Alvin Gouldner's study of
The Gypsum Plant

From the 1954 book, Patterns of Industrial Bureaucracy.

Gouldner studied what happened at a gypsum plant (gypsum is white mineral used to make plaster and plasterboard) when a new manager took over. The company owned about 25 plants, this one of them. The new manager, Vincent Peele, was transferred from a different plant. He had a number of interesting problems and some revealing solutions.

Peele was told by HQ that production was too low. Had to improve it. Also, he was new at general mgr job, and had to prove himself. Was under a lot of pressure.

Since he was an outsider, he had no knowledge of and no position in the informal social organization at the plant. Which meant he was much more objective than his predecessor and was unencumbered by any informal understandings or agreements or favors owed to people etc. He saws things for what they were. He saw it rationally.

One problem that came right away was with the existing mgmt, his lieutenants. They all believed that one of them should have been made mgr. There was an informal expectation or belief that the next in line for the general mgr job was supposed to be the supervisor of the board building. When Peele came in, the board building supervisor was Johnson and Johnson reacted like something had been unjustly taken away from him, so he became disaffected and eventually hostile.

Another problem was that any obligations, promises etc that the old manager had going with his lieutenants were obviously not honored by Peele -- he didn't even know about them -- which caused resentment.

Obviously, one's lieutenants are very important, If they are not fully onboard there is a break in the chain of command, and lack of information about what's really happening in the plant, and they can mobilize the rank and file against the mgr. When peele would try to institute changes, the lieutenants would say, "well doug (the old manager) used to do it this way and it worked out pretty good".

The Rebecca syndrome. Daphne de Maurier wrote a novel about a woman who marries a widower, and goes to live with him in his mansion. She finds the servants and townspeople don't like her and are constantly comparing her to the dead wife whom they've practically turned into a saint.

Everything old manager did was perfect, the new guy is messing it up.

New managers brought in from outside owe everything to upper management and look to them for guidance and support. The workers in the plant didn't like this: see it as unmanly, not standing up to "corporate". say things like "Peele can't go to the bathroom without calling headquarters for permission".

Old managers in this plant become part of the social system. They have personal relationships with all the workers, and rely more on those than on formal memos or orders or other means. Peele, can't do this so he has to do things via official channels, which upsets everyone and causes them to think that whereas old doug was warm and friendly and caring, peele is cold and distant and nasty.

Peele faced with many problems:

There were two ways to handle it. One was to develop the informal communications as quickly as possible: ("personal touches here and there help. i talk with the men every chance i get, i congratulate them about births and things like that, if i can onlv get an inkling of it.").

The other is the formal organization. Since lieutenants were not doing their job he started going around plant checking on things himself. (people said he didnt trust them) he also started replacing the lieutenants. These are called strategic replacements: creating a new informal group at least at top level who owed him their positions.

But replacing lieutenants takes time, meanwhile still having problems, so:

You can see that if the rate of succession of new managers is high, then there will be a lot of bureaucracy because the managers will install it in order to deal with an informal organization that is out of their control. Also, its necessary in the sense that good working rules need to develop so that the company keeps functioning even with a stream of new people at the head.

Gouldner's basic point is that the succession of a new manager, particularly one brought in from the outside, leads to an increase in bureaucraticness.