Organisational routines


Routines form the core engine of firms, organisations and markets and their significance is well-recognized in organizational behaviour. From the viewpoint of evolution, the importance of routines is evidenced in firms’ reproduction while from the viewpoint of resource-based theory, routines add to the firm’s dynamic capability and their regenerating ability.[1] They are important to the ability of the firm to adapt to the dynamic situations or otherwise. Majority of theories dedicated to routines have conceptualized them as stable. Such theories have their basis on routines related to individual habits, computer programs or genes. However, conceptualizations such as these mitigate the role of agency in the organisational routines. In other words, the need for organisational participants to think is minimized by the cognitive efficiency and decreased complexity related to routines. To this end, organisational routines are described as the relatively mindless repetition of actions that have been well-established via evolution or voluntary design of an individual that is not a participant to it. Despite the fact that routines have often been related to stability and inertia, scholars have evidenced their relationship to the adaptation, evolution, change, innovation, versatility, improvisation and learning of an organisation. There are many ways where in organisational routines have been understood to enable the display of stability and change despite the fact that understanding both may seem to be different sides to the same coin. To this end, scholars employ the concept of cognitive efficiency to shed a light on stability and change and introduce exogenous shocks that are significantly large and may counter the advantages of cognitive efficiency generated by the organisational routines.

Exogenous shocks cover adaptation to changed or novel situations and adjustment towards technological change. Some other scholars shed a light on stability and change from the perspective of evolution. In this regard, stability arises owing to the maintenance and reproduction of work routines while change arises via mutation, incomplete copying or introduction of variation. Added to this, the performative view point also stresses on the performances role or the people’s actions take that generates the abstract notion of the routine in an organisation, or play in what people’s perception of what they are doing while enacting organisational routines. The dynamism lies in the recursive relationship between understandings and performance as underlined in practice or in theory. The performance generates and regenerates the understandings while the latter limit and allow performances. According to Feldman and Pentland, the mechanisms that guide, refer and account, assist in producing legitimate performance changes that create, maintain and modify the routine concept. Such mechanisms can explain the way routines change and why they change. Therefore, from the performative viewpoint, the change mechanisms and the stability mechanisms are one and the same thing.

Definition

Scholars who dedicated their work to the study of how organisations work define the concept of routines as repetitive patterns of interdependent actions in the organisation from various perspectives. Nevertheless, the concept has been described based on its different aspects based on the study approach. For instance, organisational economists have a tendency to consider routines as a ‘black box’ and they are primarily focused on the purpose behind routines and their effect on performance. Individuals who have training in organisation theory focus on routines in terms of practice – how routines operation, how they are reproduced and how they change while enacting them. Such various viewpoints of capabilities and practice are respectively informed by organisational economics and organisation theory. Despite the considerable work in both, researchers in each appear to have parallel discussions. This can be attributed to the attention to different analysis levels, with the capabilities viewpoint addressing the whole entity and the practice viewpoint addressing the routine parts. This communication gap is also attributed to the different primary explanations provided by both streams of perspectives with the capabilities stream focused on the way routines impact organisational performance and the practice perspective focused on the internal dynamics of the organisation. Both streams also have distinct theoretical assumptions with the capabilities viewpoint based on economics while the practice viewpoint based on sociology. Regardless of their differences, a thorough review of studies in both areas highlighted some significant findings and common themes. Both streams stresses on paying attention to individuals, the role of tacit knowledge and the fact that routines are stable and changing. Added to this is the significance of context in comprehending the growth of routines operation and their outcomes for the performance of the firm.

Foundation of Routines

Similar to other basic ideas, the concept of organisational routines can be linked to the Carnegie School (Cyert & March, 1963; March & Simon, 1958; Simon, 1947). In this regard, Dewey’s (1922) work stressed on habit as a reflective action and as major driver of individual and collective behaviour. In later years, Stene (1940) described organisational routines as interaction patterns that are pertinent for the coordination of organisational activities and differentiated them from actions that are preceded by decision making. According to Simon, individual’s ideas are boundedly rational and organizations are rational systems wherein coordination and resolution of conflict is necessary. He also contended that organisational routines develop to save time and attention during the analysis and making of decisions. Such routines are combined with performance programs that enable organisations to respond to the changes in the environment. The standard rules and behavioural patterns bring about effective organisational decision-making processes as they reinforce search issues, conflict resolution and environment adaptation.

The cognitive underpinnings of organisational behaviour of the Carnegie School were underpinned by the aspects of emotion and habit. To this end, Nelson and Winter’s book entitled “An Evolutionary Theory of Economic Change”, dated 1982 is considered as the top influential work dedicated to routines and reveals the efforts of the authors in providing a deeper explanation of organisational behaviour that goes against traditional assumptions of neoclassical economics. In this book, routines are defined as regular and predictable firm patterns and the authors proposed that they act like biological genes as they are heritable and selectable by the environment. As such, they provide the basis of the organisation’s evolutionary change (e.g. production or implementation) as opposed to knowing how to choose (e.g. deliberation, alternative selection or modification). On the other hand, capabilities are described as the various things that a firm can do at any point in time and is a term that is synonymously used with routines. Individual skills were employed by Nelson and Winter to explain routines in that they suggested that routines coordinated behaviours that function smoothly. Routines are considered as performance targets that offer mechanisms for control and platforms for replication. They are also repository of organisational memory within organisations as organisations keep track of specific routines by specific individuals as a reaction to distinct stimulus. According to Nelson and Winter, routines contextual basis lies on skills, organizations and technology that are combined in a single functioning routines.

Routines are also the basis for change in that innovation refers to the new combinations of existing routines. In other words, the notion of routines is expanded beyond the simple procedures and programs. Added to this, it drew work from the capabilities perspective by introducing a firm-specific, path-dependent concept of routines that stresses on their complexity and underlies their influence on the differences in performance. Despite the fact that it is grounded in evolutionary economics and hence paying minimal focus on individual agency in routines, significant number of ideas remains aligned with the practice perspective.

Moreover, Nelson and Winter expected the recent focus on endogenous change in routines when they contended that routine operation is aligned with routinely arising laxity, slippage, rule-breaking, defiance and sabotage. However, ambiguities still arise concerning the intentionality of routines and the level to their stability and change, where some scholars addressed the behavioural regularities of routines and their habitual nature, specifically bringing forward that they are mindlessly conducted until they are disturbed by an external change. This is aligned with the notion of routines as heuristics and simple rule of thumb to tackle daily decisions.

In relation to this, Weick and Roberts adopted a cognitive approach by explaining that tacit coordination and heedful interrelationships in activity systems of routines stem from a collective mind and the shared consensus of the way tasks are completed and each individual’s role indicates an innate and distinct view of routines.

This argument was countered by Pentland who contended that the performance of routines require individuals’ selection of an action from a list of actions where the performance outcome is thought to be effortful achievements. Pentland’s work is the basis for the practice perspective as it pays attention to the daily actions related with distinct routines. On the basis of such basic understanding, organisational routines refer to the repetitive patterns of interdependent organisational actions – a definition aligned with the foundations of routines and with the capabilities and practice perspectives emerging from this work with differing focus. On one hand, the capabilities perspective is based on the organisational economics point of view where routines are considered as a black box and is focused on accomplishing organizational goals and on the other hand, the practice perspective is based on organisational theory where the black box processes are emphasized.

The Concept of Routines

In the context of modern literature, routine is a concept that is based on the premise of patterns developed by activities sequences over time. Despite this premise, there is still confusion on the actual meaning of activity. The literature analysis presented by Beacker is consistent with the routines definition as the recurrent interaction of patterns and it stresses on the collective nature of routines rather than the individual nature of habits. Routines are core to the economic and business phenomena owing to their roles in the organisation.

According to literature, routines have various organisational roles – first, they coordinate and control. Coordination is when the simultaneity of action is enabled after which it leads to regularity, consistency and predictability and it can easily change into control. Second, routines also reflect a truce in that they are developed on a micro-political stability that enables their free functioning. Nelson and Winter explained that such an aspect of routines have been largely ignored although it is crucial in terms of evolutionary theory outcomes. Without such truce, the explanation behind the disturbing interference in the routine environment and their stability will be lacking. Third, routines are major mechanisms in economizing on bounded cognitive resources by freeing up such resources on the greater awareness levels via the relegation of repetitive decisions to be tackled through semi-conscious mechanisms.

Attention is focused on the exceptional events rather than the repetitive ones, and as such, the search is guided by experience and in this way, routines significantly contribute to the actor’s ability to handle uncertainty. Fourth, routines assist in handling uncertainty with two mechanisms underlying this potential namely, the freeing up of mental resources through relegation of activities, and setting up a specific predictability of other participants via the constraints of setting. Fifth, routines can create inertia, driven by cognitive sunk costs but this does not necessarily mean there is no potential for variations and sixth, routines do not have to result in inertia as it can also result in stability. This function is ignored in favour of the pathological condition ‘inertia’. The stability provision plays a key role in learning as it allows comparison. Therefore, routines have a role in the provision of stability and the implementation of change. It is generally important to acknowledge them as having enabling as opposed to limiting roles. Seventh, routines are combined with other routines, and such can urge other routines – a trigger could be made up of aspiration levels. Eighth, routines represent knowledge like tacit knowledge and knowledge in action. Such embodiment is sensitive to specific levels of interruptions in the routine exercise. Ninth, we may distinguish between operational routines and strategic or dynamic routines which guide organizational search and change. In this latter respect, there are clear links with the literature on dynamic capabilities (see Douma & Schreuder, 2013).

Characteristics of Routines

Developing an argument on the basis of the above contention that routines are recurrent interaction patterns, literature characterizes routines as repetitive by virtue of recurrence, persistent, leading to predictability, interaction patterns having a collective nature, interplay of collective patterns constituting a whole out of different routines parts. In other words, routines in organisations constitute collective action that integrates distributed action elements. Routines are also self-actuating and they do not need voluntary deliberation and owing to this characteristic, problems are removed from the conscious influence and cognitive resources are freed up for deliberative action when dealt with routines. Moreover, routines are processual phenomenon, they are context dependent, specific and they can only be transferred to a limited level. In this regard, successful routines application depends on the context specificities where there exist complementarities between routines and context.

It is possible to alleviate specificity but not to neutralize it through standardisation. Routines can be transferred to various contexts in a limited manner indicating that they can reflect local optimum solutions but not global best solutions. History shapes routines and they are dependent on the path. Such path-dependent routines clarifies their involvement with mutually dependent forces that positively or negatively provides feedback between them and has no pre-defined ending to which they meet. To this end, changes will most probably be incremental and developed on prior state and hence, being an insider to the routine history makes a difference in comprehending its present form.

Metaphors about routines

Regardless of the several variant interpretations and conceptualizations of routines taking place, some generic attributes have been attached to the role which routines possess. Routines have been described to act as central repositories of organizational knowledge and to provide the building blocks of organizational capabilities and change 1. Cyert and March used a metaphor of routines as performance programs, and Nelson and Winter portray routines as habits or skills of an organization 2,3. Routines allow certain type of performance to be repeated, however as they adapt to the changes provided by their environment, routines rather paradoxically are seen to provide both stability and change inside organizations 4. Another analogy often quoted to describe routines as facilitating firm actions is “routines as genes”

At the organizational level of analysis, Nelson and Winter introduced a wide variety of metaphors for routines: routines as genes, routines as memory, routines as truce, routines as targets for control, replication, and imitation 3. Each of these metaphors portrays a routine as a kind of thing

Another view of routines is as a set of possibilities that can be described as grammars 5. The grammatical approach attempts to look at the inside of routines. Selecting and performing a routine is an effortful accomplishment. It is not a single pattern but, rather, a set of possible patterns from which organizational members enact particular performances that are functionally similar but not necessarily the same. Routines can be described by a grammar that explains the regular patterns in a variety of behaviors. In the same way as English grammar allows speakers to produce a variety of sentences; an organizational routine allows members to produce a variety of performances. Thus a routinized activity is not mindless or automatic, but rather an effortful accomplishment within certain boundaries.

References

  1. ↑ S. Douma & H. Schreuder, Economic Approaches to Organizations, Pearson/FT, 2013

http://www.routinedynamics.org/publications/4586509721

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