Fundamentals of Organizational Theory and Management
 What is theory anyway?
 A theory is a broad explanation of a phenomenon or
phenomena that is testable, falsifiable and has multiple
lines of evidence.
 Theories are formed after numerous hypotheses are vetted
using the scientific method.
 Hypotheses are tested, data is collected, and the results are
documented, shared and retested.
 Then, a theory that explains the data and predicts the
outcomes of future experiments is formed.
 Public administration means public organizations and their
management.
 The relationship between size, complexity, specialization,
and the need for coordination is extremely important for
public agencies.
 Organizational theory studies virtually everything that is
associated with organizations.
 It is a large field of study that includes examining
organizational design, motivation, organizational culture,
managerial styles, group behavior, leadership, and
communication.
 Concepts and practices like management by objectives,
transactional analysis, quality circles, job enrichment, and
organizational development are all a part of organizational
theory.
 The goal of organizational theory is to enhance our
understanding of organizations and organizational life and,
hopefully, discover ways to improve organizations.
 In this process, the essential question is; how do they
work?
 Large organizations are complex configurations comprised
of people, rules, and regulations, structures, materials,
equipment, and expertise.
 No doubt, all these aspects are important, but management,
people and organizational design have received the most
attention by researchers.
 There are a number of approaches or models that can be
used to study public organizations but three are more
significant models than others: Political, organizational and
humanistic approaches.
Political Approaches
 Two politically oriented models are still widely used today:
structures / functions model and public policy model.
 The models that examine structures and functions define
public organizations in a way similar to describing the
anatomy of the human body or the mechanical
configuration of an automobile.
 These models diagram the formal legal powers and
relationships among organizations.
 The emphasis is on the formal organization, its procedures,
and legal structures.
 This model sees organizations as a system of components
that perform a variety of functions and activities, which
includes the behavior of administrators and agencies.
 The problem with this approach is that it fails to adequately
describe the behavior that occurs within agencies and
seldom focuses on how agencies are managed.
 Moreover, policy outcomes are viewed simply as the result
of interaction within the formal institutions of government.
 It maps out the legal, procedural, and structural
arrangements found in public organizations, which is
something that we need to know to understand public
agencies.
 In public policy model it is focused on the complexities and
dynamics of the public policy process.
 This includes the agencies, decision makers, and players
who are involved in making public policies.
 The process develops because of conflicts between
competing interest groups who have different values and
objectives.
 Interest groups seek to influence outcomes in the process
by using money, votes, and resources to gain access to
decision makers.
 This model is primarily found in public policy analysis.
 It is typically a rigorous form of inquiry that provides great
insight into the real workings of the public policy process
and how agencies behave in the process.
 However, it reveals very little about managerial dimensions
of organizations or other aspects of organizational life.
 Political approaches are interesting and useful since they
define the organizational, procedural, and legal structure of
political institutions and agencies.
 They also enhance our understanding about the behavior of
the institutions, groups, and people involved in the policymaking process.
Organizational Approaches
 Organization-based approaches are considered to be the
true beginning of organizational theory in the managerial
sense of the term.
 These approaches were the first to shed light on many of
the realities of organizations and organizational life.
 Organizational models are multi-disciplinary, involving
many disciplines outside of political science and public
administration.
 Two thinkers are important in framing the basics of
organization theory: Max Weber (1864-1920) and
Frederick Taylor (1856-1915).
 Weber had the least impact on practitioners at the time; his
impact was much greater on academicians.
 In the modern world, Weber’s description of bureaucracy
still helps to shape the way that most of us view large
organizations.
 We should keep in mind that his descriptions were about an
ideal type or model bureaucracy.
 His model reflected the fundamental elements of efficient
and effective organizations that he saw developing in
Germany in the 19th century.
 For Weber, the bureaucracy was the only way that modern
societies could organize themselves.
 Modern societies were simply too complex to be administered
without bureaucracy.
 For Weber, bureaucracy was simply an organization that had
certain characteristics and was organized in a rational way.
 Weber described a hierarchical structure arranged like a
pyramid, with each position responsible to the one above it.
 Labor is divided, and specialized duties are assigned to each
position.
 The organization is governed by rules, thus, decision making is
based on the application of standardized rules that apply equally
to everyone and are designed to accomplish organizational
goals.
 The bureaucracy is impersonal; officials make decisions
according to the responsibilities assigned to their positions.
 Legitimacy is essential in bureaucracy and it comes from those
standardized rules and regulations that apply to everyone.
 Selection and promotion are based on merit using objective
standards.
Weber’s legal-rational model has elements such as;
 Fixed and official jurisdiction, ordered by rules and
administrative law, regular activities distributed in a fixed
manner, authority by directives according to fixed rules, rights
and duties of administrators prescribed by law, management
based on written documents that are maintained in files,
separation of public from private lives of officials,
 Positions held for life, free from political and personal
considerations, which confers independence, and many more
similar elements that we see in our bureaucratic structure.
 Weber believed that rationally organized bureaucracy was the
most efficient form of administration.
 He also foresaw problems with bureaucracy and indicated that
once it is established, it is among those social structures that are
the most difficult to destroy.
 As bureaucracy grows and becomes more powerful, it turns on
the very society that created it and attempts to reorder society
into categories of stability and rationality.
 Frederick Taylor studied another dimension of organizations,
namely, the part that is directly involved with production.
 All organizations have two primary types of behavior: the
collective behavior of the organization as a whole that is
reflected in its output, and the internal behavior of its members.
 For many years, the focus in studying business organizations
was on finding the right methods to get workers to be more
productive, and therefore achieve greater output.
 This notion fascinated Taylor.
 Workers were thought to be lazy and only segmentally involved
with their work.
 The primary motivator was assumed to be money, and
management’s job was to use science to find the best way to
perform tasks and then train the workers to follow these
procedures.
 The formula was rather simple: Science directs, money
motivates, and workers will produce.
 This was the guiding doctrine in the world of business
administration, and it was provided by the principles of
Frederick Taylor’s scientific management.
 Taylor was a controversial figure even during his own time
and the ideas espoused in his scientific management
principles aroused distrust and suspicion among workers
who feared the potential of exploitation.
 During the 1920s, efficiency experts with stopwatches
symbolized everything that clerical and blue-color workers
feared the most from the dehumanizing effects of scientific
management.
 Workers were viewed as “cogs in the wheel” to be managed by
the “carrot and the stick”.
 It should come as no surprise that the American labor
movement was strongest in industries where mass production
and scientific management techniques were widely used.
 Taylor’s organization was viewed as a “closed system” that
focused on production and efficiency.
 The emphasis was at the lower levels of the organization
because that was where products were produced.
 Although Taylor is best remembered for trying to find the “one
best way” of performing a given task, his position contained
four main principles that delineated what he saw as
management’s duties and responsibilities in teaching workers
 Conducting studies to find the best way to perform tasks.
 Selecting the best workers and properly training them.
 Bringing together the science and trained workers by
offering some incentive to the worker.
 Cooperation with workers by having management performs
part of the work previously performed by workers.
 If management is to teach workers the “one best way” to do
something, they must know how to do it themselves.
 Taylor predicted that because of this sharing of work, labor
strikes would not occur if scientific management were
properly used.
 Although Taylor’s ideas may seem dated, they are still very
influential in modern management and thought.
 With respect to the study of business, time and motion
studies are still done, and the idea of trying to find the most
efficient way to produce goods and services is still very
much alive and well in the new century.
 Like business administration, public administration had a
lot of faith in science to provide the principles and
procedures needed to create more efficient organizations.
 Many believed that a science of administration was
possible that administration could be similar to biology,
physics, and other established sciences.
 Using science to learn about organizations proved to be
useful and revealed much about organizations, but the hope
that science would reveal a universal set of principles of
administration was never fulfilled.
 Herbert Simon dismissed the idea of using the principles as
guiding wisdom because he saw the principles as being
mutually contradictory.
 For instance, at the same time that they called for tall
organizations to ensure that the chain of command was
followed and that proper authority was maintained because
everyone would know exactly who to report to, the principles
also called to limit the levels of hierarchy to ensure that
communication did not get distorted flowing through the chain
of command, which suggests that the organization be as flat as
possible.
 How can an organization be both tall and flat?
 Simon and others argued that principles are often simply too
vague to have meaningful application.
 Simon literally went principle by principle and showed that a
counter principle existed for virtually every one of the tenets of
administrative science, at least as it was defined at the time.
 Mary Parker Follett (1868-1933) was one of the leading
critics of scientific management and the ideals of the
principles of administration long before it became popular to
criticize them.
 The basic assumptions of scientific management rested on the
belief that gathering data and utilizing the scientific method
would lead to the discovery of the one best way to perform a
given task.
 This view assumed that a fact was constant over time that a
fact today was the same fact yesterday, and would still be a
fact tomorrow.
 Follett essentially argued for what the scientific community
today recognizes as relativism, and she also argued for a form

Today she is considered to be among the greatest of the early
public administration thinkers.

She argued that the value of every fact depends on its position
in the whole world process and is bound by its multitudinous
relations.

Facts must be understood as the whole situation, considering
whatever sentiments, beliefs, and ideals enter into it.

The world and its social organizations are not frozen; they are
always changing and evolving.

The idea of experts with a limited scope or perspective is
suspect, since one becomes an expert not by being a specialist
in a small area but by applying insights into the relationship of
the specialty to the whole.
 Process is important in ensuring that administration is
public.
 Mary Parker Follett’s positions were the antithesis of both
Taylor’s scientific management and many of the tenets of
classic public administrationists at the time.
 The paradigm of the time focused on chain of command,
span of control, line positions being superior in power to
staff positions, and the like but these were simply not what
Follett saw as the most important elements of
organizations.
 For Follett, the organization itself was a static structure,
regardless of the design; it was the human element that
made organizations dynamic.
 The next wave of organizational approaches rejected the
administrative science idea that organizations were closed
systems.
 Closed-system models focus on the organization, its
internal structures, internal dynamics, and decision-making
processes with little regard to the external environment.
 These models recognize the existence of the world outside
of the organization, but it is management’s responsibility to
control external environmental factors to limit their impact
on the organization.
 Open-system models assume that the external environment
influences the organization.
 Because organizations depend on resources from outside
the organization, open-system approaches emphasized the
relationship between the organization and its larger
environment.
 These models recognized that organizations alter their
structure, functions, and output in response to laws, interest
groups, changing conditions, and values that are accepted
by the larger society.
 System theory emphasizes the interactive and interrelated
set of elements that affects the organization, usually
conceptualized as inputs entering the system, the
processing of the inputs back into the system.
 Since the process is continuous, an organization is
constantly undergoing change.
 Weber’s model of bureaucracy is technically an open
system.
Humanistic Approaches
 Some researchers felt that existing models and theories failed to
adequately explain how organizations really worked.
 That is why another perspective was needed – the humanistic
approaches that focus on the people who work in organizations.
 By the 1940s organizational theory was changing.
 The humanistic approaches, which included a major subfield
called organizational psychology, provided new insight by
focusing on the individuals who work in organizations.
 The new focus included taking a careful look at such things as
decision making, leadership, motivation, and reward systems.
 Much of the focus of humanism is on the individual or
small groups of individuals and organizational conditions.
 Workers attitude toward their work might be more
important than environmental conditions in productivity
level.
 The mood of workers is important in increasing their
productivity.
 Worker’s job satisfaction is directly related to productivity.
 The emphasis of the organizational humanists was on
developing techniques for leadership, conflict resolution,
and decision making that recognized the importance of
expanding employee participation in the organization.
 Abraham Maslow developed his influential needs theory of
motivation to illustrate that humans have needs that must be
fulfilled.
 Productivity is improved by greater communication, feedback,
and worker involvement in self-managed work teams.
 This is a radical shift from Frederick Taylor’s ideas.
 Organizational humanism has advantages over the other
approaches by providing much deeper insight into the core of
organizational life.
 Its focus on the needs of individuals rather than on an abstract
political system or the mechanistic diagrams of organizational
theorists provides insight about what might be done to improve
the relationships between employees and organizations.
 One obvious criticism is that organizational humanism focuses
so much on the needs of employees that it deemphasizes
efficiency and productivity in organizations.
 A happy worker is not necessarily a productive worker, and a
less-than-happy worker is not necessarily an unproductive
worker.
 These three approaches tell us a great deal about organizations,
the legal relationships between public organizations, how the
conceptualizations apply to the real world, and the needs and
relationships that exist within organizations.
 Most agree that no universal principles exist to be uncovered,
but each theory gives us a better understanding of the
complexities of organizations and the people who work in them.