1. CHAPTER 2 Organization Theory and Management Thought
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2. Organization Theory William G.Scott Classical Organization Theory
Neoclassical Organization Theory
Modern Organization Theory
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3. Classical Organization Theory
Four key pillars
The division of labor
Structure
The Scalar and functional process
The span of control
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4. Classical Perspective
Rational, scientific approach to management – make organizations efficient operating machines
Scientific Management
Bureaucratic Organizations
Administrative Principles
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5. Scientific Management
Fredrick Winslow Taylor
The “father” of scientific management
Published Principles of Scientific Management (1911)
The theory of scientific management
Using scientific methods to define the “one best way” for a job to be done:
Putting the right person on the job with the correct tools and equipment.
Having a standardized method of doing the job.
Providing an economic incentive to the worker.
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6. Exhibit 2–2 Taylor’s Four Principles of Management
Develop a science for each element of an individual’s work, which will replace the old rule-of-thumb method.
Scientifically select and then train, teach, and develop the worker.
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.
Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers.
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7. Bureaucratic Organizations
Bureaucratic Organizations
Max Weber
Prior to Bureaucracy Organizations
European employees were loyal to a single individual rather than to the organization or its mission
Resources used to realize individual desires rather than organizational goals
Systematic approach –looked at organization as a whole
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8. Characteristics of Weberian Bureaucracy
Characteristics of Weberian Bureaucracy
Division of labor
with Clear definitions of
authority and responsibility
Personnel are selected
and promoted based
on technical
qualifications
Positions organized
in a hierarchy of authority
Managers subject to
Rules and procedures
that will ensure reliable
predictable behavior
Administrative acts
and decisions recorded
in writing
Management separate
from the ownership
of the organization
Exhibit 2.3
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9. Classical Administrative School
Henri Fayol
Believed specific management skills could be learned and taught
Developed 14 principles that form the foundation for modern management practice and sound administrative structure.
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10. Figure 2.2 Henri Fayol’s general principles of management
Division of Work
Authority
Discipline
Unity of Command
Unity of Direction
Subordination of the Individual to the General Interest
Remuneration of Personnel
Centralization
Scalar Chain
Order
Equity
Stability of Tenure of Personnel
Initiative
Esprit de Corps
Source: Adapted from General Principles of Management by Henri Fayol. Copyright 1949 by Pitman Learning, Inc., 6 Davis Drive, Belmont, CA
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11. Neoclassical Organization Theory
Embarked on the task of compensating for some of the deficiencies in classical doctrine
1. Fatigue and monotony caused by the specialization of the work
2. Human behavior thwarts the cleanness of the logical relationships
3. Overlapping of authority often causes clashes; and, gaps in authority cause failures in getting jobs done, with one party blaming the other for shortcomings in performance.
4. Universally applicable ratio of span of control is silly.
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12. Hawthorne Studies Started in 1895
Hawthorne Studies
Started in 1895
Four experimental & three control groups
Five different tests
Test pointed to factors other than illumination for productivity
1st Relay Assembly Test Room experiment, was controversial, test lasted 6 years
Interpretation, money not cause of increased output
Factor that increased output, Human Relations
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13. Modern organization Theory
Modern organization Theory
Systems Theory
Contingency View
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14. The Systems Approach System Defined Basic Types of Systems
A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.
Basic Types of Systems
Closed systems
Are not influenced by and do not interact with their environment (all system input and output is internal).
Open systems
Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.
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15. Exhibit 2–6 The Organization as an Open System
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16. Implications of the Systems Approach
Coordination of the organization’s parts is essential for proper functioning of the entire organization.
Decisions and actions taken in one area of the organization will have an effect in other areas of the organization.
Organizations are not self-contained and, therefore, must adapt to changes in their external environment.
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17. The Contingency Approach
Contingency Approach Defined
Also sometimes called the situational approach.
There is no one universally applicable set of management principles (rules) by which to manage organizations.
Organizations are individually different, face different situations (contingency variables), and require different ways of managing.
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18. Exhibit 2–7 Popular 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.
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19. Contingency View of Management
Contingency View of Management
Exhibit 2.6
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20. TQM
Focuses on managing the total organization to deliver quality to customers.
Four significant elements are
Employee involvement
Focus on the customer
Benchmarking
Continuous improvement
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21. The learning Organization
As one in which everyone is engaged in identifying and solving problems, enabling the organization to continuously experiment, change, and improve, thus increasing in its capacity to grow, learn, and achieve its purpose
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22. Elements of a Learning Organization
Elements of a Learning Organization
Horizontal Structure
Leadership
Emergent Strategy
Learning Organization
Empowered Employees
Open Information
Exhibit 2.7
Strong Culture
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23. The learning Organization
1. Leadership
The traditional view of leaders who set goals, make decisions ,and direct the troops reflects an individualistic view
In learning organization, leaders need the ability to build a shared vision, help people see whole system, work together, design horizontal structure, initiate change, expand the capacity of people to shape the future.
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24. The learning Organization
2. Horizontal Structure
New organization structure represent a revolution in management thinking.
The team is more important than the individual, and teams are given major responsibilities, such as producing a product and service, making decision about work and pay.
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25. The learning Organization
3. Employee empowerment
Giving employees the power, freedom, knowledge, and skills to make decisions and perform effectively
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26. The learning Organization
4. Open communication
To identify needs and solve problems, people have to aware of what’s going on
They must understand the whole organization as well as their part in it.
Formal data about budgets, profits, and departmental expenses are available to everyone.
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27. The learning Organization
5. Emergent strategy
Strategy emerges from discussions among employees.
Emergent strategy relies on an experiment mind-set.
Employees are in touch with the environment, providing data about external changes in technology and customer needs. They are the ones to identify needs and solutions , passing these ideas into the organization for discussion.
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28. The learning Organization
6. Strong culture
The whole is more important than the part, and boundaries among parts are minimized.
The culture is egalitarian.
The culture values improvement and adaptation.
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