Organizations Are "Constructed"—Understanding the Essence of Corporate Transformation Through Constructivism

Rethinking “Organizations”—A Perspective

Beyond Rationalism How should we perceive corporate organizations? Many business leaders view an organization as “a blueprint for achieving specific goals.” However, Professor Karl Weick from the University of Michigan’s Ross School of Business offers a perspective that fundamentally challenges this conventional wisdom. As a globally recognized authority in organizational behavior, Weick adheres to a constructivist viewpoint, asserting that organizations are “constructed” rather than pre-designed entities. Weick’s theory stands apart from the rationalist view, which advocates for a linear approach of “first set a goal, then design the organization,” as well as from the naturalist perspective, which sees organizations as entities that evolve passively. Weick emphasizes that the essence of an organization lies in its “construction,” defining organizational construction as “the consolidation of existing interactions into visible sequences, thereby producing meaningful outcomes.” At the core of this theory is a three-stage cyclical process—Enactment, Selection, and Retention (ESR model). Weick encourages managers to move away from linear thinking and adopt this cyclical systems approach, emphasizing the importance of fostering connections in organizational relationships. ---

Decoding the Three Processes of the ESR Model

Enactment—Action Creates Perception The first

stage of ESR, “Enactment,” refers to the process in which individuals select and focus on certain aspects of their experiences. A key idea here is the reversed logic that actions define perception. Unlike the traditional one-way model where individuals react to environmental stimuli, Weick highlights the bidirectional interaction between individuals and their environment. To borrow the words of British biologist Thomas Huxley, “Experience is not what happens to you; it’s what you do with what happens to you.” Similarly, Weick himself stated, “You can’t know what you’re thinking until you act,” emphasizing his belief that meaning arises only after action.

Selection—Meaning Arises Through Reflection

on the Past The core of “Selection” lies in the organizational process. This stage involves filtering ambiguous information to give meaning to experiences, allowing organizations to clarify their goals and establish direction. Weick argues that much of this meaning is retrospective, emerging as individuals and organizations reflect on past actions. This might seem counterintuitive. Typically, we think, “Set a goal first, then act towards that goal.” However, Weick claims that it is through a series of actions that we come to realize, “Ah, this is what we were trying to achieve,” and that understanding gradually solidifies into the organization’s goals.

Retention—The Dialectic of Memory and

Forgetting “Retention” refers to the accumulation of useful experiences. While organizations need to retain effective experiences to maintain stability, they must also discard irrelevant memories to adapt to change. Balancing this contradiction between stability and flexibility is key to sustainable organizational development. To address this paradox, Weick proposed three approaches: first, making compromises; second, alternating between stability and flexibility; and third, differentiating processes within various parts of the organization. He left us with a particularly memorable statement: “People must act as if memory is reliable, but in other processes, they must act as if memory is not entirely trustworthy.” In other words, organizations must avoid becoming overly reliant on past successes while also not completely discarding them—a delicate balancing act that sustains organizational vitality. ---

Four Stages of Organizational Construction

Over 20 Years One intriguing case study that provides a practical application of Weick’s theory is that of E-Technology, a company established in 1994 that has grown over two decades in the field of chemical cleaning agents. The company underwent four distinct stages of organizational construction, offering a practical illustration of the ESR model in action.

Stage 1—Escaping Price Competition with

Automatic Dispensers In its early stages, the company sold single detergents and dishwashers, which relied heavily on manual operations and suffered from inconsistent quality. Faced with a market mired in price competition, the company leveraged its years of on-the-ground experience to develop automatic dispensers from the perspective of “usage methods.” This was a classic example of “Enactment,” where existing experiences were optimized and reconstructed to overcome challenges. The resulting innovation became the organization’s first “Retention,” forming a foundation for future growth.

Stage 2—Expanding Customer Base with Laundry

Dispensers Building on the retained knowledge from its initial organizational structure, the company identified challenges in its existing business model. It then developed laundry dispensers with statistical functions, expanding its customer base from hotels to social laundry services. This stage is characterized by the assembly of new elements into the existing business model, achieving a successful balance between flexibility and stability.

Stage 3—Establishing Identity with a Rental

Model Drawing on its prior experiences, the company identified social food service businesses as a new customer base. It invented a rental model for dishwashers, integrating supply, maintenance, and detergent provision into a unified solution. This business model resolved the customer pain point of dealing with multiple suppliers. Through this process, the company clarified its identity as a “comprehensive cleaning solution provider.”

Stage 4—Toward Platforms and IoT With

customer data accumulated through the rental model, the company redefined and selected a new direction based on its existing experiences. Its goal became the development of a platform and expansion into IoT-based business opportunities. Currently, the company is preparing for its public listing, confident that the business models, management capabilities, and competitive strengths it has “retained” will be highly valued by the capital markets. ---

Four Takeaways for the Tech Industry

Organizational Goals Are “Constructed”

One clear takeaway from E-Technology’s four-stage construction process is that organizational goals were not explicitly defined from the outset. Every stage was rooted in action, and the goals gradually became clearer over time. Innovation in models and methods proved more significant than the content itself. Today, many entrepreneurs and tech leaders begin by setting grand goals and designing their organizations to achieve them. However, Weick’s theory suggests that goals lacking trial-and-error action are more likely to become hollow. Utility-driven organizations struggle to create future-oriented meaning and are more prone to failure due to their rigidity.

Organizations Are Self-Organizing Systems

Weick pointed out that organizations are self-organizing systems, where relationships and the ESR cycle play a larger role than individual capabilities. Artificially imposed interventions can often lead to a loss of control over the system. In other words, there must be recognition that “situations are stronger than individuals.” Abrupt organizational changes or heavy-handed top-down reforms could destabilize an organization.

Constructive Cognition Supports Strategic

Execution Many companies face a common issue: even with perfect strategic plans, execution often falters. Weick attributes this to decision-makers’ flawed perceptions of their organizations. His assertion that “reality is selectively perceived, cognitively reconstructed, and negotiated through interpersonal interactions” provides valuable insights for managers to design more robust interaction and negotiation mechanisms that can drive effective strategy execution.

Balancing Stability and Flexibility Is Key to

Sustainability When organizations excessively rely on familiar cycles from their past, stability can overpower flexibility, hindering adaptability to change. Conversely, abandoning past memories entirely and acting impulsively can lead to excessive flexibility, destabilizing the organization’s identity. For sustainable development, it is essential to rationally balance what to retain and what to forget. Retaining memory provides meaning, while selective forgetting helps avoid becoming burdened by inertia. ---

Organizational Theory is “Alive”

The most significant message of Weick’s constructivist organizational theory is that organizations are not static structures but dynamic processes continually being constructed. In an era marked by digital transformation, AI adoption, and platform strategies, this perspective is increasingly vital for navigating the rapidly changing environment of the tech industry. The future of organizations does not arise from blueprints. It emerges through action, reflection, the construction of meaning, and the selective retention of necessary memories while letting go of those that are no longer relevant. This cyclical process might hold the true strength of organizations.