PowerPoint Presentation by Charlie Cook The University of West Alabama Plunkett Attner Allen © 2008...

© 2008 Thomson/South-Western All rights reserved.© 2008 Thomson/South-Western All rights reserved.

PowerPoint Presentation by

Charlie CookThe University of

West Alabama

PowerPoint Presentation by

Charlie CookThe University of

West Alabama

Plunkett AttnerAllen

CHAPTER 2

Organization

Theory and

Management

Thought

CHAPTER 2

Organization

Theory and

Management

Thought

© 2008 Thomson/South-Western. All rights reserved. 2–2

Organization TheoryOrganization Theory

• William G.ScottWilliam G.ScottClassical Organization TheoryClassical Organization TheoryNeoclassical Organization TheoryNeoclassical Organization TheoryModern Organization TheoryModern Organization Theory


Classical Organization Classical Organization TheoryTheory

• Four key pillarsFour key pillarsThe division of laborThe division of laborStructureStructureThe Scalar and functional processThe Scalar and functional processThe span of controlThe span of control


Classical PerspectiveClassical Perspective

● Rational, scientific approach to Rational, scientific approach to management – make organizations management – make organizations efficient operating machines efficient operating machines

● Scientific ManagementScientific Management

● Bureaucratic OrganizationsBureaucratic Organizations

● Administrative PrinciplesAdministrative Principles


Scientific ManagementScientific Management• Fredrick Winslow TaylorFredrick Winslow Taylor

The “father” of scientific managementThe “father” of scientific management

Published Published Principles of Scientific ManagementPrinciples of Scientific Management (1911) (1911)

The theory of scientific managementThe theory of scientific management– Using scientific methods to define the “one best way” for a job to Using scientific methods to define the “one best way” for a job to

be done:be done:

• Putting the right person on the job with the correct tools and Putting the right person on the job with the correct tools and equipment.equipment.

• Having a standardized method of doing the job.Having a standardized method of doing the job.

• Providing an economic incentive to the worker.Providing an economic incentive to the worker.


Exhibit 2–2Exhibit 2–2 Taylor’s Four Principles of ManagementTaylor’s Four Principles of Management

1. Develop a science for each element of an individual’s work, which will replace the old rule-of-thumb method.

2. Scientifically select and then train, teach, and develop the worker.

3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed.

4. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers.


Bureaucratic OrganizationsBureaucratic Organizations

• Max Weber 1864-1920Max Weber 1864-1920• Prior to Bureaucracy OrganizationsPrior to Bureaucracy Organizations

European employees were loyal to a single European employees were loyal to a single individual rather than to the organization or its individual rather than to the organization or its missionmission

Resources used to realize individual desires rather Resources used to realize individual desires rather than organizational goalsthan organizational goals

• Systematic approach –looked at organization Systematic approach –looked at organization as a whole as a whole


Characteristics of Weberian Characteristics of Weberian BureaucracyBureaucracy

Positions organized in a hierarchy of authority

Managers subject to Rules and procedures

that will ensure reliable predictable behavior

Personnel are selected and promoted based

on technical qualifications

Administrative acts and decisions recorded

in writing

Management separate from the ownership of the organization

Division of labor with Clear definitions of

authority and responsibility

Exhibit 2.3


Classical Administrative SchoolClassical Administrative School

• Henri FayolHenri Fayol Believed specific management skills could be learned Believed specific management skills could be learned

and taughtand taught Developed 14 principles that form the foundation for Developed 14 principles that form the foundation for

modern management practice and sound modern management practice and sound administrative structure.administrative structure.


Figure 2.2 Henri Fayol’s general principles of management

1. Division of Work

2. Authority

3. Discipline

4. Unity of Command

5. Unity of Direction

6. Subordination of the Individual to the General Interest

7. Remuneration of Personnel

Source: Adapted from General Principles of Management by Henri Fayol. Copyright 1949 by Pitman Learning, Inc., 6 Davis Drive, Belmont, CA 94002.

8. Centralization

9. Scalar Chain

10. Order

11. Equity

12. Stability of Tenure of Personnel

13. Initiative

14. Esprit de Corps


Neoclassical Organization Neoclassical Organization TheoryTheory• Embarked on the task of compensating for some Embarked on the task of compensating for some

of the deficiencies in classical doctrineof the deficiencies in classical doctrine 1. Fatigue and monotony caused by the 1. Fatigue and monotony caused by the

specialization of the workspecialization of the work 2. 2. Human behavior thwarts the cleanness of the Human behavior thwarts the cleanness of the

logical relationships logical relationships 3. Overlapping of authority often causes clashes; and, 3. Overlapping of authority often causes clashes; and,

gaps in authority cause failures in getting jobs done, gaps in authority cause failures in getting jobs done, with one party blaming the other for shortcomings in with one party blaming the other for shortcomings in performance.performance.

4. Universally applicable ratio of span of control is 4. Universally applicable ratio of span of control is silly.silly.


• Started in 1895Started in 1895• Four experimental & three control groupsFour experimental & three control groups• Five different testsFive different tests• Test pointed to factors other than illumination for Test pointed to factors other than illumination for

productivityproductivity• 1st Relay Assembly Test Room experiment, was 1st Relay Assembly Test Room experiment, was

controversial, test lasted 6 yearscontroversial, test lasted 6 years• Interpretation, money not cause of increased outputInterpretation, money not cause of increased output• Factor that increased output, Factor that increased output, Human RelationsHuman Relations

Hawthorne StudiesHawthorne StudiesHawthorne StudiesHawthorne Studies


Modern organization TheoryModern organization Theory

●Systems TheorySystems Theory

●Contingency ViewContingency View


The Systems ApproachThe Systems Approach• System DefinedSystem Defined

A set of interrelated and interdependent parts A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.arranged in a manner that produces a unified whole.

• Basic Types of SystemsBasic Types of Systems Closed systemsClosed systems

Are not influenced by and do not interact with their Are not influenced by and do not interact with their environment (all system input and output is environment (all system input and output is internal).internal).

Open systemsOpen systemsDynamically interact to their environments by Dynamically interact to their environments by

taking in inputs and transforming them into outputs taking in inputs and transforming them into outputs that are distributed into their environments.that are distributed into their environments.


Exhibit 2–6Exhibit 2–6 The Organization as an Open SystemThe Organization as an Open System


Implications of the Systems ApproachImplications of the Systems Approach• Coordination of the organization’s parts is Coordination of the organization’s parts is

essential for proper functioning of the entire essential for proper functioning of the entire organization.organization.

• Decisions and actions taken in one area of the Decisions and actions taken in one area of the organization will have an effect in other areas of organization will have an effect in other areas of the organization.the organization.

• Organizations are not self-contained and, Organizations are not self-contained and, therefore, must adapt to changes in their therefore, must adapt to changes in their external environment.external environment.


The Contingency ApproachThe Contingency Approach• Contingency Approach DefinedContingency Approach Defined

Also sometimes called the Also sometimes called the situational approach.situational approach.

There is no one universally applicable set of There is no one universally applicable set of management principles (rules) by which to manage management principles (rules) by which to manage organizations.organizations.

Organizations are individually different, face different Organizations are individually different, face different situations (contingency variables), and require situations (contingency variables), and require different ways of managing.different ways of managing.


Exhibit 2–7Exhibit 2–7 Popular Contingency VariablesPopular Contingency Variables

• Organization size• As size increases, so do the problems of coordination.

• Routineness of task technology• Routine technologies require organizational structures,

leadership styles, and control systems that differ from

those required by customized or nonroutine technologies.

• Environmental uncertainty• What works best in a stable and predictable environment

may be totally inappropriate in a rapidly changing and unpredictable environment.

• Individual differences• Individuals differ in terms of their desire for growth,

autonomy, tolerance of ambiguity, and expectations.


Contingency View of ManagementContingency View of Management

Exhibit 2.6


TQMTQM• Focuses on managing the total organization to Focuses on managing the total organization to

deliver quality to customers.deliver quality to customers.• Four significant elements areFour significant elements are

Employee involvementEmployee involvementFocus on the customerFocus on the customerBenchmarkingBenchmarkingContinuous improvementContinuous improvement


The learning OrganizationThe learning Organization

• As one in which everyone is engaged in As one in which everyone is engaged in identifying and solving identifying and solving problems, enabling problems, enabling the organization to continuously the organization to continuously experiment, change, and improve, thus experiment, change, and improve, thus increasing in its capacity to grow, learn, increasing in its capacity to grow, learn, and achieve its purposeand achieve its purpose


Elements of a Learning OrganizationElements of a Learning Organization

Learning Organization

Open Information

Empowered Employees

Horizontal Structure

Exhibit 2.7

Strong Culture

Emergent StrategyLeadership



• 1. Leadership1. LeadershipThe traditional view of leaders who set goals, The traditional view of leaders who set goals,

make decisions ,and direct the troops reflects make decisions ,and direct the troops reflects an individualistic viewan individualistic view

In learning organization, leaders need the In learning organization, leaders need the ability to build a shared vision, help people ability to build a shared vision, help people see whole system, work together, design see whole system, work together, design horizontal structure, initiate change, expand horizontal structure, initiate change, expand the capacity of people to shape the future.the capacity of people to shape the future.



• 2. 2. Horizontal StructureHorizontal StructureNew organization structure represent a New organization structure represent a

revolution in management thinking.revolution in management thinking.The team is more important than the The team is more important than the

individual, and teams are given major individual, and teams are given major responsibilities, such as producing a product responsibilities, such as producing a product and service, making decision about work and and service, making decision about work and pay.pay.



• 3. Employee empowerment3. Employee empowermentGiving employees the power, freedom, Giving employees the power, freedom,

knowledge, and skills to make decisions knowledge, and skills to make decisions and perform effectivelyand perform effectively


The learning OrganizationThe learning Organization• 4. Open communication4. Open communication

To identify needs and solve problems, people have to To identify needs and solve problems, people have to aware of what’s going onaware of what’s going on

They must understand the whole organization as well They must understand the whole organization as well as their part in it.as their part in it.

Formal data about budgets, profits, and departmental Formal data about budgets, profits, and departmental expensesexpenses are available to everyone.are available to everyone.



• 5. Emergent strategy5. Emergent strategyStrategy emerges from discussions among Strategy emerges from discussions among

employees.employees.Emergent strategy relies on an experiment Emergent strategy relies on an experiment

mind-set.mind-set.Employees are in touch with the environment, Employees are in touch with the environment,

providing data about external changes in providing data about external changes in technology and customer needs. They are the technology and customer needs. They are the ones to identify needs and solutions , passing ones to identify needs and solutions , passing these ideas into the organization for these ideas into the organization for discussion.discussion.



• 6. 6. Strong cultureStrong cultureThe whole is more The whole is more important than the part, important than the part,

and boundaries among parts are minimized.and boundaries among parts are minimized.The culture is egalitarian.The culture is egalitarian.The culture values improvement and The culture values improvement and

adaptation.adaptation.

PowerPoint Presentation by Charlie Cook The University of West Alabama Plunkett Attner Allen © 2008...

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