Organization theory
INTRODUCTION
Organisation • = a system of consciously coordinated activities or forces of 2 or more persons
Di8erent levels • Employee à micro
• Group à meso
• Organisation à macro
CHAPTER 1: LOOKING BACK IN HISTORY
è Summary of di,erent schools of thought in organizational & management history
Organisations • Social entities à they have goals and objectives
• Are designed as a system of consciously structured & coordinated activities
• Operate in connectedness with external environment
The rational approach
19th century • Sociologists Karl Marx, Emile Durkheim & Max Weber
Ø Founders of the modern science of sociology
Ø Studied implications of shift from feudalism to capitalism
• Marx à focus on working class
• Durkheim à analysis of what he saw as the loss of solidarity in new society
• Weber à first true organizational sociologist
Context • Turn of 20th century à interesting turning point for organisations
Ø Power, machinery, transportation is booming…
Issues • Large group of people working in same organization
• Increasing pace of industry
• Di8erent working issues
Taylor • Scientific Management
Ø = Scientific approach to management in which all tasks in organisations are
in-depth analysed, routinised, divided & standardized, instead of using
rules-of-thumb
Ø Initiated number of time & motion studies à on the basis of which he carried
out number of experiments to determine methods that would provide most
optimal return within the organisation
Ø Studied the organizational chain from perspective factory worker
Ø Divided tasks into subtasks, measured time needed, eliminated
unnecessary ones à identify the most e8icient method of working (the One
Best Way)
è Introduced as standardized method that all organisation’s workers were
obliged to use
Consequences for • higher return
organisations • standardization of products & activities
• greater control & predicitability
• greater subdivision & more routine tasks à reduced training times
• ‘managers must think, workers only work’ philosophy
• Optimisation of tools & equipment
Resistance to ideas of • Resistance from workers & unions who later came to present them
Taylorism • Ideological standpoint à greater profits by increasing pressure on workforce
• Focus on feirs for ‘deskilling’ à devaluation of human labour
• Human factor
Ø Taylor ignored importance of professional pride & job satisfaction
Ø Ignored significance of forms of reward other than purely financial
Ø Failed to take any account of physical & psychological make)up of
employees required to carry out routine work à led to strain and stress
1
, Taylor was aware of • Resistance of very di8erent kind
certain degree of • Was convinced that workers deliberately worked slower à attempt to ensure
resistance among that his findings would not result in tempo of their work being increased
working population Ø Attributes this to lack of direct supervision
during experiments & • Tasks of forceman (as front-line supervisor) à should be split up into di8erent
tests sub-tasks
Ø Distribution & allocation of tasks to workers
Ø Ensuring quality of execution
Ø Ensuring speed of execution
Solutions • Task enrichment, task enlargement & job rotation
Nowadays • Still criticism against work involving machine-related tempo
Ø People do not tend to work at same constant speed à there are variations
between individuals & within same individual
• Tempo too fast à people lose interest, concentration… => increased sickness
absence…
• Tempo too low à also loss of interest
• People need certain degree of ‘task tension’ in order to be able to function
optimally
Fayol • Management
Ø Kind of management training course
Ø First person to explore the task of ‘management’ as a separate & important
function within organisations
• Functions management
Ø Planning
è Can be regularly reviewed
è Must achieve general objectives
è Long-term & short-term must influence each other
è Flexible & capable of adjustment
è Specific
Ø Organizing
è Involves allocation of materials, resources & personnel
è Strictly ordered hierarchical line, everyone knows what their role is
è All the rules & di8erent levels of authority are clearcly set out in an
organigram
Ø Leading
è Motivating people, rewarding/punishing people, set tasks…
è Leaders must be aware of di8erent capacities of personnel
è Leaders must take action against incompetent member of sta8
Ø Co-ordinating
è Need to co-ordinate tasks of di8erent departments to ensure that the
wider organizational objective is reached
è Regular inter-deparmental meeting
Ø Controlling
è Managing, keeping things under control & within agreed bounds
è Every deviation from agreed objective must be sanctioned
Fayol’s 14 basic principles • Task division
of management • Authority & responsibility
• Discipline
• Centralization
• Equity
• Stability
• Initiative
•…
2
, Di8erences between • Taylor
Taylor & Fayol Ø Managers think, workers work
Ø Employees can have more than 1 leader at the same time
• Fayol
Ø Initiative was important for success
Ø Unity of command à every employee can only have 1 superior
Barnard & Simon • All employees à behave far less rationally than previously assumed
• Claimed that purely rational approach à insu8icient
Barnard • E8ort of individual employees on behalf of the wider objectives of organization
should not be taken for granted (vanzelfsprekend zijn)
Ø Every employee is di8erent & had di8erent visions à might not necessarily
match overall organizational objectives
Ø prime task leader à ensure compatibility between individual needs of
employees & the objectives of the organisation as a whole
• Most important matters of concern for organisation à obtain collaboration for
development of a common objective & communicate these matters clearly
• Specialization à needed to organize the work e8ectively
• Appropriate remuneration à necessary to persuade employees to accept
additional pressure of work
• Authority à necessary but not guaranteed that it will be followed
• Decision-making processes à needed to follow formal lines of organizational
hierarchy (not matter of personal initiative)
Ø Making a decision = making choice between alternative options
Ø Dealing with a problem = deciding to accept only available option that is
acceptable in circumstances
Simon • Organisations distinguish themselves through their
Ø Communication processes
Ø Attention to human relations
Ø Decision-making processes
• ability to motivate people to work hard à crucial factor
Ø Ensuring people can identify with objectives of organisation
Ø Training
Ø Convince rather than coerce people by giving appropriate information &
advice
• Bounded rationality
Ø Sometimes you need to make decisions that are less optimal because they
are limits to people, time pressure….
Ø Psychological, social factors & organisation culture à also play role
The human relation approach
Context • 1930’s à movement developed amongst behavioral scientists in US à for first
time attention on ‘human’ factor in organisations
Elton Mayo • Hawthorne studies
• Four studies with basic principle à giving attention to employees
• The attention that people received had an impact on the productivity
• Rewards had no impact
First phase • Series of tests to see if better working conditions resulted in increased labour
e8iciency à improvement in lighting of spaces
• Productivity improved, but no immediately clear correlation between level of
improvement in lighting & level of improvement in productivity
• Performance could be enhanced by ‘various’ factors, including environmental
ones
3
, Second phase • Group of 6 women put in specially prepared test room
• Introducing more variables à length of working day, number of rest breaks…
• Not possible to find direct connection between particular working conditions &
improvements (even after a year of tests)
• Productivity improvements were result of attention the women received &
through conversations they had with researcher ⟹ informal group feeling
Ø Social processes within group were responsible for improvement
Further test • Now all workers of factory were interviewed
• Employees react to company’s policy & manner in which they were treated by
management
• Clear approval & appreciation for occasions when management pay attention
to results of work
Fourth study • Focus on influence of reward on productivity
• There was no di8erence in forms of leadership for di8erent groups & no contact
with researchers during tests à but research team was aware of existence of
informal groups within formal test groups
• Production norm for group increased ⟹ decrease in productivity for entire
group (even though workers knew they would be rewarded on basis of
individual performance)
Ø Wanted to ‘protect’ weaker members of group à collective solidarity
• Informal group pressure is much stronger than any form of pressure
Hawthorne e8ect • Special attention given to workers in test conditions + fact that results of
performance were being followed with interest by management ⟹ to
improvement of productivity
Psychology on the • Maslow à a theory of social needs
workfloor à revisionism • Herzberg à a theory of dissatisfiers & satisfiers
• Likert & Argyris à result orientation & people orientation in management
Theory X & theory Y • Douglas McGregor
• The way managers think about & treat their personnel is important in terms of
motivation à can be viewed in perspective of 2 contrasting visions:
Ø Theory X -> people don’t like to work, pressure to do job, no initiative…
Ø Theory Y -> capable of directing themselves & controlling own work
• How are the people?
Ø
• What motivates people?
Ø
• How to manage them?
Ø
4
INTRODUCTION
Organisation • = a system of consciously coordinated activities or forces of 2 or more persons
Di8erent levels • Employee à micro
• Group à meso
• Organisation à macro
CHAPTER 1: LOOKING BACK IN HISTORY
è Summary of di,erent schools of thought in organizational & management history
Organisations • Social entities à they have goals and objectives
• Are designed as a system of consciously structured & coordinated activities
• Operate in connectedness with external environment
The rational approach
19th century • Sociologists Karl Marx, Emile Durkheim & Max Weber
Ø Founders of the modern science of sociology
Ø Studied implications of shift from feudalism to capitalism
• Marx à focus on working class
• Durkheim à analysis of what he saw as the loss of solidarity in new society
• Weber à first true organizational sociologist
Context • Turn of 20th century à interesting turning point for organisations
Ø Power, machinery, transportation is booming…
Issues • Large group of people working in same organization
• Increasing pace of industry
• Di8erent working issues
Taylor • Scientific Management
Ø = Scientific approach to management in which all tasks in organisations are
in-depth analysed, routinised, divided & standardized, instead of using
rules-of-thumb
Ø Initiated number of time & motion studies à on the basis of which he carried
out number of experiments to determine methods that would provide most
optimal return within the organisation
Ø Studied the organizational chain from perspective factory worker
Ø Divided tasks into subtasks, measured time needed, eliminated
unnecessary ones à identify the most e8icient method of working (the One
Best Way)
è Introduced as standardized method that all organisation’s workers were
obliged to use
Consequences for • higher return
organisations • standardization of products & activities
• greater control & predicitability
• greater subdivision & more routine tasks à reduced training times
• ‘managers must think, workers only work’ philosophy
• Optimisation of tools & equipment
Resistance to ideas of • Resistance from workers & unions who later came to present them
Taylorism • Ideological standpoint à greater profits by increasing pressure on workforce
• Focus on feirs for ‘deskilling’ à devaluation of human labour
• Human factor
Ø Taylor ignored importance of professional pride & job satisfaction
Ø Ignored significance of forms of reward other than purely financial
Ø Failed to take any account of physical & psychological make)up of
employees required to carry out routine work à led to strain and stress
1
, Taylor was aware of • Resistance of very di8erent kind
certain degree of • Was convinced that workers deliberately worked slower à attempt to ensure
resistance among that his findings would not result in tempo of their work being increased
working population Ø Attributes this to lack of direct supervision
during experiments & • Tasks of forceman (as front-line supervisor) à should be split up into di8erent
tests sub-tasks
Ø Distribution & allocation of tasks to workers
Ø Ensuring quality of execution
Ø Ensuring speed of execution
Solutions • Task enrichment, task enlargement & job rotation
Nowadays • Still criticism against work involving machine-related tempo
Ø People do not tend to work at same constant speed à there are variations
between individuals & within same individual
• Tempo too fast à people lose interest, concentration… => increased sickness
absence…
• Tempo too low à also loss of interest
• People need certain degree of ‘task tension’ in order to be able to function
optimally
Fayol • Management
Ø Kind of management training course
Ø First person to explore the task of ‘management’ as a separate & important
function within organisations
• Functions management
Ø Planning
è Can be regularly reviewed
è Must achieve general objectives
è Long-term & short-term must influence each other
è Flexible & capable of adjustment
è Specific
Ø Organizing
è Involves allocation of materials, resources & personnel
è Strictly ordered hierarchical line, everyone knows what their role is
è All the rules & di8erent levels of authority are clearcly set out in an
organigram
Ø Leading
è Motivating people, rewarding/punishing people, set tasks…
è Leaders must be aware of di8erent capacities of personnel
è Leaders must take action against incompetent member of sta8
Ø Co-ordinating
è Need to co-ordinate tasks of di8erent departments to ensure that the
wider organizational objective is reached
è Regular inter-deparmental meeting
Ø Controlling
è Managing, keeping things under control & within agreed bounds
è Every deviation from agreed objective must be sanctioned
Fayol’s 14 basic principles • Task division
of management • Authority & responsibility
• Discipline
• Centralization
• Equity
• Stability
• Initiative
•…
2
, Di8erences between • Taylor
Taylor & Fayol Ø Managers think, workers work
Ø Employees can have more than 1 leader at the same time
• Fayol
Ø Initiative was important for success
Ø Unity of command à every employee can only have 1 superior
Barnard & Simon • All employees à behave far less rationally than previously assumed
• Claimed that purely rational approach à insu8icient
Barnard • E8ort of individual employees on behalf of the wider objectives of organization
should not be taken for granted (vanzelfsprekend zijn)
Ø Every employee is di8erent & had di8erent visions à might not necessarily
match overall organizational objectives
Ø prime task leader à ensure compatibility between individual needs of
employees & the objectives of the organisation as a whole
• Most important matters of concern for organisation à obtain collaboration for
development of a common objective & communicate these matters clearly
• Specialization à needed to organize the work e8ectively
• Appropriate remuneration à necessary to persuade employees to accept
additional pressure of work
• Authority à necessary but not guaranteed that it will be followed
• Decision-making processes à needed to follow formal lines of organizational
hierarchy (not matter of personal initiative)
Ø Making a decision = making choice between alternative options
Ø Dealing with a problem = deciding to accept only available option that is
acceptable in circumstances
Simon • Organisations distinguish themselves through their
Ø Communication processes
Ø Attention to human relations
Ø Decision-making processes
• ability to motivate people to work hard à crucial factor
Ø Ensuring people can identify with objectives of organisation
Ø Training
Ø Convince rather than coerce people by giving appropriate information &
advice
• Bounded rationality
Ø Sometimes you need to make decisions that are less optimal because they
are limits to people, time pressure….
Ø Psychological, social factors & organisation culture à also play role
The human relation approach
Context • 1930’s à movement developed amongst behavioral scientists in US à for first
time attention on ‘human’ factor in organisations
Elton Mayo • Hawthorne studies
• Four studies with basic principle à giving attention to employees
• The attention that people received had an impact on the productivity
• Rewards had no impact
First phase • Series of tests to see if better working conditions resulted in increased labour
e8iciency à improvement in lighting of spaces
• Productivity improved, but no immediately clear correlation between level of
improvement in lighting & level of improvement in productivity
• Performance could be enhanced by ‘various’ factors, including environmental
ones
3
, Second phase • Group of 6 women put in specially prepared test room
• Introducing more variables à length of working day, number of rest breaks…
• Not possible to find direct connection between particular working conditions &
improvements (even after a year of tests)
• Productivity improvements were result of attention the women received &
through conversations they had with researcher ⟹ informal group feeling
Ø Social processes within group were responsible for improvement
Further test • Now all workers of factory were interviewed
• Employees react to company’s policy & manner in which they were treated by
management
• Clear approval & appreciation for occasions when management pay attention
to results of work
Fourth study • Focus on influence of reward on productivity
• There was no di8erence in forms of leadership for di8erent groups & no contact
with researchers during tests à but research team was aware of existence of
informal groups within formal test groups
• Production norm for group increased ⟹ decrease in productivity for entire
group (even though workers knew they would be rewarded on basis of
individual performance)
Ø Wanted to ‘protect’ weaker members of group à collective solidarity
• Informal group pressure is much stronger than any form of pressure
Hawthorne e8ect • Special attention given to workers in test conditions + fact that results of
performance were being followed with interest by management ⟹ to
improvement of productivity
Psychology on the • Maslow à a theory of social needs
workfloor à revisionism • Herzberg à a theory of dissatisfiers & satisfiers
• Likert & Argyris à result orientation & people orientation in management
Theory X & theory Y • Douglas McGregor
• The way managers think about & treat their personnel is important in terms of
motivation à can be viewed in perspective of 2 contrasting visions:
Ø Theory X -> people don’t like to work, pressure to do job, no initiative…
Ø Theory Y -> capable of directing themselves & controlling own work
• How are the people?
Ø
• What motivates people?
Ø
• How to manage them?
Ø
4
