ORGANIZATIONAL
THEORY
Town Hall Unit #2
Prof. Christopher L. Howard
Organizational Theory
defined….sort of???
• Organizational behavior is currently a growing field. Organizational
studies departments generally form part of business schools,
although many universities also have industrial psychology and
industrial economics programs.
• The field is highly influential in the business world with practitioners
like Peter Drucker and Peter Senge, who turned the academic
research into business practices. Organizational behaviour is
becoming more important in the global economy as people with
diverse backgrounds and cultural values have to work together
effectively and efficiently. It is also under increasing criticism as a
field for its ethnocentric and pro-capitalist assumptions (see Critical
Management Studies).
• During the last 20 years organizational behavior study and practice
has developed and expanded through creating integrations with
other domains:
• http://en.wikipedia.org/wiki/Organizational_studies
Bureaucratic Model
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For Weber - the organisation is "neutral" (a big, big assumption and one to be challenged). It is
presented as a technically useful model of the most logically efficient form of structure possible.
"Precision, speed, unambiguity, knowledge of files, continuity, unit, strict subordination, reduction
of friction and of material and personal costs - these are raised to the optimum point in the strictly
bureaucratic administration". Though metaphorically a smooth machine its rules and set
procedures can be inflexible instruments of administration - experience of the past may not be intune with present conditions. Some rules cannot be readily adapted to suit individual needs and
thgey can become barriers behind which the vulnerable administrator to hide. Bureaucratic
alienation is reinforced by conformations with "face-less administrators"
A tension occurs in organisational design between preserving control and encouraging flexibility &
freedom of expression. Bureaucracy favours the former. Cries of "bureaucratic inefficiency" marks
frustration of taxpayers, drivers, holiday makers, radical activists, people from other departments who feel their personal domain has been infringed. Bureaucracy today is attacked for its inability
to innovate, aspects of its alienating and demotivating effect on employees, and the dependen
"unhealthy" relationships some feel it creates (rather than self- help).
Bureaucratic culture rewards safe, conformist attitudes - constrained, riskfree work is good. Nonconformist, creative and outward-looking, opportunistic approaches to management are suspect.
The bureaucratic model by definition embodies depersonalisation. Bureacrats become more
absorbed with maintaining the official form (the means). They lose sight of what they are
supposed to achieve. Smooth, efficient running removes hassle for officers but may be effective
(as valued by clients)?
http://www.bola.biz/systems/bureau.html
Bureaucratic Model
Continued
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Delegation and the Bureaucratic Form
Bureaucratic structures emphasise specialisation between jobs and departments, reliance on
formal procedures and paperwork, extended managerial reporting structures and clearly marked
status definitions. Job demarcation is an informal, interpersonal response by individuals and
groups which may be at odds with the firm's objectives. Demarcation may be supported by trades
union preferences. It is manifested also in officer rivalries and empire-building. If the firm becomes
large & complex it bears formal & informal overheads of possible inefficiency. Bureaucracies
employ a system of delegation down these hierarchies. Employees use discretion only within
delegated limits. Job roles are defined formally (often in writing) by profiles of task responsibility
and /her authority - scope of discretion to act. An organistional principle is that job responsibilities
require equivalent authority to carry these out. But authority comprises:formal (job) authority - others know your responsibilities and their reporting relationships
personal (interpersonal) authority - secure others co- operation
resource authority (hours, staff, budget, rewards) for the task
expertise authority: having the skills, knowledge and experienceto carry out the responsibilities.
The authority of language and hetoric which may be difficult to argue against as all seems so
plausible.
Though posts are hierarchical with successive steps embracing all those beneath it - problems of
role ambiguity, conflict & overload frequently occur. Delegation is a complex process reliant on
managers' ability to communicate well with subordinates and obtain common perception of
jobÊrequirements (so too with colleagues with whom the post interfaces).
http://www.bola.biz/systems/bureau.html
Bureaucratic Model
contingencies
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Coping with Contingencies.
Within Weber's model, rules and procedures aim to anticipate every possible contingency. Top management
"know" that lower level staff are acting in controlled ways. This control is underpinned by training, briefing and
observation/guidance by the superior. Loyalty and cooperation is expected. Officers should carry out their duties to
the letter - without overstepping their role and conflicting with others duties. This assumes a perfect
communication and cooperation - formally and interpersonally. Of course where the person in terms of aptitude,
skill and motivation is cheesed off or feels rivalry towards others or feels like being bloody-minded - problems
arise. Fitting the job to the person and the person to the job is a key task for the personnel management of
bureaucracy.
For officers, there clear separation between personal and business affairs.
"When I am at work, I do my job without personal feelings/biases entering into it!" This is bolstered by contract &
technical qualifications (techno-meritocracy). Instructions are obeyed because appointment assumes competence
to issue such commands. A sign of developing bureaucracy is the growth of professional managers and more
specialist/departmental experts. Manager-experts maintain the fabric of the existing firm and develop new
responses (policies and practices) to external and internal events/conditions.
Information, Records and Decision-support.
The "bureau" keeps records and files. System rationality demands that information is written down. The
organisation can reference and compare past decisions to ensure consistency. Records and structure make the
organisation concrete. It will continue even though the people who run it change. Policies, procedures, minutes,
reports, records show it operating dynamically. The bureaucratic model implies a programmed organisation.
Procedures and rules are algorithmic ie routinised solutions to known, common problems ie like computer
programs. Records, policies and procedures provide a knowledge-base minimising risk and maximising
consistency in decision-making..
http://www.bola.biz/systems/bureau.html
Scientific Management
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Scientific management was a theory of management that analyzed and synthesized
workflows. Its main objective was improving economic efficiency, especially labor
productivity. The core ideas of the theory were developed by Frederick Winslow
Taylor in the 1880s and 1890s, and were first published in his monographs Shop
Management (1903)[1] and The Principles of Scientific Management (1911).[2] While
working as a lathe operator and foreman, Taylor noticed the natural differences in
productivity between workers, which were driven by various causes, including
differences in talent, intelligence, or motivations. He was one of the first people to try
to apply science to this application, that is, understanding why and how these
differences existed and how best practices could be analyzed and synthesized, then
propagated to the other workers via standardization of process steps. He believed
that decisions based upon tradition and rules of thumb should be replaced by precise
procedures developed after careful study of an individual at work, including via time
and motion studies. Scientific management's application was contingent on a high
level of managerial control over employee work practices. This necessitated a higher
ratio of managerial workers to laborers than previous management methods. It also
caused interpersonal friction between workers and managers, and social tensions
between the blue-collar and white-collar classes.
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http://en.wikipedia.org/wiki/Scientific_management
Hawthorne Effect
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The major finding of the study was that almost regardless of the experimental manipulation
employed, the production of the workers seemed to improve. One reasonable conclusion is that
the workers were pleased to receive attention from the researchers who expressed an interest in
them. The study was only expected to last one year, but because the researchers were set back
each time they tried to relate the manipulated physical conditions to the worker's efficiency, the
project extended out to five years.
Four general conclusions were drawn from the Hawthorne studies:
The aptitudes of individuals are imperfect predictors of job performance. Although they give
some indication of the physical and mental potential of the individual, the amount produced is
strongly influenced by social factors.
Informal organization affects productivity. The Hawthorne researchers discovered a group
life among the workers. The studies also showed that the relations that supervisors develop with
workers tend to influence the manner in which the workers carry out directives.
Work-group norms affect productivity. The Hawthorne researchers were not the first to
recognize that work groups tend to arrive at norms of what is "a fair day's work," however, they
provided the best systematic description and interpretation of this phenomenon.
The workplace is a social system. The Hawthorne researchers came to view the workplace as a
social system made up of interdependent parts.
http://www.nwlink.com/~donclark/hrd/history/hawthorne.html
Organizational
Humanism
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ORGANIZATIONAL HUMANISM is a set of organization theories which stress that work holds
intrinsic interest and value for the worker. Workers seek satisfaction in their work, want to work
rather than avoid it, and can be motivated through systems of positive incentives, such as
participation in decision making [1].
Organizational humanists contend that the design of most organizations leads to highly
specialized and routine jobs in which employees cannot use all their creative, motivated potential.
They believe that employees are primarily self-motivated and self-controlled and react negatively
to externally imposed controls.
Organizational humanists suggest that the best role for a manager is to challenge employees,
develop employee decision-making skills, and grant employees workplace responsibility. If jobs
allow employees freedom to achieve self-actualization, they will be motivated and satisfied;
conversely, if jobs limit employees’ sense of personal achievement and growth, they will not be
satisfied with other incentives. If allowed to become self-actualized, employees will integrate their
goals with those of the organization.
In seeking to encourage innovation, many companies have challenged employees, sought to
involve them fully in decision-making activities, and encouraged them to seek responsibility.
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http://papedia.wikispaces.com/organizational+humanism
Theories X and Y
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THEORY X and THEORY Z
Theory X posits that the average person dislikes work and will avoid it he/she can.
Most people must be forced with the threat of punishment to work towards
organizational objectives. The average person prefers to be directed and to avoid
responsibility; the average person is relatively unambitious and wants security above
all else[2].
In contrast, Theory Y posits that people will apply self-control and self-direction in the
pursuit of organizational objectives, without external control or the threat of
punishment. People usually accept and often seek responsibility. The capacity to use
a high degree of imagination, ingenuity, and creativity in solving organizational
problems is widely distributed in the population[3].
SELF-ACUALIZING VIEW
Self-actualization refers to reaching one’s ultimate potential through the use of
personal skills and talents. The organizational humanists believe that allowing
employees greater freedom and satisfaction at work is more consistent with human
nature than were earlier views. Because self-actualized employees are highly
motivated, such changes should produce organizational benefits that cannot be
achieved in hierarchical or traditional industrial organization [4].
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http://papedia.wikispaces.com/organizational+humanism
Maslow’s Theory
of Needs
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Physiological Needs
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Safety Needs
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When the first three classes of needs are satisfied, the needs for esteem can become dominant. These involve needs for both selfesteem and for the esteem a person gets from others. Humans have a need for a stable, firmly based, high level of self-respect,
and respect from others. When these needs are satisfied, the person feels self-confident and valuable as a person in the world.
When these needs are frustrated, the person feels inferior, weak, helpless and worthless.
Needs for Self-Actualization
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When the needs for safety and for physiological well-being are satisfied, the next class of needs for love, affection and
belongingness can emerge. Maslow states that people seek to overcome feelings of loneliness and alienation. This involves both
giving and receiving love, affection and the sense of belonging.
Needs for Esteem
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When all physiological needs are satisfied and are no longer controlling thoughts and behaviors, the needs for security can
become active. Adults have little awareness of their security needs except in times of emergency or periods of disorganization in
the social structure (such as widespread rioting). Children often display the signs of insecurity and the need to be safe.
Needs of Love, Affection and Belongingness
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These are biological needs. They consist of needs for oxygen, food, water, and a relatively constant body temperature. They are
the strongest needs because if a person were deprived of all needs, the physiological ones would come first in the person's search
for satisfaction.
When all of the foregoing needs are satisfied, then and only then are the needs for self-actualization activated. Maslow describes
self-actualization as a person's need to be and do that which the person was "born to do." "A musician must make music, an artist
must paint, and a poet must write." These needs make themselves felt in signs of restlessness. The person feels on edge, tense,
lacking something, in short, restless. If a person is hungry, unsafe, not loved or accepted, or lacking self-esteem, it is very easy to
know what the person is restless about. It is not always clear what a person wants when there is a need for self-actualization.
http://honolulu.hawaii.edu/intranet/committees/FacDevCom/guidebk/teachtip/maslow.htm
Open Systems
• An open system is a system which continuously interacts with its
environment. The interaction can take the form of information,
energy, or material transfers into or out of the system boundary,
depending on the discipline which defines the concept (see below).
An open system should be contrasted with the concept of an
isolated system which exchanges neither energy, matter, or
information with its environment.
• The concept of an "open system" was formalized within a framework
that enabled one to interrelate the theory of the organism,
thermodynamics, and evolutionary theory.[1] This concept was
expanded upon with the advent of information theory and
subsequently systems theory. Today the concept has its applications
in the natural and social sciences
• http://en.wikipedia.org/wiki/Open_system_(systems_theory)
Closed System
• Isolated system that has no interaction with its external
environment-a system without any input. Closed systems
with outputs are knowable only thorough their outputs
which are not dependent on the system being a closed
or open system. Closed systems without any output are
knowable only from within. See also entropy.
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Read more:
http://www.businessdictionary.com/definition/closedsystem.html#ixzz10NUjpX6x
Theory Z
• Theory Z is an approach to management based upon a combination
of American and Japanese management philosophies and
characterized by, among other things, long-term job security,
consensual decision making, slow evaluation and promotion
procedures, and individual responsibility within a group context.
Proponents of Theory Z suggest that it leads to improvements in
organizational performance. The following sections highlight the
development of Theory Z, Theory Z as an approach to management
including each of the characteristics noted above, and an evaluation
of Theory Z. Realizing the historical context in which Theory Z
emerged is helpful in understanding its underlying principles.
• http://www.enotes.com/management-encyclopedia/theory-z
Game Theory
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Game theory is a branch of applied mathematics that is used in the social sciences,
most notably in economics, as well as in biology (particularly evolutionary biology and
ecology), engineering, political science, international relations, computer science, and
philosophy. Game theory attempts to mathematically capture behavior in strategic
situations, or games, in which an individual's success in making choices depends on
the choices of others. While initially developed to analyze competitions in which one
individual does better at another's expense (zero sum games), it has been expanded
to treat a wide class of interactions, which are classified according to several criteria.
Today, "game theory is a sort of umbrella or 'unified field' theory for the rational side
of social science, where 'social' is interpreted broadly, to include human as well as
non-human players (computers, animals, plants)" (Aumann 1987).
Traditional applications of game theory attempt to find equilibria in these games. In an
equilibrium, each player of the game has adopted a strategy that they are unlikely to
change. Many equilibrium concepts have been developed (most famously the Nash
equilibrium) in an attempt to capture this idea. These equilibrium concepts are
motivated differently depending on the field of application, although they often overlap
or coincide. This methodology is not without criticism, and debates continue over the
appropriateness of particular equilibrium concepts, the appropriateness of equilibria
altogether, and the usefulness of mathematical models more generally.
http://en.wikipedia.org/wiki/Game_theory
Total Quality
Management (TQM)
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At its core, Total Quality Management (TQM) is a management approach to long-term success through customer
satisfaction.
In a TQM effort, all members of an organization participate in improving processes, products, services and the
culture in which they work.
The methods for implementing this approach come from the teachings of such quality leaders as Philip B. Crosby,
W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran.
A core concept in implementing TQM is Deming’s 14 points, a set of management practices to help companies
increase their quality and productivity:
Create constancy of purpose for improving products and services.
Adopt the new philosophy.
Cease dependence on inspection to achieve quality.
End the practice of awarding business on price alone; instead, minimize total cost by working with a single
supplier.
Improve constantly and forever every process for planning, production and service.
Institute training on the job.
Adopt and institute leadership.
Drive out fear.
Break down barriers between staff areas.
Eliminate slogans, exhortations and targets for the workforce.
Eliminate numerical quotas for the workforce and numerical goals for management.
Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.
Institute a vigorous program of education and self-improvement for everyone.
Put everybody in the company to work accomplishing the transformation.
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http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
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Wrapping It Up
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Organizational Theory defined
Weber and the bureaucratic model
Scientific Management
Hawthorne Studies and Effect
Organizational Humanism
Theory x and Y
Maslow Hierarchy of Needs
Systems theory (open and closed systems)
Theory Z
Game Theory
Total Quality Management (TQM)