Organizational Theory Comp

MPA Study guide for Comps covering the history of organizational theories.
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Introductory Statement
Society as it is today, became so through a history of transitional time periods. Currently, individuals exist in a culture dependent upon technology and growing industry, this world is much different than the rural society years prior. Despite the changes in civilization, people have continue to require stability and eliminate challenges that halt production and balance. Much like other sectors of society, when the problems of managing an organization grew to be more than one head could cope with, the search for guidance on how to manage and arrange large-scale organization became [a] noble quest (Shafritz,1). Organizational theory, though not based on one approach, meets these needs. Theories continue to develop, each distinctive and responsive to prior schools of thought.
Classical Organizational Theory
-Foundation; a starting point.
-This era is considered the foundation for today's modern organizational perspectives.
- It began as a response to the industrial revolution during the 1700s and continued as a dominating theory well into the 1930s.
- Concepts for this school of thought are heavily influenced by industry's dominance in society and there are many reflective constructs included in the theory's tenets and beliefs.
- For example, people are not viewed as individuals, but rather parts in an industrial mechanism.
- Scientific inquiry was often sought to solve the complex problems brought on with the factory organization and the demand to increase production and reach economic goals.
- Concerned primarily with the anatomy/structure of formal organizations" (Shafritz, 29).
- It was during this era that the first organizational chart was designed and specialization of labor was introduced.
- Economic production goals were fundamental objectives during this era.
- Individuals sought to assist complex and often, recurring, issues regarding production systems, organizational structure of the factory personnel, and how to manage these individuals to remain productive.
Fredrick Winslow Taylor (Classical)
- Studies on management and advocacy to include scientific approaches to labor discovered the fastest, most effective and least fatiguing production methods.
- He encouraged scientifically selecting and training the workman, rather than letting the employee choose his own work, to improve performance.
Henri Fayol (Classical)
- Introduced division of work that lead to the concept of specialization.
- recognized that authority and responsible must be established and that discipline is essential for the smooth running of business, without it, businesses cannot prosper.
- The interest of one employee should not prevail over another and orderly placement, centralization and adherence to the scalar chain (line of command from top level to lowest) encourages commitment and stability.
-scientific management as the way for firms to increase profits and raise productivity so that the broader society could enter a new era of harmony based on higher consumption of mass-produced goods by members of laboring classes.
Luther Gulick (Classical)
- heavily influenced by Fayol's findings.
Most notably known for his piece Notes on the Theory of Organization, he outlined the functions of the chief executive.
-These functions are represented by the acronym POSDCORB- planning, organizing, staffing, directing, coordinating, reporting and budgeting.
- Span of control and unity of command were also analyzed in
- Prior attitude advocated separating administration and politics; however he expressed opposition, suggesting that it was impossible to divide the two.
Woodrow Wilson (Classical)
- Believed that public administration should be studied more practically to increase the government's efficiency.
- Public administrators, have a duty to supply the best possible federal organization with the upmost efficiency and success, while simultaneously at the least possible cost and energy
Weber (Classical)
- also notable in the sociological arena, "used an 'ideal-type' approach to extrapolate from the real world the central core of features characteristic of the most fully developed bureaucratic form of organization" (Shafritz, 33).
- He recognized features characteristic of bureaucracies: a form of hierarchical structure, each level controls the level below and is controlled by the level above.
- Work is specialized and organized into units based on the type of work or skills employees have.
- A personnel system has a consistent pattern of recruitment and all employees are treated equally, as are the customers.
Neoclassical Era
- During this era, theorist sought to correct the perspectives held previously and began to move toward ideas that birthed creativity, as well as focused on human needs.
- Critics of the classical organizational period attacked the forerunners with exceptional ease, as most research was based on scientific principles without empirical research support.
- Most critical notations occurred in the time period between World War II and the 1950s, yet despite their "vigorous attacks upon the classicalists, the neoclassicalists did not develop a body of theory that could adequately replace the classical school.
-The neoclassical school modified, added to and somewhat extended classical theory.
-The neoclassical school attempted to save classical theory by introducing modifications based upon research findings in the behavioral sciences. It did not have a bona fide theory of its own," (Shafritz, 88).
- Despite its attempts to become an established school of thought, the neoclassical theory is considered a transitional stage in the lineage of organizational thought.
- However, it does remain an important part of the historical development of organization because it was the first school of thought to challenge classical views.
- Neoclassical views additionally promoted creativity, personal growth and motivation and it also "initiated theories that became central to the foundations of most of the schools that have followed," (Shafritz, 88).
- Within this era were notable organizational theorists that remain influential to modern school of thoughts even today.
Chester Barnard (NC)
- one of the first individuals to challenge classical organizational thought. In his work "The Functions of the Executive" he sought to define organization as a series of coordinated activities in such a way that incentives are creating an atmosphere of values and purpose that will reduce negative burdens.
- Stressed the importance of communication, both informal and formal; he also stated that an authority's hierarchical power is derived from the acceptance of subordinates.
- His contribution to neoclassical theory rests as an example to explain in detail the common themes of motivation, cooperation and effective executive leadership.
- Stress that an organization cannot "exist as self-contained island isolated from their environments," (Shafritz, 90).
Herbert A. Simon (NC)
-Particularly critiquing Weber's ideal-type of bureaucracy, Simon argued that a "science of administration" would never exist, but rather proverbs that could be utilized as a developing discipline.
-He suggests that such "principles" as "span of control" and "unity of command" were vague and contradictory. In studying various administrations, hepioneered studies in how organizations made decisions and developed quantitative ways to improve these methods.
-The perspective of logical positivism should be used with questions of policy making, and it should be acknowledged that decisions making is the true heart of administration.
Robert Merton (NC)
- proclaimed that the 'ideal type' bureaucracy as described by Max Weber, had inhibiting dysfunctions- characteristics that prevented it from being optimally efficient- and negative effects on the people who worked it," (Shafritz, 89).
- The structure of the bureaucracy places pressure upon the participants to adhere to a rigid operating pattering and skews the understanding of goals.
- Such goals are seen to solely exist for the organizational entity rather than for an individual's personal achievement, additionally adhering to these strict rules takes priority over organizational goals.
- Bureaucracies deemphasize personal relationships and act as a secondary avenue of relationships with the public it serves. At best, having a primary relationship is endangering because such would compromise consistent, fair and formal structures of the bureaucracy.
- Highlighted the need to impose and consider how individuals behave and act and how these reactions affect the formal structure.
-He points out yet another theme in this school of thought: human disconnects are caused by the imperfections in the system and how these gaps are approached.
Classical Versus NeoClassical
The neoclassical organizational theory introduces the concept of human relations on formal and informal structures. Whereas classical theory focuses on scientific components, neoclassical delivers information on the interrelationships composed in the organization. Theorists also provided empirical evidence to support their claims, though critics suggest they had little influence outside their own context. As Public Administrators, one can take away from these researchers that it is important to understand and consider human relationships and actions in any organization. Refusal to do so limits the ability of the organization and its means of existence. At the very least, negative burdens will occur that place unneeded hardship not only on the leaders, but also subordinates. Although theorists comprised in this time period often attacked the classical theory of being incomplete, neoclassical approaches were not without folly. These discrepancies paved avenues for other emerging schools of thought.
Human Resource Theory
The concern of human need and behavior continued onto the human resource theory or organizational behavior perspective. Like the neoclassical theory concern for a sociological approach to organizations, the organizational behavior perspective places a high regard on "humans as individuals" (Shafritz, 145) rather than as a separate component. Also, human resource theory relies on much empirical research to support its body of beliefs which include: organizations existing to serve human need, organizations and people need each other. When the fit between organization and people are poor one will suffer, and a good fit between organization and human produces meaningful and satisfying works and the organization gets the human talent they need," (Bolman & Deal, 1997, pp. 102,103).
Elton Mayo Team (HRT)
-Hawthorne Experiment
-it laid the foundations for a set of assumptions that would be full articulated and would displace the assumption of classical organization theory twenty years later," (Shafritz, 146). Fritz J. Roethlisberger examined the Hawthorne Experiment and concluded that a human problem requires a human solution. It further highlighted that monetary increase for the work performed does not mean the individual is satisfied with their job. In fact, the experiments exposed the paradigm that humans are "social animals" and their sentiments are distinct from the work being performed.
Abraham Maslow (HRT)
- Hierarchy of Needs
- Sought to explain that "humans have needs that underlie their motivational structure," (Shafritz, 147) and as these lower levels of needs are met, they no longer influence the drive of behavior conducted. An individual wishes to maintain these levels of need and any threat to these motivations is seen as danger and may thwart the desire to continue to gain higher levels of motivation. Understanding what level of hierarchy one is stationed will assist in continuing motivational incentives that are appropriate for the individual.
- His theory can be utilized in organizations. Resources, located at the lowest level of hierarchy needs, include people, budget and time. If an organization lacks basic resources, then more focus is spent on this level, than safety and stability, the next-highest level. For example, if the budget of an office is being cut, then individuals spend more time analyzing how to cut back other resources. At the same time, a person may have recently felt stable in their job, but the resources such as personnel are being threatened, and a person may strive to attain stability, rather than begin to look at interdependence and purpose within a company. Understanding his tenants of hierarchy of needs allows a manager to understand why people behave the way that they do in organizations.
Douglas McGregor (HRT)
it stands as a profound influence of administrative and educational practices today. He explained in his article how managerial assumptions about employees become self-fulfilling prophecies. He labeled his two sets of contrasting assumptions Theory X and Theory Y. By outlining the "average" man as gullible, resistant to change and lacking ambition, he identified an approach of creating an environment within which employees are motivated via authoritative, direction and control or integration and self-control.
Irving Janis (HRT)
Groupthink" contribution expanded this idea into how individuals make decisions. "Janis examined high-level decision makers and decision making during times of major fiascoes" (Shafritz, 148) such as the 1962 Bay of Pigs. Groupthink is a mode of thinking that people engage in when concurrence-seeking becomes so dominate in a cohesive in-group that it tends to override realistic appraisal of alternative courses of action. It is a desperate drive for consensus at any cost that suppresses dissent among the mighty in the corridors of power. Often, it can lead to very negative decision-making results. Her solutions for eliminating groupthink were developed when studying the Marshall Plan, the Truman administration and the handling of the Cuban Missile Crisis. Such remedies include allowing debate, inviting outside members to challenge views and dividing into subgroups headed by different leaders.
Themes of HRT
As the tenants suggest, the major themes in this era surrounded the relationships between humans and organizations. In this school of thought it is believed that individuals influence the organization and likewise, the organization can manipulate what behavior occurs. "Organizational behavior assumes that under the right circumstance, people and organizations will grow and prosper together. The ultimate worth of people is overarching value of the human relations movement, a worthy end in and of itself," (Shafritz, 149). Unlike the neoclassical school of thought which approached information from a moderately closed perspective, discussions about the organization and its employees were honest and open so that the people could make the best decision. It is certainly a theory that holds an optimistic outlook for organizations. This may be a reason that many subfields and leaders took on the theory to incorporate these themes into studies and applications, respectively.
Modern Structural Organizational Theory
The distinctive characteristics of modern structural organization theory are the historical events which influenced theorists of this time, such as World War II. Though the theorists are heavily influenced by classical contributors, "modern" structuralists are concerned with hierarchical levels of organizational authority and coordination, and the horizontal differentiations between organizational units.
Henri Mitzburg (MSOT)
wrote many articles on management policy and theory of organization during the 1960s. His book Power in and Around Organizations explains "The Five Basic Parts of the Organization" which are concepts used to create a model or organizations with five interdependent parts: the apex (top management), middle line (middle management), operating core (operating procedures), technostructure (analysts that design processes), and the support staff. His model is a creative and useful departure from traditional views of formal organization structure (Shafritz, 195)
MSOT Themes
Though classical theorist heavily influenced the tenants of "modern" structural organization theory in terms of increasing wealth and efficiency, other assumptions are present. Followers believe that flaws in an organization are due to its structure and these can be resolved by changing the structure. Organizations have purpose to achieve objectives and these objectives are attained by set rules and structure. Maintaining objectives call for control and coordination. Modern theory also calls for specialization and division of labor among employees. Lastly, each organization has one "best" structure, or at least a more appropriate formation. This would be so in the case a coal mining industry's environmental conditionals will have a best structure of management compared to an accounting firm.
Power and Politics Org. Theory
Power is a complex and comes in many forms. Its definition is daunting to pinpoint. Jeffrey Pfeffer, explored some of these definitions in "Understanding the Role of Power in Decision Making." As Pfeffer points out, power is context or relationship specific. A person is now powerful or powerless in general, but only with respect to other social actors in a specific social relationship. Power is also a cultural phenomenon, a consequence of the division of labor and specialization. Organizational conflicts occur because different races, sexes and professions often work together and argue about who has the "right" of a profession and control the way things will be exercised. This is why many power and politics theorist reject that decisions are rational as the "modern" followers suggest.
French and Raven (P and P)
examined and identified the many types of social power. There are two viewpoints from which to view social power: the behavior of the agent exerting the power and the reaction of the recipient of the power behavior. Power is defined in terms of influence and influence is defined in terms of psychological change. Psychological change is determined by changes in behavior, opinions, attitudes, goals, needs, values, and other "systems." The change is measured by the amount of change over time. Social influence is determined by the force of the agent exerting the power and the resistance of the recipient of that power (all outside forces remaining the same). Social power is determined by the maximum potential of the social influence. It is assumed that [the agent exerting power] is capable of various acts [and] may often choose to exert less than his full power. French and Raven conclude that the stronger the basis of power, the greater the power and the more legitimate the power, the less resistance.
James March (P and P)
continued to research social power in organization. He outlines three approaches for studying power: experimental, community and institutional study. Additionally, he explored factors that influence and contribute to decision-making, as well as assessed six models of Social Choice and the concept of power. March concluded that the power of power depends on the extent to which a predictive model requires and can make effective use of such a concept- dependent upon the kind of system confronting and the various data.
Power Themes
"Modern" structural organizational theory asserts that organizations are assumed to be rational institutions and participants interact to achieve established goals and personal preferences are restrained by system of formal rules, authority and norms for rational behavior. Contrastingly, power and politics organizational theory declares individuals to be selfish, unrealistic and conflict is inevitable. Organizations are very complex, and influence is an essential element to organizational life. Theorists in this school argue that organizational goals are only rarely established by people in position of formal authority. Goals result from ongoing maneuvering and bargaining among individuals and coalitions. At any level in the hierarchy these bargaining situations take place and when power changes among the organization, so does the conflicts and goals. Authority was previously viewed and as an understood attainment to achieve the established goals, however in power and politics organizational theory, authority is just one of the many available sources of organizational power.
Organizational Culture
It is difficult to advocate for different methods of looking at organizational behavior and many of the literature available is based on assumptions, thus most publications have occurred within the past two decades. The first wave of publications addressed on socializing employees into pre-existing organizations, while the second stream focused on interpretation, symbols and how people face uncertainty. However, it was not until the 1980s, when organizational culture gained its momentum.
Schien (OT)
author of Organizational Culture and Leadership, he proposed a formal definition of organizational culture that has gained wide, though not universal, acceptance. The concept of culture is most useful if it helps to explain some of the more seem¬ingly incomprehensible and irrational as¬pects of groups and organizations. The bottom line for leaders is that if they do not become conscious of the cultures in which they are embedded, those cultures will manage them. Schien asserts that is important for administrators to understand the organization's culture, but essential to the leaders.
Trice and Beyer (OT)
outline some measures managers may take to change cultures. According to these two theorists, those managing the process of culture change are more successful when they are able to convince people that the benefits of changing outweigh the losses. However, even when organizations are new, the development of the organization's culture may prove challenging because of the "cultural baggage," that people bring. "Whether changing or creating cultures managers inevitably need to replace some of the existing ideologies, symbols, and customs with new ones." (Shafritz, 383)
OT Perspective
Organizational culture theory attempts to explain behavior within organizations. Its focus is on values, attitudes and beliefs; it provides a description of patterns of behavior and believes that these decisions are predetermined by the patterns of basic assumptions held by members of an organization. These patterns continue to influence members because they have been proven effective previously, and thusly assumptions slowly drop out of people's consciousness but continue to influence organizational decisions and behaviors when they environment changes and different decision. These decisions have become so ingrained in the culture; many do recognize that they may no longer be effective or appropriate. This theory calls into quest the practices of the past and view organizations as more than the sum of management practices and task allocation. Communication is central and it is the intention of organizational culture theory to not increase profits, but to excavate the underlying values and assumptions that guide organizational life. The organizational culture perspective believes that the "modern" structural, organizational economics and systems/environment schools of organization theory are suing the wrong tools to look at the wrong organizational elements in their attempt to understand and predict organizational behavior (Shafritz, 253).
Reform Through Changes in Organizational Culture
The reform through changes in organizational culture held that "lasting organizational reform requires changes in organizational culture. Organizations that reflected unwanted values, such as authoritative power, closed networks and rigidity, were now being replaced with desirable characteristics such as accessibility, flexibility and group empowerment," (Shafritz, 415). Specific reform movements exhibited changing perspectives on organization's culture.
Dr. W. Edwards Deming (Reform)
traveled to Japan in the 1960s and convinced a number of Japanese executives to improve their productivity with various statistical methods. Hailed as having a significant and vital impact on the Japanese economy, he was essentially unknown in the United States. His total quality movement a management approach that allowed employees across organizations to participate in quality improvement activities outlined fourteen points to improve transforming business effectiveness. These included, though were not limited to: instituting training on the job, institute a program for education and self-improvement and create a consistency of purpose. Additionally, he recognized seven deadly diseases such as emphasis on short-term profits, mobility of management and excessive medical costs that are inhibitors for success.
Ouchi (Reform)
analyzed Deming's work and sought to separate the culturally specific principles between the United States and Japan and to show that different companies have different ways of approaching problems. "Theory Z," Ouchi's research, focuses on increasing employee loyalty. Management according to Theory Z will promote stability, high productivity, morale and satisfaction if the managers place enough confidence in their workers to follow through specific participation within the company. Employees are expected to have a great understanding and education about the company, which often calls for extensive training much more lengthy and in-depth than previous theories described. Unlike previous schools of thought that advocated specializations to task, Ouchi stressed the need for workers to be generalists and to increase their knowledge of the organization by rotating areas and departments of training. Loyalty is a by-product of this extensive training and it is hoped that the rich understanding of the culture, organizational structure and operation will be passed on to other, newer, employees as hiring cycles continue.
Senge (Reform)
suggested that only those organizations which were willing to expand their capacity would survive in their market. An organization must be able to adapt to the intended or desired outcomes as well as recognize if the direction of the organization is going awry from these outcomes and make the necessary steps to correct the discrepancy. "Learning organizations are organizations that are able to move past mere survival learning and engage in generative learning," (Shafritz, 420).
Theories of Organization and Environments
The focus of theory and research from the open systems perspective inevitably moved to the interaction and interdependencies among organizations and their environments," (Shafritz, 476).
Daniel Katz and Robert Kahn (Environment)
The Social Psychology of Organizations recognized the theoretical change in organizations from a "closed system model" to an "open systems perspective." Focus was now placed on external dynamics and organizations as systems of interdependent activities. Organizations rely upon input from its environment and process this information to achieve a product that society needs or wants. Organizations are not self-contained, though they seek to control their environs and extend their boundaries, (Katz & Kahn, 1980). Katz and Kahn examined the complexity of organizations not as one-dimensional institutions, but rather interconnected and multidimensional. Theorists in this school of thought viewed organizations as changing interactions that adapt to the environment and, in turn, leaders must recognize that the decisions they make influence their surroundings.
James D. Thompson (Environment)
sought to bridge the gap between the classically held view of closed systems and the approaching acceptance of open systems. Thompson approaches organizations on two fundamental ideas: the nature of uncertainty in the environment is a determining factor of organizational structure and simple models cannot work for complex organizations.
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