Organizational Theory PDF

# Organizational Theory ## What are Theories? ADMN 2510H ## What are organizational theories? - "Ways to analyze and better understand organizations" (Daft textbook) - Guidelines that aid decision makers in addressing issues - "starting point" - People have been leading, controlling others for thou...

# Organizational Theory ## What are Theories? ADMN 2510H ## What are organizational theories? - "Ways to analyze and better understand organizations" (Daft textbook) - Guidelines that aid decision makers in addressing issues - "starting point" - People have been leading, controlling others for thousands of years - there are "ways" (theories) to do this (evidence of Bureaucracy in politics/government) - Social, environmental, and technological changes have created newer theories (neo-classical approaches) - Decision makers, Managers, Owners looking to make their organizations more organized, productive, efficient, manage people (workers) - Organization Theory is "a way of thinking about, and informing action within, organizations." - Theories "provide alternative ways to represent and analyze organizations" ## Theories ### Classical Management – early 1900s - "Industrial” Management – factories, assembly lines, mass production, large workforce - Work is needed to be managed for productivity and efficiency - Organizations operate as efficient, well-oiled machines (Gareth Morgan's Images of Organizations) - Authority (command and control), division of labour (simplified tasks), rules and regulations, hierarchy of employees, bureaucracy ### Scientific Management (Taylorism) – more focused Classical Management - Organize the organization - Focus on the “science” of maximizing output, efficiency (mass production) - plan work, provide proper tools, focus on workers through training, incentivize workers (wages) to motivate, maximize their work ### Problems with Classical and Scientific Management - Some organizations deal with more specialized, customized products and services that require, and demand specialized skilled labour, technology - Unions, laws created to protect worker rights - human rights issues (health and safety, exploitation) - Taylor's theory cannot deal with rapid changes in technology (costly and lengthy to train), environment (legitimacy), markets (more complex in terms of variety and customization of products, services) ### Human Relations – Elton Mayo - 1930 - **Hawthorne studies** - The studies showed that social factors impact the organization in positive (and negative) ways - Focus on worker needs through proper leadership, leads to increased productivity - Understand what motivates workers, what affects their productivity - **Human Resources thrives in Human Relations organizations** - Mayo addresses the major issue with Taylorism - treat employees as humans, not machines - Recognize and appreciate employees and their skills - humans are the main assets - Authority delegated and humane, employee autonomy, trust and openness, co-operation, participation in decisions and operations - Structure of firms should be temporary and decentralized, temporary leadership and task assignment - better able to adapt to change - Theories similar to Human Relations - Organizational Culture, Stakeholder Theory, Institutional Theory, Legitimacy Theory ### Bureaucracy (Weber, 1920s) – focus on the structure of an organization - Bureaucracy becomes an essential part of classical management - Bureaucracy is not "evil" - can be applied to make organizations more efficient - Applied through administration (such as groups, departments under management), hierarchy of authority, uniform rules, formal record keeping - Leadership can clearly assume their responsibility through rules, policies (organizational governance) - Clear lines of communication, rules, authority, hierarchy, expectations, responsibilities ### Henri Fayol – administrative principles of management – bureaucratic characteristics ### Politics: Conflict, Power, Goals, Decision making (1950s) - Conflict running rampant in organizations - conflicting goals, but being creative - conflict is healthy (encourages new ideas - leads to change) - **Power** - "influence other people to bring about desired outcomes” (Daft) - Power can be good (motivational, acquire skills, authority and control, negotiation), or bad (domination, exploitation) - power can be used/abused by decision makers, and/or stakeholders - **Mission Statements and Goals** (short and long-term) - **Decision making** - involves many managers (coalition), because goals are often ambiguous (especially within departments of an organization), and one manager does not have time to deal with all decisions (Daft) - Stakeholders can even be involved in decisions - **Problem?** "Satisficing” decisions (Simon and March) - Decisions are often made to satisfice - satisfactory level of performance to achieve several goals simultaneously - quickly solve a problem (but may not be ideal, perfect) - **Heuristics** (mental shortcuts) - such as “these solutions worked before, let's try them again” - maintain the “status quo” - lack of change, innovation, crisis often forces change - Decision makers have to make a decision - involving too many and seeking their input takes time - may not always have the opportunity to take time (crisis) ## Newer Theories (?) ### Human Management? (article) - A new theory needs to arise to "kill the old brand of management" - A new theory that accommodates physical capabilities with intellect, skills, spirit (ethics, values, concern well-being for others, compassion) - Not just consider the economic consequences of decisions, but stakeholders, environment as well - "rejecting technologies that enable tyranny" - through power and control - Will organizations need to face a "mid-life crisis” in order to make a transformation in management, get away from the old way of doing things (profits and productivity driven)? - Is the system of Capitalism to blame? - Current crises (COVID, income inequality, inflation) serve as catalysts of change?