Organizational Theory - Introduction and Classical Management

Organizational Theory - Introduction

• Organizational theory provides ways to analyze and better understand organizations.
• It offers guidelines for decision-makers to address organizational issues.
• People have been leading and controlling others for a long time, resulting in organizational theories, like bureaucracies in politics and government.
• Social, environmental, and technological changes constantly create new theories.
• These theories help represent and analyze organizations.
• They are a way of thinking about, and informing action within, organizations.

Classical Management

• Developed in the early 1900s, focusing on industrial management (factories, mass production, large workforces).
• Emphasizes efficient work processes and management for productivity.
• Organizations are viewed as efficient machines, with clear authority, division of labor, rules, and regulations.
• Classical theories are represented in work methodologies such as Taylorism and scientific management which emphasizes efficiency through planning and task specialization.

Scientific Management

• A more specialized type of classical management, focused on maximizing output and efficiency (usually mass production)

• Managers should plan work, use proper tools, and incentivize workers.

• This theory focuses on workers through training, and incentivize worker wages.

• This approach had weaknesses such as organizations needing specialized skilled labor, and technology constantly changes.

• There are concerns around worker rights, health and safety concerns, and societal shifts. This approach did not consider the environment, issues with legitimacy, and market complexity.

Human Relations Theory

• Developed by Elton Mayo in the 1930s, reacting to the dehumanizing aspects of earlier theories.
• Focuses on understanding workers' needs and motivations to enhance productivity.
• Social factors affect organizations in both positive and negative ways.
• The theory shifted the focus to treat employees as humans, rather than machines.
• Recognizing and appreciating their skills, autonomy and co-operation are important for firms.
• Suggests that firms should enable decentralized, adaptable management structures.

Bureaucracy (Weber)

• Introduced by Max Weber in the 1920s and became an essential part of classical management.
• Bureaucracy is not inherently negative, but can make organizations more efficient.
• It involves clearly defined structure, authority, rules, and record-keeping.
• Focuses on organizational structure (rules,policies and hierarchy).

Politics, Conflict, Power, and Decision-Making

• Organizations are often characterized by conflict, which can be healthy, driving innovation.
• Organizations compete for resources and power.
• Decision-making is a complex process, involving multiple managers and frequently ambiguous goals.
• Decision-makers often use simplifying strategies called heuristics.

Newer Theories

• New theories need to emerge to address modern issues.
• These theories need to acknowledge technological and societal changes, consider diverse stakeholder needs, and address ethical and responsible decision-making.
• Organizations may need to undergo transformations and move away from old ways of doing business.
• Current crises (e.g., COVID, inflation) can serve as catalysts for change.

Organizational Frames (Bolman and Deal)

• Organizational theories can be grouped into four main frames: Structural, Human Resource, Political, and Symbolic.
• These frames provide different perspectives on how organizations function, offering different viewpoints to stakeholders.
• Managers are encouraged to employ multiple frames from these theories to understand complex situations and make effective decisions.
• Leaders must also communicate effectively the perspectives they adopt to colleagues.

The Four Frames Summary

• The Machine Frame - Focuses on roles, goals, policies, technology, division of labor
• The Jungle Frame - Emphasizes power, conflict, scarcity of resources, bargaining and negotiation
• The Extended Family Frame - Focuses on human needs, relationships, and skills.
• The Theatre Frame - Focuses on shared values, symbols, rituals, and meaning.

Frames (cont.)

• Structural frame focuses on organization architecture (strategy, structure, efficiency, relationships).
• Human Resource frame emphasizes employee needs and relationships to better motivate staff.
• Political frame looks at power struggles and conflicts within organizations.
• Symbolic frame sees organizations as driven by culture, rituals, meanings, and shared values.

This quiz delves into the foundational concepts of organizational theory and its historical context, particularly classical management. It explores how different organizational theories emerged to navigate the complexities of decision-making and productivity in various settings. Test your understanding of the principles and applications of these theories.