Chapter 1 - The evolution of organization and management thoughts
Organization behaviour: interdisciplinary science that is concerned with the study of behaviour of organisations as well
as factors that determine this behaviour. Two aspects of the subject:
1. Descriptive - description of the behaviour of organizations, including motives and consequences.
2. Prescriptive - advice about organizational design and the best course of action to follow.
To study this, an interdisciplinary approach is required .
Multidisciplinary approach - non-integrative mixture of disciplines that each discipline retains its methodologies
and assumptions without change or developments vs. interdisciplinary approach- organizational behaviour
contains many elements that originate from sciences (crosses boundaries between school of thoughts).
Organizational behaviour- direction (targeted persuasion, the guiding activity that involves giving direction on a
moment-to-moment basis, these directions should be aligned with a target that has been predetermined in
advance), effectiveness (the extent to which such activities have succeeded).
Obtaining overall picture of an organization, an organizational problem or a specific project-> priority: gaining an
overview.
Origins of the field of study
Origin: need to think in a structured manner about what to do in organizations and what goes on within them.
4BC- Socrates and Plato - theory about leadership, task allocation and specialisation.
Henry Fayol - the first person to mention that management was a science.
The development of trading and emergence of multinational enterprises
Earliest examples of international trade can be found in the time of ‘trade routes’.
The first trading companies were established with the support of national governments.
Formation of steam engine (fired by coal)- the companies started bringing cheap raw materials and started selling
these to all over the world.
First, the prosperity was measured by gold (1), but later in the production (2) = MASS PRODUCTION
Dutch East India Company - monopoly trade, developed into largest company of its time, trading spices, silk, tea,
porcelain.
In the 1900s - dramatic increase in the multinational businesses (because governments were not so powerful
anymore, technological developments, shortening distances, improving communication between people).
Schools of thought and personalities (valuable elements and a timeless character)
How to achieve the goal through combined efforts- effective and coordinated division of tasks, selection of the
most suitable leadership style, utilisation of the most appropriate manner of communication play the main roles.
Events prior to the industrial revolution (400 BC - 1900 AD)
Nicollo Machiavelli - Principe (Prince) - based on self-interest and taking advantage of the situation at any
opportunity; it is his experience as an adviser to the government.
Until the second half of the 18th century – MERCANTILISM - possession of bullion (gold and money) was the only
measure of national wealth-export more than was import.
1776 - Adam Smith - The Wealth of Nations- productive work is the source of prosperity, effective division of
labour can raise levels of productivity, rejects mercantilism.
18th century - coal-fired engine, mass production, replacing manufacture of products in workers’ homes- Western
society changed from an agricultural to an industrial one.
19th century - growth of American companies as a response to expanding consumer market -> no planning, not
systematic, need for a structured approach.
,Frederick Taylor and scientific management (1900+) F.T. was the first to suggest a systematic, coherent approach to
determine the manner in which factories should be organized *managers should focus on planning, coordinating,
overseeing and checking the results (that is why it is scientific). Key characteristics:
1. Scientific analysis of the activities that should be carried out, the time and motion studies to be used
2. Clear division of tasks and training for the workforce so that each task and operation can be precisely identified and
allocated (worker routines)
3. Close and friendly working relationships between managers and workers
4. Managers are responsible for seeking, analysing appropriate working methods and for creating optimum
conditions for production
5. Use of careful selection processes
6. Financial rewards in order to reduce production costs
7. Division of front-line supervisory responsibilities within the production: (eight-bosses system)
This resulted in an increased production, but not increased wages or an improvement in relations with
management.
Employees were just an extension of a piece of machinery, with boring tasks, restriction of freedom.
Labour studies, job descriptions, job classification
Henry Fayol and the general management theory (1900+)
In Europe, the first guidelines of how organizations can manage their operations as a whole.
Looking at organization from the production angle, directed at organizations other than industrial enterprises
General educational model, most important principle: unity of command (each employee reports to one
immediate superior), support for training future managers, more attention paid to the tasks of managers.
Six independent management activities:
1. Technical
2. Commercial
3. Financial
4. Security (safeguarding people and properties)
5. Accounting
6. Directing
Max Weber and the bureaucracy theory (1940+) (studying government organizations and large businesses from a
sociological perspective). Large organizations:
Clear and definite divisions of tasks
Hierarchical command structure
Carefully defined authority and responsibilities
Impersonal relations between officials, recruitment on the basis of ability and knowledge
Recruitment on the basis of ability and knowledge
Promotion and reward on the basis of objective criteria and procedures
The execution of activities according to clearly laid down procedures
All information, procedures and details written down
The power of officials
Ideal bureaucracy -most efficient form of organization- pyramid system – Top-to-bottom; all regulations were
written
Elton Mayo and the human relations movement (1945+)
Connection between improvements in working conditions (shortening the working day, increasing the number and
duration of breaks, providing free soup or coffee) and productivity -> each change led to increase in production and
reduction in employee fatigue.
, Objective affects and subjective effects (attention, feeling of security, belonging to a group) had an effect on the
results - subjective factors are even more important, group determination has the greatest influence.
Happy and satisfied employees are more likely to reach their maximum potential level of performance-
management needs to ensure good interpersonal relationships within small groups.
Rensis Likert and the neo-human relations approach (1950+)
Criticism of the human relations movement-too idealistic, more like a social club.
Synthesis of human relations management and scientific management
Warren G. Bennis: ‘The Taylor approach leads to an organization without men, while that of the human relations
movement groups of men without organization.’
Likert, Herzberg, McGregor, Burn, Mouton
Likert- ‘linking pin model’, structure containing a number of overlapping groups in which members of one unit are
leaders of another, effective communication with higher groups.
Abraham Maslow’s needs- 5 levels- psychological needs, security and safety needs, love and belonging needs,
status or esteem needs, self-actualization needs.
Douglas McGregor - book: The Human side of enterprise - Theory X and theory Y (more about human perception than
about the image of an organization), how employees can cooperate.
Kenneth Boulding and the systems approach (1950+)
Neo-human relations supporters - CELL PHILOSOPHY
Organizations seen as a system-as a whole made up of parts (subsystems, divisions), organizations interact with the
outside world- RESULT: SYNERGY
An organization is run with the help of information that is given to the various subsystems; management should
tackle organizational problems in a consistent way.
In case organization grows faster than it should and is divided in the parts, manager focuses on the one division.
Paul Lawrence, Jay Lorsch and the contingency approach (1965+)
To obtain optimal performance, different circumstances will require different structures, task divisions and working
methods.
Concept of contingency: determination by situation.
The relationship between an organization and its surroundings, constantly aware of how complex the
interrelationships within their surroundings are.
Recent organizational theories (1980+)
Philip Crosby and Quality Control
W. Deming - organizational behaviour relates to quality control in organizations.
Philip Crosby - quality gurus, developed a total quality management theory, working according to the ‘zero defects’
rule, in organizations, you have to attempt to avoid mistakes in all processes.
Organization can reduce their expenses by about 20% provided they treat quality control as number one.
Henry Mintzberg: organizational structure and strategic planning
The structuring Organizations -blend of organizational theories, not possible to generate the best organizational
structure.
Don’t view qualities separately, but in a common form of configuration (ideal typical organization).
Tom Peters and management principles for excellent companies: Research to find out a set of management principles
for organizational development.
Characteristics of the success of enterprises:
Organization behaviour: interdisciplinary science that is concerned with the study of behaviour of organisations as well
as factors that determine this behaviour. Two aspects of the subject:
1. Descriptive - description of the behaviour of organizations, including motives and consequences.
2. Prescriptive - advice about organizational design and the best course of action to follow.
To study this, an interdisciplinary approach is required .
Multidisciplinary approach - non-integrative mixture of disciplines that each discipline retains its methodologies
and assumptions without change or developments vs. interdisciplinary approach- organizational behaviour
contains many elements that originate from sciences (crosses boundaries between school of thoughts).
Organizational behaviour- direction (targeted persuasion, the guiding activity that involves giving direction on a
moment-to-moment basis, these directions should be aligned with a target that has been predetermined in
advance), effectiveness (the extent to which such activities have succeeded).
Obtaining overall picture of an organization, an organizational problem or a specific project-> priority: gaining an
overview.
Origins of the field of study
Origin: need to think in a structured manner about what to do in organizations and what goes on within them.
4BC- Socrates and Plato - theory about leadership, task allocation and specialisation.
Henry Fayol - the first person to mention that management was a science.
The development of trading and emergence of multinational enterprises
Earliest examples of international trade can be found in the time of ‘trade routes’.
The first trading companies were established with the support of national governments.
Formation of steam engine (fired by coal)- the companies started bringing cheap raw materials and started selling
these to all over the world.
First, the prosperity was measured by gold (1), but later in the production (2) = MASS PRODUCTION
Dutch East India Company - monopoly trade, developed into largest company of its time, trading spices, silk, tea,
porcelain.
In the 1900s - dramatic increase in the multinational businesses (because governments were not so powerful
anymore, technological developments, shortening distances, improving communication between people).
Schools of thought and personalities (valuable elements and a timeless character)
How to achieve the goal through combined efforts- effective and coordinated division of tasks, selection of the
most suitable leadership style, utilisation of the most appropriate manner of communication play the main roles.
Events prior to the industrial revolution (400 BC - 1900 AD)
Nicollo Machiavelli - Principe (Prince) - based on self-interest and taking advantage of the situation at any
opportunity; it is his experience as an adviser to the government.
Until the second half of the 18th century – MERCANTILISM - possession of bullion (gold and money) was the only
measure of national wealth-export more than was import.
1776 - Adam Smith - The Wealth of Nations- productive work is the source of prosperity, effective division of
labour can raise levels of productivity, rejects mercantilism.
18th century - coal-fired engine, mass production, replacing manufacture of products in workers’ homes- Western
society changed from an agricultural to an industrial one.
19th century - growth of American companies as a response to expanding consumer market -> no planning, not
systematic, need for a structured approach.
,Frederick Taylor and scientific management (1900+) F.T. was the first to suggest a systematic, coherent approach to
determine the manner in which factories should be organized *managers should focus on planning, coordinating,
overseeing and checking the results (that is why it is scientific). Key characteristics:
1. Scientific analysis of the activities that should be carried out, the time and motion studies to be used
2. Clear division of tasks and training for the workforce so that each task and operation can be precisely identified and
allocated (worker routines)
3. Close and friendly working relationships between managers and workers
4. Managers are responsible for seeking, analysing appropriate working methods and for creating optimum
conditions for production
5. Use of careful selection processes
6. Financial rewards in order to reduce production costs
7. Division of front-line supervisory responsibilities within the production: (eight-bosses system)
This resulted in an increased production, but not increased wages or an improvement in relations with
management.
Employees were just an extension of a piece of machinery, with boring tasks, restriction of freedom.
Labour studies, job descriptions, job classification
Henry Fayol and the general management theory (1900+)
In Europe, the first guidelines of how organizations can manage their operations as a whole.
Looking at organization from the production angle, directed at organizations other than industrial enterprises
General educational model, most important principle: unity of command (each employee reports to one
immediate superior), support for training future managers, more attention paid to the tasks of managers.
Six independent management activities:
1. Technical
2. Commercial
3. Financial
4. Security (safeguarding people and properties)
5. Accounting
6. Directing
Max Weber and the bureaucracy theory (1940+) (studying government organizations and large businesses from a
sociological perspective). Large organizations:
Clear and definite divisions of tasks
Hierarchical command structure
Carefully defined authority and responsibilities
Impersonal relations between officials, recruitment on the basis of ability and knowledge
Recruitment on the basis of ability and knowledge
Promotion and reward on the basis of objective criteria and procedures
The execution of activities according to clearly laid down procedures
All information, procedures and details written down
The power of officials
Ideal bureaucracy -most efficient form of organization- pyramid system – Top-to-bottom; all regulations were
written
Elton Mayo and the human relations movement (1945+)
Connection between improvements in working conditions (shortening the working day, increasing the number and
duration of breaks, providing free soup or coffee) and productivity -> each change led to increase in production and
reduction in employee fatigue.
, Objective affects and subjective effects (attention, feeling of security, belonging to a group) had an effect on the
results - subjective factors are even more important, group determination has the greatest influence.
Happy and satisfied employees are more likely to reach their maximum potential level of performance-
management needs to ensure good interpersonal relationships within small groups.
Rensis Likert and the neo-human relations approach (1950+)
Criticism of the human relations movement-too idealistic, more like a social club.
Synthesis of human relations management and scientific management
Warren G. Bennis: ‘The Taylor approach leads to an organization without men, while that of the human relations
movement groups of men without organization.’
Likert, Herzberg, McGregor, Burn, Mouton
Likert- ‘linking pin model’, structure containing a number of overlapping groups in which members of one unit are
leaders of another, effective communication with higher groups.
Abraham Maslow’s needs- 5 levels- psychological needs, security and safety needs, love and belonging needs,
status or esteem needs, self-actualization needs.
Douglas McGregor - book: The Human side of enterprise - Theory X and theory Y (more about human perception than
about the image of an organization), how employees can cooperate.
Kenneth Boulding and the systems approach (1950+)
Neo-human relations supporters - CELL PHILOSOPHY
Organizations seen as a system-as a whole made up of parts (subsystems, divisions), organizations interact with the
outside world- RESULT: SYNERGY
An organization is run with the help of information that is given to the various subsystems; management should
tackle organizational problems in a consistent way.
In case organization grows faster than it should and is divided in the parts, manager focuses on the one division.
Paul Lawrence, Jay Lorsch and the contingency approach (1965+)
To obtain optimal performance, different circumstances will require different structures, task divisions and working
methods.
Concept of contingency: determination by situation.
The relationship between an organization and its surroundings, constantly aware of how complex the
interrelationships within their surroundings are.
Recent organizational theories (1980+)
Philip Crosby and Quality Control
W. Deming - organizational behaviour relates to quality control in organizations.
Philip Crosby - quality gurus, developed a total quality management theory, working according to the ‘zero defects’
rule, in organizations, you have to attempt to avoid mistakes in all processes.
Organization can reduce their expenses by about 20% provided they treat quality control as number one.
Henry Mintzberg: organizational structure and strategic planning
The structuring Organizations -blend of organizational theories, not possible to generate the best organizational
structure.
Don’t view qualities separately, but in a common form of configuration (ideal typical organization).
Tom Peters and management principles for excellent companies: Research to find out a set of management principles
for organizational development.
Characteristics of the success of enterprises:
