management § organization - ulb.ac.be · douglas mcgregor abraham maslow frederick herzberg karl...

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Anne Drumaux Management § OrganizationSolvay Business School

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Management § Organization


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Contents• Introduction/case discussion• Chap 1 : Perspectives in Organization Theories

• Chap 2 : Environment § Technology• Working session on technology and environment

• Chap 3 : Organizational Structure• Working session on structure

• Chap 4 : Culture – Identity• Working session on culture

• Chap 5 : Key Issues and Themes• Working session on decision making

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Main References :

Hatch Mary Jo (1997), Organization Theory, Oxford University Press

Hatch Mary Jo (2000), Théorie des organisations, De Boeck Université, Paris, Bruxelles

Friedberg E. (Dir) (2001), A la recherche de l’organisation, CDRom, Banlieues Media, Paris

Friedberg E. (Dir) (2005), Decision-making, CDRom, Banlieues Media, Paris

Strategor (1995), Stratégie, structure, décision, identité, Interéditions, Paris

Stoner J.A., Freeman R.E.,Gilbert D.R.Jr (1995), Management, Prentice Hall International Editions, New Jersey


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Introduction

• A short story

• A first lecture of organizational stakes

• Quiz

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“From Brussels to Hanoi”

The organizational story of a missed plane– Brussels- CDG Paris : AF 7184– CDG Paris-Hanoi : VN 534


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Decision-making– Timing– Available information– Partnership Rail-Airlines Companies– Partnership Airlines

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Behavior– Cooperation among partners– Cooperation between agents– Preferences of AF & VN agents– Conflict management


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Rationality – AF staff person at CDG/VN staff person at

CDG– Effective or intentional ?

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E. Friedberg on organizationaltheory

• Decision-making and organization are linked

• Behind behavior, rationality• Myth of rational decision making as a

representation of our intelligence


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Initial QUIZ

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Chap 1 : Perspectives in Organization Theories

• Management and Organization definitions

• Organization Main Theories• Management process• The “Five circles” model of organization


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Management definitionMany definitions… many approachesManagement is

a process in relation with resourcesto reach organizational goals

« Management is an action, an art, a way to conduct an organization, to direct it, to plan its development, to control it » (Thiétart,1960)

Management definition is related to organization definition

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Management or general policy of the enterprisesynthesis of information (marketing, production

management, human resources management, finance…)

generates own process


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OrganizationOrganization definition:

2 or more peoples working togetherin a structured wayto achieve goals

« an Organization is a social unity with an aim »(Litterer, 1960)

« an Organization is a response to collective action » (Crozier, 1977)

« Organization is defined like a collective action pursuing a common mission » (Mintzberg, 1989)

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Organization Humanressources

Financialressources

Physicalressources

Informationressources

Petrofinacorporation

DrillingplatformExecutives &workers

ProfitsStockholderinvestments

RefineriesOfficebuildings

Sales forecastOpecproclamation

BrusselsUniversity

FacultySecratariatstaff

AlumnicontributionsGovernmentgrants

ComputersCampusfacilities

ResearchreportsGovernmentpublications

Brussels city Police officersMunicipalemployees

Tax revenueGovernmentgrants

SanitationequipmentMunicipalbuildings

EconomicforecastCrimestatistics

Grocery store Grocery clerksBookkeeper

ProfitsOwnerinvestment

BuildingDisplayshelving

Price list fromsuppliersNewspaper adscompetitors


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Organization theories

Evolution in relation with historical and social times and places

Attempts and various approaches beginning at the end of the 19th century in Europe and US

5-6 Basic « schools » of Management §Organization

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1. Classical School ( the foundators)

• 1880-1920• Model « one best way »• Model focused on mass production and

on scale economies• Mecanist conception of organization


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• Max Weber (1864-1920)The Theory of Social and Economic Organization

(1924)

Why people obey to orders?Distinction between power and authorityOrganization Typology :

charismatic legitimacytraditional legitimacyrational legal legitimacy

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Bureaucracy as the ideal organization whose activities and objectives were rationally thought

Bureaucracy as an ideal type based on principles:

Norms by mutual agreementClear hierarchy with functions and jobsEach job has a sphere of legal competence Hierarchy related to the function and not to the

personSelection on qualification ( examinations)Career : promotion by superiors


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• Henri Fayol (1841-1925)Administration industrielle et générale (1916)

identifies principles and skills of effective management :Division of laborAuthority and responsibilityDiscipline from good leadership, Unity of command, Unity of Direction, Degree of decentralization of authority, Subordination to common good, Equity, Stability of staff, Initiative...

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• Frederic W.Taylor (1856 - 1915)Principes of Scientific management (1911)

Principles :Scientific study of work by specialistsScientific selection and training of staff Scientific study and scientific selection of the workerCooperation between managers and workers

Hierarchy is not enough to ensure effective coordination

Best methods for performing any tasks (« one best way »), selecting, training and motivating workers


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Differential rate system : payment of higher wages to more efficient workers+ : production « miracle » with increasing productivity- : emphasis on productivity and profitability led to

exploitation and mistrust by workers

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2. The behavioral school (Human Relations)

• 1930-1970• Research in association among big

enterprises and academics• Role of human factors in the functioning

of enterprises• Role of motivation


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Elton Mayo (1880-1949)Democracy and Freedom ( 1929)

The human problems of an industrial civilization (1933)

Organization is peopleUnderstanding of the workers themselves as

opposed to an understanding of the workHawthorne effect : (Western Electric 1927-1932)

studies on the effect of work conditions (lighting, pauses, productivity primes…)shows the possibility that workers who receive special attention will perform better simply because they receive that attention

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Abraham Maslow (1908-1970)Motivation and Personality (1954)

hierarchy of the needs (physical and safety, …, ego needs)

emphasizes the fact that when lower-level needs are satisfied, most people are motived more by higher-level needs

a satisfied need is not anymore a factor of motivation

Physiologic needs

Security needsSocial needs

Estime & respect

Ego needs


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3. The Cognition SchoolJames March (1928) & Herbert Simon (1916-2001)

Organizations (1958)

analyse patterns of behaviors show that individuals stay in an organization as

long as retributions ( salary, status, ego needs…) are superior in their view to their contribution (work, effort, subordination…)

cognition : people function in the organization with a certain type of rationality: a bounded rationality

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• Douglas Mc Gregor (1906-1964)– The human side of the enterprise (1960)

management decision-making is based upon assumptions about human nature

Theory X ( people are lazy, do not accept responsibility, necessity to constraint) versus

Theory Y ( people enjoy working, seek challenge, able to direct himself, ordinary man is able to learn, intellectual potential is rarely used )


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4. Structural contingency approach (1930 -1970)

≠ one best wayInfluence of variables : size, age, strategy,

technical system of production, environment impact)

management technique that best contributes to the attainment of organizational goals might vary in different types of situations

the manager ’s task is to identify which technique will, in a particular situation, under particular circumstances, and at a particular time, best contribute

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• Charles PerrowOrganizational Analysis: a sociological view (1970)

Introduces a typology of technical systems of production which explain the structure of the organization

2 types of influences:Nature and repetitively( unity, mass production,

continued)complexity


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• Arthur ChandlerStrategy and Structure (1962)

Study between 1909-1959 of big US Enterprises (GM, Du Pont, Standart Oil, Sears§ Roebuck)

Structure is determined by strategic choices:Enterprises offering limited quantity and scope of

products are often centralizedWhen size, market are growing, structure of

enterprises were modified to match with growth strategy:

Vertical integration for volume strategyDivisionalization for diversification strategy

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Theories of contingency approach

Organizational structures are influenced by

Organizational structures are influenced by

Internal Variables

External Variables(environment)

age

size

technology

strategy

variability

turbulence

relativity

national culture

coordination

Labor division

Starbuck, Greiner, Stinchcombe

Dale, Blau, Aldrich

Woodward, Perrow

Chandler, Child

Burns et Stalker

Emery et Trist

Laurence et Lorsch

Hofstede

Mintzberg


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5. Power and rationality limits ( organization sociology) (1945-1980)

– 1945-1980– Focus on power in organizations– Focus on decision process– Discussion of the nature of rationality

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• Richard M. Cyert § James MarchA behavioral theory of the firm (1963)

Organization is a coalition of members with different goals; consensus only on general aims; conflicts solved by local rationality and by sequential treatment of problems

Uncertainty is eliminated step by step without anticipation

Problematic searchSliding rules and goals


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• Chester Barnard (1886-1961) • believes that individual and organizational

purposes can be kept in balance; he introduces the concept of « zone of indifference » that is what the employee would accept to do without questioning the manager ’s authority

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• Michel Crozier (1922-With G. Friedberg, L’acteur et le système (1977)

Organization as a place of collective action is composed of actors

Organization is never totally controlled ; incertitude zones exist ;one may pursue own goals

Power as a way to master incertitudeActors inside the organization may control

incertitude's zones : particular competence, link with an environnemental segment, communication, information, rules application...


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6. Strategic reactivity & participative management

• 1980-• Economic context more turbulent ,

enterprises and academics explore flexible organization

• Focus on adaptability• Role of culture

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William OuchiA conceptual framework for the design of organizational

control mechanisms (1979)Markets, Bureaucracies and Clans (1980)

Control consists to achieve cooperation among individuals who hold partially divergent objectives

3 sources of control: markets, bureaucracies, clans (possible combination)

Market control take place through competition : when organizations participate in free markets, prices and profits can be used to evaluate and control their performance

Bureaucracies rely on a combination of rules, procedures, documentation and surveillance to achieve control

Cultural values, norms and expectations provide the primary mechanisms of control to organizations that use clan control


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Chronology of organizational theories (SCOTT)

Organization is a closed system

Organization is an open system

Individual is a rational agent

Individual is a social agent

1900 1900 -- 19301930 1960 1960 -- 19701970

1930 1930 -- 196019601970 1970 -- ……

Organize for efficient production Adapt structure

Individual motivation Mobilize through culture

Directive Management Contingency and planification

Human Relations Participating management

”Order from rules” ”Organization modeled by exogenous forces”

« role of group and working conditions » « Complexity, change, turbulence and adhocracy »

Max WEBER(1864-1920)Frederick TAYLOR (1856-1915)Henri FAYOL (1841-1925)

Alfred CHANDLERPaul LAWRENCE et Jay LORSCHJohan WOODWARDCharles PERROW

Elton MAYODouglas McGREGORAbraham MASLOWFrederick HERZBERG

Karl WEICKJames MARCHWilliam OUCHI

Herbert SIMON Michel CROZIER

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ENVIRONMENT

Culture

Social structure

Physical structure

Technology

ORG

Five circles model(Hatch, 1997)


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Comparison of characteristics associated with industrialism and post-industrialism (Hatch, 1997)

• global competition• de-concentration of capital with respect to nation state

• fragmentation of markets and international decentralization of production

• rise of consumer choice, demand for customized goods

• rise of social movements, single issue politics, service class

• pluralism, diversity, localism

• nation states regulate national economies

• mass marketing• Standardization• the Welfare State

Environment

PostindustrialIndustrial

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Comparison of characteristics associated with industrialism and post-industrialism - continued (Hatch, 1997)

• flexible manufacturing, automation

• use of computer for design, production, and stock control

• just-in-time systems (JIT)• emphasis on speed and

innovation• service/information output

• mass production along Taylorist/Fordist lines

• routine• manufacturing

output

TechnologyPostindustrialIndustrial


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Comparison of characteristics associated with industrialism and post-industrialism – continued (Hatch, 1997)

• new organizational forms(e.g., networks, strategic alliances, virtual organization)

• flatter hierarchies with horizontal communication and devolved managerial responsibility

• outsourcing• informal mechanisms of

influence ( participation, culture, communication)

•Vertical and horizontal disintegration

• Loose boundaries between functions, units, organizations

• bureaucratic• hierarchical with

vertical communication emphasized

• specialization• vertical and

horizontal integration

• focused on control

Social structure


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• deconcentration of people• reduction in transportation

time links distant spaces andencourages international, global orientation

• compression of temporal dimension (e.g., shortening product lifecycles) leads to simultaneity

• concentration of people in industrial towns and cities

• local, nationalisticorientation

• time is linear

Physical structure (space-time)

• celebrates uncertainty, paradox, fashion

• organizational values : quality, customer service, diversity, innovation

• celebrates stability,tradition, custom

• organizational values : growth, efficiency, standardization, control

Culture



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• frenetic, complex• knowledge-based skills• cross-functional teamwork• greater emphasis on

learning• more outsourcing,

subcontracting, self-employment, tele-working

• routine• deskilled labor• functional

specialization of tasks

Nature of work


Based on : Clegg (1990); Harvey (1990); Heydebrand (1977); Kumar (1995); Lash and Urry (1987, 1994); Piore and Sabel (1984).

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The metaphors of organization theory (Hatch, 1997)

an artifact who would like to be a symbol of the organization

a pattern of meanings created and maintained by human association through shared values, traditions, and customs

CultureSymbolic-interpretive

an interdependent part of an adaptive system

a living system that performs the functions necessary to survival esp. adaptation to a hostile world

OrganismModern

Machine

Metaphor

an engineer who designs builds and operates the organizational machine

a machine designed and constructed by management to achieve predefined goals

Classical period

Image of the manager as …

Image of the organization as …

Perspective


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The metaphors of organization theory – continued (Hatch, 1997)

Collage

Metaphor

a theoristthe theorist is an artist

an organization theory is a collage made from bits of knowledge and understanding brought together to form a new perspective that has reference to the past

Postmodern

Image of the manager as …

Image of the organization as …

Perspective

management § organization - ulb.ac.be · douglas mcgregor abraham maslow frederick herzberg karl...

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