Third Edition
Chapter 5 . . . . . . . . . . . . . . . . . . . . . .
The Evolution of Management and
Organization Theory
Dr. Wasim Al-Habil.
Chapter Five
The Evolution of Management and
Organization Theory
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Key Topics
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The Origins of Public Administration
The Evolution of Management Principles
What is Organization Theory?
The Origins of Scientific Management
The Period of Orthodoxy
Bureaucracy
Neoclassical Theory & Systems Theory
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“Civilization and administration have
always gone hand in hand.”
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The Origins of Public Administration
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Management: A term that can refer to both:
The people responsible for running an
organization
The running process itself - the utilization of
numerous resources to accomplish an
organizational goal.
Hierarchy: Any ordering of persons, things, or
ideas by rank or level. Administrative structures
are typically hierarchical in that each level has
authority over levels below and must take orders
from level above.
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The Origins of Public Administration
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The Military Heritage of Public Administration: Government administrators are
still considered servants in this sense; they are public servants because they, too,
have accepted obligations, which means they are not completely free.
Comparing Military and Civilian Principles:
Objective: Direct Every military operation toward a clearly defined,
decisive, and attainable objective.
Offensive: Seize, retain, and exploit the initiative.
Mass: Concentrate combat power at the decisive place and time.
Economy of force: Allocate minimum essential combat power to secondary
efforts.
Maneuver: Place the enemy in position of disadvantage through the
flexible application of combat power.
Unity of command Ensure unity of effort under one responsible
commander.
Security Never permit the enemy to acquire an advantage.
Surprise: Strike the enemy at a time/place for which he is unprepared.
Simplicity: Prepare clear, uncomplicated plans, concise orders to ensure
thorough understanding
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The Origins of Public Administration
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Comparing Military and Civilian Principles:
Policy should defined.
Work should be subdivided.
Tasks and responsibilities should be specifically assigned and
understood.
Appropriate methods and procedures should be developed and
utilized by those responsible for policy achievement.
Appropriate resources (men, money, materials).
Authority commensurate with responsibility should be delegated
and located.
Adequate structural relationships.
Effective and qualified leadership.
Unity of command.
Continuous accountability for utilization of resources.
Effective coordination.
Continuous reconsideration of all matters
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What is Organization Theory?
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An “organization” is a group of people who jointly
work to achieve at least one common goal.
A “theory” is a proposition or set of propositions
that seeks to explain or predict something.
The organization theory shows how groups and
individuals behave in differing organization
arrangements.
Organization theory was always there in the
authoritarian model offered by the military.
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Classical Organization Theory
The first school of organization theory rooted in the
industrial revolution of the 1700s.
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Characteristics of Classical Organization Theory:
Organizations exist to accomplish productionrelated and economic goals.
There is one best way to organize for production
Production is maximized through specialization
and division of labor.
People and organizations act in accordance with
rational economic principles.
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The Origins of Scientific Management
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Frederick Taylor, the “father” of scientific management, is the pioneer who
developed time and motion studies and provided the impetus around which
classical organization theory would evolve.
Through scientific management, Taylor believed that there is ‘one best way’
to accomplish any given task (Shafritz and Hyde, 1997, p.2). He argues that
the “one best way” provides the “fastest, most efficient, and least fatiguing
production method” (Ibid.).
In 1912, the U. S. House of Representatives investigated Taylor’s
systematic use of management techniques. Some of the management
techniques or as Taylor called them “duties,” included:
Replacing traditional rule of thumb methods of work accomplishment with systematic,
more scientific methods of measuring and managing individual work elements;
Studying scientifically the selection and sequential development of workers to ensure
optimal placement of workers into work roles;
Obtaining the cooperation of workers to ensure full application of scientific principles;
and
Establishing logical divisions within work roles and responsibilities between workers
and management. (From the book of the Principles of Scientific Management, Ibid., 3)
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Fayol’s six principles
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Fayol’s major work, General and Industrial Management, which published in France in
1916 and translated to English in 1925, also came with general principles that can
improve the performance of management in every type of organization.
Fayol’s six principles are:
Technical (production of goods)
Commercial (buying, selling, and exchange activities)
Financial (raising and using capital)
Security (protection of property and people)
Accounting
Managerial (coordination, control, organization, planning, and command of people)
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Shafritz, Ott, and Jang (2005) states that “Fayol believed that his concept of
management was universally applicable to every type of organization” (p.31).
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This generic model of Fayol’s general principles had an impact on public administration
because it was theorized to work in both public and private organizations.
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The Period Of Orthodoxy
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It covers the development of the public administration
between the WWI and WWII.
The tenets of orthodoxy ideology held that the work of
government could be neatly divided into decision-making
and execution (politics-administration dichotomy of
Woodrow Wilson).
This dichotomy, which played an important role in the
historical development of PA, would hardly have been
possible of scientific management had not evolved when it
did.
According to Lynn (1996), orthodoxy “was finished off in
public administration after World War II in a series of
articles and books” (p.31) including the works of Simon,
Dahl, Appleby, Waldo, Long, and Marx..
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Orthodox and Paul Appleby
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Paul Appleby was the Dean of Maxwell School at Syracuse
University.
Appleby (1945) contends similarly that, “ Government is different
because it must take account of all the desires, needs, actions,
thoughts and sentiments of 140,000,000 people.” (Shafritz et al.,
2004: p.135).
Paul Appleby, by some accounts wrote the definitive endnotes on the politicsadministration dichotomy. Essentially, Appleby in Big Democracy (1945) compared
government to business and determined government was different and that politics is
what comprises that difference.
Appleby states that:
“Other institutions admittedly are not free from politics, but government is politics.
Government administration differs from all other administrative work to a degree not
even faintly realized outside, by virtue of its public nature, the way in which it is
subject to public scrutiny and public outcry. (Paul Appleby in “Big Government”
reprinted in Classics of Public Administration, 125)
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Luther Gulick’s POSDCORB
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Gulick’s book “The Papers on the Science of Administration” (1937).
Gulick argues that for governmental organizations to achieve
technical efficiency there is need to arrange or structure units and
departments according to their level of homogeneity, as failure to do
so, as he argues has often been the case, can only lead to
unsatisfactory results.
Of significant importance is Gulick’s prescription of the functions of
the chief executive, which he derived from Henry Fayol’s general
principles of management.
He coined the famous POSDCORB from planning, organizing,
staffing, directing, coordinating, reporting, and budgeting, and these
were to be equally applicable to all forms of organizations
irrespective of type, context and size, presumably exhibiting some
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general science based qualities.
Federalism & Finance
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Fiscal federalism is the financial relations between and among the
units of government in a federal system.
The assets and financial resources are divided and shared between
and among the three levels of government. For example, income
tax goes for the federal government and house and property tax
goes for the state government.
The theory of fiscal federalism, or multiunit government finance, is
one part of the branch applied economic known as public finance.
Medicaid is a federally aided, state-operated, and stateadministered program that provides medical benefits for a certain
low-income people in needed of health and medical care.
Grant: It is an intergovernmental transfer of funds (or other
assets). Since long along time, state and local governments have
become increasingly dependent upon federal grants for an almost
infinite variety of programs.
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Bureaucracy
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The word bureaucracy is derived from two words; “bureau” and
“Kratos.” While the word “bureau” refers to the office the Greek
suffix “kratia or kratos” means power or rule.
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We use the word “bureaucracy” to refer to the power of the office
(Hummel, 1998, 307).
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“Bureaucracy” is rule conducted from a desk or office, i.e. by the
preparation and dispatch of written documents and electronic ones.
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Bureaucracy is borrowed by the field of public administration (PA)
from the field of sociology.
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It was borrowed by PA in much a similar way that practices of
business were borrowed from the field of business administration
and economics.
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Bureaucracy & Max Weber
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Weber (1946) presents bureaucracy as both a scientific and generic
model that can work in both the public and private sectors (Rainey,
1996).
Max Weber’s work about bureaucracy, translated into English in
1946, was one of the major contributions that has influenced the
literature of public administration.
Weber’s bureaucracy consists of the traditional way of thinking in
public administration that relied on the same “ingredients” to
reform public administration based on the science of administration
(Thompson, 2005).
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Bureaucracy & Max Weber
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Weber’s bureaucracy has the following characteristics:
The bureaucrats must be free agents.
The bureaucrats are arranged in a clearly defined hierarchy of
offices.
The functions of each office are clearly specified in writing.
The bureaucrats accept and maintain their appointment freely.
The appointments to office are based on the technical
qualifications.
The bureaucrats receive money salaries and pension rights.
The office must be the bureaucrat’s sole.
A career system is essential.
The bureaucrats do not have property rights.
The bureaucrats’ conduct must be subject to systematic control.
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Neoclassical Organization Theory
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There is no precise definition for “neoclassical” in the content of
organization theory.
This school was important because it initiated the theoretical movement
away from he over-simplistic mechanistic views of classical school.
The neoclassicalists raised issues and initiated theories that became central
to the foundations of the most schools or approaches to organization
theory that followed.
The majority of the writers and authors of the neoclassical school came
after the end of the WWII.
They sought to “save” classical theory by introducing modifications based
upon research findings in the behavioral sciences.
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Neoclassical Organization Theory & Herbert Simon
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Herbert Simon looked back at the ‘principles’ and argued
that they lacked all scientific rigor and they could be mere
proverbs.
He deconstructed Gulick’s POSDCORB and dethroned them
as confusing facts with values and lacking all scientific rigors
(Stillman, 2000).
In his book ‘Administrative Behavior: A Study of Decision
Making Process in Administrative Organization’ (1947), he
draws on “logical positivist continental analytic philosophy”
(Stillmann, 2000, pg. 22) to explain administrative behavior.
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Neoclassical Organization Theory & Herbert Simon
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Herbert Simon looked back at the ‘principles’ and argued that they
lacked all scientific rigor and they could be mere proverbs.
He deconstructed Gulick’s POSDCORB and dethroned them as
confusing facts with values and lacking all scientific rigors
(Stillman, 2000). The POSDCORB functions of the public
administration orthodoxy were inconsistent, conflicting, and
inapplicable in public administration (Shafritz et al., 2004).
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In his book ‘Administrative Behavior: A Study of Decision Making
Process in Administrative Organization’ (1947), he draws on “logical
positivist continental analytic philosophy” (Stillmann, 2000, pg. 22)
to explain administrative behavior.
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Neoclassical Organization Theory & Herbert Simon
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He argued that a true scientific method should be used in the study of administration,
but what was used by the orthodoxy lacked the empirical basis to do so.
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Simon (1946) believed that for “almost every principle [of orthodoxy] one can find an
equally plausible and acceptable contradictory principle.”
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Simon proposed the fact-value dichotomy because it provides a stronger basis for a
science of administration. Through the behavioral approach, Simon narrowed the
scope of rationalism by separating facts from values and introducing his concept of
bounded rationality.
Bounded rationality refers to the bounds that people put on their decisions. Because
truly rational research on any problem can never be complete, human make decisions
on satisfactory as opposed to optimal information.
Simon rejected the politics-administration dichotomy because of its failure to “define a
value-free domain required for the development of a science of administration, since
administrators are involved in policy functions and thus values consideration” (p.186).
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Modern Structural Organization Theory
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The basic assumptions of the modern structural organization
theory:
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Organizational are rational institutions whose primary
purpose is to accomplish established objectives.
2.
There is a “best” structure for any organization or at least a
appropriate structure in light of its given objectives, the
environmental conditions.
3.
Specialization and the division of labor.
4.
Most problems in an organization result from structural
flaws.
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Mechanistic and Organic System
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This system came up as a result of the fast technological
advancements.
British researchers including Tom Burns and G. M. Stalker,
developed the theory of “mechanistic” and organic systems” of
organization while examining rapid technological change in the
British and Scottish electronic industry.
Stable conditions of organizations suggest use of mechanistic form
where traditional pattern of hierarchy, reliance on formal rules and
regulations, vertical communications, and structured decisionmaking is possible.
Dynamic conditions of organizations require the use of organic
form where there is less rigidity, more participation, and more
reliance on workers to define and redefine their positions and
relationships.
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Systems Theory
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Since WWII, the social sciences have increasingly
used systems analysis to examine their assertions
about human behavior.
Systems theory views an organization as a
complex set of dynamically intertwined and
interconnected elements, including its inputs,
process, outputs, feedback loops, and the
environment in which it operates and with which it
continuously interacts.
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Comparison Between Systems & Classical Theories
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Classical theory tends to be one-dimensional and
somewhat simplistic while system theories tend to
be multidimensional and complex in their
assumptions about organizational cause-andeffect relationships.
The classical school viewed organizations as static
(unchanging structures,; systems theorists see
organizations as continually changing process of
interactions among organizational and
environmental elements.
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Cybernetics System
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Cybernetics is a Greek word meaning
“steersman.”
Norbert Wiener used this word to mean
multidisciplinary study of the structures and
functions of control and information processing
system in animals and machines.
The basic concept behind Cybernetics is selfregulation-biological, social, or technological
systems that can identify problems, do something
about them, and then receive feedback to adjust
themselves automatically.
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Review
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