Organization Theories

 Classical Theory
- Scientific Management theory
- Administrative Management Theory
- Theory of Bureaucracy
 Human Relation approach ( Hawthorne
experiments)
 System theory
 Contingency Theory

Organization theories
 Given by Frederick W. Taylor
Principles of scientific management :
Substituting research science rules for
rules of thumb
Harmony in Group action
Cooperation
Maximum output in place of restricted
output
Scientifically select, train, teach and
develop employees
Scientific Management theory
Main features:
 Separation of planning from doing function
 Functional foremanship
 Standardize fair day’s work
 Work study
-Method study
- Motion study
-Time study
- Fatigue study

Scientific Management theory

Rate setting
Standardization

Scientific selection & training

Financial incentives
Mental Revolution

Scientific Management theory

Given By Henry Fayol
1. Division of work
2. Authority & Responsibility
3. Discipline
4. Unity of Command
5. Unity Of direction
6. Subordination of individual interest to Group
interest

Administrative theory
7. Remuneration of personnel
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of tenure
13. Initiative
14. Esprit de Corps

Administrative theory contd…

Given by Max Weber
 Division of Labor with highly skilled employees
in each position
 Consistent organization rules and procedures
 Hierarchy of authority/chain of command
 Impersonality of interpersonal relationships
 Employment/Advancement based on
competence

Bureaucracy theory
Hawthorne experiments conducted by Elton
Mayo
Illumination experiment
Relay assembly test room experience
Mass interviewing programme
Bank wiring observation room experiment

Human relation approach

Organizations are social organizations
Informal group exists with formal groups
Production norms decided by social norms
not by physical capacity
Money not a sole motivator
Informal leader exists
Friendly supervision
Workers prefer cordial relationships

Findings of Hawthorne
experiments
The Systems Approach

System Defined
◦ A set of interrelated and interdependent parts arranged
in a manner that produces a unified whole.
Basic Types of Systems
◦ Closed systems
 Are not influenced by and do not interact with their
environment (all system input and output is internal).
◦ Open systems
 Dynamically interact to their environments by taking in inputs
and transforming them into outputs that are distributed into
their environments.
The Organization as an Open System
Composed of subsystems
Components are interrelated
Environment awareness
Feedback
Cyclical character
Balance of maintenance & adaptation
activities
Self regulatory mechanism

Characteristics of open system:

Implications of the Systems
Approach
Coordination of the organization’s parts is
essential for proper functioning of the
entire organization.
Decisions and actions taken in one area of
the organization will have an effect in
other areas of the organization.
Organizations are not self-contained and,
therefore, must adapt to changes in their
external environment.
The Contingency Approach

Contingency Approach Defined

◦ Also sometimes called the situational approach.
◦ There is no one universally applicable set of
management principles (rules) by which to manage
organizations.
◦ Organizations are individually different, face
different situations (contingency variables), and
require different ways of managing.