Organizational Theories & Management Styles
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Organizational Theories & Management Styles
- 1. KATES DORLYN GRAJALES MPA Student
- 2. MANAGEMENT – the function that coordinates the efforts of people to accomplish goals and objectives by using available resources efficiently and effectively ORGANIZATION – an organized body of people with a particular purpose, especially a business, society, association, etc. THEORIES – a set of interrelated propositions that organizes and explains a set of observed phenomenon
- 4. Classical Organization Theory Neoclassical Organization Theory Modern Structural Organization Theory
- 6. 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.
- 7. SCIENTIFIC MANAGEMENT APPROACH – based on an idea of systematization where attempts were made to enhance the efficiency of procedure to best effect via scientific analyses and experiments. ADMINISTRATIVE THEORY – based on several principles of management which is planning, organizing, training, commanding and coordinating function WEBER’S BUREAUCRATIC APPROACH – considers the organization as a part of broader society
- 8. STRENGTHS This theory has a narrow focus on improving production related economic goals (strength and weakness). Helped create division of labor, time and movement studies, and organized planning models (such as POSDCORB). Attempted to address, and further, organizational functions when few resources existed. WEAKNESSES This closed-system, rational theory is perhaps too narrowly focused on production and reduces the human component to simply fleshy machines. This theory helped invent the industrial revolution, which led to deterioration of individual craftsmanship; it promotes capital intensive economies.
- 10. The theory emphasizes individual or group behavior and human relations in determining productivity PRINCIPLES OF NEOCLASSICAL APPROACH ▪ Individual ▪ Work Group ▪ Participative Management
- 12. STRENGTHS It found “holes” in classical organization theory, attempted to revise it, and spurred almost all other schools of thought that followed. De-emphasized simplistic mechanistic organizational theories. Helped the future incorporation of professions into organization theory, such as sociology. WEAKNESSES “The neoclassicalists did not develop a body of theory that could adequately replace the classical school”. It modified it. “It attempted to blend assumptions of classical theory with concepts that were subsequently used by later organization theorists from all perspectives” It was an “anti-school” – it couldn’t stand on its own.
- 14. It is based on the concept that the organization is an adaptive system which has to adjust changes in its environment. Characteristics of modern approaches to the organization: • Systems viewpoint • Dynamic process of interaction • Multileveled and multidimensional • Multi motivated • Probabilistic
- 15. SYSTEMS APPROACH – considers the organization as a system composed of a set of interrelated and thus mutually dependent sub-system. SOCIO-TECHNICAL APPROACH – considers the organization as composed of social system, technical system and its environment. CONTINGENGY / SITUATIONAL APPROACH – recognizes that organizational systems are inter- related with their environment and different environments required different organizational relationships for effective working.
- 16. STRENGTHS Still very focused (in comparison to classical theory) on goals and achievement. Expanded the perspective of bureaucracy (mechanistic vs. organic). Acknowledges the existence of both formal and informal elements. Still a very rational model, but not as closed of a system as classical. WEAKNESSES Still a very rational theory. Does not completely address the potential of external influences. Relies on control rather than empowerment. Still considers structure the main tool for making improvements.
- 17. Human Resource Theory Organizational Economics Theory Power & Politics Organizational Theory Theories of Organizational Culture and Change Theories of Organization & Environments
- 18. • Levels of management • Functions of managers • Managerial skills • Management styles
- 19. Management involves the utilization of human and other resources (such as machinery) in a manner that best achieves the firm’s plans and objectives. According to a recent survey by Shareholder Surveys, shareholders rank good management and long-term vision as the two most important characteristics of a firm.
- 20. Top (high-level) management – managers in positions such as president, CEO, CFO and vice-president who make decisions regarding the firm’s long-run objectives. Middle management – managers who are often responsible for the firm’s short-term decisions. Supervisory (first-line) management – managers who are usually highly involved with the employees who engage in the day-to-day production process.
- 21. Top Management – Set new plan to expand production & increase sales. – Communicate those plans to all managers. Middle & Top Managers – Determine how many new employees to hire. – Determine how to charge lower prices to increase sales. – Determine how to increase advertising to increase sales. – Determine how to obtain funds to finance the expansion.
- 22. Supervisory Managers – Provide job assignments to the new employees who are hired. – Set time schedules for new employees who are hired.
- 23. Planning – the preparation of a firm for future business conditions Organizing – the organization of employees and other resources in a manner that is consistent with the firm’s goal. Leading – the process of providing employees with instructions on how they should complete their tasks. Controlling – the monitoring and evaluation of tasks.
- 24. Top Managers: make the strategic (long-term) plan Middle Managers: Organize the employees and other resources to produce Supervisors: Explain each employee’s tasks & how to perform the tasks Middle Management: Determine whether the production is efficient (based on monitoring the plant’s output and expenses each month) Top Management: Assess the expenses and sales from producing products every month. Determine whether the new strategic plan is successful.Communicate the plan to middle management and ask middle management to implement the plan. Communicate the organization to supervisors and ask them to implement the production process. Supervisors: Monitor employees to ensure their new assignments properly
- 25. Conceptual skills (analytic skills) – the ability to understand the relationships among the various tasks of a firm. Interpersonal skills (communication skills) – the skills necessary to communicate with customers and employees. Technical skills – skills used to perform specific day-to-day tasks Decision-making skills – skills for using information to determine how the firm’s resources should be allocated.
- 26. Democratic Style Autocratic Style Laissez-faire
- 27. DEMOCRATIC (PARTICIPATIVE) – the manager allows the employees to take part in decision-making: therefore everything is agreed by the majority. (empowerment) this style can be particularly useful when complex decisions need to be made that require a range of specialist skills; from the overall business' point of view, job satisfaction and quality of work will improve. the decision-making process is severely slowed down, and the need of a consensus may avoid taking the 'best' decision for the business.
- 28. AUTOCRATIC – an autocratic or authoritarian manager makes all the decisions, keeping the information and decision making among the senior management. the direction of the business will remain constant, and the decisions will be quick and similar, this in turn can project an image of a confident, well managed business. subordinates may become dependent upon the leaders and supervision may be needed this style can decrease motivation and increase staff turnover
- 29. LAISSEZ-FAIRE (FREE-REIN) – the leader delegates much authority to employees; the leader's role is peripheral and staff manage their own areas of the business. the style brings out the best in highly professional and creative groups of employees. the leader therefore evades the duties of management and uncoordinated delegation occurs this leads to a lack of staff focus and sense of direction, which in turn leads to much dissatisfaction, and a poor company image
- 30. Management controls or directs people/resources in a group according to principles or values that have already been established. Leadership is setting a new direction or vision for a group that they follow, ie: a leader is the spearhead for that new direction;
- 31. Thank You FOLKS ! ! !
Editor's Notes
- Deeper understanding of different organizational theories and management styles would enhance your communication strategies in dealing with your colleagues, managers and even clients to have a more efficient and productive workplace.
- There are several theories which explains the organization and its structure. Classical Organization Theory Time Line: Essentially introduced with the origins of commerce, largely shaped the industrial revolution, “dominated organization theory into the 1930s and remains highly influential today” Neoclassical Organization Theory Time Line: Approximately 1945 (end of WW II) through the 1950s. Modern Structural Organization Theory Time Line: Post WW II, second half of 20th century (differentiated from classical structure theories pre-WW II).
- SCIENTIFIC MANAGEMENT APPROACH - the approach to increased productivity is through mutual trust between management and workers. Taylor (1947) proposed four principles : Science, not rule-of-thumb Scientific selection of workers Management and labor cooperation rather than conflict Scientific training of workers WEBER DEMOCRATIC APPROACH – The organization is based on the principles of Structure Specialization Predictability and stability rationality Democracy This approach is considered rigid, impersonal, self-perpetuating and empire building ADMINISTRATIVE THEORY – it was profounded by Henry Fayol Division of work Authority and responsibility Discipline Unity of command Unity of direction Subordination of individual interest Remuneration of personnel Centralization Scalar chain Order Equity Stability of tenure of personnel Initiative Esprit de corps The concepts of line and staff
- STRENGTHS It utilizes systematic, scientific inquiry. WEAKNESSES It is primarily concerned with anatomy/structure rather than individual needs and potentials. It did not take large-scale changes in environments into much consideration. It is largely derived intellectually rather than empirically
- Chester Bernard – The Economic of Incentives “from the viewpoint of the organization requiring or seeking contributions from individuals, the problem of effective incentives may be either one of finding positive incentives or of reducing or eliminating negative incentives or burdens” o A great list of classes of incentives o Methods of persuasion
- STRENGTHS It led to further research and study relating to the humanness of organizational members, coordination needs among administrative units, the operation of internal-external relations, and the processes used in decision making.
- “Most problems in an organization result from structural flaws and can be solved by changing the structure
- SYSTEMS APPROACH -Thus, the organization consist of components, linking processes and goals. COMPONENTS Individual Formal and informal organization Patterns of behavior Role perception Physical environment LINKING PROCESSES Communication Balance Decision Analysis GOALS OF ORGANIZATION Growth Stability Interaction SOCIO-TECHNICAL APPROACH –these interact among themselves and it is necessary to balance them appropriately for effective functioning of the organization. CONTINGENGY / SITUATIONAL APPROACH
- STRENGTHS Stressed formal authority and responsibility. Expanded the understanding of specialization and the division of labor. More flexible than classical theory (such as organizational structure options: product vs. function). Synthesized much of the various schools of thought. Acknowledged, to some extent, the existence of external environments, especially technology.
- Organizational Economics Theory - Uses “concepts and tools from the field of economics to study the internal processes and structures of the firm” Power and Politics Organization Theory - The power and politics theories view authority as only one of the many available sources of organizational power, and power is aimed in all directions – not just down through the hierarchy” THEORIES OF ORGANIZATIONAL CULTURE & CHANGE - Organizational cultures that reflect unwanted values, such as hierarchy, rigidity, homogeneity, power based on authority and associations in closed networks, and reliance on rules, restrict flexibility and can be formidable barriers to effecting lasting change” Theories of Organization & Environments - The primary focus of research and theory building shifted from the internal characteristics of organizations to the external dynamics of organizational competition, interaction, and interdependency”
- -Managers have to perform many roles in an organization and how they handle various situations will depend on their styles of management. -A management style is an overall method of leadership used by a manager. Three main styles: – Autocratic – Democratic – Laissez-faire Various management styles can be employed dependent on the culture of the business, the nature of the task, the experience and personalities of the workforce and the personality and skills of the leaders. Managers should exercise a range of management styles and should deploy them as appropriate.