kay 235: introduction to management
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Kay 235: Introduction to Management
Lecture 4
Subject: Fundamentals of Organization Theory
Reading: Grene, p. 122-136.
Two Options for Midterm 1 Option 1
Date: November 8, Monday
Time: Class Time Location: D13 Only Questions: All
Classic Essays, No Multiple choice or fill in the blanks
Exam Begins @: 09:30
Option 2 Date: November 12,
Friday Time: Afternoon Location: Two
classes Questions: Multiple
choice and fill in the blanks, in addition to essays
Exam Begins @: 13:30 or 14:00
Organization
Greek Organon: meaning a tool or instrument. So, organizations are tools or
instruments to meet goals, objectives, to carry out tasks.
Kaynak: Gail Johnson, OT, 2003.
Organizations They are
The structure/context in which PA works One of the principal focuses of PA
Definitions Complex, goal-seeking units Systems of consciously coordinated
activities Contain people Include division of labor & specialization
Organizations: DefinitionImplicit in the definition are four concepts: Organizations are made up of people. The necessity of the division of labor Organizations have identifiable
boundaries. Organizations are purposeful, goal
seeking work arrangements.
Kaynak: Wasti, 2010.
What is Organizational Theory? Organizational Theory (OT)
Studies Everything that is associated with organizations
Aims To understand organizations and to improve them
Examines Organizational Design Motivation Organizational Culture Managerial Styles Group Behavior Leadership Communication
Operational Level
Top Level
Middle (Mid) Level
Organizational Levels Different levels of
organization have different priorities in organizing.
Who: Top managersWhat: Evaluating organizational data,
Planning aheadAim: Organizational strategy and planning
Operational Level
Top Level
Middle Level
Who: Middle Level ManagersWhat: Control of operational activitiesAim: Organizational Efficiency
Operational Level
Top Level
Middle Level
Who: Workers-Street Level BureaucratsTheir Supervisors
What: Redundant and repetitive jobsAim: Increasing organizational efficiency
Operational Level
Top Level
Middle Level
Classical Theory of Organizations Industrial Revolution
Large scale organizations and mass production New patterns of relationships between workers
and factory owners & managers Emphasis on the formal structure Notion of “economic man”
Emphasis on material rewards Strictly define and control the work
processes “Employees are lazy and unreliable” Theory X versus Theory Y
Key Pillars of the Classical Theory
Division of labor Scalar and functional processes
Vertical and horizontal growth of the organization Delegation of power and authority
Line and staff Blue-collar and white-collar Line: Initiators of key organizaitonal activities Staff does not direct, it advises and serves
Reservoir of expert knowledge (A limited) Span of control
The number of subordinates a manager can effectively supervise (5-6)
Frederick Taylor, 1856-1915
“Frederick Taylor’s ideas may well be the most powerful, as well as the most lasting contribution America has made to Western thought since the Federalist Papers.”
Peter Drucker, 1954
“Founder of Scientific Management”
“Father of Industrial Engineering”
Kaynak: Wasti, 2010.
Scientific Management
– Time Studies – workers timed with stopwatches to identify “appropriate” time for specific tasks
– Motion Studies – workers observed to identify “one best way” of completing a task• Frank Gilbreth credited with origins of
Motion Studies
Scientific Management Simple Method of Management
Break job into efficient parts – Division of Labor, Workers/Managers
Hire the right worker for the job Give worker appropriate training –
everyone is trainable Introduce incentive pay plans –
assumption workers are only motivated by money.
Huge productivity gains, allowed for Mass Production
Scientific Management
Scientific Management: Management method by which systems are broken down into individual components and each studied independently and optimized using scientific methods.
Man Against the Machine
Scientific Management
Simplify Work “one best way”
Scientific Selection
Separate Planning from Doing
Incentive Pay
Scientific TrainingIndividual
Productivity
Share Wealth and Cooperation
Fordism
Meticulous time and motion study, perfection of each worker movement, specialized machines, conveyor belts.
Identifying work tasks and then making that method the standard, together with emphasis on inspection.
From Craft to Assembly Line Production at Ford’s Highland Park Plant
Pre-1912 20-30 per day
1913 100 per day
1914 1000 per day
1915 3000 per day
Model-T Production (Highland Park:1910)
Minutes of Effort to Assemble:
Late Craft
Fall, 1913
Ass’y Line
Spring 1914
% Reduced
Engine 594 226 62
Axle 150 26.5 83
Complete Vehicle
750 93 88
Fayol’s (1841-1925) Administrative Theory
Broad administrative principles to serve as guidelines for rationalization. “Top down” approach compared to Taylor.
Coordination: Scalar principle: Hierarchical organizational
form in which all participants are linked to a single pyramidal structure of control relations
Unity of command principle: No organizational participants should receive orders from more than one superior.
Fayol’s Administrative Theory (cont.)
Span of control principle: No superior should have more subordinates than can be effectively overseen.
Specialization: How various activities are to be distributed among organizational positions and how such positions can most effectively be grouped into work units/departments.
Fayol’s Administrative Theory (cont.)
Line and staff principle: All activities directly concerned with achieving organizational goals are line functions. Staff activities consist of advice, service, support. Staff units are to be segregated from the scalar organization of power and made responsible and subordinate to appropriate line units.
Max Weber, German Sociologist (1864-1920)
“The purely bureaucratic form of administrative organization […] is, as regards the precision, constancy, stringency, and reliability of its operations, superior to all other forms of administrative organization.”
Weber’s Theory of Bureaucracy
Three types of authority: Traditional: Rests on established belief in
the sanctity of immemorial traditions and the legitimacy of those exercising authority under them
Charismatic: Rests on devotion to the specific and exceptional sanctity, heroism, or exemplary character of a person
Legal- Rational : Rests on a belief in the legality of patterns of normative rules and the right of those elevated to authority under such rules to issue commands
Weber’s Theory of Bureaucracy (cont.)
Only traditional and rational-legal authority relations are sufficiently stable as basis of permanent administrative structures.
Charismatic forms arise in periods of instability and crisis.
Weber’s Theory of Bureaucracy (cont.)
Bureaucratization increases subdivision of the functions which the owner-managers of the early enterprises had performed personally.
Jurisdictional areas are clearly specified. Regular activities required of personnel are distributed in a fixed way as official duties.
Organization of offices follows the principle of hierarchy. Each lower office controlled and supervised by a higher one. Scope of authority over subordinates is circumscribed. Lower offices have a right to appeal.
Criticisms of Classical Principles
Division of labor Repetitive work causes industrial fatigue and
monotony Scalar and functional processes
Too much or insufficient delegation of authority Span of control
No single answer, depends on the organization and work
Neoclassical Theory of Organization
This school does not reject the principles of classical theory, It criticizes them
Introduction of behavioral sciences to the study of organizations Studies on motivation, coordination and
leadership
The Human Relations School
Explored the role of groups and social processes in organizations.
Viewed organizations as open systems and began to emphasize organization context.
Notable works: Mayo & Roethlisberger`s Hawthorne
Studies, Barnard’s Functions of the Executive, McGregor’s The Human Side of Enterprise.
Hawthorne Studies (1924-1932)
– Scientific Management study at Western Electric Hawthorne plant:• Question: How does workplace illumination affect
worker productivity?• Results: Productivity went up when illumination
was increased… productivity went up when illumination was decreased.
• Research team shifted to examine other variables, always finding a greater productivity in group under study..
Hawthorne Effect: Productivity increased as a result of the attention received by workers under study.
Neoclassical Theory
Human relations movement Hawthorne studies (1927- 1932)
Effects of changes in physical environment on output of workers
Temperature, hours of sleep, humidity, etc. Importance of social systems, friendliness,
etc. Importance of “informal organization” Natural groupings of people in work, a social need
Worker satisfaction- increased output
Human Relations –Elton Mayo
Analysis of the Hawthorne Studies: Work is a group activity – man is a
social creature
Need for Recognition, Security, and Sense of Belonging is more important in determining morale and productivity than physical working conditions.
Informal groups within the workplace exercise strong social controls over people’s work habits and attitudes.
Human RelationsOpportunities for Social Interaction
Employee Input
Sensitive Supervision
TeamProductivity
SatisfiedWorkers
Theory X and Theory Y Theory X
childlike passive lazy resists work want to be led bare minimum
Theory Y adults desire to
achieve committed to
work responsible lead, control
their work want to do a
good job
Kaynak: Gail Johnson, OT, 2003.
Theory X and Theory Y Theory X rests on four assumptions that an
administrator holds about people in the organization. They dislike work, must be supervised closely, will shirk
responsibility and seek formal direction, and have little ambition.
Theory Y embraces four very different assumptions administrators hold about the nature of people at work.
They view work as satisfying, exercise initiative and self direction if committed to the organization, learn to accept responsibility and seek it, and have the ability to make good decisions.
Theory Z
William Ouchi (1974) Theory Z
1. Lifetime employment2. Promotion based on seniority3. Cross-training of workers4. Collective decision-making process
Created after observing Japanese working culture
Pattern A & Pattern B Behavior Chris Argyris explains how Theory X views give
rise to Behavior Pattern A in leaders: Pattern A, Hard: characterized by no-nonsense,
strongly directive leadership, tight controls, and close supervision.
Pattern A, Soft: involves a good deal of persuading, “buying” compliance from subordinates, benevolent paternalism, or so-called good (that is, manipulative) human relations.
Maslow’s Need Hiearchy
Physiological
Safety / Security
Self-Esteem / Ego
Self- Actualization
Social Approval
Pro
gres
sing
Nee
d
Sat
isfa
ctio
n
Regressing N
eed
Satisfaction
Modern Theories of Organization
More than a synthesis of classical & neoclassical theories
Organization as a complex unit Various types of social groups interact Conflicts between
Management and workers Formal and informal organizations
Organizations as systems Environmental factors
Systems Approach to Organizations
Development of Systems Approach
Borrowed from Biology (Norbert Wiener) Increasing division of labor and expertise Every branch of science examining abstract
areas Weakening of links between these branches Difficulty of understanding and solving
complex problems Search for an integrating theory
Types of Systems
Closed systems Not affected by
external stimuli Exists only in theoryExample: Electric
circuit Open systems
Interacts with the environment
Example: Every living creature
Environment
OutputsInputs
Environment
Goals Culture
Behaviors Processes
TechnologyStructure
Kaynak: Gail Johnson, OT, 2003.
Features of Open Systems
1. Input- Receiving energy► Interpretation of stimuli► Conforming to the environment,
decision-making
2. Using energy► Transformation
3. Output► A good, service or a decision
4. Control/ Feedback► Positive or negative► Adaptation to changing conditions
5. Isomorphism► Fit between the parts of the system
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