Organizational Management

Theories
and
Key Concepts
Notes
Classical Organization Theories

 scientific management approach

 Weber's bureaucratic approach,
 and administrative theory (Fayol)

* Explain organization and structure

Neo classical

 emphasizes individual or group behavior and human relations in

determining productivity
 main features - individual, work group and participatory
management
Modern

 Organization is an adaptive system

 systems approach, the socio-technical approach, and the
contingency or situational approach.
Contributors to the Classical
Organizational Theory
Scientific Management:
Frederick Taylor
Administrative Management:
Henri Fayol
Luther Halsey Gulick
Max Weber
Scientific Management

• focused on the management

of work and workers

Frederick
Taylor
- The Principles of Scientific
Management (1911) - most
influential book of the Second
Industrial
Revolution
- Father of Scientific Management
- Taylor’s scientific management
principles
symbolize America’s place
as the leading industrial nation
Taylor’s Management System

The scientific management

approach - planning of work to
achieve efficiency,
standardization, specialization
and simplification.
- increased productivity is
through mutual trust between
management and workers.
Henri Fayol
 first to identify management as a continuous process of
evaluation.
 Recognizes the management principles rather than
personal traits
 14 principles that should guide the
management of organizations:

1. Division of Work —improves

efficiency through reduction of
waste, increased output, and
simplification of job training.
Specialization produces more and
better work with the same effort.
2. Authority and Responsibility
-authority: the right to give orders and the
power to extract obedience – responsibility:
the obligation to carry out assigned duties.
Authority stems from:
- that ascribed from the delegation process
(the job holder is assigned to act as the
agent of the high authority to whom they
report - hierarchy)
3. Discipline—respect for the rules that govern
the organization

Discipline is essential for the smooth running of a

business and without it - standards, consistency of
action, adherence to rules and values - no
enterprise could prosper.
4. Unity of Command — an employee
should receive orders from one superior
only.
5. Unity of Direction—grouping of similar
activities that are directed to a single goal
under one manager.
6. Subordination of Individual Interests to
the General Interest—interests of
individuals and groups should not take
precedence over the interests of the
organization as a whole.
7. Remuneration of Personnel
- payment should be fair and satisfactory for
employees and the organization

8. Centralization—managers retain final

responsibility – subordinates maintain
enough responsibility to accomplish their
tasks.
9. Scalar Chain (Line of Authority)— the
chain of command from the ultimate
authority to the lowest.
10. Order—people and supplies should be
in the right place at the right time.
11. Equity—managers should treat
employees fairly and equally
12. Stability of Tenure of Personnel - managerial
practices that encourage long - term commitment from
employees create a stable workforce and therefore a
successful organization.
13.Initiative — employees should be encouraged to
develop and carry out improvement plans.
14.Esprit de Corps—managers should foster and maintain
teamwork, team spirit, and a
sense of unity among employees
Luther Gulick and Lyndall
Urwick
- POSDCoRB
- planning, organizing, staffing,
directing, coordinating,
reporting and budgeting
 Max Weber
(1864-1920)
Weber uses and defines the terms
authority and power as:

Power: any relationship within which

one person could impose his will,
regardless of any resistance from
the other.
Chester Barnard - argued that for
the executive to become more
effective - should maintain an
equilibrium between the needs of
the employees and the
organization
• Maslow - focused on the
hierarchical needs of the individual
• Herzberg’s “motivation-hygiene
theory”
• Mc Gregor’s Theory X and “Y”
• Chris Argyris - focused his attention
on the personal development of
the individual in the context of
organization
• Likert’s System 1 to 4
Why Government can’t
be “Run Like a
Business”
Elton Mayo
Founder of Human Relations School of Management
Hawthorne experiments
 Hawthorne plant of Western Electric Chicago with 29,000
employees and manufactured telephones and telephone
equipment, principally for AT & T
 study of the relationship between work-place lighting and
individual efficiency
 isolating two groups of workers to experiment with the impact of
various incentives on their productivity
 Other incentives - including payment incentives and rest pauses -
were manipulated at regular intervals
Major thoughts
 job satisfaction increased as workers were given more freedom to determine the
conditions of their working environment and to set their own standards of output;
 intensified interaction and cooperation created a high level of group cohesion;
 job satisfaction and output depended more on cooperation and a feeling of worth
than on physical working conditions
 Manager- strive for an equilibrium between the technical organization and the
human side;
 should develop skills in handling human relations and situations ie diagnostic skills in
understanding human behaviour and interpersonal skills in counselling, motivating,
leading and communicating
 conclusions established:
 the beginnings of the importance of management style as a major contributor to
industrial productivity
 interpersonal skills as important as monetary incentives ;
 and of a more humanistic approach to attains organization's economic needs
Mary Parker Follet
 a "pull" rather than "push" approach to employee motivation, differentiated
between "power over" and "power with,"
 postulated insightful ideas on negotiation, conflict resolution and power sharing
which helped shape modern management theory
 Follett Theory of Management principles:
 Conflict resolution through Integration (i.e., identifying and meeting each party's
underlying and often compatible need, as opposed to attempting to meet the
frequently-incompatible expressed desire of each) - often results in a win-win
situation
 leadership theory - genuine power is not "coercive" ("power over") but "coactive"
("power with")
 True leaders create group power, rather than expressing personal power
System Theory and Contingency
Theory
 Contingency theory is an addition to system theory which fills its
gaps
 Both theories consider an organization as a system that consists of
several sub-systems
 emphasize maintaining and adapting activities for the growth and
survival of the system.
 deal with patterns of relationships and the interdependence among
the elements of the system
System vs Contingency

 System theory - deals with the internal dynamics of the

organization,
 Contingency theory - deals with external determinants of the
organization’s structure and behavior
 Systems theory - discusses the universal principles for application in
all situations
 Contingency organizational theory works on the remedy; ‘it all
depends’ on the situation
 Contingency theory offers a more clear understanding of the
relationship between different variables of the environment
 Performance-oriented; directed towards the application of the
system theory’s concepts