Historic Perspective of Organizational Theory Essay
Historic Perspective of Organizational Theory
Theories pertaining to concepts of management were developed by Max Weber, Henri Fayol, and Elton Mayo. Management is the central component to an organized view on what each theory encompasses, the contributions and how the theories differ and even complementary factors. Individual contributions to management theories impact organizational power as well as the society and state which the ideas are focused. The legacy of theses theories will continue to shape business in the present and future. Organizational theory is designed to understand the nature of the organization. By which organizations can evaluate its overall business by putting the right structure and operate in different ways. Organizational theory also helps us understand how processes such as change and decision making can be managed. It deals with different structures and cultures such as large organizations have different structures and cultures than small ones, and the manufacturing organizations operate in a different way than those in the service sector. (Burton & Obel, 1984)
Frederick Taylor composed the principles of scientific management in the early nineteenth century, which marked the beginning of modern management theory (Robbins, 2000). The theory influenced management and has the greatest impact because of the insistence on application of scientific method. Furthermore, managers relied upon instinct and intuition as the source of constructive ides and information but the scientific method provided a formulation for conscious analysis.
Max Weber contributed to management theory that within a bureaucratic system the organization was continuous bond of rules and the hierarchical arrangement is where one level was subject to control by the level above. Bureaucracy lends to the notion of society becoming more integrated and more complex. Organizations have become more dependent on specialists and experts for advice and for influence. In the managerial perspective, democracy is seen as a consequence of elite competition (Alford and Friedland1985,). Henri Fayol, an industrialist divided the management structure into six basic groups, technical, commercial, financial, security, accounting and managerial activities. The six categories or groups are not absolute but can be manipulated according to purpose and need. Fourteen general principles of management were developed such as organize, delegate, staff, control, co- ordinate, lead and budget, your organization will prosper with efficiency and effectiveness therefore bringing great productivity. An administrative principle is a major contribution because this creates a narrower process of developing and maintaining procedures.
The principle gives clear structure and rules and takes into consideration the changing environment and it applies to the organization, powers, duties and information that sets each organization apart and the basis for which all employees can be trained. A rigid form of rules and power being still govern any organizations so that uniformity can be established. Bureaucratic organizations have become more of a necessary function to the advancement of the economy and society at large because some cities and towns are dependant upon the economic benefits. The advance of large scale corporations with more coordination within markets forces our government to become more bureaucratic because businesses have become informal controllers and dictators. The inevitability of bureaucracies handle increased industrialization reflects the functional emphasis within the concept of management.
Frederick Taylor and Henri Fayol are both considered classical contributors to management theory. Developers of an expressionist viewpoint during a period when the aim was elevating the standards of management within the industry that was veiled but instead created a balance and established equity (Brodie, 1967). The two theorists provided the few publications and theories on management. Both theories were developed under the same influencing factors such as war, social struggles and industrial revolution (Urwick. 1951, p7), however each developed different management theories and instructions and vantage points. Scientific management and he developed scientific principles of management, focusing on the individual, rather than the team and aimed to improve efficiency through production-line time studies, breaking each job down into its components and designing the quickest and best methods of performing each component.
Fayol provided insight on the human reaction and identified needs of the individually and that work can be tailored based on intelligence, background and abilities. Taylor focused on the total organization rather than the individual worker, outlining the management functions of planning, organizing, commanding, coordinating and controlling. The theories proposed by Fayol and Mayo differ greatly in all areas. Fayol concentrated on management functions and attempted to generate a boarder perspective and on principles that would serve as guidelines for the rationalization of organizational activities and looked at an organization as a whole (Scott, 1992). Mayo focused on motivation techniques and individual satisfaction. Fayol directed attention on areas such as the production process and adjusted humans to this process, versus Mayo’s human relations approach emphasized the coordination of human and social elements in an organization by following concept such as
* Communication and leadership.
The employee of an organization is seen as a machine in Fayol’s theory rather than an important part of the organization. Employee’s needs according to Mayo are based on the idea that workers are happy they will be more productive. Theories proposed by Fayol and Mayo differ greatly in all areas. Fayol emphasized management functions and attempted to generate broad administrative principles that would serve as guidelines for the rationalization of organizational activities (Scott, 1992) and looked at an organization as a whole. Mayo focused on motivation techniques and individual satisfaction. Fayol emphasized the production process and adjusted humans to this process that included relational approach emphasized the coordination of human and social element. Characteristics of bureaucracy Weber believed that all large organizations would over time assume more bureaucratic characteristics.
These characteristics were one a high degree of division of labor, two a hierarchy of authority, three the use of formal written documents and files, 4 the expert training of organizational members, five decisions guided by written rules and procedures, and 6 an impersonality in human relationships. Division of Labor: The organization, according to Weber, was broken down into separate units with their areas of responsibility officially established by organizational policy. Similar to Administrative Management’s concept of departmentalization, Weber proposed that such specialization by organizational units led to greater efficiency. The people involved would only need to be trained in a limited area of knowledge. They could learn their jobs faster and thus perform more efficiently. 2. Hierarchy of Authority. Like Fayol, Weber noted that when the organization was divided into separate units, their activities needed to be coordinated by a hierarchy of graded levels of authority. This authority, according to Weber, was rational-legal, resting on a belief by the members of the organization that those people occupying higher positions had a right to issue commands to those occupying lower levels.
The authority resided in the legally established and impersonal “offices” (job positions), not in the people themselves. Weber contrasted this rational form of authority with the non-bureaucratic traditional authority based upon loyalty to the person of the chief or monarch. In order for an organization to continue operating for many years, it must become somewhat independent not only of the people who founded it, but also of the people who managed its activities. The extensive use of formal, written documents in everyday activity and a sophisticated filing system was the characteristic giving the bureaucratic organization certain immortality. People could come and go in specific jobs over time but the bureaucratic organization continued to function efficiently with minimal problems. The knowledge of past events, along with the power that it conveyed, belonged to the specific position (in the filing cabinet) and was only temporarily used by the person holding the position. Anyone new to a particular position could learn what actions had been taken and decisions made by the previous person in the job by going to the relevant files.
Expert Training: Weber envisioned that the specialization of positions would enable people to be trained more thoroughly in a narrow range of activities. Employees would be hired and promoted based upon merit and expertise. Decisions and Operations Guided By Written Rules and Procedures. A key characteristic of bureaucracy was the idea that an organization’s employees followed written rules, which were assumed to be generally stable. The use of rules and procedures made the organization more efficient because they made people’s behavior more predictable and reliable. Rules served not only to make the organization independent of any one individual over time, but also to ensure that actions and decisions made in different parts of the organization were consistent at any given time. Human variability was reduced. In any given set of circumstances, anywhere or anytime in the organization, the same decision would be made and the same actions taken as long as the rules were followed.
Impersonality from Weber’s point of view, the very impersonality of bureaucracy was a significant improvement over earlier forms of organization. By applying rules and controls impersonally, involvement with personalities and personal preferences was avoided. Employees and customers of a bureaucracy were not considered as individuals but as members of categories. This helped to ensure fair and unbiased treatment according to law — the policies and standard procedures of the organization. Managers were constrained by the same impersonal network of rules as were their subordinates. Actions and decisions could no longer be justified on the basis of personal opinion or on tradition.
Bureaucratic Management based on Weber’s description of bureaucracy has been criticized by a number of scholars in the area; there is agreement that he made a significant impact on the field of management and the study of organizations. Unlike Fayol, however, Weber did not recommend a new system of management for others to follow and imitate. Merely described what he saw as the inevitable movement by organizations to become increasingly bureaucratic over time. An over developed bureaucratic mechanism in comparison with other organizations conflicts with the non-mechanical modes of production and allows dominance and could cause a monopoly.
Legacy of Traditional Management
Traditional Management, as it is now known, was formed out of Scientific Management, Administrative Management, and Bureaucratic Management. By the mid-twentieth century, the use of Scientific Management techniques and Administrative Management principles within a rationally structured
bureaucratic organization became the accepted way of managing large organizations. Based upon some key assumptions from classical economics regarding economic man, division of labor, and profit maximization, the concepts, techniques, and prescriptions of Traditional Management succeeded in producing a large number of standardized products and serving a large number of customers with similar needs. Traditional Management seemed incapable of dealing effectively with changing conditions. The best of traditional management found themselves, in the second half of the twentieth century, floundering in the face of more flexible competition with different ideas of managing. The use of traditional management’s prescriptions and techniques resulted in dysfunctional as well as functional consequences for organizational performance.
The functional consequences outweighed the dysfunctional consequences; organizations following the traditional approach were very successful. In the early 1900s in North America and Europe, for example, business corporations operated very efficiently and made huge profits selling valued products and services. The dysfunctional consequences present at that time were too few in number and too small in size to overwhelm the vast amount of functional consequences. For example, the epitome of Scientific Management, Henry Ford’s moving assembly line, created jobs in the 1920s for thousands of unskilled workers at double ($5/day) the current wage for similar work. It produced the first automobile affordable by the average person. The jobs may have been monotonous, but worker boredom did not keep the Model T and the Ford Motor Company from becoming a great success story. As time passed, however, and Traditional Management became more institutionalized in large organizations, the dysfunctional consequences began to increase in number and in size. Organizational performance and productivity increased at a fast rate from 1900 to 1950. After 1950, however, the rate of performance improvement began to slow.
An increasing use of Scientific Management assembly lines and bureaucratic procedures appeared to result in less and less of a performance increase. Like heroin, increasing the use of Traditional Management practices seemed to result in a smaller amount of desirable outcomes. It is suggested here that the continued and even increasing use of Traditional Management practices without significant modification in the face of a fast-changing world contributed to the decline in organizational performance. The dysfunctional consequences of Traditional Management began to accumulate to such an extent that they finally outweighed the functional consequences. Organizational effectiveness and efficiency stopped improving and profits began to decline in the face of aggressive Japanese competition The concept that has the greatest utility by Traditional Management on standardization of the production process as well as the product meant that there could be no room for human variability.
The emphasis on rules, principles, and the “one best way” meant that the behavior of employees must be uniform and predictable if maximum efficiency was to be attained. The basic assumption underlying Traditional Management about the motivation of people stemmed from the concept of economic man. People were expected to behave rationally. Rational people were supposedly motivated by their own economic self-interest. Weber and Fayol did not directly emphasize economic incentives, traditional management generally assumed that employees wanted to earn the most money for the least work. Traditional Management expected employees to be motivated to do very specialized standardized jobs simply because of the workers’ strong need for money.
Brodie, M. (1967) Fayol on Administration. Mowbray & Co, Oxford. Burton, R. M. & Obel, B. (1984) Designing Efficient Organizations: Modeling and Experimentation, North Holland, Amsterdam Robbins, S.P., Bergman. Stagg, I & Coulter, M. (2000), Management, (2nd Edn) Prentice Hall Scott, W. R. (1992). Organizations: Rational, Natural, and Open Systems. Prentice Hall, Englewood Cliffs. Australia Pry Ltd Taylor, F. (1947) scientific management: comprising Shop management. The principles of scientific management and Testimony before the special House committee. Harper, New York. Urwick, L., Brech, E. (1951) The Making of Scientific Management. Pitman & Sons, London.