Organizational Theory

8 August 2016

The term classical refers to work done by a group of economists in the 18th and 19th centuries. The word NEO meaning , much of this work was developing theories about the way markets and market economists and they are generally termed neo-classical economists. The neo-classical school is the mainstream school of thought in economics, deriving from the work of the marginalists, who defined value in relation to scarcity and regarded the balance of supply and demand as determining equilibrium prices. The neo-classical approach was set out by Alfred Marshall in his principles of economics, which was published in 1890.

Human Relations Theories Elton Mayo: Hawthorns studies Where Classical theorists were concerned with structure and mechanics of organisations, the theorists of human relations were, understandably, concerned with the human factors. The foci of human relations theory is on motivation, group motivation and leadership. At the centre of these foci are assumptions about relationship between employer and employee. Best summarised by Schein (1965) or Elton Mayo they were academic, social scientists their emphasis was on human behaviour within organisations

Organizational Theory Essay Example

they stated that people’s needs are decisive factors in achieving an organisation’s effectiveness they were descriptive and attempted to be predictive of behaviour in organisations A ‘motive’ = a need or driving force within a person. The process of motivation involves choosing between alternative forms of action in order to achieve some desired end or goal Alternative forms of action of motivation depend on a manager’s assumptions about his/her subordinates: Prime Motivators Theory 1. Rational- economic man Self interest and maximisation of gain Basis of Classical, especially, Taylor/Scientific theory 2.

Social man Social need, being part of a group Basis of Mayo 3. Self actualising man Self-fulfilment of individual Maslow, Likert, McGregor, Argyris, Herzberg 4. Complex man Depends on individual, group, task ‘Systems approach’ Elton Mayo : Hawthorne Studies The ground-breaking Hawthorne studies carried out in the Hawthorne plant of the Western Electric Company (USA) 1927 – 32. Stage 1 (1924 -27) Study of the physical surroundings (lighting level) on productivity of workers. Control group and experimental group previously had similar productivity before study began Control Group = constant lighting level

Experimental Group = varied lighting level Result Both groups productivity increased – even when experimental group was working in dim light Product leader called Mayo and colleagues to explain Stage 2 (1927 – 29) ‘Relay assembly room stage’ Still analysing effect of physical surroundings (rest, pauses, lunch break duration, length of working week) on output Result Output increased even when worsening conditions Hypothesis was now that it was the attitudes of subjects at work and not the physical conditions.

This gave rise to the ‘Hawthorne Effect’ – employees were responding not so much to changes in the environment as to the fact they were the centre of attention – a special group. Stage 3 (1928 – 30) A Total of 20,000 interviews were collected with the workers on employee attitudes to working conditions, their supervision and their jobs. Stage 4 (1932) ‘Bank winning observation room’ This time the new subjects (14 men) put in separate room for six months Result Productivity restricted due to pressure from peers to adopt a slower rate to circumvent company wages incentive scheme to generally adopt own group rules and behaviour Advantages first real attempt to undertake genuine social research in industrial setting individuals cannot be treated in isolation, but function with group members that individual motivation did not primarily lie in monetary or physical condition, but in need and status in a group the strength of informal (as opposed to formal) groups demonstrated a behaviour of workers (formal supervisors were powerless in Stage 4) it highlighted need for supervisors to be sensitive and cater for social needs of workers within the group Disadvantages

from 1930s -1950s some doubt was cast on the increased applicability of these theories to every day working life Neo-Human Relations Theory This group were social psychologists who developed more complex theories: Maslow McGregor (theory X and theory Y) Likert Argyris Maslow is often-quoted still today, having developed a seminal theory of the needs of human beings. Herzberg’s and McGregor’s neo-human relations theories both focus on motivation and leadership, but their theories are, as we shall see, very different.

In this group we find a particular focus on human motivation including: satisfaction incentive intrinsic Maslow (1943) 1. This psychologist, from his studies, proposed a hierarchy of human needs building from basic needs at the base to higher needs at the top. 2. Maslow made assumptions that people need to satisfy each level of need, before elevating their needs to the next higher level e. g. a hungry person’s need is dominated by a need to eat (i. e survival), but not to be loved, until he/she is no longer hungry. 3.

Today the focus in most Western societies is on the elements towards the top of Maslow’s hierarchy – in which work environments and ‘jobs’ (including ‘having a job’ and the satisfaction or otherwise such jobs provide – have become typical features. Notably the attainment of self-esteem and, at the very top of the hierarchy, what Maslow calls ‘self-actualisation’ – fundamentally the synthesis of ‘worth’, ‘contribution’ and perceived ‘value’ of the individual in society. Advantages Managers can/should consider the needs and aspirations of individual subordinates. Disadvantages

The broad assumptions in 2 above have been disproved by exceptions e. g. hungry, ill artist working in a garret. Empirical research over the years has not tended to support this theoretical model. Regarding monetary reward, sometimes beyond certain level of pays (e. g. consultant) other things become more important than another ? 1000 a year e. g. working conditions, boss, environment etc. McGregor (Theory X and Theory Y) Managers were perceived by McGregor, whose theories are still often quoted, to make two noticeably different sets of assumptions about their employees.

Theory X (essentially ‘scientific’ mgt) Theory Y Lazy Like working Avoid responsibility Accept/seek responsibility Therefore need control/coercion Need space to develop imagination/ingenuity Schein type: ‘rational economic man’ Schein type: ‘self-actualising man’ Advantages Identifies two main types of individual for managers to consider and how to motivate. Disadvantages Only presents two extremes of managerial behaviour. 200 engineers and accountants were asked to recall the times/occasions when they experienced satisfactory and unsatisfactory feeling about their jobs.

Later this also involved manual and clerical staff similar results claimed: Herzberg showed two categories of findings: Motivators – factors giving rise to satisfaction Hygiene factors – factors giving rise to dissatisfaction Important Motivators Important Hygienes Achievement Company policy and recognition Recognition Supervision – the technical aspects Work itself Salary Responsibility Interpersonal relations – supervision Advancement Working conditions Advantages Herzberg’s work led to a practical way to improve motivation, which had, up to that point, been dominated by Taylorism (salary, wages).

In particular ‘ job enrichment’ programs mushroomed. The aim of these was to design work and work structures to contain the optimum number of motivators. This approach counters the years of Taylorism, which sought to break down work into its simplest components and to remove responsibility from individuals for planning and control. Disadvantages There remain doubts about Herzberg’s factors applicability to non-professional groups, despite the fact that some of his later studies involved the clerical and manual groups.

The numbers were in these categories though were small and many researchers still argue about the results in these groups. Social scientists argue about the validity of his definition of ‘job satisfaction’ Likert Described ‘new patterns of management’ based on the behaviours of managers Four main patterns: 1. Exploitative – authoritative where power and direction come from the top downwards’, where threats and punishment are employed, where communication is poor and teamwork non-existent. Productivity is typically mediocre ‘Rational economic man’ 2.

Benevolent – authoritative is similar to the above but allows some upward opportunities for consultation and some delegation. Rewards may be available as well as threats. Productivity is typically fair to good but at cost of considerable absenteeism and turnover Weaker version of ‘rational – economic man’ 3. Consultative where goals are set or orders issued after discussion with subordinates, where communication is upwards and downwards and where teamwork is encouraged, at least partially. Some involvement of employees as a motivator ‘social man’ 4.

Participative – group is reckoned by many to be the ideal system. Under this system, the keynote is participation, leading to commitment to the organisation’s goals in a fully co-operative way. Communication is both upwards, downwards and lateral. Motivation is obtained by a variety of means. Productivity is excellent and absenteeism and turnover are low Self – actualising man (see also McGregor: theory Y) Another useful way of looking at this is that (1) is a highly task-orientated management style, whereas (4) is a highly people-orientated management style. Advantages

Essentially Likert’s work gives more alternatives in the spectrum between Theory X and Theory Y of McGregor Disadvantage criticised for being based more on theory than empirical practice. Therefore not widely accepted by practising managers. Argyris Studied the needs of people and the needs of organisation. He felt that classical models of organisation promoted ‘immaturity’ (see below). He felt that it was important to understand the needs of people and integrate them with needs of organisation. Only in this way, he said, can employees become co-operative rather than defensive or aggressive Characteristics of Employee.

There are two significant implications of contingency theory: if there is no ‘one best way’, then even apparently quite similar organisations, for example, two nearby colleges, may choose significantly different structures and still survive, be reasonably successful in achieving their missions, and so on if different parts of the same organisation are influenced in different ways by the contingencies bearing upon them, then it may be appropriate for them to be structured differently, for example, one university department may have a functional structure, whilst another may have a matrix structure. Examples of contingency theories: Contingency theory of leadership In contingency theory of leadership, the success of the leader is a function of various contingencies in the form of subordinate, task, and/or group variables. The effectiveness of a given pattern of leader behavior is contingent upon the demands imposed by the situation. These theories stress using different styles of leadership appropriate to the needs created by different organizational situations. No single contingency theory has been postulated. Some of the theories are: ·

Fiedler’s contingency theory: Fiedlers theory is the earliest and most extensively researched. Fiedler’s approach departs from trait and behavioral models by asserting that group performance is contingent on the leader’s psychological orientation and on three contextual variables: group atmosphere, task structure, and leader’s power position. · Hersey & Blanchard’s situational theory This theory is an extension of Blake and Mouton’s Managerial Grid Model and Reddin’s 3-D management style theory. With this model came the expansion of the notion of relationship and task dimensions to leadership and adds a readiness dimension. Contingency theory of decision making ·

Vroom and Yetton’s decision participation contingency theory or the Normative decision theory According to this model, the effectiveness of a decision procedure depends upon a number of aspects of the situation: the importance of the decision quality and acceptance; the amount of relevant information possessed by the leader and subordinates; the likelihood that subordinates will accept an autocratic decision or cooperate in trying to make a good decision if allowed to participate; the amount of disagreement among subordinates with respect to their preferred alternatives. Contingency rules theory · Smith’s contingency rules theory is an example of a rules approach to persuasion.

Smith utilizes the idea of cognitive schemas, expectations about the attributes that a given person or policy will have or expectancies about the consequences of behaving in a particular manner. These schemata function as contingency rules that both shape the way something is viewed and structure behavior. Smith suggests that rules and schemata explain persuasion better than the traditional concept of attitude. According to Smith’s contingency rules theory, rules are used to create responses to persuasive messages. Self-evaluative rules are associated with our self-concept and our image. Adaptive rules are those that will apply effectively in a particular situation – the rules most likely to generate a positive outcome. Behavioral contingency rules are contextual.

In some situations, certain consequences are considered and certain rules are activated which guide behavior. In other situations, other rules are activated. External threats and rewards are meaningful only if they apply to one’s personal goals. Conclusion: In conclusion, it has to be restated that management is the process of designing and maintaining an environment for the purpose of efficiently accomplishing Selected aims. Managers carry out the functions of planning, organizing, staffing, Leading, and controlling. Managing is an essential activity at all organizational Levels. However, the managerial skills required vary with organizational levels.

Although women have made progress in obtaining responsible positions, they still have a long way to go. The goal of all managers is to create a surplus and to be productive by achieving a favorable output-input ration within a specific time period with due consideration for quality. Productivity implies effectiveness (achieving of objectives) and efficiency (using the least amount of resources). Managing as practice is art; organized knowledge about management is science. The development of management theory involves the development of concepts, principles, and techniques. There are many theories about management, and each contributes something to our knowledge of what managers do.

Each approach or theory has its own characteristics and advantages as well as limitations. The operational, or management process, approach draws on each “school” and systematically integrates them. Finally, the organization is an open system that operates within and interacts with the environment. The systems approach to management includes inputs from the external environment and from claimants, the transformation process, the communication system, external factors, outputs, and a way to reenergize the system. No doubt, a manager who makes serious attempts to translate theory into reality is bound to increase productivity more than a manager who chooses to use the ‘fire brigade’ or trial and error approach

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