1862 Diagram of the Federal Government and American Union.
Jeffrey summarized in New Directions for Organization Theory, organizational theory studies provide "an interdisciplinary focus on Jeffrey Pfeffer, is an American business theorist and the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, and is considered one of today's most influential management thinkers
Weber's and Fayol's theories found broad application in the early and mid-1900s, in part because of the influence of Frederick W. Taylor (1856—1915). In a 1911 book entitled Principles of Scientific Management, Taylor outlined his theories and eventually implemented them on American factory floors. He is credited with helping to define the role of training, wage incentives, employee selection, and work standards in organizational performance.
Of considerable import during that period was the research done by of German sociologist Max Weber (1864—1920). Weber believed that bureaucracies, staffed by bureaucrats, represented the ideal organizational form. Weber based his model bureaucracy on legal and absolute authority, logic, and order. In Weber's idealized organizational structure, responsibilities for workers are clearly defined and behavior is tightly controlled by rules, policies, and procedures.
Researchers began to adopt a less mechanical view of organizations and to pay more attention to human influences in the 1930s. This development was motivated by several studies that shed light on the function of human fulfillment in organizations. The best known of these was probably the so-called Hawthorn Studies. These studies, conducted primarily under the direction of Harvard University researcher Elton Mayo, were conducted in the mid-1920s and 1930s at a Western Electric Company plant known as the Hawthorn Works. The company wanted to determine the degree to which working conditions affected output. Surprisingly, the studies failed to show any significant positive correlation between workplace conditions and productivity. In one study, for example, worker productivity escalated when lighting was increased, but it also increased when illumination was decreased. The results of the studies demonstrated that innate forces of human behavior may have a greater influence on organizations than do mechanistic incentive systems. The legacy of the Hawthorn studies and other organizational research efforts of that period was an emphasis on the importance of individual and group interaction, humanistic management skills, and social relationships in the workplace.
The focus on human influences in organizations was reflected most noticeably by the integration of Abraham Maslow's "hierarchy of human needs" into organization theory. Maslow's theories introduced two important implications into organization theory. The first was that people have different needs and therefore need to be motivated by different incentives to achieve organizational objectives. The second of Maslow's theories held that people's needs change over time, meaning that as the needs of people lower in the hierarchy are met, new needs arise.
Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the formal organization and concepts to increase management efficiency. Taylor presented scientific management concepts, Weber gave the bureaucratic approach, and Fayol developed the administrative theory of the organization. They all contributed significantly to the development of classical organization theory. Workers are encouraged through monetary incentives.
Note the difference between Taylor's 'scientific management' - which focuses on work - and the neoclassical approach - which focuses on workers.
Characteristics · Systems viewpoint· Dynamic process of interaction· Multi-levelled and multidimensional· Multi-motivated· Probabilistic· Multidisciplinary· Descriptive· Multivariable· Adaptive
Traditional theories regarded organizations as closed systems that were autonomous and isolated from the outside world. In the 1960s, however, more holistic and humanistic ideologies emerged. Recognizing that traditional theory had failed to take into account many environmental influences that impacted the efficiency of organizations, most theorists and researchers embraced an open-systems view of organizations. reflected the newfound belief that all organizations are unique—in part because of the unique environment in which they operate—and that they should be structured to accommodate unique problems and opportunities. For example, research during the 1960s indicated that traditional bureaucratic organizations generally failed to succeed in environments where technologies or markets were rapidly changing. They also failed to realize the importance of regional cultural influences in motivating workers
McGregor offered his renowned Theory X and Theory Y to explain the differences. Theory X encompassed the old view of workers, which held that employees preferred to be directed, wanted to avoid responsibility, and cherished financial security above all else. McGregor believed that organizations that embraced Theory Y were generally more productive. This theory held that humans can learn to accept and seek responsibility; most people possess a high degree of imaginative and problem-solving ability; employees are capable of effective self-direction; and that self-actualization is among the most important rewards that organizations can provide their workers.
Theories on organization management
Theories on Organization
Irshad Ali Shekh
Surendra K. Bohara
MICD 3rd Batch, 3rd Semester
Date: 7th February 2016
Introduction to: Organization, theory of organization management
History/background on Theories of organization management
Dealing with why of theories and detail on:
System based theories
A social group with collective goal.
Greek word organon (ergon) - means
`organ` - and it means a compartment
for a particular job.
“Organization is defined as the structure or
network of relationship among individuals
and positions in a work setting and the
process by which the structure is created,
maintained and used.”
- Dalton E. McFarland
The process of organizing, planning,
leading and controlling resources within
an entity with the overall aim of achieving
The organizational management of a
business needs to be able to make
decisions and resolve issues in order to be
both effective and beneficial.
Organizarional theory is a loosely knit family of many approaches to organizational analysis. Its theme, questions, methods and
explanatory modes are extremely diverse.
Organizational theory is not a single theory. Dwight Waldo noted in a review of field work in 1978 : "Organization theory is
characterized by vogues, heterogeneity, claims and counterclaims“
Develop and explain the concept of how organization is effectively:
a/c to Jeffrey Pfeffer:
a) The effect of social organizations on the behavior and attitudes of individuals within them,
b) The effects of individual characteristics and action on organization,
c) The performance, success, and survival of organizations,
d) The mutual effects of environments, including resource and task, political, and cultural environments on organizations and vice
e) Concerns with both the epistemology and methodology that undergird research on each of these topics."
Outcome of theories on organization
Organizational theory is not a single theory. Dwight Waldo noted in a review of field work in 1978 :
"Organization theory is characterized by vogues, heterogeneity, claims and counterclaims"
Roughly there are six types of structure:
Background on theories of Organization
Changing the meaning with changing societies: Asiatic, Agricultural, feudalistic, imperialistic, industrialization.
Modern organization theory is rooted in concepts developed during the beginnings of the Industrial Revolution in
the late 1800s and early 1900s.
Frederick W. Taylor (1856-1915)- book “Principles of Scientific Management”-implemented on American factory
Max Weber (1864-1920) presented bureaucratic model to the organization management
In the early 1900s was Henri Fayol identified: strategic planning, staff recruitment, employee motivation, and
employee guidance (via policies and procedures) as important management functions in creating and nourishing a
Hawthorn studies (Elton Mayo, 1930s) focused on human influence/factor (Maslow's need hierarchy) of
organization management emphasing on:
the importance of individual and group interaction,
humanistic management skills, and
social relationships in the workplace.
Douglas McGregor (mid 1900s)-Theory of X and Y
Open System theory (1960s)
Theory Z (1980s-90s): a blending of American and Japanese management practices
What are organizational theories then?
• Scientific Management
• Weber's Bureaucratic
• Administrative theory
• Humanistic model
• Systems approach
• Contingency or
Taylor's principles of scientific management
It treats worker as no better than a machine and lays more emphasis on the
formal organization structure.
Science, not rule-of-thumb;
Scientific selection of the worker
Management and labour cooperation rather than conflict
Scientific training of workers
Weber's bureaucratic approach (1947)
Structure: hierarchy based positions
Specialization: chain of command and unity of
Predictability and stability: formal rules and
Rationality: on recruitment and selection
Democracy: on decision making and responsibility
Span of control
Henry Fayol's principles of management: Administrative theory
Fayol, Gulick, and Urwick put forward the principles of administration based on the primacy of the
organization in terms of importance.
Neo-classical or Humanistic Theory:
Less formal, less control.
More participation in decision making with decision authority at the point of service.
Results in a flat structure developed along horizontal lines with fewer levels of management.
Communication is enhanced, but managers can be overburdened.
Human Relations Approach theory was propounded by Elton Mayo, Kurt Lewin.
This theory looks upon the workers as a whole man, with his feelings, motives, aspirations and the like.
The theory emphasizes on treating he worker as a human being, who is also a member of a team.
According to this theory non-economic rewards play a vital role in motivation.
Principles of the neoclassical approach
Based on Hawthorne experiment, productivity can be increased
through social and human relations at:
Bernard (1938) gave the first modern and comprehensive view of management
Von Bertalanffy (1951) made a significant contribution by suggesting a component of general systems theory
which is accepted as a basic premise of modern theory
Based on the concept of systematic arrangement for objectives (Hicks and Gullet, 1975).
Modern understanding of the theories includes:
1. The system approach
2. Socio-technological theory
3. Contingency or situational approach
Emphasized by Ludwig Von Bertalanffy and Kenneth Boulding. It has been applied to business by Seymour
Tilles, danielkatz, Robert Kahn and others.
It treats organization as a system, which is partly economic, partly technical, partly political and partly
Productivity is viewed as a function of the interplay among people, structure, and the environment.
The organization is a complex social and technical open system that requires human, financial, and
Open System Theory (1960s)
The term "open systems“= open for change to the externalities.
Management By Objective (MBO)
A process whereby the superior and subordinate managers
of an organization jointly identify its common goals, define
each individuals major areas of responsibility in terms of
the results expected of him and use these measures as
guides for operating the unit and assessing the
contributions of each of its members.
- (George S. Odiorne, management by objective, 1966)
Its exponents are Chris Argyris, Rensis Likert, Douglas McGregor.
It focusses the self actualization, self directing and self controlling tendencies of individuals.
One of the theories of Organizational Humanism is by Douglas McGregor Theory Y.
The theory is based on Maslow’s Theory of Need Hierarchy.
According to this theory man exercises self direction and self control in which he is committed, and is also
associated with their achievement and reward on it.
The task of management therefore is to create opportunities, realizing potential, removing obstacle,
encouraging growth and provide guidance.
Theory of X and Y
Douglas McGregor (1950s)
Nature of work
The organization’s structure must be matched to its environment
to enhance performance.
The factors that the manager should take into account in
the external environment,
the technology used, and
the staff of the organization.
Chaos (disorder) Theory
Based upon the belief in the uncertainty and unpredictability of the environment, chaos theory
asserts that organizations are living, self-organizing systems that are complex and self-adaptive.
The system moves between order and chaos and is only stable temporarily.
Social Cognitive Theory of Organizational
Management Robert Wood and Albert
Is triadic reciprocal causation of psychological functioning so as for organization