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Organizational Theory Concepts

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 BUS 5113 - Unit 1 Assignment

Organizational Theory Concepts

Michael Eydman

University of the People

BUS 5113 - Unit 1 Assignment, Organizational Theory Concepts 1

Abstract

The study of Organizational Behavior consists of multiple theories that have all contributed to

the overall understanding of human behavior in an organizational setting. Historically, these

theories have at one or another point in time influenced how we understood or interpreted

different behavior, as well as how the organization used that knowledge to help them establish

better operational efficiency. In what is considered a classical organizational theory, four schools

of thought have provided considerable contributions to this field.

Keywords: ​Business Management, Organizational Design, Organizational Theories.

BUS 5113 - Unit 1 Assignment, Organizational Theory Concepts 2

Introduction to Organizational Theories

The study of Organizational Behavior consists of multiple theories that have all

contributed to the overall understanding of human behavior in an organizational setting.

Historically, these theories have at one or another point in time influenced how we understood or

interpreted different behavior, as well as how the organization used that knowledge to help them

establish better operational efficiency. In what is considered a classical organizational theory,

four schools of thought have provided considerable contributions to this field.

The concept of Scientific Management was created by Frederick Taylor in 1880 as an

attempt to provide a framework for improving labor efficiency and productivity (Wikipedia,

2017). The crux of this approach is to apply process engineering and scientific management to an

industrial setting. During the times where these ideas were postulated, the general movement was

towards efficiency and reduction of waste. According to Taylor, employees were expected to

only be concerned with the job they were assigned and to behave like machines. This,

unfortunately, has become the biggest criticism of this school of thought, as it had not considered

the human factor. As a result, both theories and practical applications became highly disputed

and led to the rise of other competing approaches.

Around the same time, Henri Fayol has developed one of the competing theories, which

has eventually become what is knowns as Administrative Theory. Unlike the scientific approach,

this method is “top to bottom”, which means that it proposes that rigid hierarchical

organizational structures are naturally efficient. Fayol’s theory includes 14 principles that govern

how an organization needs to behave (Krenn, J., 2017). Most of them focus on creating a rigidly
BUS 5113 - Unit 1 Assignment, Organizational Theory Concepts 3

structured organization with well-defined roles. It has been criticized as being too cumbersome

and formal, also lacking any ideas which involve the human aspect.

Max Weber, a well-known sociologist, has put forward a theory of management, which

was influenced by Taylor and has become what is known as Bureaucratic Management Theory.

Unlike his predecessors, Weber did not simply postulate how an organization should be

structured but rather described how it could become an ideal bureaucratic entity, listing both the

positives and negatives. At the core of his approach was a concept that all functions within an

organization could be done according to a well-defined plan, along with a meticulously

documented trail of every action. Some of the more notable principles Weber put forward

include the creation of formal processes and methodologies, as well as specialization of labor

and strict separation between personal and professional.

While not exactly a part of the classical set of organizational theories, Herbert Simon’s

Administrative Behavior is considered to be one of the more critical schools of thought

applicable to today’s organizations and how they operate. His primary focus of thought was on

how an organization can continue to moving towards its goal even though it functions as a

collection of a multitude of decision-making entities, i.e. its employees. Herbert’s ideas are in a

departure from other classical work in that they focus on more human and psychological factors

which control organizational behavior, rather than more operational aspects.

Effect of Bureaucratic Theory on Modern Organizations

I believe this particular theory has had a profound impact on how organizations operate

which can be seen even today. Most of public and government entities are highly bureaucratic
BUS 5113 - Unit 1 Assignment, Organizational Theory Concepts 4

and compartmentalized. This often leads to a lack of agility and low level of motivation among

employees who are forced to follow numerous procedures which are often designed to be more

replicable and not necessarily efficient. On the other hand, other principles Weber put forwards

have been instrumental in the successful operations and progress of many corporations.

Documentation of the procedures is essential in making sure that complicated processed like, for

instance, aircraft manufacturing, where precision is directly tied to safety, is done correctly.

Labor specialization is also equally important, which allows professionals to develop advanced

skills necessary for advancement in areas like scientific research. I believe that while there are

significant drawbacks, this particular theory is essential to the successful operation of really large

entities, like states and counties, where the focus on administrative, scientific or other aspects of

organizational structure would dilute the focus of the underlying goals.

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BUS 5113 - Unit 1 Assignment, Organizational Theory Concepts 5

References

Laegaard, J. & Bindslev, M. (2006). Organizational Theory, 7-39.

Wikipedia. (2017). Scientific Management. Retrieved from

https://en.wikipedia.org/wiki/Scientific_management

Krenn, J. (2017). Business. Management Theory of Henri Fayol. Retrieved from

https://www.business.com/articles/management-theory-of-henri-fayol/

New World Encyclopedia. (2017). Bureaucracy. Retrieved from

http://www.newworldencyclopedia.org/entry/Bureaucracy