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Classical Organizational Theory


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FDM 201 PPDM Week 3 Summer 2013

Published in: Education, Business, Technology

Classical Organizational Theory

  1. 1. Prof. Josefina B. Bitonio, DPAFDM 201 Principles and Processes ofDevelopment ManagementClassicalOrganizationTheories
  2. 2. Major Contributors to theClassical OrganizationalTheory:Scientific Management: Frederick TaylorAdministrative Management: Henri Fayol Luther Halsey Gulick Max Weber
  3. 3. • dubbed as the “Father of ScientificManagement,” is best known for his“one best way approach” inaccomplishing task. Classicalorganization theory evolved fromthis notion.Frederick TaylorScientific management – focusing on themanagement of work and workers
  4. 4. Taylor, Generally considered the father ofscientific management pioneered thedevelopment OF TIME AND MOTION STUDIES.He wrote and published the result of his studiesin 1911 on the PRINCIPLES OF SCIENTIFICMANAGEMENT.
  5. 5. Ingenuity and Accomplishments• Creates systems to gain maximumefficiency from workers and machines inthe factory.• Focuses on time and motion studies tolearn how to complete a task in the leastamount of time.• Becomes consulting engineer for manyother companies
  6. 6. Revisiting Time and Motion StudiesThe time studies performed by Taylor, which were laterclassified as time and motion studies, were characterized bytiming a worker’s series of motions and determining theoptimal way in which to perform their particular job. Thegoals of the study are as relevant today as they were backthen - to increase the efficiency of a business process.Time and motion studies have beensuccessful in various implementationsenabling companies to move forward inproviding logical frameworks forimproving and leaning their operations.
  7. 7. “One best Way”Taylors scientific management consisted of fourprinciples:1. Replace rule-of-thumb work methods with methodsbased on a scientific study of the tasks.2. Scientifically select, train, and develop each employeerather than passively leaving them to train themselves.3. Provide "Detailed instruction and supervision of eachworker in the performance of that workers discrete task"(Montgomery 1997: 250).4. Divide work nearly equally between managers andworkers, so that the managers apply scientificmanagement principles to planning the work and theworkers actually perform the tasks.
  8. 8. Henri Fayol• Engineer and French industrialist• In France works as a managing director in coal-mining organization• Recognizes to the management principles ratherthan personal traits• While others shared this belief, Fayol was the first toidentify management as a continuous process ofevaluation.
  9. 9. Fayol’s 5 Management FunctionsFundamental roles performed by all managers: Planning Organizing Commanding Coordinating ControllingAdditionally Fayol recognizes fourteen principlesthat should guide the management oforganizations.
  10. 10. Fayol’s 14 Principles:1. Division of Work —improves efficiency through areduction of waste, increased output, andsimplification of job training2. Authority and Responsibility—authority: the rightto give orders and the power to extract obedience– responsibility: the obligation to carry outassigned duties3. Discipline—respect for the rules that govern theorganization
  11. 11. 4. Unity of Command—an employee should receiveorders from one superior only5. Unity of Direction—grouping of similar activities thatare directed to a single goal under one manager6. Subordination of Individual Interests to the GeneralInterest—interests of individuals and groups shouldnot take precedence over the interests of theorganization as a whole.7. Remuneration of Personnel—payment should be fairand satisfactory for employees and the organization8. Centralization—managers retain final responsibility –subordinates maintain enough responsibility toaccomplish their tasks
  12. 12. 9. Scalar Chain (Line of Authority)—the chain ofcommand from the ultimate authority to the lowest10. Order—people and supplies should be in the rightplace at the right time11. Equity—managers should treat employees fairlyand equally12. Stability of Tenure of Personnel—managerialpractices that encourage long-term commitmentfrom employees create a stable workforce andtherefore a successful organization13. Initiative—employees should be encouraged todevelop and carry out improvement plans14. Esprit de Corps—managers should foster andmaintain teamwork, team spirit, and a sense of unityamong employees
  13. 13. Luther Halsey Gulick(1892-1992)• A specialist in municipal finance andadministration• Gulick works with the Institute of PublicAdministration, professor of municipalscience and administration at Columbia,and serves on Franklin D. Roosevelt’sCommittee of Government Administration• Expands Fayol’s five managementfunctions into seven functions:
  14. 14. 1. Planning - developing an outline of thethings that must be accomplished and themethods for accomplishing them2. Organizing - establishes the formalstructure of authority through which worksubdivisions are arranged, defined, andcoordinated to implement the plan3. Staffing - selecting, training, and developingthe staff and maintaining favorable workingconditions4. Directing - the continuous task of makingdecisions, communicating andimplementing decisions, and evaluatingsubordinates properly
  15. 15. 5. Coordinating - all activities andefforts needed to bind together theorganization in order to achieve acommon goal6. Reporting - verifies progress throughrecords, research, and inspection;ensures that things happenaccording to plan; takes anycorrective action when necessary;and keeps those to whom the chiefexecutive is responsible informed7. Budgeting - all activities thataccompany budgeting, includingfiscal planning, accounting, andcontrol
  16. 16. Max Weber(1864-1920)• German sociologist• Weber first describes the concept ofbureaucracy – an ideal form oforganizational structure• He defines bureaucratic administrationas the exercise of control on the basis ofknowledge• Weber states, “Power is principallyexemplified within organizations by theprocess of control”
  17. 17. Weber uses and defines the termsauthority and power as:• Power: any relationship within whichone person could impose his will,regardless of any resistance from theother.• Authority: existed when there was abelief in the legitimacy of that power.
  18. 18. Weber classifies organizationsaccording to the legitimacy of theirpower and uses three basicclassifications:Charismatic Authority: based on the sacredor outstanding characteristic of theindividual.Traditional Authority: essentially a respectfor customs.Rational Legal Authority: based on a code orset of rules.
  19. 19. Weber recognizes that rational legalauthority is used in the most efficientform of organization because:• A legal code can be established which can claimobedience from members of the organization• The law is a system of abstract rules which areapplied to particular cases; and administration looksafter the interests of the organization within thelimits of that law.
  20. 20. • The manager or the authority additionallyfollows the impersonal order• Membership is key to law obedience• Obedience is derived not from the personadministering the law, but rather to theimpersonal order that installed the person’sauthority
  21. 21. Weber outlined his ideal bureaucracyas defined by the following parameters:• A continuous system of authorized jobs maintainedby regulations• Specialization: encompasses a defined “sphere ofcompetence,” based on its divisions of labor• A stated chain of command of offices: a consistentorganization of supervision based on distinctivelevels of authority
  22. 22. • Rules: an all encompassing system ofdirectives which govern behavior: rules mayrequire training to comprehend and manage• Impersonality: no partiality, either for oragainst, clients, workers, or administrators• Free selection of appointed officials: equalopportunity based on education andprofessional qualification
  23. 23. • Full-time paid officials: only or majoremployment; paid on the basis of position• Career officials: promotion based onseniority and merit; designated bysupervisors• Private/Public split: separates business andprivate life• The finances and interests of the twoshould be kept firmly apart: the resourcesof the organization are quite distinct fromthose of the members as privateindividuals.
  24. 24. (a) A tendency to a leveling of social classesby allowing a wide range of recruitswith technical competence to be takenby any organization(b) Elite status because of the time requiredto achieve the necessary technicaltraining(c) Greater degree of social equality due tothe dominance of the spirit ofimpersonality or objectivity
  25. 25. Simon(1946) in his book, “AdministrativeBehavior,” created a distinction betweentheoretical and practical science. Heintroduced more common principles in theliterature of administration administrativeefficiency and specialization when he wrotethe article, "The Proverbs ofAdministration.” (Simon 1946 as cited inShafffritz and Hyde 1997; Stillman 1991)
  26. 26. Proverbs are useful but are not without defects. Simon works toexpose these defects as well as offer some suggestions as to howthe existing dilemma can be solved.Some Accepted Administrative Principles:1. Administrative efficiency is increased by a specialization of thetask among the group.2. Administrative efficiency is increased by arranging the members ofthe group in a determinate hierarchy of authority.3. Administrative efficiency is increased by limiting the span of controlat any point in the hierarchy to a small number.4.Administrative efficiency is increased by grouping the workers, forpurposes of control, according to (a) purpose, (b) process, (c)clientele, or (d) place.Proverbs of AdministrationHebert A. Simon
  27. 27. None of the four principles survive criticismvery well. Administrative description sufferscurrently from superficiality, oversimplification,lack of realism. It is too concerned withallocation of authority and not with modes ofinfluence or behavior. Until administrativedescription reaches a level of sophistication,there is little reason to hope that a rapidprogress will be made toward the identificationand verification of valid administrativeprinciples.
  28. 28. • in 1945, Appleby, led a postwar attackon the concept of politics-administration dichotomy by drafting aconvincing case that “publicadministration was not somethingapart from politics” but rather at the“center of political life.” (Stillman 1991:123)
  29. 29. • In 1948, Dwight Waldo tried to establish thedirection and thrust of PublicAdministration as a field of study in hisbook, “The Administrative State,” which hitthe “gospel of efficiency” that dominatedthe administrative thinking prior to WordWar II. That same year, Sayre attackedpublic personnel administration as “thetriumph over purpose.” (Shafritz and Hyde1997: 74)
  30. 30. Revisiting Waldos Administrative State brings together a groupof distinguished authors who critically explore publicadministrations big ideas and issues and question whethercontemporary efforts to "reinvent government," promoteprivatization, and develop new public managementapproaches constitute a coherent political theory capable ofmeeting the complex challenges of governing in ademocracy.Probing the material and ideological background of modernpublic administration, problems of political philosophy, andfinally particular challenges inherent in contemporaryadministrative reform. It concludes with a look ahead to"wicked" policy problems -- such as terrorism, global warming,and ecological threats -- whose scope is so global andcomplex that they will defy any existing administrativestructures and values“gospel of efficiency”
  31. 31. Waldo warned that public administrativeefficiency must be backed by a framework ofconsciously held democratic values. Callingfor a return to conscious consideration ofdemocratic accountability, fairness, justice,and transparency in government“gospel of efficiency”
  32. 32. In 1949, Selznick introduced the so-called“cooptative mechanism” where hedefined “cooptation” as “the process ofabsorbing new elements into theleadership or policy determiningstructure of an organization as a means ofaverting threats to its stability orexistence.” (Shafritz and Hyde 1997: 147)
  33. 33. Since administration is concerned will allpatterns of cooperative behavior, it isobvious that any persons engaged in anactivity is in COOPERATION with the otherpersons who is engaged in administrationEveryone has cooperated with othersthroughout his life and he has some basicfamiliarity with administration and some ofits problems.(Simon, 1991)
  34. 34. A contemporary of Goodnow was WilliamWilloughby (1918). Willoughby stressed the role ofthe trilogy covering all three branches ofgovernment but he was more known for hisbudgetary reforms. He discussed the movementsfor budgetary reforms in the US in view of thebudget as an instrument for democracy, as aninstrument for correlating legislative and executiveaction, and as an instrument for securingadministrative efficiency and economy.
  35. 35. Mary Parker Follet (1926) also made somesignificant contribution to the discourse of PublicAdministration as one of the proponents ofparticipatory management and the “law ofsituation” which can be attributed to theconcept of contingency management. Sheillustrated the advantages of participatorymanagement in her article, “The Giving ofOrders. “
  36. 36. In the 1920s and early 1930s, Elton Mayoconducted the Hawthorne experimentson the theory of individuals within anorganization which propelled the humanrelations school of managementthought.
  37. 37. Hawthorne ExperimentsThe Human Relations Movement began withthe Hawthorne Experiments. They were conductedat Western Electrical Works in USA, b/w 1924-1932Part I - Illumination Experiments (1924-27)These experiments were performed to find out the effect ofdifferent levels of illumination (lighting) on productivity oflabor. The brightness of the light was increased anddecreased to find out the effect on the productivity of thetest group. Surprisingly, the productivity increased evenwhen the level of illumination was decreased. It wasconcluded that factors other than light were also important
  38. 38. Part II - Relay Assembly Test Room Study(1927-1929)Under these test two small groups of six femaletelephone relay assemblers were selected. Each group waskept in separate rooms. From time to time, changes weremade in working hours, rest periods, lunch breaks, etc. Theywere allowed to choose their own rest periods and to givesuggestions. Output increased in both the control rooms. Itwas concluded that social relationship among workers,participation in decision –making etc. had a greater effect onproductivity than working conditions.
  39. 39. Part III - Mass Interviewing Programme (1928-1930)21,000 employees were interviewed over a period of threeyears to find out reasons for increased productivity. It wasconcluded that productivity can be increased if workers areallowed to talk freely about matters that are important tothem.Part IV - Bank Wiring Observation Room Experiment(1932)A group of 14 male workers in the bank wiring room wereplaced under observation for six months. A workers paydepended on the performance of the group as a whole. Theresearchers thought that the efficient workers would putpressure on the less efficient workers to complete the work.However, it was found that the group established its ownstandards of output, and social pressure
  40. 40. • The social and psychological factors areresponsible for workers productivity and jobsatisfaction. Only good physical workingconditions are not enough to increaseproductivity.•The informal relations among workers influencethe workers behavior and performance morethan the formal relations in the organization.•Employees will perform better if they are allowedto participate in decision-making affecting theirinterests.The conclusions derived fromthe Hawthorne Studies were as follows :-
  41. 41. •Employees will also work more efficiently,when they believe that the management isinterested in their welfare.•When employees are treated with respectand dignity, their performance will improve.•Financial incentives alone cannot increasethe performance. Social and Psychologicalneeds must also be satisfied in order toincrease productivity.
  42. 42. Chester Barnard (1938) presented a morecomprehensive theory of organizationalbehavior when he wrote the functions ofthe executive. He argued that for theexecutive to become more effective, heshould maintain an equilibrium betweenthe needs of the employees and theorganization.
  43. 43. His concepts were later explored anddeveloped into more comprehensivetheories and principles as advocated byother researches in organizationalbehavior and management, such as,Herzberg’s “motivation hygiene theory,”Mc Gregor’s “Theory X and Y,” 11 Argyris’“personality versus organization andLikert’s Systems 1 to 4, among others.(Shafritz and Hyde 1997)
  44. 44. Maslow (1943), on the other hand,focused on the hierarchical needs ofthe individual. His “theory of humanmotivation,” states that the humanbeing has five sets of needs:physiological, safety, love or affiliation,esteem and ultimately, and self-actualization.
  45. 45. Public Administration is often characterizedas a fragmented field – one that is pulledin competing directions by differentintellectual and disciplinary perspective aswell as by the concerns of practice andtheory, Nevertheless, it does have acommon core of knowledge and coherentintellectual
  46. 46. Common Criticisms of ClassicalOrganizational TheoryClassical principles of formal organization may leadto a work environment in which:• Employees have minimal power over their jobsand working conditions• Subordination, passivity and dependence areexpected• work to a short term perspective• Employees are lead to mediocrity• Working conditions produce to psychologicalfailure as a result of the belief that they are lowerclass employees performing menial tasks
  47. 47. Alex Brillantes, Jr. and Maricel Fernandez Is there aPhilippine Public Administration or Better Still, for whom isPublic Administration? UP NCPAG. June, 2008Reference:Vincent Myers and Nina Presuto. ClassicalOrganizational