The Development of Modern Organization Theory

The Development of Modern
Organization Theory
Lecture Outline
• Bureaucracy and administrative theory
– concepts and limitations
• Decision making theories of organization
– concepts and interpretation
• Open-systems theory
– concepts and implications
• Sociotechnical systems
– the story, and what we learned
Bureaucratic Models of
• Goal: describe the rational, efficient
organization of tasks in society
• Key players: K. Marx, M. Weber
• Key concepts:
hierarchical organization of authority
division of labor
chain of command
unity of command
Administrative Man
• Describes the model of man that is assumed
in the bureaucratic model of organization
• Key players: H. Fayol and F. Taylor
• man is a passive instrument
• one best way to organize
• ignored social aspect of organizational life
• These assumptions led to significant
limitations of bureaucratic models
Limitations: the ‘unanticipated
consequences of bureaucracy’
• Reductions in personalized relationships
(results in anomie)
• internalization of organizational rules
results in inflexibility
• increased use of categorization for decision
making - reduces search for alternatives
• departmentalization leads to bifurcation of
interests among subunits
• subunit goals become internalized
Behavioral View of Organizations
• Views individuals as decision making
• individual characteristics and situations
influence decision making
• bounded rationality
– we use simplifying models of reality
• satisficing
– decisions are made with limited information
– we are rational only with respect to our frame
of reference
Behavioral View of Organizations
• standard operating procedures (SOP’s) necessarily
– problems are either novel or routine
– routine problems are responded to by simple stimulusorganism-response pattern (based upon SOP)
– novel problems are responded to by complex problem
solving behavior: simulus-organism-search-standard
• Thus the eventual result is to distill all complex
situations down to SOP’s - routinization
Limitations of SOP’s
SOP’s determine problem definition
SOP’s determine alternative solutions
SOP’s constrain search activity
SOP’s determine consequences
SOP’s rules for ordering consequences
Behavioral View of
Organizational Structure
• Basic features:
– SOP’s; division of labor; communications
patterns (e.g. hierarchy)
• These result directly from the characteristics
of human decision makers
– bounded rationality
– satisficing behavior
Organizations as ‘Open Systems’
• Emphasis upon intimate relationship between
system and environment
• open systems can be characterized in terms of:
input - energy, information
throughput - processing of energy and information
output - product, information
homeostasis - steady state (balance inputs and outputs)
differentiation - specialized functions
Implications of OST
1) Organizations are continually dependent upon the
environment for inputs
2) We cannot assume factor inflows as given
3) There will be 5 major functional subsystems:
support - procurement, disposal, institutional relations
adaptive - planning, R&D, intelligence or feedback
– managerial - control
Sociotechnical Systems View
• Result of a study of the mechanization of
British coal faces by - Trist & Bamforth
• The 'hand-got' system
– interdependent work pairs
– each with responsibility for the 'whole job'
– Leadership and supervision were internal to the
– Choice of workmates was made by the men
Sociotechnical Systems View
• Mechanization in the form of the 'longwall
method' developed in response to the
characteristics of British coal seams, being
economically more efficient.
• primary work unit grew to a group of 40-50 men, a
shot firer and shift deputies (suprvisors).
• 3 shifts: cutting, ripping, and filling
• barriers to effective intergroup communication
• close task interdependence between shifts
• role segregation intensified by payment methods
Sociotechnical Systems View
 The results of reorganization:
functional interdependence is magnified
uneven levels of functional efficiency
uncertainty of conditions
bad conditions resulting in overtime
too many hours resulting in bad work
a vicious cycle resulting from the above - even
to the point of complete stoppage
Sociotechnical Systems View
 defense mechanisms used to counteract the effects
of mechanization:
 Informal organization
 Mutual scapegoating
 Self-compensatory absenteeism
 How did they fix it?
reducing group size
increasing integration within groups
increasing autonomy
Story so far...
• Bureaucracy and administrative views are rational
– they explain conditions for efficiency
• Behavioral view is of bounded rationality
– internal structure of organizations reflects this
• OST describes organizations subject to
– organizations must compete for and acquire resources
• Sociotechnical systems suggests that efficiency
needs may not override social system needs
To be continued……….