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Facilitator and Course Coordinator:
Vinayshil Gautam PhD, FRAS(London)
(Founder Director IIM K; Leader Consulting Team IIM S)
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A Al_Sager Chair Professor and First Head,
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Management Department, IIT D
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Chairman, DKIF
•1
Theory?
“A plan or scheme existing in the mind only, but
based on principles verifiable by experiment or
observation”
(Funk & Wagnalls page 1302)
Organization?
“Organizations are social entities that are goaloriented; are designed as deliberately
structured and coordinated activity systems,
and are linked to the external environment”
•2

Organization theory: is the set of propositions (body of
knowledge) stemming from a definable field of study
which can be termed organizations science
(Kast&Rosenzweig1970).

The study of organizations: is an applied science
because the resulting knowledge is relevent to problem
solving or decision making in ongoing enterprises or
institutions (Kast&Rosenzweig1970).
•3
Early examples of management
Captains of Industry (Localized)
Advent of communication channels
•4
Classical Approaches
1890
1900
Systematic
management
Scientific
management
1910
1920
Administrative
management
1930
Contemporary Approaches
1940
Quantitative
management
Human
relations
1950
Systems
theory
1960
Contingency
theory
1970 onwards
Current and
future revolutions
Organizational
behavior
•5
Classical Theories of
Organization Management
•6
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Scientific Management: F. W. Taylor

Three major theories:
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Bureaucratic Theory: Max Weber
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Principles of General and Administrative
Management: Henry Fayol.
•7

Propounded by Frederick Taylor in 1900.

Advocated application of scientific methods to
improve productivity.

Optimisation of performance of work to achieve
one ‘best’ method.

Simplified skilled jobs to unskilled ones.
•8

Identified three main reasons for soldiering:
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Increase in productivity would require fewer
workers.
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Employee would receive same pay for higher
productivity; faster pace would be set as
standard.
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Used rule of thumb and wasted time.
•9

Used stop watches to time workers and to
determine best way.

Most mindless jobs could be scientifically done
to increase productivity.

Better than ‘Initiative and Incentive’ method.
•10

Replace rule-of-thumb work methods with
methods based on a scientific study of the
tasks.

Scientifically select, train, and develop each
worker rather than passively leaving them to
train themselves.
•11
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Cooperate with the workers to ensure that the
scientifically developed methods are being
followed.
Divide work nearly equally between managers
and workers, so that the managers apply
scientific management principles to planning
the work and the workers actually perform the
tasks.
•12

Increased the monotony of the work.

Dehumanisation.
•13
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Proposed by Max Weber in 1909.

Recognized bureaucracy as logical structure
for large organizations.

Operations characterized by impersonal rules.

Impersonalisation and focus on the system.
•14
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Insistence on following standard rules.
Systematic division of work.
Principle of hierarchy.
Knowledge of and training in the application of
rules.
Recording in writing of administrative acts,
decisions and rules.
Rational personnel administration.
•15

Pragmatic approach.

Focus on the system rather than the individual.

Sense of equity and fair play.
•16

Organizations tend to become too procedure
oriented.

May lead to inefficiency.
•17

Published ‘Administrative Industrielle et
Generale’ in 1916.

Complementary to Taylor’s work.

Proposed 14 principles of management.
•18
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Division of work .
Authority and responsibility.
Discipline.
Unity of command.
Unity of direction.
Subordination of individual interest to general
interest.
Remuneration of personnel.
•19
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Centralization.
Scalar chain.
Order.
Equity.
Stability of tenure of personnel.
Initiative.
Esprit de corps.
•20
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Principles have universal support.

No empirical evidence.
•21
Behavioral Theories of
Organization Management
•22
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Contribution in terms of HUMAN RELATIONS
and MOTIVATION THEORY
Elton Mayo examined productivity and work
conditions.
Mayo studied the variables affecting
productivity.
Conducted Hawthorne studies at Western
Electric Hawthorne Works in Chicago.
•23

Illumination Experiments
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Relay Assembly Test Group
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Interviewing Program
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The Bank Wiring Observation Room
Experiments
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•24
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
Work is a group Activity
The social world of an adult is primarily
patterned about work activity.
The need for Recognition, Security and the
Sense of belonging is more important in
determining worker’s morale and productivity
than the physical conditions under which e
works.
•25

Informal groups within the work plants exercise
strong social controls over the work habits and
attitudes of the individual workers.

The change from an established society in the
home to an adaptive society at the work plant
resulting from the use of new techniques tends
continually to disrupt the social organisation of
the work plant and the industry generally.
•26
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Particular to Industrial Situation
He contends “The form of organisation that will
make greatest use of human capacity is highly
effective work groups linked together in an
overlapping pattern by other similarly work
groups.
Four different management styles.
•27

The Exploitive –Authoritative system
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The Benevolent –Authoritative system
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The Consultative System
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The Participative –Group system
•28

Modern principles of Motivation

Employees perspective
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Group linkages for Organisation
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Supportive Relationships in a Group.
•29
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Descriptive and multidimensional development
process.
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Examined industrial organizations to determine
the effect of management practices on
individual behavior.
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Noticed seven basic changes in mature peple
•30
 Tendency to develop state of being
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active as an adult
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independent as an adult
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able to behave differently as an adult
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deeply interested in things as an adult
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able to develop a long term

perspective
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able to have a control over one self
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able to move to superior positions
•31
•32
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Widespread worker apathy
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Design of the Formal Organisation
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Leadership style and Management control
•33
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Alternative to content theories
Provides with a very comprehensible, Valid and
useful approach to understand motivation
Assumes that behavior results from the
conscious choices among alternatives whose
purpose is to maximize pleasure and minimize
pain.
•34
 Individuals have different set of goals and can
be motivated if they believe :
 In positive corelation between the efforts and
performance
 Favorable performance will result in desired
award
 Reward will satisfy an important need
 Desire to satisfy the need is strong enough to
make effort worthwhile
•35
 The theory is based on three beliefs:
 VALENCE
 EXPECTANCY
 INSTRUMENTALITY
•36
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Vroom suggests that an employee’s belief’s
about expectancy, Instrumentality and valence
interact psychologically to create a force such
that the employee acts in a manner that brings
pleasure and avoid pain.
This can be calculated via the formula:
MOTIVATION=VALENCE*EXPECTANCY
(INSTRUMENTALITY).
•37
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The formula explains job satisfaction, one’s
occupational choice, the likelihood of staying in
a job, and the effort one might expend in work.
•38
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Man’s motivational needs can be arranged in a
hierarchical order
Once a given level of need is satisfied it no
longer serves to motivate
The next higher level of need has to be
activated to motivate the individual
•39
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Physiological Needs
Safety Needs
Love Needs
Esteems Needs
Self- Actualization
Needs
•40
Self-Actualization
Esteem Needs
Title, Status, Promotion etc
Belonging Needs
Formal, Informal work groups
Security Needs
Seniority plans, union etc
Basic Needs
Pay
•41
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Theory X represents the old style authoritarian
type of management and is based on 3 primary
assumptions of human beings.
Theory Y marks the point of departure for the
new behavioral approach to management.
Hawthorne studies, early leadership research,
emphasis on participation, and general
humanistic philosophies would fall between
Theory X and Y.
•42
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The average human being has an inherent
dislike of work and will avoid it if he can.
Because of their dislike for work, most people
must be controlled and threatened before they
will work hard enough.
The average human prefers to be directed,
dislikes responsibility, is unambiguous, and
desires security above everything.
•43
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These assumptions lie behind most
organizational principles today, and give rise
both to "tough" management with punishments
and tight controls, and "soft" management
which aims at harmony at work.
Both these are "wrong" because man needs
more than financial rewards at work, he also
needs some deeper higher order motivation the opportunity to fulfill himself.
Theory X managers do not give their staff this
opportunity so that the employees behave in
the expected fashion.
•44
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The expenditure of physical and mental effort
in work is as natural as play or rest.
Control and punishment are not the only ways
to make people work, man will direct himself if
he is committed to the aims of the organization.
If a job is satisfying, then the result will be
commitment to the organization.
•45
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The average man learns, under proper
conditions, not only to accept but to seek
responsibility.
Imagination, creativity, and ingenuity can be
used to solve work problems by a large number
of employees.
Under the conditions of modern industrial life,
the intellectual potentialities of the average
man are only partially utilized.
•46
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Job satisfiers were related to job content and
are called the MOTIVATORS
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Job dissatisfiers are related to the job context
and are called the HYGIENE FACTORS
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They together form Hertzberg’s Two Factor
Theory of Motivation
•47
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Hygiene factors are preventive and
environmental in nature
Equivalent to Maslow’s lower level needs
They prevent dissatisfaction but do not lead to
satisfaction.
Hygiene factors do not motivate.
Eg: Salary, Working conditions, interpersonal
relations, supervisor, company policy and
administration.
•48
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Beyond a certain level, hygiene factors cannot
motivate.
Hertzberg’s ‘Motivators’ can be mapped to
Maslow’s higher level needs.
E.g: Achievement, recognition, responsibility
advancement.
•49
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The key controversy: The methodology used.
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His model oversimplifies complex human
motivational process.
•50
Modern Theories of
Organization Management
•51
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Systems are elements in interaction
Systems thinking
Characteristic
Overall view
Key processes
Type of analysis
Focus of investigation
State during
investigation
Basic assumption
Traditional thinking
Reductionistic, focus is on
the parts
Analysis
Deduction
Attributes of objects
Static
Systems thinking
Holistic, focus is on the
whole
Synthesis
Induction
Interdependence of objects
Dynamic
Cause and effect
Multiple, probabilistic
causality
An adaptive system or
modeling
Suboptimal
Problem resolution
A static solution
Operation of parts
Optimal
•52
Open System
Closed System
Import energy from outside
Self-contained and selfmaintained
Highly dynamic and flexible
Generally Mechanical
Intracts with the
environment
Negetive Entropy
Rigid and Static
Feedback Mechanism
No interaction
No interaction
•53
 Systems are nested in a Hierarchy. Example?
 Boundaries
 Friction
 All systems have inputs, processes, and
output.
 Goal Seeking
•54
Contributions
Recognized the importance of the relationship
between the organization and the
environment
Limitations
Does not provide specific guidance on the
function of Managers.
•55
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General Systems Theory (GST): interested in
systems in general; family systems theory is an
extension of this branch.
Cybernetics: a science of communication
concerned with the transmission and control of
information; it examines the communication
and manipulation of information in various
systems.
Information theory: focuses on the reduction of
uncertainty which is achieved by the acquisition
of information.
•56
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Proposed by Ludwig von Bertalanffy in 1936.
GST is also a process of theory construction
which focuses on building universal concepts,
postulates, and principles.
General Systems Theory (GST) is used to
explain the behavior of a variety of complex,
organized systems.
GST, as a worldview, emphasizes
interrelationships between objects
9 Level complexity of GST
•57
• GST Has Potential for Unifying Science:
suggests that there are unifying principles in
every discipline.
 A System Must Be Understood as a Whole
 Von Bertalanffy: promoted the notion that a
family, or any system, is greater than the
some of it's parts.
 Lewin: the whole is different from the sum of
it's parts.
•58
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For a system to work properly, it must have
feedback and control mechanisms.
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Cybernetics is the study of feedback & control
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Feedback & control mechanisms
Capture information about system outputs
Evaluate information using goal related
criteria
Use evaluative information as additional
inputs
•59
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No one type of organizational structure or
leadership style is most appropriate for all
situations.
Which management style is most effective
depends on the degree to which the group
situation enables the manager to exert
influence.
Managers must be trained to modify their roles
to fit the situation.
•60
Contributions
Identified major contingencies
Argued against universal principles of
management
Limitations
Not all important contingencies have been
identified
Theory may not be applicable to all
managerial issues
•61
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Interpretation of an organization differs with
perspectives.
•62