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Public Management and Mechanism Theory. The Brokerage

Mechanism and its Use in Organizational Change Interventions.

DEPARTMENT OF MANAGEMENT ENGINEERING

POLITECNICO DI MILANO

PROFESSOR GIANCARLO VECCHI

SABA SAEEDI 815773

April 2016

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ABSTRACT:

This research starts with understanding reasons why and how bureaucracy and classical

hierarchies in specifically public sector, limits innovation and makes reform coalitions difficult

from the perspective of leaders and employees, then focuses on “best practice” and introduces a

methodology regarding the most important criteria to define best practice and then discusses

methodologies for extrapolation of the practice from a source site to a target site.

Then the focus of research diverges to “Social Mechanism”, types and examples and after that

the “Brokerage Mechanism” as a relevant social mechanism is studied in depth from the point of

view of utilizing the mechanism for bringing a managerial innovation and in the end, an example

case of application of brokerage mechanism in cloud service providers is studied.

Keywords: Change in Public Sector, Reform in Public sector, Managerial Innovation, Social

Mechanisms, Brokerage Mechanism, Cloud Service Brokerage, CSB

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TABLE OF CONTENTS:

1.1.0Introduction 7

1.1.1Public Management and Change Management 8

1.1.2How Public Organizations Promote Resistance To Change? 12

1.1.3Change and the Traditional Procurement System 13

1.1.4Change strategies in a World which is Resistance to Change 13

1.1.5Source of Discontent 14

1.1.6Factors Encouraging Joining the Reform Coalition 16

1.1.7 The Reformer’s Agenda 17

1.1.8 Changes at The Top and The Unleashing of Reform 18

1.1.9 Initiating Change: Implications for Theory and Practice 18

1.1.10Activating the Discontented Theory 19

1.1.11Implications of the Activating the Discontented Path for the Theory and Practice of

Organizational Change 19

1.1.12Organizational Change as a Political Process 20

1.1.13Three Theories for Change Initiation 20

1.1.14How a Change Effort Feeds on Itself in Theory 21

1.1.15Learning from the Good Practices 23

1.2.2 What is The Best Practice? 23

1.2.3Methodologies to Find the Best Practices 24

1.2.4The Problem Solving Theory Definition 27

1.2.5 How to Find the Best Practice? 28

1.2.6How to Define and Implement the Best Practice From the Managerial Point of View 29

STEP1- DEFINE THE EXACT PROCESS THAT NEEDS TO BE BENCHMARKED 30

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STEP2- DETERMINE SOURCE ORGANIZATIONS TO BE STUDIED 31

STEP3-COLLECTING INFORMATION 31

Step 4-ANALYZZING THE DATA 32

Step 5-DEFINING FUTURE TRENDS 33

STEP6- COMMUNICATING THE RESULTS 34

STEP 7-CONFIRM THE MISSION 35

STEP 8-DESIGN 35

STEP 9-EXECUTION AND CONTROL 36

STEP10-DEFINE NEW STANDARS 37

1.2.7 How to Learn From a Good Practice: Solving the Extrapolation Problem 38

1.2.8Vulnerabilities and Their Sources 39

1.2.9Basic Mechanisms 40

1.2.10 Implementing, Optional, Supportive Features 41

1.3.1 Mechanism Theory 42

1.3.2What is “Mechanism”? 42

1.3.3 Social Mechanisms 43

1.3.4 Some Relevant Mechanisms 46

1.3.5 Self fulfilling Prophecy 51

1.3.6Network Diffusion 52

1.3.7 Threshold-Based Behavior 53

1.3.8Bandwagon Effect 54

1.3.9Positive Feedback 54

1.3.10 Self efficiency Theory 55

1.3.11 Social Learning Theory 56

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1.3.12 Self Concept Theory 57

1.3.13 Attribution Theory 58

1.3.14 Burning Platform Theory 59

1.3.15 Perceptual Confirmation 59

1.3.16 Cognitive Dissonance Theory 60

1.3.17Activating the Discontented 61

1.3.18 Perceptual Preconceptions 62

1.4.1 How to Study Mechanisms in Action, the Process Tracing Methodology 62

1.4.2 What Is a Process Tracing? 62

Theory Testing 63

Theory Building 66

Explaining Outcome 69

CHAPTER 2 73

2.2.1Broker and Brokerage 73

2.2.2Brokerage Role 74

2.2.3Challenges and Strengths 76

2.3.1Mechanism Design Theory, How to Overcome Challenges? 78

2.3.1.1. Isolation 80

2.3.1.2. Broker Capture 81

2.3.1.3Organizational Grafting 82

2.3.2 Brokerage and Social Mechanisms 83

2.3.3Brokerage and Public Sector 85

2.3.4. Brokerage Mechanism application, Management Innovation 86

2.4.1Mechanism in Action, Cloud Service Brokerage (CSB) 90

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2.4.2Capgemini Group 92

Figures

Figure1.problem solving chart 28

Figure2-Cognitive dissonance theory 61

Figure3-theory testing 66

Figure4-theory building 68

Figure5-Outcome explanation 70

Fiqure6-the small sociogram 78

Figure7."Network Structure" by Backstrnt - Own work. Licensed under CC BY-SA 4.0 via

Commons 87

Figure8- Capgemini service brokerage offers 93

Figure9- number of employers CapGemini has in different geographic areas. 94

Figure10-Evolution in the number of employers in year 2012/2013/2014 95

Figure11- Revenue 2014 by sector 95

Tables

Table1- Social Mechanisms, Definition, Example 47

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INTRODUCTION:

In the following research you will read about reasons why and how organizations create

structures and patterns and limit employee’s course of actions, mechanisms as a cause and effect

relationship has always existed within systems and they have always been utilized by authorities

and individuals to derive a desired outcome, paths can be engineered through systematic problem

solving methodologies in order to receive efficient outcomes.

I used a case, as a more deep example and illustration of my claim; brokerage mechanism is

being utilized every day and everywhere, brokerage mechanism acts as a bridge which creates

necessary connections where needed and make transactions faster and easier through a shortcut.

From the social and psychological point of view there are incentives for people who facilitate

these mechanisms and also for people who use them, these incentives are fuels that let

mechanisms work, so in order to understand a mechanism and to understand how it performs,

first we need to understand enough about incentives, and if we realize how those incentives

work, we can implement those mechanism by emphasizing on those incentives.

In order to survive in the complex business environment of 21th century, organizations must

have the supporting technical knowledge and infrastructure, and more importantly than before,

they need to know how they can work more lean, or be more efficient, using mechanisms can

create a reliable technical support field for companies who try to be more effective and create

value to the work of companies which they try to keep up with the pace of innovations in the

world.

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1.1 .1Public Management and Change Management

Recent studies on organizational change in public sector can be normative or analytical

focusing on the instrumental aspects of the public sector reforms. In this review an empirical

path is considered in order to learn more about the nature of change in the public sector

organizations. In the beginning the organizational processes which start a change is being

considered and then the focus is on consolidating the change context. In order to active

discontented, leaders don’t have to persuade pressure or scale people instead they need to

provide opportunity for already existing supporters to move. Secondly we highlight the

importance of having a self motivation, and the so called “motivation crowding effect” which

says that some actions which are regarded as extrinsic incentives like monetary incentives or

punishments are actually undermining labor’s intrinsic motivation.

The gap between the aspiration and the reality made it necessary for governments to change.

New people and new managers come and go new procedures get written new services, products

are introduced, but what is difficult in organization’s change is when modification is required in

embedded individual behavior patterns or ways the organization has been structured.

In order To have easier change processes, it’s better to add innovation to the process which

already exists, by keeping that in mind that people resist to change and this resistance is usually

oversimplified and misleading so the common change strategies are therefore incomplete and

inefficient. Kelman discusses this issue as followed in his book unleashing change [1].

His studies show that people usually resist change; we can use some successful tactics in order to

have a Successful change:

1) Attitude change in people, to create new attitudes and behavioral patterns and belief

system in order to convince people, they should embrace the new approach.

2) Establishing powerful rewards or penalties tied to the behavior of change. Creating

incentives, physical and psychological in order to accelerate ease the process.

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I would like to investigate reasons why individuals may resist change in any reform processes or

even in any simple decision that they may want to differ, here I summoned a few reasons that

may be effective in this context:

1. Change may make people worse off and the minimum requirement of the solution is

learning something new or in other words, paying the cost of the change. To

understand the issue more in depth we recall the fact that people are good at

performing what they did a lot of times before and they are more comfortable and

confident in performing them again, to bring a famous quote from Alfred North

Whitehead would be useful here, “civilization advances by extending the number of

operations we can perform without thinking of them,” [2]. According to argument

above, this is the most primitive but maybe the strongest reasons why people resist

organizational reforms.

2. Behavioral consistency is often seen as a virtue. It shows rationality, logic, stability,

honesty and it is usually understood or misunderstood that behavioral changes,

exposes people’s positions to critics, usually these critics are seen as negative and

people do relate them to negative attributes rather than being open minded or

Flexibility. So people avoid change, even maybe they are not aware of it and they do

it unconsciously because they want to create the picture of stability and being

trustworthy in other people’s minds.

3. Mere-Exposure effect or the familiarity principle, this phenomenon happens when

people tend to develop a preference for things merely because they are familiar with

them or an unconscious commitment to a previously undertaken course of action.

4. Behaviors can become embedded, which means if you want to change the habit from

driving your own car to work that taking bus requires knowing the schedules not

learning to buy a ticket. Buying clothes for inclement weather and to find a new way

of eating the breakfast instead of having the coffee on dashboard. Changing a

behavior requires change in a large set of other activities rather than just the sole

activity, old behaviors may take a symbolic significance, drivers and people on train

have different self-image. This means the psychological aspect of a behavior change

is significant that makes it more difficult to change.

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5. People misperceive the distance between their own performance and what they would

view as good performance. Positive illusions make it harder to change because they

hinder our ability to notice a gap between current and desirable performance. If

people have this perception that they need to go through a long and hard way of

difficulties, tests, hard work and needing to learn enormous amount of new principles,

they are not eager to do that and they like to chose the easy way, which is doing the

things the way they were before.

Apart from people, sometimes organizations promote the resistance against the change in people;

here are four of the most important Reasons why organizations also promote resistance to

change:

1. The first reason is the inherent tension between organization and innovating; in other

words, what makes it hard to organize activities makes it harder to reconfigure them. It is

not an easy task to organize people specially when the population of an organization

increases this difficulty rises, and so in many of the rich countries now, organizations are

the carrot and not the stick, It means that they recruit people predisposed based on

personality or previous professional education to want to do what the organization needs

them to do and they also develop systems to reward people for behaving in ways the

organization wishes. This recruitment and reward system create workforce oriented to

behaving according to current practice.

2. Organizations create member commitment to the current practices. In order to create

emotional identification with its practices and values. Employee commitment means the

higher performance and that’s organization’s desire.

3. Change is difficult because it affects power relationships. An example in this context is

when in a hospital they start to use new technology but only some technicians who are

trained are able to use that equipment but even technicians with less training also can use

the new equipment. So in this case establishing change may upset authorities who are not

able to control anymore.

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4. Knowledge structures, mental models and schemas are created by organizations. These

patterns are thought by organizations and this is what makes it hard for people to notice

signals that change is needed. Usually in organizations, employee is exposed to situations

which look like another to which the organization develops a standard response. This

repeated pattern of stimulus and response creates “knowledge structure”. Knowledge

structure defines what is important and what is not important among the data that is

coming and it establishes a framework for employee to behave in a specific manner, it’s

also a very strong and controlling source to resist change. The advantage of knowledge

structure is that it brings order to our understanding of the world but it also creates

problems as well, the problem is called “the perceptual preconception”, and it is when

people perceive new situations in ways consistent with preexisting knowledge structure,

reinterpreting or even ignoring the information which is non-conform to the established

structure. The result is people see what they want to see and its less probable to see the

signals that the current system is not working,

The elements of bureaucracy like rules, hierarchy, and specialization are examples of

organizational practices that inhibit change. Rules may be seen as knowledge structure imposed

consciously on people rather than arising spontaneously through organizational experience.

It is challenging to reduce bureaucracy in bureaucratic organizations for so many reasons. Rules

and hierarchies are negatively related to innovativeness which means the more we have

established rules and hierarchies in an organization the less innovativeness we can receive from

the employees.

Bureaucratic organizations limit the capacity of employees and so it’s less probable that

employees behave differently from the established frameworks, also when hierarchy exists in an

organization when there is no predefined task the decision making is being referred to upper

levels in such arrangements the employees role is intentionally limited so it becomes harder for

employees to develop skills needed to change.

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1.1.2 How Public Organizations Promote Resistance To Change?

It is harder to change rules in the government organizations. In all large organizations

people at the bottom who are unhappy about the prospect of change adopt delaying tactic to slow

down the implementation in the hope that leaders attention will wander to something else and

that” this too shall pass”. Such resistance is easier in government because top leadership turns

over more quickly.

Also, government organizations are more likely to have more people with long tenure and such

people may be more likely to resist to change, if career employees are more resistance to change

than shorter-term ones (because of the more effect of the matters discussed above) then

government organizations become more resistant to change because they have a large proportion

of such employees.

Another issue is that in government environment, it is more seen that the error is being punished

more than the excellence to be rewarded and this encourages bureaucracy. So the government

organizations have so many reasons not to soar and improve and a lot of reasons to maintain the

current system and avoid error. And also change has risk and with the attitude avoiding punish

nobody wants to take the risk to change.

If it is crucial to avoid criticism in government then having rules is good because it provides a

shield from criticism.

Another reason is, usually in government organizations they have a set of goals which not always

be clear and specified so in this case also people don’t have clear and defined measurement

indicators about how well they are doing. When the number and the complexity of goals increase

it’s more risky to give authority to the operators, and finally the last reason is that rules and

hierarchy have legitimacy as a tool in democracy for equal treatment. There are two theories on

behalf of bureaucracy .the first is: in democratic societies only elected officials have the

authority to make public decisions. This consideration establishes the virtues of the rule and

limits the rights of non-elected officials to exercise discretion. And the second argument is how

government treats its citizens the same. Rules are being made to treat people fairly and this is a

support to bureaucracy.

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1.1.3 Change and The Traditional Procurement System

When it comes for government to procure for a project, the first issue is that the

government is so much constrained with rules, it has to follow specific procedures for each

section of the project and it has other constraints like documentation of everything in a specific

way, treating contractors in a specific and more bureaucratic way, all of these constraints and

specifications make it harder, more time consuming and in some cases less cost effective that

the situation when an independent authority free of all those constraints is taking the charge for

the same project, so we can deduce that it’s a big challenge for the traditional procurement

system to change,

In bureaucratic communities the operative authority of individuals is tied to rules so it creates a

barrier to change. When a big reform in order of governmental change is occurring, there are

many different factors that accelerate the process.

1.1.4 Change strategies in a World Which is Resistance to Change

Most of the literatures on achieving organizational changes goes back to 1940s and 1950s

produced by social psychologist, Kurt Lewin and his students, the deliberation was on strategies

of public sector change in public managements[3] , most of this literatures is heavily focused on

leader actions and pays little attention to the process itself and one of the most common

prescriptions of these literatures is that most of the people are resistant to change and the way to

overcome this resistance is to put force upon them to break their habits and divert from a current

behavior to unfreeze the old behavior and to put force for moving from state A to state B.

Research approach and design of this study is mostly based on the employees on the front lines,

this focus is based on the hypothesis that the most important reason for resistance to change is

that people don’t want to change. This approach is also consistent with the focus on

implementing research on gaps between the policies that leaders announce and what happens in

the end.

This studies showed that organizational changes were successful on the ground in cases that a

large number of individuals reasonably high pro-perform attitudes and levels of reform oriented

behavior change. By other words, it is seen that a great level of change happens when a large

number of individual change their own attitudes in the first place.

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1.1.5 Source of Discontent

There are 4 main factor discussed as sources of discontent, they are also called, bureaucrat’s

complaint.

1. The desire for autonomy: How, where, when, with what pace their work should be

performed and managed (self control and self management). A synonymous word for

autonomy is empowerment.

2. The introduction of TQM: Total quality management and also the concept of customer

has been introduced, in respond to Japanese economic success in 1980, the concept of

TQM is introduced to government so the business processes will change in order to

satisfy customers.

3. Job burdens and stress caused by bureaucracy: All the rules that a bureaucratic system

has, make people go through lots of works and numerous hoops to finish an assignment

and this will add stress to the job.

4. Support for better-value contracting ideology: For the same reason to those embraced by

the leaders of procurement reform, some people criticized this preoccupation of the

traditional system.

There are also some reasons which cause people to value greater job autonomy.

1. Some people have this particular value that specific ends is more valuable for them, like

using their minds to exercise judgment, make choices or display self-reliance ( a

motivated desire) this desire increases when the level of education and job level

increases.

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2. People may look for autonomy in order to reduce job burdens, and reduce job stresses,

the more a system is burden with rules the more is difficult to finish a task.

3. People may look for autonomy to get better organizational results, as noted before; many

of the procurement reform leaders gave autonomy to the front line in order to use

discretion to improve the value procurement delivered.

4. To develop a motivated desire for autonomy is to value an abstract idea. Philip Converse

concluded that as education and political information decrease, the ability to think in

terms of abstract belief systems rapidly decline (Philip Converse, 1972, Human meaning

of social change) in general getting education helps people to have the capacity for

abstract thoughts.

Other researcher showed that those at higher organizational levels, develop more complex

knowledge structures [4], they are exposed to more complex situations they get the ability to

abstract and they require more use of their brain. In other words, the more experience one gets

the more capacity he gets to solve more complex situations.

There are three psychological traits, which have implications for the course and the nature of the

process of organizational change in order to reduce bureaucracy, risk tolerance, deference and

self confidence.

The first trait, risk tolerance, speaks about people who are more likely to try new things, these

people value jobs that give them the opportunity to do new things, in reverse some people prefer

to have a schedule and pre defined frameworks for their daily works. The second, the deference,

indicates that, some people prefer to have less autonomy because they don’t like to have choice

and decide, and the third is, the more confidence one feels about one’s ability to successfully

realize projects, then one considers the ability to exercise choice more valuable that it might be

perceived before.

This point should be clarified that since people are seeking autonomy for different reasons, they

are not going to operate the same way in case of autonomy, for example the behavior of a person

who seeks autonomy for reducing his job burdens would be different from the behavior of a

person who seeks autonomy to have a better organizational result.

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The question to be asked here is that, is it true that these intrinsic traits on one hand, and the

reasons discussed about the discontents on the other hand, made it possible to reform coalitions?

Do these people become change vanguards? Truth is, not all the people who were discontent

with the system joined the reform coalition, factors encouraging resistance to change reduce

dissatisfaction level and also may bring people back from becoming part of the reform coalitions.

1.1.6 Factors Encouraging Joining The Reform Coalition

The first factor, as mentioned before, is the kind of discontent with the traditional system

and the second is obviously, the degree of dissatisfaction. Examples are, desire for autonomy,

burden and stress reduction, providing better customer service.

According to “Activating the discontented” theory of change initiation, successful initiation

requires a change vanguard that is waiting for an opportunity, ready to act as soon as receiving

encouragement from above. Change vanguards are so important that if they weren’t eager for

change, no change could ever take place. In addition to the sources of discontent and to factors

promoting (or discouraging) attachment to an organizational status quo, there are two more

factors which effect joining the reform coalition:

1. Personality or demographics,

2. Influence of leaders and co-workers.

Adopting a perspective from diffusion of innovation research, rather than simply assuming that

people oppose change, diffusion-of-innovation research puts people in different categories, from

enthusiasts to critics with regard to innovation. According to our discussion, some people enjoy

change in general. They have the personality and characteristic which makes them easier to

translate discontent into early support for change. These people are called early adopters of

innovation.

There are also other demographic and personality traits make it easier for people to translate

discontent with the procurement status quo into reform coalition membership, It means, people

with these traits are more likely to join early coalition at a given level of discontent. For instance,

some people have the ability to think abstractly, these people are able to use an innovation before

it is in run, later adopters can observe the innovation in the here-and-now of a peer’s operation,

so they need less abstractions.

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An individual is more likely to adopt an innovation if he or she is efficacious and believes that

he or she is in control. Particularly in an organizational context, people who don’t believe that

their efforts can differentiate issues are less likely to be early adopters of change.

The second factor, influence of leaders and co-workers, is undeniable; they can effect individual

decisions and apply pressure in lower hierarchies in organizations to make them change. They

can influence individual’s decisions for joining the reform coalitions in other ways, for instance

through persuasion, they might provide a vision of an alternative system, in this case upon

launching the reform effort, system leaders could provide reassurance or cover for change

vanguards.

Leaders and co-workers may have social influences or provide support for people who are

discontented to join rather than persuasion. The higher the support for change in person’s

workgroup, the more likely it is that a person will join the reform coalition.

Virtually the only factor uniquely distinguishing change vanguard members from everyone else

in both early recruits and initial skeptics and fence-sitters was ideological discontent with the

traditional system. Trust and idealism are both personality traits. At higher job levels, where

people develop a greater ability to think abstractly about procurement issues, these personality

traits got translated into an ideological critique of the traditional system for being based too

much on mistrust. This propels people into being change vanguards.

1.1.7 The Reformer’s Agenda

As Kelman mentioned in his book unleashing change [5], There are differences in the

nature of discontent with the traditional system among the change vanguards and early recruits.

Intellectual Change vanguards, especially those with higher job hierarchies, are those who

provide the ideological discontent with the traditional system and leadership for the reform, they

are seeking better values for contracting while early recruits have different political capacities

and ambitions, they provide the energy and manpower.

Idealism and the abstraction ability, improves the ideological dissatisfaction with the status quo

and the more the discontent-controlling for other factors producing change vanguard

membership the more likely one was to become an early opponent of the traditional system.

Lenin declares that in any revolutionary changes there are two groups with two different political

capacities “two groups with different sorts of political capacities and ambitions: a revolutionary

class whose discontent provides the energy and whose members supply the man power and an

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intellectual local vanguard providing the ideology and leadership” [6]. In a revolutionary

movement, these two elements define who change-vanguards are and who the early recruits are.

This forms the foundation of a coalition and obviously the more the size of the coalition grows,

the more power and ability to influence it gets.

We should note that leaders for different parties also come from different social, educational

background as well. Revolutionary leaders have idealistic goals and due to their high educations

they usually have the abstraction ability more.

1.1.8 Changes at The Top and The Unleashing of Reform

There are analogies between initiating reform to natural selection in the theory of

evolution. Leaders at the top, play an important role in initiating reform. They provide

opportunities for already existing supporters on the front lines. In the natural selection theory of

evolution, environment plays this same role, when an exogenous change happens (by the

environment) the species which are already constituted to be resistant to that change will survive.

Likewise the situation when new leadership (the environmental change) helps those who support

the change. And this selectively put pressure produces the change faster and only those people on

the frontline who were looking for this change will remain. The truth is if there is no leadership

change, the change initiation would not be successful [7].

1.1.9 Initiating Change: Implications For Theory and Practice

As mentioned before, there are usually three ways that a procurement reform begins with,

Persuasive discussion, leader pressure and burning platform. But sometimes politics has stronger

pressure levers and politicians decide about the initiation of a reform more than the criteria

mentioned above. Although this is necessary but not sufficient, the initiation could not be

accomplished without the existence of change vanguards. Change vanguards are not politically

strong enough to start reform and the leaders cannot steer a reform without the local support.

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1.1.10 Activating The Discontented Theory

This theory is stated as follow: a system has two levels, call them “the top” and “the

bottom.” Some at the bottom would like to see changes in how the system works. However those

desiring change lack power to achieve it.

An exogenous shock (exogenous from the perspective of the bottom), favorable to change the

bottom wants, occur at the top. This creates a moment when those who sought change before the

shock have a chance, a “window of opportunity,” to become more powerful.

The common prescription that “people resist change” is often over simplified, misleading and

incomplete and the change could be unleashed through “activating the discontented” affirms the

hybrid approach to change initiation. His theory presupposes that bottom level employees desire

change in the way the system operates but lack the power to confirm it. The change leaders at the

up also desire the changes and couple their actions with those at the bottom, “it is this coupling

that unleashes successful change initiation”. Also change efforts can feed on it.

This approach is synonymous with positive feedback theory in that many people are open to

change and ready to be influenced by positive feedback forces also pro-change attitudes become

an integral element during the change process and spread throughout the organization until the

change becomes self-sustaining. Support for positive feedback theory can be associated with

“contagion models” [8] and the “tipping point” [9].

1.1.11 Implications of The Activating The Discontented Path For The Theory and Practice

of Organizational Change

Leaders don’t need to persuade, pressure or scare people they only need to trigger that

there is a discontent on the front line and there are supporters for change they should provide

opportunity for the already-existing supporters to move.

The theory suggests that if there are even small but important levels of frontline discontent, if the

change does not occur, then the fault lays with the top not the bottom.

Most of the politicians are attracted to government by the opportunity to influence policy than to

manage organizational production. So these initiatives typically involve new policies or

programs added to existing ones, rather than efforts to change the existing plan.

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1.1.12 Organizational Change As a Political Process

There are steps in forming “reform coalitions” in any reforms in procurement systems, in

the beginning (before the reform is presented) there are people who are discontent with the

current procurement system these people are called “change vanguards”.

These people reformers or change agents, even before the reform began. When the reform is

announced another group is going to join the first group immediately these people are called “

early recruits” these people were not change advocates but soon when exposed to the reform feel

favorable to change and join the first group and together with the first group they form a “change

coalition”.

1.1.13 Three Theories For Change Initiation

The procurement reform in usually initiated by one of these three levers:

1. Persuasive discussion

2. Leader pressure

3. Burning platform

As mentioned before, when there is a resistance from people to change, for initiating the change

is good to start changing the attitudes by “unfreezing” or using “shock-and-awe” tactics to propel

people onto the path. During the World War II, Kurt Lewin has had experiments which lead him

to dedicate the so called “the persuasive- discussion theory”.

During the war there was a shortage of unorthodox cuts of meats. Lewin compared two groups of

housewives: one was exposed by a nutrition expert; the other participated in discussion led by

the expert. The group which was involved in the discussion individually showed greater

responding. According to Lewin 2 factors can describe the reason why this happened, the first is

the greater personal involvement that the discussion produced, and the other was that the

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discussion gave the leader a better understanding about the audience and the probable obstacles

that they may encounter.

An effort to introduce productivity enhancing production methods in a factory was applied

through Lewinian principles to organizational change. There are two other common theories for

initiating the change, I enumerate these theories or in other words, “mechanisms” here, but

further in my section about social mechanisms I would explain more in depth.

1. Burning platform: Change is hard, if people understand that failure to change is even

harder they are more proceeding to change. This theory is most commonly presented in a

business context, wherein the burning platform is the threat that if the change does not

occur the company will go bankrupt. The key role in this theory is “establishing a sense

of urgency”. As Kotter suggests leaders should allow the errors to blow up instead of

correcting them in the last minute.

2. Leader pressure: This theory emphasizes the personal commitment of top management.

As Kotter notes, “Resistance to change cannot be overcome without top leader’s

relentlessly pressuring the reluctant troops below” [10]. This mechanism is a very

important mechanism when change initiation wants to happen, it may happen within a

small group, an organization or in a country. The pattern is the same and the logic behind

it is the influence and power of a leader to orientation is unquestionable. The theory

emphasizes the personal commitment of top management. Leaders guide others toward a

common goal. They show the way by example and are committed to carrying out a

mission. Leaders have the power to influence the world.

1.1.14 How a Change Effort Feeds on Itself in Theory

When the change starts, at the beginning only a minority support it but when the time

goes by, it becomes more favorable for a larger set of people, so here we want to discuss what

happens and how does the change consolidates? From the conventional point of view, there are

methods that may help consolidating the change, we will discuss here.

The claim that “change efforts can feed on themselves” is discussed through a phenomenon

which social scientists call “positive feedback”. Positive feedback is defined as a process of a

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feedback loop. In this process the effect of a small disturbance on a system include an increase in

the magnitude of the perturbation.

It means, Belief A produces more of behavior B and existence of more behavior B as a result

produces more of belief A. In the sociology literature, it is interpreted that there is a positive loop

between believes and behaviors, If enough number of people believe that a social fact is true,

then their behavior can make the fact true and also observation and consequence of what they

perform may also augment the belief. So as a change begins to happen, there are “early wins” or

the improvements and positive aspects that a reform movement gain, so this can be an incentive

for skeptical third parties who are just watching the movement and this early wins may get

supporters from these third parties and “turns neutral into supporters and even reluctant

supporters into active helpers.”

Another tactic which is mentioned in the literatures is to use “shock-and-awe” tactic and to put

financial incentives and promotions for supporters, in this methodology, opponents may need to

be fired.

Although this shock-and-awe may not change employee’s minds, but it will change their

behavior and also another advantage is that, it makes it clear that people who want to stay under

the new system will remain with new attitudes and people who resist change will leave the

system. We need to mention that these tactics are easier to be used in the private sectors than the

public sector.

***

Until here, we became familiar with Kelman’s research on initiation of social and organizational

change and the contributing factors, by knowing that there are mechanisms which can be used to

accelerate and strengthen change process, we can use these methodologies to spread a desired

change in public sector, but how to find the plan or practice that is desirable and what is a

desirable or “good practice”? How can we find that and how can we transfer it to another site?

What are the challenges and issues and how the process should be operated?

These topics will be discussed in this chapter. The aim is to understand what are the best

practices and methodologies, we define them and then by understanding the mechanisms, we try

to illustrate how we implement best practices from source site to target site.

In the following section I have a deeper discussion about mechanisms, I named and defined the

most relevant mechanisms and discussed their importance, only by properly understanding of

how mechanisms work, clearly definition of the “good practice” we can create a clear and useful

plan which works and has output.

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1.1.15 Learning From The Good Practices

1.2.2 What is The Best Practice?

There are two different approaches when studying a best practice, different scholars had

different points of view about the same issue, one of them emphasized of the exemplar

identification and one of them emphasized on the target site, and they had different approaches,

but According to literature, There is no consensus of a precise definition of the “Best practice”,

but it is more related to the Method or Technique which has shown superior results to those are

practiced in the same field, and which is used as a benchmark for other techniques and methods

in terms of efficiency, quality, results, and outcome a clear and concrete method which solves a

specific problem and leads to a desired aim.

Best practices are contrived not only because of the need of having the best possible benchmark

but also to keep the quality in a specific level and have measurements for quality assurance and

to create certificates. The most desirable methodology to determine the practices and the clearest

roadmap of instructions of how to implement them. When facing an issue in the public policy,

analysts evaluate different programs and methodologies that had been previously used or are

already being used in other countries and other organizations in order to find the “best” possible

and “smartest” practice applicable to the their own issue, but what determines the best practices?

And what are the benchmarks for defining the best in this case?

Well According to Bardach [11], two relevant factors for definition of a best practice according

to its characteristics as mentioned above are: first is the effectiveness of the practice (both in

source and target site) and also the cost-effectiveness of the practice (in both sites). As he

suggests there is a slight difference between “the best practices” and “the smart practices”, as in

smart practices the cost component has a low effect, also other differences would be that the term

smart is a generic term those practices are not necessarily proven or evaluated.

Researchers, make categories for best practices, Jennings and Hall call their categories:

evidence-based practices and promising practices [12]:

• Evidenced-Based: Strategies, activities, or approaches which have been shown through

scientific research and evaluation to be effective at preventing and/or delaying an untoward

outcome.

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• Promising Practices: Programs and strategies that have some scientific research or data

showing positive outcomes in delaying an untoward outcome, but do not have enough evidence

to support conclusions that can be generalized.

Now we take a look at other scholars definition on best practices, In a general sense, the term

best practice refers to the most efficient way of doing something. The fastest method that uses

the least resources (including labor and parts) to create the highest quality output is the “best

practice.”

Almost every thinkable industry has adopted best practices in some aspect of its processes, but

those that have made use of it successfully and publicly have typically done so in the fields of

technology development, quality control, project management, teaching (on the college and

secondary circuits), manufacturing, healthcare and sales [13].

The term “best practice” implies that it is best when compared to any alternative course of action

and that it is a practice designed to achieve some deliberative end [14], it is business jargon

arising from the management tool known as “benchmarking.”

The assumption underlying this term is that production and management processes are uniform

enough so that a “best practice” can be identified and then adopted more or less “as is” by

another entity [15]. and the most precise definition of BPR is the selective observation of a set of

exemplars across different contexts in order to derive more extendable principles and theories

[16].

There are inevitable features of a best practice according to Bretschneider et al [17]. The

emphasis when finding a best practice is on exemplar identification rather than the target site, the

methodologies that are used are mostly quantitative rather than qualitative.

1.2.3Methodologies to Find The Best Practices

In the real life situations, we face a complexity and a diversity of factors which makes it

almost impossible to set predefined clear algorithms and methodologies, at the social level, there

are large amounts of different factors effecting a practice simultaneously which can differ from a

site to another which must be under our considerations even small. But analysts tried to set a

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roadmap and theoretical frameworks for the process and they done it through dividing the efforts

in to two classes: “Qualitative methods” and “Quantitative methods”.

Quantitative methods deal with numbers and can include cross-sectional designs, time

series studies, and longitudinal designs.

Qualitative methods deal with words and can include case studies, focus groups, and

meta-analysis [18].

Combinations of any of those two methods can also be used in determining which best practice is

appropriate and how it is to be implemented [19]. The methodology According to Bardach to

find the best practice for a policy problem is,

1. Develop realistic expectations

2. Analyze the smart practice

3. Observe the practice

4. Describe generic vulnerabilities

5. Context verification

As we can see above, at the first stage, we must develop realistic expectations which means, each

existing practice is being researched and tailored for a specific policy problem.

There are several other factors that show their importance and significance only when applying

in a new situation so we must be aware that errors and inefficiencies may exist and we must be

ready to take action to solve them.

Then we need to understand the opportunities and methodologies that are effective and create a

public value and contribute lower costs. “Cost-based pricing” and “Input substitution” are

examples of that.

Cost based pricing: the easiest way to calculate what a product should be priced at. This

appears in two forms: full cost pricing and direct-cost pricing. Full cost pricing takes into

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consideration both variable, fixed costs and a % markup. Direct-cost pricing is variable

costs plus a % markup.

Input substitution: Input Substitution in Production is a key idea in economics that business

firms typically can produce their products or services by using a variety of different methods and

or a variety of different combinations of inputs. A firm’s choice of production method and of

inputs is likely to depend on the prices of various inputs it might use.

Examples of input substitution: Labor (L) & Capital (K) Substitution For example, banking

services can be provided by human tellers, by ATM machines, or some combination of the two.

In observing the practice stage, we need to consider that there are so many hypothesizes behind

each methodology, full understanding of those methodologies require understanding of the

hypothesis behind it. It also allows us to use the practice in the best way.

By understanding the true nature and the causes behind each procedure we can adapt it to our

own situation in a more optimal way and have a greater amount of flexibility and modification,

Also by understanding how it is applied and how it is working we might be able to put changes

in a desired way that it operates more robust and desirably, making a practice more applicable,

modifiable, customizable and the ability to add optional features improves a practice.

But we should keep it in mind that any practice, behind its strength, has also its generic

vulnerabilities and an analysis must consider them when applying or extrapolating.

Those vulnerabilities may differ from a practice to another one, but there are two types which

must be considered with a special attention, the first group is the vulnerabilities related to “a

weak managerial capacities “ and the second is “the intrinsic weakness of a practice itself”.

Sometimes due to weak managerial paternity the implementation of a practice becomes difficult

this lack of potency may be related to having a low authority, hierarchy and bureaucratic vertical

and horizontal specializations, specific restrictions and lack of coordination between related

segments in an organization, which reduces the general manager’s ability to implement the

practice effectively and in this case, some of the features are being restricted or not desirably

modified, and the second is that, even the practices which are proven as benchmarks for the

others have some limits and problems related to their intrinsic nature, so one must be aware of

that when implementing it in order to minimize the risk and errors.

And finally, we must understand that, there are some contexts and backgrounds for any practice

which means it is specially designed for a specific purpose and it has risks related to that subject

so when we want to adopt a practice from a source to a target we must understand that those two

sites must be comparable.

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If a practice can be adaptable to a site, it needs some structure, we may have the required

structure (or maybe infra-structure) in the source site but implementation of this structure in the

target site is not possible or it may have difficulties. Also is any practice there is a “weak ring of

a chain” which must be discovered and have under control. There are usually alternatives or

backup plans for these weak points.

1.2.4The Problem Solving Theory Definition

Problem solving is a part of thoughts and contemplation. Problem solving is the most

complex part of each intellectual process and it’s an important part in realization of anything,

problem solving ability needs a series of generic and fundamental expertness and workmanships.

Problem solving is an issue when a living creature or a system of artificial intelligence doesn’t

know what to do for going from a situation to another; this is a part of a bigger problem which

creates stages of the problem solving.

In general, there is a 4 step method for solving a problem,

1. Understanding the problem, in this stage we must clearly understand the issue, we need

to understand what are the given data and available inquiries and what do they want from

us in the end.

2. Choosing the method, for solving any problems, there may be lots of methods but at this

stage we must choose the best possible way according to our available data and our

favorable result. At this stage we must plan clearly for what needs to be implemented

with what sequence, in which timing schedule and with what means and resources.

3. Implementation of the method, at this stage we accomplish and execute the method that

we chose with the specified timing, method, means, sequence.

4. Going back, at this final stage we need to go back and check whether the execution of

the problem is correct, whether we reach to the favorable result and if there is anything

that we can modify in order to improve the process.

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Design is a form of problem solving.

Figure1.problem solving chart

1.2.5 How to Find the Best Practice?

Some benchmarks are used in order to find best practices and measure their

performances. We need to use benchmarks to determine and classify practices ability of

satisfaction of the needs of the contexts they are applied in. They are four types of bench-

markings in general: Internal, Competitive, Functional and Generic.

1. An internal bench-marking is the process of comparing one particular operation within your

organization with another. Different sectors activities are being coordinated according to one

another. Activities are assigned according to the task of other sectors." Internal benchmarking is

by far the easiest, both to research and to implement. Productivity improvement achieved in this

type is usually about 10 percent.

2. A competitive bench-marking is the process of comparing an operation with that of your direct

competitors. Same sectors and same operations are being investigated at this point and they are

being compared according to the processes, procedures, the outcome and efficiency, this is the

most difficult type of benchmarking to carry out successfully, most of the times constraints due

to privacy is set and achieving to the clean, trustable data is not an easy task also legal

considerations must always be kept in mind. Productivity improvement achieved in this type is

usually about 20 percent.

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3. A functional benchmarking is process of comparing an operation with that of similar ones

within the broad range of your industry. The comparing is not limited to specific operation or

organization an example can be copper mining techniques compared with coal mining

techniques. Functional benchmarking is relatively easy to research and implement because the

researcher usually has a good access to variety of different data bases. Productivity improvement

achieved in this type may be 35 percent or better.

4. A generic benchmarking is the process of comparing operations from unrelated industries ones

often used by a wide variety of industries. An example would be a film library using the

warehousing techniques of another industry to store more efficiently its catalogue of old movies.

The advantage of this type is that the problems of competition do not apply, increasing the access

to information and reducing the possibility of legal problems. Productivity improvement

achieved in this type may be 35 percent or better.

We must keep in mind that when extrapolating a practice from source site we must consider two

criteria as vital before any further research, completeness and comparability. The condition of

completeness states that in order to truly identify a “best practice”, we must include all

comparable examples from a given area and The condition of comparability states that examples

in a given set are comparable in terms of actions (practices), outcomes and the contexts they

exist in.

Although they are ways which one can understand a “best practice for instance when a practice is

clearly a new or innovative use of manpower or technology, or maybe when the practice

produces much better results than the previous practices in the experiment or when suppliers and

customers recognize it as the best practice or maybe an industry expert comments on it but all of

these paths have no defined framework for proceeding, so here we try to define the framework

according to the benchmarks. Organizations top leaders and managers must create and develop a

specific, organized approach to implement bench markings. The procedure will be illustrated in

10 steps as below:

1.2.6How to define and implement the best practice from the managerial point of view

In this section I enumerate 10 steps to define and implement the best practice from the

managerial point of view according to Charles J.Bruke [20].

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STEP1- DEFINE THE EXACT PROCESS THAT NEEDS TO BE BENCHMARKED

The process to be benchmarked must be defined as accurately as possible. For this purpose we

are going to write a “project description”. We must gather some series of information like:

1. A reason for the project.

2. Goals and objectives of the project.

3. The cost and duration of the project

4. Critical measures

5. Potential gains

6. The project's impact on the entire organization

Information at This stage must be clear and precise because any other further investigations and

researches may depend on. They must convince the investors and general managers and leaders

that it has benefit for the organization. Sharply focused, clearly defined procedures which tell

management what needs to be changed, are needed. It must be defined that how much change

can be achieved within given limitations and how to measure accurately the processes against

those of others and against your own future projections.

First criteria to consider is, the priorities and objectives of the organization and also the

department, the most important criteria as a benchmark would be those has the same direction

with the overall objectives and goals of the organization in the first place and the department in

the second place. Both short-term and long-term objectives must be considered.

What comes next is the level of change. We must define exactly the segments within an

organization which are going to be changed and modified Perhaps just a particular process within

a system needs to be improved and we must define whether improvements be achieved by

upgrading some particular tasks within the process that already exists.

The next step is to create flowchart of the work flow within the process, by making this flow

chart we can have an accurate overview of the overall process and we make sure we don’t miss

any details. This also will help identify problem areas and locate potential trouble areas (the

vulnerability points).

Then establish the critical performance measurements (CPM) by which to compare future

progress. Then we must deliberate organization and also project’s resources, capitals and

circumstances, we must check the amount of change which is possible within the specified

process or procedure and we must define the level of change.

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It makes it easy to understand and also to compare these measures if they are expressed in terms

of ratio or percentage.

Until now the “critical performance measures” (CPM) are determined but it must be checked

whether the measures are in accordance and conformance with customer requirements also they

have to have priorities from the most important performance measure to the least important one.

STEP2- DETERMINE SOURCE ORGANIZATIONS TO BE STUDIED

With the aim of extrapolating the practice from a source site to the target organization (target

site) we need to determine which are the organizations that conform with our criteria and what

are their practices are adapted to our requirements. An incorrect choice could lead to electing

partners that are not true benchmarks for the selected process or procedure, that are

uncooperative or whose practices are incompatible or irrelevant to your needs.

To start, one must first gather the means by which he can get to know the reliable sources,

partners, also he must find the most useful and accurate and up-to-dated information about these

reliable individuals or groups. Consultant organizations, annual industry reports or periodicals

are examples. Then a careful evaluation must take place according to his own benchmarks and

“critical performance measures” and determine among the possible candidates, which is the best

in case of the most conformed with the performance measures from the view of organization.

By conformance, we mean the comparability of the systems and processes in both sites,

sometimes the practices in the source site need far more facilities and procedures that they are

not possible to be implemented in the target site, so all criteria must be considered. An important

one is the cost criteria to mention. Another issue is the legal problems when gathering data, some

organizations have high levels of confidentiality and security about data and it would be

complicated to gather information which is necessary.

STEP3-COLLECTING INFORMATION

Once the target is determined, we must select a plan to gather data from the selected targets. The

correct implementation of this step will result in data that can be used directly to enhance your

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organization's performance. Incorrect implementation of this step could result in data that is

useless or inadequate to your purposes. The aim at this stage is to obtain and classify complete,

accurate and relevant information from the source site which matters to the target site so a

careful data-collection plan has to be created.

Data sources must be classified according to the simplicity of data gathering from which data can

be obtained easily and from which is complicated. Then we need to figure out which data is the

most valuable one. Other important factors are the time and cost limitations of collecting data.

We must Decide which combination of the four types of sources-internal, published, external or

original research-would yield optimal results and so we can identify the best data source

according to our own criteria. The best internal, published, external or original sources must be

consulted.

Organization’s library, other appropriate data sources, professional organizations dealing with

the target business, industry experts and independent consultants, appropriate contact persons

and benchmarked organizations must be included at this part. Then a plan to visit the site must be

scheduled, Proper preparations must be made before the visit.

Before the visit it must be clear that what are the subjects that need to be evaluated during the

visit and what are the questions are to be asked. The clear schedule of visit must follow. The

source organization also needs to be aware of the purpose and the performance criteria. They can

help a huge amount since they have better understandings of their own processes, advantages and

disadvantages.

On arriving at the site, the team should repeat its mission to the contact person. Obviously the

appropriate questions should be asked during the visit, and the team should personally observe

the process to be benchmarked.

Visit team must be instructed about how to make extensive written observations of the process

and to document observations as soon as possible after the visit. The agenda should allow for

equal time for both benchmarking teams.

Appropriate ethical issues must be considered. Misinterpretation may happen when obtaining

information from other sites specially competitors and the visitor must be careful to avoid them.

Step 4-ANALYZZING THE DATA

In this step the data is analyzed according to the critical performance measures in order to

understand whether the practice is the best practice or not, a large a amount of data is gathers

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through the visit and investigation and if they are not analyzed and classified carefully it may

cause the researcher to face a large amount of vague, unnecessary irrelevant data which makes

you more confused. After analyzing the data and finding relevant features from each of the best

practices an ideal practice would be introduces that can be implemented within budgetary and

other constraint of your own organization.

In order to see how in practice it has our requirements and it can satisfy our needs we must

analyze the data extract the most important topics and organize them. This step gives a clear

picture of the process and the relevant contemporary practices in the industry, makes us familiar

with the possible available technologies and the alternatives that we have in order to customize

our own procedures if necessary.

But how can the data compiled in step three are most effectively analyzed? When analyzing the

result we must keep in mind that the basis of the analysis is in terms of “effectiveness of outputs”

and “customer satisfaction”. Other criteria when analyzing the results may be in terms of the

related work practices.

It’s better if the results are expressed quantitatively. This makes it easy to compare and makes

the decision making process easier, makes it easier to graphically represent and explain the

results for the board of managers.

Different benchmarks are used in different organizations, it would be useful to know their

benchmarks and make a comparison between their benchmarks and our own organization. It

gives a clear view about the effectiveness of implementation of the practice and also

competitiveness of our practice.

During different visits from different source sites, we may obtain variety of contradicting data or

maybe they can be combined, sometimes “best practices” can be made through a combination of

different practices of different sites.

Step 5-DEFINING FUTURE TRENDS

In order to propose clear benchmarking changes to general management and to have a clear idea

of its options and allot it a realistic conception of the potential benefits of adopting the

benchmarking practices, the investigator team needs to examine the record of past performances

of the organization in comparison to its competitors, it also can create a sense about the probable

future changes and progresses.

Industry trends related to the practice being benchmarked in the recent past must be analyzed,

from this analyze revenues and productivities must be defined, by doing this we can have a

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realistic overview of the future situation and expect the outcomes and consequences sooner than

the time they happen and be prepared for them in case they needed preparation.

Another key issue at this step is to find and compare the gap between the performance of the

“current practice” and the “benchmarked organization” this helps understanding trends of the

target site when implementing. Reasons for the gap must be clarified because those are the points

that change must be implemented in. The quantitative benefits of implementing the proposed

benchmarking changes must be identified at this stage.

Competitors benchmarked positions must be anticipated By projecting past trends into the future

and allowing for anticipated changes also it must be defined that if the benchmarks are

implemented, then what would be the future trend, position, competitiveness and cost

effectiveness of the plan in future.

STEP6- COMMUNICATING THE RESULTS

Change doesn’t occur unless a leader or an authority within the organization supports the

movement. Communicating the benchmarking results and their implications to significant

audiences in the organization and motivating them to carry out changes will make it more

effective.

Significant audience means anyone whose job will be affected due to change, this may be a

specific manager of a single department or the overall boards of managers, it can be suppliers or

customers. Incorrect implementation of this step will leave both management and employees

confused or inadequately informed, reducing the potential for effective change. Also at this point

it must be defined that which kind of presentation is going to be done, the format in which data

will be delivered is determined (video or text documents and so on).

How is the report to be written? Determine what kind of publications (e.g., full-length report,

newsletter and video presentation) would be most appropriate to communicate the benchmarking

results, based upon the nature of the organization and its goals.

Express the purpose of the benchmarking process in the appropriate manner. Has emphasis been

placed on the results of the study, rather than methodology? Has emphasis been placed on fact

rather than opinion?

After informing the related authority about the results, it’s important to receive feedbacks to see

whether they understand the necessity for change and to receive the management approval.

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STEP 7-CONFIRM THE MISSION

Board of managers and also the administrative team must have consensus on the outcome of the

project so in This step the performance gap discussed in step 5 is revised and the managerial

team confirms the final course of actions. After involvement and participation of managements

then it’s time for employees to participate in the plan. Managers must make sure that employees

are aware and supportive of the project.

Correct implementation of this step will create realistic and unambiguous new standards for the

processes involved. Incorrect implementation of this step could create poorly understood or

unrealistic standards that would only increase the frustration level of both management and

employees.

At this step a revised plan of the operational terms of action is created through the modification

of previous plans, the change conditions are affected by the performance gap. This plan is a more

quantitative, measurable and defined plan than the previous one.

If a plan is theoretically ideal but the change requirements are not easy to acquire and maintain

then at this step the revision is done to make the plan affordable for the organization. The degree

of change should also be realistic based upon benchmarking findings.

Revision of executive plans may have different effects on other departments and sectors which

must studied again at this stage. Some departments may need to be reorganized, and some

employees' positions will need to be redefined, created or eliminated. Also, some lines of

authority may need to be altered.

Those changes may also have impacts on customers and suppliers, the legal situation also needs

to be scrutinized. Then decide in what detail they should be informed of changes and how to

present the changes to generate support rather than anxiety.

STEP 8-DESIGN

In this step we must plan accurately for the detailed implementation and sequence of the action

plans. The management must approve the plan and related individuals must be assigned for their

jobs. Factors like: time, cost, software, infrastructures, etc. are being evaluated and selected. The

procedure and the requirements for it must be as clear as possible otherwise the management

36

consider is vague and confusing. Then a specific procedure for any of the factors must be

prepared, the allocation of each factor to each step of implementation of the practice must be

clear documented.

Action plans are written according to requirements, final objective, their constraints and

priorities. The advantages and disadvantages of each factor must be clear.

The next move is to separate each task to some number of smaller functions and processes. This

has two advantages, first is that it is easier to solve a big problem if you divide it into smaller

ones and the second is by dividing and the so called expression “modular tasking” you can see

each task as an independent module of a whole, that gives you the possibility to have more

control and modification over it and also if there is any problem, then it would be much easier to

find the source and resolve it.

But from the managerial point of view, the sequence of implementation of modules must be

defined in this step.

Management needs to approve the procedure at this point. He also needs to assign individuals

with appropriate levels of knowledge and capability for responsibilities like line management,

team management and project management. In cases of need for training, the topics and the flow

of training program is defined here.

STEP 9-EXECUTION AND CONTROL

This step involves executing the approved best-practice procedures and the day-to-day

monitoring of changes. The measures of this stage must be accurate in order to receive satisfying

results. The implementation of each step is done according to a time-table chart the temporal

period for each part must be defined and followed as planned.

During the implementation, measurements from each step must conform to data prepared in

advance. Variances between the theoretically foreseen data and the real data derived from the

experience must noticed and be under control, for each data there is a safe interval with tolerance

in this area is logical , these confidence intervals must be controlled while measurements,

Appropriate action needs to be taken as soon as deviations are detected.

Incorrect implementation of this step could result in inaccurate or spotty measurement, leading

to poor control of the process and disappointing overall results. Communication should be open

to all affected parties; it helps us receive feed backs as soon as possible.

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The aim is to create and enable a system of implementation which is able to monitor changes

with the real-time-data and also preparing a final report, including which elements of the

incorporated changes should be rejected and which should be accepted as permanent practices

within the organization. We must check whether the final evaluation conforms with the

benchmarks..

STEP10-DEFINE NEW STANDARS

If an organization wants to stay in the most advanced stages of a practice, then a constant

process is required. The organization needs to continuously evaluate the benchmarked practices

and change them if necessary. If otherwise, then there would be a risk of failure in this dynamic

world of today but how should we understand which are the most important benchmarks which

needs to be recalibrated more frequently?

There answer lies in the level of their importance from the point of view of company’s

performance measures and goals. A benchmark like customer satisfaction is what has to be

monitored constantly. The management must be ready to implement 10 steps in case necessary.

Until here, we became familiar with how we can understand and define the best practice, what

are the factors that we must consider, here I will discuss a methodology for transferring the

desired best practice from one site to another, and this process of transferring is called

extrapolation.

Extrapolating a practice is not just a copy paste task, there are principles and facts that affect the

process and we must understand what is exactly the impact of implementation of a practice in a

site, these impacts can show off in short term or also in long term.

A practice may or may not be applicable to a site due to the requirements of implementation of

the practice, so here we become familiar with the right methodology of extrapolation in order to

have an effective and sustainable process. The architectures of two sites must conform and also

other factors must conform in order to have a successful extrapolation.

Some mechanisms are used here to power the engine of process; vulnerabilities and strength are

being discussed in the following pages.

***

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1.2.7 How to Learn From a Good Practice: Solving The Extrapolation Problem

What is discussed here is called “the extrapolation”, when there is a problem or a

complex situation in a site ( which is then called the target site) and we as the person who is in

charge of analysis of the situation, try to study and then learn from another practitioners (which

is then called the source site) and then apply their practices to our own site, but this process is not

as easy as just copying the practices, its more about the “methodologies that we have to

implement to extract the information” and to “conceptualize what is that they are doing is the

source site, does make sense to our situation or not? “

The challenge here, is that we just don’t simply adopt a practice from a source site to a target

site, but before adoption we need to “customize it and localize it”, to modify it in the way looks

the best for our, so when an analyst is analyzing a practice, he needs to study first the practices

that he sees and second the practices that he feels are necessary but not yet implemented.

We need to keep that in mind that extrapolation is not as we think in mathematics is, in

mathematics, extrapolation means, we have some observations between two or more variables

and we understand a correlation between the variables, and there is point which we cannot

measure any more ( because of various reasons, maybe the particle size are too small or too big,

maybe lack of accessibility to the correct instrument and so many other reasons) at this point in

mathematics we assume that is the behavior of the variables is the same as we had seen in

previous observations, then we can apply a formula to the line which passes from all the points

that are already measured and then estimate what would be the answer of any further point that

we cannot calculate.

But it’s not exactly what we do here, here from extrapolation, we mean “ searching for

interesting ideas about successful mechanism that might be adapted at home, and then inferring

from the experience of others plausible estimate about the chances of success or failure in

implementing the adaption.” [21].

The focus on this review would be on how to overcome the challenges of extracting ideas from a

source site, by taking into account the importance of two items, first “ the effectiveness of the

practice’ and second, the “cost-effectiveness of the practice” which is applied to a source site.

In many cases, policy analysts can make mistakes and misinterpret and underestimate the

potential for what is observed and underestimate the risk of failure, but a good methodology or

“a conceptual framework” can to some degree substitute for intelligence of analyst and give

specific directions and clear borders and frame works to analyze policies.

The type of relationship to look for and the type of uncertainties to calibrate are the issues that

will be prescribed in that conceptual framework.

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When applying a practice from a source site to a target site, there are some qualitative variations

on what has been observed which, though perhaps small in some sense, might have large effects.

Another related topic is “the architecture of work structure” by that we mean, by understanding

the mechanism of operating a technology or practice we are able to implement the practice in the

target site, and the example is, “knowledge of how electricity is generated allows us to provide

such power where electricity may never have been available before.”

Researchers can effectively investigate practices in source sites to prepare the disciplined and

ingenious extrapolation of practices from source to target sites through a case study. Acquiring

such practices needs learning and experimenting.

In order to improve performance in one situation (the target site) involve examining experience

acquired elsewhere (source sites). A Vicarious experience or what is felt and learnt by watching,

hearing about, or reading about someone else rather than by doing something yourself (Merriam

Webster), is what we call extrapolation here.

Extrapolation has two general steps, in the first step the research part, by doing the research, we

understand and explain the design exemplars’ performance effects, by explaining performance

effects and the research provides a causal understanding of how the exemplar functions. In the

second step, extrapolation takes the form of using the account as a source of ideas for solving the

design problem at hand.

1.2.8Vulnerabilities and Their Sources

There is no such a 100% flawless practice, each practice may have weak points and

“vulnerabilities”. Vulnerability is where the failure of the system may begin and the existence of

the vulnerabilities reduces practice’s strength to be adaptable and usable but by improving them

and doing “vulnerability management” we can reduce the vulnerabilities constantly and prevent

failures. There are two groups of vulnerabilities,

Mediating conditions:

There are conditions, usually due to the environment that a practice is implementing and it

affects the implementation process. For example if we introduce an process which is very

effective itself regardless of the conditions that it requires, but one of the requirements for the

implementation is having a specific level of education for people who use it, then only people

can take the advantage of the practice who has the required education and if we are speaking

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about a society which only have a few people with the mentioned education, then this process

wouldn’t be effective in such environment.

Way of implementation of a practice:

The main source of vulnerability is the way which a practice is implemented.

Not all of the vulnerabilities may lead to a failure on each site, may in some sites a vulnerability

becomes more critical, so when using a practice in another site, it’s good to analyze it in different

conditions of sites and to learn different possible failure modes of the system.

When a practice is taken from a source site, due to local objective, resources and available

alternatives it may be ignored, replicated, being adapted, experimented or it can be used to get

some further ideas inspired by it.

This decision making process occurs with strategy as Bardach says [22], for example one of the

strategies is “A Fortiori Analysis” which helps designing a search strategy, it suggests that if you

look at the source site and the target site with respect to comparing them from the aspect of their

resources or only a single resource, you can decide “how much trouble you will have, given their

level of resources and also you can decide whether you better or worse off than they were in the

source site with respect to the resource( or resources).

1.2.9Basic Mechanisms

Basic mechanisms are the most relevant driving elements of a practice, basic mechanisms

have some sort of “causal power”, it means some of the actions lead to a specific result, and a

basic mechanism produces effects which are valuable and desirable for us within the relevant

practice.

These cause and effect relations naturally exist in the social nature and are proved through

empirical experiments or are so obvious that policy analysts take advantage of them when

applying any policy.

There are some natural reservoirs that we have in nature and also within ourselves for example

thermal power can be extracted from hydrocarbon molecules, we only need to know the

procedure and mechanism. Another example is the emotional and intellectual arousal that occurs

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under moderate pressure, driven from psychology and empirical experiments from the relations

between a moderate external pressure and memory.

1.2.10 Implementing, Optional, Supportive Features

Supportive or optional features are those features that when we apply, they cause the

basic mechanisms to be implemented directly. For example in the example above, they are

functional and essential for a mechanism to work.

If you put deadline, it creates pressure, which is an arousal to a higher

performance).implementing features are the most basic, and indispensable features whereas

optional features can alter due to site that it is implemented. They can differ due to preferences

and their role is not functional.

Although there are times that scholars argue about whether a feature is an implementing one or

an optional one, because due to some levels, it depends on the argue and statements, so there is

not really a clear defined boundaries between them.

Supportive features, support implementing features to be implemented, which means, they must

exist in order to have implementing features implemented, grounds and supports which give

implementing features the “Resource” that it needs but They don’t have a direct effect. An

example in this case can be insurance and budgeting and other infrastructures of the institute.

When a mechanism is applied, there are primary effects which are observable from the first place

but beside those, we have “secondary effects” or “secondary benefits”. Not all of these are seen

before the implementation of the mechanism from a source site. Maybe some of them were

predictable but due to complexities that a social policy implementation has, some of them may

take time to show themselves, also, when extrapolating maybe some of the secondary effects

didn’t occur on the source site but may happen in the target site and these secondary effects can

be both positive or negative(harmful).

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1.3.1 Mechanism Theory

1.3.2What is “Mechanism”?

The word’s terminology refers to a “system of parts which work together” or “a natural

or established process by which something takes place or is brought about”. As we comprehend

from definition, The relation is a cause and effect one, a piece or part which has a kind of

functionality which has impact on the functionality of another part. Mechanisms exist

everywhere.

From the simplest actions and phenomena in nature and human relations until the most

complexes of them, science is expanded through understandings of mechanism, knowledge of

human and the legacy of their doctrine lies within the fact that people realized that by

understanding, and then utilizing and emulating mechanism that they see in nature, they can

provide themselves means to their willing and all they had to do was to understand how a

mechanism works and then to emulate them as they are, this algorithm does not only works for

physics or mathematics but also for human relations and social mechanisms, some of them are

that simple and obvious that even without any more research we as a creatures who has the gift

of intellect and logic can understand like it is in our subconscious and many of our daily

activities are based on the logic and our understandings of mechanisms that is recorded and

registered in our brain (consciously or unconsciously) and we haven’t learned about them in

schools. “It is the sequence of events and processes (the causal complex) that lead to the event

[23].”

Basic mechanisms are the most relevant driving elements of a practice, basic mechanisms have

some sort of “causal power”, it means some of the actions lead to a specific result, a basic

mechanism produces effects which are valuable and desirable for us within the relevant practice

[24]. These cause and effect relations naturally exist in the social nature and are proved through

empirical experiments or are so obvious that policy analysts take advantage of them when

applying any policy.

There are some natural reservoirs that we have in nature and also within ourselves for example

thermal power can be extracted from hydrocarbon molecules, we only need to know the

procedure and mechanism. The term “social

Mechanism” refers to recurring actions and events, and links identifiable initial conditions

With specific results, and is a helpful concept for identifying processes that generate inequalities

[25].

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Mechanisms can be systematic and can be non-systematic, “systematic mechanisms” are those

who are applicable in variety of cases and not a specific one, these mechanisms are strong have

relatively developed theories and they are confidently applicable on so many cases but instead

the “non-systematic mechanisms” are those who are applicable only in one or a few cases, they

don’t have the ability to be generalized and the outcome of the mechanism occurs only when

specific criteria in that context is satisfied.

1.3.3 Social Mechanisms

As Manzo said [26] social mechanism is a more or less general sequence or set of social

events or processes analyzed at a lower order of complexity or aggregation by which—in certain

circumstances some cause X tends to bring about some effect Y in the realm of human social

relations.

This sequence or set may or may not be analytically reducible to the actions of individuals who

enact it, may underwrite formal or substantive causal processes, and may be observed,

unobserved, or in principle unobservable “In the briefest possible terms, a social mechanism is a

fairly general, but only sometimes true, (partial) theorization of complex temporal phenomena in

the social world” In the words of the esteemed German political sociologist, Renate Mayntz [27].

Social mechanisms have advanced these years and they have become more explanatory.

There are different approaches to social theories;” purely descriptive approach” and

“mechanism-based” approach are the most relevant ones to our fields of study. The purely

descriptive approach seeks to account for the unique chain of events that lead from one situation

or event to another.

Mechanism-based approaches are more interdisciplinary and it concerns the cause and effect

relation, which means to recognize and identify the factors involving in the results of the process

and to implement control and modification through them in order to enhance the cognition and

therefore to control the result of the process. The overall argue is, in sociology studies, it’s better

to move from designing based on a “pure statistical association among different elements” to a

design based on “mechanism”.

One key defining characteristic of an explanatory mechanism is the function it performs in an

explanatory account. Assume that we have observed a systematic relationship between two

entities, say X and Y. In order to explain the relationship between them we search for a

mechanism, M, this is such that on the occurrence of the cause or input “X”, it generates the

effect or outcome, “O”.

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On the mechanism-based approach rather than merely establishing systematic correlated

variations between events, we generate a systematic set of plausible account of how inputs

generate outputs and they are linked to one another therefore a mechanism entails a general

covering law plus the conditions that make the law applicable. We have to keep in mind that any

mechanisms need the “enabling conditions” otherwise they wouldn’t work or they wouldn’t be

effective.

Our aim in this chapter is to get acquainted with the most relevant social mechanisms and to

understand how they work, then to their impacts on social or political phenomena and to finally

understand how to use mechanism approaches to learn from a good practice and how to use them

in order to implement a good plan?

In order to understand the idea of “social mechanisms” we start to examine the most relevant of

them.

Explaining many of these social mechanisms needs several elementary mechanisms. In any case,

the multiplicity of mechanisms makes it important to introduce some kind of typology that sorts

them in a meaningful way.

Many of these mechanisms may work together in order to make an output. Sometimes

mechanisms work in a concurrent way sometimes they work in opposite direction. And the

output depends on how mechanisms merge together. In discussing these theories our aim is to

understand how change and variations at macro level occurs, how the change itself effects the

trend of change after some time and how different actors of change can generate new macro

states at a later time so three types of social mechanisms are considered in macro level,

1. Situational mechanisms

2. Action-formation mechanisms

3. Transformational mechanisms

The first typology of mechanisms considers how the individual conforms to the impacts of macro

level events and what his perception of situation is. The individual actor is exposed to a specific

social situation and his situation will affect him or her in a particular way.

Many of the mechanisms which will be discussed further have these sorts of mechanisms at their

core. These social mechanisms systematically and reasonably link a social structure or other

macro sociological events or states to the beliefs, desires and opportunities of some individual

actors.

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The second typologies of mechanisms are how a number of individuals through their actions and

interactions generate macro level outcomes. This typology is a macro level mechanism. This

type of mechanism indicates how a set of combinations of the actor’s beliefs, desires, tendencies

and action opportunities lead to performance of a specific action. It is a combination of

psychological and social-psychological mechanisms which have these mechanisms in their core.

The third typology argues that the way of conceptualizing social actions leads itself a very

natural way to a typology of mechanisms. This theory includes a micro to macro transition and

therefore it’s called a transformational mechanism.

In this case we have a number of individuals who interact with one another through different

vessels, and depending on the nature of interaction the mechanism are being activated and will

affect how the sum of their interactions which form a overall collective action and result. Many

of the game theories models follow this logic.

By understanding how mechanisms work and knowing how to activate them in people we can

use some benefits, actually in “Mechanism design” or “reverse game theory” we do so. It is one

of the subsets of the game theory. This science finds solution for private-information

conundrums. In these cases we know what the upcoming result function has to be and we are

looking for a mechanism to design that leads us to the desired result function. Problem solving is

a part of thoughts and contemplation.

Problem solving is the most complex part of each intellectual process and it’s an important part

in realization of anything, problem solving ability needs a series of generic and fundamental

expertness and workmanships. Problem solving is an issue when an alive creature or a system of

artificial intelligence doesn’t know what to do for going from a situation to another; this is a part

of a bigger problem which creates stages of the problem solving.

Design of mechanism is a form of problem solving which means in designing scheme to use

benefits of known mechanisms in order to orient organizations in the desired way, use the same

procedures.

The design process should be with aim to drive a situation from its present performance to the

preferable one like a problem solving situation. This requires a problem solving approach and the

process of problem solving involves designing “artificial things” or “artifacts”. Artifacts are

expected to perform a function or fulfill a purpose and it will interact with its environment. Thus,

“fulfillment of purpose” or “adaptation to a goal” involves a relation among three terms: the

purpose or goal, the character of the artifact, and the environment in which the artifact performs”

[29].

At this point our view of an organization is like an artifact which is devised to transform existing

situations to the preferred ones and this is done through social mechanism. They are theories of

processes and methodologies that explain by sequence which process and how much take place.

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There is a challenge here, the designer wishes to customize each part of design in a more

effective and desirable way and this requires breaking a task into smaller more localized pieces

which may act differently from each other so the need for creativity and wisdom is more than

ever.

An emerging movement to explicitly use the current is the “evidence-based management” or

EBM, best evidence in management and decision-making. Its roots are in empiricism and well

developed in evidence-based medicine and evidence based policy. These are quality movements

aimed at applying the scientific method to evaluating practice.

This emerging methodology helps reducing the gap between research and practice. Many of the

managerial practices are places via cosmopolitan fads, casual benchmarking and much is based

on arbitrary attitudes and the aim is to make them less arbitrary and more reflective and effective

via evidence-based management.

1.3.4 Some Relevant Mechanisms

Social mechanisms have three compounds, as McAdam, Tarrow, and Tilly [29] define

actor certification in terms of “the validation of actors, their performances, and their claims by

external authorities.” Attribution of opportunity “is an activating mechanism responsible in

part for the mobilization of previously inert populations”. Performance feedback [30], [31]

entails the production, handling, and interpretation of information about effort outcomes, in the

light of previously established aspirations and goals. These mechanisms usually concatenate with

each other as different building blocks of a social theory.

Mechanisms like: Self fulfilling prophecy, Network diffusion, Threshold-based behavior,

Bandwagon effect, Positive feedback, Self efficiency theory, Social learning theory, Self concept

theory, Attribution theory, Burning platform theory, Perceptual confirmation, Cognitive

dissonance theory, Activating the discontented and Perceptual preconceptions are introduced

here, the general methodology is to illustrate the core of each mechanism, the causal relations

between different operating parts in each mechanism and to show how the mechanism affects

different factors and create a specific output out of it.

Most of these theories illustrate the simple cause and effect relation between the natural and

social facts, for example if A happens in a society, as the effect of A, B would be unavoidable

and so a chain of related activities occur and they would produce a final major output which is

observable. To understand each mechanism, examples are devised, the key is if we know what

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causes an output, then if we desire to eliminate the output, modify it or in some case create it in

an organization, and then we know the core cause and the methodology to use.

In the table below, I have summarized the most relevant mechanisms and defined them, in the

next part I will go through each mechanism more in depth and give more explanations about

each of them.

Table1- Social Mechanisms, Definition, Example

Name of Mechanism Definition Example

Self fulfilling prophecy

If the initial understanding and

definition of a situation is

false, then human behave in a

way that the false concept

becomes true.

a rumor about bankruptcy and

insolvency of a bank gets

started, depositors will

withdraw their money, this

action from a large amount of

people lead to a real

bankruptcy.

Network diffusion

Social networks are paths

through which innovations can

diffuse and spread. The more

awareness people have about a

new technology, the more

probable to use the technology

and change their behavior.

Spread of idea through

communications in social

networks, when an impressive

Instagramer takes photo of his

new product, other people

become aware and imitate.

Threshold-based behavior

An individual’s tendency

about if he or she participate

in collective behavior in many

cases depends on how many

In “Ice Bucket Challenge”,

The more people sent video of

themselves having the

challenge, the more popular it

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other participants already have

decided to participate.

became and more people were

willing to take the challenge.

Bandwagon effect

If there are a lot of people

believing in X, then it’s more

probable that more people

believe in X whether X is

correct or is wrong.

In the music industry, the

statistics show that many

people will find a song

popular only when the

popularity of the song in

public increases.

Positive feedback

There is a positive loop

between believes and

behaviors, If enough people

believe that a social fact is

true, their behavior can make

the fact true and also

observation and consequence

of what they perform may also

augment the belief.

When the technology and

healthcare improves, more

people will be alive thanks to

technology that provided

health care for them and they

are potential minds that can

improve technology and

health care.

Self efficiency theory

One's belief in one's ability to

succeed in specific situations

or accomplish a task. One's

sense of self-efficacy can play

a major role in how one

approaches goals, tasks, and

challenges

With the same amount of

study, If a student thinks he is

good at math, he will be more

comfortable at exam and he

does his exam better than a

person who thinks he is not

good because he is stressed

and stress distracts the mind.

Social learning theory

People learn from each other

through observation, imitation

and modeling. It describes that

people learn new knowledge

and skills in society via social

If a child sees his older brother

bring home a good report card

and he gets a great reward for

it, the child may observe this,

see the older brother get

rewarded, and then learn that

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groups that they interact with. having a good report card will

get rewarded so he should do

it too.

Self concept theory

People perceive and interpret

their own existence from the

feedbacks and clues they

receive from external sources

focusing on how these

impressions are organized and

how they become active

throughout life.

The child understands that he

does an action and he receives

a reaction like when he

touches something and that

thing moves. He understands

that he exists in space and

time and he can affect his

environment.

Attribution theory

People are simple

psychologists trying to make

sense of the social world.

They incline to see cause and

effect relationships even when

there is none and when they

are trying to explain their own

behaviors they use external

and internal causes.

A person gets personal trainer

to lose 5 kg and the trainer

promises so. After 1 month he

loses only 2 kg.he becomes

angry and tries to find the

reason, he blames himself and

the trainer.(Internal and

external reason)

Burning platform theory

Change is hard, if people

understand that failure to

change is even harder they are

more proceeding to change

An exam is close, It’s hard for

the student to student to study

for exam but it’s harder for

him to fail the exam, so he

studies.

Perceptual confirmation

A person’s expectation of how

some object will be evaluated

itself affects how the object is

If a man thinks that women

are bad drivers, then it is more

probable that he sees woman’s

accidents more, even if he sees

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evaluated. the same rate of accidents

from men and women, his

brain bolds the woman’s

accidents in his perception.

Cognitive dissonance theory

human are sensitive to

inconsistencies between

actions and beliefs,

Recognition of this

inconsistency will cause

dissonance, and will motivate

an individual to resolve the

dissonance in three ways,

change beliefs, change

actions, change perception of

action.

Mr X believes smoking is

good and makes him more

concentrated, he becomes

aware that smoking causes

cancer, so this inconsistency

makes him to do research and

understand the bad causes of

smoking and he decides to

quit smoking.

Activating the discontented

A change becomes successful

and followed by a large

number of people if at the

beginning phase they are

people who support change

and act accordingly.

When Internet banking was

announced, majority of people

refused to use it because they

didn’t have enough

information and they didn’t

feel safe, a few people who

were more aware and started

to use it, the other people saw

that its safe, and so more

people started using it.

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1.3.5 Self Fulfilling Prophecy

One of the most famous mechanism-based theories in sociology is “self-fulfilling

prophecy”. This theory was first proposed by Robert Merton in 1948 [32]. Theory states that if

the initial understanding and definition of a situation is false, then human behave in a way that

the false concept becomes true. In other words, an expectation about a subject, such as an event

or a person can affect our behavior toward that subject which causes the expectation to be

fulfilled. The most famous for his illustrations is a bank.

If a rumor about bankruptcy and insolvency of a bank gets started, depositors will withdraw

their money. This action will hurt the bank and make the prophecy come true from two aspects,

first is strengthening the belief in the rumor, because people see that depositors are withdrawing

their money so even if they didn’t care in the first place they will start to be worries about the

rumor and also they may act and the second aspect is that they also will threat the financial

standing of the bank. But more importantly is the psychological effect that it has on other

depositors so there would be more withdrawals and it reduces the trust in bank more than before

and so on.

If this mechanism works like this for some time, it will lead to a real bankruptcy. Another

example of a self-fulfilling prophecy would be when a coach expects a new player to be

unskilled and he doesn’t involve him in plays so the player becomes unskilled.

, a person’s expectation of how some object will be evaluated itself affects how the object is

evaluated and it’s different from the self-fulfilling prophecy, in the self-fulfilling prophecy

expectations generate action that produces more better experience, but in a perceptual

confirmation it’s just a perception of it.

“The self-fulfilling prophecy is, in the beginning, a false definition of the situation evoking a

new behavior which makes the original false conception come true. This specious validity of the

self-fulfilling prophecy perpetuates a reign of error. For the prophet will cite the actual course of

events as proof that he was right from the very beginning”.

Research on the self-fulfilling-prophecy in areas relevant to organizational changes shows that:

expectations about future performance will have impact on the actual performance. The more

people think that they are successful in operating a task, the more they put effort in doing it

perfectly and so they become more successful at doing that so here the effect of personality and

demographic characteristics plays an important role.

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1.3.6Network Diffusion

Everett Rogers proposed this mechanism for the first time in his book “Diffusion of

innovations” in 1962 [33]. This mechanism, consider any social networks as a path through

which innovations can diffuse through. The core of the argument is that information about a new

technology or an innovation or any new issue is diffused and reached to people through networks

and social group through certain channels and this information can affect their behavior because

they see that other people are also doing it and so they are more eager to do so this is more

intense when there is a great deal of uncertainty about the true value of the innovation or people

are in doubt whether a new invention works or not.

Innovations spread through networks with different speeds, and this speed depends many

elements, the innovation itself, types of communication channels they used, amount of time the

social group is exposed to the innovation and the nature of the social group, but the whole

concept is how interesting an idea seems to a network.

Understanding this mechanism helps using the social networks in order to make an innovation

known to public. The diffusion of an idea, and the fact that other people in society are

considering the innovation and try it and give comment on it, provides insight into the process of

the social change with this argument people can observe the qualities that make an innovation

successfully spread and it indicates the importance of networking and communicating. There are

some steps through diffusion of a new idea through a “decision-making” process. In the

beginning the individual becomes aware of the innovation but he doesn’t have further

information and abetment.

But this interest will lead the individual to more exploration which is the next step and he or she

begins to research and we will attain some advantages and some disadvantages about the new

innovation and so he or she decides upon this data and also his or her idea at this stage is added

to other data on the social network about the innovation, depending on the effectiveness of the

individual this idea adds weight to the innovation and finally individual adds the innovation into

the system and at this stage he begins to determine innovations real criteria.

If we take a closer look into the inner mantle of this mechanism we would understand that

through communication ideas spread and are diffused, and networks are what give us the ability

to communicate and so the “activating condition” for this mechanism is existence of a network.

In some cases although the network exists, but it needs modifications in order to become

compatible with the needs of network users and administrators, in other words, new innovation

(technology, idea, procedure)must fit with already established network system in order for

changes to occur easily.

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Introduction of ideas to a network can arise from internal factors or external ones. Internal

diffusion is spread of information and innovations within a network, flowing within the adopting

population. In external diffusion the process of introduction of ideas to a network is raised from

outside actors, for example the ideas can come from within the R&D section of an organization

which then becomes an internal mode from the initiation of innovation, it also can come from

competitors organizations (or other organizations ) or change agents (business professionals).

1.3.7 Threshold-Based Behavior

Another useful social mechanism is Granovetter’s threshold theory of collective behavior

” [34]. This theory argues that an individual’s tendency about if he or she participate in collective

behavior in many cases depends on how many other participants already have decided to

participate.

Different actors are different in term of the number of people who have to participate before

them and this depends on their personality traits. An actor’s threshold’s means the proportion of

the group which must have joined before the actor in the argument is willing to participate.

A very common and understandable example is when you want to chose among some

restaurants that you have haven’t try yet and based on how crowded is a restaurant you logically

deduce that the most crowded has the most popular food or in other words, if the restaurant

doesn’t have the minimal number of clients you would probably chose elsewhere. And this

minimal number of clients is what varies in different people.

Now let’s analyze the logic behind it. This theory argues that the propensity of individual’s to

perform a collective act at any time is a function of the strength of individual’s belief in the value

or necessity of performing the act in question at that time.

Core attribute of all theories mentioned above is the general belief formation mechanism which

indicates the number of individuals who perform is a measure of its value and necessity . This

belief formation mechanism is the core logic of self-fulfilling prophecies and also the network

diffusion and also many other effects.

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1.3.8Bandwagon Effect

In 1848, one of the candidates of presidency in united states used a clown and a band

wagon car and he moved it in cities as his innovative advertisement and this methodology was

actually very effective, this made many other politicians to use the same methodology and after

some time this became a very usual method for candidates in presidency in united states.

This phenomena is not only happening for candidates but also in many others social phenomena,

for instance when election, it is observed that many people vote to some party not because they

believe he is the best but because they have this feeling that that person will win, in other words

when people think that some party is winner they unconsciously do the same thing that the

winner do.

Another example would be in the music industry, the statistics show that many people will find a

song popular only when the popularity of the song in public increases , also in micro economics,

there is logical relationship between the need and the supply but it is been observed that the

propensity of mass of people increase irrationally when selling of a product increase and this has

contradiction with the fundamental theories of need and supply, because in most of those

theories it is assumed that a customer thinks logically and based on his needs which is not true in

these cases.

This theory simply says that, if there are a lot of people believing in X, then it’s more probable

that more people believe in X whether X is correct or is wrong.

1.3.9Positive Feedback

Positive feedback is defined as a process of a feedback loop. In this process the effect of a

small disturbance on a system include an increase in the magnitude of the perturbation. It

means, A produces more of B and as a result produces more of A.

In the sociology literature, it is interpreted that there is a positive loop between believes and

behaviors, If enough number of people believe that a social fact is true, then their behavior can

make the fact true and also observation and consequence of what they perform may also augment

the belief.

So as a change begins to happen, there are “early wins” or the improvements and positive aspects

that a reform movement gain, so this can be an incentive for skeptical third parties who are just

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watching the movement and this early wins may get supporters from these third parties and

“turns neutral into supporters and even reluctant supporters into active helpers.

Positive feedback is a “contagion” way of spreading ideas, products, messages and behaviors, It

is defined as “ a change in one direction sets in motion reinforcing pressure that produce further

change in the same direction”.

The overall structure of is that, the model adoption begins slowly, then there is a curvature point

which is also called the tipping point or the critical mass, at this point the further expansion of

the phenomena is based on the positive feedback mechanism alone.

At the tipping point, change starts to feed on itself and it is called self-sustaining. Also it is self-

reinforcement which means than when there is an increase in the phenomenon, this creates

further increase.

On the other hand, another natural phenomenon “Negative feedback” may also occur, those who

are lacking confidence may be more likely to fail. A single mechanism can make both of the

negative or positive feedback; in this case if the mechanism is successful it means that the

number of positive feedbacks which it’s creating is enough.

Positive feedback helps consolidating change, it increases support for change indirectly by

promoting the successful experience and so it produces more favorable attitudes, also, as we

know in learning curves, when people get more experienced in doing a task, the more they

practice the better they do it, and so it increases the positive experience and the positive

experience generates more satisfaction with the change,

1.3.10 Self Efficiency Theory

Psychologist Albert Bandura [35] has defined self-efficacy as “one's belief in one's ability

to succeed in specific situations or accomplish a task. One's sense of self-efficacy can play a

major role in how one approaches goals, tasks, and challenges”.

This theory emphasizes on the role of observational learning and social experiences in

development of personality. Any individual is in a constant action and reaction with society and

he receives feedbacks from each action he does and this creates a psychological structure in him

which is consists of habits, personalities, his perception about himself, his inclinations and, so it

gives a perception about specific abilities and traits one has.

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In other words, by receiving a perception and transformation of this perception to belief of

someone, then its more probable that the one acts accordingly, which means if someone believes

he is good at something, then probably he does a better job when facing that task. This

mechanism has an external activator (the society which gives feedback and interacts with

individual) and also an internal activator (how the individual interpret the information he

received from the society.)

People with high self-efficacy that is, those who believe they can perform well, are more likely

to view difficult tasks as something to be mastered rather than something to be avoided.

1.3.11 Social Learning Theory

Theory states that people learn from each other through observation, imitation and

modeling. It describes that people learn new knowledge and skills in society via social groups

that they interact with.

Social learning depends on how individuals either succeed or fail at dynamic interactions within

groups, individual’s emotional traits, his practical skills and his or her self acceptance is created

within these dynamic relationships. Another process is defined within the social learning theory

called “vicarious reinforcement”.

This process claims that in addition to the observation of behaviors of others, learning also

occurs through observation of rewards and punishments. There are five principles claimed in

this theory:

1. Learning is not purely behavioral; rather, it is a cognitive process that takes place in a

social context.

2. Learning can occur by observing a behavior and by observing the consequences of the

behavior

3. Learning involves observation, extraction of information from those observations, and

making decisions about the performance of the behavior (observational learning

or modeling). Thus, learning can occur without an observable change in behavior.

4. Reinforcement plays a role in learning but is not entirely responsible for learning.

5. The learner is not a passive recipient of information. Cognition, environment, and

behavior all mutually influence each other.

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Another factor in social learning theory is the concept of reciprocal determinism. This expression

is referring to a reciprocal relationship between the learner and environment and it says that the

learner is influenced from the environment but at the same time also the environment is

influenced from the learner.

In other words, a person’s behavior, environment, and personal qualities all reciprocally

influence each other. Many of the social phenomena are now being explained by this theory and

one more-used example is the subject of aggression, consider a child who plays video games, his

smaller brother or his friends are being affected with this action, they see and they also may

imitate, and this action from the environment around the boy makes him even more eager to

playing video games, and if these games encourage violence then this violence is becoming more

and more by time.

1.3.12 Self Concept Theory

This theory claims that people perceive and interpret their own existence from the

feedbacks and clues they receive from external sources focusing on how these impressions are

organized and how they become active throughout life. Successes and failures are closely related

to the ways in which people have learned to view themselves and their relationships with others.

This theory describes self-concept.

Another definition for self-concept is: "the individual's belief about himself or herself, including

the person's attributes and who and what the self is". Learned, organized in the way it is applied

to the self, and dynamic which means it’s not fixed and it can change during time. This concept

has to aspects and contains 2 selves

The Existential Self

This is the most basic part of the self-scheme or self-concept; the sense of being separate and

distinct from others and the awareness of the constancy of the self” [36].

The child realizes that they exist as a separate entity from others and that they continue to exist

over time and space.

According to Lewis awareness of the existential self begins as young as two to three months old

and arises in part due to the relation the child has with the world. For example, the child

understands that he does an action and he receives a reaction like when he touches something

and that thing moves.

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The Categorical Self

Having realized that he or she exists as a separate experiencing being, the child next becomes

aware that he or she is also an object in the world. Just as other objects including people have

properties that can be experienced (big, small, red, smooth and so on) so the child is becoming

aware of him or herself as an object which can be experienced and which has properties.

The self too can be put into categories such as age, gender, size or skill. Two of the first

categories to be applied are age (“I am 3”) and gender (“I am a girl”)

1.3.13 Attribution Theory

This theory focuses on how people ascribe events and how this perception affects the

self-perception. It is a process of thinking and analyzing that happens when people try to deduce

from a behavior or a situation.

It is how we define and attach meaning to other’s behaviors or even our own, this theory deals

with how a social individual perceives information and how he or she uses causal explanations

for events, the causal judgment of people is the key point here.

A sociologist Heider [37]. suggested that people are simple psychologists trying to make sense of

the social world. They incline to see cause and effect relationships even when there is none.

Influential aspects of this theory are first, it is proven in researches that people look for enduring

internal attributes such as personality traits when they are explaining the behavior of others.

And secondly, when they are trying to explain their own behaviors they tend to make external

attributions, situational or environmental.

This theory briefly considers human behavior a combination of two forces and incentives,

external incentives like chance, environment and luck and internal incentives like ability,

perseverance and knowledge. According to this theory, people observe behaviors and then

attribute the reasons to them.

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1.3.14 Burning Platform Theory

Usually in literatures which study the change and reform initiations, this mechanism is

studied as a strong lever for change initiation. We have come to understand that this is a

metaphor for a crisis situation and the aim is to understand the sense of urgency that is necessary

to effectively react and overcome the crisis.

Change is hard, if people understand that failure to change is even harder they are more

proceeding to change. This theory is most commonly presented in a business context, where in

the burning platform is the threat that if the change does not occur the company will go bankrupt.

The key role in this theory is “establishing a sense of urgency”. As Kotter suggests leaders

should allow the errors to blow up instead of correcting them in the last minute. This

methodology Shows how staying where you are is not an option anymore, and that doing

nothing will result in disaster.

1.3.15 Perceptual Confirmation

Perceptual confirmation mechanism states that, a person’s expectation of how some

object will be evaluated itself affects how the object is evaluated and it’s different from the self-

fulfilling prophecy, in the self-fulfilling prophecy expectations generate action that produces

better experience, but in a perceptual confirmation it’s just a perception of it.

All of us have stereotypes, the belief structure that is being created since childhood, there is a

tendency in human to see things in the same direction with his or her expectations, this is

mechanism which occurs in part because we unconsciously interpret ambiguous information as

supporting our stereotypes and this leads to misunderstanding in some cases, we interpret other

peoples or phenomena in a very different way depending on our expectations.

Stereotypes lead people to store specific formation about a person that is consistent with their

expectations of that person and if they interpret some differences in other’s behavioral patterns

they understand the distinction and consider it as mental disease.

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1.3.16 Cognitive Dissonance Theory

This Theory is first suggested by Leon Festinger [38] and it is a strong mechanism which

human face with it many times during the day life, it tries to rationalize the reasons why people

behave differently from what they belief and what motives them?

This theory considers three fundamental assumptions, first is that human are sensitive to

inconsistencies between actions and beliefs second is Recognition of this inconsistency will

cause dissonance, and will motivate an individual to resolve the dissonance an third is

Dissonance will be resolved in one of three basic ways: change beliefs, change actions, change

perception of action.

Theory suggests that if we act differently from our beliefs and opinions we understand internally.

For example, if you have a belief that it is wrong to cheat, yet you find yourself cheating on a

test, you will notice and be affected by this inconsistency.

This theory suggests that by realizing of violation of one of the beliefs, you will feel sorrow and

suffer about this. The degree of dissonance, of course, will vary with the importance of your

belief, attitude, principle it is different in different people and with the degree of inconsistency

between your behavior and this belief.

In any case, according to the theory, the greater the dissonance the more you will be motivated to

resolve it. Perhaps the simplest way to resolve dissonance between actions and beliefs is simply

to change your beliefs. However, if the belief is fundamental and important to you such a course

of action is unlikely that the person just simply change it.

We need to keep in mind that our basic beliefs and attitudes are fundamental and stable; they

usually didn’t form easily in us they cannot vanish quickly, since we rely a lot on our world view

in predicting events and organizing our thoughts. A second option would be to make sure that

you never do this action again. Guilt and anxiety can be strong motivators for changing behavior,

also you may really benefit in some way from the action that’s inconsistent with your beliefs.

So, the trick would be to get rid of this feeling without changing your beliefs or your actions,

and so the third solution is the most common one and that is a method of resolution. It is to

change the way you perceive your action.

In more colloquial terms, you would “rationalize” your actions which means you think about the

action in a different way and in this new way of thinking the action doesn’t have contradiction

with beliefs any more.

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Figure2-Cognitive dissonance theory

1.3.17Activating the Discontented

This mechanism is used when a change initiation wants to start, this mechanism

accelerate change initiation by activating the discontented. According to “Activating the

discontented” theory of change initiating, successful initiation requires a change vanguard that is

waiting for an opportunity, ready to act as soon as receiving encouragement from above.

Change vanguards are so important that if they weren’t eager for change, no change could ever

take place. In addition to the sources of discontent and to factors promoting (or discouraging)

attachment to an organizational status quo, there are two more factors which effect joining the

reform coalition:

1) Personality or demographics,

2) Influence of leaders and co-workers.

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Adopting a perspective from diffusion of innovation research, rather than simply assuming that

people oppose change, diffusion-of-innovation research puts people in different categories, from

enthusiasts to critics with regard to innovation.

According to our discussion, some people enjoy change in general. They have the personality

and characteristic which makes them easier to translate discontent into early support for change.

These people are called early adopters of innovation.

There are also other demographic and personality traits make it easier for people to translate

discontent with the procurement status quo into reform coalition membership, It means, people

with these traits are more likely to join early coalition at a given level of discontent.

For instance, some people have the ability to think abstractly, these people are able to use an

innovation before it is in run, later adopters can observe the innovation in the here-and-now of a

peer’s operation, so they need less abstractions so we can use “activating the discontented” as a

mechanism to start and accelerate change initiation.

1.3.18 Perceptual Preconceptions

People perceive new situations in ways consistent with preexisting knowledge structure,

reinterpreting or even ignoring the information which is non-conform to the established

structure. The result is people see what they want to see and it’s less probable to see the signals

that the current system is not working,

1.4.1 How to Study Mechanisms in Action, the Process Tracing Methodology

1.4.2 What Is a Process Tracing?

Process tracing is a fundamental tool of qualitative analysis. When the data on a case is

qualitative, then it’s better to use this methodology. It is also defined as the systematic

examination of diagnostic evidence selected and analyzed in light of research questions and

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hypotheses posed by the investigator. In political science process tracing is often defined by “the

ambition to trace causal mechanisms” [39].

Process tracing helps researchers to study causal mechanisms in qualitative case studies which is

deeply dedicated to the topic and we can update the level of trust we have in the causal

mechanisms in time and to see whether a mechanism still works the way we expect or not. It is a

complex system which produces an outcome by interaction of number of parts.

A causal mechanism is the processes or pathways through which an outcome is brought into

being. We explain an outcome by offering a hypothesis about the cause that typically brings it

about. The aim is to discover causes. The causal mechanism links cause to effect through

processes.

When we trace a process it means rather than the old input output system, we are looking for

some “data points” which help us understand the trend and predict the future according to the

function between independent and dependent variable. Usually a regression analysis is carried

out for that.

It includes many techniques for modeling and analyzing several variables, the focus is on the

relationship between a dependent variable and one or more independent variables . These

independent variables are usually the phenomena or the fact that we try to predict so they are

also called predictors. This type of analysis helps us to predict and forecast and most importantly

to trace processes.

Process tracing method has become more popular for qualitative analysis of the processes.

According to literature, there are three vital usages for process tracing:

Theory Testing

Theory-testing process tracing involves the explicit tracing of causal mechanisms in a

single case as Beach and Pedersen explain [40]. It is a deductive research method; it deduces a

theory from the existing literature and then tests whether there is evidence that a hypothesized

causal mechanism is actually present in a given case.

In theory-testing Process Tracing, it will be discussed whether we can find another method

which is more cost efficient and more general. If a more comprehensive mechanism is being

traced in the theory testing process then the design would be a mixed-methods design. If during a

research a relationship between variables X and Y is diagnosed and we are not sure whether this

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relation rises out of an actual causal mechanism then theory testing is used as the process tracing

methodology.

In theory testing process tracing we know both X and Y and we have either an existing

conjectures about a plausible mechanism or are able to deduce one plausible mechanism from

existing theorization relatively easily. it is called a deductive method because the process of

deduction from X and Y is deductive.

By using logical reasoning we formulate a causal mechanism whereby X produces Y.

There is a logical work we need to perform to create a premise of the causal mechanism and it

depends on different factors like the correlation between the existing data; whether existing

theories are formulated in terms of mere correlations (X: Y), as possible causal links between X

and Y (like when we study the relationship between the dependent and independent variables), or

as comprehensive causal mechanisms where the relation between X and Y is not still

conceptualized.

In order to theory testing in process tracing, first we need to formulate and conceptualize a

detailed plausible causal mechanism, we need to theorize parts of the mechanisms that are

necessary to produce the outcome(Y).

The next step is to divide the causal mechanism into different steps and then develop a set of

predicted observable manifestation for each part. The most important and “core” of any

hypothesis testing is a structured empirical test which checks whether the hypothesized causal

mechanism is actually present in the evidence of a given case.

The next step is to gather data and the required information to check whether the expected

relation is satisfied or not. If strong evidence is found for these observable manifestations, we

can infer that the hypothesized causal mechanism is present in the case based upon Bayesian

logic of inference.

The conceptualizing process is done through some smaller steps or activities, where the activities

are the producers of change or what transmits causal forces through a mechanism [41].

Entities can be individual persons, groups, states, or structural factors depending upon the level

of the theory. It is important to note that the theoretical conceptualization of the entities includes

nouns and the activities include verbs that are the ‘transmitters’ of causality through the

mechanism.

In causal mechanism different parts are involved, each of these must exist and operate a part of

the mechanism then the whole mechanism would work.

Each part is insufficient individually but necessary for the overall process like different parts of

a machine that work together and cause the movement of the car.

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Figure bellow illustrates a simple example of a theory-testing case study. The first step to test

whether a causal mechanism exists in a concept is to plot a causal mechanism between X and Y

based upon existing theory.

In this example a two part mechanism between X and Y is deduced which means there are two

activities that cause the Y be driven from X and each of these two parts of causal mechanism

(CM) is vital for the final output and none of them individually can create the causal mechanism,

each part is composed of entities engaging in activities, whatever these activities in each part do,

they cause a final result from each part and the addition of these final results together from

different steps create the causal mechanism.

This theorized causal mechanism then needs to operate in step 2, translating theoretical

expectations into case-specific predictions of what observable manifestations each of the parts of

the mechanism should have if the mechanism is actually present in the case. In this step we must

look for observable manifestations of the causal mechanism (CM) and to find out that which is

the data that is relevant and proves our hypothesis and what is the operation we need to do in

order to precede the research.

Once the mechanism is conceptualized and its operational tasks are done, the analyst proceeds to

step 3, where she collects empirical evidence that can be used to make causal inferences,

updating our confidence in whether the hypothesized mechanism was actually present in the

case, and whether the mechanism functioned as predicted, or whether there were only some parts

of the mechanism that were present.

In theory testing we are tracing and checking whether the causal relationship between different

steps and activities are established.

Causal mechanisms can vary in the degree of generality, ranging from mechanisms that are

theorized to operate in a narrow context, over middle-range theories; to more law-like

propositions like the democratic peace mechanism usually mechanisms that are being tested in

theory testing are “systematic” mechanism, meaning that they are expected to operate within a

population of cases larger than one.

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Figure3-theory testing

Theory Building

The aim in process tracing is to use empirical evidence of a particular case and create

theoretical explanations or literally to create generalized theories and to obtain more general

causal mechanisms.

Theory building process tracing starts with empirical material and uses a structured analysis of

this material to induce a plausible hypothetical causal mechanism whereby X is linked with Y

[42]. Theory building process tracing involves the explicit tracing of causal mechanisms in a

single case, building what is expected to be a more general causal mechanism based upon the

empirical evidence in the case and

The creation of theory must be after gathering empirical data because if we create the theory and

then try to find out the data, then we only gather data and interpret them in a case that it suits the

theory and it may lead to mistake, so in order to start this process we must gather data and

information first.

What is being ‘traced’ is a theoretical causal mechanism that is expected to be present across a

group of cases. The core difference between theory-testing and building is one between

deductive (characterized by the inference of particular instances from a general law) and

inductive (characterized by the inference of general laws from particular instances) methods.

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In theory building process tracing, empirical material is used to build a hypothesized theory and

then we try to do a conclusion from those empirical data which indicated a causal mechanism

and the focus is to trace a hypothetical causal mechanism by detecting its empirical

manifestations from the empirical data, the key difference is that theory building, builds a

relatively easy, understandable and practical theory of a systematic causal mechanism that can be

extended to other cases outside the context of the individual case .

When a causal mechanism is theorized and built, it doesn’t mean that the theory can fully

explain the outcome (Y) instead the more feasible and practical goal is merely to detect a

mechanism that has a causal relationship with Y.

The aim of theory building process tracing is to build theories that are developed through

empirical data and analysis aiming to integrate the empirical research of a causal mechanism that

is expected to function within the research area.

Theory building process tracing is used in different situations:

When we can understand a correlation between X and Y, but we don’t have enough

information to mathematically prove the theory regarding potential mechanisms linking

the two variables.

When we know an outcome (Y) but we are not sure about the income which caused that

outcome or in other words, we are not sure that the X that we assume leads to Y.

In the next figure a basic illustration of theory-building is shown:

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Figure4-theory building

As mentioned before, the overall aim is to move from an empirical level to a theorized level,

The first step in theory building process is to gather data which are necessary to built the

theoretical concepts, these data are facts about the case, the empirical narratives about the case.

The next step is to infer existence of manifestations from the observable manifestations, means

we should try to find the possible correlations and mathematical relations among variables and

infer from the observable empirical evidence that observable manifestations that reflect an

underlying plausible causal mechanism were present or not in the case Here we have to use

deductive elements, in the end we must try to satisfy the final goal which is to find and

hypothesize the causal mechanism, here we can check whether the inferred causal mechanism is

applicable in other cases or not.

Theory building process tracing is usually an iterative and creative process. When scholar’s

research, they find some information and usually the next step is set and assigned according to

that information, so although the general framework maybe determined from before but the

research may have tolerances as well and this means that steps 1 and 2 are often repeated before

step 3 is reached.

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Explaining Outcome

Process tracing can be used as an equipment and mean to analyze and trace many

political and sociological decisions to their roots and to explain outcomes in cases. At this point

we don’t want to build a theory but we plan to find sufficient explanations for a case.

The focus of explaining outcome process tracing is on building a minimally sufficient

explanation of the outcome in the individual case.

Here the ambition is to craft a minimally sufficient explanation of a particular outcome, with

sufficiency defined as an explanation that accounts for all of the important aspects of an outcome

with no redundant factors being present [43].

We must keep it in mind that the term causal mechanism is used in a more extensive context in

explaining outcome process tracing than in theory testing or building theories. In theory testing

and building of process tracing the goal is to test or build relatively simple, parsimonious

mechanisms, to craft a minimally sufficient explanations but in explaining outcomes so we need

to use a mechanism or a set of mechanisms in order reach an outcome scholars use some

mechanisms among all other mechanisms and use them as explanations for the observed

outcome.

The ambition here is to craft a minimally sufficient explanation of a particular outcome instead

of developing a mechanism that can be generalized, it is usually necessary to include

mechanisms that can be understood as case specific mechanisms to complete our explanations,

some scholars claim that it’s better to use mechanisms that are able to be generalized for this use

and so they exclude the use of nonsystematic mechanisms in explaining outcomes while other

scholars think that even mechanisms that are suitable for a specific occasion can be used for this

context and non systematic mechanisms can play an important role in explaining a particular

outcome and the reason is that non-systematic mechanisms are more case specific than the

systematic ones.

One of the ways of explanation of the outcome is the inverse engineering which means to work

backwards from a known outcome by tracing the empirical process that led to it.

Explaining outcome process tracing is an iterative research strategy that aims at tracing causal

mechanisms it starts by using both deductive and inductive path which means it is characterized

by the inference of particular instances from a general law or it can be characterized by the

inference of general laws from particular instances. This is illustrated in figure depicted below.

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Figure5-Outcome explanation

In the deductive part, an existing mechanism is tested to see whether it can generate the results

(y) or not, this method almost practical in some cases but it doesn’t provide sufficient

explanation and support so consequently we need to perform another step in the research where

either a deductive or inductive path can be chosen informed by the results of the first empirical

analysis and if the deductive path is chosen again, this would involve testing alternative theories

to see whether they can provide a sufficient explanation and this is what we mean from the

“iteration” for instance we chose a theory and we try to explain the result with that, but the

theory doesn’t provide enough explanations, so we chose a second theory for justification of

another results, and maybe if we use another alternative which is a combination of both of those

theories, we can justify the results better.

Alternatively, the inductive path can be chosen in the second iteration, using empirical evidence

to build a better explanation.

The inductive path is often used when we study the subjects that have a small amount of

information available and not too many previous studies had been done on them like working

backwards from the outcome by investigating the evidence in an attempt to uncover a plausible

sufficient causal mechanism that produced the outcome on the inductive side.

If we are in a situation that we don’t have complete data on a research subject, so based on the

data we try to chose the mechanisms that work in the context, this is called a “bottom-up” type of

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analysis using empirical material as the basis for building a plausible explanation of causal

mechanisms whereby X (of series of Xs) produce outcome (Y).

On the procedure of this process, we have realized that we must continue the iteration process

until we find sufficient data, but the question is how do we know when we have the sufficient

data?

There is no 100% accurate answer to this question, but there criteria which indicate the level of

relevancy of the answer, we need to decide whether we have sufficient explanation based on a

subjective assessment of whether all of the aspects of the outcome (Y) have been covered and

apart from the sufficiency, the developed explanations must be the best plausible explanation in

comparison to other alternatives.

a good explaining outcome process tracing study will point to potential systematic factors that

can be investigated deeper by future studies, or that can act as building blocks for future attempts

to build extendable causal mechanisms that can explain outcomes across the population of

relevant cases, the conclusions discuss the lessons that are potentially applicable to other

comparable cases; lessons that can be understood as a series of systematic factors that can be

investigated in further research .

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CHAPTER 2

When a group of people gather, there are advantages which some positions have in

comparison to others. A “social capital” is the collective value of all social networks or as Burt

says” The advantage created by a person's location in social structure is known as social capital,

Social capital explains how people do better because they are somehow better connected with

other people” [44].

People know other people in a network and they are aware of his product or service which can be

provided. Also James Coleman defines social capital as” social capital is the sum of the

resources, actual or virtual, that accrue to an individual or group by virtue of possessing a

durable network of more or less institutionalized relationships of mutual acquaintance and

recognition” [45].

People may have different inclinations to do things for each other, maybe they want to receive a

product or service instead or maybe they have other incentives but the overall result of these

incentives is an inclination which leads to a transaction which is reciprocal, which means there

are two (or more) parties involved so there is an element called” trust” and wide variety of

benefits flow from trust reciprocity like the flow of information, and cooperation which arose

from social networks.

Social capital creates value for the people who are connected and, at least sometimes, for

bystanders (people who do not participate in the network) as well. We need to keep that in mind

that Number of parties to an interaction can affect its nature [46] so when the number of

participants in a community increase, the nature of value changes as well and it becomes more

vital rather than just a simple help to a friend.

Social scientists study interactions among people in a more structured way. There is a qualitative

difference between when two people are involved (dyads) and when three people (triads) are

involved [47]. In the case of two people, each party can maintain his or her role within the

relationship and when any of them refuses to keep the role, the relationship would be over. As

soon as a third person is added, the structure begins to converge more to the structure of a group,

which means may different scenarios may occur, for instance, Two of the people can form a

group against the third; one person can become the mediator or the object of competition

between the remaining two, and so on [48].

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2.2.1Broker and Brokerage

As etymology dictionary suggests, the word “broker” goes back to old French

broceur which means small trader, and wine retailer [49]. A broker agent is an independent

financial agent (or entity) that arranges transactions between a person (or a firm or an

organization) who wants to buy a product or receive a service and a person (or a firm or an

organization) who wants to sell or provide a service and receive an amount of commission for

bridging these two parties together [50].

Brokerage is a function in social life; Brokers have a good and updated knowledge about the

market, prices, products, and conditions. In order to be effective, they must have good

knowledge of both sides of the market, they must know the language the terms and conditions of

each party and they must know how to deal with each side. For example a real estate broker must

have a good amount of knowledge about available apartments and their terms and conditions

while at the same time he must have good connections and networking to be able to find clients

which are looking for that apartment so the relationship would be reciprocal.

Although they receive commissions to bridge these connections and in some cases this

commission is extremely high, people are willing to employ them, the most important reason is

of course because they know market and have already established relations with potential

customers.

They have the tool and resource and the network which is required to ease the transaction, they

are aware of the risks, and they know the legal ways of doing things, They also can screen these

potential customers who may support the potential acquisition, so the most important resource

they have is their network and data about the customers and legal issues. The other important

factor which results in people doing business with them is that when there is a small market, it is

usually cheaper to work with them, by using the so called “economy of scale”, it is their

specialization to do the specific business over and over again and so they already know about the

possible minimum price, and if a firm is going to do all the investments for research and finding

networks and finding the legal issues of the transaction, it would be probably more expensive to

them and this makes it easier for firms to outsource this measures.

In this chapter I would like to discuss social brokerage (intermediary links in social system) and

to peruse in deep the theory of brokerage as a social mechanism, and answer question like: who

they are? What do they do? What is the impact on society and organizations? What mechanism

do they utilize? And in the end I will propose an innovation in an organization based on the

brokerage mechanism.

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2.2.2Brokerage Role

Brokers play an important role in facilitating the movement of goods and information and

services [51]. There are cases which information are scares or it is difficult, time consuming or

expensive to collect or a lot of analysis is required in order to make a decision or the transaction

is rare and difficult.

Brokers have this kinds of information in the situation when other sides don’t and its vital for

them to access it (or have access to people who own the information), They provide this data and

they create trust between different parties, they know gaps and link this gaps, they know about

possible users of that information and their functionality is to connect them to the convenient

resource that he or she is looking for, brokers trade over gaps in social structures [52]. Brokers

use resources which are embed in other people and other organizations and they don’t risk their

own resources [53].

Brokers may perform their job in many different social, political and economical arenas, from

exchange of a product in the market stock-dealers and stockbrokers, to create organizations to

help asylums and international migrants, to create social health care brokerage companies who

help patients find the right possible treatment, to their political interests, sometimes they are

praised and sometimes they are reviled [54]. Burt mentioned in his book Brokerage and closure

there are three ways that a network can be closed to brokerage, when the network contain too

few contacts, when the contacts are too interconnected and when the contacts are too connected

indirectly, when contacts are connected through a central person we have the network which is

made of hierarchies

As mentioned before, from the structural point of view there is a huge difference in a relationship

when two people are involved and a relationship when three people are involved(which has a

structure of the group more), Thomas Faist in his article Brokerage in Cross-Border Mobility

[55] , defines three kinds of “third” he names “third” for the party who is added to the dyadic

relationship and has the role of brokerage in particular, he calls two other nodes which contribute

in the relationship the “ego” and the “alter” and considers different scenarios about the

interactions that may occur among this three nodes.

First situation is when the “third” (or the brokerage role) acts as a non-partisan member he (or

she) as a reciprocal or bilateral relationship with both nodes and he is not inclined to either sides.

There are two types of non-partisan thirds: the one who bridges two parties “ego” and “alter” as

a non-partisan mediator, and the one who makes a binding decision as an impartial arbitrator

(e.g., between employers and unions) [56].

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The second situation is when the “third” is looking to change the situation in a way that she takes

the advantage of a disagreement between the other two, In this case the “third” or the brokerage

waits and looks for a situation in which he can take advantage of rivalry situation between two

nodes (ego and alter), and the third condition for the communication between the ”third” and ego

and alter is a strategy that is literally called “divide and rule” , which means when the “third”(or

the brokerage role) not only enjoys from the conflict and takes the advantage of the inequality

situation among ego and alter, but also he (or she) creates the conflict himself intentionally. The

strategy of the “third” in this case is to destroy any possible stronger relationships between ego

and alter in order to maintain his position, thus we can conclude that brokerage role is not just a

pipe which passes information and goods but they affect the nature of transaction, they

participate strongly in a way that they are able to change equilibriums and create or subvert

equalities and inequalities. Brokerage as a function is social life, we speak about type of

brokerage which is tertius gaudens –literally meaning “the third party who enjoys”, or the third

who laughs last [57], which means he takes the advantage of the situation in a way profitable for

him.

Research on international migration is a prime example of a field in which the importance of

brokerage is highlighted in both conceptual and empirical accounts of the causes and dynamics

of migration.

In the case of international migration, brokerages intervene by the aim of transaction cost

reduction, they try to fulfill customer’s desires. Transaction cost is the cost that migrants must

pay to overcome the boundaries, the costs like getting the visa, filling and preparing all the

application forms and documents required from the country that they are from to the destination

to pass the border, entering new country, finding settlement and housing, finding jobs, getting

introduced to communities and all other requirements of living and adapting in the new country.

Potential migrants need to have all those information, for instance they must know how to get

visa, how to find housing, how to provide healthcare for their children and so forth, these are

services the brokers provide beyond just border passing.

There are different people or organizations who offer different intermediary services along the

way, those are brokers.

At the point when a migrant wants to get visa, there are legal institutions and organizations

which have organized a structure to provide this service to different categories of customers, they

have lawyers and connections in the country of origin and also the country of destination, if you

are a business person and you want to get visa, they have expert who tell you everything they

may even help you providing the documents you need and they do all the stages that you need to

do and get your visa for you. (there are people who cannot get their visa legally, there are

traffickers and smugglers who can provide passport and can bring them illegally, also those are

called brokers.)

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There are mechanisms like network effect which take part here, for instance when migrants tell

each other about other services that they receive from these organizations, other people who plan

to migrate can also take advantage of that service provider, in this case when a migrant uses a

service it increases the value of the service for other users.

In the migration process, Brokerage occurs where there are gaps and structural holes, Such holes

exist when there are no direct ties between actors (nodes). Brokers then act as a third party that

arranges for the connection and they create value by providing their service, they operate where

ever there is a need that must be fulfilled, to be connected to an intermediary who tells you how

to do things and show you the process (in some cases they offer service themselves and take

commission). In many of the bureaucratic organizations, they operate uniformly [58] which

means who comes first, is served first that means a lot of waiting time and queues for people, but

“Brokerage” finds a way around and provides the same service faster, In short, brokerage serves

as a catalyst to ease flows of information and practices

2.2.3Challenges and Strengths

Usually when we hear the word “broker” as in “stock-broker” or “broker-exchange”, they

remind us big crowded saloons with a lot of angry and stressful people talking on their phones

and yelling numbers and squealing to each other, these elements indicate the fluctuating,

instable, stressful nature of this job but what is the truth behind their job? Is it that stressful and

instable? One of the most important properties of broker’s situation is instability. They have

access to information which may considered vital today but maybe it’s not important tomorrow,

brokers create different ties and maybe these ties are not long stable, but we know that (as

provided before), attitude change is one of the most important reasons why people oppose

change, also I said (in chapter one) that people consider behavioral consistency as a virtue and

when they are in a situation of new attitude, they have inertia to their previous state.

The question to ask here is, if because of the reasons mentioned above it is hard for people to be

in an unstable situation then what is an incentive for brokers to stay in their situations? What

makes them create new ties every day, the answer lies in advantages that a broker’s situation has.

A broker’s role is to bind a bridge of two parties, which means at the same time he needs to exist

in two worlds, he must be aware of changes and fluctuations in each side, he had to deal with

two different business partners and he must know their language, and due to high demand for his

positions, he has rivals and he has to compete at anytime to have better connections, to have

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more data, to acquire more customers and so forth. It is usually challenging to maintain these

kinds of positions and roles in the long term.

Those are cons, but those negative aspects have also a positive side which is, when a broker has

more information, it means he is more powerful in competitive markets and he can benefit from

his awareness [59]. When parties who are involved in the transaction don’t have enough

information and transparency and they have confidence that brokers do and they are reliable,

they are ready to give commissions to do their transactions and investments and expenditures

safer.

The other important vulnerability in brokerage position is “fragility of weak bridges”. Mark S.

Granovetter in his article “strength of weak ties” [60] presents a fragile structure of brokers

position and he argues that it’s hard to maintain the position of a broker because in has instability

in its nature, so he considers broker’s ties as structurally weak ties and he thinks because of that

reason those ties are fragile but valuable sources of information and the reason to that is because

they are not just attached to a specific group or some few networks of information rather they are

easily mobile to different clusters and networks of scarce information and the unknown

information will be available to them because they have relatively a large circle of research.

There is a motivational theory of attitude change: “balance theory” [61] which states that there is

motivation for people to orient their relationships in a way to minimize dissonance, so

technically “friend of your friend is your friend and friend of your enemy is your enemy”, if we

consider this logical inclination we deduce that the position of a broker in this model is

incoherent and unstable because he is not completely affiliated and committed to either parties.

And although they connect different nodes but they don’t have a durable position in the pattern.

Another challenge about being a brokerage is that since they have different roles in different

social, economical networks, they may see themselves having “Role Conflict” which means,

being in any network of people or business groups has its own requirement of attitudes and

behaving, speaking, functioning and performing and when somebody at the same time has to be

in two different social networks with different rules and requirement this conflict becomes bold,

In spite of all the challenges mentioned above, there are social and economical pros to broker’s

function which makes it a competitive position. This is how Burt tries to explain the advantage

of the broker’s position in social networks, consider two people James and Robert, we define a

group as people who are physically or intellectually interacting with each other and they all have

one thing in common which brought them together (like the same age, same classroom,

neighbors of the same floor or anything that allows people to have interactions which may lead

to friendship) and also ties or connections as friendship relations where people exchange

information or goods.

Both James and Robert have six ties (or have five friends) James has all of his six ties within

group B (which is his classroom) and Robert has four ties with group B and one tie in group A

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and one tie in group C&D .(He has four friends in classroom B and one friend in group A and

one friend in group C&D), in this case Robert has a more strategic position than James, he has

access to information from both group A and group B and group C&D, he is a gate which means

any information that has to exchange between classes must pass through him and he is aware of

any news in each class sooner than anybody else in the other group, so as Burt says in social

closure [62], there are 3 advantages to Robert’s situations “: access to a wider diversity of

information, early access to that information, and control over information diffusion”. In this

case, Robert can take advantage of this information for his own good and that’s why his position

is better than many other in the group because he has more “social capital”, and his strong

relations to three disconnected groups give him a “competitive advantage” in detecting and

developing rewarding opportunities” [63].

We can summarize advantages of Roberts’s situation to James in 3 sentences, Robert has early

knowledge, his breadth of knowledge is deeper than James and he has opportunity advantage in

terms of his breadth of knowledge which means he is able to use the information into his own

favor before anybody else.

Fiqure6-the small sociogram

2.3.1Mechanism Design Theory, How to Overcome Challenges?

Mechanism design or reversed game theory, is the game of private information, for

instance in an economical transaction each sides have information which consider valuable and

they don’t want to reveal it to the other party in order to maximize their own profit, but at the

same time doing a transaction has some minimum requirements which is at least having a

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minimum amount of information about the other sides, so in that case what do they do? For

instance firm “A” decides to buy some industrial machines and after doing a small research he

understands that there are two companies “B” and “C” who sell these types of machines, firm

“A” requires to gather some information about the product details to investigate which is more

compatible to their need and so asks company “B” and “C” about the details, now company “B”

has to decide which information can he provide. He may provide information about how many

horse powers does the engine of the machine has but they probably don’t reveal information

about the specific tempering process they did on the steel to make it resistance to corrosion, or

another example is, the company “B” probably doesn’t want to share the final price of

production of that machine to firm “A”, at the same time they have to provide enough

information which satisfies buyer and makes him eager to buy.

This is the typical problem in mechanism design theory; until which amount should we reveal

our information?

The classical solution to this problem suggested by mathematician R. Mayerson [64] is to

consider a central, mutually trusted agent that can credibly commit to the rules it will follow.

This mutual credible agents has the role of “Mechanism”. When this nonpartisan mechanism

functions both sides feel safe to share their relevant private information, for instance in the case

mentioned above the mechanism would receive data about the actual price of company B and

then since he has information about the competitor “C”, then with respect to level of privacy of

information, he decides which parts of information he reveals to “A” and which parts he doesn’t,

but we have to keep in mind that the most important prerequisite to this achievement is “trust”

from both sides [65].

So far, we realized that brokerage position as a mechanism is not only important but in some

cases vital for the life of the organizations, transactions and trades occur in organizations and

without the help of brokerage, it’s very hard and maybe impossible to define which information

to reveal or not and to whom do the transaction, but the situation of brokerage is a fragile yet

unstable due to the fragile structure of its nature, so we are looking for new methods and

organizational models which can help to have a safe and more stable arrangement for both

brokerages and the other parties involved, then I am going to study a specific case where

brokerage functions and apply those proposals in that specific case and propose new models of

innovation according to my proposals in that organization.

According to Stabilizing the Brokerage [66], there are three proposals for making a broker’s

position more stable and to reduce tensions that are inherently involved with the nature of the

job:

Isolation

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Broker Capture

Organizational Grafting

2.3.1.1.Isolation

“Isolation” or “social categorization” is the first solution for stabilizing broker’s situation,

it involves development of an institution that socially isolates brokers from those with whom

they might trade with [67].

I want to transcribe an old story, where they needed brokers and they were scared whether the

broker establishes relationships with parties and so solved their problem by isolation.

When Ottoman Emperor established, Emperors reigned their land by Islamic rules, and Islam

allowed them to have 4 wives who were official and they were part of the hierarchy of power and

unlimited unofficial wives (who technically didn’t have official powers), due to the large number

of wives they usually created big castles called “Harem” and all those wives lived together, these

women were isolated from the rest of the world specially other men and usually when they came

to harem they had to stay there until the end of their lives, but there was a problem that in each

harem they also needed men power for doing some tasks that needed more physical power and so

they had to put some men among these women to live inside the harem, these men had the role of

brokers, when women inside the harem needed to have a transaction with somebody outside the

harem they used these brokers.

These brokers must be trustable, one the one hand they lived among women of sultan so sultan

had to be sure these men wouldn’t have any sexual interaction with her wives and from the other

hand they had to deal with men and they must not have any incentives to collude with the

outsider men and they should psychologically know themselves as a member of harem who

keeps secrets of harem and doesn’t reveal them to outsiders, so these people were chosen from

Eunuchs, most of these eunuchs weren’t castrated but were people who naturally born in the

shape of a man but weren’t sexually men.

Actually within each harem there was a category or small society of eunuchs, these people were

trusted by both sides, they were physically men and they could go among men and do transaction

to them and it was easy for traders to trade with them also they were trusted by women in the

harem and because they had the psychology of women so they behaved like women and had a

sense of belonging to harem.

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What explained above is a typical example of isolation. Isolation is the emergence of a social

category, or a group of people doing that linking task or creating of an occupation where the self

raised interests are minimized and where there are no incentives for intermediary to collude with

any of the parties. Such social categorization is effective at stabilizing brokered trade because by

defining expectations for engagement between occupants of social categories, it makes behavior

more predictable and enforces social distance between the brokers and those with whom they

interact. We should keep that in mind that enforcing social distance requires either structural or

cultural cohesion within and or among the side parties [66].

Another example for Isolation of brokers through a social category is Matchmakers [66].

Matchmakers (or as I describe ancient dating websites) are people(old or widowed women) with

the same job, they had a good knowledge about the marriage market, the available girls and their

treatments, their family’s economical status and other information about available girls, and their

role was to introduce them to men who were looking for wives, these women usually were old

and they weren’t possible candidates themselves, so both the families and also the man who

looked for a wife could trust her because it was less probable that she had self interests, in this

case after union of families none of the parties pay money to the woman instead the power of

woman increased locally and both families were in dept to that woman morally.

This is another case which explains that when there is a distinct social category which is isolated

from the trade parties and both trade parties can trust him in the way that they know there is no

logically self interest reason for the intermediary to reveal their information, then traders trust

intermediary (Broker) and also the intermediary can act as a non-partisan bridge and link traders

together.

2.3.1.2Broker Capture

In this solution to the problem, we don’t have a 100% non-partisan intermediary in fact,

we have an agent whose interests are highly aligned with only one side of the trade [66] and the

aim is to reduce the double marginalization effect.

In economy when there are not one but two or more monopolists in an specific area, each of

them define high margins for themselves (the difference between the price that customers are

willing to pay and the price that companies assign to their product is high) this is called a double

marginalization problem where companies try to maximize their profit with the increase in price

even if they reduce the number of sales, from the economical point of view, if these monopolist

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merge together and create one unified monopoly then the overall margin for all of these

monopolists would be higher.

Another way to stabilize the contradiction inherent in brokerage is the capture of the broker by

one of the side parties [66] in this case if an intermediary decides to take advantage of his

information to his personal benefit, then even he becomes a monopolist himself, he will have

some surplus from his sales, if he and other monopolists in the market form a unified

organization they overall profit to both sides would have a greater margin. So the broker must be

captured by the monopolist and this is another way to stabilize the place of brokerages in society.

An example of this case is “Missionaries” or people who go to preach their religious believes in

other villages, usually colonial governments hired these people to align them with their own

purposes and so they were captured by the monopolist (the government) to work on behalf of

their advantage.

2.3.1.3Organizational Grafting

This is a situation when brokers are functioning as a part of another organization, in this case

the interest of the broker is not aligned with any of the sides, the broker has his functionality in

the organization but at the same time behaves as a broker and does responsibilities that are not

aligned with the ambition of the organization.

For more illustration assume an organization which produces value on the basis of it’s mission, if

a broker is tied to this organization then a surplus value is created through the broker which

benefits both organization and individuals which interact with the organization means that

brokers benefit both sides of the trade, an example of this case is in Switzerland, there are some

almost free (with a very small fee) classes held by municipal organizations, this classes are

specifically for wives of immigrants whose husbands work in Switzerland but their wives don’t

have a job or are not students, in this classes they provide different categories like teaching

French or German language, they have cooking and sewing classes, but the point is, this is not

only a French language class they actually act as brokers, beside the typical value of providing

education, these places are concourses that women meet new people, they find house, job

opportunities and they find information about child care services and many other issues, people

who teach in this classes provide other services rather than only the service that they are

supposed to provide and they create a surplus value for the social institute.

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The most important point about the organizational grafting case is there actually must be a

physical place like an institute which colonizes and organizes brokers in a more structured

network.

Another example of this case is in “Urban Childcare Centers” [66] researchers observed that

schools that defined a specific time lapse after school for parents to pick their children up from

school, unintentionally create a concourse for parents that they exchange information about their

children and therefore they are much aware about the children’s status at school and they are

well informed about other families and the problems at school in comparison to other childcare

centers which only ask parents to do some voluntary tasks at school for their children [68].

Again in this case the childcare center is providing a value adding service, but by forcing parents

to be at one place at the same time, it creates surplus value for both the childcare center and also

for parents, in this case the institute itself acts as broker.

Advance of technologies in the past years, made life easier and faster, communication has been

expanded and faster in comparison to ten years ago. Social networks do a great job connecting

people and spreading news to thousands of millions of people in less than a second this is a key

point for advent of new shapes of brokerage in our communities. Although bureaucratic

organizations has also utilized technology to make their works faster, but brokers are also

working much smarter. They offer their services through online networks and they know

shortcuts, and the result is whatever you want to do, with a broker’s help you will do it faster.

2.3.2Brokerage and Social Mechanisms

As mentioned before, mechanisms have causal power and they may work together or they

may work in opposite directions in order to create a result, when we speak about the brokerage

mechanism and we see its implications in the social structure, we can observe other mechanisms

that work with it and make it possible to be efficient.

I want to name three of them which I mentioned before (in chapter one), they work closely to

brokerage mechanism and if they didn’t exist, brokerage mechanism would be barely efficient.

The first is network diffusion. Remembering the social mechanism as a set of social events or

processes by which in certain circumstances some cause X tends to bring about some effect Y in

realm of humans social relations, I want to highlight the “certain circumstance” which is the

infrastructure and the platform that mechanism needs in order to work, in our case this

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infrastructure is the network and another mechanism which makes flow of information through

networks possible.

Going back to definition of the network diffusion mechanism we already know that Social

networks are paths through which innovations can diffuse and spread. We know that any

mechanism needs an enabling condition in order to create results from inputs; the more

awareness people have about a new technology, the more probable to use the technology and

change their behavior. People and specially brokers get their information through social

networks and they spread them through this same vessel, network diffusion can be named as a

complementary mechanism for brokerage mechanism since it provides explanation to why

brokerage can function.

Another related mechanism is the “social learning theory”, going back to its definition People

learn from each other through observation, imitation and modeling. It describes that people learn

new knowledge and skills in society via social groups that they interact with. The key point here

is the social group as a source for people to get to new knowledge and to find new sources of

innovation. Brokers use their connections they have with social groups to get access to

information which may be vital and critical for another group, brokers understand that the most

important sources to their knowledge and information are other social groups, they utilize this

mechanism as a source of acquiring their knowledge.

Another relevant mechanism is burning platform theory, according to the material provided in

chapter one, it is difficult for both organizations and also employee to change. In the previous

sectors of chapter two I provided information about how a situation for a broker is unstable and

difficult to maintain, then I provided information about the competitiveness and the advantages

that their situation has for instance when a broker has more information, it means he is more

powerful in competitive markets and he can benefit from his awareness [69] , I want to add

another mechanism that is activated here and makes this even more robust and natural, the

burning platform mechanism.

In burning platform definition I stated that Change is hard, if people understand that failure to

change is even harder they are more proceeding to change. This theory is most commonly

presented in a business context, wherein the burning platform is the threat that if the change does

not occur the company will go bankrupt. The key role in this theory is “establishing a sense of

urgency”, and that acts as an incentive for brokers. They already know that their position in the

social structure is very delicate and unstable, they also know that their advantage lies in

maintaining this competitiveness and that’s the force that moves them, give them incentive to

create new connections and to explore new groups in order to keep their competitiveness of

having fresh new sources.

From the mechanism typology point of view, we already know that many of the game theory

models follow transformational mechanisms patterns. we can consider brokerage mechanism as a

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transformational mechanism, In this typology we have numbers of individuals as here we have

brokers and separated dense groups, interacting with one another through different vessels which

means the bridges created by brokers, and depending on the nature of interaction and their

incentives the brokerage mechanism is activated and will affect how sum of their interactions

form an overall collective result.

2.3.3Brokerage and Public Sector

In chapter one, some reasons summoned in order to indicate why public sector

organizations promote resistance to change and so consequently they limit innovations, to

summarize is that organizations create a standard knowledge and behavior structure, give their

employees patterns of how to think and how to behave in case of facing with specific situations.

Rules and hierarchies are the essence of many organizations and they create inherent tension

between organizations and innovations.

It is hard to concede autonomy of making decisions in public sector, rules, bureaucracy and

hierarchy defines processes in organizations which their functionality usually depends on many

factors and many different segments, in general, doing any performance through organization

becomes time consuming and difficult, and this creates a gap, a hole which can be filled by

brokers who do things faster, cheaper, easier.

An example to be told here, is brokerage and migration, in the migration process, brokers

function through many different stages of the process, from getting visa, booking hotels for

people who don’t have credit card in the destination country to welcoming migrants in the

destination country, introduce them to organizations that they need to attend, to provide them

work permits, their jobs and their accommodation and help migrants become familiar with the

country, learning about healthcare services and many other issues mentioned before.

Brokers fill-in all of the gaps that exists in this process, of course they have self interest reasons

but the overall result is positive for even public sector, they help public sector and government

managing and accommodate a lot of people and they put right people in right working

environment.

Going back to example above, Visa to any country is provided by official public sector national

departments, they require some documents in a specific format and they go through their

documents and decide whether to give the visa to the applicant or not. One of the most casual

problem they face is, individuals who apply for the visa, don’t bring documents in the format

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they required or they have small problems filling out the forms, in this case if a third party

provides these documents organized with the format that they required, then it would be more

efficient for the department to operate, from the managerial point of view it is a lever which can

eliminate time wasting and increase efficiency because they can provide more service at the

same time. For instance if these officials serve 30 people every day and 8 out of 30 is rejected

and must come again according to their incomplete applications, then by applying the third party

applicant provider the efficiency will increase for 27%.

The existence of brokerage as a social mechanism is not a rival for public sector rather it is a

vital position and role that reduces burdens of many jobs and allocate them through different

functional levers (brokers), in this case the management would become easier for public sector,

instead of dealing with different groups of individuals who have sporadic knowledge about

processes and procedures, who have different needs for attending to the public sector, they

interact with expert brokers who already know the procedure and they are representative of an

organized group of people with the same need. Brokerage mechanism helps public sector

managing his customers faster and easier, by arranging them according to their category of

needs.

Public sector organizations can collaborate with different intermediary individuals (brokers) as

levers of coordination for their responsibility. Public sector organizations can innovate in their

managerial systems by outsourcing and allocating some parts of their responsibilities to brokers

and thus become more efficient.

2.3.4.Brokerage Mechanism application, Management Innovation

As explained before Brokerage is a mechanism that links two or more previously

unconnected social sites by a unit that mediates their relations with one another and/or with yet

other sites. Most analysts see brokerage as a mechanism relating groups and individuals to one

another in stable sites, but it can also become a relational mechanism for mobilization during

periods of contentious politics, as new groups are thrown together by increased interaction and

uncertainty, thus discovering their common interests [70].

Brokerage is called a mechanism because it has reoccurring features in its nature in the social

life. They have different strategies, some of them keep their clients separately but some of them

merge them, in some cases the broker finishes his contact with parties’ right after doing his role

but in some cases he may intend to create a long lasting relationship with his client.

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Brokers may have different operandi modus; they might be among local elites, arbitrators,

bicultural, interpreters, interlocutors, political entrepreneurs, nobles, priests, and chiefs. Some of

them don’t even know they are brokering, because they think of their activity as gossip,

sociability, information-gathering, favor-giving, or mutual aid [71]. When a broker creates

connections and links within a network, he creates new boundaries and new structures for the

network.

As mentioned before in the literature review part The term “social mechanism” refers to

recurring actions and events, and links identifiable initial conditions with specific results, and is a

helpful concept for identifying processes that generate inequalities[72].

Brokerage Provides unequal chances for people, creating cross-cuts .Services of a smuggler, a

trafficker, or labor recruiter across nation-state borders are examples, in the nineteenth century a

lot of workers in china and India signed contracts with those people, they will pay the

transportation cost as soon as they arrived to united states, in a situation when it was not free for

labors to move, this was the only shortcut for people who wanted to live in a country with more

welfare [73]. Such divergent outcomes certainly have implications for life chances and thus

social inequalities [74].

There are two types of brokerage in general, mediating and catalyst brokerage. Mediating

brokerage manages flows of information and resources; they provide these services usually with

lower costs. In this type of brokerage the broker does not create direct links between the parties

on either side, the reason why people use these channels instead of the usual bureaucratic

organizations is that in this case the material (information, goods, service) flows much faster and

also the overall cost would be lower. In the catalyst brokerage, two disconnected parties are

connected through the broker and they create a relationship.

The type of reward that the broker receives is not only monetary, he may receive access to some

critical information, he may have access to job opportunities or he may gain social capital and

enhanced social status or he may be able to create his own monopoly.

Figure7."Network Structure" by Backstrnt - Own work. Licensed under CC BY-SA 4.0 via Commons

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Let’s consider these two different network structures; the most important attribution of the

network on the right (network B) is that it is a dense cluster of strong connections; this is what

we see in most of social networks and sub-groups in different segments of departments in

organizations .

In a network like this the information is homogeneous among all members of group because each

member has the same connections as everybody else in the group has, which is good from some

points but also means smaller chances for innovation and new ideas, sometimes when a team is

stuck in a situation that they need more data or an idea to proceed their researches the usual way

of solving these situations is for managers to hold meetings through hierarchy levels and share

the situation to their upper level and the upper level must decide where to share(may be that is

effective maybe not because the upper level manager has information about different teams that

are working for him but he doesn’t have information about details) and also that is time

consuming because of the reasons I explained in the first chapter anything that goes through

hierarchy becomes slow, And then we have a lot of these dense groups elsewhere in the

organization and they are coordinated by a manager, then in the upper levels in the hierarchy

another manager, manages tasks between each head quarter, here I want to suggest using the

brokerage mechanism for bringing a more efficient and innovative way for managing these

traditional problem that when a sector is faced with a problem, due to hierarchy he has constraint

to operate in the way he thinks is better, in the best case the manager directly involved to that

segment or the upper manager has the authority to implement changes, but not always the best

solution is in their hands, sometimes people need better connections with people who already

have the information they need or the solution to their problem. But the real problem is how to

find that effective person fast and easy?

On the other hand we can see the network “A” on left. Here there is more probability that

individual A brings new attitudes or behaviors or information from each sector to another, person

A has all the competitive advantages that we enumerated for a broker’s position, a person who is

a port to access to information and network, A has all the benefits in comparison to the network

“B” that we mentioned before, what if we transfer current structures of organizations and social

networks to the new structure which is on the right?

If we consider person “A” as an innovative manager (or just a person in the group who has a lot

of connections with other segments) who has ties with different sectors and has a brokerage role

among different sectors, it is more probable that we have innovation in different sectors. What if

a manager is educated to be a professional broker who is able to efficiently connect different

segments who are working with him? How much the efficiency would increase and does it make

chaos?

The proposition is to add some features to the management role, responsibilities like bridging

different segments, brokering among different managers. In brokerage and closure, Burt derives

conclusion from one of his experiments that when a manager has a higher ranking the more he

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has connections which reduces the network constrains on him, the more a manager is able to

share information and get consultant from different headquarter managers, the more he is

weighty in the network, one of the indicators he used for his studies was the wage of these

managers which can be inferred as an indicator for productivity of the manager.

Specialization and hierarchy are inseparable elements of organizations who offer sophisticated

and specialized services and products and that’s what makes it impossible to connect all nodes

directly together but if we increase the number of bridges and reduce the number of indirect

connections between the most effective individuals in a network by detecting the most effective

nodes in the structure and connecting them through specialized networks, meetings and so forth,

we would be able to have a better information flow in the organization and it is an innovation in

comparison to the traditional methodologies for problem solving through hierarchy and

bureaucratic paper works.

Because of all the reasons that I mentioned that indicated that broker’s better off, In the first step,

all of the most effective managers or most effective people in each subgroup (people who

intrinsically and naturally are brokers) must be triggered. If we find who is the most effective

person in each sub-group of any segment in each department of an organization, then we know

what are the most important and effective communication channels, if these people can see each

other more often and they are able to transact and share their information, ideas, problems with

each other, then if there is a problem in each segment of a department, by transacting of data

between these specific effective connector nodes, it is more probable that they find solution to

their problem faster and easier, the overall result would be more efficiency and less time for

solution of problems. This can be implemented by using network constraint indexes. In an

organization, we have different departments, each department is consisting of different sub-

groups, in each sub-group we may have different teams.

The network constraint index and its composition in terms of network size, density, and

hierarchy are discussed elsewhere (Burt, 1992:Chap. 2; 2000b; cf. Borgatti, Jones, and

Everett,1998; and for a triad version implicitly capturing constraint, Täube, 2003). The index

begins with the extent to which manager i's network is directly or indirectly invested in the

manager's relationship with contact j: cij = (pij + Σqpiqpqj)2, for q ≠ i,j, where pij is the

proportion of i's network time and energy invested in contact j, pij = zij / Σqziq, and variable zij

measures the zero to one strength of connection between contacts i and j. The total in parentheses

is the proportion of i's relations that are directly or indirectly invested in connection with contact

j. The sum of squared proportions, Σicij, is the network constraint index C. I divided by the

maximum score possible to bound scores in small, dense networks, and multiply by 100 to

discuss integer points of constraint.

Within each subgroup we can find network constraint index for all the members, the person with

smaller network constraint index is the most effective person in the group, we continue doing

this for other sub-groups and finally in each department then we have some members who are

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more effective connector channels and information bridges, what we have to do is to organize

these people’s relationship by holding regular meetings and providing other channels for them to

stay more effectively connected. In this context, we are using “Brokerage mechanism” to

manage relationships more effectively. Many of the ties may become created naturally but if we

organize them with the intention of creating specific connection with the most effective people

from each part then it would be more prolific.

From the psychological point of view, people are more involved physically and mentally with

their job, the job becomes more fun because they don’t feel a lot of barriers and constraints

above them and they are able to do something personally when they face a problematic situation,

rather than waiting for a higher manager to tell them what to do or to approve his idea. They can

talk and have a dinner with their friends and solve their problems themselves, when such an open

network exists with less hierarchy, people feel free to innovate and they are being encouraged to

increase their effective connections which results in efficiency increase.

Again in this context we can see that in brokerage mechanism the value is created by bridging

disconnected parts of the social structure and the value resides in the increased variation which

means the unrepeated contacts that the broker creates.

The next phase to consolidate trust and stabilize the connections in network is to realize value

through repeated and stable exchanges, keeping that in mind that all relations are based upon

trust in the first place by repeating the experience for people who are connected this trust would

become more stabilized, we also need to mention that in these networks, people and their stable

connections are sources of social capital and unlikely to the previous state, when stabilizing the

value appears in the decreased variation through the norms shared in the closed and densely

connected network.

2.4.1Mechanism in Action, Cloud Service Brokerage (CSB)

Cloud service is any resource (software, hardware, platform) that is provided through the

Internet, many kinds of cloud services are available these days but among them, three of them

have critical importance. Software as a service or “SaaS”, Platform as a service “PaaS” and

Infrastructure as a service or “IaaS”.

The final goal in the software as a service is to create a distribution model in which applications

are hosted by a vendor or service provider and made available to customers over a network,

typically the Internet. In platform as a service the operating systems and its associated services

are being delivered to customers over the Internet which means there is no need for any

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downloads or installations. Infrastructure as a service involves outsourcing the equipment used to

support operations, including storage, hardware, servers and networking components, all of

which are made accessible over a network.

By the growth in demand for cloud computing services, companies are involved with not only

one but many different types of cloud providers, each offering specific services for different

sectors, as mentioned above, for instance maybe a startup uses company A for its infrastructure

support and company B for its software support because company A and B are offering exactly

what the startup needs in that context, but the problem is in most cases these different services

needed to be integrated for instance the software must be applicable on the infrastructure and the

integration is a big issue, besides having different needs means having different relation

managements and different contracts and payments and so forth which is not so efficient, from

the managerial point of view its easier and more efficient for a company to deal with one

outsourcing partner for his IT issues. In this context Cloud Services Brokerage would be helpful.

A cloud services brokerage (CSB) is a third party company that has the role of intermediary

between cloud providers and companies who want to use cloud services. They have different

functionalities, they make the specific service that a company requires customized for it,

sometimes CBS integrates different services that already exist in a company, CBS may increase

security and safety within an already existing cloud service, they may offer consulting services

for companies and by these they add value to the system, in many companies now the IT

department is shifting its functionality from just being an IT provider to a cloud service broker

and the reason is IT staff lose their role of providing system and managing software available

and so the natural evolution makes them interested in cloud brokering, they need to make sure

each cloud contract is the best possible contract for the company and they have information and

connections about different providers at the same time they have the responsibility of integrating

different cloud services they also ensure security so naturally they become cloud brokers by

time.

Behind the technical knowledge that CSB must have, good relations are also another asset which

is vital for them, they must have connections to different cloud vendors, because they need to be

able to provide the exact service that customer needs with the minimum expense, so they need to

know that which service is provided by whom and how much the price. There are three

important business value drivers in cloud service brokerage, scalability and rapid agility, the

ability to focus on the business and financial flexibility.

They must be updated with the latest knowledge about the cloud computing and technological

advances that occurs in that area, they must have ties which keeps them updated with knowledge

about each vendor and work close to them, its capabilities and its advances, and at the same time

a CSB must be able to convince customers to trust them and to sign with them for all of their

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needs in one place. It is said that by 2015, at least 20% of all cloud services will be consumed via

internal or external cloud service brokerages.

This is a typical brokerage case, with all the strength and all vulnerabilities and challenges of

brokerage. What I want to discuss is to compare a company that doesn’t have and use cloud

service brokerage and the case that it does, I want to compare them from the managerial point of

view ( the number of parties that they deal with, the amount of time and energy that they need to

put for managing different contracts and work force) and from the economical point of view, to

compare expenses with the real time data that providers in the market place offer now, I want to

understand the effect of using brokerage as a mechanism inside the organization from the

management and financial point of view.

2.4.2Capgemini Group

“Thanks to the TRUST of our clients and our shareholders and to the commitment of our

employees, we have met or exceeded all our objectives

PAUL HERMELIN, CHAIRMAN AND CEO OF CAPGEMINI)

Capgemini group, operates in providing business services like cloud services, consulting

services, cybersecurity services, digital services, mobile solutions, local professional services,

testing services and many other IT solutions for companies, they have collaboration with

companies like IBM, HP, Oracle, Microsoft, SAP ,EMC2, PIVOTAL, SaleForce and they

already done projects in many different sectors like Automotive and logistics, Banking,

Insurance, public sector, financial services, healthcare, telecom, media &entertainment,

manufacturing, industrial products. Capgemini creates and delivers business, technology and

digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A

deeply multicultural organization, Capgemini has developed its own way of working, the

Collaborative Business ExperienceTM, and draws its worldwide delivery model.

Thanks to their expert IT team and good relations with companies above, they were able to

collaborate in many projects bringing and leveraging specific services like IBM’s bluemix for

customers who exactly need them like POSTNORD and to create value for both their customers

and themselves and becoming up to 50% cost efficient.

One of the successful cases at Capgemini was their collaboration with Jardine Restaurant Group,

part of the Jardine Pacific Group (JRG) (Pizza Hut and KFC), they operated this project in Hong

Kong, Taiwan, Vietnam and Macau, what Jardine pacific group needed was to maintain world-

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class operations at low costs, JRG needed to move its Finance & Accounting (F&A) operations

to a low-cost center, while ensuring business continuity, enhanced process efficiency, and stable

reporting.

What Capgemini group found as the solution to their problem was some technical enhancement

in company’s infrastructure and designing a new finance and accounting process by end to end

consolidation of F&A process, the result was brilliant, the productivity and risk mitigation with

internal controls has improved, due to better compliance of the system the reporting enhances

and cost efficiency has increased up by 50% and cost per year of owning and operating overall

assets over their entire lifespan increased by 5%. The establishment of the Delivery Network

across Hong Kong and Nanhai helped establish the most cost-effective location mix for JRG’s

operations. This enabled significant cost reduction of approximately 50% at JRG. More savings

means higher business growth: The project implementation at JRG helped save operation costs

and established scalable finance back office support services. The efficient and high-quality

accounting services being provided at the Restaurant Group helped them focus better on business

growth and other development initiatives.

The project rollout also provided a means to realize an average cost efficiency

improvement of 5% annually. There was a rise in the number of JRG stores by 12% over the four

year period from 2011 to 2014, and this growth in business was well-supported by the

Capgemini team through reliable services. With Capgemini’s Global Process Model,

productivity and operational efficiencies remained unaffected. Improvements were also noted in

certain parameters including cost per invoice, Day Sales Outstanding and Average Days

Delinquent.

Figure8- Capgemini service brokerage offers

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Basically what they offer to their customers, is what usually different companies offer, JRG

group used to get its cloud provider software and its platform from different providers, JRG

received its consulting from elsewhere, the consulting they received wasn’t 100% compatible to

their operating potentials of JRG because it wasn’t their specific product.

What Capgemini offered was an integration of all those services they need in one contract,

Capgemini offered a host of tools, platforms and methodologies at the same time, therefore

JRG’s productivity has increased significantly, they have implemented internal controls and the

business continuity plans which became instrumental in mitigating risks and While there has

been a huge one-time impact on cost efficiency, Capgemini continued to work towards driving

more value forJRG by using its Global Process Model to enhance productivity, operational

effectiveness and reporting. Capgemini helps businesses become more agile up to 30%, it means

up to 30% time saving through certain phases of the life cycle of IT projects( test, environment

management, deployment and so forth), brings more security, up to 30% more productivity due

to the digital manufacturing and preventive maintenance they offer.

These different services, provided by only one broker, not only made JRG better off from the

point of view of cost efficiency but also made it easier for managers to deal with only one broker

instead of four different brokers, now JRG doesn’t need to employ extra it staff to integrate and

coordinate different operating platforms and infrastructures because now the integration process

is happening automatically by implementation of different services which are already compatible

with each other. The company is able to bring balance between a low-cost location mix and best-

in-class operations. Operational strategy transformation requires the right blend of operational

expertise, platforms, and methodologies which is provided by Capgemini’s expert team. I have

prepared some data about revenue of cloud service broker Capgemini.

Figure9- number of employers CapGemini has in different geographic areas.

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Figure10-Evolution in the number of employers in year 2012/2013/2014

Figure11- Revenue 2014 by sector

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Back to “Brokerage mechanism”, by observing this case as an application, an intermediary

between clients, consulting providers, application provider services, cloud providers, the

company was successful with net result of 580 million euro in 2014, net cash and cash

equivalents of 1,218 million euro, 10.6 Mds euro revenue, 970 Mn euro operating margin and

668Mn euro cash flow in accomplishing its aim.

This case is an example which shows that brokerage mechanism is not just a theory, it shows

how the use and application of mechanisms can bring innovation to management level of

companies, by using the theory behind the mechanism, a manager can understand how

mechanisms work for their business and by implementing convenient changes where needed,

aligning theory with practice he can make his company better off. By defining new connections

and ties he is able to create a new organization, bringing new value adding services to attract

customers and to become more competitive, compliance with customer needs and trends of the

day.

Conclusion

This research shows how the inherent nature of bureaucracy creates gaps and structural

holes which makes reform coalitions difficult in organizations and stated that organizations need

to use methodologies to find their organizational problems systematically and to use techniques

to implement changes wherever required, this thesis also suggests using mechanisms in order to

fill in those gaps in an efficient way and therefore the use of mechanisms in management is

shown. Thesis discusses that mechanisms can be used in order to implement innovation and ease

and fasten the reform process in organizations.

Another important result of this survey was to indicate the effect of “brokerage social

mechanism” in the management context and shows the example of using brokerage mechanism

in field of cloud service providers and highlight that firms can turn from a cloud service provider

to a cloud service broker, explains how brokers create their ties and how they use them in order

to add value to their services and become more competitive and therefore deduces that leaders

must understand mechanisms and must utilize them in order to bring efficiency to their

organizations, in today’s competitive markets, organizations need to have a strategic

understanding of the environment and understanding the mechanisms that lead to certain results

can help them in this context.

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