Session 2Evolution of Organization Theory

8/19/2019 Session 2Evolution of Organization Theory

1/37

The Evolution Of

Organization Theory

Chapter 2


2/37

Session Agenda

• Describe the Frameor! of Evolution of"anagement Thought

• Describe brie#y the contributions of type $

classical theorists• Describe the impact of %athorne Study on thedevelopment of Type 2 Theorists or %uman&elations School

• Discuss the concept of Contingency school or Type ' theorists

• Describe brie#y the main concerns of type (theorists


3/37

Developing Frame or!

• There are to underlying dimensions in the

evolution of organization theory and eachdimension in turn has opposed perspective

$) Organizations are systemsa) *rior to $+,- tended to be dominated by

closed system perspective

b) .eginning $+,-/ O)T began to ta!e ondistinctly open system perspective

2) Deals ith the ends of the organizationstructure

c) &ational perspective emphasizes that

structure of an organization is conceived as avehicle to speci0cally achieve ob1ectives

d) Social *erspective emphasize thatorganization structure is primarily the resultof con#icting forces by the organizations

constituents ho see! poer and con#ict


4/37

Evolution of Contemporary Organization Theorists

Approximat

e TimeFrame

1900 -

1930

1930-

1960

1960 -

1975

1975 -

SystemsPerspective

EndsPerspective

entra!T"eme

T"eoretica!!assi#ication

!ose

$ationa!

%ec"anica!E##iciency

Type 1

!ose

Socia!

Peop!e and"&man

re!ationsType '

(pen

$ationa!

ontin)encyFrame *or+

Type 3

(pen

Socia!

Po*er andPo!itics

Type ,


5/37

Type $ Theorists

• Classical School

• Developed universal *rinciples ormodels that apply in all situations

• Each perceived organization asclosed system to achieve goalse3ciently


6/37

Taylors 4ies On *roblems of

*roductivity

• "atter of ignorance on part ofmanagement and labor

• .oth dont !no hat constitutes a 5Fair day or!6 and 5 Fair *ay6

• .oth concerned too much ith hoto divide pro0ts that arose fromproductivity and not enough ithincreasing productivity


7/37

The 7abor 8uestion

• Soldiering the real cause of lolabor productivity

• Types of Soldiering

$) 9atural Soldiering. 9atural Tendency and instinct ofmen to ta!e it easy

2) Systematic Soldiering

: &esult of inherent relationshipith other men


8/37

&easons for Systematic Soldering

• 9atural Soldering could be overcome by a manager

able to inspire or force or!ers to come up to themar!• Systematic soldering;$)


9/37

Determining Fair Days


10/37

Summary of Taylors


11/37

Administrative Theorists

• %enri Fayol

• *rimary emphasis on establishing broad

administrative principles applicable to highermanagement level

• De0nition of "anagement

"anagement is an overall function of conducting anunderta!ing toards its ob1ectives by trying to

ma!e best possible use of all resources at itsdisposal and to ensure smooth or!ing the 0veessential elements

$) *lanning

2) Organizing') Command

() Coordination

@) Control


12/37

Elements of "anagement

$) *lanning;

. To Fayol/ managing meant loo!ing ahead and foresight. Any plan of action rested upon;

$) The 0rms resources

2) The nature of present or! in progress

') Future trends in all activities of the 0rm hose occurrencecould not be determined

. A good plan of action has the characteristics of;i) ?nity one overall plan folloed by speci0c plans for each

activityii) Continuity both long range and short rangeiii) FleBibility to bend to uneBpected eventsiv) *recision eliminating as much guess or! as possible. Fayol advised series of separate plans hich ould

altogether comprise one entire plan for the 0rm. Fayols stress on long term plans ere uni>ue contribution

to management thought and his ideas are as importanttoday as hey ere for his on time


13/37


2) Organizing)ncluded provisions for the structuring of activities and

relationships as ell as the procurement/ evaluation/and training of personnel

As this element evolved later riters split Fayolsorganizing elements into to elements organizing andsta3ng

n organization theory/ the organizational pyramid isproduct of functional groth

Functional groth is horizontal in that more people are

added to functions a s the organizational or!loadeBpandsScalar groth is vertical and caused by the need to

add layers of supervision to direct and coordinateloer echelons


14/37


• Organizing Contd) • Fayal built his functional and scalar groth

processes on the basis of $@ or!ers to a foremanand a ratio of ( supervisors to every other superior

•Fayol advocated a relatively narro span ofmanagement control

• The functions of sta= ere to;i) Aid in carrying out the managers personnel

personal duties li!e correspondence/ intervies/intervies/ conferences/ etc)

ii) To aid in liaison and controliii) To gather information and assist in formulating

future plansiv) Search for improvements


15/37


• The function of sta= as uni>ue toFayol

• %e postulated that operating

managers had neither the time norenergy to devote longGtermresearch

• The sta= freed of daily cares could

search for better or! methods/perceive changes in businessconditions/ and concern itself ithlong range met


16/37


() Coordination• Coordination as meant to harmonize all the activities of

a concern so as to facilitate its or!ing and its success• To Fayol/ coordination as a balancing act of !eeping

eBpenses to revenues/ of maintaining e>uipment to meet

production goals/ and insuring that sales and productionere consonant

• Organization and planning facilitated coordination byspecifying duties/ establishing schedules/ and focusingresponsibilities on the ob1ectives

• Sta= personnel liaison o3cers should be used to

enhance coordination in the interim beteen conferencesand in the care of establishments located far aay

• The liaison position supplemented coordination but didnot replace the direct responsibility of the manager


17/37


@) Control

• Control consisted of verifying hether every thing occursis in conformity ith plan adapted/ instructions issued/and for principles established

• The ob1ective of control as to identify errors in order tocorrect them and to prevent recurrence

• E=ective control as based on prompt action/ folloed bysanctions if necessary

• Control also had an integrative e=ect on all the fourelements because;

i) Stimulated better planningii) Simpli0ed and strengthened the organization

iii) ncreased e3ciency of command

iv) Facilitated coordination


18/37

Fayols Fourteen *rinciples

1. Division of work:2) Authority:3. Discipline() Unity of command@. Unity of direction,. Subordination of individual interests to

general interest:

.!emuneration of personnelH) "entrali#ation

$. %he scalar "hain

1&.'rder $$. ()uity: procedural *ustice

$2) Stability of tenure of personnel

$'. +nitiative

$(. (spirit de corps


19/37

Criticism

• Static Consideration

Does not eBplain the impact ofDynamic Environmental Factorsand its resultant compleBities

• Dehumanization of organizations

• Criticism of universal principles

?nity of command principle

Authority and responsibility maynot be openSpan of control restricted to 0ve


20/37

"aB


21/37

EI%.T 2)(;


22/37

Types of Authority

• &ational 7egal

• Traditional

• Charismatic


23/37

&ational 7egal Authority

• *rovides a basis for continuity ofadministration

• *erson chosen on the basis ofcompetence

• 7egal means of eBercising authority

• Function necessary to accomplishtas!


24/37

Assessment of .ureaucratic "odel

• Functional conse>uences

Specialization*redictability and stability

&ational

• Dysfunctional Conse>uences

&igidity

mpersonality

Displacement of ob1ectives

Cost of control


25/37

"a1or assumptions of Classical Theorist

• There is one best ay

• &ational Economic "an

• Organization as "echanistic System• Structuring and controlling %uman

*articipants

• "anagement primary integrative forceand formal hierarchy the mechanismfor achieving coordination


26/37

Type 2 Theorists

• Common Theme; &ecognition ofthe social nature of organization

• 4ie organizations as made up of

tas!s and people SocioGtechnicalsystem

• &epresent a human counterpoint

to Type $ theorists• Commonly !non as %uman

relation or .ehavioral school ofthought


27/37

.ehavioral School

• %athorne EBperiments Elton "ayo$+2(G $+2K

*hase $;

$) llumination eBperiments

2) &elay room EBperiment Small group of siBomen

4ariables studied; shorter or!ing periods/

group incentive pay/ and supervision&esults; productivity increased

&easons; "ore freedom on 1ob/ 9o boss/Setting their on or!/ Small group/ theay they ere treated


28/37

*hase 2; ntervieing*rogram• 9on directive techni>ues

• Complaints had to levels of content;

a) "anifest or material content

b) *sychological content or 5 *essimistic&everies6

Conclusion;

9e supervisor as to be more peopleoriented/ more concerned/ less aloof ands!illed in handling social problems


29/37

*hase '; .an! iring &oom EBperiments

• $( male operatives• The group 1ob as to ire and solder of

e>uipment for general connectingservices

Conclusions;mportance of group norms and standards

and the informal groupLroup norms regarding rate of

productivity signi0cantly in#uenced thelevel of individual productivity

nformal authority of in#uential groupmembers often overrode formal authority

from the supervisor

li i f h


30/37

mplications of %athorneStudies

• denti0ed that organizations are socioGtechnical systems• Demonstrated the importance of

psychological or human factors on or!erproductivity and morale

• Signaled the criticality of certain variablesfor or!er satisfaction/ autonomy on the

1ob/ relative lac! of need for the need forclose supervision/ the importance of

receiving feedbac! on the directrelationship beteen performance andreard

• *rovided data and stimulus for groupdynamics/ especially in or! conteBt


31/37

Type ' Theorists

• 9either mechanistic forces ofdar!ness nor the humanistic forces oflight could muster evidence that

their solution and only their solutionas right for all situations

• The con#ict beteen thesis and anti

thesis led to synthesis that providedbetter guidance to managers

• The synthesis as contingency

approach


32/37

%erbert Simon

• &ecognized in $+(- that Type $principlesould have to give ay to contingencyapproach

• "ost classical principles ere nothing

more than proverbs and contradicted eachother

• Argued that organization theory needed togo beyond super0cial oversimpli0ed

principles to a study of the conditionsunder hich competing principles ereapplicable

• Too! 2- years before organization theoriststo e=ectively respond to Simon challenges


33/37

Matz and Mahns Environmental*erspective

• Daniel Matz and &obert Mahns boo! 5 The social *sychologyof organizations6 as a ma1or impetus toards promotingthe Type ' open system perspective

• *rovided a convincing description of the advantages of anopen system perspective

•EBamined the relationship of an organization ith itsenvironment and the need for an organization to adapt tochanging environment if they have to survive

• Since Matz and Mhans or! numerous theorists li!e .urnsand Stal!er/ Emery and Trist/ 7arence and 7orsh haveinvestigated environment structure relationships

• 9o current discussion of the organization theory ould becomplete ithout a thorough assessment of environment asan a ma1or contingency factor in#uencing the preferredform of structure


34/37

The Case for Technology

• &esearch by Noan oodard/Charles *erro / and Names

Thompson have shon the

importance of technology indetermining the appropriatestructure for an organization


35/37

The Aston Lroup andOrganization Size

• Size as the ma1or contingency factor inin#uencing structure as championed by?niversity of Aston researchers

• 7arge and small organizations have beenshon to have many common structuralcomponents

• The evidence suggest that certain of these

components follo an established asorganizations eBpand in size


36/37

Type ( Theorists

• Focuses on *olitical nature of organizations

• ,arch and Simon-s "ognitive limits to!ationality /ounded !ationality0

• Challenged the classical notion of rational or

optimum decisions• They argued that most decision ma!ers due to

incomplete information/ cognitive limitations/con#icts/ and time pressures select satisfactoryalternatives alternatives that ere good enough

• Only in eBceptional cases ould they beconcerned ith discovery and selection of optimalalternatives


37/37

*fe=ers Organizations as *oliticalArenas

• %enry *fe=er model of organization theoryencompasses poer coalitions/ inherentcon#ict over goals/ and organization designdecisions that favor self interest of those inpoer

• Control in organizations become an end ratherthan merely means to rational goals

• Organizations are coalitions composed ofvarying groups and individuals ith di=erentdemands

• An organizations design represent the resultof poer struggles by these coalitions

• f one ants to understand hy organizationsare designed the ay they are/ one needs to

th f d i t t f th

Documents

Session 2Evolution of Organization Theory