Psychotic Organization as a Metaphoric Frame for the Socio-Analysis of Organizational and Interorganizational Dynamics

The notion of the pathological organization provides a starting frame for better understanding irrationality and madness in organizations, profit and non-profit organizations alike. It has been used up to now by various psychoanalytic authors in their attempt to gain a better understanding of severe personality disturbances caused by pathological fixation, a splitting of bad and good parts or a liaison of fragments under the dominance of an omnipotent narcissistic personality structure. The concept originally referred to the narrow frame of individual ego-organization, but it is argued that the notion of the psychotic organization provides a useful metaphoric frame for application to social organizations. The attempt is made to apply the metaphor to various organizational and interorganizational contexts: the intraorganizational dynamics of hospitals, the interorganizational relatedness of the hostile takeover of an enterprise, and the increasing dominance of the shareholder value optimization in a global context. The attempt at ignoring and denying psychotic organizational dynamics is vain, resembling the futile efforts to escape a plague which is devastating the country so lucidly described by Edgar Allan Poe (1980) in his story 'The Mask of the Red Death'.