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DATE TIME FORMAT - Plenary participatory lecture TRAINER OBJECTIVES At the end of this session, participants will be able to understand and appreciate: 1. Classical, neoclassical and modern theories of organization. INSTRUCTIONAL MATERIALS
REQUIRED READING Reading note: Organizational theories BACKGROUND READING None. SPECIAL EQUIPMENT AND AIDS Overhead projector and chalkboard Session guide: Organizational theories
There are several theories which explain the organization and its structure (EXHIBIT 1). Classical organization theory includes the scientific management approach, Weber's bureaucratic approach, and administrative theory. Thescientific management approach is based on the 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. Taylor (1947) proposed four principles of scientific management: · science, not rule-of-thumb; Show EXHIBIT 2 and discuss these principles. Weber'sbureaucratic approach considers the organization as a part of broader society. The organization is based on the principles of: · structure; Show EXHIBIT 3, and discuss Weber's bureaucratic approach. Observe that this approach is considered rigid, impersonal, self-perpetuating and empire building. Administrative theory was propounded by Henry Fayol and is based on several principles of management (EXHIBIT 4). In addition, management was considered as a set of planning, organizing, training, commanding and coordinating functions. Neoclassical theory emphasizes individual or group behaviour and human relations in determining productivity. The main features of the neoclassical approach are individual, work group and participatory management. Show EXHIBIT 5 and discuss the principles. Show EXHIBIT 6 on a modern approach to organization characteristics. 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 include the systems approach, the socio-technical approach, and the contingency or situational 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 (EXHIBIT 7). Thesocio-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. Thecontingency 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. Ask participants whether they consider the research organization as a social system. Since scientists constitute the core resource in a research organization, their growth is as important as the growth of the organization. A social organization is characterized by complexity, degrees of inter-dependence between sub-systems, openness, balance and multiplicity of purposes, functions and objectives. Show EXHIBIT 8 and discuss each of these characteristics. Now move to goal setting in an organization. Ask participants "Why should goals be set?" Goals are set to increase performance and provide control. Show EXHIBIT 9 and discuss how goal setting improves performance. How are goals set? Following management by objectives, the process of goal setting involves five steps (EXHIBIT 10). First, the overall objectives of the organization are set and then an action plan is evolved. The second step is to prepare members in the organization for successful implementation of the action plan. Individual goals are set in the third step. Periodic appraisal and feedback is the fourth step, to ensure smooth implementation of the action plan. Finally, an appraisal of performance by results takes place. Now discuss the concept of integration and coordination in the organization. These are controlling mechanisms for smooth functioning of the organization. Organizational differentiation is the unbundling and re-arranging of the activities. Integration is re-grouping and re-linking them. The need for integration arises in the face of environmental complexity, diversity and change. Show EXHIBIT 11 and discuss some of the important reasons which necessitate integration. How is integration achieved? Obviously, the structure of the organization should facilitate proper coordination and integration of different specialized units. What could happen were the organizational structure not proper? Integration is achieved through vertical coordination along the hierarchy, decision making levels, and span of control (EXHIBIT 12). There are several methods to improve integration. These include rules and procedures and professional training. Next discuss the process in the organization, which involves the concept of power, decision making and communication. Power refers to the ability to get an individual or group to do something or to change in some way. Power could emanate from position, economic status, knowledge, performance, personality, physical or ideological traits. Observe that power is one of the strongest motives, and affects setting of objectives and availability of resources in an organization. Next discuss the concept, and the various types of organization-based power (EXHIBIT 13). Communication is another important process in the organization and is a key mechanism for achieving integration and coordination of the activities of specialized units at different levels in the organization. Communication can be horizontal, downward or upward (EXHIBIT 14). Finally, discuss decision making in an organization. It begins with goal setting, identification and evaluation of alternatives and the choice of criteria. Show EXHIBIT 15 and discuss the important steps involved in decision making. There are several models of decision making (EXHIBIT 16). Exhibit 1: Organization theoriesCLASSICAL ORGANIZATION THEORY · Scientific Management approach MODERN ORGANIZATION THEORY · Systems
approach Exhibit 2: Taylor's principles of scientific management· Science, not rule-of-thumb; Exhibit 3: Weber's bureaucratic approachStructure Exhibit 4: Fayol's principles of management: Administrative theory· Division of work (specialization) Exhibit 5: Principles of the neoclassical approachINDIVIDUAL Exhibit 6: Characteristics of modern approaches to the organization· Systems viewpoint Exhibit 7: Modern approaches to organization: The systems approachCOMPONENTS · The individual LINKING PROCESSES · Communication GOALS OF ORGANIZATION · Growth Exhibit 8: The research organization as a social systemCharacteristics of the research organization ß Complexity Exhibit 9: The importance of goal settings· Clarified what people have to do Exhibit 10: The process of goal setting (management by objectives)1. Setting overall organizational objectives and action plan · identifying key result areas 2. Develop
the organization Exhibit 11: The need for integration· Environmental complexity, diversity and change Exhibit 12: Methods of integration
Exhibit 13: Organization-based power
Exhibit 14: Communication in the organizationÝ UPWARD Ý Ü Ü Ü HORIZONTAL Þ Þ Þ ß DOWNWARD ß Exhibit 15: The process of decision makingSETTING ORGANIZATIONAL GOALS ß ESTABLISHING PERFORMANCE CRITERIA ß CLASSIFYING AND DEFINING THE PROBLEM ß DEVELOPING CRITERIA FOR A SUCCESSFUL SOLUTION ß GENERATING ALTERNATIVES ß COMPARING ALTERNATIVES TO CRITERIA ß CHOOSING AN ALTERNATIVE ß IMPLEMENTING THE DECISION ß MONITORING THE DECISION AND GETTING FEEDBACK Exhibit 16: Models of decision making
Reading note: Organizational theories
Organizational theories which explain the organization and its structure can be broadly classified as classical or modern. Classical organization theory
Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the formal organization and concepts to increase management efficiency. Taylor presented scientific management concepts, Weber gave the bureaucratic approach, and Fayol developed the administrative theory of the organization. They all contributed significantly to the development of classical organization theory. Taylor's scientific management approachThe scientific management approach developed by Taylor is based on the concept of planning of work to achieve efficiency, standardization, specialization and simplification. Acknowledging that the approach to increased productivity was through mutual trust between management and workers, Taylor suggested that, to increase this level of trust, · the advantages of productivity improvement should go to workers, Taylor developed the following four principles of scientific management for improving productivity: · Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a scientific approach to each element of a person's work. Weber's bureaucratic approachConsidering the organization as a segment of broader society, Weber (1947) based the concept of the formal organization on the following principles: · Structure In the organization, positions should be arranged in a hierarchy, each with a particular, established amount of responsibility and authority. Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such as rigidity, impersonality, displacement of objectives, limitation of categorization, self-perpetuation and empire building, cost of controls, and anxiety to improve status. Administrative theoryThe elements of administrative theory (Fayol, 1949) relate to accomplishment of tasks, and include principles of management, the concept of line and staff, committees and functions of management. · Division of work or specialization This increases productivity in both technical and managerial work. Neoclassical theory
Neoclassical theorists recognized the importance of individual or group behaviour and emphasized human relations. Based on the Hawthorne experiments, the neoclassical approach emphasized social or human relationships among the operators, researchers and supervisors (Roethlisberger and Dickson, 1943). It was argued that these considerations were more consequential in determining productivity than mere changes in working conditions. Productivity increases were achieved as a result of high morale, which was influenced by the amount of individual, personal and intimate attention workers received. Principles of the neoclassical approachThe classical approach stressed the formal organization. It was mechanistic and ignored major aspects of human nature. In contrast, the neoclassical approach introduced an informal organization structure and emphasized the following principles: · The individual An individual is not a mechanical tool but a distinct social being, with aspirations beyond mere fulfilment of a few economic and security works. Individuals differ from each other in pursuing these desires. Thus, an individual should be recognized as interacting with social and economic factors. Note the difference between Taylor's 'scientific management' - which focuses on work - and the neoclassical approach - which focuses on workers. Modern theories
Modern theories tend to be based on the concept that the organization is a system which has to adapt to changes in its environment. In modern theory, an organization is defined as a designed and structured process in which individuals interact for objectives (Hicks and Gullet, 1975). The contemporary approach to the organization is multidisciplinary, as many scientists from different fields have contributed to its development, emphasizing the dynamic nature of communication and importance of integration of individual and organizational interests. These were subsequently re-emphasized by Bernard (1938) who gave the first modern and comprehensive view of management. Subsequently, conclusions on systems control gave insight into application of cybernetics. The operation research approach was suggested in 1940. It utilized the contributions of several disciplines in problem solving. Von Bertalanffy (1951) made a significant contribution by suggesting a component of general systems theory which is accepted as a basic premise of modern theory. Some of the notable characteristics of the modern approaches to the organization are: · a systems viewpoint, Modern understandings of the organization can be broadly classified into: · the systems approach, The systems approachThe systems approach views organization as a system composed of interconnected - and thus mutually dependent - sub-systems. These sub-systems can have their own sub-sub-systems. A system can be perceived as composed of some components, functions and processes (Albrecht, 1983). Thus, the organization consists of the following three basic elements (Bakke, 1959): (i) Components There are five basic, interdependent parts of the organizing system, namely:· the individual, Socio-technical approachIt is not just job enlargement and enrichment which is important, but also transforming technology into a meaningful tool in the hands of the users. The socio-technical systems approach is based on the premise that every organization consists of the people, the technical system and the environment (Pasmore, 1988). People (the social system) use tools, techniques and knowledge (the technical system) to produce goods or services valued by consumers or users (who are part of the organization's external environment). Therefore, an equilibrium among the social system, the technical system and the environment is necessary to make the organization more effective. The contingency or situational approachThe situational approach (Selznick, 1949; Burns and Stalker, 1961; Woodward, 1965; Lawrence and Lorsch, 1967) is based on the belief that there cannot be universal guidelines which are suitable for all situations. Organizational systems are inter-related with the environment. The contingency approach (Hellriegel and Slocum, 1973) suggests that different environments require different organizational relationships for optimum effectiveness, taking into consideration various social, legal, political, technical and economic factors. The research organization as a social system
An organization is a continuing system, able to distinguish and integrate human activities. The organization utilizes, transforms and joins together a set of human, material and other resources for problem-solving (Bakke, 1959). The main function of an organization is to satisfy specific human needs in interaction with other sub-systems of human activities and resources in the given environment. In a research organization, individual needs of researchers are more often in conflict with organizational needs than in any other organization. Therefore, growth of the organization should concurrently also promote growth of the individual. Characteristics of the research organization Social organizations are characterized by their complexity, degree of inter-dependence between sub-systems, openness, balance, and multiplicity of purposes, functions and objectives (Huse and Bowditch, 1973). · Complexity A research organization consists of a number of individuals, groups, or departments, each of which is a sub-system within the total system. The prevalence of these sub-systems makes the organization complex. Goal settingIn an organization, goal setting is one of the control systems, a component of the appraisal process and an effective tool for human resource management (Locke, 1968; Sherwin, 1976). The concept of goal setting is now used to increase the performance of the organization as well as the individual through management by objectives. Drucker (1954) suggested that management by objectives can be useful for managers for effectively managing the future direction of the organization. Importance of goal setting Well specified and clear goals improve performance in an organization by: · making clear what people have to do; There is a definite linkage between goal setting and performance. Latham (1981) reported that · specified goals are better than vague or general goals, The process of goal setting Peter Drucker suggested thirty years ago that a systematic approach to goal setting and appraising by results leads to improved organizational performance and employee satisfaction. This concept of goal setting is now widely used in most organizations. The process of goal setting (or management by objectives as it is often called) involves several steps (Luthans, 1985): (i) The first step in the process is setting general organizational objectives and preparing an action plan. Goal setting is based on a top-down approach, and involves:· identifying key result areas in the organization, Integration and coordinationIntegration and coordination refer to integration of the objectives and activities of specialized units or sub-systems in order to achieve the organization's overall strategic objectives. Coordination and integration are necessary controlling mechanisms to ensure placid functioning, particularly when organizations become large and complex. Integration aims at ensuring that different sub-systems work towards common goals. Integration of the organizational sub-systems relates to differentiation and division of labour in the organization. Organizational differentiation means un-bundling and re-arranging of activities. Re-grouping and re-linking them is organizational integration (Lawrence and Lorsch, 1967). When different units are assigned different tasks and functions, they set independent goals for performing the assigned tasks and function accordingly. In such situations, integration of the activities of different sub-systems is necessary to facilitate smooth working and to bridge communication gaps. In research organizations, integration of research units and administrative units is very important for the smooth functioning of research activities. Need for integration Integration and coordination is necessary for several reasons (Anderson, 1988): · As the organization encounters environmental complexity, diversity and change, it requires more and more differentiation of its units. Need for integration also increases with increase in structural dimensions. Methods of integration Within any large organization it is important to have proper communication systems to enable different sub-systems to coordinate various activities and avoid obstacles in the work environment. Lack of proper coordination often causes conflicts in an organization. To ensure proper coordination in research organizations, the research manager has to take care of behavioural dimensions (such as motivation and conflicts) while ensuring an efficient overall structure. Achieving integration The structure of a research institution needs to be suitably designed to facilitate proper coordination and integration of different specialized units. A poorly designed structure may: · hinder coordination and integration, Coordinating vertically through hierarchy Work is assigned to specialized units and coordinated by a manager. A hierarchy (vertical) of authority evolves from lower to higher levels. A manager can use the following principles of hierarchy of authority for integrating specialized units: · The unity of command principle. Every worker should report to only one manager. Determining the decision making level A manager has to decide about the levels at which decisions are to be taken, and this would depend upon the type, impact and values of decisions. Deciding the span of control Span of control refers to the number of specialized activities or personnel supervised by one manager. There is no optimal number for a span of control and number of levels in the hierarchy. In fact, span of control and hierarchy levels are inter-related and depend on situational factors (Barkdull, 1963). Some of the important situational factors are: · Similarity of functions. Methods to improve integration There are several ways to improve integration, the most common being through a hierarchy of authority. For this, specialized units whose activities are inter-related could be put under one manager. Coordination can also be improved through · developing rules and procedures wherever possible, Using committees to improve coordination is more difficult than other methods, as it requires considerable skills in group dynamics and technical knowledge on the part of the chairperson of the committee. The person who takes this role must not be involved directly in the work, but tries to assist managers in improving integration. Process in the organization
Norms for proper functioning of the organization are evolved through organizational processes. These relate to power, decision making, communication, motivation and leadership. Socialization also plays a significant role. Power in the organizationPower refers to the ability to get an individual or group to do something or to change in some way. Politics is a process to achieve power. Power is inter-related with authority and influence. Bernard (1938) defined authority in terms of 'legitimate power.' Power is considered as an essential element in any human organization so as to engender order and coordinate various activities. Power provides one of the strongest motivations (Galbraith, 1952). It also affects the setting of objectives and the distribution of resources in an organization. The source of power can be positional, economic, knowledge, performance, personality, physical or ideological (Hicks, 1975). Organization-based power refers to the power beyond the range of legitimate authority because of the position which a person has in the organization (Milgram, 1974). This power can be controlled and transferred by the organization. Four categories of organizational power can identified, according to source (French and Raven, 1959): · Reward power This refers to the control over rewards desired by others. This is given by persons at a higher level or by decision-makers. In research organizations, as in other organizations, power plays a significant role. It influences the organization's strategies, recruitment of competent scientists, behavioural control system and changes in the organizational structure. Communication in the organizationCommunication is a basic element in organizational structure and functioning. It is the key mechanism for achieving integration and coordination of the activities of specialized units at different levels in the organization. The communication process consists of seven steps (Shannon and Weaver, 1949): message, encoding, transmitting, receiving, decoding, understanding and feedback. Organizational communication can be horizontal, upward, and downward: · Horizontal (lateral) communication aims at linking related tasks, work units and divisions in the organization. The importance of horizontal communication increases with task specialization and diversity in organizational structure. The need for lateral or horizontal communication was first stressed by Fayol (1949), when he suggested a 'gang plank' between similar hierarchical positions. In an agricultural research organization, a suitable blending of lateral, downward and upward communication is required to effectively coordinate and integrate activities of individual subsystems. The effectiveness of research results greatly depends upon proper communication links among scientists, between scientists and agricultural extension workers, and between extension workers and farmers. In an agricultural research organization, there are several specialized sub-systems which need to be integrated through horizontal communication. Downward communication facilitates transmission of research results to actual users. Upward communication enables flow of information from lowers level to the top level: farmers Þ extension workers Þ scientists Þ research manager Þ DG and policy-makers Organizational decision making Decision making is choosing among alternatives. It starts with goal setting in the organization, and entails searching for alternatives, analysing alternatives and choosing criteria. Decisions may pertain to · broad policies or plans for the organization, The process of decision making involves nine steps (Hicks and Gullet, 1975; Anderson 1988): (i) Setting organizational goals. Models of decision making There are five major models for decision making in an organization (Gortner, Mahler and Nicholson, 1987). They are: · The economic or rational choice model, as used in bureaucratic organizations. It is based on rational choice among well reasoned and logical alternatives. Certainty decisions are largely made by managers at lower levels under known conditions with known outcomes. For such decisions, nearly complete information is available. Quantitative techniques are not usually required to make certainty decisions. However, calculus and a few mathematical programming techniques can be useful. Risk decisions are more difficult to make than certainty decisions because of limited information and the possibility of several outcomes for each alternative. Most risk decisions are taken at higher levels. For risk decisions, probability techniques (objective and subjective probability) are widely used. Decisions under uncertainty are the most intricate. For such decisions, probability techniques are of limited help. However, minimax analysis and Bayes's procedure can be used in refining the decision making process under conditions of uncertainty. Minimax analysis attempts to calculate the worst outcome that can occur for each alternative, whereas Bayes's procedure is based on the concept of expected value and assumes that each possible outcome has an equal chance of occurring. ReferencesAlbrecht, K. 1983. New systems view of the organization. pp. 44-59, in: Organization Development. Englewood Cliffs, NJ: Prentice-Hall. Anderson, C.R. 1988. Management: Skills, Functions and Organization Performance. New York, NY: Allyn and Bacon. Bakke, W.E. 1959. Concept of social organization. pp. 16-75, in: Haire, M. (ed), Modern Organization Theory, New York, NY: John Wiley. Barkdull, C.W. 1963. Span of Control: A method of evaluation. Michigan Business Review, 15(3). Bernard, C. 1938. The Functions of the Executive. Cambridge, MA: Harvard University Press. See pages 65-114. Burns, T.G., & Stalker, G.M. 1961. The Management of Innovation. London: Tavistock Institute. David, S.M., & Lawrence, P.R. 1978. Problems of matrix organizations. Harvard Business Review, May-June: 131-142. Drucker, P.F. 1954. The Practice of Management. New York, NY: Harper. Fayol, H. 1949. General and Industrial Management, translated by Constance Storrs. London: Pitman. French, J.R.P., Jr., & Raven, B. 1959. The bases of social power. pp. 156-165, in: Cartwright, D. (ed), Studies in Social Power. Ann Arbor, MI: University of Michigan. Galbraith, J.K. 1956. American Capitalism: The Concept of Countervailing Power. Boston, MA: Houghton Mifflin. Gortner, H.F., Mahler, J., & Nicholson, J.B. 1987. Organization Theory. Reading, MA: Dorsey Press. See pages 244-266. Gulick, L., & Urwick, L. (eds) 1937. Papers on the Science of Administration. New York, NY: Institute of Public Administration. Hellriegel, D., & Slocum J.W., Jr. 1973. Organization theory: a contingency approach. Business Horizons, April, 1973. Hicks, G.H., & Gullet, C.R. 1975. Organizations: Theory and Behaviour. New York, NY: McGraw-Hill. See pages 245-259. Huse, E.F., & Bowditch, J.L. 1973. Behaviour in Organizations. The Philippines: Addison-Wesley. See pages 27-44. Katz, D., & Kahn, R. 1978. The Social Psychology of Organizations. New York, NY: John Wiley. Latham, G.P. et. al., 1981. Goal setting and task performance: 1969-80. Psychological Bulletin, July: 125-152. Lawrence, P.R., & Lorsch, J.W. 1967. Differentiation and integration in complex organizations. Administrative Science Quarterly, June: 1-47. Locke, E.A. 1968. Toward a theory of task motivation and incentives. Organizational Behaviour and Human Performance, May: 157-89. Luthans, F. 1985. Organizational Behaviour. Singapore: McGraw-Hill. See pages 257-262 and 599-610. Milgram, S. 1974. Obedience to Authority. New York, NY: Harper & Row. Pasmore, W.A. 1988. Designing Effective Organizations, New York, NY: John Wiley. See pages 87-109. Roethlisberger, F.J., & Dickson, J.W. 1943. Management and the Worker. Cambridge, MA: Harvard University Press. Seiznick, P. 1949. TVA and the Grass Roots. Berkeley, CA: University of California Press. Shannon, C.E., & Weaver, W. 1949. The Mathematical Theory of Communication. Urbana, IL: University of Illinois Press. Sherwin, D.S. 1976. Management of objectives. Harvard Business Review, May-June: 149-160. Taylor, F.W. 1947. Principles of Scientific Management. New York, NY: Harper. Tosi, H.L., Rizzo, J.R., & Carroll, S. 1986. Managing Organizational Behaviour. New York, NY: Pitman. Von Bertalanffy, L. 1951. General systems theory: a new approach to the unit of science. Human Biology, December. Weber, M. 1947. The Theory of Social and Economic Organization. Translated by Talcott Parsons. New York, NY: Free Press. Woodward, J. 1965. Industrial Organization. Oxford: Oxford University Press.
Is the purpose or rationale for an organization's existence?A mission statement is a concise explanation of the organization's reason for existence. It describes the organization's purpose and its overall intention.
What is the purpose of an organization's mission statement quizlet?A mission statement serves as the basis for organizational goals, which provide more detail and describe the scope of the mission. The mission and goals often relate to how an organization wants to be perceived by the general public, and by its employees, suppliers.
When an organization able to produce goods or services that have some uniqueness in their characteristics This strategy is known as?A differentiation strategy is one that involves developing unique goods or services that are significantly different from competitors.
Which of the following did the authors not suggest as a reason for globalizing operations?Pursuing stockholder approval ratings. Explanation for correct option: Pursuing stockholder approval ratings are not a reason for globalizing.
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