Organizational Leadership

Session 4 Organizational Theories

LY Vanthy, MD., BBA., MPH

Objectives
After the session, student should be able to:
Define related key terminologies
List benefits and chronology of organizational theories
Explain how system affect organizational setting and

performance
Relate organizational theories to organizational behaviour,
culture, effectiveness approach

VanthyL

Key Terminologies
(dictionary.cambridge.org, 2003*)

Organization* - A group of people who work together in a

structured way for a shared purpose

Institution that enables society to pursue goals that could not be

achieved by individuals acting alone, Mc Graw-Hill, Organitional Behavior and

Management, 2005

Organize (v) - to do or arrange something according to a particular

system
System* - a set of connected items or devices which operate

together
Systemize* (v) - to plan a system for something

Theory - a formal statement of the rules on which a subject of

study is based or of ideas which are suggested to explain a

fact or event or, more generally, an opinion or explanation
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Theory
Define as an explanation for how or why something

occurs.
Question: What is the most efficient and effective
means of running an organization?
Function of Theory

Describe
Explain
Predict
Control

Classical approaches to organizational management and

early organizational theories were designed to predict

and control behavior in organizations.

Why Study Organization Theories?

Correctly applying organizational theory can have several

benefits for both the organization and society.

Once an organization sees a window for expansion, it begins to
grow and thus alters the economic equilibrium by catapulting
itself forward.
The organization expansion induces changes not only in the
organization's infrastructure, but also in competing
organizations and the economy as a whole.
Example_ Henry Ford created the assembly line, a system of
organization that enabled efficiency and drove both Ford and the
U.S. economy forward.
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Ford is still one of the world's largest makers of cars including brands
such as Ford, Lincoln, Mercury, Volvo, Mazda, and Land Rover. Ford was
a pioneer in manufacturing using the assembly line.

Chronological Organization Theories

What is Organizational Theories? - Explain the organization

and its structure

Organizational theories have:
Classical; and
Modern

A Brief Timeline of Organization Theories

(Organization Theory and Governance for the 21st Century, Sandra Parkes, Montana State University )

Classical Theories
Emerged in early part of the twentieth century
Models were military and the Catholic Church
Features
Strict CONTROL of workers
Absolute CHAINS of COMMAND
PREDICTABILITY of behavior
UNIDIRECTIONAL downward influence
Three people contributed significantly to the development of

classical organization theory:

Taylor(1947) presented scientific management concepts

Weber (1947) gave the bureaucratic approach

Fayol (1949) developed the administrative theory of the organization

Classical Theories of Organizations:

Relevancy and Metaphor
Organizations are viewed as if they are machines
Managerial principles
Modes of operation
Treatment of workers
Communication in the organization
Properties of Machines
Very predictable
Rarely deviates from the norm
Replace defective parts with other standard parts
Specific rules exist regarding repair and specific roles
Organizational Application
Workers behave predictably-management knows what to expect
Workers operating outside expectations are replaced
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Classical Theories:
1.Taylor's scientific management approach(1856-1915)
Base on the concept of planning of work to achieve efficiency,

standardization, specialization and simplification

Increase productivity through mutualtrust between
management and workers
Trust is managed through
Advantages of productivity improvement should go to workers
Physical stress and anxiety should be eliminated as much as possible

Capabilities of workers should be developed through training, and the traditional 'boss'

concept should be eliminated

Has three principles

Science, not rule-of-thumb - scientific selection of the worker Organizational members

should be selected based on some analysis, and then trained, taught and developed.
Management and labor cooperation rather than conflict Management
Scientific training of the workers should be trained by experts, using scientific methods

Maximum effort = Higher wages

Manager is responsible for planning, training, and evaluating
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Classical Theories:
2. Weber's bureaucratic approach (1864-1920)
Consider the organization as a segment of broader society
Principles and Elements of Management - describe an ideal or pure form of

organizational structure (general policy and specific commands)

Primary Focus: Organizational Structure
Worker should respect the right of managers to direct activities dictated by
organizational rules and procedures
Has four principles
Structure in the organization, positions should be arranged in a hierarchy, and specialization,

each having a separate chain of command.

Organization should operate according to a system of procedures consisting of formal rules and
regulations.
Rationality recruitment and selection of personnel should be impartial(not bias).
Democracy responsibility and authority should be recognized by designations and not by
persons

Bureaucracy allows for the optimal form of authority, 3 types of Authority

Traditional Authority - past customs; personal loyalty
Charismatic Authority - personal trust in character and skills
Rational Authority - rational application of rules or laws

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Classical Theories:
3. Administrative theory (Fayol,1949)
The elements of administrative theory relate to accomplishment of tasks
Five Elements of Management -- Managerial Objectives

Planning
Organizing
Command
Coordination
Control
Keep machine functioning effectively and efficiently, replace quickly and

efficiently any part or process that did not contribute to the objectives
Has two principles
The concept of line and staff - organizations require specialization of skill to
achieve organizational goals
Committees
Members from the same or different hierarchical levels from different departments can

form committees around a common goal

Diverse forms, such as boards, commissions, task groups or ad hoc committees.

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Summary of Classical Theories

Classical Theories of Organizations
Taylors Theory of Scientific Management
Webers Theory of Bureaucracy
Fayols Administrative Theory
All 3 theories attempt to enhance managements ability to

predict and control the behavior of their workers

Considered only the task function of communication (ignored
relational and maintenance functions of communication)
Designed to predict and control behavior in organizations

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Modern Theories
Tend to be based on the concept that the organization is a

system which has to adapt to changes in its environment

Define Organization as a designed and structured process in
which individuals interact for objectives
Characteristics of the modern approaches to the organization

A system viewpoint
A dynamic process of interaction
Multimotivation
Multidisciplinary
Adaptive

Modern theories can be broadly classified into

Systems approach
Socio-technical theory; and
Contingency or situational approach
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Modern Theory:
1. Systems approach
Views organization as a system composed

of interconnected - and thus mutually

dependent - sub-systems.
A system can be perceived as composed of some components,
functions and processes
Organization consists of the following three basic elements:
Components
Linking processes
Goals of organization

Systems generally contain the following

Input (e.g., people, time, energy, information)
Processes or reactions (e.g., tools, software, analyses)
Outputs (e.g., products, reports, plans)
Feedback mechanisms (e.g., information, reports)

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Example System Approach

Here is an example of systems thinking: say that a single

department, Human Resource, is trouble with problems in

workflow and Efficiency.

A manager who uses systems thinking to fix this problem looks

at Human Resources in the context of all of the workflow in the

company to see whether the "Human Resources problem"
could actually be a company-wide issue. Only a systemsthinking approach can lead to this realization because systems
thinking provides insight into how problems that manifest in a
specific location can spring from distant, seemingly unrelated
locations. This helps managers get an accurate understanding
of the problem and facilitates a superior response to the
problem.
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Modern Theories:
2. Socio-technical approach
It is not just job enlargement and enrichment, but also

transforming technology into a meaningful tool in the

hands of the users
Base on people, technical system and the environment
People (the social system) use tools, techniques and
knowledge (the technical system) to produce goods or
services valued by consumers or users (who are part of
the organization's external environment)
An equilibrium among the social system, the technical
system and the environment is necessary to make the
organization more effective.
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Modern Theories:
3. The contingency or situational approach
A few people (Selznick, 1949; Burns and Stalker, 1961;

Woodward, 1965; Lawrence and Lorsch, 1967) contributed to

this approach
Base on the belief that no universal guidelines which are
suitable for all situations
Suggest that different environments require different
organizational relationships for optimum effectiveness, taking
into consideration various social, legal, political, technical and
economic factors.

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Organization Theories Philosophy and Its

Attributions to Organizational Behavior(OB)

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How the Design Challenges in Results

Mechanic and Organic Structures

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Summary
Summarize by your words, chronology of organizational

theories and the systems affect organizational setting and

performance as well as connecting the organizational
theories to organizational behaviour, culture, effectiveness
approach
Suggested reading materials
1. Organization Theory, John McAuley, 2007
2. Theoretical Debates and the Scope of Organizational Theory

VanthyL

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Assignment
Team up into 3-5 people, prepare a 10-minute Power Point

presentation, which is responded to the below points through

analyzing your organization(current or recent one), what the
Organization Theory(ies) is/are used:
1). Provide background and characteristics of the organization, for
instance organizational mission, vision, values, etc
2). Give your comments (positive and negative points) in term of
effectiveness and positive cultures
3). If you were promoted to be a senior person who has authority to
change, what Organization Theory(ies) that you will use to get better results
in term of effectiveness and positive cultures, give your justifications

Deadline - session 11

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