Principles of Management: Classical Organization Theory

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Questions and Answers

What are the central perspectives associated with emergent processes in organizations?

Decisions, group dynamics, and organizational culture (correct)

Efficiency and productivity

Financial profitability

Resource allocation and technology adoption

Which of the following is a common criticism of management practices?

Environmental destruction (correct)

Innovation and creativity

Cost efficiency

Employee empowerment

How do routines contribute to organizational stability?

They restrict decision-making

They are static and unchangeable

They increase employee turnover

They provide a basis for problem-solving and innovation (correct)

What aspect of organizational power is increasingly well understood?

Intra-organizational power Signup and view all the answers

What challenge does corporate governance face in the context of business ethics?

Addressing exploitation and corporate power Signup and view all the answers

What is a key characteristic of hybrid organizations?

They simultaneously meet social and commercial demands. Signup and view all the answers

Which process is crucial for increasing the likelihood of sustained competitive advantage?

Strategic choice Signup and view all the answers

How do dynamic capabilities contribute to an organization’s success?

By renewing and reconfiguring skills and resources Signup and view all the answers

What perspective shifts the focus of strategy creation from rational choice to practice?

Emergent strategies Signup and view all the answers

What common assumption do older theories on motivation make about employees?

Happy workers are usually productive. Signup and view all the answers

What aspect do traditional organization theories typically exclude?

Individual motivations Signup and view all the answers

What is a significant new question arising from the concept of dynamic capabilities?

How can companies develop new core competencies? Signup and view all the answers

Which of the following is NOT a part of the strategic control process?

Market dominance analysis Signup and view all the answers

What is one identified shortcoming of monological theories in ethical decision-making?

They are often too simplistic and do not consider multiple perspectives. Signup and view all the answers

Which approach is suggested as a potential solution to the limitations of traditional ethical theories?

Discourse ethics. Signup and view all the answers

Why are businesses increasingly addressing social and environmental problems?

To assume a political role within society. Signup and view all the answers

What is one potential form of organization suggested for politically active businesses?

Democracy in corporations. Signup and view all the answers

What element is crucial for the gradual improvement of decision processes in management according to discourse ethics?

Gradual enhancement of the quality of discourse. Signup and view all the answers

In the context of sustainable hybrid organizations, what is a primary challenge faced?

Balancing profit-making with ethical practices. Signup and view all the answers

What aspect of corporate governance is highlighted as important in a risk society?

Enhancing transparency and ethical accountability. Signup and view all the answers

How do managerial decision processes benefit from discourse ethics?

They encourage collaborative dialogue among diverse stakeholders. Signup and view all the answers

Study Notes

Principles of Management: Conclusion

Classical organization theory (1): Max Weber's seminal work laid the foundation for the sociological examination of societal rationalization, a process characterized by the increasing emphasis on logical reasoning and efficiency in both individual and institutional behaviors. Within this framework, he distinguished legal authority as the epitome of rationality, where power and legitimacy stem from established laws and regulations. Furthermore, he conceptualized bureaucracy as the ideal organizational form that encapsulates rationality, characterized by a hierarchical structure, systematic procedures, and a clear division of labor, which collectively enhance operational efficiency and predictability in organizational settings..

Classical organization theory (2)

Taylor and Fayol's work focused on practical investigations. Their findings largely aligned with Weber's, emphasizing hierarchy, bureaucracy, and division of labor for maximizing organizational efficiency. This provided a theoretical basis for modernization and industrialization. However, this approach had drawbacks, including alienation and unsustainability, and overlooked individual and informal organizational aspects.

Classical organization theory (3): Outlook: Partial organizations

Organization theory's applicability can be considered in partial organizations, expanding its scope. Key features of organizations include membership, hierarchy, rules, monitoring, and sanctions. Many organizations utilize these features selectively, such as clubs or trade associations.

Organization and environment

Organizations aren't independent of their environments. Relevant environmental factors include stability and turbulence, available resources, and the wider institutional field/society. The core takeaway is that organizations need to conform to at least some environmental demands.

Organization and environment: Outlook: Hybrid Organizations

Societal logic, which includes varied and potentially competing ideas, like the state, family or religion, shapes organizations.
Each organization is affected by these varied logics.
Organizations grapple with potentially conflicting demands across these various logics, attempting to achieve harmony.
A good example includes social enterprises meeting both social and business demands. Hybrid organizations combine multiple demands.

Strategy

Strategy involves systematic processes to improve the likelihood of achieving long-term competitive advantage. Crucial elements include analyzing the organization and its environment, creating strategic options, choosing a strategy, developing programs, implementing the strategy, and using strategic controls like premise control, implementation control, and strategic surveillance.

Strategy: Outlook (1): Strategy as practice

Traditional strategic research presumed rational choice. An alternative approach considers emergent strategies, challenging this notion. A modern perspective emphasizes practical aspects, including who creates strategies, how these strategies are developed, and the role of emotions/motivations in strategy making.

Strategy: Outlook (2): Dynamic capabilities

Success depends on specific capabilities. Historical focus has been on core competencies. A more contemporary perspective considers dynamic capabilities to explain how organizations develop new core competencies. This involves renewing and integrating internal and external resources and organizational skills to adapt to changing environments.

Organization and Individual

Classical organizational theories and environmental theories usually exclude individuals, focusing on structures and processes. The question is how to best understand what motivates individuals within organizations and how to design organizations to align individual and organizational goals.

Organization and individual: Outlook

Older motivation theories assumed compatibility between employee motives and organizational goals (happy workers = good workers).
However, this can also lead to negative dynamics or exploitation.
Team-based self-management often aims to improve job satisfaction. But teamwork in certain settings can create highly restrictive conditions. Self-management might also lead to more freedom, but high performance pressure can still cause self-control issues and other unwanted consequences.

Emergent processes

Unintended outcomes often result from organizational processes.
Emergent processes which go beyond rational approaches play a key role in organizational understanding, including decision-making, group dynamics, and organizational culture.

Emergent processes: Outlook

Organizations rely heavily on routines as repetitive structures.
These routines offer crucial stability, predictability, problem-solving, and innovation.
The critical element concerning routines is increasing focus on actions, particularly as a foundational element of routines (Feldman et al., 2021).

Power

Intra-organizational power is well understood.
Societal power of organizations is also critical, including lobbying, political power of corporations, and digital companies.

Critical perspectives on management

Criticism of management and business includes exploitation, environmental destruction, and issues of alienation and corporate power. Previous lectures (2-8) provide important foundations for understanding these issues.

Business ethics

How can we improve or resolve problems in management and business? - Ethical theories support managerial decision-making in these contexts. - Monological theories have limitations. - Discourse ethics and wide-ranging implementation of discourse are promising solutions, though their effectiveness might not always be fully realistic or immediately apparent . However, improving the quality of managerial discourse is still possible.

Critical perspectives and business ethics: Outlook

Contemporary forms of production and management have various issues, such as environmental problems (e.g., climate change), social problems (e.g., exploitation and inequality), etc.
Businesses increasingly address these social and environmental issues, and assume a political role (Scherer & Palazzo, 2011).
There's growing importance for understanding organizational forms that enable political engagement/action by corporations.
Democracy within corporations is a potential solution (Schneider & Scherer, 2015).

Exam (1)

Final exam: December 3rd, 8:00 AM – 10:00 AM
Retake exam: January 29th, 2025, 6:00 PM – 8:00 PM
Details about location will be available online.

Exam (2): Relevant material

Lectures 2 (part 1) through 9 are crucial.
The provided readings are also important for deep understanding, with the exception of general author names and years.

Exam (3): Question types & points

Multiple response:Choose the correct option(s) from several provided options.
Drag & drop:Match terms with specific areas.
Matrix:Identify correct associations in a matrix format.
Points:Correct answers earn points; incorrect answers lose points. - The points system in some cases can award additional points for correct answers in a question. There are no negative marks for reaching a negative score. A minimum of 50 points are required to pass the course.

Q&A session #2

Q&A session #2 is scheduled for Monday, December 2nd, at 10:00 AM.
Attendance is optional.
Participants can ask questions relating to lectures 1-10.
Questions will be addressed stepwise.
The Zoom link is included in an announcement on Athena.

Course evaluation

Course evaluation is available soon.
Provide feedback to improve the course.

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Description

Explore the key concepts of Classical Organization Theory including the contributions of Weber, Taylor, and Fayol. Understand the implications of hierarchy, bureaucracy, and division of labor in organizational efficiency. Analyze the drawbacks of these theories and their impact on modern organizations.