1. THEORIES AND CONCEPTS OF ORGANIZATION
CLASSICAL THEORY OF ORGANIZATION
Presented by
MUHAMMAD YAHYA AHMAD
CEdAP STUDENT OF PCU MANILA

2. Organization Theory (Some Definitions)
A proposition or set of propositions that attempts to explain or predict how groups and individuals behave in differing organizational arrangements.
Organizational theory attempts to explain the workings of organizations to produce understanding and appreciation of organizations.
Some types of organizational theories include classical, neoclassical, contingency, systems and organizational structure

3. Organization Theory (Some Definitions)
Organization theory: is the set of propositions (body of knowledge) stemming from a definable field of study which can be termed organizations science.
The study of organizations: is an applied science because the resulting knowledge is relevant to problem solving or decision making in ongoing enterprises or institutions.

4. Organization Theory (Some Definitions)
Classical organization theory combines aspects of scientific management, bureaucratic theory and administrative theory. Scientific management involves obtaining optimal equipment and personnel and then carefully scrutinizing each component of the production process,
Neoclassical organization theory is a reaction to the authoritarian structure of classical theory. The neoclassical approach emphasizes the human needs of employees to be happy in the workplace,

5. Organization Theory (Some Definitions)
3. Contingency theory views conflict in the work place as inescapable, but also manageable. This differs from classical and neoclassical theories that interpret conflict as interference with organizational equilibrium 4. Systems theorists believe all organizational components are interrelated. Changes in one component may affect all other components 5. Organizational structure became an important aspect of organizational theory due to the increasing complexity of multinational organizations.

6. PERSPECTIVES OF ORGANIZATION THEORIES
Human as
Machine
Human
Relations
Structuralists
Theory
Open
Systems
Contingency
Heavy
handed
Hostility
among
workers
Humanize
Management
Still
accomplish
goals
Efficiency
Understand
tensions
between
production and
humans
Ways to
adapt to
environmental
pressures
Horizontal
Communicat-ion
Bridge from
closed to
open Systems
Rationality Vs
Irrationality

7. CONTRIBUTORS TO ORGANIZATION THEORIES
Human as
Machine
Human
Relations
Structuralists
Theory
Open
Systems
Theory
Contingency
Theory
Frederick
Taylor
Mary Parker
Follett
Phillip
Selznik
Getzel and
Guba
Stogdill and
Ohio State
Henri Fayol
Elton Mayo
House and
Mitchell
Talcott
Parsons
Victor Vroom
Max Weber
Vilfredo
Pareto
Katz and
Kahn
Blake and
Mouton
Chester
Barnard
Robert Merton
Abraham
Maslow
John Seiler
Alvn Gouldner
Fred Fiedler
Stogill
J.W.
Forrester
Hersey &
Blanchard
Fredrick
Herzberg
Andrew
Halpin
Porter &
Lawler
Douglas
McGregor

8. Three Major Theories of Organization
3 Theories of Organizations
Classical Theory
Four Basic components to any Organization
System of differentiated activities
People
Cooperation toward a goal
Authority
Neoclassical Theory
Critique of the 4 structural principles of classical Theory
Functional
Scalar
Line/Staff
Span of control
System theory
Five parts of an organization
Individuals
Formal organization
Small groups
Status & Roles
Physical setting

9. Classical Theory
Organizations exist to accomplish production-related and economic goals.
There is one best way to organize for production, and that way can be found through systematic, scientific inquiry.
Production is maximized through specialization and division of labor.
People and organizations act in accordance with rational economic principles.

10. Classical Theory (Covers the period from 1900's to mid-1930)
Three assumptions:
The relationship between employees and management: formal structured communication process, defined tasks, defined accountability, and formalized procedures and practices to avoid any conflict in their relationship.
The Workers have been treated as economic man who can be motivated by means of money only.
The workers have been considered as a product of means of production or as a cog in the wheel.

11. Classical Theory Two perspectives:
Scientific management (Frederick Taylor)– focusing on the management of work and workers
Administrative management (Henri Fayol Luther Halsey Gulick and Max Weber): addressing issues concerning how overall organization should be structured

12. Classical Theory (Fayol’s 5 Management Functions)
Fundamental roles performed by all managers:
Planning
Organizing
Commanding
Coordinating
Controlling
Additionally Fayol recognizes fourteen principles that should guide the management of organizations.

13. Classical Theory (Scientific Management Frederick W. Taylor, 1911)
Scientific management principles.
Replacing traditional, rule of thumb methods of work accomplishment with systematic, more scientific methods of measuring and managing individual work elements;
The scientific study of the selection and sequential development of workers to ensure optimal placement of works into work roles;
Obtaining the cooperation of workers to ensure full application of scientific principles; And.
Establishing logical divisions within work roles and responsibilities between workers and management.

14. Classical Theory (The fourteen principles of organization (Henry Fayol)
Division of Work
Authority and Responsibility
Discipline
Unity of command
Unity of Direction
Subordination of Individual Interest of General Interest
Remuneration of Personnel
Centralization of Authority
Scalar Chain
Order
Equity
Stability of Tenure
Initiative
Esprit de Corps

15. Classical Theory (7 functions’ of management Luther H. Gulick)
Planning - developing an outline of the things that must be accomplished and the methods for accomplishing them
Organizing - establishes the formal structure of authority through which work subdivisions are arranged, defined, and coordinated to implement the plan
Staffing - selecting, training, and developing the staff and maintaining favorable working conditions
Directing - the continuous task of making decisions, communicating and implementing decisions, and evaluating subordinates properly
Coordinating - all activities and efforts needed to bind together the organization in order to achieve a common goal
Reporting - verifies progress through records, research, and inspection; ensures that things happen according to plan; takes any corrective action when necessary; and keeps those to whom the chief executive is responsible informed
Budgeting - all activities that accompany budgeting, including fiscal planning, accounting, and control

16. Classical Theory (Bureaucratic administration, Max Weber)
Power: any relationship within which one person could impose his will, regardless of any resistance from the other.
Authority: existed when there was a belief in the legitimacy of that power.
Charismatic Authority: based on the sacred or outstanding characteristic of the individual.
Traditional Authority: essentially a respect for customs.
Rational Legal Authority: based on a code or set of rules.

17. Relevance of the Classical Theory of Organization
Principle's of organizations formulated in the 18th century are not able to enhance performance in the changed environment and technology and contribute negatively to organizational performance.
Fayol's principle: organization as a closed system, organizational factors are under the control of management.

18. Critics to the Relevance of the Classical Theory of Organization
Modern management operates in a dynamic environment constantly adopted to suit the changes in the environment. Modern organizations do not operate in vacuum environment. Modern organizations tend to provide maximum autonomy , free to take actions to solve problems: to think, innovate, explore and bring about positive and effective changes.

19. Thank You