Jacobus N Joseph-Management Organization

Organization Theories

Theory

• A Theory is a set of inter related concepts, definitions & propositions that present a systematic view of phenomena

• It also specifies the relationship among variables with purpose of explaining and predicting the phenomena.

Organization theory

• Refers- to the study of the phenomena or occurrences of organizational functioning and performance and of the behavior of Groups and individuals working in them.”

• There are several theories which explain the organization and its structure .

• Classical organization theory includes the scientific management approach, Weber's bureaucratic approach, and administrative theory.

Competing theories of organization

• As organizations are implemented over time, many people experimented as to which one was best.

• These theories of organizations include:– Bureaucracy

– Rationalization (Scientific Management), and

– the Division of Labor.

• Each theory provides distinct advantages and disadvantages when implemented.

Bureaucratic theory- Max Weber

• In his ‘Economy and Society’ book published in 1922, Weber articulates the necessary conditions and descriptive features of bureaucracy.

• An organization governed under Weber’s conception of bureaucracy is characterized by:1. the presence of impersonal positions that are earned

and not inherited, 2. rule-governed decision-making, 3. professionalism, 4. a chain of command, 5. defined responsibility, and 6. bounded authority.

In Weber's ideal of bureaucracy:

a) Official Jurisdiction on all areas are ordered by rules or laws already implemented.

b) There is an office hierarchy; a system of super-and subordination in which there is supervision of lower office by higher ones.

c) The management of the modern office is based upon written rule, which are preserved in original form.

d) Office management requires that of training or specialization.

e) When the office is developed/established it requires the full working capacity of individuals.

f) Rules are stable and can be learned. Knowledge of these rules can be viewed as expertise within the bureaucracy (these allow for the management of society)

g) When a bureaucracy is implemented, they can provide accountability, responsibility, control, and consistency. The hiring of employees will be an impersonal and equal system.

• NB: Although the classical perspective encourages efficiency, it is often criticized as ignoring human needs. Also, it rarely takes into consideration human error or the variability of work performances (each worker is different).

Additional features:

• There are several additional features that comprise a Weberian bureaucracy:1. It is possible to find the utilization of hierarchical

subordination in all bureaucratic structures. This means that higher-level offices supervise lower level offices.

2. In bureaucracies, personal possessions are kept separate from the monies of the agency or the enterprise.

3. People who work within a bureaucracy are usually trained in the appropriate field of specialization.

4. Bureaucratic officials are expected to contribute their full working capacity to the organization.

5. Positions within a bureaucratic organization must follow a specific set of general rules.

Criticism

• It is hard to critique Weber’s theory strictly because of the fact that it’s a theory nearly impossible to perform in real life, making it impossible for one to know if it works or not.– It is merely a set of guidelines that make up

bureaucracy, which today still many believe as the best way to run organizations in all aspects.

• All the same this approach is considered rigid, impersonal, self-perpetuating and empire building.

Rational system perspective

• In a rational organization system, there are two significant parts:

• Specificity of Goals and Formalization. Goal specification provides guidelines for specific

tasks to be completed along with a regulated way for resources to be allocated.

Formalization is a way to standardize organizational behavior. As a result, there will be stable expectations, which create the rational organizational system.

Scientific Management Theory-Taylor

• Taylor’s SM theory analyzed how to maximize the amount of output with the least amount of input. Taylor’s in his attempt to rationalize the individual worker argued for the:1. Division of work between managers and workers2. Provision of an incentive system (based on

performance)3. Scientifically training of workers4. Creating of a science for each individual’s

responsibilities5. Ensuring that work is done on time/efficiently

Problems arising out of scientific management

1. standardization leads workers to rebel against mundaneness (routineness).

2. workers may reject the incentive system because they are required to constantly work at their optimum level, an expectation that may be unrealistic.

The Administrative Theory

• was propounded by Henry Fayol and is

based on several principles of

management. In addition, management

was considered as a set of planning,

organizing, training, commanding and

coordinating functions.

Fayol's Administrative theory

emphasised adherence to principles of

management:

1. Division of work (specialization)

2. Authority and responsibility

3. Discipline

4. Unity of command

5. Unity of direction

6. Subordination of individual interest

7. Remuneration of personnel

8. Centralization9. Scalar chain10. Order11. Equity12. Stability of tenure of personnel13. Initiative14. Esprit de corps15. The concept of line and staff16. Committees17. Functions of management

- planning- organizing- training- commanding- coordinating

Division of labor- Adam Smith

• The division of labor is the specialization of individual labor roles. It is often associated with increasing output and trade.

• According to Adam Smith, the division of labor is efficient due to three reasons: – occupational specialization– saving from not changing tasks, and – machines taking the place of human labor.

• Smith argued -:– that ‘occupational specialization’ leads to increased productivity and

distinct skill, and– that human and physical capital must be similarly matched;

• If the skill of workers were matched with technological improvements, Smith concluded, there would be a major increase in productivity.

Arguments against theory

• Although the division of labor is often viewed as inevitable in a capitalistic society, there are several specific problems that may arise.

• They include a lack of creativity, monotony, and lack of mobility-: – Creativity will naturally suffer due the monotonous

atmosphere that the division of labor creates. Doing the same routines may not be for everyone.

– Non mobility employees aren’t familiar with other parts of the job and thus cannot assist employers elsewhere.

Modernization Theory- Frank Dobbin

• The growth of modernization took place beginning in the 1950s; and the ensuing decade, people analyzed the diffusion of technological innovations within Western society and the communication that helped it disperse globally

• This “first wave” as it became known had some significant ramifications:– First, economic development was enhanced from the

spread of new technological techniques, and – second, modernization supported a more educated

society (as mentioned above), and thus a more qualified labor force

Modernization Theory- 2nd. Wave

• The ‘second wave’ took place between the years 1960 and 1970. This period was labeled anti-modernization, because it saw the push of innovations of Western society onto developing countries as an exertion of dominance

• It refuted the concept of relying heavily on mass media for the betterment of society.

Modernization Theory- 3rd. Wave

• The last wave of modernization theory, which took place in the 1990s, depicts impersonality (Perrow 737)

– As uses of newspapers, TVs, and radios became more prevalent, the need for direct contact, a concept traditional organizations took pride in, diminished. Thus, organizational interactions became more distant (“Modernization Theory”).[11]

Frank Dobbin

• According to Frank Dobbin, the modern worldview is the idea that “modern institutions are transparently purposive and that we are in the midst an evolutionary progression towards more efficient forms.

• This phrase epitomizes the goal of modern firms, bureaucracies, and organizations to maximize efficiency.

• The key to achieving this goal is through scientific discoveries and innovations (according to Dobbin).

Arguments for the theory

• Dobbin discussed the outdated role of culture in organizations and explored the significance of culture in the modern organization.

• He argued that, the rationalist worldview counters the use of cultural values in organizations, stating that “transcendental economic laws exist,

• that existing organizational structures must be functional under the parameters of those laws, and

• that the environment will eliminate organizations that adopt non-efficient solutions

• These laws govern the modern organizations and lead them in the direction that will maximize profits efficiently. – Thus, the modernity of organizations is to generate maximum profit,

through the uses of mass media, technological innovations, and social innovations in order to effectively allocate resources for the betterment of the global economy.