He enna ay ih i mt in a ee mae me ge aa iy peo Avtat oe an as weg yas ihecige heat acs fe Aihen ah y niente i ian Ags ane aah meh enna TENS, A eahn aba boda cha) eat ian eho a oa Aras Rla ti ay 4 Ru a WR aaneny cis SAG ae am sands Las at re AW \e i eater Cet Vasa oti srt yk WaAWay: aN MNCL sani Mgaekeantatea y maha tel a ie Ay Navies Bahri a avn SLSR ie gba vam au Ayman heady he a i ry Tans AMT Wiss nCader tata ia wet hit 4 4sap ATA W eo eeiyays WA Sy Dearne VICE a YRYEIOTLE i a staan AGAR NG enna Bane sPeie Srrcenna rr tny te haha, agi gnidun eA A CN MT aa get a Oo tay i wae Bouneneis Patt Bar leat bra ys areca Foci ott Vist WANA! wabitiuonesaaet see ein vo sbdaatgee bats ‘ * % ie Pri atar vi ie ‘ Apsenyasal CAN oakeieatata es Gh: ieafain! is thsts Win Rekha acay fa we tet \ ri ay Ths. Adacwrmtiyhs Satta Hear heey A Beg Ne ic PARA SOUMMdcunereansAvenn seine i ate 09 4 Aen A Abe AM CEN, ; Aha tH Ge iH { Sr tast Ne of gh “a ede VER ETS ashes te: yi is Parte Peers Sith ack! sac REYES egccheaye anys tt Harned ay ut as arerinhy SASATAZWES ENO iy He iced k : \ are se enayas i hofel de BHR z Pareirrittareneren rat eor ‘ f seh H Seta se muatyAacecee Dect esr ge ONE tree yeh aay ‘ TiS or exvaekyinty clade yh reat 4 Perec dete ait Ere ‘ i Pecan Ate Taree 5 7 Sf arr ite bt teas rteereageentot PAK en poy edu Airs Tah © hea bead aR Tena eta ordenerkake td SERPRET hee syeeiye phode tos MANS oy foe partys be gig cy 0 ook sia tereerge ola ate ep hyip bo of sate ates ACN EM pette ee ’ Tests a tyf i at neeseeyeas it teil teeth “i an ripen aee : an te Bi ri aH OTH Boh Wintel yom tys gt ot meat! sey td te Ne EI ote estore Frets ttecasote Penner a Pe WAST abd wn“ Lavy aipne sy ra ri8s a op ; eae So Sel “ay ein at! saat beds iptedaws vieuhdgitga tee Theva eevee vee ay hprukigates yt Titie Pivaptelaneta make ' , Tote iby nines eviniCN rg Tenge: oy Tite ete cate Viatigodates iyranywiewng wire ty‘ Pes eer hedtoyr ar Spee g ay ane aT Pan) Phe ns Hyer evs ye itn) uly Terget eo a7 C8 EH: Orns Srivitey seriall vict sale UManerecsiucadeay tasetigete ly Ty tieearesa tee : a i % ih Banned itsett deities ! ahaa leh pel re Teh e ANA TIE Wratce a caensoh rd see heey UNIVERSITY OF; ILLINOIS LIBRARY AT URBANA-CHAMPAIGN BOOKSTACKS Digitized by the Internet Archive in 2011 with funding from University of Illinois Urbana-Champaign http://www.archive.org/details/interorganizatio48pfef 7 a ri : 1 ls a) | See i ha ) mw «6 heal ie \ a + | 7 ; fe a\ - R ‘ - ij PR eS a is i } 7 7 Al hy 7 iy > - ¥ > 4 ’ ‘ / | — iar. oe i - . =e 1 . - —__ oe) ‘ t | le = Faculty Working Papers College of Commerce and Business Administration University of Illinois at Urbana-Champaign FACULTY WORKING PAPERS College of Commerce and Business Administration University of Illinois at Urbana-Champaign April 21, 1972 INTERORGANIZATIONAL INFLUENCE AND MANAGERIAL ATTITUDES Jeffrey Pfeffer University of Illinois The author wishes to acknowledge the assistance and advice of Yair Aharoni who so generously made available the data on which this study is based. The comments of James R. Miller, W. Richard Scott, Michael Hannan, and Eugene Webb are also gratefully recognized. No. 48 Pm abe gen stk 2 at Ome ° . q ba “ 7 f. ees SEALE “ Bio . f to 3 Heqah, see sae 2 i ere a 3 eae a : . wh 3 : 2 ABSTRACT Managerial behavior in organizations is probably affected by influences from external organizations in the environment. It is hypothesized that the extent of external influence from specific or- ganizations will be related to the degree to which the focal organi- zation is interdependent with the external organization. Data from 141 Israeli managers tends to support the principal hypothesis. Firms that sell relatively more to the government perceive themselves as influenced more by governmental demands. Firms that are in relatively poorer financial condition are influenced more by both the government and banks. Managers tend to report spending more time with external organizations to the extent that the firm is interdependent with them. And managers who tend to rank external, governmentally controlled paanaee as being more important to organizational success are more likely to rank the importance of having political connections as being more important for a manager. 7 aint veresdioqy fogboaieg oda dtoqque Uoeaieta int on6 geita rk *abanaab neds we oes’ jet) ae id “ bagdstin. xldadony, ah Prien oree mire iene 7 sh mea Reet Aya, a ya 9 ee : An 3 ei a edanox ty | orl ae Muabapehitant, toinnidne mort ‘aaomelliae : eal tiay | ei Br he an HW) } : “16 abso ed | senouitiat naive k pao saben ay au hii 30 iF fet j SY rl egal ohana pace ¥ c buts Hi wy a6. ebrfeands outeonag pact ine he ytowi ule ‘aa wie _Atisimrsbveg aay aes xe sock ‘bostiouts nt exh | mots thaos fanlanels ay Oe aan q 7 Isnz9ax9 Si ar One ee: - a _ See a ui : gfadtes ak ob (EERE canta sa sittin i oie: a i 3 aatinw a searnans ot i - via - , a ar ts . an vaaets %s wsthines od wa ondant “een. ‘gaat ‘ee : * ae ee 7 ae Nite m a . Salo, aa boyanany ‘prams vee, teatgatansions, oa x0 an "x : i b; -_ a al ., ae Z -baeo ae tow" dromeperee: iw weed ee slasare a9. Thalastaaa es » ; Palace ial vtdeae eer. e's steaagorge »amste. eotnain & = ie ; in ee a ; banbuag outs ‘ony nolass?nepto. A: > ae ata ati ‘de a Se 7 soe ee pane oe et bowsay wow Seema vio ods emia en st ery awhooW er ; — ny fue a ee pet) useaow bre. soesead " sgaplondaod ae - Ba . iki ao. sanisonaib ets gure pret hi persia jae . af i aiaat n. gad. is ables, ta eon metre Simpson and Guljey (1962) examined how differences in the goals of Lhe organization and pressures from the environment af- fected organizational operation, while Pugh, et al. (1969) investi- gated the inierrelationship of a variety of organizational con- textual variables and variables of organizational structure. These studies can all be distinguished by their focus on the interrelationship between environment and elements of organization structure. More like the present study, Dill (1958) examined the impact of the environment on the behavior of managers. In his study of two Norwegian firms, Dill provided evidence that managerial behavior was conditioned at least in part by the environment, as well as by factors internal to the organization. The present study focuses on the impact on managerial per- ceptions of their behavior of influences emanating from specific other organizations in the focal organization's organization-set (Evan, 1966). This study, then, is different because the environ- mental components being examined are other organizations, acting in mechanisms of interorganizational influence, and the effects being examined are actual differences in managerial behavior and attitudes. interorganizational Influence and Managerial Attitudes We hypothesize that interorganizational influence arises from conditions of asymmetric interdependence between organizations. In turn, interdependence can be productively viewed in a resource- exchange framework (Levine and White, 1961). We shall argue, then, that when organizations are interdependent, because of resource exchange, and when one of these is less dependent than the other eal Bi 09% ie nani bath wort bin fer 19 oe yell ‘wie mays, = ht) Deemed vino ae ite “ty ‘odes a io on tind uate) hy aang | mek tO ua Fatt Lert: bores | tea bet) ‘ia: ae Meas a in a ay Peuie) roading. io yet 5 ao sano algae ath bore i aria iid figtnkd W sete Ri etilaryed ta autuni ast: Tai ye tui edt atc auaed nies ad hur 298 aw tea ne astboun wear, naidushddats 45 renin ban ‘sown 2d vies sanihod ajsuoisstonivaady 7 Pen beainiee (Rear Hid ers wngeiay ts mid Syvo joa: fe at ny. » te agairem | tw Youvnses ail is ‘ingtr ve ‘ia to 3 Falzagnooe deity ncn bes babivore we cat gor rs emeain tyra ould «i yey, ae tees 3 staves ew set a a ct ai PE eRATIE ade oi! Josrsoans Frayna x ae ® Tew a 7 sad | Tuan ib pei os He nastirs ghost scan ae a ai bbiige int gotten schon’ a2 4 solving intoats Ao nods ea inen i ie i sonia ren * ‘npkdeichnwga® haat er wt ‘nae et nage r8d30, a “tions: odd adia yasins i tb o aad ies AA dare, ey a » alison Bibi deaptngxe 18629 ate ter tab ants ‘vino oaqio Kedose “f aes, we “bnsbihe Baa bne aoaiwud tek ina tio co ‘aut ingidasin i 4ay aobvaded eee re deononsth tb Fanda8, ane gan jie r nha - a ~ a re {ies ty : % , as a ; r eS mes ia iro benhie arial eh ehanapd uegr0n 8A sie ‘agaonoire ae ns ie nt take aneinng 30: ines slgebasqebaan ptooimanebe 30 seed + wisyiun iss * at ‘bewe2y etabssoubent at Sie any Ei ee ry cos iene 1 pling “gis ol 10h aati he ‘antyay ees ’ ie Sirah | eae Aid, or) selene peace bpomebaatinh: an | etek ity md A fr ay: | a vitae ark ee sera uret eb s5= on the particular exchange relationship, conditions exist which can lead to interorganizational influence. Some examples may help illustrate the types of behavior to which we are referring. Perrow (1970) reports that it is believed that General Motors audits the accounting records of some of its smaller suppliers, to make sure that they are not making too much money on the business they are doing with GM. In this instance, the small suppliers are selling virtually all of their output to General Motors, while on the other hand, each supplier comprises only a minute fraction of the input-system that General Motors itself uses. Moreover, since there are relatively few automobile companies, there are few alternatives for the small suppliers in terms of markets for their output. Thus, the small suppliers are more dependent upon GM than GM is on them. Consequently, General Motors can use this asymmetric interdependence to influence the ‘organizations to sell to them at a relatively lower price. The antitrust laws are literally filled with proscriptions that seek to prohibit the use of interorganizational power. Sup- pliers are not supposed to be able to restrict their distributors' resale price or sales territory, and tying arrangements and con- tracts are also illegal. In most of these instances, the supplier has a large number of distributors, but each distributor can buy products from one, or only a few suppliers. This leads to asymmetric interdependence, and to the potential for interorganizational in- fluence. In the cases just mentioned, society has acted to pro- hibit the actual exercise of such influence. Vache ae mes, » sa ‘uno haat phi Ldtameinl ae ine hae a a, he il Ni FN MND dt ach a Sasdunieiline = : | ed! aiakwts tod ie eaays | ay ey wie Hide naka ne ey sama fi : = Dine ‘as EY Feds a‘ Seams, os a 7 pada bis Er oa e me a | cy me) far # te salad wea ina! ¥aN: oil 7; “unin aia tose 12 i See eo hg | a ie dei i a . Hai ‘toa gotten jae ear yon "kt ‘yuk ton ay “abi Tague set ed ' i 5 6 =i : i) “ 5 = ae 2 Ha : NA, iad oA | \aonetent ants, ‘at: se. sigh gidob er6 its esi ita ne wee fs oe ny 7 = ovary rr et 31930 tes te ite, tlloutstv gad thas axe a Ftggue fines 9 | ae ae a) —- tebieeins sot faque foes | sboad 08. By (re ci hl 1 4 a yee ae of ty i fi a) i i ; v , py jhe rad maaicemin hd it yee sa ity by aren y roth veld 3 ‘abao': Ve: av semeieh OHNE Ne ts: a ) +09 ‘emesirtnl anonerv0g, Yo ise. oy fonxai at andy sisd09 hone meat a oe t Wie fatidados od, ant ae) wes 4) ay te ualioulbiats et aan sa “gue Pa) wid WUE ‘ine obgxt | 14 MG rae, sit, > weeta eqelsyab aliIs09 phe) Mineg., mila, Her Tagae on oda 0, eane's art , Ma Lee ANON, ey, Reig DA! o estos aks? wid. ‘is eavent THY 2D) We mati KS (ee Ironate ves! band ot im} it Feed bivow, ae th jaavat blige T bi dition) yi » ee oy * ied ad, er Foc ebes uy aii ng sep wne ~10- The Kendall rank-order correlations between the percentage of Sales to the government und the answer to this question are displayed in Table 1. Note that all correlations are in the ex- pected direction, and that they are all statistically significant at the .035 level or less, Table 1 about here A second question tapping the influence of the government on managerial decisions was as follows: You are looking for a Vice-President, and are trying to locate a good man. Two persons were suggested to you. One of them is liked by a central government personality, but does not have the optimal qualifications for the job. The second man has the best qualifications, but his same government man doesn't like him. Would you 1. Take the first man; 2. Take the first man only if the job requires contact with the government; 3. Take the second only if ‘the job does not require contact with the government; 4. Take the second man. The Kendall tau correlation between the answer to this question and the percentage of sales to defense is significant at the .05 level. Firms that sell more to defense are more likely to choose the vice-presidential candidate favored by the government. The extent of the financial limitations faced by the firm was assessed partially by the following question: Do you think the firm is limited in choosing its source of funds? 1. No; 2. Generally no; 3. Usually yes; 4. Always yes. The answer to this question, as hypothesized above, correlated -.112 with the answer to the question on investing in a development area, a relationship which is significant at the .04 level. The direction of the correlation means that firms that were more limited in their financing tended to more frequently be willing DEW Ot Bk a “8: . ae” as TC hate? ot ioe anit Pea ‘gem Etat engi upon dot ad Vi eho gem Huh ai wlwE > .t_f eae pie: Mh - vita Biusew oy avot- 2 syqendaevos. wel aeew penn ont agains rag, oi c Pe a 0 Teams 9¥ 3 IS te 6h naw nit gees ny waoaa, Ar. 6 i ai ME, [eaenereaT ‘oth joe ryed(io2 o*etops® dna. i9ab dot 9 ; | a) 7 10 F fen va, pi splnad ine aol npg vs si ; " Rin i) smal oh lh ina. da e- rn A spay ells mj LS iv i bs eat ta aes fe eee . Trae a DY re. fp bs i & ‘ AL: 7 5 nee ire Pruitt) eas i ae fun i . i ms i, a ’ | apa Teh ey wane a i CaN oat poe cnt nee ne, ote ais od satadanb ee | realy’ sh ea Ninos Saicd det (atts col ere aes nen dalzelet3e rasp Habeas, “ a hd *ameat tage a “oener ob, of ‘astes Me sguandorna wh bag base -ghing 70m oa ovdsiol. ay eater 1 ten ‘vast Cake faye! a, ‘tel, a na . “tanasrseoy wid bie boxownd panhtionge int ie Leow daoty, ad rouse ot aa att na he oder hed , rae! adios 9 ‘aay So dives ot gonbe ls. ey ata sae nak kad tive f ei leah soiis tom ae badetoyzgs wie erect al sei sen aes a omer wee” , “Anemno Laval, ty id & teva Ay? oo ahs pokey pind omer orig cio nat aa ae abn col seboige id c y Bs, ‘sor iaoup ani jos Tet adi gl Bietineg = i rw Se crgel ial Pits as) oe ‘ A. ap ae y 4 with aneeah 1, nos seu ait: ‘oy ‘i bs ee sy yy i} it ae ile to locate in the government-sponsored areca. The correlation be- tween this question and the one on choosing the vice-president was in the expected negative direction, but did not achieve statistical significance. Yet another measure of the influence of external organizations on the managers' decisions was obtained from the following question: Please rank the following bodies according to the amount of influence they have on your freedom to make decisions. (The ranking proceeds from 1 for most influence, to 15, for the least influence.) The groups include government ministries, shareholders, directors, workers, customers, suppliers, and competitors. The influence of the Ministry of Trade and Industry was correlated non-parametrically -.098 with the extent of financial limitations reported, significant at the .06 level, nie correlated -.121 with the percentage of sales made to the Shekem, which is significant at less than the -03 level. The reported influence of the Ministry of Finance was also related to the reported financial limitations, with the Kendall tau value of -.172 being significant at less than the .003 level, while the influence of the Ministry of Finance was correlated at less than the .10 level of significance with the percentage of sales made to defense (Kendall's tau = -.085). Once again, then, we see demonstrated the relationship between both sales interde~ pendence and financial interdependence and the reporting of in- creased governmental influence on managerial decisions. In addition to the interdependence resulting from the sales distribution of the firm, and the possible interdependence arising from financial limitations, there is a third concern which involves ay wait noisatoxse3 ae rf a es tas sanniia- ona ashe oe é : ir “38w webiwesq- 9Y ano 8a Jee ‘oe Sn nal fivp) > itd hs ‘ fpalsaiansa ovalitoa don: bab. que saaatoonis wisn babanepta i . 304 | - rs - i Mae Be Ms Abe > ; a W a * : ® Jaen shh Aaa ¥ > 8 ee engi aesidugse Lense 33 a io » soul. ads: id su ian -eatatine ae if ; _ - HERE aurivatton iit work ‘bait sado any 39688 gah onsen aia eT Le eae ee rae | ie ie pa ont : sauems, 93 ‘of anileronse sorbed ‘qin “al hits egil : senolelsab: eben oe woboast Hey He. oveit ‘gosta 89004 m9 TS al 70. A ae sbessorg potiies a i) a eee ha ae id ; Oe cetied jaaal ad oa a : ba0390555, _cbphbantenede. satsseteim 2aamexavag) sot oat —— ( a ae aati nett carepiasann> bas Poems a a ; er 4 | Pe speravoieg ds oe < 1 steep Onto stb : sa edly pla wav! ey remots high gk talite rained als fact eben | gals a, Soman a6 sve ron ody, ia vont dennogers ot “toad €9 -bfebans oil. Ha Saji sain psarioaih oy Sn bersten . _. ‘ i hl Se en Prisha hing ant ia Hare ah wee: mehurkel Dern sit bey mt2E 0) may an » oui af jevitemoits ‘dail ‘nda, ahmed” id” my phigh «| a ee Pa 2 Loses te byiecsea mall Dai aac 88 ina r beset ‘eovisegon vine 4b sdenp eo et ite 9 ot - sotie wad Uhnas- wif) i ew sei, aaavitig nai pool te wsngaag. i" te i‘ “anes: ieee tovas'e bia) outa) oats tor: ie one wl Hem a ang. tai ind 7 10, mls mais aol te! fps ea ag tat a tise al Sve Firms owned by loca] investors would be expected to fall somewhere between these previously presented results, and in fact, there was not a significant correlation between the percentage of private local ownership and the answer to this question on governmental impact. We would’ expect that firms that were largely owned by the government would have the power to be more independent of other governmental bodies, and in fact, we find that there is a predicted positive correlation of .126 with the influence of the Ministry of Trade and Industry and the percentage of government ownership of the organization. This relationship, significant at the .02 level, means that firms that were owned more by the government ranked the influence of the Ministry of Trade and Industry lower. The correlations with the other ministries were not sig- nificant, however. The Influence of Banks We. hypothesize that the influence of banks on the decisions made by the firm would be directly proportional to the extent that the firm is in poor financial condition. When the opportunities for financing are limited because the firm is in financial trouble, banks, as providers of the necessary funds, should be able to exert relatively more influence. Bank influence, as ascertained in the question asking which extern.i bodies had the most impact on de- cisions, was correlated -.135 with the extent of reported financial limitations, a relationship which is significant at less than the oy Bae, yal” : at a Be hi i be. Le saat ta ret | on i, Sms Liut oY age ry oy ME, ie rca tld | Bie USO yasnt / Bet: t 249i sh 1 hgh) ne na agivint oxo envied rt sjaul "4 bt eam 9 ae min ie satiny shea Homi ft, ton . be telah sine my ili ia ely esi ce, oat bine sone » tet Coie ree ay ms d's ye ‘ : : * lll { i an i “oe ; é ‘ ~ att yi homin vlogail S500, gaits wrth “ity, vaainiee ‘BYnow OM | xoilto he- ssealaed aren “ 0 ena ad’ aed, “bso Jenene ‘ ‘evs Taoag at ered! anti nana ay, toa, a fa nade Sarogansss | ae ind Re onan toi adda iw 7 4a: ovantmane iota i. “qidsronw2 anemaxovog ie oqn2nao4eg. ats ‘Se ‘exist — bart ie < °30. ‘eas ae inestt tagte | atdeaotietor sist noctsiqaulaagint ® ata | dnemarzavo sit sd ex0m Syontao Pers ae meu ante sieht . ‘ove Lk , : ath aa spreader hits obey in rune ety ko. panauitay. ‘oda or a ‘oe : sie: ‘don eaaie. enszretate SO ee: date Acioeaetierton an Me shee rt s a? Ge ay neat aes ert: aAtved a aohaottat sits iedis aezsiisosed ow “pala Saeixe siz 062! Aint rogue ¢Lacants, ae ‘phue on rey: oe i < “abd ntngs0gge- “eda, wag suf} 1605 Felsen yon nd ‘ou eit ad a) ‘yadvens’ Sunaina at veh dels saves beinimal wa gnbageat 3 ae! irae nail e4° aids ad. bifeoda «Bball toen2g90 wt te. atshivor4 &B | Ny Awd ; ' py 4s : ext. tk bantedxesan. ‘ab sony ant fei onda, yer ‘genes ols Ae im ry ae OH Ez a. 70 onan: Seah. vod an athe! be wangee! Se, jan aot : we % - av wis mer ai oN : -davonant.. besragan te inate Fs ite! ey ee bajatenion abWe a ‘ eee -weitee) Gy") lean nits anak a eno? sania War tatty, me 7 i a : i ve en cht vit tie ly pete .O2 level. The direction of the correlation means that firms that were more limited in choosing their source of funds ranked banks relatively more important in influencing Ene cen atone: At the Same time, the percentage of government ownership was correlated -117 with the influence of banks, significant at the .03 level. This suggests either that under government ownership, financial conditions in the firm tended to be better, or that the problem of obtaining financing were reduced because of the connection to the government. How Managers Report Spending Their Time It is to be expected that not only managerial decisions and attitudes, but also reported time allocations among alternate activities should be affected by the existence of situations of interdependence with important external organizations. Correlations between the reported time spent in dealing with external organi- zations and those factors that have been postulated as influencing interdependence further support the conceptualization of these factors as sources of organizational problems. The percentage of the time managers report spending with the government is correlated non-parametrically .102 with the percen- tage of foreign private ownership in the firm, and .109 with whether or not the firm believes its sales are being hindered by financial problems, with both correlations reaching statistical significance at less than the .04 level. The percentage of time spent with banks is correlated .170 with whether the firm's sales are being hindered by financial constraints, and this correlation is sig- nificant at the .001 level. The percentage of time spent in ert inforrte’s ieliid ‘Ae seid seateg vite aera $0 Vert | aneE RVers aay: a ol ran ; aamed lesbians re ¥d ‘atuoR 1 sit ertenontl «i ‘wd eit owen > Mas regan once fesse aye vine 4 baselavie 4° ke wie hkites ae raat Poa . ie. gaa) afle : a ao alte : noe ‘. favor EO, ald: VE Gouseaa . wen oe 30 ‘id iw che fesoainans s atameo’ wo! same alts? por Haasan ait : reat ding: say ged? 40 a ‘ed 83, popres at: "ost Bi. lang ts me | be Al ov soba soanb i” oi Toews bosubsy oan ualsnaitt “qitetadca hase — See . rs : : . .deaenyeyag ian omh as aiaat anton ves of at 25926 bnew angiaiseb fa. vegomens ‘eth Jon ‘eds ‘basabes od at al +t ‘ojatcibats acme “uti Skcotie omnis “bettogai oath tes woltttitan 7 el to gaatsélsie $0: site! td va beastie ad "bkvods evtsivisom ame AL atioitnivas00 -aosa shdangio Siurisies sana 20qni aie ‘oadabrogebsagad ohnsg 6 hiesnas ae ee ‘pita at nt. seo eink ‘pasnayey, odd nacre, , getecigaltab: ati eerie. aso ovad ved groganl aged hes enokans * > “ aad "3a Whisen ‘féu2qe2009 meta ia en aorta benabiogsboseat ek an . ” -eivitntg \Peire true thao. yo aesrwan “OB ex 396] if Nm i= edd At tw grthosee’: 25185 figs sinh ods ie aguaanste9 ont Oe Se ee | sits, = p at. ylieidatann tea aai boyateiegs at Saacareven. nM 5 7 \ ee . j ‘ w bas, oe sift: nk qigscene > weet mgioaot Yeo! pgs a but wok se - ae baa Meri? oe lontaa:s aay: ‘$2 tan i gett “niet i Wibe Ort. “padres! ab i de uae sort a nen ant! “delet $0) ~ eh a: ak a + fay nia” aie “how: (asin eaRaes ‘inden hea Ab gpa: to 4 inept me: f r S1i5= contact with the Ministry of Finance is similarly correlated with the reporting oi financial constraints, with the Kendall tau value of .128 being significant at the .02 level, while contact with the Ministry of Trade and Industry was correlated .154 with the same question, a relationship that is significant at the .003 level. While correlations of reported time spent with government ministries are not significantly related to the percentage of sales made to the government, the sign of the relationships is in the expected positive direction. We see, then, that the percentage of time and reported con- tact with both banks and the principal government economic min- istries are significantly positively related to the existence of financial constraints on the firm. These data reinforce our earlier conclusions that financial problems create increased inter- dependence between the organization and the banks and the govern- ment. -Attitudes Toward Exports “Exports are very important to the Israeli government. Export incentives are given, and exports are normatively valued in the Israeli culture. Willingness to export, then, is an attitude that is strongly desired and encouraged by the government. The following question was asked: From the point of view of demand, you can sell all of your firm's output both in Israel and abroad. Assume that the rate of profit in the local market is 25% on sales. What will be the percentage of production that you will sell abroad under the following profit conditions. Profits both in Israel and abroad are after taking into account all of the export incentives. (Profit abroad ranged from 257, down to 54). | i ie ont nt : Wie ; 4 sb3009 ‘ef iW, | asi Hr, ‘baravanads. aha er) i hd (ae ; aa he * £00, "eh 46 ‘eat i ace aia ania netis +: a0 nsun ang ee £ ‘a a a4 - - ; uf af sa as deren nad ‘a ngs ae ‘ame ae t ue ~ an oe, ‘ : Stee ge 7 - ‘ ee re ee. a “m0 taaoges baa ana Yo exes a anita so yom — ; : ithe Io s7uabso A asbirvong n623adup Pe eR moa gindeszn nisabeadbe osls Yo) aanaulan Lente aac eroganeur: shohite oy aiiedxe att: godesitat eas! bits cahiongounie om -esaoalint fentojxo te oqya atta co gaiboonens “-tognt 01 naowsad ‘noisefories tals x02 siskww ‘via Liebaow edt ae, oa oy obi .antee Ie: ‘suesaeored ‘oft bss atous nod: faokshtoq tows ati i sais, nt: ,fsvel £00. -orks a8 mnpoitingt aNBhen es posse oaiateh oly ",censtsb ox ahem eotne +0 SAR IOORZEg | onl raidong ods oan soxon} B ae er seaHIOD inka Nog to! aittcn eit ak geerinanie “a a gonasteuel) bevisioxeq: ‘ad! iia aorta shanna us : -gnivet fo¥? way nelii”t 10 ‘ oF: he kicks Leocsinade eiadons weraehte ny we , aPaateka eapds RoMeno you Beit uOoR ob . godt sanobbak exoalt femescen eee 2 pimmssregut’ Sf staePtognt exey | mane $ ua eae spares a3 to peer oe sins i ae aravoy” wit at Btroks vetted iow Sad Baw Shag» yt LR Nhe a amt , hae | ” ‘i , hs | he: i Va i ) ar CP ; y ath NM i ie i f one i } fy a (ly Or ; ie “je We can hypothesize that answers to this question would tend to be related to the extent to which the manager believes that external factors, over which the government has control, are important to the euecess of the firm. To the extent that the success of the firm is dependent upon cconomic variables controlled by the govern- ment, the manager should express the belief that good political connections are relatively important for managerial success, These predictions are supported in the data. The percentage of exports of the firm is correlated -.116 with this latter ques- tion, suggesting that the larger the percentage of exports, the more important good political connections are thought to be, and this relationship is significant at the .03 level. When the respondent was asked: Please rank the following factors according to the influence they have on your freedom to make decisions. (One of the factors is customs protection on local production). we found that this factor was correlated .118 with the importance of good political connections. The more important this factor was, the more important political connections were thought to be, ina relationship that was significant at less than the .03 level. Finally, the question was asked: Based on your experience, please rank the following factors according to those which you think are most important for the success of the firm's management. The factors, largely controlled by the government, and the correlations between their ranking-and the question of the im- portance of having good political connections, are displayed in Table 2. The importance of the wages policy, while not correlated with this dimension of the importance of political connections, was ‘ais io sesobue oats + idly habia, wt Piva ti HET eon as wit, i 7 th i soa oda ; an -fesnoue ose 1a? set vce lay re) splor sae) anol eannos | ek 7 “vated eds et berreague ome Bagot so thers gaadT” r fepistiog boos aes sated et = hone el ogernao7%g edt eet ‘a ot, aay. paneer Poway oils sie canta me ‘he a acahrsirs aiieat’ oF mobes2t anor ao ave yeu? sousattad % : Senet ne mehd ater ayn BS 2 et aroda “aila to en) . ha, ei ith Shaetreabe sy : 7 | sogiea: get a ety wit, ‘poaatoar9s Saw eter aud Sets Siivo La , com dorsi acs sae sSom ove oa bout soda yasitartoy Soin to m 3 ene 2 6 ba aad J pauedta’ are" wot soni Leot9i fog tabi seaget Siow odd ge “devel oo; ‘at, ond. eur’ 36" saestteghe, aeu ‘vaity aameci ee i x iv : ‘thontes cy ae? ng os, serene yatwoltod eat tony wieeiy ‘woe tealge qu0K ne ‘baat . Tao ore Aorta voy. doinw aaa? ot “eaibie 28 Basis fan i. nl “HeSRg em ae ii ‘and’ 10, ewesnne ada wee a | is ona bag aeomeyeveg. a ve bsffortibs eee aa wine om ans ta petytoue cd ba: ead ediying, estos | bosslexzay, Jon obit oth Table 2 about here correlated .197 with the question of how much political contacts helped in the advancement of the manager in Israel. The extent to which the manager attributes the success of the firm to factors essentially external to the firm, and under the control of the government, is related to his belief in the im- Portance of good political connections for managerial success and advancement. Once again we see highlighted the interdependence between the firm and its external environment, and how this inter- dependence influences the perceptions and attitudes of the Israeli managers. Conclusion The data reviewed in this study appear to indicate the impor - tance of external organizations in influencing the attitudes of managers in the focal organization under consideration. Inter- dependence, the result. of transactions interdependence, financial interdependence, or an interdependence growing out of a need to be socially legitimate, tended to consistently influence the Israeli Managers interviewed to take positions favored by the external organization with which they were interdependent. The importance of good political connections was related to the extent the managers believed that external factors under the entre of the government contributed to their success and advancement. And, the time re- ported spent with various external organizations was also correlated with the firm's interdependence with these external agencies. asqedins ta. ah ike - oe | toner ne abr ae P erp ant rt : ee ee ads, * wir oou wis £4 pad eade a. oo feast si awa way Ip - ‘i ve ‘. vip ‘iran oaks 6a oboe, fie yin? wd) a Romain Lei ain grove ss 4 7 * id pik ‘9a at tonne ag a Wesaton ae veneer nt a0: toxaa Pr ah ue #e9nsue tetveginen ad aon teen ‘tuod 4s Fin hoon: de 8 P ae Pacts i ont ae svt ada ah tn a vanobaeobsavet arty biraeigt! imu vow ial ate, 1s Hance t “yest ehds ‘tod howe “Mamie 8 Inesgiey ‘aa Any acer outa, 7 ~ 4 ‘Lieevel wt to eat wstaie, bes saataqeniag ‘ite, sepa tan 99) 9 i : i _ ¢ “As : F 7 oe gel Sa oy Y f | oq ods dsaatbeit oa. anata pissata a eee, wind oat a ” eur 5 ko aobus 9, ais anipoeitiaa at srovamnidnss- 4 antes te oe sunt shams}: aoe aebidis neh sesinagse: Toni one a evant a : =< a -sastigbsi08 Wobitoeanets eg ‘lias ads jesvsbaateb © ae ae ad oo hea a ta Sito eh nh sonnhneqabineatl. 08 Eo “sanobnogabsodea | foal arbet aguneel at qf thenananes: ‘a2 betes” odeeangst cttetioa 7 s Teatiane welt eee ensyats ‘aneh Yaeif ‘aday a ‘Paablhvaniiit. wa 4 a “soins egal ait - pub wei ies ‘athe ‘dite colsiabngs a a ian aria ‘Snatew ay wd dean tae Wer sholiaamiod ‘ost hal re 7 | Feiorareavog ad? Io foarinos at Spotlea jesse sss wa io | ce ones ed ona Setgina Sha ia wives senso 1 iejeTexidn oxta Ani: i aay age Hote miecs lire atleast? pees ul amar nl ihe a tig ga i et . eae The data appear to point up the need to consider external in- fluences in seeking to analyze organizational behavior, and also provide some evidence of the usefulness of the concept of inter- dependence in aiding this consideration. Pay ae Z canto ie. sa ohn 2 ai 4 ie awe nati at” da ee i Aaa re ; > : : a " ° om ¥ : ae . ves 6 ved ai) bene weit bab; inte rts its nm ada sa a Pog a ue NOTES Q (es leet r 1 : ; At the time the research was done, the exchange rate was 3.5 Israeli pounds per American doliar. 2the Shekem is the equivalent in Israel of the American military commissary, or PX. i, BRRONIOD |, a Ss , i. : re aes, ch : ae a. _ -_ ae 7 be : ; y i | ab aa ste suit inxs, ws ‘uel ale tert Se, neta vegeta eases via a7 ae Zc REFERENCES xe Aharoni, Yair, The Israeli Manarer, unpublished ms., Stanford University, 1971. Argyle, M., G. Gardner, and F. Cioffi, "Supervisory Methods Related to Productivity, Absenteeism, and Labour Turnover," Human Relations, HE CAS5E)) 23-40. Boulding, K. E., The Organizational Revolution, New York: Harper, 1953. Brayfield, A. H., and W. H. Crockett, "Employee Attitudes and Employee Performance," Psychological Bulletin, 52 (1955), 396-424, Burns, T., and G. 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K., "Bureaucratic Structure and Personality," Social Forces, 18 (1940), 560-568. Parsons, T., "Suggestions for a Sociological Approach to the Theory of Organizations," Administrative Science Quarterly, 1 (1956), 63-85. Parsons, T., Structure and Process in Modern Societies, Glencoe, I1l.: Free Press, 1960. Perrow, C., Organizational Analysis: A Sociological View, Belmont: Wadsworth, 1970. Bugh, D. Sas D. di. Hickson, Co R. Hinangs, and ¢. Turner, ‘The Context of Organization Structures," Administrative Science Quarterly, 14 (1969), 91-114. Selznick, P., "Foundations of the Theory of Organizations," American Sociological Review, 13 (1948), 25-35. Simpson, R. L., and W. H. Gulley, "Goals, Environmental Pressures, and Organizational Characteristics ," American Sociological Review, 27 (1962), 344-351. taylor, F. W., Ihe Principles of Scientific Management, New York: Harper, 1911. Thompson, J. D., Organizations in Action, New York: McGraw-Hill, 1967. Thompson, J. D., and W. J. McEwen, "Organizational Goals and Environment: Goal~Setting as an Interaction Process," American Sociological Review, 23 (1958), 23-31. Viteles, M. S., Motivation and Morale in Industry,’New York: Norton, 1953. Vroom, V. H., Work and Motivation, New York: Wiley, 1964. Woodward, J., Industrial Organization: Theory and Practice, London: Oxford University Press, 1965. selenite arrasibmba. Wiest: ae ‘ ql 3 abiytegh Lag a Rabe q p ee ae a sepaowebs 7 a a } iy } Ts - t : " ys ; “fy Rie: ‘ynueitn 4 ae poset at) re Bye on teria oti SEA yy ean tir tees Eire to is os : 7 ; es ve - ‘ =, ut. fs ; i i" ' HEbeat : el) er yt é mas oitsnt Loan? a asad’ ede Re, a a ea ~ne- as Se ae 7 cm cr ee e nk fhe. he mo baw - eee i - nes B eaoremthy: tok . aa fy) ea ean (set) “ ie , rf ‘ Dy on 4 {Pe * 7y oS gee Rabin, ae lige asm ‘ 0 sb eam , a a , i ? beak ae fer ste Lewiot mr oft lane e $0 oil : Stomees® Cig 82, TL sS r £) Ee ba & “i 7 j 7 Somalia teeta ieee ia ella ea Fi stich al skal bre sige say tiation ni Ao ae De 1 ae ali j i | an wore ni 4 ca . { | at ea a : ii i in oe “i i Wie a Ht : ; pou tient’ Dap Veo C i eels erent =yirerorets mm he thes : ' cH Sh NE i Corre Gove Government Agency Defense Shekem Other government Total government *Kendall rank-order Tabter ne lations of Percentage Sales to Various smmmental Agencies and Willingness to Invest in a Davelopment Area Corre Lation* Level of Significance SSH IHG) 034 = .325 001 - .160 004 EG 2lat 001 correlations el Lay eh, scust ie tae By Ta se oat ; fiteanyll ter doen itieneg = a OE att feune eye Ow” Wl 7 a, ul : , MA oe “4 _ — : ie ae ‘ is Cimuee i me Sees enie SE, ae 5 Rector ee th : " i a at Pa a ery wig i hy ft" » ut 1 hel oon <2 , 7 ee . ‘on, Pu a * - ; 7 oo : E ; N : ale r hint, a a oe . Spgkiiatonaad Ate Seep Pane we “ gy a ieee : i) ‘ 2 a 1 ¥ = O4 Se iv “ i 7 sh a _ , : ey fe os yea, ; : = oF asa Pr — ae > ie _ y : a. oe ie - 7 [ we a H Wy te ' ee “ : 1 Rin 6 7 i ey a 1 i ae iy : 2 : ( ? it) 7 ~ } a = » ane . pcs ' i 7 i { ? : of ¥ i ail .! 5) ‘ F i , 7 ' 1 D 1 oh | rh ; rp ay bang lente Li able 2 . Correlations Between Llinportance of Having Good Political Connections and Importance of Factors for the success of Management Factors Corre lation* Level of Significance Indirect taxes .188 002 Monetary policy 169 .005 Export incentives '.202 .001 Incentives to development areas 52UP 001 Customs 142 015 “Kendall rank-order correlations i | “2 73 ? | my i : q rr i i. - a te Rana are ee qieknes pri tent obs pee geet Fh tle ay fons “a Fait pati art what lia Pec nahn Deal isha ‘ iO) a S Ai SEN) 6 HEE, a x ° My a gD Fe i ie ; 7 2 An 7 Pen i ne ; en 1 f Rt f, s ; ] air : } >, 4 Wal i q i i anh of” ; is ' he ‘ + = tak at ’ 7) : i ral tue ‘ us ves, i ir » fh J ' i i & meet hs i i, cme ae a i 4 Oe ts oe yt ) , “ jee . a > ‘ 7 = my q iu *e a4 aa < ae — rs) ¢ ! De ~ 7 ie a) : at , ie) va i = om " i = 5 eS fy a - 1G “f - MI ae fF i = i , ; y i; ie } © an) hot) ci hi i Bre <> ae z = f — < i * 7 i % a 1 5) ‘ ” i ee i y J 2 3 a rs ‘ q i) ik p hy ( ' y { “ “hy ‘ ‘ uv $ ’ . ‘ a i i * « ' oa Fi , + ,) ‘ ” hy yes EO a Oe eee nde ba batiotiaitles Bie? Viet katy fay tee} ‘; COCR YT Faire Rricy Nitdeka than i roel ; , eet taocannns na rt Ai heptane She DRE EA satea anat a ‘ ies i Hy abeatat j eet: : NERC Learnt j UNIVERSITY OF ILL wetpatinons agen eatery lr Beant et - iii meh aia lies Oe Fei cedgiperd tte matatasacktavionyn ricate a SeneusbsksAchioate Sele sereis naib ; : ne fan : a Gre vivaresit ac ahm Anda te piney i ( ’ pit Tomer as cent eset ft nee ea : i Cet $ : ma uns : Cod sheitaeesaab ; i rites : 2 aria ; { f { Sree aT ATT i F et klsate ee ; Hetty sepeannasha fogeament tendibee iverra e tsks MA ry rund inadeeh weet bebe nel Br Eds Dhaai REESE ER ein reheat AS Ne vd Mea Piet beet dieiee ian Meth Ads net z yh fos HAR YCRTa i peaobvatin nies Naty bea fo Hehe acbuii eb oxen Sind H eit Asoherasbtabke bvaUdo ‘ : Set eas ent a Tinh ohh da wad nei ekmyntnencd oad sso heneal eee eteL Os ENT ways y ae bis a hk Aedeanni he dsGeabbowedin gt away aiiaketat U8) bod ph iaki Bond gh Rare tdi SLO Aiaesia epee dnt Raliae pin Okan fed fas eeake til snd irre pres rit Ve ioaner? Veeco Bit Srna area h lire Soe err WAT SG, PORN rene revi ipensd Dasa Bec vie wept propo n APta apne Ruel wade ket tne Ale: abl Bipne. aah SRE een Sealers Caw aden ded bearer Su kot een Ue phshobh ota bt anneal nae) oa Bf laine basi Ganeand tdi xe) eae POAT Team e3t eh & : pijmebiaet Shade oh haw Me a) Sugheasc Pedant site sabule Hdomee et ahd 3 Pe POTeYPIONUR Tags MED Tee ie aie Faken v3, Sooke yours Tae sacra reeeb Para re WORT IAC Sinrngg trans De eet Si y Paya vente tne Lye shiireneey tte Pi pietearatabcay Polat eed ASAE AM whe ede ireaner anti st yharbentest yn NM Lit bh ¢ i EVIE wrariyerun eur biel eoe “i ee Wyse bavens Uy ‘ Rirtinrair ton Vary eaperaealap yeyatly " Twa ety Le Sk 34 44 oh { ere ate baie Vet yeu veyron Ata otaryay yt pice tyteta as SF oft J Seat la rate neve aby fay! vw Pera ean vival Sew Fina CUE yiateverttatG tea SETI TE TEENS PAB Raa “paket lite) pF Opto en a MAY cer ys Ca ed yryeely te t {of reaastreer tat y tata Weplepernsasay Mah Ving Wha Usa thay erly WomhOPwr Wh PATA ENTE Ee PUB H tt ge | ARR er tree OL RRA ety Toryt ry ynereTAt ris: H Trew omen bicree Bly yey Ec yi NL eeei ays Cher WViuier yer atvey us eb y ut primers char wlare duh wutenyaae kos ere sh tun ve Pate Bape H EN Demet Fevers ds yn A ten Wrew er phd bts eto ee ee Hake RH salen iter ey! 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