The document discusses various organizational theories that have developed over time, from classical to modern theories. It provides details on key aspects of each approach, including: - Classical theories focused on efficiency and control, exemplified by scientific management, bureaucracy, and administrative principles. - Neoclassical theories emphasized the human element and informal organization, informed by Hawthorne studies. This led to recognition of social and psychological factors. - Modern theories take an interdisciplinary approach and view the organization as an open system interacting with its environment. Approaches include systems theory, contingency theory, and socio-technical systems.

1. Josefina B. Bitonio, DPA
Resource Person
Effective Organization and
Management with Focus on Human
Resources and Development - Part I

2. Organization are defined differently by
different authors. There are, however, certain
essential elements that can be discerned
from them. In other words, organizations
consist of people who, more or less, share
common objectives or purpose. The
behavior of the organization is directed
towards the attainment of these objectives

3. It is an association of
several to many people
who are attempting to fulfill;
the common goals

4. The members who compromise the organization work
jointly in groups and cooperate together in interdependent
relationships. This suggests that organizations structure and
integrate their activities. Furthermore, organizations use
knowledge and techniques to accomplish their goals.

5. Organizations and Management focuses on
the study of two things: how individuals and
groups interact within organizations, and how
firms interact with one another and with
consumers, employees, communities, and
institutions.
https://som.yale.edu/programs/phd/overview/organizations-and-management

6. The Nature of Organization and
Management is twin terms that exist
side by side with each other, each
one needs and supports the other.
Organizations will be motionless
and useless if there is no
management that will steer it;
management will be hollow and
meaningless if there’s no
organization to manage.
https://www.slideshare.net/jobitonio/o-m-27141569

7. The Nature of Organization and
Management. In the real world of
administration, organization and
management are essential elements through
which human actions and objectives are
carried out and accomplished. In a manner
of speaking, organization and management
become a means to an end.

9. Historical
Perspective

10. Walt Rostow took a
historical approach in
suggesting
that developed
countries have tended
to pass through 5
stages to reach their
current degree of
economic
development.
Rostow's Five
Stages of
Economic
Growth Model

11. Take off
Great Britain 1783-1802
Russia 1890-1914
USA 1843-1860
Germany 1850-1873
Canada 1896-1914
China 1952
India 1952

12. DRIVE TO MATURITY
Great Britain 1850
Russia 1950
USA 1900
Germany 1910
Canada 1950
The modern industrial sector attracted workers from the rural areas

13. Industry 1.0,
and 2.0 are the
eras where
organizational
studies are
dominated by a
view of the
organization as
machines
Goals:
efficiency,
productivity
and control
predominant economic or social values of the time

14. Emerging Issues:
Large
groups
working
together
People
working
alongside
machinery
Increasing
pace of
industry
Saw a
noticeable
lack of
management
theory of
large
complex
enterprises

15. How are we going to organize all of
this?
How are we going to maximize
productivity?
How are we going to manage all of
these people?

16. Assumptions
Proponents of earlier
approaches made quite a
few assumptions that
were grounded on the
predominant economic or
social values of the time
and the perceived needs
of management of labor

17. The theory consists of principles that describe
relationships observed in association with phenomenon. The
primary role of theory is to provide a description as well
as explanation of the phenomenon. This means that
organization theory can help us in understanding people
within the organization (us) ; what is organizations, how
organization behaves in a given environment and how
they may behave in a different set of circumstances
Organizational Theories

18. Organizational Theories
1. Classical Organization Theory
• Scientific Management Approach
• Weber‟s Bureaucratic Approach
• Administrative Theory
2. Neo Classical Theory
3. Modern Organizational Theory
How did current
management
theories develop?

19. The Classical Management Theory is thought to have
originated around the year 1900 and dominated management
thinking into the 1920s, focusing on the efficiency of the work
process. It has three schools of thinking:
• Scientific Management
which looks at „the
best way‟ to do a job
Scientific
Management
• , which focuses on
rules and procedures,
hierarchy and clear
division of labor
Bureaucratic
management • which emphasizes the
flow of information
within the organization
Administrative
management,

20. Classical Organization Theory
Early 1900s to 1930
Merging of three fields of Scientific Management
Frederick W. Taylor
Max Weber
Henri Fayol
1864-1920
1841-1921 1856 – 1915

21. From human manual craft
work to the application of
mechanization to factory, the
advancement of technology
and its’ application to
manufacturing industry in late
eighteen century and early
ninety century made this
theory became possible for the
purpose of economic efficiency
and labor productivity.
Scientific Management Theory
Though a systematic study of labor
flow, including time and motion studies,
workers were rewarded or punished upon
the conditions of reduction or elimination of
waste, task standardization and best
practice of labor procedures. Application of
scientific management yielded significant
improvements in productivity. Scientific
management worked well for organizations
with assembly line setups and other
reutilized jobs. From 1901 to 1915 the
scientific management was introduced to at
least 181 American factories.

22. Max Weber's concept of the iron cage
capitalist
production
technological
and economic
relationships
Weber considered the iron cage a massive
hindrance to freedom. The Protestant Ethic and the
Spirit of Capitalism he researched and theorized the
interplay between the cultural realm of values and
beliefs, and the economic system of society.
Max Weber expressed the importance of
values in the development of public administration
theory. However, theory cannot simply be derived
from empirical observation of facts, it must be
constructed using value judgments that direct our
empirical observations and then guide out
interpretation of those observations. Values are
essential for the construction of public administration
theories because it takes into account the
meaningful ethical principles and philosophies of a
culture which ensure appropriate theory practice.
Public Administration theories are put into practice
or considered through a few distinct strategies
Max Weber is famous for his thesis that the
“Protestant ethic” (the supposedly
Protestant values of hard work, thrift,
efficiency, and orderliness)

23. Administrative Management Theory
Henry Fayol (1841-1925)
Fayol provided 14 principles of
general management to guide
the managers who in his time
didn‟t use a scientific approach
of management. His theory is
based on how the management
should interact with the
employees. Fayol‟s theory
provided a broad and analytical
framework of the process of
administration which overcomes
the drawback of Taylor‟s
management theory.

24. Hierarchy
Standardized approach to work
Centralization of authority
Separation of personal and work life
Wanted to select the best employee
People paid fairly
it is more appropriate for stable and simple
organization
Commonalities & Overlap

25. Classical management theory was introduced in the late 19th century. It
became widespread in the first half of the 20th century, as organizations
tried to address issues of industrial management, including specialization,
efficiency, higher quality, cost reduction and management-worker
relationships.
Contributions:
1. Increased production, Decreased cost, Improvement in or Maintenance of Quality,
Speedy Production and Accurate Delivery and the Power and Stimulus of Knowledge
(Farquhar)
2. Made a significant contribution to the development of management theories
3. Administrative theory focused on the total organization and on way to make it
more efficient
4. Classical approach highlighted the universal character of management principles
(Berdayes V, 2002).
5. it often prescribed the universal procedures that are not appropriate in some
setting. Henry H. Farquhar, 1919 https://www.jstor.org/stable/pdf/1885947.pdf

26. Criticism
• Rigid and mechanistic. It follows an assembly
line approach where the social and self-
actualization needs of the employees are not
taken into consideration.
• Too formal
• Authoritarian -deliberately promote a „yes-
boss‟ culture
• Limit on individual discretion
• Does not satisfy the need of
belongingness and community
• Applicable to factories where typically
routine work happens

27. 1. Definitely very valuable today.
2. The classical management approaches are
still used today by many small-business
owners to build their companies and to
succeed. This has since led to the development
of further theories
3. The key underlying principles remain
unchanged. Management today, like it was
100 years ago, is still very much about
planning, organizing, controlling, influencing.
4. Public organizations were molded on the
classical organizational management
theoretical perspectives and have proven
remarkably stable in different circumstances
around the world.
Relevance
today

28. Neoclassical Theories 1920‟s –1940
• Human Relations School
• Most modern theories of Organization
Elton Mayo
1880 -1949
Chester Barnard
1886-1961
Herbert A. Simon
1916 - 2001
Theories of
Bounded
Rationality
and
Satisficing
Hawthorne
and
solidarity
among the
work
group
Studies
Solidarity
Theory of
Behavior in
formal
organization
that
centered in
cooperation;
sense of
purpose

29. The classical approach stressed the formal organization. It was mechanistic and
ignored major aspects of human nature. In contrast, the neoclassical approach introduced
an informal organization structure and emphasized the following principles:
The individual is not a mechanical tool but a distinct social being, with aspirations
beyond mere fulfilment of a few economic and security works. Individuals differ from
each other in pursuing these desires. Thus, an individual should be recognized as
interacting with social and economic factors.·
The work group highlighted the social facets of work groups or informal organizations
that operate within a formal organization. The concept of 'group' and its synergistic
benefits were considered important.
Participative management or decision making permits workers to participate in the
decision making process. This was a new form of management to ensure increases in
productivity.
Principles of the Neoclassical Approach

30. Informal Organization Informal organization is a spontaneous creation which is generated
automatically based on some common characteristics like caste, religion, region or some other
form of mental matching. The relationships among the informal network is not restricted by the
formal authority
Coffee
group
Newspaper
Group
Millennial
Core
Group

31. Contributions of Neo Classical Theory
• Organization exists to serve human needs
• People and organization need each other
• When the fit between individual and system is poor,
both suffer
• A good fit profits both the individual and organization
• Organizations can not exist independently and
isolated
• Opened up the door to an explosion of studies in
organization

32. Neoclassical theorists recognized the importance of individual or
group behavior and emphasized human relations. Based on the
Hawthorne experiments, the neoclassical approach emphasized
social or human relationships among the operators, researchers
and supervisors (Roethlisberger and Dickson, 1943). It was argued
that these considerations were more consequential in determining
productivity than mere changes in working conditions. Productivity
increases were achieved as a result of high morale, which was
influenced by the amount of individual, personal and intimate
attention workers received.
Contributions of Neo Classical Theory

33. Criticism
1. The assumptions on which this theory is based are sometimes not true. A
thinking that there is always a possibility of finding a solution acceptable to all
is not true. There are conflicting interests among various groups that are
structural in character and not merely psychological. This aspect has not been
discussed in the theory.
2. No particular organizational structure can be suitable for all the organizations.
Various organizational formats given by neo- classists are not applicable in all
situations.
3. Neo-classical theory is only a modification of classical organization theory. It
suffers from nearly same drawbacks from which classical theory suffered. It
lacks unified approach of organization. This theory has also been criticized on
the ground that it is nothing more than “a trifling body of empirical and
descriptive information as it was mainly based on Hawthorne Studies.”

34. Organizational theories are
useful in explaining many
aspects of human behavior
within the organization
Modern Organizational Theories

35. • Modern organization theory is
constructed on an interdisciplinary
basis, broadening the perspective
that can be developed concerning
organization behavior and the
management of large, complex,
organization.
• The integration of valuable
concepts of the classical models with
the social and behavioral sciences.
This theory posits that an
organization is a system that
changes with the change in its
environment, both internal and
external.

36. System Theory
In the context of modern social
science, a system theory, tend to be
based on the concept that the
organization is a system which has
to adapt to changes in its
environment
Open System
Closed System

37. Open systems
continuously interact with
their environment, there
is a constant need to
balancing pressures and
responses, demands and
resources and worker
incentives and
contributions
Open System
Closed System
which have no interaction with
their environment. Closed
systems have the advantage of
being efficient because there
are clear procedures that are
not affected by outside
influences. The best way to
understand closed systems is
to see how they are used in
organizations.

39. An interconnection between the sub-systems
The sub-systems of an organization are interconnected through various
processes as described below:
Communication – An effective mechanism which
links all the organizational sub-systems together. It
involves receiving messages from the external
environment and sharing this message within the
organization. It also works as a control and
coordination mechanism to link the decision
centers in the system
Decision-making – This is another important
process for linking various parts in an
organization. In fact, the decision to produce
depends on the interaction between individuals
and the demands of the organization. Hence, the
decision of an individual to participate in
production depends on the demands and rewards
of the organization.
Balance – Balance is an equilibrating mechanism
which allows the different parts of the system to
stay in a harmonious and structured relationship
with each other. It helps in ensuring integrity in the
face of a rapidly changing environment

41. System should be viewed as a
whole not as a collection of
separate pieces
A system is greater than the
sum of its parts
Those parts are
interdependent and interact
through mutual feedback
processes
Holism

42. Positive Feedback. Changes or grows the system
in desired ways that amplify and enhance the
system‟s current processes
Negative Feedback – seeks to correct or reduce
deviations in the system‟s processes to
reestablish a study course back in the decision of
the system‟s goals
Feedback

43. Theory X and Theory Y
Our
behavior

44. Without this active
intervention by
management, people
would be passive – even
resistant – to
organizational needs.
They must therefore be
persuaded, rewarded,
punished, - controlled -
their activities must be
directed.
Theory X

45. Theory X
beliefs
Controlling
practices
Poor Results
Employee
Resistance
Force Breeds
Counterforce's

46. Theory Y in Practice
Arrange things so
individuals can
achieve their own
goals and happily
accomplish the
organizational goal at
the same time

48. The socio-technical systems approach is based on the premise that
every organization consists of the people, the technical system and
the environment (Patmore, 1988). People (the social system) use
tools, techniques and knowledge (the technical system) to produce
goods or services valued by consumers or users (who are part of
the organization's external environment). Therefore, an equilibrium
among the social system, the technical system and the environment
is necessary to make the organization more effective
Socio - Technical Approach

49. The situational approach (Selznick, 1949; Burns and Stalker, 1961;
Woodward, 1965; Lawrence and Borsch, 1967) is based on the
belief that there cannot be universal guidelines which are suitable
for all situations. Organizational systems are inter-related with the
environment. The contingency approach (Hellriegel and Slocum,
1973) suggests that different environments require different
organizational relationships for optimum effectiveness, taking into
consideration various social, legal, political, technical and economic
factors.
The contingency or Situational Approach

50. Total Quality Management is a
management approach that originated in
the 1950s and has steadily become more
popular since the early 1980s. Total Quality
is a description of the culture, attitude and
organization of a company that strives to
provide customers with products and
services that satisfy their needs. The
culture requires quality in all aspects of the
company‟s operations, with processes
being done right the first time and defects
and waste eradicated from operations

52. In public administration, quality
management is communicated as an attitude
that stresses customer satisfaction, improves
internal processes and empowers employees to
make decisions

54. Josefina B. Bitonio, DPA
Resource Person
Effective Organization and
Management with Focus on
Human Resources and
Development - Part II

55. Let‟s
transform
the
organization
https://www.nap.edu/read/13062/chapter/18#320

56. https://www.nap.edu/read/13062/chapter/18#320
Organization theory is a wide-ranging,
multidisciplinary field that includes sociology,
psychology, political science, economics, and professional
school fields such as urban planning and management.
Although organization theorists tackle vastly
different questions using a multitude of methodologies
responding to issues:
(1) how internal organizational structures and features
affect organizational outcomes (particularly
efficiency and survival);
(2) how external factors influence what goes on inside an
organization; and
(3) how the interaction between internal and external
forces shapes an organization’s prospects for survival.
Insights and Limitations of
Organization Theory

57. The most serious limitation of
organization theory is its focus on firms.
As Steve Kelman (2007, p. 226) writes,
“Improving government performance is a
topic worthy of significant research
attention, yet dramatically insufficient
scholarly firepower is directed at it.” The
result is that organization theory pays
relatively little attention to political
incentives, institutions, and power, forces
that are crucial for understanding
adaptation challenges in government
agencies (Zegart, 2007).
Limitations

58. Yes
No
Challenges:
Adopting New Practices Is Difficult
This idea is more important than it
sounds. Critics frequently bemoan that
government is not run more like a business,
and recommend exporting private-sector
practices into public-sector bureaucracies
(Osborne and Gaebler, 1993; Osborne and
Plastrik, 1998). The data show, however,
that most businesses are not run like
businesses.

59. Organizational Structure
Matters More Than We Think
The second insight focuses on the relationship
between an organization’s structure and its ability
to learn. Cyert and March’s 1963 classic, A
Behavioral Theory of the Firm, first introduced the
idea that organizations were not fixed and rigid,
but adaptive learning systems. Four important
points:
(1) organizational learning involves acquiring,
processing, and integrating information important
to the functioning of the organization;
(2) organizational learning positively affects future
performance (Fiol and Lyles, 1985; Levitt and
March,
(3) organizations learn
in a host of directed
and spontaneous
ways; and
(4) organizational structure
can influence learning in
profound and often hidden
ways.

60. Social science research finds what i
insiders already know to be true:
employees become wedded to
organizational routines, thinking, norms,
ideas, and identities and these
attachments make change difficult
Resistance to innovation stems more from
the everyday aspects of organizational
life than from a few old-timers or old-
thinkers. Levitt and March argue that
organizational performance often falls
victim to “competency traps,” which are
routines that were once beneficial, but
have become obsolete over time (Levitt
and March, 1988; March, 1981).
competency traps

61. Avoiding competency traps requires
systemic and careful work to identify
and exploit “old knowledge” that still
works (March, 1991; Crossan et al.,
1999), “unlearn” routines that do not
(Hedberg, 1981), and explore new
approaches that might work better
(March, 1991; Levinthal and March,
1993).
It requires an explicit
management program to identify and
shed maladaptive practices, encourage
the search for new and better ones,
foster supportive cultures and habits,
and erode counterproductive ones.

62. Relevance
Management
theories are
products of their
environment.
Thus, the social,
political, economic
and technological
forces present in a
given time and
locale create
demand for a
given theory and
shape it.

65. The study of now organization’s
function how they affect and are
affected by the environment I which
they operate
Organizational
design and
Change
Organizational
Structure
Organizational
Culture
1
2
3

66. The study of now
organization’s function how
they affect and are affected
by the environment in which
they operate
Organizational Theory

67. The study of now organization’s
function how they affect and are
affected by the environment I which
they operate
Organizational Structure. The
formal system of tasks and
authority relationships that control
people, coordinate their action,
use resources to achieve
organizational goals
1
Authority

68. The study of now organization’s
function how they affect and are
affected by the environment I which
they operate
Organizational Culture. The set of
shared values and norms that controls
organizational members interactions
with each other and with suppliers,
customers and other people outside of
the organization
2
• Committed
• Transparent
• Accountable
• Honest
• With integrity
Smiling
Customer
satisfaction
interaction

69. The study of now organization’s
function how they affect and are
affected by the environment I which
they operate
Organizational design and Change.
The process by which managers
select and manage aspect of structure
and culture so that an organization
can control the activities to achieve
goals
3
efficiency
Goals

70. The study of now organization’s
function how they affect and are
affected by the environment I which
they operate
1
2
3
Organizational
Structure. The formal
system of tasks and
authority relationships
that control people,
coordinate their action,
use resources to achieve
organizational goals.
Organizational design and
Change. The process by
which managers select and
manage aspect of structure
and culture so that an
organization can control the
activities to achieve goals
Organizational Culture. The
set of shared values and
norms that controls
organizational members
interactions with each other
and with suppliers, customers
and other people outside of
the organization

71. All this is the long-
interest of
organizational
stability, which
permits continued
functioning by
leaders, workers
and customers
Stability

72. Great Leaders Transform
Organization