Module 2 Theories PDF

# Organizational Theory ## What are Theories? - "**Ways to analyze and better understand organizations**" (Daft textbook) - **Guidelines** that aid decision makers in addressing issues. - **"Starting point"** - **People have been leading and controlling others for thousands of years**. - There ar...

# Organizational Theory ## What are Theories? - "**Ways to analyze and better understand organizations**" (Daft textbook) - **Guidelines** that aid decision makers in addressing issues. - **"Starting point"** - **People have been leading and controlling others for thousands of years**. - There are "**ways**" (theories) to do this. - Evidence of **Bureaucracy** in politics and government. - **Social, environmental, and technological changes** have created newer theories. - **Neo-classical approaches**. - **Decision makers**, **managers**, and **owners** look to make their organizations: - More **organized** - More **productive** - More **efficient** - **Manage people** (workers) - **Organizational 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 workforces - **Work needs 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 Labor** (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 and efficiency. - **Mass production** - **Plan work** - **Provide proper tools** - **Focus on workers through training** - **Incentivize workers** (wages) to motivate and maximize their work. ### Problems with Classical and Scientific Management - **Some organizations deal with more specialized, customized products and services**. - They require and demand **specialized skilled labor** and **technology**. - **Unions and laws were created to protect worker rights**. - **Human rights issues** (Health and safety, Exploitation). - **Taylor's theory cannot deal with rapid changes in technology**. - It is costly and lengthy to train. - **Taylor's theory cannot deal with rapid changes to the environment**. - **Legitimacy** - **Taylor's theory cannot deal with rapid changes to the market**. - **More complex in terms of variety and customization of products and 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, which leads to increased productivity. - **Understand what motivates workers and what affects their productivity**. - **Human resources thrive 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 is 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** - **Task assignment**. - More 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**. - **An essential part of classical management**. - **Bureaucracy is not "evil"**. - **Applied through administration** such as groups and departments under management, hierarchy of authority, uniform rules, and formal record keeping. - **Can be applied to make organizations more efficient**. - **Leadership can clearly assume their responsibility** through rules, policies (organizational governance). - **Clear lines of communication**, **rules**, **authority**, **hierarchy**, **expectations**, and **responsibilities**. - **Henri Fayol** – administrative principles of management – bureaucratic characteristics. ### Politics: Conflict, Power, Goals, Decision Making (1950s) - **Conflict runs 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** - **Power can be 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) - Goals are often **ambiguous** (Especially within departments of an organization). - 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. A 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**” - Lead to a lack of change and 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? # What are Frames? - **Organization theories are associated under 4 main frames**: - **Structural** - **Human Resource** - **Political** - **Symbolic** - **Establishing Frames helps decision makers and stakeholders** gather and filter information, make judgments, and make decisions on issues. - Help understand and make sense of how organizations are operated. - Look at multiple viewpoints and perspectives. - **Frames (like theories)** are tools that have strengths and limitations. - **Managers often cannot stick to one frame**. Adopt a multi-frame perspective depending on situations that arise - **Organization leaders start decision making and setting goals and objectives with one theory, frame**. - May alter their thinking as they determine solutions - frame and reframe. - **Leaders must also be able to clearly communicate their perspective to others**. ## What are Frames? (Bolman and Deal) ### The Four Frames Summary #### Structural ("The Machine") - **Rules** - **Roles** - **Goals** - **Policies, Processes** - **Technology** - **Environment** - **Division of Labor** #### Political ("The Jungle") - **Power** - **Conflict** - **Scarce Resources** - **Competition** #### Human Resource ("The Extended Family") - **Needs** - **Skills** - **Relationships** #### Symbolic ("Theatre") - **Culture** - **Ritual** - **Heroes, Villains** - **Myths** - **Symbols** - **Metaphors** - **Ceremonies** ## Frames ### Structural - **The architecture of the organization**. - **Strategy and structure, goals, efficiency, roles, relationships, responsibilities, rules, policies, procedures, chain of command, decision making.** - Similar to Classical Management, Taylorism (SM), Bureaucracy, Morgan’s Machine metaphor. - **The challenge for leaders: maintain the** structure alignment with current "environment", technology, and goals – when they become misaligned, problems occur. ### Human Resource Frame - **Human component** - **Understand workers, stakeholders, and their relationships, feelings, skills.** - Very similar to Mayo’s Human Relations Organizational Theory, Stakeholder theory, Institutional theory. - **Individuals have needs** - motivate to get the job done – empowerment. - **Open communication, team building, support and coaching, care**. - **Decisions often made to maintain the "fit" between people and the organization.** ### Political - **Organizations as arenas, contests, jungles - compete for power and resources**. ### Symbolic - **Organizations as cultures**. - **Organizations as cultures driven more by rituals, ceremonies, stories, heroes, myths, than by rules, policies, managerial authority**. - **Leaders instill enthusiasm and motivation through charisma and drama**. - **Drama - Actors (Leaders) who perform, audience (employees, stakeholders)** form impressions from what they see (inspiration and motivation, leading by example). - **Shared values, beliefs** – similar to organizational culture theory.