What ıs the scıentıfıc explanatıon - İlhan Çiftçi Web viewClassiscal...

1/6/2010

Classics of Organization Theory

Bahçeşehir University

Organizational Theory SUMMARY OF CLASSICS

Reviewd by: Prof. Dr. İlhan Atilla DİCLE

Prep. by: İlhan ÇİFTÇİ

Contents

Change in the Organization Structure...................................................................................................4

Chapter 1: Classical Organizational Theory............................................................................................4

Major Contributions of Classical School.............................................................................................5

Adam Smith - (1723 –1790)............................................................................................................5

Daniel C. McCallum (1815 – 1878)..................................................................................................5

Henry R. Towne (1844 – 1924).......................................................................................................5

Henry Fayol (1841 -1925)...............................................................................................................6

Frederick Taylor..............................................................................................................................7

Max Weber (1864 – 1920)..............................................................................................................7

Luther Gulick (1892 – 1992)...........................................................................................................9

Summary of Classical Organization Theory.......................................................................................10

Chapter 2: Neoclassical Organizational Theroy....................................................................................10

Major Contributions of NeoClassical School.....................................................................................11

Chester I. Barnard (1938).............................................................................................................11

Robert K. Merton (1957)..............................................................................................................12

Herbet A. Simon (1946)...............................................................................................................12

Philip Selznick (1948)....................................................................................................................13

Richard M. Cyert & James G. March (1959)..................................................................................13

Chapter 3: Human Resource Theory, or the Organizational Behavior..................................................14

Major Contributions of Human Resource Theory School................................................................14

Mary Parker Follett (1926)............................................................................................................14

Fritz J. Roethlisberger (1941)........................................................................................................15

Abraham H. Maslow (1943)..........................................................................................................15

Douglas Murray Mc Gregor (1957),..............................................................................................16

Chapter 4: “Modern” Structural Organization Theory..........................................................................17

Major Contributions of Modern Structural Organization Theory School.........................................17

Tom Burns & G.M.Stalker (1961)..................................................................................................18

Peter M. Blau & W.Richard Scott (1962).......................................................................................19

Arthur H. Walker & Jay W. Lorsch................................................................................................19

Henry Mintzberg (1979)...............................................................................................................20

Richard M. Button & Borge Obel (1998).......................................................................................21


Chapter 5: Organizational Economics Theory.......................................................................................21

Major Contributions of Organizational Economics Theory...............................................................22

Chapter 6: Power and Politics Organization Theory.............................................................................22

Major Contributions of Power and Politics Organization Theory.....................................................23

Jeffrey Pfeffer (1981)....................................................................................................................23

Robert Michels.............................................................................................................................23

John R. P. French Jr. & Bertram Raven (1959)..............................................................................24

James G. March (1966).................................................................................................................25

Henry Mintzberg (1983)...............................................................................................................25

Rosabeth Moss Kanter (1979)......................................................................................................26

Chapter 7: Organizational Culture Theory............................................................................................26

Edgar H.Schein (1993)..................................................................................................................27

Scott D.N. Cook,Dvora Yanow (1993)...........................................................................................27

Harrison M.Trice & Janice M.Beyer (1993),..................................................................................28

Joanne Martin (2002)...................................................................................................................28

Chapter 8: Reform Through Changes in Organizational Culture...........................................................29

The Z Organization...........................................................................................................................29

System Thinking:..........................................................................................................................30

Personnel Mastery.......................................................................................................................30

Building Shared Vision..................................................................................................................31

Team Learning..............................................................................................................................31

Gendering Organizational Theory.....................................................................................................31

Creating a Goverment That Works Better & Costs Less: Report of The National Performance Review.........................................................................................................................................................31

Problems of National Goverment:................................................................................................32

Creating the Multicultural Organization: The Challenge of Managing Diversity...............................33

Chapter 9: Theories of Organizations and Environments.....................................................................34

Daniel Katz & Robert L. Kahn (1966).............................................................................................34

James D. Thompson (1967)..........................................................................................................35

John W. Meyer and Brain Rowan (1977)......................................................................................35

Jeffrey Pfeffer & Gerald R. Salancik (1978)...................................................................................35

Geln R. Carroll and Michael T. Hannan (2000)..............................................................................36


Change in the Organization Structure

The structure of the organizations has been affected by the economical, social and the political

enviroment. Managements have formed in accordanceto changing organizatiıons. The shape of the

changing organization structure is represented below:

There has been two types of organization structure: Classical and Comtemporary. According to this

two basic types of organizational structure, variety of organizations comprised. These are listed

below.

Classciacal Organizational Structure Neo Classical Organizational Structure Modern Organizational Structure Post Modern Organizational Structure

Chapter 1: Classical Organizational Theory

Classiscal organziational theroy was the first organizational theory taking place in business and

administration era. Structure of this theory was mechanic and rigid. This organization comprised with

three approach defined below:

Scientific Management Approach Administrative Management Approach Bureaucracy Approach


1890 1900 1910 1920 1930 1940 1950 1960 1970 2000

Systematicmanagement

Administrativemanagement

Quantitativemanagement

Systemstheory

Current andfuture revolutions

Scientificmanagement

Humanrelations

Organizationalbehavior

Bureaucracy

Classical Approaches Contemporary Approaches

Contingencytheory

Major Contributions of Classical School

Classical Organizational Theory contributions are occured with respect to the three management

approach. Most of the essantial contributions are firstly Fredirick W. Taylor, Henry Fayol and Max

Weber. Rest of the important contributions were Adam Smith, Daniel C. McCallum, Henry R. Towne,

Luther Gulick.

Adam Smith - (1723 –1790)

Most important contribution on Organizational theory was Division of Labor Theory. This was the framework of Classical Organizational Theory Specialization model. In accordance to this theory , Production stages are seperated and employees specialize some part of the production. Specialization on the job descriptions provide:

To Increase in product

To Increase in efficiency with a dexterity

Saving time

Invention of a great number of machines

Division of labor theory implemented on Pin Factory. Personnel effciency and output were increased.

Most important study of Adam Smith was Wealth of the Nations Other contributions to economy and

the business adminitration were: Competitive Market, Capital, Invisible Hand, Labor, and Wage.

Daniel C. McCallum (1815 – 1878)

Daniel McCallum was an engineer. He was the railroad engineer and manager. Contribution to

Classical Organizational Theory was Organization Chart. He was early proponent of the organization

chart

Henry R. Towne (1844 – 1924)

He was the Draftsman at the Port Richmond Iron Works. He was one of the first engineers to see

management as a new social role for engineers and that the development of management

techniques was important for the development of the engineering profession. He laid out his ideas

about the management role for the engineer in his "The Engineer as Economist."


Henry Fayol (1841 -1925)

Henry Fayol contribution to Classical Organizational Theory was General Principles of Management. Related to his idea, Fundamental roles performed by all managers are comprised 5 management functions: Planning, Organizing, Commanding, Coordinating, and Controlling.

Additionally Fayol recognizes fourteen principles that should guide the management of organizations.

Fayol’s 14 Principles:

1. Division of Work —improves efficiency through a reduction of waste, increased output,

and simplification of job training

2. Authority and Responsibility —authority: the right to give orders and the power to

extract obedience – responsibility: the obligation to carry out assigned duties

3. Discipline —respect for the rules that govern the organization

4. Unity of Command —an employee should receive orders from one superior only

5. Unity of Direction —grouping of similar activities that are directed to a single goal under

one manager

6. Subordination of Individual Interests to the General Interest —interests of individuals

and groups should not take precedence over the interests of the organization as a whole.

7. Remuneration of Personnel —payment should be fair and satisfactory for employees and

the organization

8. Centralization —managers retain final responsibility – subordinates maintain enough

responsibility to accomplish their tasks

9. Scalar Chain (Line of Authority) —the chain of command from the ultimate authority to

the lowest

10. Order —people and supplies should be in the right place at the right time

11. Equity —managers should treat employees fairly and equally

12. Stability of Tenure of Personnel —managerial practices that encourage long-term

commitment from employees create a stable workforce and therefore a successful

organization

13. Initiative —employees should be encouraged to develop and carry out improvement

plans

14. Esprit de Corps —managers should foster and maintain teamwork, team spirit, and a

sense of unity among employees


Frederick Taylor

Frederick Taylor played a major role for development of Classical Organizational Theory with his studying was The Principles of Scientific Management. The importance of this was:

Scientific Job Analysis – observation, data gathering, and careful measurement determine “the one best way” to perform each job

Selection of Personnel – scientifically select and then train, teach, and develop workers

Management Cooperation – managers should cooperate with workers to ensure that all work is done in accordance with the principles of the science that developed the plan

Functional Supervising – managers assume planning, organizing, and decision-making activities, and workers perform jobs

Ingenuity and Accomplishments

Creates systems to gain maximum efficiency from workers and machines in the factory.

Focuses on time and motion studies to learn how to complete a task in the least amount of time.

Becomes consulting engineer for many other companies

Max Weber (1864 – 1920)

According to Max Weber an ideal form of organizational structure was Bureaucracy. He defines

bureaucratic administration as the exercise of control on the basis of knowledge. He states, “Power is

principally exemplified within organizations by the process of control”

Weber classifies organizations according to the legitimacy of their power and uses three basic

classifications:

Charismatic Authority: based on the sacred or outstanding characteristic of the individual.

Traditional Authority: essentially a respect for customs.

Rational Legal Authority: based on a code or set of rules.

Weber recognizes that rational legal authority is used in the most efficient form of organization because:

A legal code can be established which can claim obedience from members of the organization


The law is a system of abstract rules which are applied to particular cases; and administration looks after the interests of the organization within the limits of that law.

The manager or the authority additionally follows the impersonal order

Membership is key to law obedience

Obedience is derived not from the person administering the law, but rather to the impersonal order that installed the person’s authority

Weber outlined his ideal bureaucracy as defined by the following parameters:

A continuous system of authorized jobs maintained by regulations

Specialization: encompasses a defined “sphere of competence,” based on its divisions of labor

A stated chain of command of offices: a consistent organization of supervision based on distinctive levels of authority

Rules: an all encompassing system of directives which govern behavior: rules may require training to comprehend and manage

Impersonality: no partiality, either for or against, clients, workers, or administrators

Free selection of appointed officials: equal opportunity based on education and professional qualification

Full-time paid officials: only or major employment; paid on the basis of position

Career officials: promotion based on seniority and merit; designated by supervisors

Private/Public split: separates business and private life

The finances and interests of the two should be kept firmly apart: the resources of the organization are quite distinct from those of the members as private individuals.


Fayol & Taylor&Weber Comparison

Fayol Taylor WeberOrigin French US German

Management Type General Managament

Production Management

General Managament

Effects Limite bcs of to late translation

Widespread Less than Taylor

Chain of Coomand

Division of Labor

Standartization

Close Entity

Centralized ManagementSystem

Hierarchy

Human Behavior x x x

Luther Gulick (1892 – 1992)

Notes on the Theory of Organization

Gulick works with the Institute of Public Administration, professor of municipal science and

administration at Columbia, and serves on Franklin D. Roosevelt’s Committee of Government

Administration

Expands Fayol’s five management functions into seven functions: It was identified POSDCRB.

Planning - developing an outline of the things that must be accomplished and the methods for accomplishing them

Organizing - establishes the formal structure of authority through which work subdivisions are arranged, defined, and coordinated to implement the plan

Staffing - selecting, training, and developing the staff and maintaining favorable working conditions

Directing - the continuous task of making decisions, communicating and implementing decisions, and evaluating subordinates properly

Coordinating - all activities and efforts needed to bind together the organization in order to achieve a common goal

Reporting - verifies progress through records, research, and inspection; ensures that things happen according to plan; takes any corrective action when necessary; and keeps those to whom the chief executive is responsible informed

Budgeting - all activities that accompany budgeting, including fiscal planning, accounting, and control


Fayol & Gullick Comparison

Fayol GullickPlanning

Organizing

Directing x

Coordinating

Reporting x

Budgeting x

Controlling x

Commanding x

Summary of Classical Organization Theory

Classical principles of formal organization may lead to a work environment in which:

Employees have minimal power over their jobs and working conditions

Subordination, passivity and dependence are expected

work to a short term perspective

Employees are lead to mediocrity

Working conditions produce to psychological failure as a result of the belief that they are lower class employees performing menial tasks

Theorist of the Classical period thought that organizations should be based on universally applicable scientific principles.

Chapter 2: Neoclassical Organizational Theroy

There is no precise definition of neoclassical in the context of organization theory. The general

connotation is that of a theoretical perspective that revises and/or is critical of classical of

organization theory – particularly for minimizing issues related to humanness of organizational

members, the coordination needs among administrative units, the operation of internal – external

organizational relations, and the process used in decision making.

Inspite of their frequent and vigorous attacks upon the Classicalists, the Neoclassicalists did not

develop a body of theory that could adequtely replace the classical school.


The Neoclassical scholl attempted to save classical theory by intoducing madofications based upon

research findings in the behavioral sciences. It did not have a bona fide of its own. To a great extent,

it was an antischoll.

Despite its limitations, the Neoclassical school was very important n the historical development of

organization theory. It was a transitional, somewhat reactionary school.It initiated the theoritical

movement away from the overly simplistic mechanistic views of the classical school. In the process of

chakkenging the classical school, the Neoclassicalists raised issues and initiated theories that became

central to the foundations of most of the schools that have followed.

Major Contributions of NeoClassical School

Major contributions of the Neoclassical organization Theory were: The Economy of Incentives –

Chester I. Barnard (1938), Bureaucratic Structure and Personality – Robert K . Merton (1957)- The

Proverbs of Administration – Herbert A. Simon (1946), Foundations of the Theory of Organization –

Philip Selznick (1948), A Behavioral Theory of Organizational Objectives – Richard M. Cyert & James

G. March (1959)

Chester I. Barnard (1938)

Economy of Incentives was the basic contribution to Neoclassical School.

An Essential Element of organiations is the willingness of person to contribute their individual efforts

to the cooperative system. The individual is always the basic strategic factor in organization.

Regardless of his history or his obligations he must be induced to cooperate, or there can be no

cooperation.

The net satisfactions which induce a man to contribute his efforts to an organization result from the

positive advantages as against the disadvantages which are entailed. From the viewpoint of the

organization requiring or seeking contributions from individuals, the problem of effective incentives

may be either one of finding positive incentives of or reducing or eliminating negative incentives or

burdens.

The method of incentives: Incentives distinguishes two class, and called first class spesific

inducements, the second general incentives.

Spesific inducements class, for exapmle, material inducements, personel non material opportunities,

desirable physical conditions, ideal benefactions. In addition general incentives are associational


attractiveness, adaption of conditions to habitual methods and attitudes,the opportunity of enlarged

participation, the condition of communion.

Robert K. Merton (1957)

Bureaucratic Structure and Personality was the basic contribution to Neoclassical School.

A formal, rationally organized social structure involves clearly defined patterns of activity in which,

ideally, ever series of actions is functionally related to the purposes of the organization. In such an

organization there is integrated a series of offices, of hierarchized statuses, in which inhere a number

obligations and privileges closely defined by limited and spesific rules. Each of these offices contains

an area of imputed competence and responsiblity. Authority, the power of control which derives

from an acknowledged status, inheres in the office and not in the particular person who performs the

official role. Official action ordinarily occurs within the framework of preexisting rules of the

organization. The system of prescribed relations between the various offices involves a considerable

degree of formality and clearly defined social distance between the occupants of these positions.

Formality is manifested by means of more or less complicated social ritual which symbolizes and

supports the pecking order of the various offices. Such formality, which is integrated with the

distribution of authority within the system, serves to minimize friction by largely restricting contact

to modes which are previosuly defined by the rules pof the organization.

Like Follett, Merton argued the meaning of organization depended upon the personalities and

groupings of individuals within bureaucracy. He went further by speculating that the individual that

tried to act according to the stipulations of classic bureaucracy would have a dysfunctional

personality, especially in public service organizations.

Herbet A. Simon (1946)

The Proverb of Administration was the basic contribution to Neoclassical School.

A fact about proverbs that greatly enhances their quotability is that they almost always occur in

mutually contradictory pairs. "Look before you leapl"-but "He who hesitates is lost."

Some Accepted Administrative Principles

Among the more common "principles" that occur in the literature of administration are these:

1. Administrative efficiency is increased by a specialization of the task among the group.


2. Administrative efficiency is increased by arranging the members of the group in a determinate hierarchy of authority.

3. Administrative efficiency is increased bylimiting the span of control ,at any point in the hierarchy to a small number.

4. Administrative efficiency is increased by grouping the workers, for purposes of control, according to (a) purpose, (b) process, (c) clientele, or (d) place. (This is really an elaboration of the first principle but deserves separate discussion).

Philip Selznick (1948)

Foundations of the Theory of Organization was the basic contribution to Neoclassical School.

The three major ideas in Selznick’s theory of organization are; organizations as cooperative, adaptive

social systems; the conflict of personal and organizational goals and needs; and controlling conflict

for the good of the organization. He was also the first to talk about co-optation, which is a method of

protecting the organization and its mission by inviting threatening elements into the policy making

process.

Richard M. Cyert & James G. March (1959)

A Behavioral Theory of Organizational Objectives was the basic contribution to Neoclassical School.

Organizations make decisions. They make decisions in the same sense in which individuals make

decisions. The organization as a whole behaves as though there existed a central coordination and

control system capable of directing the behavior of the members of the organization sufficiently to

allow the meaningful imputation of purpose to the total system. Because the central nervous system

of most organizations appears to be somewhat different from that of the individual system, we are

understandbly cautious about viewing organization decision making in quite the same terms as those

applied to individual choice. Nevertheless, organizational choice is a legitimate and important focus

of research attention.

the prevailing theory about the firm is based on the two rational assumptions:

Firms seek to maximize profits

Firms operate with perfect knowledge.

Acc. To Cyert and March; organizational goals being set by a negotiation process that occurs among

members of the dominant coalition.


Chapter 3: Human Resource Theory, or the Organizational Behavior

Human resource theory draws on a body of research and theory built around the following assumptions:

Organizations exist to serve human needs (rather tahn the reverse).

Organizations and people need each other. (Organizations need ideas, energy, and talent; people need careers, salaries, and work opportunities.)

When the fit between the individual and the organization is poor, one or both will suffer: individuals will be exploited, or will seek to exploit the organization, or both.

A good fit between individual and organization benefits both: human beings find meaningful and satisfying work, and organizations get the human talent and energy that they need.

No other perspective of organizations has ever had such a wealth ıf research findings and methods at its disposal.

According to this theory, the organization is not the independent variable to the manipulated in

order to change behavior (as a dependent variable), even though organizations pay employees to

help them achieve organizational goal.

Major Contributions of Human Resource Theory School

Major contributions of the Neoclassical organization Theory were: The Giving of Orders – Mary

Parker Follett (1926), The Hawthorne Experiments – Fritz J. Roethlisberger (1941), A Theory of

Human Motivation – Abraham H. Maslow (1943), The Human Side of Enterprise – Douglas Murray Mc

Gregor (1957), Groupthink : The Desperate Drive for Consensus at any Cost – Irving L. Janis (1971)

Mary Parker Follett (1926)

The Giving of Orders was the basic contribution to Human Resource Theory.

The importance of her work was the emphasis on the reciprocating reality of giving and taking orders

between bosses and subordinates. Unlike the assumption of Weber that rules and role description

determined subordinate compliance, Follett argued for a form of participation to insure acceptance.

The personalization of the relationship in the giving of orders also challenged the Taylor assertions of

manger led teams.


Fritz J. Roethlisberger (1941)

The Hawthorne Experiments was the basic contribution to Human Resource Theory.

The Hawthorne effect is a psychological phenomenon that produces an improvement in human

behavior or performance as a result of increased attention from superiors, clients or colleagues. In a

collaborative effort, the effect can enhance results by creating a sense of teamwork and common

purpose. In social networking, the effect may operate like peer pressure to improve the behavior of

participants.

The Hawthorne effect was first seen in the 1920s at the Western Electric Company's Hawthorne

Works, from which the term derives. The Hawthorne studies were designed to find ways to increase

worker productivity. An increase in the level of workplace illumination had a measurable positive

effect on employee productivity. However, the researchers also found that when they lowered the

lighting levels, productivity still increased. In fact, for a limited period after any change in the

illumination level, the workers' average output increased. The researchers concluded that the

specific conditions tested for had nothing to do with the productivity increases.

Fritz J. Roethlisberger documented the results of the Hawthorne Studies in 1939 in Management and

the Worker. The conclusions about worker productivity were in sharp contrast to the common

perceptions of that time. Financial reward was found to be much less conducive to worker

productivity than expected. Instead, greater productivity resulted when management made workers

feel valued and aware that their concerns were taken seriously.

Abraham H. Maslow (1943)

Human Motivation was the basic contribution to Human Resource Theory.

There are at least five sets of goals, which we may call basic needs. These are briefly physiological,

safety, love, 'esteem, and self-actualization. In addition, we are motivated by the desire to achieve or

maintain the various conditions upon which these basic satisfactions rest and by certain more

intellectual desires.

These basic goals are related to each other, being arranged in a hierarchy of prepotency. This means

that the most prepotent goal will monopolize consciousness and will tend of itself to organize the

recruitment of the various capacities of the organism. The less prepotent needs are [p. 395]

minimized, even forgotten or denied. But when a need is fairly well satisfied, the next prepotent


('higher') need emerges, in turn to dominate the conscious life and to serve as the center of

organization of behavior, since gratified needs are not active motivators.

Thus man is a perpetually wanting animal. Ordinarily the satisfaction of these wants is not altogether

mutually exclusive, but only tends to be. The average member of our society is most often partially

satisfied and partially unsatisfied in all of his wants. The hierarchy principle is usually empirically

observed in terms of increasing percentages of non-satisfaction as we go up the hierarchy. Reversals

of the average order of the hierarchy are sometimes observed. Also it has been observed that an

individual may permanently lose the higher wants in the hierarchy under special conditions. There

are not only ordinarily multiple motivations for usual behavior, but in addition many determinants

other than motives.

Any thwarting or possibility of thwarting of these basic human goals, or danger to the defenses which

protect them, or to the conditions upon which they rest, is considered to be a psychological threat.

With a few exceptions, all psychopathology may be partially traced to such threats. A basically

thwarted man may actually be defined as a 'sick' man, if we wish.

It is such basic threats which bring about the general emergency reactions.

Douglas Murray Mc Gregor (1957),

The Human Side of Enterprise was the basic contribution to Human Resource Theory.

Douglas McGregor in his book, "The Human Side of Enterprise" published in 1960 has examined

theories on behavior of individuals at work, and he has formulated two models which he calls Theory

X and Theory Y.

Theory X Assumptions

The average human being has an inherent dislike of work and will avoid it if he can.

Because of their dislike for work, most people must be controlled and threatened before they will work hard enough.

The average human prefers to be directed, dislikes responsibility, is unambiguous, and desires security above everything.

These assumptions lie behind most organizational principles today, and give rise both to "tough" management with punishments and tight controls, and "soft" management which aims at harmony at work.

Both these are "wrong" because man needs more than financial rewards at work, he also needs some deeper higher order motivation - the opportunity to fulfill himself.


Theory X managers do not give their staff this opportunity so that the employees behave in the expected fashion.

Theory Y Assumptions

The expenditure of physical and mental effort in work is as natural as play or rest. Control and punishment are not the only ways to make people work, man will direct himself

if he is committed to the aims of the organization. If a job is satisfying, then the result will be commitment to the organization. The average man learns, under proper conditions, not only to accept but to seek

responsibility. Imagination, creativity, and ingenuity can be used to solve work problems by a large number

of employees. Under the conditions of modern industrial life, the intellectual potentialities of the average

man are only partially utilized.

McGregor sees these two theories as two quite separate attitudes. Theory Y is difficult to put into

practice on the shop floor in large mass production operations, but it can be used initially in the

managing of managers and professionals.

The Human Relations era acknowledged the social or people focused features of organization and worker productivity. The management counsel to invite participation and seek cooperation of workers inside bureaucratic organizations coupled with the growing sense of workers as collective members of unions that would bargain with management.

Chapter 4: “Modern” Structural Organization Theory

Modern Organization Theory was consisted of two parts: Systems Theory and Contingency Theory.

System Theory looks like the human body. Part of the human bodies - cells, organs, systems – can not

be meaningful alone. The importance of parts can be understood whenever they are working

together. Organizations parts are not significant without working together.

Organizations and its management working conditions are affected from the enviromental change.

Contingency Theory provides the entity’s working situations with respect to the changing

enviroment.

Major Contributions of Modern Structural Organization Theory School

Major contributions of the Modern Structural Organization Theory were: Mechanistic and Organic

Systems – Tom Burns & G.M.Stalker (1961), The Concept of Formal Organization - Peter M. Blau &

W.Richard Scott (1962), Organizational Choice: Product Versus Function - Arthur H. Walker & Jay W.


Lorsch, The Five Basic Parts of The Organization - Henry Mintzberg (1979), In Praise of Hierarchy -

Elliot Jaques (1990), Technology as a Contingency Factor - Richard M. Button & Borge Obel (1998)

Tom Burns & G.M.Stalker (1961)

Mechanistic and Organic Systems was the basic contribution to Modern Structural Organization

Theory.

Origin: Merchanistic and organic systems are interested external enviroment conditions on

organization strutures and management applications.

Result: Organization structures are changing in accordance to enviromental conditions. Organic

organizations are suitable for quickly changed cEnviroment and mechanic organizations are suitable

for traditional enviroments.

Planning Mechanic Organic

Objectives Spesific General

Standarts rigid Flexible

Principles and Methods More and Spesific Less and Wide

Plans Detailed and less flexible

General and flexible

Estimations Historic Trend Qualitative and Forecast

Decision Making Management Science Techniqes

Creation and intuition

Organization Mechanic Organic

Chain of Command Definite – No Deviation

Wide – Deviation is possible

Separation of Departments

Specialized units Expanded units

Devolution of authority Less More

Control Field Narrow Wide

Coordination Provided with chain of command

Special coordinators


Peter M. Blau & W.Richard Scott (1962)

The Concept of Formal Organization was the basic contribution to Modern Structural Organization

Theory.

What is the spesific and differentiating criterion implicit in our intuitive distinction of organizations

from other kinds of social groupings or institutions?

Social Organization: It refers to the ways in which human conduct become socially organized, that is,

to the observed regularities in the behavior of people that due to social conditions in which they find

themselves rather than to their physiological psychlogical characteristics as individuals.

The fact that an organization has been formally established, however, does not mean that all

activities and intersactions of its members conform strictly to the official blueprint.

In every formal organization there arise informal organization.

It is impossible to understand the nature of a formal organization without investigating the networks

of informal relations and the unofficial norms as well as the formal hierarchy of authority and the

official body of rules, since the formally instituted and the informally emerging patterns are

inextricable intertwinwed.

The distinction between the formal and informal aspects of organizational life is only an analtytical

one and should not be reified: there is only one actual organization.

Small group society informal relations are more than large scale of groups.

Arthur H. Walker & Jay W. Lorsch

Organizational Choice: Product vs Function was the basic contribution to Modern Structural

Organization Theory.

Origin: In accordance to most of the managers, It is difficult to select organization activities form

product or function. Lorsch and lawrance investigated organization succes in accordance to variety of

enviroment.

Result: The best organization form should be changed with respect to the enviroment. Appropriate

level between the org. and the enviroment determines the best organization.

Three important factors used about specialization and coordination:


Differentiation: Difference im behavior and thought patterns that develop among different specialists

in relation to their respective tasks. Differentiation is necessary for functional specialists to perform

their jobs effectively.

Integration: Colloboration between specialized units or individuals.

Recent studies have demonstrated that there is an inverse relationship between differentiation and

integration.

Well – developed: Achievment of both differentiation and integration is possible.

Henry Mintzberg (1979)

The Five Basic Parts of The Organization was the basic contribution to Modern Structural


Organizations were described in terms of coordinating mechanims. Conceptual description is shown

with right side and this logo is operating core, where in the operators carry out the basic work of the

organization – the input, processing, output, and direct support tasks associated with producing the

products or services.


Richard M. Button & Borge Obel (1998)

In Praise of Hierarchy - Elliot Jaques (1990), Technology as a Contingency Factor was the basic

contribution to Modern Structural Organization Theory.

The bodies that govern companies, unions, clubs, and nations all employ people to do work, and they

all organize these employees in managerial hierarchies, systems that allow organizations to hold

people accountable for getting assigned work done

Managerial hierarchy is and will remain the only way to structure unified working systems with

hundreds, thousands, or tens of thousands of employees, for very good reason that managerial

hierarchy is the expression of two fundamental characteristics of real work.

First, the tasks we carry out are not only more or less complex but they also become more complex

as they separate out into discrete categories or types of complexity.

Second, the same is true of the mental work that people do on the job, for as this work grows more

complex, it too separates out into distinct categories or types of mental activity.

Managerial hierarchy is and will remain the only way to structure unified working systems with

hundreds, thousands, or tens of thousands of employees, for very good reason that managerial

hierarchy is the expression of two fundamental characteristics of real work.

First, the tasks we carry out are not only more or less complex but they also become more complex

as they separate out into discrete categories or types of complexity.

Second, the same is true of the mental work that people do on the job, for as this work grows more

complex, it too separates out into distinct categories or types of mental activity.

Chapter 5: Organizational Economics Theory

Organizational economists use concepts and tools from the field of economics to study the internal

process and structures of the firm. They ask questions such as “why do organizations exists?” “ What

determines the size, scope, and structure of a firm?” “ why are some workers paid hourly rates while

others receive salaries?” and “what factors determine organizational survival and growth?” Most of

the serious developments in this field occured in the second half of the 20 th century, including the


introduction of important ideas associated with, for example, agency theory, behavirol theory,

incomplete contract theory of teams, transaction cost economics, and game theory.

Major Contributions of Organizational Economics Theory

Major contributions of the Organizational Economics were: Markets and Hierarchies: Understanding

the Employment Relation – Oliver E. Williamson(1975), Theory of Firm: Managerial Behavior, Agency

Costs and Ownership Structure, Michael C. Jensen & William H. Meckling (1976), Learning from

Organizational Economics – Jay B. Barney & William G. Ouchi (1986), Managing Business Transactions

– Paul H. Rubin (1990)

“Understanding the Employment Relation” from Williamson’s book, Markets and Hierarchies,

assesses organizational decisions to produce goods and services internally versus externally by

analyzing the applicability of various types of economic contracts and market models to employment

relations.

Agency theory defines managers and other employees as “agents” of owners (“principals”) who out

of necessity must delegate some authority to agents. Price Theory has been concerned with how to

structure organizations for the free interplay of markets among agents and principals.

The Theory of Property Rights adresses the allocation of costs and rewards among the participants in

an organization and, for example, how “claims on the assets and cash flows individuals”

Rubin’s underlying principles of business transactions are: “first, people are self – interested and

opportunistic. Second, it is impossible to write complete contracts which take account of any and all

possibleevents and which eliminate all forms of opportunism of cheating”.

Chapter 6: Power and Politics Organization Theory

The power and politics school rejects the assumptions about organizations as being naive and

unrealistic, and therefore of minimal practical value. Instead, organizations are viewed as complex

systems of individuals and coalitions, each having its own interests, beliefs, values, preferences,

perspectives, and perceptions. The coalitions continuously compete with each other for scare

organizational resources. Conflict is inevitable. Influence – as weel as the power and political

activities through which influence is acquired and maintained – is primary “weapon “ for use in

competition and conflicts. Thus, power, politics, and influence are essential and permanent facts of

organizational life.


Major Contributions of Power and Politics Organization Theory

Major contributions of the Power and Politics Organization Theory were:Understanding the Role of

Power in Decision Making – Jeffrey Pfeffer (1981), Democracy and the Iron Law of Oligarchy – Robert

Michels, The Bases of Social Power – John R. P. French Jr. & Bertram Raven (1959), The Power of

Power – James G. March (1966), The Power Game and the Players – Henry Mintzberg (1983), Power

Failure in Management Circuits – Rosabeth Moss Kanter (1979)

Jeffrey Pfeffer (1981)

Understanding the Role of Power in Decision Making was the basic contribution to Power and Politics


“Power is the ability to get things done the way one wants them done; it is the latent ability to

influence people.” This definition offers several advantages for understanding organizations.

First, it emphasizes the relativity of power. As Pfeffer points out, “power is context or relationship

specific. A person is not powerful or powerless in general, but only with respect to other social actors

in a specific relationship.”

Second, the phrase “ the way one want them done” is a potent reminder that conflict and the use of

power often are over the choice of methods, means, approaches, and/or “turf.” They are not limited

to battles about outcomes. This point is important because power is primarily a structural

phenomenon, a consequence of the division of labor and specialization.

Robert Michels

Democracy and the Iron Law of Oligarchy was the basic contribution to Power and Politics


Argue power in organizations from a political perspective. “Organization implies the tendency to

oligarchy. In every organization ... the aristocratic tendency manifests itself very clearly. The

mechanism of the organization, while conferring a solidity of structure, induces serious changes in

the organized mass, completely inverting the respective position of the leaders and the led. As a

result of organization, every political party or professional union becomes divided into a minority of

directors and a majority of the directed.


Organizations are oligarchic by their nature because majorities in organizations are not able to rule

themselves.

The mechanism of the organization induces serious changes in the organized mass, completely

inverting the respective position of leaders and the led. As a result, every party or union becomes

divided into a minority of directors and a majority of directed.

According to Marxist theory;

The capitalist’s mode of production transforms the great majority of the population into proletarians,

and so digs its own grave.

As soon as it attains maturity, the proletariat will seize political power and will immediately

transform private property into state property.

John R. P. French Jr. & Bertram Raven (1959)

The Bases of Social Power was the basic contribution to Power and Politics Organization Theory.

Identifies the major types of power and define them systematically.

Power, Influence and Change

Psychological Change: is defined as any alteration of the state of the state of behaviour, opinion,

attitude, goal, need, value, etc. over time.

Social Influence: influence on a person by a social agent (person, role, norms, group, or a part of a

group)

Social Power: The strength of power of a social agent in a person’s system is defined as maximum

potential ability to influence.

The Bases of Power

Reward power: power whose basis is the ability to reward.

Coercive power: power whose basis is the ability to punish.

Legitimate power: legitimized power by cultural values, acceptance of social norms, and designation

by a legitimate agent.

Referent Power: attractiveness of a social agent (influencer) to the person (being influenced)


Expert power: extent of the knowledge or perception which person attributes to the social agent.

French and Raven examines the effects of power derived from these 5 different bases of attaraction

and resistance to the use of power. They conclude that the use of power from the different bases has

different consequences.

James G. March (1966)

The Power of Power was the basic contribution to Power and Politics Organization Theory.

“ The power of power” is not limited to power inside of organizations. March reviews alternative

definitions, concepts, and approaches for emprically studing social power in organizations and

communities. His observations about “community power” are more than tangentially germane to

organization theory because of the current enthusiasm for “boundaryless organizations,” “virtual

organizations” and networks.

March discusses the advantages and limitations of three approaches to the study of power:

experimental studies, community studies, and institutional studies. In addtion six models of social

choice existed: Chance Models, Force Activation Models, Force Depletion Models, Basic Force

Models, Force Conditioning Models, Process Models.

He concludes: “Although power and influence are useful concepts for many kinds of situations, they

have not greatly helped us to understand many of the natural social – choice mechanisms to which

they have traditionally been apllied.

Henry Mintzberg (1983)

The Power Game and the Players was the basic contribution to Power and Politics Organization

Theory.

He stresses that, organizational behavior is viewed as a power game. The players are influencers with

varying personal needs who attempt to control organizational decisions and actions. Thus to

understand the behavior of organization, it is necessary to understand which influencers are present,

what needs each seeks to fulfill in the organization, and how each is able to exercise power to fulfill

them.


General Bases of Power are: Dependency, Non-substitutable, Concentrated (short supply), Formal

Power, Derives from access to those who can rely on all 4

Types of Influencers

External Coalition Internal Coalition

Owners Top Management

Associates Operators

Employee associations Line managers

Public Support staff

Directors Analysts of techno-structure

Ideology

Rosabeth Moss Kanter (1979)

Power Failure in Management Circuits was the basic contribution to Power and Politics Organization

Theory.

Chapter 7: Organizational Culture Theory

Organizational culture is the culture that exists in an organization, something akin to a societal

culture. It is composed of many intangible phenomena, such as values, beliefs, assumptions,


perceptions, behavioral norms, artifacts, and patterns of behavior. It is the unseen and unobservable

force that is always behind the organizational activities that can be seen and observed. Y

The primary questions of organization theory thus involve how best to design and manage

organizations so that they acheive their declared purposes effectively and efficiently.

Edgar H.Schein (1993)

Defining Organizational Culture was the basic contribution to Organizational CultureTheory.

According to Edgar Schein, cultural analysis is especially valuable for dealing with aspects of

organizations that seem irrational, frustrating, and intractable. He writes, "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." (Schein 375) It is significant that Schein uses the plural "cultures." Using

open-systems concepts, we know that members of a group culture may also belong to subcultures

within an organization. Since organizations do have a shared history, there will normally be at least a

few values or assumptions common to the system as a whole. But sometimes, as in many orchestra

organizations, the subcultures have had different experiences over time, and their group learning has

produced very different sets of basic assumptions.

Organization members interpret the behavior and language of others through their own cultural

biases. Each member’s (or subsystem’s) set of beliefs, values, and assumptions becomes their

unquestioned "reality"; they then perceive behavior inconsistent with their own biases as irrational,

or even malevolent. The organizational culture model suggests reinterpreting such conflict as a

product of different sets of experiences. Instead of looking at conflict as "right" versus "wrong," this

approach suggests that subsystems examine the assumptions underlying their behavior, honor the

experiences and learning that led to those assumptions, and then investigate whether those

assumptions still work well in the present.

Scott D.N. Cook,Dvora Yanow (1993)

Culture and Organizational Learning was the basic contribution to Organizational CultureTheory.

Traditionally, theories of organizational learning have taken one of two approaches that share a

common characterization of learning but differ in focus. One approach focuses on learning by

individuals in organizational contexts; the other, on individual learning as a model for organizational


action. Both base their understanding of organizational learning on the cognitive activity of individual

learning. However, there is something organizations do that may be called organizational learning,

that is neither individuals learning in organizations nor organizations employing processes akin to

learning by individuals. This form of organizational learning can be seen in the case of three small

workshops that make "the finest flutes in the world." This essay proposes a perspective on

organizational learning, drawing on the concept of organizational culture, that can be useful in

understanding the case. This perspective provides a fruitful basis for exploring the above distinctions

in both theory and practice.

Harrison M.Trice & Janice M.Beyer (1993),

Changing Organizational Culture was the basic contribution to Organizational CultureTheory.

Although there is general recognition that leadership is important for organizational cultures, the

issue of how leadership affects culture has received only scattered attention. Existing analyses have

tended to focus on how leaders create or change cultures, ignoring the role that leadership plays in

maintaining cultures. This paper focuses on how cultural leadership that innovates, by either creating

or changing organizational cultures, is likely to differ from that which maintains organizational

cultures. Hypothesized linkages are advanced between nine elements of cultural leadership—drawn

from the literature on charisma—and its consequences. The predictions made are derived from a

synthesis of existing theory and insights gained from descriptions of leadership in the scholarly and

popular literatures. Both descriptions and theoretical considerations suggest that, while cultural

innovation and maintenance leadership differs in some ways, the behaviors of effective cultural

leaders do not. Cultural leadership apparently has some generic characteristics. Two variants of each

of the basic types are identified and linked to extant conceptualizations of leadership. Implications

discussed include the risks and advantages of organizations' having multiple cultural leaders at the

same time.

Joanne Martin (2002)

Organizational Culture:Pieces of Puzzle was the basic contribution to Organizational CultureTheory.


Many researchers define the culture in approximately the same way- in terms of cultural

manifestations that are shared by most cultural members, it is so often defined unique about a

context.

All the different definitions are to be made but we have to pay attention how researchers are

operationalizing them.

Chapter 8: Reform Through Changes in Organizational Culture

The change in enviroment, increase in the deregulation movements and reduction of transportation

and communication costs lead to change in organizations structure. Related to this change,

employees are more participate the entity’s decisions. Motivation and team working are very

important also.

The Z Organization

The origin of the William Ouchi was Japan and affected by American management system. Thats, why

The Organizaition is an amalgam of Japan and American management system.

13 step must be implemented for successful Z Organization

Step 1: To understand Z organization structure

Step 2: To determine organization philosophy

Step 3: To determine adopted and expected management philosophy

Step 4: To set organization to new management idea occur

Step 5 : To improve employees skills and abilities

Step 6: To control implemented management philosophy and management

Step 7: To develop coorperation with trade unions

13 step must be implemented for successful Z Organization (cnt’d)

Step 8: To set and appply stable decisions for employment structure

Step 9: To think going concern and to provide development and progress of the organization


Step 10: To provide employees career opportunities

Step 11: To change in organization must be started the top. (Top – down)

Step 12: To participate employees comments and suggestions for decision making process

Step 13: To integrate all level of employees.

Organization Types Comparison

The Z Organization

The A Organization

The J Organization

Origin USA & Japan USA Japan

Employee Term Long Term Short Term Lifelong

Decision Making Collective Individual Collective

Responsibilty Individual Individual Group

Promotion Slow Fast Slow

Employee Concern Continuedoutside of the

work

Limited with work placa

Continuedoutside of the

work

The Fifth Discipline: A shift of Mind

The Fifth Discipline is an essential struture of Learning Organization. These discipline are:

Systems Thinking

Personal Mastery

Mental Models

Building Shared Vision

Team Learning

System Thinking:

Due to the organizational environment is to complex, decisions for entity’s system should be taken

wholly. Decisions which are taken in accordance to part of the organization can not be added benefit.

Personnel Mastery


People have personel mastery, to show all attention and care on their job.

The leraning desire of an organization can not be more than a profession.

Building Shared Vision

The organization objective should be accepted by all of the employees. This means, everyone wants

to reach common target provides with belief.

Team Learning

Team oriented working results pass the individual outcomes mostly. The democratic and fair

environment is the way of team successful.

Gendering Organizational Theory

Genders refers to patterned, socially produced distinctions beyween female and male, feminine and

masculine.

Gendered process and practices may be open and overt, as when managers choose only men or only

women for certain positions or when sexual jokes denigrating women are part of the work culture.

On the other hand, gender may be deeply hidden in organizational process and decisions that appear

to have nothing to do with gender.

Elements in a Theory of Gendered Organizations

It is comprised 4 steps

Production of Gender Division

The creation of symbols, images and forms of consiousness that explicate, justify, and more rarely oppose gender divisions.

To reproduce gendered organizations are interactions between individuals, women and men, women and women, men and men, in the multiplicity of forms that enact dominance and subordination and create alliances and exclusions

Gendering organizations is the internal mental work of individuals as they consciously construct their understandings of the organization’s gendered structure of work and opportunity and the demands for gender appropriate behaviors and attitudes.

Creating a Goverment That Works Better & Costs Less: Report of The National Performance Review


Our goal is to make the entire federal goverment bothh less expensive more efficent, and to change the culture of our netional bureaucracy away from complacency and entitlement toward initiative and empowerment. We inted to redesign, to reinvent, to reinvigorate the entire national goverment.

President Bill Clinton

March 3, 1993

Problems of National Goverment:

Ineffective spendings of resources

Ineffective regulation of the financial industry brought the savings and loan debacle

Ineffective education and training programs jeopardize competitive edge

Ineffective welfare and housing program undermine families and cities

Some of the examples related to Washington’s failures

President Clinton created National Performance Review Report to abolish unequilibrium. In this

report hundred of recomendations were taken, some of them were:

To reduce waste eliminate unneeded bureaucrarcy,

To improve service to taxpayers

To create a leaner but more productive goverment

Some of these proposals can be enacted. The improvement of this report success depend upon:

A Cure Worse than the disease


The average American believes 48 cents of every tax dollar spent unnecessarily.

Only 20 % of Americans trust the federal goverment to do right thing most of the time ( down from 76 % 30 years

ago)

The Defense Department owns more than $ 40 billion unnecessarjy suppliesWashington’s failures are large and obvious. For decade,

the deficit has run out of control. The national debt now exceeds $ 4trillion - $ 16,600 for every man, woman and

child in America.

The Root Problem Industrial Era Bureaucracies in an Information Age

The Solution: Creating Entrepreneurial Organizations

Cutting Red Tape

Putting Customers First

Empowering Employees to Get Result

Cutting Back Basics: Producing Better Goverment for Less

Our Commitment : A Long Term Investment in Change

Creating the Multicultural Organization: The Challenge of Managing Diversity

Human capital has taken center stage in the business strategies of enlightened organizations in the 21 century.

Attracting, retaining, and effectively using people are increasingly the top priorities of leaders in all

kinds of organizations, from high – tech firms to universities, from goverment agencies to heavy

manufacturing firms.

The creating of multicultural organization provides with DIVERSITY such as:

Gender population

Differential birth rates,

Work groups

National origin etc

Dıversity: It is the variation of social and cultural identites among people existing together in a defined employment or market setting.

Social and cultural identity refers to the personnel affiliations such as: gender, race, national origin, religion, age, cohort, and work specialization.

Problems and Opportunities of Diversity

Diversity is a Potential Performance Barrier

Diversity as Value – Added Activity

Creativity and Innovation

Organizational Flexibility

Human Talnet


Marketing Strategy

Chapter 9: Theories of Organizations and Environments

Theoretical models of organizations underwent a major change starting during the decade of the

1960s when the “open systems perspective” gained support and essentially displaced the “closed

system models”. The primary focus of research and theory building shifted from the internal

characteristics of organizations to the external dynamics of organizational competition, interaction,

and interdependency. The organizations as open system perspective views organizations as system of

independent activities embedded in and dependent on wider environments. Organizations not only

acquire material, financial, and human resources from their environment, they also gain social

support and legitimacy. Thus the focus of theory and research from the open systems perspective

inevitably moved to interactions and interdependencies among organizations and their

environments.

Daniel Katz & Robert L. Kahn (1966)

Organizations and the System Concept was the basic contribution to Theories of Organizations and

Enviroments.


James D. Thompson (1967)

Organizations in Action were the basic contribution to Theories of Organizations and Environments.

Thompson writes that the creation of a model of human resources management would be impossible

if the planner attempted to take into full consideration the whole range of possibilities for human

behaviour: "Neither we nor organizations have the data or the calculus to understand organization

members in their full complexity, and the requirements of complicated technologies in complicated

task environments cannot be met if the full range of human variations comes into play within the

organization".

Therefore, the "conceptual framework" is crucial for the establishment of a model of human

resources management because it limits consideration of human variations."

John W. Meyer and Brain Rowan (1977)


Institutionalized Organizations: Formal Structure as Myth and Ceremony was the basic contribution

to Theories of Organizations and Environments.

Many formal organizational structures arise as reflections of rationalized institutional rules. The

elaboration of such rules in modern states and societies accounts in part for the expansion and

increased complexity of formal organizational structures. Institutional rules function as myths which

organizations incorporate, gaining legitimacy, resources, stability, and enhanced survival prospects.

Organizations whose structures become isomorphic with the myths of the institutional environment

—in contrast with those primarily structured by the demands of technical production and exchange

—decrease internal coordination and control in order to maintain legitimacy. Structures are

decoupled from each other and from ongoing activities. In place of coordination, inspection, and

evaluation, logic of confidence and good faith is employed.

Jeffrey Pfeffer & Gerald R. Salancik (1978)

External Control of Organizations: A Resource Dependence Perspective was the basic contribution to

Theories of Organizations and Enviroments.

Resource dependence theory: all organizations exchange resources with their environment as a

condition for survival.

One cannot understand the structure and behaviour of an organization without understanding the

context within which it operates.

No organizations are self sufficient, and so they must engage in exchanges with their environment in

order to survive.

Organizations need to acquire resources from their environment, and the importance and scarcity of

these resources determine the extent of organizational dependency in and on their environment.

Information is a resource organizations need to reduce uncertainty and dependency, so,

organizations seek information to survive.

Geln R. Carroll and Michael T. Hannan (2000)

Demography of Corporations and Identities was the basic contribution to Theories of Organizations

and Enviroments.


Organizations do not adapt to their changing environments by making decisions; the environment

selects the fittest among different organizational forms.

The organizational ecology approach differs from other open system theories as it focuses on

populations of organizations rather than individual organizational units.

It attempts to explain why certain types or species of organizations survive and multiply whereas

others languish and die.

Environments differentially select organizations for survival on the basis of the fit between

organization forms and environmental characteristics.

The general factors leading to higher mortality rates among organizations are; the liability of

newness, liability of smallness and the density of dependence.


What ıs the scıentıfıc explanatıon - İlhan Çiftçi Web viewClassiscal...

Documents

Transcript of What ıs the scıentıfıc explanatıon - İlhan Çiftçi Web viewClassiscal...