Amity School of Business

Bureaucracy Organizations
Max Weber 1864-1920 Prior to Bureaucracy Organizations
European employees were loyal to a single individual rather than to the organization or its mission Resources used to realize individual desires rather than organizational goals

Systematic approach looked at organization as a whole

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The Bureaucracy Theory - An Efficient Organization should be based on 5 principles. A managerss formal authority should be derived from the position held within the organization. People should occupy positions in an organization based on their performance / Qualifications and not social standing or personal contact. Each Positions authority , task responsibility and working relationship should be clearly specified. Reporting relationships should be clear and Organizations hierarchy should enable effective Authority. To control behavior , managers must create a well defined system of rules, and norms.
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Bureaucracy Organizations
Division of labor with Clear definitions of authority and responsibility Personnel are selected and promoted based on technical qualifications Positions organized in a hierarchy of authority

Administrative acts and decisions recorded in writing Management separate from the ownership of the organization

Managers subject to Rules and procedures that will ensure reliable predictable behavior

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Administrative Principles
Contributors: Henry Fayol, Mary Parker, and Chester I. Barnard Focus:
Organization rather than the individual Delineated the management functions of planning, organizing, commanding, coordinating, and controlling
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Henry Fayol (1841-1925) : Divided the managers job into five functions: Planning, organizing, staffing, commanding, coordination, and control. Developed 14 universal principles of management. Fayol divided general and industrial management into following six groups Technical activities (production, manufacture, adaptation). Commercial activities (buying, selling and exchange). Financial activities (search for and optimum use of capital). Security activities (protection of property and persons). Accounting activities (stock taking, balance sheet, cost, and statistics). Managerial activities (planning, organising, command, coordination and control)

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Henri Fayol 1841-1925

14 General Principles of Management

Division of labor Authority Discipline Unity of command Unity of direction Subordination of individual interest Remuneration

Centralization Scalar chain Order Equity Stability and tenure of staff Initiative Esprit de corps
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He gave overall concepts of general management and suggested the basic functions of management. He recommended the selection and training of workers and managers. He also advocated the use of organisation charts. He suggested certain qualities of managers winch include physical, mental, moral, educational technical and experience. Fayols theory of management was the first complete theory of management as we understand today. It incorporated proven principles, elements, procedures and techniques based on his practical experience. Henry Fayol came to be recognised as the founder of modern management theory.
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Chester Barnard Considered a bridge between classical and human relations theories The Functions of the Executive (1938) Argues for . . . strict lines of communication - classical theory a human-based system of organization The potential of every worker and the centrality of communication to the organizing process Six Issues Relevant to Organizational Communication Formal vs. Informal Organization Cooperation Communication Incentives Authority Zone of Indifference
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Humanistic Perspective
Emphasized understanding human behavior, needs, and attitudes in the workplace
Human Relations Movement Human Resources Perspective Behavioral Sciences Approach
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Human Relations Movement

Emphasized satisfaction of employees basic needs as the key to increased worker productivity

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Illumination Study (November 1924) Designed to test the effect of lighting intensity on worker productivity , Experiment indicated that Productivity increased when studies were on and slumped when the study got over as workers were motivated due to the interest shown by management . The mere practice of observing peoples behavior tends to alter their behavior and is called (Hawthorne Effect) This formed the basis of the Further Experiments done by Mayo .

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Researchers spent five years measuring how different variables impacted the group's and individuals' productivity. Some of the variables were: changing the pay rules so that the group was paid for overall group production, not individual production giving two 5-minute breaks (after a discussion with them on the best length of time), and then changing to two 10-minute breaks (not their preference). Productivity increased, but when they received six 5-minute rests, they disliked it and reduced output. providing food during the breaks shortening the day by 30 minutes (output went up); shortening it more (output per hour went up, but overall output decreased); returning to the first condition (where output peaked).

What Really Increased the Productivity?

choosing one's own coworkers, working as a group, being treated as special (as evidenced by working in a separate room), and having a sympathetic supervisor were the real reasons for the productivity increase
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Interviewing Program (1928-1930) Investigate connection between supervisory practices and employee morale The results proved that upward communication in an organisation creates a positive attitude in the work environment. The workers feel pleased that their ideas are being heard.

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Amity School of Business

The purpose of the next study was to find out how payment incentives would affect productivity. The surprising result was that productivity actually decreased, because the men were afraid that the company would lower the base rate and had a clear idea of a fair days work . Workers apparently had become suspicious that their productivity may have been boosted to justify firing some of the workers Done on group of fourteen men who put together telephone switching equipment. There was existence of informal groups or "cliques" within the formal groups. These cliques developed informal rules of behavior as well as mechanisms to enforce them. The cliques served to control group members and to manage bosses; when bosses asked questions, clique members gave the same responses, even if they were untrue.

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What Really reduced the productivity ?

Workers were more responsive to the social force of their peer groups than to the control and incentives of management.

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Illumination Study (November 1924)

The mere practice of observing peoples behavior tends to alter their behavior (Hawthorne Effect) Relationships between workers and their supervisors are powerful Human interrelationships / informal group increase the amount and quality of worker participation in decision making Demonstrated powerful influence of upward communication Workers were asked for opinions, told they mattered, and positive attitudes toward company increased Led future theorists to account for the existence of informal communication

Relay Assembly Test Room Study (1927-1932)

Interviewing Program (1928-1930)

Bank Wiring Room Observation Study (November 1931 - May 1932)

Taken together, these studies helped to document the powerful nature of social relations in the workplace and moved managers more toward the interpersonal aspects of organizing.

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Human Resource Perspective

Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential

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Abraham Maslows Hierarchy of Needs

Selfactualization Esteem Belongingness Safety Physiological

1908-1970

Based on needs satisfaction

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Douglas McGregor Theory X & Y

Theory X Assumptions

Amity School of Business

1906-1964

Theory Y Assumptions

Dislike work will avoid it Must be coerced, controlled, directed, or threatened with punishment Prefer direction, avoid responsibility, little ambition, want security

Do not dislike work Self direction and self control Seek responsibility Imagination, creativity widely distributed Intellectual potential only partially utilized
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Amity School of Business

Behavioral Sciences Approach

Sub-field of the Humanistic Management Perspective

Applies social science in an organizational context Draws from economics, psychology, sociology, anthropology, and other disciplines
Understand employee behavior and interaction in an organizational setting OD Organization Development
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Lessons from the Behavioral Approach

People are the key to productivity. Success depends on motivated and skilled individuals committed to the organization. Managerial sensitivity to employees is necessary to foster the cooperation needed for high productivity.

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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.

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Systems View of Organizations

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Amity School of Business

Coordination of the organizations 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

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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.
Popular Contingency Variables
Organization size Routineness of task technology Environmental uncertainty Individual differences
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Contingency View of Management

Amity School of Business

Successful resolution of organizational problems is thought to depend on managers identification of key variations in the situation at hand

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