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UNIT-V
THEORIES OF ORGANIZATION
PRESENTED BY,
DR.ANJALATCHI MUTHUKUMARAN
VICE PRINCIPAL
ERA COLLEGE OG NURSING
ERA UNIVERSITY , LUCKNOW
THEORIES OF
ORGANIZATION
1)Classical
organization
theory
2)Neoclassical
theory
3)Modern
theories
4)Individual
processes
5) Behavior
Science
theory
a)Taylor‟s
scientific
management
approach
a)The systems
approach
a)Motivational
theory
Douglas
McGregor’s
theory (
theory X and
theory Y)
b)Weber‟s
bureaucratic
approach
b)Socio-
technical
approach
b) Role theory
c)Administrati
ve theory
c)The
contingency or
Situational
c)Personality
theory
HISTORY OF NEOCLASSICAL
THEORY
 Neo classical approach was first set out by alfred marshall in
his book principles of economics , publised in 1890s.
 George Elton mayo is considered as founder of neo classical
theory .
 The word Neo means “new”
 The word classical refers to work done by group of economics
in the back (18&19) century .
NEOCLASSICAL THEORIES
 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).
Cont…
 Productivity increases were achieved as a result of high
morale, which was influenced by the amount of individual,
personal and intimate attention workers received.
NEO – CLASSICAL APPROACH
 Human relation movement .
 behavioral system
A)HUMAN RELATION MOVEMENT
 Proposed by Elton Mayo. He mainly focused was on the
people working in an organization.
Human relation development contributed to:
 Employee-centric, democratic and participative style
of leadership is more efficient.
B)BEHAVIOURAL SYSTEM
 It can also be called as mature version of human
relation theory.
 This theory is how the managers should behave to
motivate the employees and encourage them to
perform at high levels and be committed to the
achievement of organizational goals.
ELEMENTS OF NEO-
CLASSICAL THEORIS
1) Individual
2) Work group
3) Participative management
4) Orientation
5) Motivation
6) Leadership
7) Employee dvelopment
Cont…….
Individual :- neo – classical theory recognized the individual
difference which were ignored by the classical theory .
 Every individual has emotions , feelings, attitudde , hopes ,
aspirations, and expectations.
Work group:- an individual in a group develops social wants.
 As he is a social being , he develops a desire to belong and to
be accepted by his work group.
cont,…
Participative management :-
 Neo- classical theory suggested workers participation in
management for improving their productivity
Orientation:- classical theory was job oriented while neo-
classical theory is employee oriented there
 There is a shift in management style from product
oriented approach to employee and group centered
approach.
Motivation :- the employee could be motivated by social
and psychological wants and not solely by economic
incentives.
Cont….
Employee Development :-
 As there is a close connection between moral and
production , neo – classical writers emphasized that
management that must take greater interest in
employee development workers satisfaction
Principles of the neoclassical approach
The classical approach stressed the formal organization.
In contrast, the neoclassical approach introduced an informal organization structure
and emphasized the following principles:
 The individual
 The work group
 Participative management
Note :the difference between Taylor's 'scientific management' - which focuses on
work - and the neoclassical approach - which focuses on workers.
Classical VS Neoclassical theory:
Points of distinction Classical approach Neoclassical approach
Focus Functions and economic
demand of workers
Emotion and human qualities of
workers
Structure Impersonal and mechanistic Social system
Application Autocratic management and
strict rules
Democratic process
Emphasize Discipline and rationality Personal security and social
demand
Work goal of worker Maximum remuneration and
reward
Attainment security and social
demand
Concept about men Economic being Social being
Content Scientific management,
administrative management,
and bureaucratic management
Hawthorne experiment, human
relation movement and
organizational behavior
Relation Formal Informal
Nature Mechanistic organistic
MODERN THEORIES
Modern theories
 Modern theories tend to be based on the concept that the
organization is a system which has to adapt to changes in its
environment.
 In modern theory, an organization is defined as a designed and
structured process in which individuals interact for objectives
(Hicks and Gullet, 1975).
characteristics of the modern
approaches to the organization are:
 A Systems Viewpoint,
 A Dynamic Process Of Interaction,
 Multilevelled And Multidimensional,
 Multimotivated,
 Probabilistic,
 Multidisciplinary,
 Descriptive,
 Multivariable, And
 Adaptive.
Classification of modern
theories
The Systems
Approach,
Socio-technical
Theory, And
A Contingency Or
Situational
Approach.
The systems approach
 The systems approach views organization as a system
composed of interconnected - and thus mutually dependent -
sub-systems.
 These sub-systems can have their own sub-sub-systems.
 A system can be perceived as composed of some components,
functions and processes (Albrecht, 1983).
Thus, the organization consists of the following three basic
elements (Bakke, 1959):
i. COMPONENTS
ii. LINKING PROCESSES
iii. GOALS OF ORGANIZATION
i. Components
 There are five basic, interdependent parts of the organizing
system, namely:
 the individual,
 the formal and informal organization,
 patterns of behaviour emerging from role demands of the
organization,
 role comprehension of the individual,
 And the physical environment in which individuals work
(ii) Linking processes
 The different components of an organization are required to operate in an
organized and correlated manner.
 The interaction between them is contingent upon the linking processes,
which consist of:
 Communication,
 Balance
 And Decision Making.
 Communication :Communication is a means for eliciting action,
exerting control and effecting coordination to link decision centres
in the system in a composite form.
 Balance : Balance is the equilibrium between different parts of the
system so that they keep a harmoniously structured relationship
with one another.
 Decision making
(iii) Goals of organization
 The goals of an organization may be growth, stability and
interaction.
 Interaction implies how best the members of an organization
can interact with one another to their mutual advantage.
Socio-technical approach
 It is not just job enlargement and enrichment which is
important, but also transforming technology into a meaningful
tool in the hands of the users.
 The socio-technical systems approach is based on the premise
that every organization consists of the people, the technical
system and the environment (Pasmore, 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.
The contingency or situational
approach
 The situational approach (Selznick, 1949; Burns and Stalker, 1961; Woodward,
1965; Lawrence and Lorsch, 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.
INDIVIDUAL PROCESSES
a) Motivational Theory
 Motivation drives behavior; it is the force behind an
individual‘s decision to commit or not commit to certain acts
or behaviors.
 An individual calculates an ― “E”(energy, enthusiasm, effort)
the product of need, and prediction for likelihood of achieving
the desired results.
 Management must carefully consider how to maintain or adjust
the psychological contract in order to keep the person a
productive member of the team.
b) Role Theory
 In an organization roles can help to clearly define boundaries
between individuals .
 Organizations need to acknowledge that its employees manage
many roles and that problems or conflicts can arise and create
tensions that can change the ability of the individual to reach
their goals.
 Organizations should be sure to support their team members in
meeting new roles by giving time for transition, or offering
training and support.
 When role conflict arises the organization can nurture
employee‘s ability to relieve tension by allowing time to
devote to caring for roles outside the office.
c) Personality Theory
 Personality is the unique and enduring traits, behaviors and
emotional characteristics in an individual.
 Personality can either aid or hinder meeting work goals
dependent on fit.
For e.g. Personality types are Type A vs. Type B
 Type A personalities are competitive, impatient, seekers of
efficiency and always seem to be in a hurry.
 Type B personalities are laid back and possess more patience
and emotional stability, but tend to be less competitive
 Organizations can play a role in developing their staff for
success.
 Workshops, seminars, even book clubs that focus on
developing EQ an strengthen organizational success.
 Allowing for a diverse set of experiences, with appropriate
support can maximize and expand the capabilities of each
employee
BEHAVIOR SCIENCE THEORY
Douglas McGregor
 Theory X :- Manager believes that their employee are basically
lazy, need constant supervision and direction are indifferent to
organizational needs
 Theory Y:- believes that their worker enjoy their work, are self
motivated and are willing to work hard to meet personal and
organizational goals.
0
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THEORIES OF ORGANIZATION.pptx

  • 1. UNIT-V THEORIES OF ORGANIZATION PRESENTED BY, DR.ANJALATCHI MUTHUKUMARAN VICE PRINCIPAL ERA COLLEGE OG NURSING ERA UNIVERSITY , LUCKNOW
  • 2. THEORIES OF ORGANIZATION 1)Classical organization theory 2)Neoclassical theory 3)Modern theories 4)Individual processes 5) Behavior Science theory a)Taylor‟s scientific management approach a)The systems approach a)Motivational theory Douglas McGregor’s theory ( theory X and theory Y) b)Weber‟s bureaucratic approach b)Socio- technical approach b) Role theory c)Administrati ve theory c)The contingency or Situational c)Personality theory
  • 3. HISTORY OF NEOCLASSICAL THEORY  Neo classical approach was first set out by alfred marshall in his book principles of economics , publised in 1890s.  George Elton mayo is considered as founder of neo classical theory .  The word Neo means “new”  The word classical refers to work done by group of economics in the back (18&19) century .
  • 4. NEOCLASSICAL THEORIES  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).
  • 5. Cont…  Productivity increases were achieved as a result of high morale, which was influenced by the amount of individual, personal and intimate attention workers received.
  • 6. NEO – CLASSICAL APPROACH  Human relation movement .  behavioral system A)HUMAN RELATION MOVEMENT  Proposed by Elton Mayo. He mainly focused was on the people working in an organization. Human relation development contributed to:  Employee-centric, democratic and participative style of leadership is more efficient.
  • 7. B)BEHAVIOURAL SYSTEM  It can also be called as mature version of human relation theory.  This theory is how the managers should behave to motivate the employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.
  • 8. ELEMENTS OF NEO- CLASSICAL THEORIS 1) Individual 2) Work group 3) Participative management 4) Orientation 5) Motivation 6) Leadership 7) Employee dvelopment
  • 9. Cont……. Individual :- neo – classical theory recognized the individual difference which were ignored by the classical theory .  Every individual has emotions , feelings, attitudde , hopes , aspirations, and expectations. Work group:- an individual in a group develops social wants.  As he is a social being , he develops a desire to belong and to be accepted by his work group.
  • 10. cont,… Participative management :-  Neo- classical theory suggested workers participation in management for improving their productivity Orientation:- classical theory was job oriented while neo- classical theory is employee oriented there  There is a shift in management style from product oriented approach to employee and group centered approach. Motivation :- the employee could be motivated by social and psychological wants and not solely by economic incentives.
  • 11. Cont…. Employee Development :-  As there is a close connection between moral and production , neo – classical writers emphasized that management that must take greater interest in employee development workers satisfaction
  • 12. Principles of the neoclassical approach The classical approach stressed the formal organization. In contrast, the neoclassical approach introduced an informal organization structure and emphasized the following principles:  The individual  The work group  Participative management Note :the difference between Taylor's 'scientific management' - which focuses on work - and the neoclassical approach - which focuses on workers.
  • 13. Classical VS Neoclassical theory: Points of distinction Classical approach Neoclassical approach Focus Functions and economic demand of workers Emotion and human qualities of workers Structure Impersonal and mechanistic Social system Application Autocratic management and strict rules Democratic process Emphasize Discipline and rationality Personal security and social demand Work goal of worker Maximum remuneration and reward Attainment security and social demand Concept about men Economic being Social being Content Scientific management, administrative management, and bureaucratic management Hawthorne experiment, human relation movement and organizational behavior Relation Formal Informal Nature Mechanistic organistic
  • 15. Modern theories  Modern theories tend to be based on the concept that the organization is a system which has to adapt to changes in its environment.  In modern theory, an organization is defined as a designed and structured process in which individuals interact for objectives (Hicks and Gullet, 1975).
  • 16. characteristics of the modern approaches to the organization are:  A Systems Viewpoint,  A Dynamic Process Of Interaction,  Multilevelled And Multidimensional,  Multimotivated,  Probabilistic,  Multidisciplinary,  Descriptive,  Multivariable, And  Adaptive.
  • 17. Classification of modern theories The Systems Approach, Socio-technical Theory, And A Contingency Or Situational Approach.
  • 18. The systems approach  The systems approach views organization as a system composed of interconnected - and thus mutually dependent - sub-systems.  These sub-systems can have their own sub-sub-systems.  A system can be perceived as composed of some components, functions and processes (Albrecht, 1983).
  • 19. Thus, the organization consists of the following three basic elements (Bakke, 1959): i. COMPONENTS ii. LINKING PROCESSES iii. GOALS OF ORGANIZATION
  • 20. i. Components  There are five basic, interdependent parts of the organizing system, namely:  the individual,  the formal and informal organization,  patterns of behaviour emerging from role demands of the organization,  role comprehension of the individual,  And the physical environment in which individuals work
  • 21. (ii) Linking processes  The different components of an organization are required to operate in an organized and correlated manner.  The interaction between them is contingent upon the linking processes, which consist of:  Communication,  Balance  And Decision Making.
  • 22.  Communication :Communication is a means for eliciting action, exerting control and effecting coordination to link decision centres in the system in a composite form.  Balance : Balance is the equilibrium between different parts of the system so that they keep a harmoniously structured relationship with one another.  Decision making
  • 23. (iii) Goals of organization  The goals of an organization may be growth, stability and interaction.  Interaction implies how best the members of an organization can interact with one another to their mutual advantage.
  • 24. Socio-technical approach  It is not just job enlargement and enrichment which is important, but also transforming technology into a meaningful tool in the hands of the users.  The socio-technical systems approach is based on the premise that every organization consists of the people, the technical system and the environment (Pasmore, 1988).
  • 25.  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.
  • 26. The contingency or situational approach  The situational approach (Selznick, 1949; Burns and Stalker, 1961; Woodward, 1965; Lawrence and Lorsch, 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.
  • 28. a) Motivational Theory  Motivation drives behavior; it is the force behind an individual‘s decision to commit or not commit to certain acts or behaviors.  An individual calculates an ― “E”(energy, enthusiasm, effort) the product of need, and prediction for likelihood of achieving the desired results.
  • 29.  Management must carefully consider how to maintain or adjust the psychological contract in order to keep the person a productive member of the team.
  • 30. b) Role Theory  In an organization roles can help to clearly define boundaries between individuals .  Organizations need to acknowledge that its employees manage many roles and that problems or conflicts can arise and create tensions that can change the ability of the individual to reach their goals.  Organizations should be sure to support their team members in meeting new roles by giving time for transition, or offering training and support.  When role conflict arises the organization can nurture employee‘s ability to relieve tension by allowing time to devote to caring for roles outside the office.
  • 31. c) Personality Theory  Personality is the unique and enduring traits, behaviors and emotional characteristics in an individual.  Personality can either aid or hinder meeting work goals dependent on fit. For e.g. Personality types are Type A vs. Type B  Type A personalities are competitive, impatient, seekers of efficiency and always seem to be in a hurry.  Type B personalities are laid back and possess more patience and emotional stability, but tend to be less competitive
  • 32.  Organizations can play a role in developing their staff for success.  Workshops, seminars, even book clubs that focus on developing EQ an strengthen organizational success.  Allowing for a diverse set of experiences, with appropriate support can maximize and expand the capabilities of each employee
  • 34. Douglas McGregor  Theory X :- Manager believes that their employee are basically lazy, need constant supervision and direction are indifferent to organizational needs  Theory Y:- believes that their worker enjoy their work, are self motivated and are willing to work hard to meet personal and organizational goals.
  • 35.
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  • 37. This Photo by Unknown Author is licensed under CC BY-SA-NC