Theories on Organization Management

Presenters:

Anup Aacharya

Irshad Ali Shekh

Prakriti Pradhan

Sahina Maharjan

Surendra K. Bohara

MICD 3rd Batch, 3rd Semester

Date: 7th February 2016

At Nutshell:

Introduction to: Organization, theory of organization management History/background on Theories of organization management Dealing with why of theories and detail on:

Classical theories Neo-classical theories System based theories Contingency theories Chaos theories

Conclusion

Organization

A social group with collective goal. Greek word organon (ergon) - means

`organ` - and it means a compartment for a particular job.

“Organization is defined as the structure or network of relationship among individuals and positions in a work setting and the process by which the structure is created, maintained and used.”

- Dalton E. McFarland

Organizational Management

The process of organizing, planning, leading and controlling resources within an entity with the overall aim of achieving its objectives.

The organizational management of a business needs to be able to make decisions and resolve issues in order to be both effective and beneficial.

Organizational theories

Organizarional theory is a loosely knit family of many approaches to organizational analysis. Its theme, questions, methods and explanatory modes are extremely diverse.

Organizational theory is not a single theory. Dwight Waldo noted in a review of field work in 1978 : "Organization theory is characterized by vogues, heterogeneity, claims and counterclaims“

Develop and explain the concept of how organization is effectively:

designed,

functioned

administered

a/c to Jeffrey Pfeffer:

a) The effect of social organizations on the behavior and attitudes of individuals within them,

b) The effects of individual characteristics and action on organization,

c) The performance, success, and survival of organizations,

d) The mutual effects of environments, including resource and task, political, and cultural environments on organizations and vice versa, and

e) Concerns with both the epistemology and methodology that undergird research on each of these topics."

Outcome of theories on organizationOrganizational theory is not a single theory. Dwight Waldo noted in a review of field work in 1978 : "Organization theory is characterized by vogues, heterogeneity, claims and counterclaims"

Roughly there are six types of structure: Pre-bureaucratic structures Bureaucratic structures Post-bureaucratic Functional structure Divisional structure Matrix structure

Background on theories of Organization

Changing the meaning with changing societies: Asiatic, Agricultural, feudalistic, imperialistic, industrialization.

Modern organization theory is rooted in concepts developed during the beginnings of the Industrial Revolution in the late 1800s and early 1900s.

Frederick W. Taylor (1856-1915)- book “Principles of Scientific Management”-implemented on American factory floors

Max Weber (1864-1920) presented bureaucratic model to the organization management

In the early 1900s was Henri Fayol identified: strategic planning, staff recruitment, employee motivation, and employee guidance (via policies and procedures) as important management functions in creating and nourishing a successful organization.

Background…

Hawthorn studies (Elton Mayo, 1930s) focused on human influence/factor (Maslow's need hierarchy) of organization management emphasing on:

the importance of individual and group interaction, humanistic management skills, and social relationships in the workplace.

Douglas McGregor (mid 1900s)-Theory of X and Y

Open System theory (1960s)

Theory Z (1980s-90s): a blending of American and Japanese management practices

What are organizational theories then?

• Scientific Management approach

• Weber's Bureaucratic approach

• Administrative theory

Classical Organizational Theories

• Humanistic model

Neoclassical Theory

• Systems approach• Socio-technical

approach• Contingency or

Situational approach

Modern Organization Theory

Taylor's principles of scientific management

It treats worker as no better than a machine and lays more emphasis on the formal organization structure.

· Science, not rule-of-thumb;· Scientific selection of the worker· Management and labour cooperation rather than conflict· Scientific training of workers

Weber's bureaucratic approach (1947)

Structure: hierarchy based positions

Specialization: chain of command and unity of command

Predictability and stability: formal rules and regulations

Rationality: on recruitment and selection

Democracy: on decision making and responsibility

Span of control

Henry Fayol's principles of management: Administrative theory (1949)

Fayol, Gulick, and Urwick put forward the principles of administration based on the primacy of the organization in terms of importance.

Neo-classical or Humanistic Theory:

Less formal, less control.

More participation in decision making with decision authority at the point of service.

Results in a flat structure developed along horizontal lines with fewer levels of management.

Communication is enhanced, but managers can be overburdened.

Human Relations Approach theory was propounded by Elton Mayo, Kurt Lewin. This theory looks upon the workers as a whole man, with his feelings, motives, aspirations and the like. The theory emphasizes on treating he worker as a human being, who is also a member of a team. According to this theory non-economic rewards play a vital role in motivation.

Principles of the neoclassical approach

Based on Hawthorne experiment, productivity can be increased through social and human relations at: Individual Work Group Participative Management

Modern theories

Bernard (1938) gave the first modern and comprehensive view of management Von Bertalanffy (1951) made a significant contribution by suggesting a component of general systems theory

which is accepted as a basic premise of modern theory Based on the concept of systematic arrangement for objectives (Hicks and Gullet, 1975).

Modern understanding of the theories includes:

1. The system approach

2. Socio-technological theory

3. Contingency or situational approach

Systems TheoryEmphasized by Ludwig Von Bertalanffy and Kenneth Boulding. It has been applied to business by Seymour

Tilles, danielkatz, Robert Kahn and others. It treats organization as a system, which is partly economic, partly technical, partly political and partly

social. Productivity is viewed as a function of the interplay among people, structure, and the environment. The organization is a complex social and technical open system that requires human, financial, and

material resources.

Open System Theory (1960s)

The term "open systems“= open for change to the externalities.

Management By Objective (MBO)

A process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members.

- (George S. Odiorne, management by objective, 1966)

Organizational Humanism

Its exponents are Chris Argyris, Rensis Likert, Douglas McGregor.

It focusses the self actualization, self directing and self controlling tendencies of individuals.

One of the theories of Organizational Humanism is by Douglas McGregor Theory Y.

The theory is based on Maslow’s Theory of Need Hierarchy.

According to this theory man exercises self direction and self control in which he is committed, and is also

associated with their achievement and reward on it.

The task of management therefore is to create opportunities, realizing potential, removing obstacle,

encouraging growth and provide guidance.

Theory of X and Y

Douglas McGregor (1950s) Independence Responsibility Motivation Nature of work Drive themselves

to work.

Contingency Theory

The organization’s structure must be matched to its environment to enhance performance.

The factors that the manager should take into account in analyzing are: the external environment, the technology used, and the staff of the organization.

Chaos (disorder) Theory

Based upon the belief in the uncertainty and unpredictability of the environment, chaos theory asserts that organizations are living, self-organizing systems that are complex and self-adaptive.

The system moves between order and chaos and is only stable temporarily.

Social Cognitive Theory of Organizational Management Robert Wood and Albert

Bandura (1989) Is triadic reciprocal causation of psychological functioning so as for organization

Conclusion

Conclusion..