The Development of Modern Organization Theory

Lecture Outline Bureaucracy and administrative theory –concepts and limitations Decision making theories of organization –concepts and interpretation Open-systems theory –concepts and implications Sociotechnical systems –the story, and what we learned

Bureaucratic Models of Organization Goal: describe the rational, efficient organization of tasks in society Key players: K. Marx, M. Weber Key concepts: –hierarchical organization of authority –division of labor –chain of command –unity of command

Administrative Man Describes the model of man that is assumed in the bureaucratic model of organization Key players: H. Fayol and F. Taylor man is a passive instrument one best way to organize ignored social aspect of organizational life These assumptions led to significant limitations of bureaucratic models

Limitations: the ‘unanticipated consequences of bureaucracy’ Reductions in personalized relationships (results in anomie) internalization of organizational rules results in inflexibility increased use of categorization for decision making - reduces search for alternatives departmentalization leads to bifurcation of interests among subunits subunit goals become internalized

Behavioral View of Organizations Views individuals as decision making beings individual characteristics and situations influence decision making bounded rationality –we use simplifying models of reality satisficing –decisions are made with limited information –we are rational only with respect to our frame of reference

Behavioral View of Organizations standard operating procedures (SOP’s) necessarily result: –problems are either novel or routine –routine problems are responded to by simple stimulus- organism-response pattern (based upon SOP) –novel problems are responded to by complex problem solving behavior: simulus-organism-search-standard setting-choice Thus the eventual result is to distill all complex situations down to SOP’s - routinization

Limitations of SOP’s SOP’s determine problem definition SOP’s determine alternative solutions SOP’s constrain search activity SOP’s determine consequences SOP’s rules for ordering consequences

Behavioral View of Organizational Structure Basic features: –SOP’s; division of labor; communications patterns (e.g. hierarchy) These result directly from the characteristics of human decision makers –bounded rationality –satisficing behavior

Organizations as ‘Open Systems’ Emphasis upon intimate relationship between system and environment open systems can be characterized in terms of: –input - energy, information –throughput - processing of energy and information –output - product, information –feedback –homeostasis - steady state (balance inputs and outputs) –differentiation - specialized functions

Implications of OST 1) Organizations are continually dependent upon the environment for inputs 2) We cannot assume factor inflows as given 3) There will be 5 major functional subsystems: –production –support - procurement, disposal, institutional relations –maintenance –adaptive - planning, R&D, intelligence or feedback function –managerial - control

Sociotechnical Systems View Result of a study of the mechanization of British coal faces by - Trist & Bamforth (1951) The 'hand-got' system –interdependent work pairs –each with responsibility for the 'whole job' –Leadership and supervision were internal to the group –Choice of workmates was made by the men themselves

Mechanization in the form of the 'longwall method' developed in response to the characteristics of British coal seams, being economically more efficient. primary work unit grew to a group of men, a shot firer and shift deputies (suprvisors). 3 shifts: cutting, ripping, and filling barriers to effective intergroup communication close task interdependence between shifts role segregation intensified by payment methods Sociotechnical Systems View

 The results of reorganization:  functional interdependence is magnified  uneven levels of functional efficiency  uncertainty of conditions  bad conditions resulting in overtime  too many hours resulting in bad work  a vicious cycle resulting from the above - even to the point of complete stoppage Sociotechnical Systems View

 defense mechanisms used to counteract the effects of mechanization:  Informal organization  Mutual scapegoating  Self-compensatory absenteeism  How did they fix it?  reducing group size  increasing integration within groups  multiskilling  increasing autonomy Sociotechnical Systems View

Story so far... Bureaucracy and administrative views are rational models –they explain conditions for efficiency Behavioral view is of bounded rationality –internal structure of organizations reflects this OST describes organizations subject to environments –organizations must compete for and acquire resources Sociotechnical systems suggests that efficiency needs may not override social system needs To be continued……….