The document traces the evolution of organization theory from the late 19th century to present. Early theories focused on efficiency and treated organizations as closed systems. Contributors included Taylor's scientific management and Weber's bureaucracy. Later, human relations and behavioral approaches emphasized social aspects and informal relations. Contemporary approaches view organizations as open systems contingent on factors like technology, size, and environment. Theories are classified along two dimensions: rational/social and closed/open system perspectives. Current organization theory integrates multiple influences on organizational design and effectiveness.

1. The Evolution ofThe Evolution of
Organization TheoryOrganization Theory

2. Evolution Of Management
Thought
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000+
Systematic
management
Administrative
management
Quantitative
management
Systems
theory
Current and
future revolutions
Scientific
management
Human
relations
Organizational
behavior
Bureaucracy
Classical Approaches Contemporary Approaches
Contingency
theory

3. UPS
 Post service company.
 Use time-study.
 Drivers should do 120 stops per day.
 Specified delivery time.

4. HINTS
 The current state of OT is the result of an
evolutionary process.
 Theories and contributions have been
introduced, evaluated, refined, and
synthesized.

5. Contributors:
Adam Smith
 Division of labor would lead to significant
economic efficiencies.
 Industrial revolution: Machine power was rapidly
replacing human power, and building railroads
and transportation methods.
 Building factories requires a creation of
organization structure that facilitates efficiency.

6. Early Management Concepts And
Influences
 Industrial revolution
– minor improvements in management tactics produced
impressive increases in production quantity and quality
– economies of scale - reductions in the average cost of
a unit of production as the total volume produced
increases
– opportunities for mass production created by the
industrial revolution spawned intense and systematic
thought about management problems and issues
• efficiency
• production processes
• cost savings

7. Dimensions of OT
 It has been suggested that there are two
underlying dimensions in the evolution of
OT:
 First: organizations are systems.
 Second: ends of organization structure.

8. First: organizations are systems
 Prior 1960, organization are dominated by
close system where organizations are seen
as essentially autonomous and sealed off
from their environment.
 Beginning around 1960s, open system
perspective begun to prevail.

9. Second: ends of organization
structure.
 Two positions
 1- The rational perspective: the structure of
an organization is conceived as a vehicle to
effectively achieve specified objectives.
 2- The social perspective: structure is
primarily the result of the conflicting
forces by the organization’s constituents
who seeks power and control.

10. Four theoretical classifications of OT
 See table 2-1 page 31.

11. Rational
Closed Type 1
Social
Type 2
Type 3
Open
Type 4

12. Type 1
 Focus on efficiency in internal functions of
the organization.
 Economic motivates.

13. Type 1 Theories
 The classical school.
 Organizations as a closed systems to
achieve goals efficiency.

14. Type 1 Theories (cont.)
Fredrick Taylor
 His book “principles of scientific management.”
 He observed that workers output was only one-
third of what was possible.
 Finding the “one best way”
 His focus was on the lowest level of the
organization.
 He explicitly demonstrated that managers should
carefully assess the one best way for each job to be
done to maximize efficiency.

15. Type 1 Theories (cont.)
Henry Fayol
 His ideas were based on experience and
practice not based on science.
 He offered general principles applicable to
all managers.

16. Type 1 Theories (cont.)
Henry Fayol: 14 principles
See p. 36

17. Type 1 Theories (cont.)
Max Weber
 Ideal type.
 He argued that bureaucracy was the most
efficient means by which organizations can
achieve their ends.
 Division of labor, clear authority
hierarchy, formal selection procedures,
detailed rules and regulations, and
impersonal relationships.

18. Bureaucracy
 Bureaucratic structures can eliminate the
variability that results when managers in the
same organization have different skills,
experiences, and goals
 Allows large organizations to perform the
many routine activities necessary for their
survival
 People should be treated in unbiased manner
 Personalities
– Max Weber

19. Type 1 Theories (cont.)
Ralph Davis
 Rational planning perspective: structure is the
logical outcomes of the organization’s objectives.
 Means that structure is contingent upon the
organization’s objectives.
 Management planning determines the
organization’s objectives. These objectives, then,
in logical fashion, determines the development of
organization structure.

20. Type 1 Theories (cont.)
Fredrick Taylor
 Four principles
– develop a scientific approach for each element of
one’s work instead of rule-of-thumb.
– scientifically select, train, teach and develop each
worker
– cooperate with workers to ensure that jobs match
plans and principles to achieve work objectives.
– ensure appropriate division of labor by offering equal
division and responsibility between managers and
workers.

21. Type 2
 Theories operated under closed system
assumptions and emphasized the informal
relations and non-economic motives.

22. Type 2
Elton Mayo and Hawthorne Studies
 Illumination and productivity.
 Redesign job, change length of workday,
rest periods, and individual vs. group wage
plans.

23. Type 2
Chester Bernard and Cooperative
Systems
 The functions of the Executive.
 Tasks and people have to be maintained at
an equilibrium state.
 Managers should around the requirements
of the task to be done and the needs of the
people.

24. Type 2
Theory X and Y
– Theory X
• managers assume that workers are lazy,
irresponsible, and require constant supervision
– Theory Y
• managers assume employees want to work and
control themselves

25. Type 2
Warren Bennis and the Death of
Bureaucracy
 He claimed that bureaucracy’s central
decision making, impersonal submission to
authority, and narrow division of labor was
being placed by decentralized and
democratic structures organized around
flexible groups.

26. Type 3
 Emphasize rationality.
 Focus on size, technology, and
environmental uncertainty as a major
contingency variables.
 Proper alignment of structure to its
contingencies would facilitate the
achievement of the organization's goals.

27. Type 3
Herbert Simon
 The contingency theory.
 He argued that organization theory needed
to go beyond superficial and
oversimplified principles to a study of the
conditions under which competing
principles were applicable.

28. Type 3
Katz and Khan
 Environmental perspective.
 Open system.
 Organizations need to adapt to a changing
environment if they are to survive.
 Various types of environment.

29. Type 3
Technology and size
 Woodward and Perrow (1960s) argue that
technology determine the appropriate
structure.
 Aston University Group advocates
organize size as an important factor
influencing structure.

30. Type 4
 Social perspective in an open system
framework.
 The outcome of the political struggles
among coalitions within the organization
for control would create the most effective
structure.

31. Type 4
March and Simon
 They revised the rational-cooperative
systems view.
 They recognize the limits of a decision
maker’s rationality and acknowledge the
presence of conflicting goals.

32. Type 4
Pfeffer’s organizations as political
arenas
 OT encompasses power collations, inherent
conflict over goals, and organizational decisions
that favor the self-interest of those in power.
 He proposes that control in organizations
becomes an end rather then a means to rational
goals such as efficient production of out put.
 To understand how and why organizations are
designed, we need to assess the preferences and
interest of those who have power.