Organisational Behavior

Lecture 2

Theories of Organization and
Management
Organization theories

 CLASSICAL ORGANIZATION THEORY
 Scientific Management approach
 Weber's Bureaucratic approach
 Administrative theory
 NEOCLASSICAL THEORY
 MODERN ORGANIZATION THEORY
 · Systems approach
· Socio-technical approach
· Contingency or Situational approach
CLASSICAL ORGANIZATION THEORY

Scientific Management Approach
 concept of planning of work to achieve efficiency,
standardization, specialization and simplification.
 The approach to increased productivity is through
mutual trust between management and workers.
 Frederick Winslow Taylor proposed four principles of
scientific management:
 Scientific Management Approach
(Cont.)

Taylor's four principles of scientific management
 Develop a science for each element of an individual’s work, which will
replace the old rule-of-thumb method.
 Scientifically select and then train, teach, and develop the worker.
 Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed.
 Divide work and responsibility almost equally between management
and workers. Management takes over all work for which it is better
fitted than the workers.
 Scientific Management (cont’d)

•

Frank and Lillian Gilbreth
– Focused on increasing worker productivity through the
reduction of wasted motion
– Developed the micro chronometer to time worker
motions and optimize work performance
• How Do Today’s Managers Use Scientific
Management?
– Use time and motion studies to increase productivity
– Hire the best qualified employees
– Design incentive systems based on output
 Weber’s Bureaucratic Approach

Weber's bureaucratic approach is a
theory of authority that developed based
on an ideal type of organization
(bureaucracy)
Emphasized rationality, predictability,
impersonality, technical competence, and
authoritarianism
Weber’s Bureaucratic
Approach

 Administrative theory

Administrative theory was propounded by
Henry Fayol and is based on several principles
of management. In addition, management was
considered as a set of planning, organizing,
training, commanding and coordinating
functions.
 Fayol’s 14 Principles Management

1. Division of work 7. Remuneration
2. Authority 8. Centralization
3. Discipline 9. Scalar chain
4. Unity of command 10. Order
5. Unity of direction 11. Equity
6. Subordination of 12. Stability of tenure of
individual personnel
interests to the
13. Initiative
general interest
14. Esprit de corps

2–9
 NEOCLASSICAL THEORY

 Neoclassical theory emphasizes individual or group
behavior and human relations in determining
productivity. The main features of the neoclassical
approach are individual, work group and
participatory management.
Principles of the neoclassical approach
INDIVIDUAL
WORK GROUP
PARTICIPATIVE MANAGEMENT
 MODERN THEORIES

Modern theories are based on the concept that the
organization is an adaptive system which has to adjust to
changes in its environment. Discuss the important
characteristics of the modern approach to organizations.
Modern theories includes:
 systems approach
 socio-technical approach,
 contingency or situational approach.
 Characteristics of modern approaches
to the organization

Systems viewpoint 
 Dynamic process of interaction
 Multilevelled and multidimensional
 Multimotivated
 Probabilistic
 Multidisciplinary
 Descriptive
 Multivariable
 Adaptive
 Systems approach

 The systems approach considers the organization as a system
composed of a set of inter-related - and thus mutually
dependent- sub-systems. Thus the organization consists of
components,linking processes and goals .
Modern approaches to organization: The systems
approach components:
 The individual
 The formal and informal organization
 Patterns of behavior
 Role perception
 The physical environment
System Approach
The Organization as an 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.

2–15
Socio-Technical Approach

The socio-technical approach considers
the organization as composed of a social
system, technical system and its
environment. These interact among
themselves and it is necessary to balance
them appropriately for effective
functioning of the organization.
Contingency or Situational Approach

The contingency or situational approach
recognizes that organizational systems are inter-
related with their environment and that different
environments require different organizational
relationships for effective working of the
organization.
 Contingency or Situational
Approach (Cont.)
Organization size

As size increases, so do the problems of coordination.
Routineness of task technology
Routine technologies require organizational structures,
leadership styles, and control systems that differ from those
required by customized or non-routine technologies.
Environmental uncertainty
What works best in a stable and predictable environment may
be totally inappropriate in a rapidly changing and
unpredictable environment.
Individual differences
Individuals differ in terms of their desire for growth, autonomy,
tolerance of ambiguity, and expectations.